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Insurance — bad faith

By: WISCONSIN LAW JOURNAL STAFF//October 23, 2012//

Insurance — bad faith

By: WISCONSIN LAW JOURNAL STAFF//October 23, 2012//

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Wisconsin Court of Appeals

Civil

Insurance — bad faith

An insured must demonstrate some evidence that the insurer’s denial of coverage was unreasonable in order to proceed to discovery on a first-party bad faith claim.

“Ullerich argues that the preliminary-showing holding in Brethorst applies only to cases where the insured only pleads bad faith. And it is true that that is the procedural posture of Brethorst. However, Ullerich ignores the fact that the supreme court specifically stated that the preliminary showing of bad faith is also required when a breach of contract is pled as well, stating: ‘The need to make a preliminary showing on bad faith applies even more to a claimed breach of contract. The court must be satisfied that the claimed breach of contract is well founded and can be proved in the future.’ See id., ¶81. As a basis for its ruling, the Brethorst court expressly acknowledged the policies protecting insurers from unfair discovery in Dahmen, see Brethorst, 334 Wis. 2d 23, ¶5, and cited Farmers, noting that our holding in Farmers requires ‘“some evidence that what the insurance company did was objectively unreasonable”’ before discovery can proceed in a bad faith case, see Brethorst, 334 Wis. 2d 23, ¶80 (citing Farmers, 313 Wis. 2d 93, ¶26). The supreme court further noted that it had affirmed our decision in Farmers, saying ‘that if the insured “shows prima facie evidence of a reviewable claim … discovery is potentially available.”’ Brethorst, 334 Wis. 2d 23, ¶80 (citing Farmers Auto. Ins. Ass’n v. Union Pac. Ry. Co., 2009 WI 73, ¶52, 319 Wis. 2d 52, 768 N.W.2d 596; ellipses in Brethorst).”

Affirmed.

Recommended for publication in the official reports.

2011AP2875 Ullerich v. Sentry Insurance

Dist. I, Milwaukee County, White, J., Brennan, J.

Attorneys: For Appellant: Wilber, Geoffrey D., Milwaukee; For Respondent: Drabot, Lawrence J., Milwaukee

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