Jha v. Chicago Title Insurance Company
2:23-cv-00584
W.D. Wash.Jul 31, 2024Background
- Plaintiffs Lakhan Jha and Minakshi Kumari purchased a house in Woodinville, WA, and bought title insurance from Chicago Title Insurance Company.
- Plaintiffs later discovered a covered easement defect (the "2000 Easement") and filed a claim with Chicago Title.
- Chicago Title acknowledged coverage for the defect in 2021 but did not tender payment until more than a year later, after Plaintiffs filed suit.
- Chicago Title's offer was $5,000, based on an appraisal valuing the property as vacant land; Plaintiffs contested this valuation, arguing it should include improvements.
- Plaintiffs asserted breach of contract, bad faith, CPA, IFCA, and negligence claims, alleging undervaluation and delayed payment violated the insurer's obligations.
- The court previously narrowed the contract claim to the 2000 Easement issue and now addresses summary judgment on the remaining claims by Defendant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendant breached the insurance contract | Did not pay full value for the 2000 Easement loss | Paid correct amount per vacant land appraisal; no breach | Material fact issues preclude summary judgment |
| Whether claims handling was in bad faith | Delayed response and undervalued claim; failed good faith duties | Acted reasonably, promptly accepted and paid claim | Material fact issues preclude summary judgment |
| IFCA violation (unreasonable denial of coverage) | Delay and low offer amounted to effective denial of benefits | Offered payment; no outright denial | Material fact issues preclude summary judgment |
| CPA violation | Failure to follow regulations resulted in per se CPA violation | No violation; some facts disputed | Material fact issues preclude summary judgment |
Key Cases Cited
- Miebach v. Safeco Title Ins. Co., 743 P.2d 845 (Wash. Ct. App. 1987) ("actual loss" in title insurance means diminution in value, including loss of beneficial bargain)
- Coventry Assoc. v. Am. States Ins. Co., 961 P.2d 933 (Wash. 1998) (insurer has fiduciary duty of good faith and fair dealing in claim handling)
- Kirk v. Mt. Airy Ins. Co., 951 P.2d 1124 (Wash. 1998) (damages for insurer’s breach should put insured in position as if no breach occurred)
- Mut. of Enumclaw Ins. Co. v. Dan Paulson Const., Inc., 169 P.3d 1 (Wash. 2007) (bad-faith insurance claims analyzed as tort claims, duty of good faith applies)
- Smith v. Safeco Ins. Co., 78 P.3d 1274 (Wash. 2003) (bad faith is unreasonable, frivolous, or unfounded insurer conduct)