Blake v. Progressive Northern Ins., No. 164-9-15 Oecv (Tomasi, J., Feb. 4, 2016)
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy
of the text and the accompanying data included in the Vermont trial court opinion database is not guaranteed.]


                                          STATE OF VERMONT
SUPERIOR COURT                                                                       CIVIL DIVISION
Orange Unit                                                                 Docket No. 164-9-15 Oecv

Christopher Blake,
       Plaintiff

         v.

Progressive Northern Insurance,
      Defendant


 Opinion and Order on Defendant’s Motion For Partial Judgment on the Pleadings

      Defendant Progressive Northern Insurance Company moves for partial
judgment on the pleadings as to Plaintiff Christopher Blake’s claim for breach of the
Consumer Fraud Act (CFA), 9 V.S.A. §§ 2451-63. The Plaintiff is represented by
Michael Hanley, Esq. The Defendant is represented by Daniel Burchard, Esq. The
Court makes the following determinations.

                                                   Discussion

       A motion for judgment on the pleadings under Vt. R. Civ. P. 12(c) is judged
under the same standard as a Rule 12(b)(6) motion to dismiss. Irish Lesbian and
Gay Org. v. Giuliani, 143 F.3d 638, 644 (2d Cir. 1998). The “complaint should not
be dismissed ‘unless it appears beyond doubt that the plaintiff can prove no set of
facts in support of his claim which would entitle him to relief.’” George C. Frey
Ready-Mixed Concrete, Inc. v. Pine Hill Concrete Mix Corp., 554 F.2d 551, 553 (2d
Cir. 1977) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957), which, though no
longer followed under federal law, still sets forth the standard that governs motions
to dismiss under Vermont law).

       In analyzing a Rule 12(c) motion, the Court takes as true “all well-pleaded
factual allegations in the nonmovant’s pleadings, including all reasonable
inferences to be drawn from them.” Goodby v. Vetpharm, Inc., 2009 VT 52, ¶ 3, 186
Vt. 63, 66 (internal quotation omitted); see Bressler v. Kessler, 139 Vt. 401, 403
(1981). Further, such a motion “is designed to provide a means of disposing of cases
when the material facts are not in dispute … and only has utility when all material
allegations of fact are admitted or not controverted in the pleadings and only
questions of law remain to be decided by the district court.” 5C Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure § 1367, at 206–08 (3d
ed. 2004).

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Blake v. Progressive Northern Ins., No. 164-9-15 Oecv (Tomasi, J., Feb. 4, 2016)
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy
of the text and the accompanying data included in the Vermont trial court opinion database is not guaranteed.]



      Plaintiff’s complaint alleges that the Defendant promised the Plaintiff that it
would pay for injuries caused by an underinsured motorist, that the Defendant
refused to follow through on the promise, that the Plaintiff relied on the Defendant’s
promise to pay, that the Defendant had no basis for refusing, and that the
Defendant knew or should have known that it had no basis for refusing. The
Plaintiff alleges that such conduct is a violation of Vermont’s CFA, 9 V.S.A.
§ 2451ff.

       Relying on Wilder v. Aetna Life & Cas. Ins. Co., 140 Vt. 16 (1981), the
Defendant argues that the CFA does not cover insurance transactions as a matter of
law. In the alternative, based on Greene v. Stevens Gas Service, 2004 VT 67, 177 Vt.
90, the Defendant argues the Plaintiff’s cause of action is merely a coverage dispute,
and the CFA does apply to such matters.

       As to the first contention, the Court concludes that Wilder no longer controls
the question presented. Wilder involved an insurance settlement between a
plaintiff and the tortfeasor’s insurer, which had withheld a portion of a settlement
as a setoff against mistakenly paid funds. At the time, the CFA defined goods as
“tangible personal chattel” and services as “work, labor and services . . . in
connection with the delivery, installation, servicing, repair or improvement of
goods.” The Supreme Court held that the sale of insurance does not amount to “a
contract for goods or services within the meaning of 9 V.S.A. § 2451.” Wilder, 140
Vt. at 18.

       In 1985, the Legislature amended the CFA, significantly modifying the
provisions at issue in Wilder. As currently enacted, 9 V.S.A. § 2451a defines “goods”
or “services” to include “any objects, wares, goods, commodities, work, labor,
intangibles, courses of instruction or training, securities, bonds, debentures, stocks,
real estate, or other property or services of any kind.” In Greene, the Supreme
Court acknowledged the legislative change to the CFA but did not rule on whether
Wilder remains good law. Greene, 2004 VT 67, ¶¶ 15-17, 177 Vt. at 97-98.

       This Court now concludes that it is not. The 1985 amendments to the CFA
fully undermine the basis for the Supreme Court’s ruling in Wilder. Given the
Legislature’s significant expansion of the definition of matters covered by the CFA –
from “delivery, installation, servicing, repair or improvement” of “tangible personal
chattel” to “intangibles” and “property and services of any kind” – this Court
believes that the CFA now covers transactions involving the sale of insurance.
Insurance likely constitutes an intangible, see Showpiece Homes Corp. v. Assurance
Co. of America, 38 P.3d 47, 57 (Colo. 2001), and, at a minimum, meets the catch-all
provision “other property or services of any kind.”

       Other courts have also concluded that Wilder is no longer good law, see, e.g.,
Bertelson v. Union Mut. Fire Ins. Co., No. 834-04 Cncv (Vt. Super. Ct. Nov. 22,
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Blake v. Progressive Northern Ins., No. 164-9-15 Oecv (Tomasi, J., Feb. 4, 2016)
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy
of the text and the accompanying data included in the Vermont trial court opinion database is not guaranteed.]
2004), available at: http://www.vermontjudiciary.org/tcdecisionscvl/2005-8-15-5.pdf;
and the Vermont Attorney General has filed an amicus curiae brief in the Vermont
Supreme Court taking that same position, Greene, 2004 VT 67, ¶ 10, 177 Vt. at 95.
At least one court has gone the other way, however. See Nautilus Ins. Co. v.
Loomis, No. 194-9-10 Oecv, 2012 WL 1144698 (Vt. Super. Ct. Feb. 29, 2012).

       In this Court’s view, in light of the broad and plain language used by the
Legislature; the liberal construction that is to be afforded the CFA, Elkins v.
Microsoft Corp., 174 Vt. 328, 331 (2002); and the additional analyses set out in the
amicus brief and the Bertelson court, the sale of insurance falls within the
provisions of the CFA. To the extent Defendant’s motion for judgment on the
pleadings is based on the rule set forth in Wilder, it is denied.

       As to the Defendant’s second argument, the Court concludes that the
Defendant is not entitled to judgment on the pleadings under Greene. Defendant
correctly points out that the Greene Court concluded that simple coverage disputes
between insurers and insureds could not fall within the proscriptions of the CFA.
Greene, 2004 VT 67, ¶¶ 15-16, 177 Vt. at 97-98. Instead, to prove a CFA claim, an
insured must establish conduct approximating bad faith on the part of the insurer.
Id. In his opposition, Plaintiff in this action appears to acknowledge and accept
that burden.

       To establish bad faith on the part of an insurer, a party must show that “(1)
the insurance company had no reasonable basis to deny benefits of the policy, and
(2) the company knew or recklessly disregarded the fact that no reasonable basis
existed for denying the claim.” Bushey v. Allstate Ins. Co., 164 Vt. 399, 402 (1995).

       Here, the Defendant appears to contend that, by not including more specific
factual allegations, the complaint is somehow defective. The Court disagrees.
Vermont continues to require only notice pleading, and, to state a cause of action, a
plaintiff need only give a defendant fair notice of the claim being brought against
him. Vt. R. Civ. P. 8; Bock v. Gold, 2008 VT 81, ¶ 5, 184 Vt. 575, 576.

       In this case, the complaint does just that. As noted above, the complaint
alleges that the Defendant promised that it would pay for injuries caused by an
underinsured motorist, the Defendant refused to follow through on the promise, the
Plaintiff relied on the Defendant’s promise to pay, the Defendant had no basis for
refusing, and it knew or should have known that it had no basis for refusing.

       The Court is not presently permitted to test Plaintiff’s evidence or to judge
whether there any actual facts that would support the allegations of the complaint
or establish bad faith. At this stage, the Court’s only role is to determine whether
the complaint states a claim for violation of the CFA. The Court finds that it does.



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Blake v. Progressive Northern Ins., No. 164-9-15 Oecv (Tomasi, J., Feb. 4, 2016)
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy
of the text and the accompanying data included in the Vermont trial court opinion database is not guaranteed.]




                                                   Conclusion

      In light of the foregoing, the Defendant’s motion for partial judgment on the
pleadings is denied.

         Electronically signed on February 04, 2016 at 01:53 PM pursuant to V.R.E.F.
7(d).


                                                               ________________________
                                                               Timothy B. Tomasi
                                                               Superior Court Judge




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