Vorhees v. Esurance Insurance Services Inc
2:23-cv-00420
| W.D. Wash. | Jun 20, 2024Background
- Plaintiffs (Justin Vorhees and Kassi Blanchard) were involved in a car accident in July 2018 and submitted a claim to their insurer, Esurance, seeking UIM (Underinsured Motorist) and PIP (Personal Injury Protection) benefits.
- Blanchard received $100,000 in UIM benefits; Vorhees received $10,000 in PIP benefits, but later had a disputed UIM claim based in part on alleged wage losses following the accident.
- Vorhees claimed his handyman business shut down due to the accident, resulting in substantial economic damages; Esurance questioned the validity and documentation of Vorhees' wage loss claims.
- Esurance made settlement offers based on available medical documentation but disputed the wage loss figures, relying on social media evidence indicating Vorhees was physically active post-accident.
- Plaintiffs sued Esurance for breach of contract, IFCA violations, insurance bad faith, and CPA (Consumer Protection Act) violations after settlement discussions failed.
- Both parties moved for partial summary judgment; Esurance also moved to exclude Plaintiffs’ insurance expert.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| IFCA violation for denial of ‘undisputed’ benefits | Esurance failed to pay an ‘undisputed’ sum ($55,696.78) allegedly owed under the policy. | No obligation to pay settlement offers not accepted; no evidence sum was truly ‘undisputed’ or requested; actions were reasonable. | For Esurance: No IFCA violation; no unreasonable denial found. |
| Insurance bad faith | Esurance’s investigation/settlement conduct was unreasonable, frivolous, or unfounded. | Claims handling was reasonable given documentation and conflicting evidence (social media, incomplete records). | For Esurance: No bad faith; actions deemed reasonable. |
| Washington Consumer Protection Act violation | Esurance’s conduct constituted an unfair trade practice and caused injury to business/property. | No unfair practice or injury; all documented claims were paid, and wage loss claim was reasonably disputed. | For Esurance: No CPA violation; no qualifying injury shown. |
| Counterclaim filed in bad faith (Rule 11) | Esurance’s counterclaim is frivolous/baseless and damages reputation. | Counterclaim has evidentiary support (social media, business records); lack of ultimate merit doesn’t show bad faith. | For Esurance: Counterclaim stands; not a Rule 11 violation. |
| Exclusion of Plaintiffs’ expert witness | --- | Lacks Washington-specific insurance expertise; not qualified. | For Plaintiffs: Expert testimony allowed; weight/credibility for jury to decide. |
Key Cases Cited
- Smith v. Safeco Ins. Co., 150 Wn.2d 478 (Wash. 2003) (sets out requirements for insurance bad faith claims in Washington)
- Kirk v. Mt. Airy Ins. Co., 134 Wn.2d 558 (Wash. 1998) (establishes elements for bad faith under Washington law)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778 (Wash. 1986) (articulates the five elements for a CPA claim in Washington)
- Am. States Ins. Co. v. Symes of Silverdale, Inc., 150 Wn.2d 462 (Wash. 2003) (discusses insurer’s duties under UIM)
- Coventry Associates v. Am. States Ins. Co., 136 Wn.2d 269 (Wash. 1998) (breach of insurer good faith is a CPA violation)