Poco, LLC v. Farmers Crop Insurance Alliance, Inc.
712 F. App'x 617
| 9th Cir. | 2017Background
- POCO, LLC sued Farmers Crop Insurance Alliance (FCIA) alleging breach of contract, misrepresentation, and violation of the Washington Consumer Protection Act (CPA) arising from settlement of claims under POCO’s 2003 federally reinsured crop insurance policies.
- FCIA and POCO executed a Mutual Release relating to POCO’s indemnity claims under 2003 Multiple Peril Crop Insurance (MPCI) and Adjusted Gross Revenue (AGR) policies and FCIA’s handling/adjustment of those claims.
- POCO contended the Release’s phrase “its insurance companies” included the Federal Crop Insurance Corporation (and thus the federal government), arguing the Release barred later federal criminal charges.
- POCO also alleged FCIA knew of a federal criminal investigation and misrepresented/failed to disclose that fact, causing POCO to accept the Release.
- The district court granted summary judgment for FCIA on all claims; POCO appealed. The Ninth Circuit reviewed the grant of summary judgment de novo and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Mutual Release barred federal criminal claims | The phrase “its insurance companies” includes the Federal Crop Insurance Company/the federal government, so the Release extinguished related claims | The Release, read objectively, does not bind the federal government; scope is limited to indemnity disputes between parties | Court: Release does not cover federal criminal prosecution; no breach of contract |
| Whether FCIA knowingly concealed a criminal investigation (misrepresentation) | FCIA knew of a federal investigation and failed to disclose it, making the Release invalid | POCO produced no admissible evidence showing FCIA knew of the investigation during 2003; evidence relied on a 2004 policy | Court: POCO failed to raise a genuine dispute of FCIA’s knowledge; summary judgment for FCIA |
| Whether POCO reasonably relied on any alleged misrepresentation | POCO reasonably relied on FCIA’s conduct/terms when executing the Release | Any alleged misrepresentation could not have been reasonably relied on under the circumstances | Court: As a matter of law POCO could not reasonably rely; misrepresentation claim fails |
| Whether FCIA’s conduct violated the Washington CPA (unfair/deceptive practice) | The Release and FCIA’s settlement conduct were deceptive/unfair and violated insurance unfair settlement regs supporting a CPA claim | No deception or unfairness: no misrepresentation and no evidence FCIA knew of the investigation; regulatory violation not shown | Court: No unfair or deceptive act shown; CPA claim fails |
Key Cases Cited
- Suzuki Motor Corp. v. Consumers Union of U.S., Inc., 330 F.3d 1110 (9th Cir. 2003) (standard of review for summary judgment)
- Hearst Commc’ns, Inc. v. Seattle Times Co., 115 P.3d 262 (Wash. 2005) (objective manifestation rule for contract interpretation)
- Oliver v. Flow Int’l Corp., 155 P.3d 140 (Wash. Ct. App. 2006) (contract words given their reasonable meaning)
- ESCA Corp. v. KPMG Peat Marwick, 959 P.2d 651 (Wash. 1998) (elements for negligent misrepresentation)
- Pope v. Univ. of Wash., 852 P.2d 1055 (Wash. 1993) (knowledge of concealed facts is a precondition for misrepresentation liability)
- Hawkins v. Empress Healthcare Mgmt., LLC, 371 P.3d 84 (Wash. Ct. App. 2016) (reasonable reliance requirement for fraudulent misrepresentation)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531 (Wash. 1986) (unfair or deceptive acts element for CPA claims)