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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