Beasley v. GEICO Gen. Ins. Co.

• Decision Date: 20 September 2022
• Docket Number: 54997-2-II
• Citation: 517 P.3d 500
• Parties: Jerymaine BEASLEY, Appellant/Cross Respondent, v. GEICO GENERAL INSURANCE COMPANY, a foreign insurer, Respondent/Cross Appellant, and Aaron Yaws and Jane Doe Yaws, husband and wife and their marital community, Defendants.
• Court: Washington Court of Appeals

517 P.3d 500

Jerymaine BEASLEY, Appellant/Cross Respondent,
v.
GEICO GENERAL INSURANCE COMPANY, a foreign insurer, Respondent/Cross Appellant,
and
Aaron Yaws and Jane Doe Yaws, husband and wife and their marital community, Defendants.

No. 54997-2-II

Court of Appeals of Washington, Division 2.

Filed September 20, 2022

George M. Ahrend, Luvera Law Firm, 457 1st Ave., Nw, P.O. Box 816, Ephrata, WA, 98823-0816, Terence F. Traverso, Law Offices of Terence F. Traverso PS, 1408 140th Pl Ne Ste. 140, Bellevue, WA, 98007-3964, for Appellant/Cross-Respondent.

Glenn Earle Barger, Sean David Lanz, Barger Law Group PC, 5005 Meadows Rd. Ste. 130, Lake Oswego, OR, 97035-5294, Marilee C. Erickson, Reed McClure, 1215 4th Ave., Ste. 1700, Seattle, WA, 98161-1087, for Respondent/Cross-Appellant.

PART PUBLISHED OPINION

Cruser, A.C.J.

¶1 This case involves an action under RCW 48.30.015, a provision of the Insurance Fair Conduct Act¹ (IFCA). The primary issue is whether the term "actual damage" as used in RCW 48.30.015 includes noneconomic damages.

¶2 The appellant/cross respondent, Jerymaine Beasley, challenges the trial court's orders (1) granting the uninsured motorist (UIM) insurer GEICO General Insurance Company's motion to exclude noneconomic damages from the actual damages recoverable under IFCA and not instructing the jury on noneconomic damages related to the IFCA claim, and (2) denying Beasley's post-trial motion for reconsideration. GEICO cross appeals, arguing that (1) the IFCA claim was not proper because it was based on regulatory violations, (2) the trial court erred when it granted Beasley's motion as a matter of law and found that GEICO had unreasonably denied payment of benefits by failing to pay the agreed-to portion of a settlement offer, and (3) the trial court erred when it granted Beasley's request to treble the IFCA damages award because that decision was based on a mischaracterization of the evidence.

¶3 In the published portion of this opinion, we hold that noneconomic damages are available under IFCA, reverse the trial court's orders related to noneconomic damages under IFCA, and remand for a new trial on noneconomic damages. In the unpublished portion of this opinion, we reject the cross appeal arguments.

FACTS

I. ACCIDENT AND DEMAND

¶4 Jerymaine Beasley was injured in a car accident that occurred when he was the passenger in Anar Askerov's vehicle. The accident was caused by the driver of the other car, who had policy limits of $25,000 and therefore was "underinsured." Clerk's Papers (CP) at 3. Askerov's insurance policy with GEICO included UIM coverage.

¶5 Beasley demanded that GEICO pay the $100,000 limit of Askerov's UIM policy. GEICO offered to pay $10,000 to settle Beasley's UIM claim. Beasley rejected the offer as insufficient, but his counsel requested that GEICO pay the $10,000 as an undisputed

517 P.3d 506

UIM amount. GEICO did not issue the $10,000 payment.

II. LAWSUIT

¶6 Beasley sued GEICO. Among other claims, Beasley alleged that GEICO had violated RCW 48.30.015 of IFCA, breached the duty of insurance good faith, breached its fiduciary duty, violated the Consumer Protection Act² (CPA), acted negligently, and breached the insurance contract. Beasley sought a broad range of relief including "special, general and/or actual damages;" "exemplary/punitive damages;" "costs, including reasonable attorney's fees;" and "treble damages ... for each violation by [GEICO] of [IFCA]." Id. at 7-8. The case proceeded to a jury trial.

A. TRIAL TESTIMONY

1. GARY WILLIAMS

¶7 At trial, Gary Williams, an attorney and former insurance adjuster, testified for Beasley. Williams testified that even when the ultimate amount of the claim is in dispute, "[i]nsurance companies should pay what we call ‘undisputed amounts," the amount "that this case is not going to go below." 3 Report of Proceedings (RP) at 353.

¶8 Williams further testified that GEICO made a settlement offer of $10,000 in exchange for Beasley " ‘drop[ping] all [of his] claims.’ " Id. at 356. He noted that GEICO did not dispute that it owed Beasley $10,000, but it never paid Beasley the $10,000.

2. MICHAEL MURPHY

¶9 Michael Murphy, the claims supervisor at GEICO who initially handled Beasley's UIM claim, also testified for Beasley. Murphy testified that he was taken off the claim after Beasley filed his IFCA notice and was replaced by claims adjuster Lawrence Bork.

¶10 Murphy also testified about his training at GEICO when he joined the company in 2010. Murphy testified that pain and suffering were two types of noneconomic damages and that he was trained on how to evaluate pain and suffering claims. He admitted that he was not "to [his] knowledge" ever trained "on any other elements of noneconomic damages." 4 RP at 473. And he agreed that during his tenure as a bodily injury adjuster supervisor, he had "never valuated and paid for any noneconomic damages other than pain and suffering." Id. at 474. But he acknowledged that "loss of enjoyment of life, embarrassment, inconvenience, noneconomic damages, other than pain and suffering," could "sometimes be part of the claim that's being made." Id. at 475-76. And he stated that he recalled cases in which such damages were awarded.

¶11 In response to a jury question, Murphy testified that there were times GEICO would pay undisputed benefits in a UIM claim before the case was final. Murphy then testified about what "undisputed benefits in UIM cases" were:

Q. [Beasley's counsel] So what are undisputed benefits in UIM cases?

A. [Murphy] Okay. So my understanding is that if we're in the phase of negotiation where there's an offer and a demand, a dollar figure, then there would be an undisputed amount.

If the offer is lower than the demand, then the offer—usually, it would be outside of our procedure to pay the offer before there's an agreed-upon amount, but it could be possible. I've heard of situations where it could be.

Q. So a settlement offer is what an undisputed benefit is in the UIM context under your definition?

A. In my understanding, yeah.

Q. So if an offer is made in a UIM case, and you told us earlier that undisputed UIM benefits should be paid as soon as possible, then whatever that amount of the offer is, it should be paid as soon as possible, right?

A. Yes.

Q. And not paying that would be a violation of insurance standards, wouldn't it?

517 P.3d 507

A. Yes.

Id. at 616-17.

3. LAWRENCE BORK

¶12 Bork testified that after he was assigned to Beasley's UIM claim, he made "a settlement offer of $10,000." Id. at 620. In response to Beasley's counsel asking if "those would be undisputed UIM benefits," Bork responded, "[t]hat was the offer that was made, yes." Id.

¶13 Counsel then asked Bork if "those would be undisputed UIM benefits that the claim[ant] is entitled to?" Id. at 621. Bork responded, "It was the—it was the offer made as settlement that—that we believe was fair and reasonable as a settlement offer." Id. Counsel then asked Bork if he disputed whether those benefits were owed, and Bork responded, "No." Id. Bork later agreed that he had valued Beasley's UIM claim at $10,000. Bork also testified that he did not issue a check to Beasley for $10,000.

B. MOTION TO EXCLUDE NONECONOMIC DAMAGES UNDER IFCA CLAIM AND IFCA DAMAGES JURY INSTRUCTION

¶14 After Beasley presented his case-in-chief, GEICO moved to prevent him from arguing that he was entitled to noneconomic damages under the IFCA claim or from presenting any jury instructions to that effect. GEICO admitted that there was no state case law addressing the availability of noneconomic damages in an IFCA claim, but it directed the trial court to two federal cases, Schreib v. American Family Mutual Insurance Co. , 129 F. Supp. 3d 1129, (W.D. Wash. 2015), and Dees v. Allstate Insurance Co. , 933 F. Supp. 2d 1299 (W.D. Wash. 2013).

¶15 Relying on Schreib , the trial court concluded that the IFCA claim did not include noneconomic damages because the claim sounded in negligence rather than intentional tort, and granted GEICO's motion. Based on this ruling, the trial court refused to provide the jury with Beasley's proposed instruction on damages under IFCA that included noneconomic damages.

C. BEASLEY'S CR 50 MOTION

¶16 During trial, Beasley moved under CR 50 for the trial court to decide as a matter of law that GEICO had violated IFCA based on GEICO's "fail[ure] to pay undisputed UIM benefits and refus[al] to pay them as soon as possible." 1 RP at 32. GEICO opposed this motion, arguing that the $10,000 was a compromise offer rather than an undisputed amount and that the jury, not the court, should determine if the $10,000 was an undisputed amount.

¶17 The trial court granted Beasley's motion, stating:

At this point we have no evidence in contradiction. We have the letter, but it's just an interpretation. But the person who's somewhat behind the authoring of that letter says, "I construed that as 10,000 undisputed."

Based on the evidence, I think I have to rule in favor of plaintiffs on this.

Id. at 54.

¶18 When instructing the jury on the elements of the IFCA claim, the trial court included the following language: "The Court has determined the [GEICO] unreasonably denied the payment of benefits by failing to pay the undisputed $10,000 offer of UIM benefits made on October 23, 2015." CP at 164.

D. VERDICT

¶19 The jury found that Beasley had proven his IFCA claim and that Beasley's IFCA-related damages were $84,000. The jury further found that Beasley had proved his insurance bad faith claim and that he had incurred $400,000 in noneconomic damages related to that claim.

E. BEASLEY'S MOTION FOR RECONSIDERATION AND TREBLING OF IFCA DAMAGES

¶20 After the verdict, Beasley moved for reconsideration of the trial court's exclusion of noneconomic damages under the IFCA claim. Beasley also requested that the trial court treble the IFCA damages awarded by the jury. He further argued that if the trial court reconsidered the exclusion of the noneconomic damages under IFCA, the court

517 P.3d 508

should treble the...