Nautilus Ins. Co. v. Loomis, No. 194-9-10 Oecv (Eaton, J., Feb. 29, 2012) 

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the 

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STATE OF VERMONT 

SUPERIOR COURT CIVIL DIVISION 

Orange Unit Docket No. 194-9-10 Oecv 

│ 

Nautilus Insurance Company │ 

 Plaintiff │ 

│

 v. │

│ 

Jason Loomis │ 

 Defendant │

│

 v. │

│

The Clerkin Agency │

 Third Party Defendant │ 

│ 

DECISION ON MOTION TO DISMISS 

 The Clerkin Agency, as third party defendant, has filed a motion to dismiss the claims 

asserted against it by defendant, Jason Loomis, alleging that his third party complaint does not 

state a cause of action against it. Mr. Loomis has opposed the motion. 

 Factual Background 

 Plaintiff Nautilus Insurance Co. brought this action against Loomis for unpaid premiums 

which it claims are due to them as a result of an audit conducted in connection with a 

commercial liability policy issued by Nautilus to Loomis. Proceeding pro se, Loomis has 

asserted a third party claim against the Clerkin Agency, his insurance agent who procured the 

commercial liability policy. Mr. Loomis alleges various acts by Clerkin violated the Insurance 

Trade Practices Act, 8 V.S.A. § § 4721 et seq., and also Vermont’s Consumer Fraud Act, 9 

V.S.A. § § 2451 et seq. The Clerkin Agency asserts that neither statute provides defendant with a 

cause of action. 

 Discussion 

 Motions to dismiss are not favored, and are rarely granted. Gilman v. Maine Mutual Fire 

Ins. Co., 2003 VT 55, ¶ 14, 175 Vt. 554 (mem.). The purpose of a motion to dismiss is to test 

the law of the case, not the facts which underlie the complaint. Kane v. Lamothe, 2007 VT 91, 

¶ 14, 182 Vt. 241. In considering a motion to dismiss, the court assumes all factual allegations in 

the complaint to be true and gives the benefit of all reasonable inferences to the non-moving 

party. Richards v. Town of Norwich, 169 Vt. 44, 48 (1999). A motion to dismiss should not be 

granted unless it is beyond doubt that there exist no facts or circumstances which would entitle 
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the plaintiff to relief. Assoc. of Haystack Property Owners, Inc. v. Sprague, 145 Vt. 443, 446–47 

(1985). 

Claims under the Insurance Trade Practices Act 

 Defendant asserts that Clerkin violated the Insurance Trade Practices Act (ITPA), 8 

V.S.A. § 4721 et seq. Defendant further asserts that because a private right of action exists 

against insurance finance companies under 8 V.S.A. § 7009, a private right of action should exist 

under 8 V.S.A. § 4721 et seq. as well. 

 It is not alleged that the Clerkin Agency is an insurance financing company. As a result, 8 

V.S.A. § 7009 does not apply in this instance. Defendant’s assertion that a private cause of action 

should exist under the ITPA, as it does against insurance finance companies, is inconsistent with 

well established Vermont law. 

 In 1981, the Vermont Supreme Court held that no private cause of action existed under 

the ITPA. Wilder v. Aetna Life & Casualty Insurance Co., 140 Vt. 16 (1981). The ITPA is a 

regulatory statute that provides public administrative sanctions against unfair and deceptive acts 

within the insurance industry, but it does not create a private cause of action or imply a duty 

toward any one person. Wilder has been consistently followed in the 30 years since it was 

decided. Denis Bail Bonds v. State of Vermont, 159 Vt. 481 (1993); Larocque v. State Farm 

Insurance, 163 Vt. 617 (1995); City of Burlington v. Hartford Steam Boiler Inspection and 

Insurance Co., 190 F. Supp 2d. 663 (D. Vt. 2002). 

 There is no private cause of action for claimed violations of the ITPA. 

Claims under the Consumer Fraud Act 

 Defendant’s claims under the Consumer Fraud Act (CFA), 9 V.S.A. § 2451 were also 

addressed in Wilder. The Wilder Court held that the CFA did not apply to insurance since the 

provision of insurance is neither a good nor a service. 

 Four years after Wilder, the CFA was amended with respect to the definition of goods 

and services. The combined definition of goods and services contained in 9 V.S.A. § 2451a (b) 

now reads as follows: 

(b) “Goods” or “services” shall 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. The term also includes bottled 

liquified petroleum (LP or propane) gas. 

 Defendant asserts that the amended definition in the CFA covers the provision of 

insurance because the new language includes “intangibles” and “property or services of any 

kind.” Defendant has provided the court with the amicus brief of the Vermont Attorney General 

in the matter of Greene v. Stevens Gas Service, 2004 VT 67, 177 Vt. 90, a case which squarely 
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presented the question of whether the amended definition of “goods” and “services” applied to 

insurance. In Greene, however, the Vermont Supreme Court declined to decide the issue, 

determining instead that the facts of the case did not establish CFA liability even if such liability 

existed. Defendant has also provided a Vermont Bar Journal article discussing the applicability 

of the CFA to the provision of insurance, and both parties have submitted portions of legislative 

history in support of their positions. 

 Although there has been lengthy discussion of the issue of the applicability of the CFA to 

insurance contracts, as exemplified by the Bar Journal article and the briefs submitted in Greene, 

the Supreme Court has not re-examined the issue in any detail. On several recent occasions the 

federal district court judges have struggled with the question and noted that it is an open question 

whether the amended definition was meant to “extend[] the CFA to insurance.” Sullivan v. 

Allstate Insurance Co. 2010 WL 3323726 (D. Vt. Aug. 3, 2010); R.L. Vallee, Inc. v. American 

Specialty Lines Insurance Co., 431 F.Supp.2d 428, 442 (D.Vt. 2006). 

 In reviewing the issue here, the parties have provided excerpts from the legislative 

history, as researched by the Attorney General and the parties to the Greene case. Although the 

excerpts include commentary from legislators pertaining to the scope of the amended definition, 

there is no mention in the record at all of the topics of insurance or Wilder. Instead, it appears 

that the legislature was primarily concerned at the time with extending the protections of the 

consumer-fraud statutes to farmers. It further appears that the actual amendment was included as 

part of an act relating to the regulation of companies which furnish bottled gas. 1985, No. 34, § 

1. Given the amount of research that has been devoted to the legislative record on this issue, this 

court finds the absence of any reference to insurance or Wilder to be significant. 

 It is possible to read the statutory language as supporting either position when the 

amended definition is considered in the context of its enactment. At the time of the 1985 

amendment, some states had held the provision of insurance to be a “good” or “service” under 

their consumer-fraud statutes, but other states had expressly held that insurance did not fall 

within that definition. See generally Annotation, Coverage of insurance transactions under state 

consumer protection statutes, 77 A.L.R.4th 991 (1989 & Cum. Supp. 2011) (collecting cases). 

In Vermont, of course, the legislature was not painting upon a blank canvas because the Supreme 

Court had held just four years earlier in Wilder that insurance was neither a “good” nor a 

“service.” If the legislature had wished to abrogate that holding and include the provision of 

insurance as a good or service, it would have been a simple matter to so indicate by including the 

term “insurance” within the definition of a “good” or “service.” Instead, the legislature did not 

mention insurance at all, but rather chose to amend the definition to include the terms 

“intangibles” and “property or services of any kind” within the definition of “goods” and 

“services,” without any indication that it was doing so with Wilder or insurance in mind. 

 It would be reasonable to include insurance within the definition of an intangible or 

otherwise as a property interest of some kind. See Showpiece Homes Corp. v. Assurance Co. of 

America, 38 P.3d 47, 57 (Colo. 2001) (describing insurance as “intangible property”). It would 

also be reasonable to point out that (1) the CFA is a remedial statute that should construed 

liberally so as to protect the public from deceptive acts in commerce, and (2) there is a canon of 

statutory construction that holds that the legislative intent is best reflected in the plain meaning 
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of the statutory language. Elkins v. Microsoft Corp., 174 Vt. 328, 330–31 (2002). From these 

premises, one might well conclude that, by amending the definition of “goods” and “services” to 

include “intangibles,” the legislature must have meant to include the provision of insurance 

within the scope of the CFA. 

 On the other hand, trial courts are instructed to consider not only the language of the 

statute and the purposes of the legislation, but also “the legislative history and the circumstances 

surrounding [the] enactment” of a statute when seeking to determine the legislative intent. 

Garbitelli v. Town of Brookfield, 2011 VT 122, ¶ 12 (quoting Perry v. Med. Practice Bd., 169 

Vt. 399, 406 (1999)). In this case, as noted above, there is the issue that neither the legislative 

history nor the circumstances surrounding the amendment of the definition support the 

conclusion that the legislature intended to abrogate Wilder and extend consumer-fraud liability to 

the insurance industry. Adding to this is the canon of statutory interpretation that cautions the 

legislature to be more explicit about its intent if it truly means to disapprove a recent judicial 

interpretation of a statute. See, e.g., Dubaniewicz v. Houman, 2006 VT 99, ¶ 13, 180 Vt. 367. 

 

 It is also important to keep in mind that the extension of consumer-fraud liability to the 

insurance industry is an issue of significant statewide economic consequence upon which 

numerous parties have established settled expectations based on the existing state of the law. It 

would not be desirable for one trial court in one part of the state to upset those expectations by 

proclaiming that a decided opinion of the Vermont Supreme Court is no longer good law without 

some clear indication from the Supreme Court or the legislature to that effect. 

 In the final analysis, therefore, there are good arguments why insurance could be 

included within the amended definition of “goods” and “services,” but there are not any 

indications that the legislature actually intended to include insurance within the scope of 

consumer-fraud liability when it amended the statute. In the absence of a more specific 

expression of legislative intent to abrogate Wilder, and in the absence of any post-amendment 

suggestion by the Supreme Court to that effect, this court considers the decision in Wilder to 

remain controlling precedent. Accordingly, the provision of insurance, as was done by Clerkin, 

is not a “good or service” and therefore is not within the provisions of the CFA. 

 Based upon the foregoing, The Clerkin Agency’s Motion to Dismiss is GRANTED. 

 Dated at Chelsea this 29th day of February, 2012. 

 _____________________________ 

 Harold E. Eaton, Jr. 

 Superior Court Judge