COURT OF APPEALS DECISION DATED AND RELEASED February 14, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-0182
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT II
MARVIN GAUGER and
LOIS GAUGER,
Plaintiffs-Appellants,
v.
THRESHERMEN'S MUTUAL
INSURANCE COMPANY,
Defendant-Respondent,
WILLIAM LIGGETT,
Defendant.
APPEAL from a judgment
of the circuit court for Racine County:
EMILY S. MUELLER, Judge. Affirmed.
Before Anderson, P.J.,
Nettesheim and Snyder, JJ.
PER CURIAM. Marvin and Lois Gauger appeal from a
summary judgment in favor of Threshermen's Mutual Insurance Company dismissing
their bad faith claim. They argue that
a factual issue exists as to whether Threshermen's handling of their claim for
fire damage was reasonable. We conclude
that Threshermen's established a fairly debatable basis for the amount of the
claim it paid and that no bad faith exists.
We affirm the judgment.
The following facts are
undisputed. A restaurant owned by the
Gaugers was damaged by a fire on May 17, 1991.
The Gaugers submitted a claim to Threshermen's, their insurer, on July
1, 1991, for $462,857.90 to repair the fire damage. An additional sworn statement of loss was submitted on January
20, 1992. Marvin gave an examination
under oath as required by the policy on April 1, 1992. On April 16, 1992, Threshermen's tendered
two checks totaling $80,776.33 for the loss.
This bad faith action was commenced on September 10, 1993.
On appeal from a summary
judgment, we independently apply the methodology set forth in § 802.08(2), Stats., to the record de novo. Garcia v. Regent Ins. Co., 167
Wis.2d 287, 294, 481 N.W.2d 660, 663 (Ct. App. 1992). The methodology we apply in summary judgment analysis has been
stated often and we need not repeat it.
In re Cherokee Park Plat, 113 Wis.2d 112, 115-16, 334 N.W.2d
580, 582-83 (Ct. App. 1983). Summary
judgment should be granted where there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Garcia, 167 Wis.2d at 294, 481
N.W.2d at 663.
To establish a claim for
bad faith, the insured "must show the absence of a reasonable basis for
denying benefits of the policy and the defendant's knowledge or reckless
disregard of the lack of a reasonable basis for denying the claim." Anderson v. Continental Ins. Co.,
85 Wis.2d 675, 691, 271 N.W.2d 368, 376 (1978). The first prong of this test is objective, while the second prong
is subjective. Weiss v. United
Fire and Casualty Co., No. 93-3341, slip op. at 6 (Wis. Dec. 15,
1995). In applying the first prong, it
is appropriate to determine whether the insurer properly investigated the claim
and whether the results of the investigation were subjected to reasonable
evaluation and review. Anderson,
85 Wis.2d at 692, 271 N.W.2d at 377.
The Gaugers argue that a
factual issue exists as to whether Threshermen's conducted a neutral and
detached investigation with regard to their claim. The affidavits in support of summary judgment establish that
Threshermen's retained the services of John Schweitzer, an independent
adjuster, to establish the amount of loss caused by the fire. Schweitzer personally viewed the fire damage
to the restaurant, made his own estimate of the extent of damage caused by the
fire, and reviewed the documents and repair estimates submitted by the Gaugers
to determine a value of the damages. In
addition, Schweitzer consulted with a fire restoration contractor for certain
items of reconstruction costs and independently verified the prices quoted by
the company as reasonable. There is no
question that Threshermen's conducted a neutral and detached investigation of
the damages caused by the fire.
The Gaugers offered no
affidavits countering the legitimacy of Schweitzer's evaluation or his status
as an independent adjuster. Rather,
their position is that because there was such a large discrepancy between the
repair estimates they submitted and that arrived at by Schweitzer,
Threshermen's should have hired another independent adjustor to resolve the
difference. The mere dispute as to the
amount of the loss neither requires the retention of yet another independent
adjuster nor creates a factual issue as to the neutrality of Threshermen's
handling of the claim.[1] Because Threshermen's had a reasonable basis
for the amount of loss paid, it was not required to get a second opinion about
the value of the loss. See Anderson,
85 Wis.2d at 693, 271 N.W.2d at 377 (an insurance company may challenge claims
which are fairly debatable and will be found liable only where it has
intentionally denied a claim without a reasonable basis). Indeed, what the Gaugers suggest is akin to
some kind of binding arbitration.
It is undisputed that
Threshermen's gave the Gaugers opportunity to submit additional information for
consideration, even after the claim had been paid. Although Threshermen's was aware that the Gaugers considered the
payment to be inadequate, nothing further was submitted to it which questioned
the reasonableness of the amount
paid. There can be no claim that
Threshermen's acted in reckless disregard or indifference to the proofs
submitted by the Gaugers. There was no
factual dispute which precluded summary judgment dismissing the bad faith claim.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.