943 N.W.2d 513
Wis.2020Background:
- Emer's Camper Corral ("Camper Corral") believed its 2013–2014 garage policy had a $1,000 per-camper hail deductible with a $5,000 aggregate; agent Michael Alderman actually placed a policy with a $5,000 per-camper deductible and no aggregate limit.
- On September 3, 2014, a hailstorm damaged 25 campers; Camper Corral faced a $125,000 aggregate deductible instead of the $5,000 it thought it had, and sued Alderman for negligent procurement seeking the difference (~$120,000).
- At trial, Camper Corral’s expert (whose deposition was read) concluded Camper Corral was likely uninsurable for the $1,000/$5,000 terms given its prior claims history; the circuit court granted a directed verdict for Alderman for lack of causation.
- The court of appeals affirmed; Wisconsin Supreme Court granted review to decide whether commercial availability alone establishes causation or whether the plaintiff must show the policy was available to that particular insured.
- The Supreme Court held that commercial availability alone is insufficient: the insured must prove that a policy with the requested terms would have been available to that insured (i.e., the insured was actually insurable on those terms); the Court also found Camper Corral produced no evidence under the reliance theory to show it would have mitigated exposure.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether proof of mere commercial availability of requested policy terms suffices to establish causation in negligent procurement of insurance | Commercial availability of the policy terms in the market is enough to show causation | Plaintiff must show a particular insurer would have written the requested terms for that plaintiff (insurability) | Held: Commercial availability alone is insufficient; plaintiff must prove the policy was available to the particular insured (insurability) |
| Whether detrimental reliance (misrepresentation by agent) can establish causation without proving insurability | Reliance on agent’s representation could show plaintiff would have changed behavior to avoid loss, so causation can be shown without proving insurability | No evidence plaintiff actually would have mitigated exposure, so reliance theory fails here | Held: Reliance theory remains recognized in principle, but plaintiff offered no evidence she would have changed behavior, so causation was not established on this record |
| Which party bears burden to prove non-availability/uninsurability of requested coverage | Plaintiff: once commercial availability shown, burden should shift to defendant/insurer to prove plaintiff was uninsurable | Defendant: plaintiff must prove each element of negligence, including that plaintiff would have obtained the better policy | Held: Court rejects shifting presumption; plaintiff bears burden to prove the policy would have been available to that insured |
| Whether circuit court improperly relied on materials outside the record / whether alternate contract/misrepresentation claims were preserved | Plaintiff: circuit court’s decision was effectively summary judgment and alternate theories (benefit-of-the-bargain, breach, strict responsibility misrep.) should be considered | Defendant: causation defect controlled disposition; alternate theories not raised in petition for review and circuit court applied directed-verdict standard correctly | Held: Supreme Court declined to address alternate theories (forfeited/not presented in petition); affirmed directed verdict on causation grounds |
Key Cases Cited
- Baumeister v. Automated Products, Inc., 277 Wis. 2d 21 (Wis. 2004) (adopts substantial-factor test for causation)
- Beacon Bowl, Inc. v. Wisconsin Elec. Power Co., 176 Wis. 2d 740 (Wis. Ct. App. 1993) (harm that would have occurred anyway does not establish causation)
- Wallace v. Metropolitan Life Ins. Co., 212 Wis. 346 (Wis. 1933) (causation/damages require showing insured could have obtained other insurance)
- Melin v. Johnson, 387 N.W.2d 230 (Minn. Ct. App. 1986) (insurability to the particular plaintiff is required to establish negligent procurement causation)
- United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488 (4th Cir. 1998) (under Maryland law, case law shifting burden to insurer on nonavailability defense discussed)
- Tri-Town Marine, Inc. v. J.C. Milliken Agency, Inc., 924 A.2d 1066 (Me. 2007) (commercial availability alone insufficient; must show better representation would have produced a better outcome)
- Runia v. Marguth Agency, Inc., 437 N.W.2d 45 (Minn. 1989) (detrimental reliance on agent’s misrepresentation can permit recovery because plaintiffs could have avoided the uninsured activity)