449 P.3d 1040
Wash.2019Background
- In April 2007 Moun Keodalah (insured) collided with an uninsured motorcyclist; Keodalah had $25,000 UIM coverage with Allstate.
- Seattle Police and Allstate's recon firm (TCA) found the motorcyclist speeding; Allstate initially low‑balled settlement offers and an adjuster (Tracey Smith) allegedly misstated that Keodalah ran a stop sign and was on his phone (later admitted untrue).
- A jury found the motorcyclist 100% at fault and awarded Keodalah damages; judgment against Allstate was limited by policy to roughly the $25,000 limit.
- Keodalah sued Allstate and individually sued adjuster Smith for IFCA/IFCA‑style duties, insurance bad faith, and Consumer Protection Act (CPA) violations; the trial court dismissed claims against Smith under CR 12(b)(6).
- The Court of Appeals reversed, holding RCW 48.01.030’s duty of good faith could support bad‑faith and CPA claims against an employee adjuster; the Washington Supreme Court granted review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RCW 48.01.030 implies a private cause of action for insurance bad faith against employee adjusters | RCW 48.01.030 imposes a duty on “all persons,” so adjusters can be sued for bad faith | The statute contains no express cause of action; Bennett factors show no implied remedy and statutory scheme provides administrative remedies | No implied private cause of action under RCW 48.01.030; Bennett test fails (statute protects public, enforcement via commissioner and existing common law) |
| Whether an individual claims adjuster may be personally liable for insurance bad faith | Adjuster conduct can cause insured harm and should be liable | Bad‑faith tort is tied to insurer‑insured/quasi‑fiduciary relationship; adjuster not independently liable | Majority: employee adjusters are not personally liable for insurance bad faith (statutory basis); dissent would have allowed a common‑law bad‑faith claim in limited circumstances |
| Whether CPA per se claims may be premised on WAC 284‑30‑330 violations against an adjuster | WAC lists unfair settlement practices; violation supports per se CPA claim against adjuster | WAC provisions apply to the insurer, not individual adjusters | No—WAC 284‑30‑330 applies to the insurer; per‑se CPA claims based on those WAC provisions cannot be asserted against Smith |
| Whether RCW 48.01.030 supports a per se CPA claim against an adjuster | Breach of the statutory good‑faith duty supports per se CPA liability | RCW 48.01.030 does not create an actionable private duty; Tank and Panag limit per se CPA remedies to insured v. insurer contexts | No—RCW 48.01.030 does not provide an actionable basis for per se CPA claims against employee adjusters; dismissal affirmed as to CPA claims against Smith |
Key Cases Cited
- Perez‑Crisantos v. State Farm Fire & Casualty Co., 187 Wn.2d 669 (2017) (statute construed not to create independent private cause of action)
- Bennett v. Hardy, 113 Wn.2d 912 (1990) (three‑part test for implying statutory causes of action)
- Tank v. State Farm Fire & Cas. Co., 105 Wn.2d 381 (1986) (only an insured may bring a per se CPA action based on insurer's breach of good‑faith duty)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778 (1986) (elements and per se aspects of CPA claims)
- Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27 (2009) (CPA scope and standing; reaffirming Tank limits)
- Burnham v. Commercial Cas. Ins. Co. of Newark, 10 Wn.2d 624 (1941) (early recognition of common‑law insurer duty of good faith)
- St. Paul Fire & Marine Ins. Co. v. Onvia, Inc., 165 Wn.2d 122 (2008) (discussion of statutory/regulatory sources of bad‑faith duties)
- Evergreen Freedom Found. v. State, 192 Wn.2d 782 (2019) (statutory interpretation principles applied de novo)