DeChant v. Monarch Life Insurance Co
In DeChant v. Monarch Life Insurance Co., 200 Wis. 2d 559, 547 N.W.2d 592 (1996), Monarch Life acted in bad faith when it refused to provide DeChant with benefits to which he was entitled under his disability insurance policy. See id. at 577.
DeChant claimed he was entitled to actual attorney's fees because he was forced to retain an attorney to obtain the benefits owed under his policy, but which were withheld in bad faith. See id. at 574. Monarch replied that the recovery of attorney's fees was foreclosed by the American Rule that parties to litigation are generally responsible for their own attorney's fees unless recovery is expressly allowed by either contract or statute. See id. at 575.
The Court ruled that because the claim for fees was for an economic loss proximately caused by the tort, there could be recovery. See 200 Wis. 2d at 575-77.
In reaching its decision, however, the court recognized the subtle but significant difference between attorney's fees attributable to bringing a lawsuit and those recoverable as damages resulting from a tort. See id.