WI Supreme Court hears bad faith case.

• Date: 11 December 2002

Byline: Tony Anderson

The state Supreme Court is considering whether it is appropriate to preserve $3.5 million in punitive damages on a case that the District II Court of Appeals has remanded to the circuit court for a trial on bad faith.

Although the court of appeals reversed the circuit court's summary judgment that Tower Insurance Co. had acted in bad faith regarding a claim by Trinity Evangelical Lutheran Church and School, the appellate court also determined that if a trial does show bad faith, the existing punitive damage award was appropriate.

During Dec. 4 oral arguments, an attorney for Tower told the Supreme Court that the insurance company had a right to a full trial on the bad faith issue. He also indicated the punitive damages award was excessive and that the insurer had the right to a new determination by the jury hearing the bad faith case.

Question of Coverage

The case arose from a 1995 accident involving a Trinity teacher who was transporting students and collided with another car. The school does not own any vehicles, so teachers transport students in their own vehicles. However, the school provides insurance coverage for those trips.

When the insurance policy came up for renewal one year earlier, Trinity obtained quotes from a variety of insurance carriers through Jim Rodrian, an independent insurance agent. One of the companies Rodrian approached was Tower Insurance Co.

Rodrian told the Tower underwriter that Trinity wanted "hired and non-owned" automobile...