Hopkins v. Integon Gen. Ins. Co.
| Decision Date | 22 March 2022 |
| Docket Number | 21-35196 |
| Parties | DANIEL HOPKINS, Plaintiff-Appellee, v. INTEGON GENERAL INSURANCE COMPANY, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
NOT FOR PUBLICATION
Argued and Submitted March 7, 2022 Seattle, Washington
Appeal from the United States District Court for the Western District of Washington D.C. No. 2:18-cv-01723-MJP Marsha J Pechman, District Judge, Presiding
Before: NGUYEN, MILLER, and BUMATAY, Circuit Judges.
Defendant-appellant Integon General Insurance Company appeals the district court's judgment awarding plaintiff-appellee Daniel Hopkins $888, 474.75 after a jury trial. We have jurisdiction under 28 U.S.C. § 1332. For the reasons explained below we affirm in part, and vacate and remand in part.
1. Integon argues that the district court erred in failing to grant judgment as a matter of law on its claim under Washington's Consumer Protection Act (CPA) because Hopkins failed to show that he was "injured in his … business or property" by Integon's conduct. Wash. Rev. Code § 19.86.090; see Peoples v. United Servs. Auto. Ass'n, 452 P.3d 1218, 1221 (Wash. 2019). For two independent reasons, we disagree.
First, the district court correctly determined that Hopkins could satisfy the CPA's injury requirement with evidence that he incurred expenses investigating Integon's conduct. Specifically, Hopkins presented evidence that he spent $16, 000 hiring an insurance expert to investigate whether Integon acted in bad faith. The Washington Supreme Court has held that an insured is injured for purposes of the CPA if, "as a result of [an insurer's] bad faith investigation," the insured "hired insurance experts to determine if coverage was denied in bad faith." Coventry Assocs. v. Am. States Ins. Co., 961 P.2d 933, 939 (Wash. 1998).[1] Although the Washington Supreme Court has subsequently distinguished investigative and litigation expenses, see Panag v. Farmers Ins. Co. of Wash., 204 P.3d 885, 902 (Wash. 2009), it neither applied that distinction to expert fees nor suggested that the distinction turns on when expenses are incurred relative to the complaint.
Moreover, in these circumstances, as the district court noted, the investigation of bad faith could only be made after Hopkins received his claims file from Integon. Therefore, the district court did not err in declining to grant judgment as a matter of law for Integon on this basis.
The dissent contends that the district court did not conduct "the proper inquiry under Washington law." Dissent at 2. But the district court looked to facts from which the jury could have reasonably concluded that Hopkins's expert fees were "incurred … as a result of [Integon's] bad faith investigation," Coventry, 961 P.2d at 939, which is exactly the inquiry that Washington law requires, see Panag, 204 P.3d at 902 (). The district court correctly determined that the jury drew an inference that Coventry allows, as the dissent appears to acknowledge, Dissent at 2 n.1.
Second, we agree with Hopkins that he suffered injury for purposes of the CPA because he did not receive reimbursement for $931 in medical expenses that exceeded his $10, 000 personal injury protection (PIP) coverage. We reject as inconsistent with Washington law Integon's argument that Hopkins's unreimbursed medical expenses are personal injury damages distinct from injury to business or property under the CPA. See Peoples, 452 P.3d at 1222 (). We are also unpersuaded by Integon's argument that there was an insufficient causal connection between the unreimbursed expenses and Integon's conduct because Integon offered a settlement exceeding $931. The district court did not err in concluding that the jury reasonably found causation because Integon failed to make a reasonable settlement offer. Finally, by failing to raise the issue in its Rule 50(a) motion, Integon failed to preserve its argument that Hopkins's unreimbursed medical expenses were covered by his $25, 000 settlement with the at-fault driver's insurer, and no plain error occurred. See EEOC v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009) . Therefore, Hopkins's $931 in unreimbursed medical expenses independently establishes injury under the CPA.[2] 2. Integon argues that the district court erred in instructing the jury that it owed a duty of equal consideration to Hopkins in handling his underinsured motorist (UIM) claim, and in declining to instruct the jury that Integon could assert the responsible party's defenses. We agree.
Under Washington law, "a UIM insurer 'stands in the shoes' of the tortfeasor," and "UIM insurers are allowed to assert liability defenses available to the tortfeasor." Ellwein v. Hartford Accident & Indem. Co., 15 P.3d 640, 647 (Wash. 2001), overruled on other grounds by Smith v. Safeco Ins. Co., 78 P.3d 1274 (Wash. 2003); see also Ki Sin Kim v. Allstate Ins. Co., Inc., 223 P.3d 1180, 1192 (Wash.Ct.App. 2009) ("UIM insurers are allowed to assert liability defenses available to the tortfeasor because UIM insurance is designed to put the insurance company in the position of the tortfeasor with liability insurance."). While an insurer must give "equal consideration" in other contexts, an insurer's duty in the context of defending UIM claims is "different." Lock, 460 P.3d at 691; see also Ellwein, 15 P.3d at 647 (). Therefore, the district court's instructions overstated Integon's duty as a UIM insurer under Washington law.
Hopkins has failed to sustain his burden to show that the district court's error was more likely than not harmless. See BladeRoom Grp. Ltd. v. Emerson Elec. Co., 20 F.4th 1231, 1243 (9th Cir. 2021). At closing, and throughout trial, Hopkins emphasized that Integon failed to give equal consideration to Hopkins's interests. Moreover, part of Integon's defense was that it had the right to question the evidence that Hopkins's injuries were permanent and caused by the 2016 accident. Accordingly, we cannot conclude that the jury more probably than not would have returned the same verdict had it been properly instructed. See id. We therefore vacate and remand for a new trial on Hopkins's bad faith and CPA claims.
3. Whether the district court properly excluded Integon's corporate representative turns on whether any inadequate disclosure was "harmless." Ollier v. Sweetwater Union High Sch. Dist., 768 F.3d 843, 861 (9th Cir. 2014) (quoting Fed.R.Civ.P. 37(c)(1)). That analysis may turn out differently under the changed circumstances of a new trial. We therefore remand for the district court to reevaluate whether any inadequate disclosure was harmless under Rule 37(c)(1), and we need not reach Integon's argument that its disclosure complied with Rule 26(a).[3] AFFIRMED IN PART, VACATED AND REMANDED IN PART. The parties shall bear their own costs.
I agree with the majority that we must remand this case because of the instructional error on Hopkins's underinsured motorist claim. I also agree that the district court should reevaluate whether the exclusion of Integon's corporate representative was appropriate under Federal Rule of Civil Procedure 37(c)(1). But I depart from the majority in affirming the district court's ruling on Washington's Consumer Protection Act ("CPA"). The CPA requires that Hopkins show he was "injured in his . . . business or property" by Integon's actions. Wash. Rev. Code §§ 19.86.090; 19.86.020. Hopkins advances two theories of "injury" under the CPA: (1) that his expert witness fees constituted an injury; and (2) that his unreimbursed medical expenses constituted an injury. But because neither theory works under Washington law, I must respectfully dissent.
First Washington law is clear: investigative expenses may constitute an "injury" under the CPA, but litigation expenses may not. Panag v. Farmers Ins. Co. of Washington, 166 Wash.2d 27, 62 (2009) (en banc). And here, Hopkins began using his expert witness and accruing fees eight months after he filed his complaint alleging the CPA violation. Hopkins thus can't fairly say that he employed the expert witness to "dispel uncertainty" about the nature of his...
To continue reading
Request your trial