Wisconsin Bad Faith Insurance Complaint

COMPLAINT FOR BREACH OF CONTRACT, COMMON-LAW BAD FAITH, AND STATUTORY INTEREST — WISCONSIN

TABLE OF CONTENTS

1. Caption
2. Introduction
3. Parties, Jurisdiction, and Venue
4. Factual Allegations
5. Count I — Breach of Insurance Contract
6. Count II — Common-Law Bad Faith (Anderson Tort)
7. Count III — Statutory Interest Under Wis. Stat. § 628.46
8. Count IV — Declaratory Judgment
9. Damages
10. Prayer for Relief
11. Demand for Trial by Jury
12. Signature and Verification
13. Wisconsin Practice Notes
14. Sources and References

1. CAPTION

STATE OF WISCONSIN

CIRCUIT COURT — [COUNTY NAME] COUNTY

Case No. [________________________________]

Case Code: [_____] (e.g., 30303 Money Judgment; 30301 Other Contract)

COMPLAINT — BREACH OF CONTRACT, COMMON-LAW BAD FAITH, AND § 628.46 INTEREST

2. INTRODUCTION

Plaintiff [PLAINTIFF NAME] brings this action against Defendant [INSURER NAME] ("[INSURER SHORT NAME]") for (i) breach of an insurance contract, (ii) the common-law tort of bad faith handling of a first-party insurance claim recognized in Anderson v. Continental Insurance Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978), (iii) statutory interest under Wis. Stat. § 628.46 for failure to pay a covered claim within thirty (30) days, and (iv) declaratory relief. In support, Plaintiff alleges:

3. PARTIES, JURISDICTION, AND VENUE

3.1. Plaintiff [PLAINTIFF NAME] is an adult individual residing in [COUNTY] County, Wisconsin.

3.2. Defendant [INSURER NAME] is an insurance company organized under the laws of [STATE] and authorized to transact insurance business in Wisconsin pursuant to a certificate of authority issued by the Wisconsin Office of the Commissioner of Insurance ("OCI"). It may be served through its registered agent at [REGISTERED AGENT ADDRESS].

3.3. This Court has subject-matter jurisdiction over this action pursuant to Wis. Stat. § 753.03, and personal jurisdiction over Defendant under Wis. Stat. § 801.05 because Defendant transacts business in Wisconsin and entered into the insurance contract at issue with a Wisconsin resident.

3.4. The amount in controversy exceeds $[AMOUNT] exclusive of interest and costs.

3.5. Venue is proper in [COUNTY] County under Wis. Stat. § 801.50 because the events giving rise to this action occurred in this county and/or Plaintiff resides in this county.

4. FACTUAL ALLEGATIONS

A. The Policy

4.1. On or about [POLICY EFFECTIVE DATE], Plaintiff and Defendant entered into a written insurance contract bearing Policy No. [POLICY NUMBER] (the "Policy") covering [DESCRIBE COVERAGE — e.g., the dwelling and personal property at the insured premises; uninsured motorist; disability income; etc.]. A true and correct copy of the Policy is attached as Exhibit A.

4.2. Plaintiff paid all premiums when due, complied with all conditions precedent, and the Policy was in full force and effect at all relevant times.

B. The Loss

4.3. On or about [DATE OF LOSS], Plaintiff sustained a covered loss as follows: [DESCRIBE COVERED EVENT — e.g., fire, theft, collision, disability, death of insured, hail damage, etc.] (the "Loss").

4.4. The Loss is a covered cause of loss under the Policy and is not subject to any applicable exclusion.

4.5. The full value of the covered Loss is $[AMOUNT], calculated as [BASIS — replacement cost / actual cash value / scheduled benefit / etc.].

C. Notice and Proof of Loss

4.6. On [DATE], Plaintiff timely notified Defendant of the Loss in writing and submitted a sworn proof of loss in accordance with the Policy. Plaintiff fully cooperated with Defendant's investigation, including by [describe — examined under oath, produced records, attended inspections].

4.7. By no later than [DATE], Defendant received written notice of (i) the existence of a covered loss and (ii) the amount of loss within the meaning of Wis. Stat. § 628.46.

D. Defendant's Handling of the Claim

4.8. Despite undisputed coverage and adequate proof, Defendant [denied / underpaid / unreasonably delayed] the claim by letter dated [DATE] (the "Denial"). A true and correct copy of the Denial is attached as Exhibit B.

4.9. The stated grounds for the Denial were: [QUOTE INSURER'S STATED REASONS].

4.10. Defendant's stated grounds lacked any reasonable basis because [FACTUAL EXPLANATION — e.g., the cited exclusion does not apply; the insurer ignored its own adjuster's report; the insurer relied on a sham IME; the insurer disregarded undisputed documentation; the insurer invented a coverage requirement not contained in the Policy].

4.11. On information and belief, Defendant's conduct included one or more of the following:

• Failing to conduct a reasonable investigation before denying the claim;
• Misrepresenting policy provisions or coverage facts to Plaintiff;
• Refusing to pay an amount it knew or should have known was owed;
• Compelling Plaintiff to institute litigation by offering substantially less than amounts ultimately recoverable;
• Relying on a non-credible expert or "results-oriented" review;
• Setting reserves grossly inconsistent with the position communicated to the insured;
• Failing to provide a reasonable explanation of the basis for denial;
• Deliberately delaying payment to leverage settlement at a discount.

4.12. Defendant knew, or recklessly disregarded the fact, that no reasonable basis existed to deny or delay payment of the claim.

4.13. More than thirty (30) days have elapsed since Defendant received written notice of the covered Loss and the amount of loss, and Defendant has failed to pay the claim. The claim is overdue within the meaning of Wis. Stat. § 628.46.

5. COUNT I — BREACH OF INSURANCE CONTRACT

5.1. Plaintiff realleges and incorporates Paragraphs 3.1 through 4.13.

5.2. The Policy is a valid and enforceable contract supported by consideration.

5.3. Plaintiff performed all conditions precedent or such conditions have been waived or excused.

5.4. Defendant materially breached the Policy by [failing to pay covered benefits / refusing to defend / failing to indemnify / underpaying actual cash value].

5.5. As a direct and proximate result, Plaintiff has sustained damages in an amount not less than $[AMOUNT], plus consequential damages, prejudgment interest, costs, and such other relief as the Court deems just.

6. COUNT II — COMMON-LAW BAD FAITH (ANDERSON TORT)

6.1. Plaintiff realleges and incorporates Paragraphs 3.1 through 5.5.

6.2. Wisconsin recognizes a common-law tort cause of action against a first-party insurer that, in bad faith, refuses to honor a claim of its insured. Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978).

6.3. To prevail on a bad-faith claim, the insured must establish (i) the absence of a reasonable basis for denying or delaying benefits under the policy and (ii) the insurer's knowledge or reckless disregard of the lack of a reasonable basis. Id. at 691; Wis JI-Civil 2761.

6.4. As alleged above, Defendant breached the Policy and, in doing so, denied or delayed Plaintiff's claim without any reasonable basis. The grounds cited by Defendant were a pretext and were not the product of a fair, balanced, and thorough investigation.

6.5. Defendant knew, or recklessly disregarded, the fact that no reasonable basis existed to deny or delay the claim. Defendant's conduct was undertaken with intentional disregard of Plaintiff's rights or with such reckless disregard as to constitute the legal equivalent thereof.

6.6. Plaintiff has satisfied the Brethorst prerequisite by pleading an underlying breach of contract in Count I and by alleging facts that establish, or will permit Plaintiff to establish, that breach. Brethorst v. Allstate Prop. & Cas. Ins. Co., 2011 WI 41, 334 Wis. 2d 23.

6.7. As a direct and proximate result of Defendant's bad faith, Plaintiff has suffered:

• Compensatory damages including consequential economic loss, attorneys' fees incurred in obtaining policy benefits (under the DeChant rule), emotional distress, loss of credit and financial hardship, and other foreseeable harm;
• Punitive damages pursuant to Wis. Stat. § 895.043, the conduct having been intentional or in reckless disregard of Plaintiff's rights.

7. COUNT III — STATUTORY INTEREST UNDER WIS. STAT. § 628.46

7.1. Plaintiff realleges and incorporates Paragraphs 3.1 through 6.7.

7.2. Wis. Stat. § 628.46(1) provides: "Unless otherwise provided by law, an insurer shall promptly pay every insurance claim. A claim shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of the loss. ... All overdue payments shall bear simple interest at the rate of 12 percent per year."

7.3. Defendant received written notice of the fact of a covered loss and of the amount of the loss no later than [DATE].

7.4. More than thirty (30) days have elapsed since that notice, and Defendant has failed to pay the claim.

7.5. Defendant has not had reasonable proof to establish that it is not responsible for the payment within the meaning of § 628.46(2).

7.6. Plaintiff is entitled to simple interest at twelve percent (12%) per annum on the overdue amount from [DATE 30 DAYS AFTER NOTICE] until paid in full.

8. COUNT IV — DECLARATORY JUDGMENT

8.1. Plaintiff realleges and incorporates Paragraphs 3.1 through 7.6.

8.2. An actual, justiciable controversy exists between the parties as to the existence, scope, and amount of coverage under the Policy.

8.3. Pursuant to Wis. Stat. § 806.04 (Wisconsin Uniform Declaratory Judgments Act), Plaintiff requests that the Court declare:

• (a) the Loss is a covered loss under the Policy;
• (b) Defendant is obligated to pay benefits in the amount of $[AMOUNT] plus § 628.46 interest;
• (c) Defendant is not entitled to assert the exclusions or defenses asserted in the Denial; and
• (d) such further relief as the Court deems necessary.

9. DAMAGES

9.1. Contract damages (Count I): unpaid policy benefits of not less than $[AMOUNT], plus consequential damages.

9.2. Bad-faith compensatory damages (Count II): all damages proximately caused by Defendant's bad-faith conduct, including but not limited to:

• Economic loss flowing from delayed/denied payment (additional living expense, foreclosure costs, business interruption, secondary damage from non-mitigation);
• Attorneys' fees incurred in establishing the right to policy benefits, recoverable as compensatory damages under DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559, 547 N.W.2d 592 (1996);
• Emotional distress, anxiety, and mental anguish;
• Loss of credit, lender harassment, and reputational harm.

9.3. Punitive damages (Count II): pursuant to Wis. Stat. § 895.043, in an amount not exceeding the greater of two times compensatory damages or $200,000, to punish Defendant and deter similar conduct.

9.4. Statutory interest (Count III): twelve percent (12%) simple interest under Wis. Stat. § 628.46 from [DATE] through the date of payment.

9.5. Costs and disbursements under Wis. Stat. § 814.04.

9.6. Pre- and post-judgment interest as authorized by Wis. Stat. §§ 814.04(4), 815.05(8).

10. PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully demands judgment against Defendant as follows:

• A. On Count I (Breach of Contract): compensatory damages of not less than $[AMOUNT], plus consequential damages and prejudgment interest;
• B. On Count II (Common-Law Bad Faith): compensatory damages, attorneys' fees as compensatory damages under DeChant, and punitive damages under Wis. Stat. § 895.043 in the maximum amount allowed by law;
• C. On Count III (§ 628.46 Interest): twelve percent (12%) simple interest on all overdue payments from the 31st day after notice until paid;
• D. On Count IV (Declaratory Judgment): a declaration that the Loss is covered and Defendant is obligated to pay benefits as set forth above;
• E. Costs and disbursements under Wis. Stat. § 814.04;
• F. Pre- and post-judgment interest at the maximum lawful rate; and
• G. Such other and further relief as the Court deems just and equitable.

11. DEMAND FOR TRIAL BY JURY

Plaintiff hereby demands a trial by twelve (12) jurors on all issues so triable as a matter of right pursuant to Wis. Stat. § 805.01 and Article I, § 5 of the Wisconsin Constitution. The required jury fee is tendered with this Complaint.

12. SIGNATURE AND VERIFICATION

Dated this [____] day of [_______________], 20[____].

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], State Bar of Wisconsin No. [####]

Attorneys for Plaintiff

[STREET ADDRESS]

[CITY, WI ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

VERIFICATION

STATE OF WISCONSIN

COUNTY OF [COUNTY]

I, [PLAINTIFF NAME], being first duly sworn on oath, depose and state that I am the Plaintiff in the foregoing action; that I have read the foregoing Complaint and know the contents thereof; and that the same is true to my own knowledge except as to those matters stated upon information and belief, and as to those matters, I believe them to be true.

[________________________________]

[PLAINTIFF NAME]

Subscribed and sworn to before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public, State of Wisconsin

(My Commission Expires: [_______________])

13. WISCONSIN PRACTICE NOTES

• Anderson tort. Wisconsin was an early national leader in recognizing first-party bad faith as an independent tort. Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978). The two-part test is (i) absence of a reasonable basis to deny benefits and (ii) the insurer's knowledge or reckless disregard of that absence. Wis JI-Civil 2761.
• "Fairly debatable" standard. If coverage is "fairly debatable" — i.e., a reasonable insurer could deny on the same facts — the insurer is not in bad faith even if ultimately wrong on coverage. The insured's burden is therefore to prove the denial was outside the realm of debate.
• Brethorst prerequisite. Brethorst v. Allstate Prop. & Cas. Ins. Co., 2011 WI 41, 334 Wis. 2d 23, requires the insured to plead and proffer evidence of an underlying breach of contract before discovery may proceed on a first-party bad-faith claim. Always plead breach of contract as Count I.
• No private right of action under § 628.34. NAACP v. American Family Mut. Ins. Co., 978 F.2d 287 (7th Cir. 1992). The Unfair Marketing Practices statute is enforced exclusively by OCI; do not plead it as a stand-alone cause of action.
• Section 628.46 12% simple interest. A claim is "overdue" thirty (30) days after the insurer receives written notice of (a) a covered loss and (b) the amount of loss. The 12% rate is SIMPLE, not compound. Section 628.46 does not apply to settlement payments under a settled disputed claim — only to insurance "claims" themselves. Singler v. Zurich Am. Ins. Co.; Kontowicz v. American Standard Ins. Co.
• Punitive damages cap (§ 895.043(6)). Punitive damages may not exceed the greater of two (2) times compensatory damages or $200,000. The cap does not apply where the defendant's drunken operation of a vehicle caused the harm.
• DeChant attorneys' fees. Attorneys' fees incurred in establishing the insured's right to policy benefits are recoverable as compensatory damages on a bad-faith claim. DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559, 547 N.W.2d 592 (1996). Fees incurred prosecuting the bad-faith count itself are NOT recoverable absent contractual or statutory authority.
• Statute of limitations. Contract: 6 years (Wis. Stat. § 893.43). Bad-faith tort: practitioners commonly apply the 6-year contract or 3-year intentional-tort limitation depending on theory; Wisconsin courts have analyzed bad faith under multiple periods — confirm before filing.
• ERISA preemption. Where the insurance is part of an employer-sponsored welfare benefit plan, ERISA preempts the Anderson tort. 29 U.S.C. § 1144(a). Use the disability-appeal template for ERISA matters; do not use this template.
• Removal risk. Insurer defendants frequently remove diverse cases. Consider naming a non-diverse adjuster (only where state law permits direct claims against the adjuster) or carefully pleading a sum certain under $75,000 if remand is desired.
• Reserves and bifurcation. Insurers routinely move to bifurcate the bad-faith count and stay discovery until the contract claim is resolved. Dahmen v. Am. Family Mut. Ins. Co., 2001 WI App 198. Address bifurcation/sequencing early.

14. SOURCES AND REFERENCES

• Wis. Stat. § 628.46 (Timely payment of claims) — https://docs.legis.wisconsin.gov/document/statutes/628.46
• Wis. Stat. § 628.34 (Unfair marketing practices) — https://docs.legis.wisconsin.gov/document/statutes/628.34
• Wis. Stat. § 895.043 (Punitive damages) — https://docs.legis.wisconsin.gov/document/statutes/895.043
• Wis. Stat. ch. 802 (Civil Procedure) — https://docs.legis.wisconsin.gov/statutes/statutes/802
• Wis. Stat. § 806.04 (Uniform Declaratory Judgments Act) — https://docs.legis.wisconsin.gov/document/statutes/806.04
• Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978) — https://law.justia.com/cases/wisconsin/supreme-court/1978/76-242-7.html
• Brethorst v. Allstate Prop. & Cas. Ins. Co., 2011 WI 41, 334 Wis. 2d 23 — https://www.wicourts.gov/sc/opinion/DisplayDocument.pdf?content=pdf&seqNo=65844
• DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559, 547 N.W.2d 592 (1996)
• Wis JI-Civil 2761 (Bad Faith — Insurer's Refusal to Pay) — https://wilawlibrary.gov/jury/files/civil/2761.pdf
• Wisconsin Office of the Commissioner of Insurance — https://oci.wi.gov/
• NAACP v. American Family Mut. Ins. Co., 978 F.2d 287 (7th Cir. 1992)

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in Wisconsin must review and customize this document before filing. Statutes, case law, and court rules change; verify all authorities before use.