Anastasia Fortson-Kemmerer v. Allstate Insurance Company
198 Wash. App. 387
| Wash. Ct. App. | 2017Background
- In 2005 Fortson-Kemmerer was injured by a hit-and-run driver and sought $75,000 in underinsured motorist (UIM) benefits from Allstate; Allstate initially offered about $9,978.
- She sued Allstate in 2011 for UIM benefits and, after mandatory arbitration, received an award of $44,151.11; Allstate paid the award after a rejected post-award offer.
- After the UIM award, Fortson-Kemmerer brought a separate lawsuit alleging Allstate acted in bad faith and violated the Insurance Fair Conduct Act (IFCA) by unreasonably investigating and handling her claim.
- Allstate moved for summary judgment, arguing the earlier UIM judgment precluded (res judicata / claim preclusion) the later bad faith and IFCA claims because they "could have" been asserted earlier.
- Fortson-Kemmerer opposed summary judgment with evidence showing insurers commonly obtain bifurcation/stays that (in practice) separate UIM proceedings from subsequent bad faith litigation and argued the insurer’s "quality" or posture differs between UIM defense (adversarial, stepping into tortfeasor’s shoes) and bad faith litigation (quasi‑fiduciary toward insured).
- The trial court granted summary judgment for Allstate; the Court of Appeals reversed, holding the prior UIM arbitration did not preclude the later bad faith/IFCA suit because Allstate’s "quality" differed between the two proceedings, producing prejudice if claims were forced into one action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a final UIM judgment bars a later bad faith / IFCA claim (claim preclusion) | UIM arbitration did not resolve insurer-conduct claims; insurer had different posture in each action so res judicata does not apply | The IFCA/bad faith claims "could have" been asserted in the earlier action and therefore are precluded by the prior judgment | Reversed: UIM judgment does not preclude later bad faith/IFCA suit because the insurer's "quality" differed and prejudice would result |
| Whether the four identity factors for claim preclusion are satisfied | Parties identical but other identity factors (subject-matter, cause, quality) differ; especially the "quality" of Allstate as party | Prior demand letter threatened IFCA, so plaintiff "could have" litigated all claims earlier; modern transactional approaches support preclusion | Court applied traditional four-factor test and found lack of identity in "quality" dispositive against preclusion |
| Relevance of common judicial practice to bifurcate/stay bad faith claims | Frequent practice of bifurcation/stay shows parties and courts treat UIM and bad faith as effectively separate proceedings, supporting nonpreclusion | Bifurcation is discretionary and problems can be addressed by back-to-back trials or combined discovery | Court relied on practical effect of bifurcation/stays to show prejudice and different party posture, supporting nonpreclusion |
| Whether adopting Restatement transactional or pragmatic approach controls | Plaintiff argued Washington law requires the four identities and resists wholesale adoption of Restatement transactional test | Allstate urged broader transactional preclusion (claims that could have been brought) | Court reaffirmed Washington’s four-factor framework and declined to adopt Restatement as overriding rule; pragmatic considerations inform the "quality" factor |
Key Cases Cited
- Norris v. Norris, 95 Wn.2d 124 (Wash. 1980) (claim preclusion prevents relitigation of claims that were or should have been decided)
- Northern Pac. Ry. Co. v. Snohomish County, 101 Wash. 686 (Wash. 1918) (four identities required for res judicata)
- Seattle-First Nat'l Bank v. Kawachi, 91 Wn.2d 223 (Wash. 1978) (a plaintiff is not required to join every joinable cause of action; judgment bars only matters properly a part of earlier controversy)
- Fisher v. Allstate Ins. Co., 136 Wn.2d 240 (Wash. 1998) (a tort judgment can establish damages for UIM coverage; insurer stands in tortfeasor’s shoes)
- Ellwein v. Hartford Accident & Indem. Co., 142 Wn.2d 766 (Wash. 2001) (UIM insurer-insured relationship is adversarial in enforcement of policy)
- Cedele v. Farmers Ins. Co. of Wash., 176 Wn.2d 686 (Wash. 2013) (insurer’s duties and potential quasi-fiduciary obligations in first-party contexts)
- Mellor v. Chamberlin, 100 Wn.2d 643 (Wash. 1983) (party "quality" can differ between suits where causes of action change)