Assuming that Coverage Exists Does not Make a Contract

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Barry A. Lindsten appealed a circuit court order dismissing his action, Barry A. Lindsten v. Astronautics and Hartford Fire Insurance Company, , No. 2021AP115, Court of Appeals of Wisconsin, District I (August 16, 2022) the Court of Appeals resolved the issues raised by Lindsten.

BACKGROUND

On August 13, 2016, in Milwaukee County, a motor vehicle struck a rental vehicle driven by Lindsten.

Lindsten alleged that Astronautics failed to provide underinsured motorist (UIM) coverage.

Lindsten raised two causes of action against Astronautics: (1) breach of an oral contract; and (2) reformation. According to Lindsten, on or prior to the date of the accident, he was informed by Astronautics’ travel administrator that Astronautics “would provide full insurance coverage” and “would take care of all his insurance needs on rental cars.” Based on prior travel experience with previous employers, Lindsten assumed this included UIM coverage.

Both Astronautics and Robertson Ryan filed a motion to dismiss. Astronautics contended that the allegation that Astronautics agreed to take care of all of Lindsten’s insurance needs was not specific enough to cover an offer to provide UIM coverage, thus, no contract was created. Further, Astronautics contended that only written contracts could be reformed. The circuit court granted the motions to dismiss.

DISCUSSION

The court will accept as true the factual allegations in the complaint but will not accept any legal conclusions. Factual allegations must be more than labels and conclusions or a formulaic recitation of the elements of a cause of action.

The trial court’s decision was affirmed.

ZALMA OPINION

A person cannot create a contract without being able to prove that there was an offer, acceptance of the offer, and payment of consideration. Lindsten claimed that there was an oral contract to provide him all insurance he needed. Even if there was an offer and acceptance of that offer it was too vague to make sense or to be enforceable. Insurance is a contract between the insurer and the insured. Lindsten was neither an insurer nor was he an insured. He was the employee of the insured.

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