Bridgham-Morrison et al v. National General Assurance Company, No. 2:2015cv00927 - Document 81 (W.D. Wash. 2016)
Court Description: ORDER denying plaintiffs' 56 Motion for Partial Summary Judgment; granting defendant's 58 Motion for Summary Judgment; granting plaintiffs' 65 Motion to Dismiss; granting plaintiffs' 70 Motion to Dismiss by Judge Richard A Jones.(RS)
Download PDF
<![CDATA[
Bridgham-Morrison et al v. National General Assurance Company Doc. 81 HONORABLE RICHARD A. JONES 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 LAURIE BRIDGHAM-MORRISON and DEREK MORRISON, ORDER v. 11 12 CASE NO. C15-927RAJ Plaintiff, 10 NATIONAL GENERAL ASSURANCE COMPANY, a foreign insurer, 13 Defendant. 14 I. 15 INTRODUCTION This matter comes before the Court on Plaintiffs Laurie Bridgham-Morrison and 16 17 Derek Morrison (collectively, “Plaintiffs”) Motion for Partial Summary Judgment (Dkt. # 18 56), Defendant National General Assurance Company’s (“Defendant”) Motion for 19 Summary Judgment (Dkt. # 58), and Plaintiffs’ two Motions for Voluntary Dismissal 20 (Dkt. # 65 & 70). For the reasons set forth below, the Court GRANTS Plaintiffs’ 21 Motions for Voluntary Dismissal, GRANTS Defendant’s Motion for Summary 22 Judgment, and DENIES Plaintiffs’ Motion for Partial Summary Judgment. II. 23 This contentious insurance dispute began on November 9, 2010, 1 when Mrs. 24 25 26 BACKGROUND Bridgham-Morrison was rear ended while driving a vehicle covered under Defendant’s 1 27 Plaintiffs’ statement of facts asserts that the accident occurred on July 9, 2010 (see Dkt. # 56 at 2), but offers no evidentiary support and is contradicted by Plaintiffs’ own allegations and evidence (see Am. Compl. ¶ 2.5; Dkt. # 57-8 (Traverso Decl.) Ex. H at 8). 28 ORDER – 1 Dockets.Justia.com 1 Underinsured Motorist (“UIM”) policy. See Dkt. # 1-1 (“Am. Compl.”) ¶ 2.5. Mrs. 2 Bridgham-Morrison made an insurance claim with Defendant the day of the accident. 3 See Dkt. # 62 (Magalski Decl.) ¶ 3. After confirming coverage under the personal injury 4 protection (“PIP”) provisions of its policy, Defendant promptly began paying for Mrs. 5 Bridgham-Morrison’s medical treatment and household services, ultimately paying 6 $10,000 in PIP benefits (the PIP policy limit), $4,920 in income loss benefits, and $3,600 7 to reimburse Plaintiffs for household services. See id. ¶ 4. Mrs. Bridgham-Morrison’s 8 initial attorney, M. Wayne Boyack, 2 contacted Defendant around this time as well, 9 indicating that he was representing Mrs. Bridgham-Morrison. See Dkt. # 59-3 (Ferguson 10 Decl.) Ex. 3. 11 For reasons not entirely clear to the Court, Mr. Boyack did not contact Defendant 12 again until January 18, 2013, providing a police report, medical records and bills relating 13 to the accident, and a letter from Mrs. Bridgham-Morrison’s employer. See Dkt. # 63 14 (Wittels Decl.) ¶ 3, Ex. 1. Defendant assigned Jeffrey Wittels to handle Mrs. Bridgham- 15 Morrison’s claim. Id. ¶ 2. Mr. Boyack followed up on February 4, 2013, enclosing a 16 copy of the demand letter he sent to the other driver’s insurer, State Farm, as well as the 17 supporting materials, which apparently included Mrs. Bridgham-Morrison’s records 18 pertaining to the collision, as well as a “Special Damage Statement” outlining her 19 medical expenses and loss of earnings up to May 2012. See Dkt. # 57-1 (Traverso Decl.) 20 Ex. A at 4-6. On July 22, 2013, Mr. Boyack followed up with a letter that stated he “now 21 ha[d] the information needed to assess the total value of [Mrs. Bridgham-Morrison’s] 22 claim,” and attached a doctor’s letter and note. See Dkt. # 63 (Wittels Decl.) Ex. 2. At that juncture, Mr. Wittels undertook his initial evaluation of Mrs. Bridgham- 23 24 Morrison’s UIM claim. In doing so, he accepted all of the claimed (and documented) 25 medical expense and wage loss and requested additional information regarding her lost 26 27 2 28 ORDER – 2 It is undisputed that Mr. Boyack did not represent Mr. Morrison. See Dkt. # 59-4 (Ferguson Decl.) Ex. 4 [Boyack Depo. Tr.] at 7:13-17, 10:6-13. 1 wages. See id. ¶ 6. Mr. Wittels then conducted his initial evaluation and estimated Mrs. 2 Bridgham-Morrison’s noneconomic damages as ranging between $88,000 and $130,000, 3 resulting in a total value between $166,191.48 and $208,191.48. See id. ¶ 7, Ex. 3 at 22- 4 23. Mr. Wittels also requested additional documentation for Mrs. Bridgham-Morrison’s 5 lost wages (see id. Ex. 3 at 21), which Mr. Boyack forwarded on October 10, 2013 (see 6 id. Ex. 4). Mr. Wittels subsequently requested $100,000 – the policy limits – in 7 settlement authority. See Dkt. # 57-2 (Traverso Decl.) Ex. B at 5. 8 It appears (though it is not entirely clear) that around October 24, 2013, Mr. 9 Wittels’ supervisor instructed him to review his initial evaluation. See id. at 5; Dkt. # 63 10 (Wittels Decl.) ¶ 12. Whatever the case, Mr. Wittels reevaluated Mrs. Bridgham- 11 Morrison’s claim and revised his estimated range for Mrs. Bridgham-Morrison’s 12 noneconomic damages downward. Dkt. # 63 (Wittels Decl.) ¶ 14, Ex. 5 at 33-35. He 13 ultimately estimated that Mrs. Bridgham-Morrison’s noneconomic damages ranged from 14 $53,000 to $75,000, with her total UIM claim’s value ranging between $131,252 and 15 $153,252. Id. at 35. Consequently, Mr. Wittels requested $38,000 in settlement 16 authority, which he received. See Dkt. # 57-2 (Traverso Decl.) Ex. B at 2. 17 After receiving such authority, Mr. Wittels contacted Mr. Boyack and offered 18 $17,000 to settle Mrs. Bridgham-Morrison’s UIM claim. See id. That was not accepted 19 and in November 2013, Mr. Wittels offered $20,000 and Mr. Boyack lowered Plaintiffs’ 20 demand to $85,000. See Dkt. # 63 (Wittels Decl.) ¶ 17; Dkt. # 72-10 (Traverso Decl.) 21 Ex. S at 13. By December 2013, however, Plaintiffs’ current attorney, Terrence 22 Traverso, entered the fray. See Dkt. # 59-9 (Ferguson Decl.) Ex. 9. In response, around 23 January 9, 2014, Defendant assigned another adjuster, Brian Carroll, to adjust Mrs. 24 Bridgham-Morrison’s claim. See Dkt. # 60 (Carroll Decl.) ¶ 2; Dkt. # 72-10 (Traverso 25 Decl.) Ex. S at 13. 26 At that point, despite voluminous correspondence, Plaintiffs provided little 27 explanation for their continued demands for a higher settlement offer and no 28 ORDER – 3 1 documentation. See Dkt. # 59-10 (Ferguson Decl.) Ex. 10. At best, Plaintiffs’ new 2 correspondence finally introduces Mr. Morrison as a claimant (id. at 3) and alludes to 3 increased economic damages, which Plaintiffs assume to be “fully documented” (id. at 4 25). Whatever the case, after over a year, the Parties had still noted resolved the claim 5 and Plaintiffs filed suit. See Dkt. # 1. III. 6 LEGAL STANDARD 7 a. Federal Rule of Civil Procedure 56 – Summary Judgment 8 Summary judgment is appropriate if there is no genuine dispute as to any material 9 fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 10 56(a). The moving party bears the initial burden of demonstrating the absence of a 11 genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 12 Where the moving party will have the burden of proof at trial, it must affirmatively 13 demonstrate that no reasonable trier of fact could find other than for the moving party. 14 Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). On an issue where 15 the nonmoving party will bear the burden of proof at trial, the moving party can prevail 16 merely by pointing out to the district court that there is an absence of evidence to support 17 the non-moving party’s case. Celotex Corp., 477 U.S. at 325. If the moving party meets 18 the initial burden, the opposing party must set forth specific facts showing that there is a 19 genuine issue of fact for trial in order to defeat the motion. Anderson v. Liberty Lobby, 20 Inc., 477 U.S. 242, 250 (1986). The court must view the evidence in the light most 21 favorable to the nonmoving party and draw all reasonable inferences in that party’s favor. 22 Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150-51 (2000). 23 b. Federal Rule of Civil Procedure 41(a) – Voluntary Dismissal 24 Pursuant to Federal Rule of Civil Procedure 41(a)(2), a plaintiff may voluntarily 25 dismiss his claims “only by court order, on terms that the court considers proper” unless 26 the defendant has not yet filed an answer or motion for summary judgment or the parties 27 have stipulated to dismissal. A “plaintiff may dismiss some or all of the defendants, or 28 ORDER – 4 1 some or all of his claims” pursuant to Rule 41(a). See Wilson v. City of San Jose, 111 2 F.3d 688, 692 (9th Cir. 1997) (citing Concha v. London, 62 F.3d 1493, 1506 (9th Cir. 3 1995); Pedrina v. Chun, 987 F.2d 608, 609-10 (9th Cir. 1993)); but see Bailey v. Shell W. 4 E & P, Inc., 609 F.3d 710, 719 (5th Cir. 2010) (“Rule 41(a) dismissal only applies to the 5 dismissal of an entire action—not particular claims”) (citing Exxon Corp. v. Md. Cas. 6 Co., 599 F.2d 659, 662 (5th Cir. 1979)). 7 “A district court should grant a motion for voluntary dismissal under Rule 41(a)(2) 8 unless a defendant can show that it will suffer some plain legal prejudice as a result.” 9 Smith v. Lenches, 263 F.3d 972, 975 (9th Cir. 2001) (citing Waller v. Fin. Corp. of Am., 10 828 F.2d 579, 583 (9th Cir. 1987)). “Legal prejudice” in this regard “means ‘prejudice to 11 some legal interest, some legal claim, some legal argument.’” Id. (quoting Westlands 12 Water Dist. v. United States, 100 F.3d 94, 97 (9th Cir. 1996)). However, “[l]egal 13 prejudice does not result merely because a defendant will be inconvenienced by 14 potentially having to defend the action in a different forum or because the dispute will 15 remain unresolved.” WPP Luxembourg Gamma Three Sarl v. Spot Runner, Inc., 655 16 F.3d 1039, 1059 n.6 (9th Cir. 2011) (citing Smith, 263 F.3d at 976). 17 IV. DISCUSSION 18 a. Voluntary Dismissal 19 The Court begins with Plaintiffs’ requests to dismiss the majority of their claims. 20 See Dkt. # 65 & 70. Following Defendant’s Motion for Summary Judgment and tender 21 of the UIM policy limits to the Plaintiffs, Plaintiffs no longer wish to assert their claims 22 for breach of fiduciary duty, violations of the Washington Consumer Protection Act, 23 negligence, and breach of contract. See id. Instead, the only claims they now assert are 24 their claims for bad faith and violations of the Washington Insurance Fair Conduct Act 25 (“IFCA”). See id. Defendant does not oppose dismissal, but requests an expedited 26 summary judgment briefing schedule should Plaintiffs decide to reassert these claims. 27 See Dkt. # 73. 28 ORDER – 5 1 Because of the apparent consensus between the Parties, the Court GRANTS 2 Plaintiffs’ request. Plaintiffs’ sole remaining claims are for violations of the IFCA and 3 for bad faith. However, the Court will not impose Defendant’s requested expedited 4 briefing schedule. The time for amending pleadings has long since passed. See Dkt. # 29 5 (setting December 9, 2015 deadline for amending pleadings). Good cause likely does not 6 exist for amending the Scheduling Order or to permit Plaintiffs to reassert claims they 7 have already voluntarily dismissed. 8 b. Summary Judgment Motions for Plaintiffs’ IFCA and Bad Faith Claims 9 That brings the Court to the cross-motions for summary judgment on Plaintiffs’ 10 11 remaining claims for bad faith and violations of the IFCA. “Bad faith handling of an insurance claim is a tort analyzed applying the same 12 principles as other torts: duty, breach of that duty, proximate cause, and damages.” 13 Aecon Bldgs., Inc. v. Zurich N. Am., 572 F. Supp. 2d 1227, 1234 (W.D. Wash. 2008) 14 (citing Smith v. Safeco Ins. Co., 78 P.3d 1274, 1277 (Wash. 2003)). “Insurers have a duty 15 to act in good faith separate from their contractual coverage obligations to their insureds.” 16 Id. (citing cases). Nevertheless, insurers do not have an “enhanced” obligation to give 17 equal consideration to their insureds in the UIM context because they “often stand[] in 18 the shoes of the tortfeasor” and therefore find themselves “in an adversarial relationship 19 with [their] own insured.” Schreib v. Am. Family Mut. Ins. Co., Case No. C14–0165JLR, 20 2015 WL 5175708, at *3 (W.D. Wash. Sept. 3, 2015) (citing Ellwein v. Hartford 21 Accident & Indem. Co., 15 P.3d 640, 647 (Wash. 2001)). 22 “To establish the tort of bad faith in the insurance context, the insured must show 23 that the insurer’s actions were ‘unreasonable, frivolous, or unfounded.’” Dewitt Constr. 24 Inc. v. Charter Oak Fire Ins. Co., 307 F.3d 1127, 1138 (9th Cir. 2002) (quoting Kirk v. 25 Mt. Airy Ins. Co., 951 P.2d 1124, 1126 (Wash. 1998)). To do so, the insured bears the 26 burden of presenting evidence that the insurer acted unreasonably. Lakehurst 27 Condominium Owners Ass’n v. State Farm Fire & Cas. Co., 486 F. Supp. 2d 1205, 1213 28 ORDER – 6 1 (W.D. Wash. 2007) (quoting Smith v. Safeco Ins. Co., 78 P.3d 1274, 1277-78 (Wash. 2 2003)). “Claims of bad faith ‘are not easy to establish and an insured has a heavy burden 3 to meet.’” Bayley Constr. v. Great Am. E & S Ins. Co., 980 F. Supp. 2d 1281, 1290 4 (W.D. Wash. 2013) (quoting Overton v. Consol. Ins. Co., 38 P.3d 322, 329 (Wash. 5 2002)). Ordinarily, “[w]hether an insurer acted in bad faith is a question of fact.” Bryant 6 7 v. Country Life Ins. Co., 414 F. Supp. 2d 981, 997 (W.D. Wash. 2006) (quoting Am. 8 States Ins. Co. v. Symes of Silverdale, Inc., 78 P.3d 1266, 1270 (Wash. 2003)). As such, 9 an “insurer is entitled to summary judgment on a bad faith claim only if ‘reasonable 10 minds could not differ that its denial of coverage was based on reasonable grounds.’” Id. 11 (quoting Smith, 78 P.3d at 1277). “[T]he test is not whether the insurer’s interpretation of 12 the policy is correct but whether the insurer’s conduct was reasonable.” Lakehurst, 486 13 F. Supp. 2d at 1213 (citing Wright v. Safeco Ins. Co., 109 P.3d 1, 10 (Wash. Ct. App. 14 2004)). Finally, “[b]y its plain language, IFCA gives an insured no right to sue solely for a 15 16 violation of a Washington insurance regulation. The right to sue arises solely from an 17 unreasonable denial of a claim for coverage or payment of benefits. Regulatory violations 18 matter only when deciding whether to award attorney fees or enhance damages.” Seaway 19 Props., LLC v. Fireman’s Fund Ins. Co., 16 F. Supp. 3d 1240, 1255 (W.D. Wash. 2014); 20 contra Langley v. GEICO Gen. Ins. Co., 89 F. Supp. 3d 1083, 1091 (E.D. Wash. 2015). 3 21 In other words, Plaintiffs must show an unreasonable denial of a claim to coverage to 22 have a viable IFCA claim. Of course, a violation of a provision in Washington 23 Administrative Code (“WAC”) 284-30-330 is evidence of bad faith. See Seaway, 16 F. 24 Supp. 3d at 1253 (citing Overton, 38 P.3d at 330). 25 26 27 28 3 The law of the Western District of Washington is clear that violations of regulations enumerated in RCW 48.30.015(5) do not provide an independent cause of action under the IFCA. See Taladay v. Metro. Grp. Prop. & Cas. Ins. Co., No. C14-1290-JPD, 2016 WL 541398, at *4 n.8 (W.D. Wash. Feb. 11, 2016) (recognizing the split in authority between the Western and Eastern Districts of Washington). ORDER – 7 1 Before continuing, it is not entirely clear that Defendant actually refused to pay 2 benefits – Defendant indisputably offered to settle the claim twice and appeared to accept 3 its liability under the policy. See Dkt. # 57-2 (Traverso Decl.) Ex. B at 2 (documenting 4 original $17,000 offer); Dkt. # 63 (Wittels Decl.) ¶ 17 (indicating increased $20,000 5 offer). In fact, since these summary judgment motions have been filed, Defendant has 6 actually paid the limits of the UIM policy after receiving further information from the 7 Plaintiffs. See Dkt. # 62 (Magalski Decl.) ¶¶ 6-7. Courts have regularly held that where 8 a “delay in payment is due to a dispute over the amount owed, the delay alone does not 9 constitute a denial of payment under IFCA.” See Beasley v. State Farm Mut. Auto. Ins. 10 Co., No. C13-1106RSL, 2014 WL 1494030, at *6 (W.D. Wash. Apr. 16, 2014) (citing 11 Country Preferred Ins. Co. v. Hurless, No. C11-1349RSM, 2012 WL 2367073, at *4 12 (W.D. Wash. June 21, 2012)). That is particularly true where a defendant cannot assess 13 the entirety of a plaintiff’s claimed damages without additional information. Id. (citing 14 Morella v. Safeco Ins. Co. of Illinois, No. C12-0672RSL, 2013 WL 1562032, at *3 (W.D. 15 Wash. Apr. 12, 2013)). Moreover, “there is no authority for the notion that an insurer has 16 a duty to inform any insured of what legal theories it might invoke to recover damages.” 17 Tavakoli v. Allstate Prop. & Cas. Ins. Co., No. C11-1587RAJ, 2012 WL 6677766, at *5 18 (W.D. Wash. Dec. 21, 2012). However, an unreasonably low settlement offer may serve 19 as a denial of benefits, though a good faith effort to appropriately value a loss will not. 20 See Langley, 89 F. Supp. 3d at 1091-92 (E.D. Wash. 2015) (quoting Morella, 2013 WL 21 1562032 at *3). 22 Here, Plaintiffs failed to provide further documentation of their claimed damages 23 for years. For example, until January 2016, Plaintiffs had not provided any information 24 regarding Mrs. Bridgham-Morrison’s wage loss extending beyond May 2012. See Dkt. # 25 59 (Ferguson Decl.) Ex. 6 at 14, Ex. 7 at 24, 39, 55. Likewise, Mr. Morrison’s potential 26 loss of consortium claim was not mentioned until January 17, 2014, well after the claims 27 28 ORDER – 8 1 had first been presented to Defendant. 4 See id. Ex. 10 at 2. Moreover, even while 2 pressing demands for additional information (or perhaps a better settlement offer), 3 Plaintiffs did not provide Defendant with any additional documentation to better evaluate 4 their claim. See id. Ex. 10 at 2-24. At most, Plaintiffs’ letters suggest that Mrs. 5 Bridgham-Morrison had lost her job at some point and that her wage loss had ballooned 6 to a higher number – however, they still provided no documentation. See id. at 25-26. i. Unreasonable Investigation 7 Whatever the case, Plaintiffs now contend that Defendant failed to reasonably 8 9 investigate their claim because the Defendant allegedly did not include a litany of 10 economic and noneconomic damages in its original review. See Dkt. # 56 at 16-17; Dkt. 11 # 74 at 3-4. As such, Plaintiffs contend that Defendant violated WAC 284-30-330(4). 12 The Court disagrees. It is undisputed that the vast majority of the documentation Plaintiffs provided 13 14 (and nearly all of the information) regarding Mrs. Bridgham-Morrison’s damages came 15 from two letters dated January 18, 2013 and July 22, 2013, respectively. See Dkt. # 63 16 (Wittels Decl.) Exs. 1-2. These letters included a police report, medical records and bills, 17 an earning loss letter from Mrs. Bridgham-Morrison’s employer, and a “Special Damage 18 Statement” listing totaling her medical expenses and lost wages from November 2010 to 19 May 2012. See id. They also provide a relatively sparse description of Mrs. Bridgham- 20 Morrison’s noneconomic injuries, such as her involvement in the community and outdoor 21 activity, her frustration, and “the pain, suffering and loss of enjoyment of life” she has 22 endured as a result of her injuries, even though she had “largely recovered” from them. 23 See id. Ex. 1 at 11. Plaintiffs’ later letters do not include much additional information, 24 save for mentioning Mr. Morrison’s loss of consortium claim and describing some of 25 Mrs. Bridgham-Morrison’s new wage loss claims. See Dkt. # 59 (Ferguson Decl.) Exs. 26 27 4 28 ORDER – 9 In fact, Mr. Morrison had not even been mentioned as a potential claimant for the year preceding that letter. See Dkt. # 63 (Wittels Decl.) Exs. 1-2. 1 9-10. Defendant relied upon this information in valuing Mrs. Bridgham-Morrison’s 2 claim. See Dkt. # 57-4 (Traverso Decl.) Ex. D [Wittels Depo. Tr.] at 197:8-198:4 (“Q So 3 your investigation – your investigation into change of lifestyle consisted of what you read 4 in the medical records? A Medical records and Boyack’s correspondence.”). As Defendant correctly notes, many of these damages claims were not presented 5 6 until well after Defendant had already attempted to value the claim and made a settlement 7 offer. 5 For instance, Plaintiffs did not identify several categories of contractual damages 8 – Mrs. Bridgham-Morrison’s future shoulder MRIs and injections, travel mileage, or 9 impaired earnings capacity – until January 2016, years into this litigation. Compare Dkt. 10 # 59-6 (Ferguson Decl.) Ex. 6 at 14 with Dkt. # 59-7 (Ferguson Decl.) Ex. 7 at 10, 23-24, 11 38-39, 54-55. Some, such as Plaintiffs’ mortgage woes, were never mentioned during the 12 claims evaluation period or in any of the Plaintiffs’ communications with Defendant. See 13 id. Exs. 9-13; Dkt. # 63 (Wittels Decl.) Exs. 1-2, 4. Indeed, Mr. Morrison (and his 14 associated loss of consortium claim) was not even represented by Plaintiffs’ first 15 attorney. See Dkt. # 59-4 (Ferguson Decl.) Ex. 4 [Boyack Depo. Tr.] at 7:13-17, 10:6-13. Other issues that Plaintiffs claim were not investigated actually were investigated 16 17 as they were included in the medical records presented to Defendant or were indisputably 18 part of Mr. Wittels’ initial evaluation. For example, Plaintiffs claim that Defendant did 19 not consider or investigate noneconomic damages associated with Mrs. Bridgham- 20 Morrison’s “Cervical sprains and strains, thoracic sprains and strains” and the like (Dkt. # 21 56 at 16-17), but those were specifically identified in the claim log (see Dkt. # 63 (Wittels 22 Decl.) Ex. 3 at 21-23, Ex. 5 at 33-35). And Mr. Wittels testified that he allocated 23 24 25 26 27 28 5 Plaintiffs appear to argue that Defendant waived its right to argue that Plaintiffs delayed in responding to requests for additional information because it did not raise this as an affirmative defense. See Dkt. # 71 at 6. But Defendant does not raise these issues as an affirmative defense. Instead, Defendant presents this evidence to show that Plaintiffs cannot show a crucial element of their claims – to show that Defendant’s actions were unreasonable. The Court finds that Defendant did not waive or forfeit its right to rely on this evidence. ORDER – 10 1 noneconomic damages to individual procedures as part of his “damage model.” See Dkt. 2 # 57-4 (Traverso Decl.) Ex. D [Wittels Depo. Tr.] at 193:11-197:7, 208:3-23. 3 Essentially – and the way the Court reads Plaintiffs’ claim – Plaintiffs argue that in 4 order to have conducted a reasonable investigation, Defendant must have considered 5 every possible avenue Plaintiffs could have recovered. See Dkt. # 56 at 7-10. That 6 simply cannot be the case. Insurers must conduct reasonable and prompt investigations, 7 but they need not necessarily investigate every discrete element. See Lakehurst, 486 F. 8 Supp. 2d at 1214-15. The focus is not on what could have been done, but on what was 9 actually done by the insurer. See GCG Assocs. LP v. Am. Cas. Co. of Reading Pa., No. 10 C07-792BHS, 2008 WL 3542620, at *10 (W.D. Wash. Aug. 8, 2008). And an insurer’s 11 initial investigation that does not identify every issue that contributed to the insured’s 12 claim does not show that investigation was unreasonable or insufficient. Ayar v. Liberty 13 Nw. Ins. Co., No. C10-1788-JCC, 2012 WL 3144886, at *6 (W.D. Wash. Aug. 1, 2012). 14 Furthermore, there is simply no support for the proposition Plaintiffs advance that 15 insurers must be cognizant of every potential element of damage a party may recover. 16 See Dkt. # 74 at 4. 17 In fact, the investigation Defendant undertook in this case bears little difference to 18 that held reasonable in Anderson v. State Farm Mut. Ins. Co., 2 P.3d 1029, 1035-36 19 (Wash. Ct. App. 2000). In Anderson, the UIM insurer obtained the police report of the 20 incident, took statements from witnesses, and reviewed the insured’s medical bills before 21 ultimately making a low settlement offer. Id. The court held that even though the 22 insurer’s “self-serving evaluation of the evidence at hand” led to the delay in payment, 23 that alone did not render the investigation unreasonable. Id. at 1036. 24 Quite simply, Defendant conducted a reasonable investigation. Upon receipt of 25 Mrs. Bridgham-Morrison’s initial claim and information from Mr. Boyack in July 2013, 26 Mr. Wittels drafted an initial report based on the records presented – a police report, 27 medical records, medical records, and a letter from Mrs. Bridgham-Morrison’s employer. 28 ORDER – 11 1 See Dkt. # 63 (Wittels Decl.) ¶¶ 3-5, Exs. 1-2. After doing so, Mr. Wittels requested 2 additional information from Mr. Boyack to substantiate other portions of Mrs. Bridgham- 3 Morrison’s claim. See id. ¶ 6; Ex. 4. Based on this information, Mr. Wittels again 4 evaluated Mrs. Bridgham-Morrison’s claim. See id. ¶¶ 7-14. To the extent that 5 Defendant (either at deposition or during its initial evaluation) may not have 6 comprehended the universe of potentially recoverable damages without being informed 7 by Plaintiffs or their attorneys, it is enough to say that “there is no authority for the notion 8 that an insurer has a duty to inform any insured of what legal theories it might invoke to 9 recover damages.” Tavakoli, 2012 WL 6677766 at *5. That is particularly true “where 10 an insured has his own attorney.” Id. And insurers may at times rely upon an insured’s 11 own investigation where it is reasonable. See Hiller v. Allstate Prop. & Cas. Ins. Co., 12 No. 11-CV-0291-TOR, 2012 WL 2325603, at *11 (E.D. Wash. June 19, 2012). 13 Simply put, this is not a situation where the insurer unreasonably denied payment 14 prior to any investigation while relying on mere suspicion or conjecture. See e.g., 15 McGee-Grant v. Am. Family Mut. Ins., No. C14-1989RSM, 2016 WL 126429, at *4 16 (W.D. Wash. Jan. 12, 2016) (finding bad faith investigation where insurer denied 17 payment prior to reviewing medical records); Scanlon v. Life Ins. Co. of N. Am., 670 F. 18 Supp. 2d 1181, 1195-96 (W.D. Wash. 2009) (holding that insurer conducted a bad faith 19 investigation where it denied the insured’s claim by relying upon single doctor’s two 20 sentence memorandum, ignoring multiple medical professionals’ conflicting conclusions, 21 and failing to further investigate claim); Aecon, 572 F. Supp. 2d at 1236-38 (holding that 22 investigations were not conducted in good faith where insurers did not conduct any 23 investigation and made assumptions without a factual basis before denying claim). 24 Rather, Defendant conducted an investigation that Plaintiffs contend missed some 25 (unidentified at the time) portions of their claims. That alone does not render 26 Defendant’s investigation unreasonable. 27 28 ORDER – 12 1 One final point regarding Defendant’s investigation merits mention. Plaintiffs 2 contend that Defendant failed in its duty to investigate by lowering its initial damages 3 evaluation in the range of $166,191 to $209,000 down to $131,252 to $153,252 without 4 additional investigation. See Dkt. # 74 at 5-6. The Court rejects Plaintiffs’ argument. 5 First, Defendant explains that this was done upon reevaluation of the same 6 evidence. See Dkt. # 57-4 (Traverso Decl.) Ex. D [Wittels Depo. Tr.] at 256:23-25; Dkt. 7 # 63 (Wittels Decl.) ¶¶ 12-13. Ultimately, Mr. Wittels revised his estimate based on his 8 subjective evaluation of Mrs. Bridgham-Morrison’s noneconomic damages. See id. at 9 260:1-261:16. At that juncture, Defendant had already completed its initial investigation 10 and attempted to properly value the claim. That an uncommunicated initial subjective 11 evaluation for noneconomic damages was revised downward is largely immaterial. 12 Second, Plaintiffs’ own expert, Stephen Strezlec’s, own logic reveals the 13 reasonableness of the investigation. 6 In particular, Mr. Strezlec concludes that 14 Defendant made a reasonable investigation or evaluation of Mrs. Bridgham-Morrison’s 15 claims. See Dkt. # 57-8 (Traverso Decl.) Ex. H at 24 (“The claim file shows that an 16 evaluation which appears reasonable was completed on August 27, 2013”). How a 17 reasonable evaluation could magically morph into an unreasonable investigation (all 18 based on the exact same information and reasoning) is beyond the Court’s understanding 19 – the Defendant’s method of investigation simply did not change. In sum, the Court finds that no reasonable juror could find that Defendant 20 21 conducted an unreasonable investigation into Plaintiffs’ claims. 22 23 24 25 26 27 28 6 In other respects, the Court largely discounts the value of Mr. Strezlec’s opinions and finds that they do not raise a genuine issue of material fact. Mr. Strezlec’s report is largely conclusory, doing little to explain how or why particular alleged problems were unreasonable. See Dkt. # 578 (Traverso Decl.) Ex. H. A court is not required to admit expert evidence “that is connected to existing data only by the ipse dixit of the expert.” Domingo ex rel. Domingo v. T.K., 289 F.3d 600, 607 (9th Cir. 2002) (quoting Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997)). Mr. Strezlec’s opinions largely fit the bill, doing no more to explain his opinions than his mere sayso. ORDER – 13 ii. Good Faith Attempt to Effectuate Prompt, Fair, and Equitable Settlement 1 2 Next, Plaintiffs argue that Defendant violated WAC 284-30-330(6) by not 3 attempting in good faith to effectuate a prompt fair, and equitable settlement of their 4 claim. See Dkt. # 74 at 6. The Court disagrees. 5 As discussed, supra, Defendant conducted a reasonable investigation of Plaintiffs’ 6 claims. Thus, Plaintiffs’ claim that Defendant violated this provision fails to the extent 7 that it relies upon those same facts. In fact, it appears that Plaintiffs’ arguments regarding 8 the reasonableness of the Defendant’s investigation were expressly rejected in Beasley v. 9 State Farm Mut. Auto. Ins. Co., No. C13-1106RSL, 2014 WL 1494030, at *4 (W.D. 10 Wash. Apr. 16, 2014). There, like here, the insured argued that the insurer violated WAC 11 284-30-330(6) because it failed to consider certain elements of damages and that it did 12 not provide a timely settlement offer even though the insured did not provide full medical 13 records and information until well into the process. See id. The court granted summary 14 judgment in favor of the insurer and rejected both arguments. Specifically, given the 15 delay in obtaining the records from the insured, the court found that the insurer did not 16 have adequate information to value the claim and reasonably delayed in making an offer. 17 See id. Furthermore, like here, the court found that the categories of damages allegedly 18 not included in the insurer’s initial evaluation actually were wrapped up in other 19 considerations. Id. at *5. As such, the court found that no violation occurred. 20 Alternatively, Plaintiffs argue that Defendant violated this provision by not 21 offering any amounts for Mr. Morrison’s loss of consortium claim. See Dkt. # 74 at 7. 22 This argument is meritless. For one, as a matter of law, an insurer does not commit bad 23 faith or breach its statutory duties “by not disclosing the possibility of a loss of 24 consortium claim to” a party represented by an attorney. See Tavakoli, 2012 WL 25 6677766 at *6. Indeed, an insurer does not commit bad faith where it does not include a 26 loss of consortium claim where the insured does not disclose the claimant until after a 27 settlement offer is made. Id. That is plainly what happened here, where Plaintiffs’ 28 ORDER – 14 1 attorneys did not disclose Mr. Morrison’s claim until well after Defendant made its 2 settlement offers. See Dkt. # 57-2 (Traverso Decl.) Ex. B at 2 ($17,000 settlement offer 3 made on October 31, 2013); Dkt. # 59 (Ferguson Decl.) Ex. 4 [Boyack Depo. Tr.] at 4 7:13-17, 10:6-13 (Mr. Boyack did not represent Mr. Morrison at any point), Ex. 10 at 2 5 (Mr. Morrison first disclosed as a claimant on January 27, 2014), 3 (requesting basis for 6 valuing Mr. Morrison’s loss of consortium claim). 7 Finally, Plaintiffs argue that Defendant violated this provision by not paying out 8 its $20,000 settlement offer despite Plaintiffs’ voluminous demands for such allegedly 9 “undisputed” amounts. See Dkt. # 74 at 7. The Court disagrees. For one, Plaintiffs do 10 not provide any support for their position. They cite to no case authority and the cited 11 portions of Mr. Strzelec’s report do not stand for the proposition that insurers must pay 12 settlement offers they have made where no settlement has been reached. See Dkt. # 57-8 13 (Traverso Decl.) Ex. H at 23, 40. On the other hand, one case does stand for the 14 proposition that undisputed damages may give rise to an insurer’s duty to make partial 15 payments in certain circumstances. See Tavakoli, 2012 WL 6677766 at *6-7. However, 16 Tavakoli is easily distinguishable because there was evidence that the insurer’s 17 representatives had actually agreed that the insurer owed the insured certain expenses. 18 See id. at *6 n.5. Plaintiffs have not presented any such evidence here. Simply put, the 19 Parties never reached any agreement as to any valuation of Plaintiffs’ claim, meaning 20 there were no “undisputed” amounts. iii. Whether Defendant Offered Substantially Less than Amounts Ultimately Recovered 21 22 23 24 25 26 Next, Plaintiffs argue that Defendant violated WAC 284-30-330(7) because its final settlement offer of $20,000 is substantially less than the $100,000 policy limit Defendant recently paid. The Court disagrees. Simply put, Washington courts have rejected the “strict number comparison approach” Plaintiffs appear to present. See Am. Mfrs. Mut. Ins. Co. v. Osborn, 17 P.3d 27 28 ORDER – 15 1 1229, 1236 (Wash. Ct. App. 2001) (quoting Keller v. Allstate Ins. Co., 915 P.2d 1140, 2 1145 (Wash. Ct. App. 1996)). Instead, the focus is on the circumstances and reasoning 3 underlying of the offer. See Keller, 915 P.2d at 1145. But Plaintiffs offer nothing more than a strict comparison between Defendant’s 4 5 final $20,000 offer and the $100,000 policy limit that Defendant ultimately paid out. See 6 Dkt. # 56 at 20; Dkt. # 74 at 15. That is not enough under Washington law. What 7 matters is whether “the lower offer was reasonable in light of evidence available at the 8 time the offer was made.” See Lloyd v. Allstate Ins. Co., 275 P.3d 323, 327 (Wash. Ct. 9 App. 2012) (citing Keller, 915 P.2d at 1145). And Plaintiffs do not offer any evidence or 10 argument that the amount of the first offer was unreasonable. iv. Whether Defendant Misrepresented Pertinent Facts 11 Finally, Plaintiffs contend that Defendant violated WAC 284-30-330(1) 7 by 12 13 misrepresenting its concerns about the causation of Mrs. Bridgham-Morrison’s shoulder 14 injury. See Dkt. # 56 at 20. Plaintiffs contend that Mr. Wittels actually testified that he 15 did not have this concern while evaluating Mrs. Bridgham-Morrison’s claim (without 16 citing to the relevant portion of Mr. Wittels’ deposition). The Court finds that no misrepresentation actually occurred. Even if Mr. Wittels 17 18 did not hold that concern, he was specifically advised about that concern by his 19 supervisor. See Dkt. # 57 (Traverso Decl.) Ex. B at 3 (entry in claim file showing 20 concern about causation of injury given that all medical records related to the specific 21 motor vehicle accident); Ex. D [Wittels Depo. Tr.] at 263:8-20. In other words, 22 Defendant actually appeared to actually hold this belief, meaning that Mr. Wittels did not 23 misrepresent any pertinent fact. 24 25 26 7 27 WAC 284-30-330(1) deems an insurer’s “[m]isrepresent[ation] of pertinent facts or insurance policy provisions” to be an unfair business practice. 28 ORDER – 16 1 2 3 4 5 6 7 8 9 10 v. Conclusion In sum, the Court finds that no reasonable juror could find that Defendant acted unreasonably and in bad faith in its conduct with the Plaintiffs. The entirety of Plaintiffs’ bad faith and IFCA claims rest upon allegations of Defendant’s alleged violations of various WAC provisions. However, as set forth above, the Court finds that no reasonable juror could find that Defendant violated any of those provisions. To the contrary, the undisputed evidence shows that the Parties simply engaged in an ongoing valuation dispute that was not resolved until late in this litigation. Plaintiffs may fault Defendant for various shortcomings in its conduct, but Defendant was only obligated to reasonably investigate, value, and deal with Plaintiffs (and their attorneys). Defendant did so as a matter of law. 11 12 13 14 15 16 17 18 V. CONCLUSION For the foregoing reasons, the Court GRANTS Plaintiffs’ Motions for Voluntary Dismissal (Dkt. # 65 & 70), GRANTS Defendant’s Motion for Summary Judgment (Dkt. # 58), and DENIES Plaintiffs’ Motion for Partial Summary Judgment (Dkt. # 56). The Court dismisses Plaintiffs’ claims for breach of contract, breach of fiduciary duty, negligence, and for violations of the Washington Consumer Protection Act without prejudice. The Court grants summary judgment in favor of Defendant and against Plaintiffs on Plaintiffs’ bad faith and IFCA claims. 19 20 DATED this 11th day of May, 2016. 21 A 22 23 The Honorable Richard A. Jones United States District Judge 24 25 26 27 28 ORDER – 17
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
