Heide v. State Farm Mutual Automobile Insurance Company
2:16-cv-00652
W.D. Wash.May 26, 2017Background
- On May 27, 2015 Christopher Heide was rear-ended; he claimed back injuries and later suffered gastrointestinal (GI) bleeding after taking NSAIDs for pain.
- Heide tendered an underinsured motorist (UIM) claim to State Farm (his mother’s insurer); medical records noted providers suspected NSAID-related GI bleed but etiology was not conclusively established.
- State Farm’s initial UIM offer was $11,900, later increased to $12,840 plus PIP waivers; State Farm treated GI-bleeding treatment as unrelated to the accident.
- Heide’s counsel sent the IFCA notice and demanded policy limits ($50,000); Heide rejected State Farm’s offer and sued alleging IFCA violation, insurance bad faith, and CPA violation.
- The central factual dispute: whether State Farm unreasonably concluded the GI bleed was unrelated to the accident (i.e., unrelated to NSAID use prescribed for accident pain).
- Court considered whether State Farm’s offer constituted an unreasonable denial/payment of benefits (IFCA), supported a bad-faith claim, and whether Heide showed cognizable CPA injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether offer violated IFCA (unreasonable denial/payment of benefits) | Heide: Offer was unreasonable because State Farm unreasonably excluded GI bleeding linked to NSAID use after the accident | State Farm: Offer reflected a reasonable dispute over causation/value; not an IFCA violation | Denied summary judgment for State Farm — genuine dispute of material fact exists about reasonableness of insurer's causation determination |
| Whether insurer committed tortious bad faith | Heide: Same conduct (excluding GI bleed) was unreasonable and supports bad-faith claim | State Farm: Conduct was reasonable evaluation of the claim | Denied summary judgment — same factual dispute precludes resolution as a matter of law |
| Whether CPA claim is viable (cognizable injury to business or property) | Heide: Claimed unpaid medical bills, lost wages, pain and suffering as CPA injuries | State Farm: Those injuries are derivative of personal injury and not business/property injuries under CPA | Granted summary judgment for State Farm — CPA claim dismissed with prejudice |
| Whether summary judgment standards require resolution | Heide: Reasonable minds could differ given medical records; credibility/causation are disputed | State Farm: Medical evidence did not link GI bleed to accident; its offer was reasonable as a matter of law | Court: Where medical providers suspected NSAID cause and no alternative was confirmed, reasonable minds could differ; summary judgment inappropriate on IFCA/bad faith |
Key Cases Cited
- Smith v. Safeco Ins. Co., 150 Wn.2d 478 (2003) (bad-faith standard: insurer must act reasonably under circumstances)
- Hangman Ridge Training Stables v. Safeco Title Ins. Co., 105 Wn.2d 778 (1986) (elements required for a CPA claim)
- Ambach v. French, 167 Wn.2d 167 (2009) (personal-injury damages are not CPA business/property injuries)
- Hiner v. Bridgestone/Firestone, Inc., 91 Wn. App. 722 (1998) (lost wages and medical expenses not cognizable CPA injuries)
- Perez-Crisantos v. State Farm Fire & Cas. Co., 187 Wn.2d 669 (2017) (regulatory violations alone do not create an IFCA claim)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burden-shifting)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (materiality and genuine dispute standard for summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (when summary judgment is warranted where record could not lead a rational trier of fact)