Assuming that Coverage Exists Does not Make a Contract
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Posted on August 19, 2022 by barryzalma
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Barry A. Lindsten appealed a circuit court order dismissing his action against Astronautics Corporation of America (Astronautics) and Robertson Ryan &Associates, Inc. and Michael R. Schulte (Robertson Ryan).
In Barry A. Lindsten, Sarah M. Lindsten v. Astronautics Corporation of America, Mayo Medical Plan, Trumbull Insurance Company, Hartford Casualty Insurance Company and Hartford Fire Insurance Company, Defendants, Robertson Ryan &Associates, Inc. and Michael R. Schulte, ABC Insurance Company, No. 2021AP115, Court of Appeals of Wisconsin, District I (August 16, 2022) the Court of Appeals resolved the issues raised by Lindsten.
BACKGROUND
On August 13, 2016, in Milwaukee County, a motor vehicle struck a rental vehicle driven by Lindsten. At the time of the accident, Lindsten was in Wisconsin to perform work for his employer, Astronautics, who provided and paid for the rental vehicle.
Lindsten alleged that Astronautics and its insurance agent/broker, Robertson Ryan, had failed to provide underinsured motorist (UIM) coverage. Astronautics moved to lift the stay for the limited purpose of addressing whether it was a proper party in the case.
The circuit court granted Astronautics’ motion to lift the stay and allowed the parties to conduct discovery on the following limited issues: (1) whether Lindsten was acting within the scope of his employment for Astronautics when the accident at issue took place; and (2) whether Astronautics entered into a contract with Lindsten to specifically provide UIM coverage.
Lindsten filed an amended complaint. Lindsten raised two causes of action against Astronautics: (1) breach of an oral contract; and (2) reformation. According to Lindsten, on or prior to the date of the accident, he was informed by Astronautics’ travel administrator that Astronautics “would provide full insurance coverage” and “would take care of all his insurance needs on rental cars.” Based on prior travel experience with previous employers, Lindsten assumed this included UIM coverage. Lindsten further alleged that the travel administrator informed him that he should sign an insurance waiver to specifically opt out of the insurance coverage offered by the rental agency in favor of the coverage provided by Astronautics.
In regards to Robertson Ryan, Lindsten also raised two causes of action: (1) breach of contract; and (2) negligence. Lindsten alleged that Astronautics had specifically requested that Robertson Ryan provide UIM coverage, and that Robertson Ryan had failed to procure a policy that would provide UIM coverage. Further, Lindsten alleged that if Robertson Ryan had procured the UIM coverage, Lindsten would have been a third-party beneficiary of any such insurance coverage.
Both Astronautics and Robertson Ryan filed a motion to dismiss. Astronautics contended that the allegation that Astronautics agreed to take care of all of Lindsten’s insurance needs was not specific enough to cover an offer to provide UIM coverage, thus, no contract was created. Further, Astronautics contended that only written contracts could be reformed.
The circuit court granted the motions to dismiss. The court explained that a “specific offer” is required to create an insurance contract, and that it is not enough to simply allege that there was an offer for “insurance,” “full coverage,” or “insurance needs.” Rather, the pleadings needed to specifically refer to UIM coverage.
DISCUSSION
A motion to dismiss for failure to state a claim tests the legal sufficiency of the complaint. To survive a motion to dismiss, a complaint must contain a short and plain statement of the claim, identifying the transaction or occurrence or series of transactions or occurrences out of which the claim arises and showing that the pleader is entitled to relief. In other words, a complaint must plead facts, which if true, would entitle the plaintiff to relief.
Whether a complaint states a claim upon which relief may be granted is a question of law that we review de novo, benefitting from the circuit court’s decision. The court will accept as true the factual allegations in the complaint but will not accept any legal conclusions. Factual allegations must be more than labels and conclusions or a formulaic recitation of the elements of a cause of action.
On appeal, Lindsten asserts that the circuit court erred in granting the motions to dismiss. When certain conditions exist, a statute provides the exclusive remedy for recovery for an employee against an employer. Lindsten’s brief-in-chief fails to address why this doctrine does not apply. We generally do not address undeveloped arguments, and we decline to do so here. The trial court’s decision was affirmed.
ZALMA OPINION
A person cannot create a contract without being able to prove that there was an offer, acceptance of the offer, and payment of consideration. Lindsten claimed that there was an oral contract to provide him all insurance he needed. Even if there was an offer and acceptance of that offer it was too vague to make sense or to be enforceable. Insurance is a contract between the insurer and the insured. Lindsten was neither an insurer nor was he an insured. He was the employee of the insured.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
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Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
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Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
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Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
