Dufour v. Progressive Classic Ins. Co.Annotate this Case
Plaintiff, the insured of Dairyland, sustained bodily injury and property damage while operating his motorcycle. After paying plaintiff all proceeds to which he was entitled under the Dairyland policy, and after plaintiff had settled with the tortfeasor's insurer, Dairyland sought and obtained subrogation from the tortfeasor's insurer for the property damages that it previously paid to plaintiff. Plaintiff then demanded Dairyland pay him the funds it obtained on its subrogation claim. When Dairyland refused, plaintiff filed suit for breach of contract and bad faith. The court concluded that the made whole doctrine does not apply to preclude Dairyland from retaining the funds it received from its subrogation claim because the equities favor Dairyland: (1) Dairyland fully paid plaintiff all he bargained for under his Dairyland policy, which included the policy's limits for bodily injury and 100% of plaintiff's property damage; (2) plaintiff had priority in settling with the tortfeasor's insurer; and (3) if Dairyland had not proceeded on its subrogation claim, plaintiff would have had no access to additional funds from the tortfeasor's insurer. The court also concluded that Dairyland did not act in bad faith. Accordingly, the court reversed the court of appeals decision in all respects.