Peoples v. United Servs. Auto. Ass'n (Majority)Annotate this Case
Krista Peoples and Joel Stedman filed Washington Consumer Protection Act ("CPA") suits against their insurance carriers for violating Washington claims-handling regulations and wrongfully denying them personal injury protection (PIP) benefits. The federal district court for the Western District of Washington certified a question of law relating to whether Peoples and Stedman alleged an injury to "business or property" to invoke their respective policies' PIP benefits. Peoples alleged her insurance carrier refused, without any individualized assessment, to pay medical provider bills whenever a computerized review process determined the bill exceeded a predetermined limit, and that the insurance company's failure to investigate or make individualized determinations violated WAC 284-30-330(4) and WAC 284-30-395(1). Due to this practice of algorithmic review, the insurance carrier failed to pay all reasonable medical expenses arising from a covered event, in violation or RCW 48.22.005(7). Stedman alleged his carrier terminate PIP benefits whenever an insured reached "Maximum Medical Improvement," which he alleged violated WAC 284-30-395(1). The Washington Supreme Court held an insurance carrier's wrongful withholding of PIP benefits injures the insured in their "business or property." An insured in these circumstances may recover actual damages, if proved, including out-of-pocket medical expenses that should have been covered, and could seek injunctive relief, such as compelling payment of the benefits to medical providers. Other business or property injuries, apart from wrongful denial of benefits, that are caused by an insurer's mishandling of PIP claims are also cognizable under the CPA.