E. D. Kranzush, Special Administrator of the Estate of Dorothy Gerlikovski, Deceased…

Summary

The Wisconsin Supreme Court held that a tort victim cannot maintain a common-law bad-faith action against the tortfeasor's liability insurer for refusing to settle or negotiate before the insured's liability has been established. The insurer's good-faith settlement duty arises from the insurance contract and runs to the insured, while the third-party claimant is an adversary and stranger to that contractual relationship; neither the insurance statutes nor administrative rule created an implied private remedy. Justices Heffernan and Abrahamson concurred in the result but questioned or rejected the majority's categorical reasoning against recognizing such a tort under proper circumstances.