Bertelson v. Union Mutual Fire Insurance Co., No. 834-04 Cncv (Norton, J., Nov. 22, 2004)

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

the original. The accuracy of the text and the accompanying data included in the Vermont 

trial court opinion database is not guaranteed.] 

STATE OF VERMONT 

Chittenden County, ss.: 

JOEL R. BERTELSON and DANIEL MENDL 

 

v. 

UNION MUTUAL FIRE INSURANCE CO. and 

NEW ENGLAND GUARANTY INSURANCE COMPANY

ENTRY 

 The plaintiffs, Joel Bertelson and Daniel Mendl, seek damages from their insurer, Union 

Mutual Fire Insurance Company, for losses related to fire damage to their home, which was 

covered under an insurance policy with Union Mutual. The plaintiffs move to amend their 

complaint to add a consumer fraud claim under 9 V.S.A. §§ 2451–2463. Union Mutual argues 

that the Vermont Consumer Fraud Act does not apply to insurance. For the following reasons, 

the court grants the plaintiffs’ motion. 

 Whether the Consumer Fraud Act applies to insurance is an unsettled question in 

Vermont. Although the Supreme Court held in 1981 that the Act did not apply to insurance, see 

Wilder v. Aetna Life & Cas. Ins. Co., 140 Vt. 16, 18–19 (1981), subsequent amendments to the 

Act in 1985 have created disagreement among lower courts as to whether Wilder is still good 

law. Compare Greene v. Stevens Gas Serv., 2004 VT 67, ¶ 10 (acknowledging lower court 

holding that Act does not apply to insurance but declining to reach issue) with Fish v. Allstate 

Ins. Co., No. S0056-03 CnCv (June 11, 2003) (order denying motion to dismiss) (Katz, J.) 

(holding that Wilder no longer dispositive and that Act applies to insurance). 

 Prior to 1985, the statute defined applicable goods and services in consumer fraud actions 
separately. The statute defined goods as “tangible personal chattel” and services as “work, labor 

and services . . . in connection with the delivery, installation, servicing, repair or improvement of 

goods.” 1973, No. 221 (Adj. Sess.), § 3. As amended, the statute now defines goods and services 

together as “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.” 9 V.S.A. § 2451a. Obviously, this new definition has expanded the Act’s 

scope. Hence, Supreme Court interpretation of the prior definitions is no longer dispositive. 

 The Supreme Court has repeatedly held that the Act’s broad remedial purpose requires 

courts to construe its terms liberally in order to protect consumers. See Elkins v. Microsoft 

Corp., 174 Vt. 328, 331 (2002). With a liberal construction, the terms of the current statute reach 

insurance transactions. For instance, the term “intangible” suggests that goods or services include 

incorporeal assets like insurance policies. See Black’s Law Dictionary 823 (8th ed. 2004) 

(defining intangible as “[s]omething that lacks a physical form; an abstraction, such as 

responsibility; esp., an asset that is not corporeal, such as intellectual property”). Furthermore, 

the statute’s catchall phrase “other property or services of any kind” also indicates that insurance 

policies are covered by the statute either as a form of property, see Dodd v. Commercial Union 

Ins. Co., 365 N.E.2d 802, 807 (Mass. 1977) (“Insurance policies are contracts in which the 

insurer promises to pay money to the insured or to third parties on the happening of a specified 

event. This contractual right to payment is a recognized property right.”), or as a form of a 

service, see Stevens v. Motorists Mut. Ins. Co., 759 S.W.2d 819, 821 (Ky. 1988) (“An insurance 

policy is nothing more and nothing less than a contract providing for delivery of financial 

services as specified in the policy when loss occurs as described in the policy. As such it is in the 

same class as other financial services.”). Either way, the statue covers insurance. 

 Moreover, in construing a statute, courts consider the whole of the statute and every part 

of it. Sagar v. Warren Selectboard, 170 Vt. 167, 171 (1999). Another definition within § 2451a 

expressly exempts insurance from transactions involving “home solicitation sales” of goods or 

services. See 9 V.S.A. § 2451a(d)(5). If the legislature did not intend § 2451a(b) to include 

insurance, it would not have made the effort to exempt insurance from home solicitation sales of 

goods or services. 

 Furthermore, numerous other state courts, in addition to the two cited above, have applied 

similarly worded consumer fraud statutes to insurance transactions. See, e.g., Showpiece Homes 

Corp. v. Assurance Co. of Am., 38 P.3d 47, 54–55 (Colo. 2001) (en banc) (holding that Colorado 

consumer protection statute applies to insurance and reviewing numerous other state decisions); 

Lemelledo v. Beneficial Management Corp. of Am., 696 A.2d 546, 551 (N.J. 1997) (holding that 

New Jersey consumer fraud statute applies to insurance in conjunction with loans). This court 
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sees no reason to deviate from what appears to be the majority rule. 

 Courts allow amendments to pleadings at this stage “freely . . . when justice so requires.” 

V.R.C.P. 15(a); see also Bevins v. King, 143 Vt. 252, 254–55 (1983) (holding that denial of 

motion to amend is abuse of discretion where “there is no prejudice to the objecting party, and 

when the proposed amendment is not obviously frivolous nor made as a dilatory maneuver in 

bad faith”). Given that the Act applies to insurance, the plaintiffs’ request to amend is not 

frivolous and does not unfairly prejudice Union Mutual in this action. Hence, the court grants 

their motion. 

ORDER 

 For the foregoing reasons, the plaintiffs’ motion to amend their complaint is 

GRANTED. 

 Dated at Burlington, Vermont, November 22, 2004. 

____________/s/____________ 

Richard W. Norton Judge