Supreme Court Argument in 'Brethorst v. Allstate' September 7, 2010
This certification ['Brethorst v. Allstate Property & Casualty
Ins.' (2008AP2595)] asks the Supreme Court to review the
required legal procedures involved in settling a dispute between
an insurance company and a client over an uninsured motorist
claim.
Some background: The plaintiff, Wanda Brethorst, was a passenger
in a vehicle operated by her husband when an uninsured motorist
pulled out onto the highway in front of the Brethorst vehicle
and struck it. Brethorst tendered a claim for her injuries to
her auto liability insurer, Allstate, under the policy's
uninsured motorist (UM) coverage. The parties tried to settle
the matter but negotiations broke down. Brethorst sued Allstate
for claims arising out of her UM coverage and for bad faith in
handling her UM claim.
The trial court denied Allstate’s motion to bifurcate the bad
faith claim from her claim for benefits and to stay proceedings
until the claim for benefits could be resolved. Brethorst
opposed the motion, asserting that the only cause of action set
forth in her complaint was one for bad faith and that no claim
to bifurcate or stay could exist.
Following a hearing, the trial court agreed with Brethorst and
denied Allstate's motion to bifurcate and stay. Allstate
petitioned for leave to appeal. The Court of Appeals granted
Allstate's petition, leading to this certification.
The District II Court of Appeals asks the Supreme Court to
review the following issues:
Whether a finding of wrongful denial of benefits is a
condition precedent to proceeding with discovery in a
first-party bad faith claim based on wrongful denial of
benefits?
In a first-party bad faith claim, if a finding of wrongful
denial of benefits is a condition precedent to proceeding
with bad faith discovery, does the trial court err if it
refuses to grant the insurance company's motion to
bifurcate the issues for discovery?
Do the same policy considerations that make it error for
the trial court to refuse a motion to bifurcate
simultaneous bad faith and breach of contract claims—
avoiding undue prejudice to the insurance company, avoiding
jury confusion and promoting settlement—make it error to
refuse a motion to bifurcate the same two issues when the
insured's only claim is bad faith?
From Racine County.
