261 F. Supp. 3d 1110
W.D. Wash.2017Background
- In August 2013 Eileen Hanson was struck by an underinsured motorist; her PIP benefits ($10,000) were exhausted and she pursued a UIM claim under her State Farm policy.
- Plaintiff’s counsel submitted a UIM demand in Sept. 2014; State Farm investigated, evaluated the claim in a new-money range of about $50,367.16 to $70,367.16, and paid $50,367.16 in November 2014 as an initial payment.
- State Farm invited additional medical information and later offered another $10,000 in December 2015 (total offered new money ≈ $60,367.16); plaintiff rejected and demanded the full remaining UIM limit.
- State Farm arranged an independent neuropsychological exam (Dr. Alan Breen); Dr. Breen (2016 report) found no cognitive impairment attributable to the accident, consistent with treating neuropsychologist Dr. Formea’s earlier report.
- Plaintiff sued (Mar. 2016) asserting IFCA, bad faith, and CPA claims; State Farm moved for partial summary judgment on those extra-contractual claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IFCA claim based on WAC violations is viable | Hanson: IFCA claim premised on WAC violations (e.g., WAC § 284-30-330) | State Farm: IFCA requires unreasonable denial of coverage/benefits; cannot be based solely on WAC violations per Perez-Crisantos | Court: Dismissed IFCA claim — IFCA claims cannot be premised on WAC violations alone |
| Bad faith / CPA — failure to value future damages | Hanson: State Farm refused to include future damages it accepted she suffered | State Farm: Considered treating and independent neuro reports showing no long‑term deficits; valuation was reasonable | Court: Dismissed — no reasonable juror could find insurer acted unreasonably given available evidence |
| Bad faith / CPA — failure to contact treating providers | Hanson: State Farm unreasonably failed to obtain additional provider support despite requests | State Farm: Repeatedly asked for any new information, had treating reports, met plaintiff, arranged independent exam; could rely on counsel to provide updates | Court: Dismissed — investigation was reasonable; no duty to obtain every possible opinion |
| Bad faith / CPA — reliance on Dr. Breen (independent examiner) | Hanson: Dr. Breen was biased and financially interested; his report favored insurer | State Farm: Independent exam was reasonable; Mr. Olive’s assertions are conclusory; Breen’s opinion aligned with treating neuropsychologist | Court: Dismissed — use of independent examiner was reasonable; plaintiff’s evidence is speculative/conclusory |
| Bad faith / CPA — concealment of internal valuation / investigatory delay | Hanson: State Farm concealed its internal valuation and delayed investigation, refused additional $10,000 | State Farm: Paid initial new‑money promptly, later offered more; no duty to disclose internal valuation; any delay attributable to plaintiff’s counsel | Court: Dismissed — disparity in valuation alone insufficient; no unreasonable delay or concealment shown |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (burden on nonmoving party at summary judgment)
- Lujan v. National Wildlife Federation, 497 U.S. 871 (conclusory affidavits insufficient)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment when a party lacks evidence on an essential element)
- Perez-Crisantos v. State Farm Fire & Cas. Co., 187 Wash.2d 669 (insureds cannot premise IFCA claims solely on WAC violations)
- St. Paul Fire & Marine Ins. Co. v. Onvia, Inc., 165 Wash.2d 122 (elements and standard for insurer bad faith)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wash.2d 778 (CPA elements)
- Smith v. Safeco Ins. Co., 150 Wash.2d 478 (insurer entitled to summary judgment if denial was based upon reasonable grounds)
- Starczewski v. Unigard Ins. Grp., 61 Wash.App. 267 (insurer must have no reasonable justification for bad faith)