Gould v. Mutual Life Ins. Co. of New York

• Decision Date: 23 April 1984
• Docket Number: No. 11463-8-I,11463-8-I
• Citation: 683 P.2d 207,37 Wn.App. 756
• Court: Washington Court of Appeals
• Parties: Harriet M. GOULD, an unremarried widow, Appellant, v. MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, a corporation, Robert L. Israel and Jane Doe Israel, his wife, C. William Bailey and Jane Doe Bailey, his wife, Respondents.

Page 756

37 Wn.App. 756

683 P.2d 207

Harriet M. GOULD, an unremarried widow, Appellant, v. MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, a corporation Robert L. Israel and Jane Doe Israel, his wife, C William Bailey and Jane Doe Bailey, his wife, Respondents.

No. 11463-8-I.

Court of Appeals of Washington Division 1.

April 23, 1984.

Ordered Published June 5, 1984.

Vaughn E. Evans, Seattle, for appellant.

Karr, Tuttle, Koch, Campbell, Mawer & Morrow, P.S., F. Lee Campbell, Rodney Vessels, Philip A. Talmadge, Seattle, for respondents.

SCHOLFIELD, Judge.

Harriet M. Gould appeals a final judgment dismissing her complaint against Robert L. Israel and C. William Bailey, their wives and respective marital communities. We reverse.

Israel and Bailey brought a motion for judgment on the pleadings to dismiss Gould's complaint. They specifically alleged and rely on the provisions of CR 12(b)(6), which permits a party to move for dismissal of a claim against him for "failure to state a claim upon which relief can be granted".

Because of the nature of the motion, we refer to the pertinent portions of Gould's "First Amended Complaint", wherein she alleges:

(1) She is sole beneficiary on an accidental death insurance policy issued on the life of her now deceased husband by the defendant, Mutual Life Insurance Company of New York.

(2) That without any evidence to support a defense of suicide, defendant Mutual and its attorneys and agents Israel and Bailey made a decision to refuse to pay the death benefits due Gould and forced her to press her claim through trial and appeal to the Supreme Court, where she ultimately prevailed.

(3) That the actions of Israel and Bailey were not limited to rendering services as attorneys of Mutual, but included

participation in and managing the wrongful and bad faith conduct as agents of Mutual Life Insurance Company of New York, including, but not limited to, making command decisions to wrongfully and in bad faith deny plaintiff's claim, initiating and approving conduct designed solely to HARASS [sic ] and humiliate plaintiff and cause her mental distress, with intent to intimidate plaintiff into abandoning her claim or settling for a mere fraction of the benefits to which plaintiff was entitled and for which plaintiff had paid premiums.

(4) That the conduct of each of the defendants constituted bad faith and unfair and deceptive acts and practices in violation of the Consumer Protection Act, RCW 19.86.

Gould first contends that the dismissal of Israel and Bailey was not a final judgment and did not terminate the action as to them because the record is insufficient to support the finding required by CR 54(b) "that there is no just reason for delay", citing Doerflinger v. New York Life Ins. Co., 88 Wash.2d 878, 567 P.2d 230 (1977). A motion to that effect was presented to Court of Appeals Commissioner Jordan and denied April 22, 1982. Because Gould did not move to modify that ruling pursuant to RAP 17.7, the ruling of the commissioner became the final decision of the court.

Israel and Bailey contend that there is no possible basis for a cause of action against them by Gould because Gould is not an insured, only a beneficiary, on the policy. In making this argument, they rely upon Rice v. Life Ins. Co., 25 Wash.App. 479, 609 P.2d 1387 (1980). In Rice, the Court of Appeals stated in dicta that one who is not an insured does not have a cause of action against an insurance company under the Consumer Protection Act.

The sole authority cited for this proposition was the case of Rounds v. Union Bankers Ins. Co., 22 Wash.App. 613, 590 P.2d 1286 (1979). We read the language from the Rounds opinion, cited and relied upon in Rice, as holding that there was a legislative intent to provide a remedy for an insured who suffers damages due to conduct such as that alleged against the defendant in that case. The Rounds opinion does not address the question of whether a beneficiary to a life insurance policy would or would not have a cause of action against the life insurance company under the Consumer Protection Act.

If an insured has a cause of action against an insurance company for bad faith in the manner in which the insurance company processes a claim against it, there is nothing in the language of the Consumer Protection Act to suggest that a beneficiary of a policy would not also have a cause of action against the insurance company under similar circumstances. Because there is no logical basis upon which to distinguish Gould from the insured under the circumstances of this case, we decline to hold that a beneficiary of a life insurance policy does not have a cause of action against the insurer under the Consumer Protection Act for bad faith in settling her claim.

In addressing a motion to dismiss under CR 12(b)(6), our Supreme Court stated:

We have repeatedly said that a motion made pursuant to CR 12(b)(6) must be denied unless it appears beyond doubt that the plaintiff can prove no set of facts, consistent with the complaint, which would entitle the plaintiff to relief. Halverson [Halvorson] v. Dahl, 89 Wn.2d 673, 674, 574 P.2d 1190 (1978); Berge v. Gorton, 88 Wn.2d 756, 759, 567 P.2d 187 ...