Hamblin v. Garcia

• Decision Date: 26 September 2022
• Docket Number: 82788-0-I
• Citation: 517 P.3d 1080
• Parties: Andrew HAMBLIN, Respondent, v. Luis CASTILLO GARCIA, individually, and National General Insurance Company, a foreign insurance company, and Integon Preferred Insurance Company, Appellants.
• Court: Washington Court of Appeals

517 P.3d 1080

Andrew HAMBLIN, Respondent,
v.
Luis CASTILLO GARCIA, individually, and National General Insurance Company, a foreign insurance company, and Integon Preferred Insurance Company, Appellants.

No. 82788-0-I

Court of Appeals of Washington, Division 1.

Filed September 26, 2022

William L. Weber, Rick J. Wathen, Wathen Leid Hall Rider, P.C., 222 Etruria Street, Seattle, WA, 98109-1659, for Appellants.

Andrew James Kinstler, Kevin Khong, Helsell Fetterman LLP, 1001 4th Ave. Ste. 4200, Seattle, WA, 98154-1154, for Respondent.

Brent William Beecher, Hackett Beecher & Hart, 601 Union St. Ste. 2600, Seattle, WA, 98101-2302, for Other Parties.

PUBLISHED OPINION

Coburn, J.

517 P.3d 1085

¶ 1 Driver Louis Castillo Garcia T-boned a car driven by Andrew Hamblin causing long-term injuries. After Castillo Garcia's insurer, National General Insurance Company (National), declined a demand for a $100,000 coverage policy limit, Hamblin reached a $1.5 million covenant judgment settlement agreement with Castillo Garcia who agreed to assign all claims against National to Hamblin. Following trial and a judgment of more than $2.4 million, National appeals asserting the trial court erred in its award of partial summary judgment in favor of Hamblin as well as several evidentiary rulings related to whether the underlying multiple-car incident could be characterized as two accidents. National also challenges the trial court's award of attorney fees and costs. We affirm.

FACTS

¶ 2 On February 6, 2016, an intoxicated Castillo Garcia¹ lost control of his car. He hit the vehicle of Karen Sumner and then crashed into 19-year-old Hamblin's car. As a result of the accident, Hamblin sustained long-term injuries requiring medical intervention.

¶ 3 Castillo Garcia was insured by National² and his policy included a $100,000 coverage limit. In November 2016, Hamblin sent National a settlement demand letter, offering to settle his case for the policy limit of $100,000 in exchange for releasing his claims against Castillo Garcia. The letter provided a detailed history of Hamblin's injuries with treatment and prognosis along with attached medical records and bills. The letter explained that Hamblin had been diagnosed with bilateral Thoracic Outlet Syndrome, that surgery was in the near future, and that physical therapy treatment had been discontinued until after surgery. The letter explained that Hamblin's medical bills through August 10, 2016 totaled $16,731.80 and would significantly increase with additional treatment and surgery. Without reading the demand letter, National rejected the offer, and instead made a counteroffer for $21,000, which Hamblin rejected.

¶ 4 In December 2016, Hamblin filed a negligence complaint against Castillo Garcia for his personal injuries. Hamblin's attorney indicated that he intended to seek a $2 million judgment. "Because Castillo Garcia's attorneys found themselves ‘in a difficult position,’ they used a defense attorney LISTSERV to find an attorney with no relationship to National to counsel Castillo Garcia." Hamblin v. Castillo Garcia, 9 Wash. App. 2d 78, 83, 441 P.3d 1283 (2019). Brent Beecher began assisting Castillo Garcia in early August 2017. Id. In September 2017, Hamblin and Castillo Garcia reached a covenant judgment settlement agreement providing that Castillo Garcia stipulate to a $1.5 million judgment and assign all claims against National to Hamblin in exchange for Hamblin agreeing not to enforce an excess judgment "against any of Castillo Garcia's assets other than his rights against his insurer(s)." Id.

¶ 5 The parties notified National of their settlement agreement. National intervened. Following a reasonableness hearing, superior court found the settlement reasonable.³ The court found that given the extent

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and expense of Hamblin's injuries, it was "entirely possible that a jury would return a verdict [for $1.5 million] if not higher. Drunk drivers are not popular with juries." The court entered a judgment against Castillo Garcia for $1.5 million.

¶ 6 National appealed the superior court's finding of reasonableness and entry of judgment. This court affirmed the finding that the $1.5 million settlement amount was reasonable and that the settlement was negotiated without bad faith or collusion. Hamblin, 9 Wash. App. 2d at 88, 441 P.3d 1283.⁴

¶ 7 In March 2020, Hamblin filed an amended complaint for damages and declaratory relief against National and Castillo Garcia. Hamblin alleged that National engaged in negligence, breach of contract, breach of good faith duty, breach of the Consumer Protection Act (CPA), and breach of regulatory and statutory duties including the Insurance Fair Conduct Act (IFCA). Hamblin also asserted that the $1.5 million covenant judgment was the presumed damages applicable to the case. Hamblin also asked for attorney fees and costs permitted under Olympic S.S. Co., Inc. v. Centennial Ins. Co., 117 Wash.2d 37, 811 P.2d 673 (1991), the CPA, IFCA, and "other applicable law."

¶ 8 In February 2021, Hamblin filed a motion for partial summary judgment regarding damages, arguing that if National was found to have acted in bad faith, the covenant judgment set the floor on the damages the jury could award at trial. National responded, arguing that the covenant judgment set a rebuttable presumption of harm, and "[o]ne such way of rebutting the presumption of damages and/or harm is to show that Mr. Castillo-Garcia was not harmed to the extent being claimed." National focused its argument on challenging Hamblin's contention that the $1.5 million covenant judgment set the floor, not the ceiling for damages. During oral argument, the court asked National to clarify whether it was adding another element: harm suffered by Hamblin. National clarified that it was not and explained that "[b]ecause the issue for this jury in this matter will be if there was bad faith, how much harm did National General cause to Mr. Castillo Garcia. Mr. Hamblin as the assignee is entitled to collect those amounts." National did not dispute that the covenant judgment established a presumption of harm, but nevertheless it did not respond to the summary judgment motion by presenting any evidence on how it would attempt to rebut that presumption.

¶ 9 The trial court granted Hamblin's motion for partial summary judgment. The court concluded that the $1.5 million judgment established the minimum amount of damages the jury could award if it found National acted in bad faith. The parties proceeded to trial.

¶ 10 One issue at trial was whether Castillo Garcia caused one or two accidents. The parties did not dispute that the policy limited liability coverage to a $100,000 combined single limit for both bodily injury and property damage "for each person injured in any one accident." National contended that the incident was a single accident that involved two vehicles so the full policy limit of $100,000 was not available to Hamblin as $625.90 had already been distributed to Sumner. Hamblin argued that National failed to exercise good faith in investigating and treating the incident as two accidents. The investigating officer's report included a diagram and narrative of what happened based on witness interviews. According to the report, Castillo Garcia was third in a line of stopped vehicles in a left-turn lane at an intersection with a red light. The vehicle driven by Sumner was directly in front of Castillo Garcia when he suddenly went left of center, striking the rear of Sumner's vehicle, before accelerating

517 P.3d 1087

and passing the other stopped vehicle in his lane, and entered the intersection while the light was still red. Castillo Garcia struck the side of Hamblin's vehicle which was going through the intersection with a green light. Neither the officer, Castillo Garcia, Hamblin nor any witnesses to the incident testified at trial.

¶ 11 As a motion in limine, National asked the trial court to exclude the police report because it was not a business record, "irrelevant," "prejudicial," "hearsay," and its admission was prohibited by RCW 46.52.080. The trial court denied the motion. The court accepted Hamblin's proffer that it was not offering the report for the truth of the matter asserted but offered as National's business records to establish what it knew at the time it made its decisions on Hamblin's claim. The court denied National's motion but announced it would provide a limiting instruction to address the hearsay issue when the report was offered.⁵

¶ 12 National also moved in limine to preclude Hamblin from asserting that there was more than "one [car] accident." The court concluded that the question of whether the incident constituted one or two accidents was a question of fact and denied National's motion in so far as Hamblin should be given "the chance to present."

¶ 13 At trial, Hamblin questioned National's corporate representative, claims manager Bradley Gibbs. During the questioning of Gibbs, Hamblin entered the police report into evidence. Gibbs acknowledged that the police report was in the company's claim file for Castillo Garcia and that National had reviewed it. Hamblin went through the police report narrative in detail with Gibbs.

¶ 14 After National reminded the court about the limiting instruction, the court instructed the jury:

The police report contains hearsay, which means that neither the police officer who made the report or persons who gave statements to the officer are making their statements in the courtroom. Hearsay evidence often is not admissible. In this case, however, the report is admissible not to establish the truth of matters asserted in the report, but to show that Defendant National General received the report when it was received and to inform actions Plaintiff contends Defendant did or did not take based on information the report contains.

Hamblin also questioned Gibbs about the company's claim notes from March 2016 that indicated National received and reviewed the police...