Safeco Insurance, V. Folweiler Chiropractic, Ps
81520-2
| Wash. Ct. App. | Sep 7, 2021Background
- Washington requires auto insurers to offer PIP coverage, which pays medical expenses after accidents.
- Safeco uses the FAIR Health database to adjudicate provider bills and pays up to the 80th percentile.
- In Lebanon (an Illinois multistate class settlement), Safeco agreed to pay at the 80th percentile and class members covenanted not to challenge future payments.
- Folweiler, a member of the Lebanon class, sued Safeco in Washington alleging unlawful bill-review practices and asserted providers have an equitable assignment of patient PIP rights.
- The trial court denied Safeco’s dismissal motion, accepted Folweiler’s equitable-assignment theory, and certified a class; Safeco appealed.
- The Court of Appeals held the Lebanon settlement’s broad release bars Folweiler’s claims (including claims brought via equitable assignment) and reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Lebanon settlement bars Folweiler’s claims | Folweiler argued its claims (as equitable assignee of patients) are not barred because patients weren’t subject to Lebanon | Safeco argued Folweiler, as a Lebanon class member, agreed not to challenge future payments and is bound by the settlement | Lebanon settlement bars Folweiler’s claims; reversal and dismissal required |
| Whether equitable assignment gives Folweiler standing to sue patients’ statutory/WAC claims | Folweiler claimed providers receive equitable assignments of patient PIP benefits and accompanying statutory rights | Safeco argued assignment theory cannot evade the settlement and does not create independent standing | Court held equitable-assignment theory does not avoid the settlement bar; claims are prohibited |
| Whether patients suffered a cognizable injury (standing/injury) | Folweiler contended patients’ rights were impaired by reduced payments, supporting provider standing | Safeco contended patients/providers lack a compensable injury or that settlement precludes claims | Court did not reach this issue on the merits because the settlement disposition was dispositive |
| Whether express assignment is required to litigate patient statutory claims | Folweiler argued equitable assignment suffices to assert patient claims | Safeco argued express, written assignment is required and equitable assignment cannot circumvent the Lebanon covenant | Court did not decide this issue because settlement barred the suit; additional arguments not addressed |
Key Cases Cited
- McAfee v. Select Portfolio Servicing Inc., 193 Wn. App. 220 (standard of review for CR 12(b)(6) de novo)
- McGuire v. Bates, 169 Wn.2d 185 (settlement interpretation treated like contract interpretation)
- Berg v. Hudesman, 115 Wn.2d 657 (when extrinsic evidence affects contract interpretation)
- Wash. State Major League Baseball Stadium Pub. Facilities Dist. v. Huber, Hunt & Nichols-Kiewit Constr. Co., 176 Wn.2d 502 (contract interpretation as question of law absent extrinsic evidence)
- Hearst Commc’ns, Inc. v. Seattle Times Co., 154 Wn.2d 493 (focus on objective manifestations and ordinary meaning in contract interpretation)
- Chan Healthcare Grp. PS v. Liberty Mut. Fire Ins. Co. and Liberty Mut. Ins. Co., 192 Wn.2d 516 (related Washington Supreme Court decision enforcing Lebanon under full faith and credit)
- Federal Financial Co. v. Gerard, 90 Wn. App. 169 (assignee’s rights are coextensive with assignor’s rights at time of assignment)