Statutory Interest Imposed under Wis. Stat. 628.46 Is Not Applicable to Payment of Contractual Settlements of an Insurance Claim

Posted by Mark Budzinski | Jul 05, 2019 | 0 Comments

Last week, the Court of Appeals  in Singler v. Zurich American Insurance Company (2014AP391) found Wis. Stat. §628.46, the statute which imposes 12 percent annual interest if an insurer fails to pay a claim within 30 days, is not applicable to payment of contractual settlements of an insurance claim. The decision provides much needed clarity when statutory interest for non-payment of insurance claims can be imposed.

At the same time, the Court of Appeals upheld, under the facts of the case, that 30 days was a reasonable time for the insurer to pay the settlement amount, and remanded the case with directions that the insurer pay five percent interest, pursuant to Wis. Stat. §138.04.


This case arises from a motor vehicle accident on November 18, 2007 between the plaintiff, Robert Singler, and Zurich's insured, Jeffrey Maulick. Mr. Singler filed suit on August 18, 2010. Litigation was extended. The parties mediated in January 2012 to no avail. Zurich made two offers to settle the case, the first for $1.5 million and the second for $1.75 million, which Singler declined. At the final pre-trial on January 18, 2013, Zurich offered Singler $1.9 million, which Singler finally accepted.

Counsel for Singler and Zurich confirmed settlement on January 18, 2013, via a letter from Singler's counsel.  Significantly, the settlement agreement specified no deadline for payment. When Singler's counsel asked when he could expect payment, Zurich counsel responded, on January 25, 2013, that he anticipated it would take “at least a month” to get the check.

On February 28, only 38 days after settlement was reached, Singler moved the circuit court for an order requiring Zurich pay 12 percent interest on the settlement amount under Wis. Stat. 628.46.[1]

The circuit court granted Singler's motion, reasoning that Zurich was in the business of covering losses, and due to the protracted nature of litigation should have been prepared to make payment with some immediacy. [2] The court ordered Zurich to make payment with 12 percent interest from January 25th, only seven days after settlement was reached.

Consequently, Singler moved to amend the Court's order to pay 12 percent from 30 days after settlement was reached, in conformance with the statute, rather than seven days.  Zurich again disputed that §628.46 applied. The court granted Singler's motion to amend, but wrote in its decision that Wis. Stat. §628.46 did apply because the settlement “serves to liquidate the claim” and in its view of the statute, a reasonable time could be less than 30 days.[3] Zurich appealed.

Wis. Stat. §628.46 is not applicable to payment of contractual settlements of an insurance claim

The first issue before the Court of Appeals was the application of Wis. Stat. §628.46 to a mutually negotiated settlement amount of an insurance claim. The Court of Appeals reversed, stating:

What Singler fails to recognize, however, is that the interest allowed by WIS. STAT. § 628.46 is limited to situations where an insurer fails to pay an insurance claim within thirty days. Here, Zurich failed to pay a contractual settlement of an insurance claim within thirty days. Singler cites no authority for the proposition that § 628.46 can apply when an insurer fails to pay an amount required by a settlement agreement resolving a disputed claim, and we are not aware of any case applying the statute under those circumstances.[4]

Further, even if §628.46 applied, the appellate court disagreed that the settlement met the second element of the statute that “the amount of damages is in a sum certain amount.” [5] In this regard, the court of appeals found although Zurich agreed to pay Singler $1.9 million, it did not concede that the amount represented the actual amount of Singler's damages. Rather, the settlement amount reflected the parties' compromise. While the settlement was in a sum certain amount, Singler's damages were not.[6]

Lastly, the appellate court agreed Singler's interpretation of Wis. Stat.  § 628.46 was unreasonable, and would deny parties flexibility in settling insurance claims.[7]

30 Days May Be A Reasonable Time to Make Payment

The second issue for the Court of Appeals was whether the circuit court's imposition of 30-day time limit for payment was reasonable under the circumstances. The Court of Appeals agreed that the circuit court properly imposed a 30-day time limit.

There was no dispute that the settlement agreement specified no deadline for payment.[8] When a contract does not contain a time limit for performance, a reasonable time is implied.[9] What constitutes a reasonable time is a question of fact.

The Court of Appeals found ample support in the record, including the circuit court's reference to undisputed facts that Zurich had made two prior settlement offers, to uphold the imposition of the 30-day time limit.

An Insurer May Be Required to Pay Five Percent Interest on Unpaid Settlement Amounts

The third issue for the Court of Appeals was the imposition of five percent interest under Wis. Stat. §138. In this regard, the appellate court noted multiple Wisconsin cases supporting five percent interest on arbitration awards and compromise agreements. With this precedent, the appellate court remanded with directions that the circuit court recalculate the amount of interest using an annual interest rate of five percent.


The biggest lesson for defense counsel and our client is a case is not over when settlement is reached. Defense counsel and insurers need to work together to ensure settlement payments are issued in a timely manner, lest the insurer be exposed to additional interest. What is timely and “reasonable” depends on the specific facts of the case. As illustrated by the decision in Singler, the courts take into consideration that insurance companies are in the business of covering loss, and should take steps throughout litigation to get the ball rolling for payment to be made.

If you would like more information regarding Wis. Stat. §628.46 claims, please contact us at (920) 784-2280. 

[1] Wis. Stat. 628.46(1) (2011-2012) states: Unless otherwise provided by law, an insurer shall promptly pay every insurance claim. A claim shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of the loss. If such written notice is not furnished to the insurer as to the entire claim, any partial amount supported by written notice is overdue if not paid within 30 days after such written notice is furnished to the insurer. Any part or all of the remainder of the claim that is subsequently supported by written notice is overdue if not paid within 30 days after written notice is furnished to the insurer. Any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment, notwithstanding that written notice has been furnished to the insurer. All overdue payments shall bear simple interest at the rate of 12% per year.

[2] The court specifically noted that Zurich made two settlement offers in advance of trial within the range of final settlement and, at the conclusion of trial, should have reasonably expected to make payment. See Singler v. Zurich Am. Ins. Co., 2014 Wisc. App. 391 at ¶12.

[3] Id. at ¶15.

[4] Id.

[5] To recover under Wis. Stat. §628.46,  a third-party claimant must establish that: (1) there is no question of liability on the part of the insured; (2) the amount of damages is in a sum certain amount; and (3) the claimant provided the insurer with written notice of both liability and the sum certain amount owed. Kontowicz v. American Standard Ins. Co., 2006 WI 48, ¶48, 290 Wis. 2d 302, 714 N.W.2d 105.

[6] Singler v Zurich Am. Ins. Co. at ¶20.

[7] Id. at ¶21.

[8] Id. at ¶28.

[9] See Delap v. Institute of Am., Inc., 31 Wis. 2d 507, 512, 143 N.W.2d 476 (1966).

This news update is designed to provide general, educational information on pertinent legal topics, and the statements therein do not constitute legal advice. This news update is not intended to create an attorney-client relationship between you and Corneille Law Group, LLC. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel. 

About the Author

Mark Budzinski

Over the past 18 years, Mark has tried dozens of cases to verdict across Wisconsin. He has represented clients of every kind—from individuals and small businesses to one of the largest law firms in the country. The cases he has tried to jury verdict include catastrophic injuries, quadriplegia and wrongful death. His integrity and intensity connects with juries to deliver outstanding results.


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