Arika Prince v. State Farm Automobile Insurance Company
74407-1
| Wash. Ct. App. | Oct 24, 2016Background
- Arika Prince was injured by an uninsured motorist and had UIM and PIP coverage under her parents’ State Farm policy; State Farm paid $10,000 in PIP and $4,000 pretrial for general damages.
- Prince obtained a mandatory arbitration award of $70,480.07, reduced to the $50,000 statutory maximum; she requested a trial de novo.
- After arbitration, Prince served a $17,499 offer of compromise; she later disclosed that offer to the court before judgment was entered.
- A jury returned a verdict for Prince of $17,947.07. The trial court ruled State Farm was not entitled to a PIP offset and awarded Prince MAR attorney fees and costs ($88,804.75 in fees; $10,623.20 in costs) after reducing fees related to the premature disclosure.
- State Farm appealed, arguing the trial court (1) failed to make a detailed fee analysis in its PIP offset ruling, (2) should have forfeited all MAR fees for premature disclosure, and (3) the fee award was disproportionate to the amount in controversy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused discretion by not providing a detailed lodestar/factor analysis of reasonable fees in its PIP offset ruling | Prince: no detailed analysis required in PIP offset; court used agreed formula and later performed a full fee analysis | State Farm: PIP offset requires precise, supported calculation of reasonable fees used in the offset formula | Court: No abuse — no authority requires detailed fee findings in the PIP-offset ruling; later detailed MAR fee analysis by same judge sufficed |
| Whether premature disclosure of the postarbitration offer (RCW 7.06.050(1)(c)) required forfeiture of MAR fees | Prince: violation occurred but total forfeiture is excessive; limited sanction is appropriate | State Farm: premature disclosure while offset motion pending tainted the process and warrants forfeiture | Court: No abuse — trial court was best positioned to weigh severity; applied lesser sanction by excluding time related to disclosure rather than forfeiture |
| Whether the MAR fee award ($88,804.75) was grossly disproportionate to the amount in controversy | Prince: consider the arbitrator’s larger award and the work to generate the common fund; fees were reasonable | State Farm: fee amount was disproportionate given the verdict and offer (~$17–18k); court should downwardly adjust | Court: No abuse — arbitrator’s initial $70k award made the fee not grossly disproportionate; trial court’s lodestar findings adequate |
| Entitlement to appellate fees under MAR 7.3 | Prince: Prevailing below and State Farm did not improve its position on appeal, so appellate fees are warranted | State Farm: (implicit) should not be liable for appellate fees if it reasonably appealed | Court: Prince entitled to appellate fees under MAR 7.3 if she complies with RAP 18.1(d) |
Key Cases Cited
- Hamm v. State Farm Mut. Auto. Ins. Co., 151 Wn.2d 303 (2004) (PIP reimbursement and pro rata share of attorney fees principles)
- Mahler v. Szucs, 135 Wn.2d 398 (1998) (standing limits on challenging attorney-fee agreements)
- Hernandez v. Stender, 182 Wn. App. 52 (2014) (premature disclosure of postarbitration offer can warrant fee forfeiture when it frustrates statutory purpose)
- Berryman v. Metcalf, 177 Wn. App. 644 (2013) (excessive-fee review and proportionality to amount in controversy)
- Scott Fetzer Co. v. Weeks, 122 Wn.2d 141 (1993) (discussing excessiveness where fees greatly exceed amount in controversy)