Breach of Contract is not a Tort
It Doesn’t Pay to Over Charge a Suit Against an Insurer
Post 5116
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In Kole Westwood and Keeley Westwood v. The Travelers Home And Marine Insurance Company and Aaron Harrigfeld, No. 2:24-cv-00719-JNP-DBP, United States District Court, D. Utah (June 30, 2025) the case against the engineer failed completely and the case against Travelers was limited to the claim that the insurance contract was breached.
CASE BACKGROUND
Plaintiffs Kole and Keeley Westwood are homeowners in Utah whose home was damaged in a severe winter storm. The roof buckled under the weight of snow and ice, causing water damage to the house.
Their insurer, Travelers, denied their claim based on an engineering inspection report prepared by Defendant Aaron Harrigfeld. The Westwoods allege that the report contained false representations about the history and condition of their roof.
LEGAL CLAIMS
The Westwoods filed a lawsuit seeking a judgment for the amount needed to restore their house to its pre-storm condition, along with various damages. Their complaint included two contract claims and three tort claims: negligent misrepresentation, conspiracy to commit fraud, and fraud. Mr. Harrigfeld moved to dismiss the three tort claims against him, and Travelers moved for judgment on the pleadings as to those same three claims.
COURT’S DECISION
The court granted both motions, dismissing the tort claims against Mr. Harrigfeld and Travelers. The court found that no party relied on the misrepresentations in Mr. Harrigfeld’s report, which is a necessary element for claims of negligent misrepresentation and fraud. The court also noted that the dispute is fundamentally about an alleged breach of contract, not tort misrepresentation.
REMAINING CLAIMS
All claims against Mr. Harrigfeld were dismissed, and Travelers prevailed on the tort claims against it. Only the contract claims against Travelers remain live.
ANALYSIS
Utah courts consider a claim for intentional misrepresentation as essentially a claim for fraud. As the court saw it, all theories suffer from a fatal defect: no one who received Mr. Harrigfeld’s flawed report – not Travelers, not the Westwoods – relied on the misrepresentations in that report. That is, no one took the misrepresentations about preexisting damage to be true and then suffered harm as a result of taking those misrepresentations as true.
To understand this defect, consider the elements of negligent misrepresentation and fraud. Under Utah law, negligent misrepresentation occurs when:
(1) a party carelessly or negligently makes a false representation expecting the other party to rely and act thereon,
(2) the [other party] actually relies on the statement, and
(3) [the other party] suffers a loss as a result of that reliance.
In addition, fraud requires a plaintiff to show:
(1) that a representation was made
(2) concerning a presently existing material fact
(3) which was false and
(4) which the representor either (a) knew to be false or (b) made recklessly, . . .
(5) for the purpose of inducing the other party to act upon it and
(6) that the other party, acting reasonably and in ignorance of its falsity,
(7) did in fact rely upon it
(8) and was thereby induced to act
(9) to that party’s injury and damage.
The parties’ dispute here concerns Travelers’ purported obligation to pay the Westwoods’ claim – a subject matter already covered by their insurance contract laying out the conditions under which Travelers is and is not obligated to pay a claim. The suit was limited to the claim that Travelers breached its contract.
ZALMA OPINION
Whether an insurer owes a claim under an insurance policy is a question of contract, not tort, not fraud, only contract terms. The Westwoods took a simple contract suit and tried to expand it into a tort claim, a fraud claim, but did not have the facts to support the tort claims. If their loss is covered by the Travelers policy they will be paid and if not, their attempt to make it a big tort suit failed.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Death by Self-Administered Dialysis is Excluded
Post 5173
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Clear & Unambiguous Exclusion Effective
Dana Kleinsteuber died while administering her own dialysis at home. MetLife now agrees that tragedy was an accident but refused to pay because of an exclusion for losses caused or contributed to by the treatment of a physical illness.
In Charles M. Kleinsteuber v. Metropolitan Life Insurance Company, CIVIL No. 23-3494 (JRT/DTS), United States District Court, D. Minnesota (August 19, 2025) the USDC was faced with the interpretation of an exclusion in an ERISA plan.
KEY FACTS:
Dana Kleinsteuber’s Death:
Dana Kleinsteuber, diagnosed with end-stage renal disease (ESRD), was self-administering dialysis at home when she suffered acute blood loss and died. The cause of death was listed as ESRD and natural causes.
Insurance Claims:
Charles Kleinsteuber, Dana’s husband, filed claims for both ...
Not Wise to Attempt Rescission Without Evidence
Post 5173
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Desiree Durga and Justin Durga v. Memberselect Insurance Company, No. 371891, Court of Appeals of Michigan (August 13, 2025) Desiree Durga and Justin Durga (plaintiffs) claimed the insurer wrongfully attempted to rescind an auto policy.
THE ALLEGATIONS
MemberSelect claimed that Desiree Durga’s application for insurance contained a material misrepresentation, it did not produce a copy of the application. In fact defendant admitted the application for insurance no longer exists.
Trial Court Decision
The trial court granted the plaintiffs’ motion for summary disposition on their breach of contract claim and denied the defendant’s cross-motion for summary disposition, which argued that it was entitled to rescind the policy. The court found that the defendant failed to provide clear and convincing evidence of fraud
The court ...
Improper Joinder of Multiple Party Criminal Fraud Case With Co-Defendants Charged with Murder
Post 5172
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Murder Defendants Must be Tried Separately from Fraud Defendants
A case that involved allegations of a years-long scheme by over a dozen individuals to stage fake automobile collisions in the New Orleans metropolitan area and file fraudulent insurance claims and lawsuits based on the staged collisions. The key individuals involved included Cornelius Garrison, who began cooperating with the federal government in 2019 and was subsequently murdered on September 22, 2020.
FACTS
In United States Of America v. Ryan Harris, et al., CRIMINAL ACTION No. 24-105, United States District Court, E.D. Louisiana (July 25, 2025) the USCA dealt with motions to sever some defendants from the massive and admittedly complex case. There are 11 defendants charged with a multi-year conspiracy involving ...
Is Injury in the Course of Self-Defense an Occurrence?
Post 5171
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When There is no Accident the Intentional Acts Exclusion is Irrelevant
The case involves a tragic incident where Kimberly Mollicone was killed during a gunfight between her husband, Matthew Mollicone, and Daniele Giannone. The central issue is whether Giannone’s actions, taken in self-defense, are covered under his State Farm homeowner’s insurance policy.
In State Farm Fire And Casualty Company v. Daniele Giuseppe Giannone; Heidi C. Aull, personal representative for the estate of Kimberly Ann Mollicone, Nos. 24-1264, 24-1265, United States Court of Appeals, Sixth Circuit (August 5, 2025) resolved the dispute.
THE INSURANCE COVERAGE
Although rare in insurance contracts the policy in question provides coverage for the insured’s liability to third parties who are injured ...
Rulings on Motions Reduced the Issues to be Presented at Trial
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CASE OVERVIEW
In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.
FACTS
Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.
Prior to trial Bernier had three remaining claims against State Farm:
1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.
Both Bernier and State Farm dispositive motions before ...
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 ...
