Perez-Crisantos v. State Farm Fire & Cas. Co.
| Decision Date | 02 February 2017 |
| Docket Number | No. 92267-5,92267-5 |
| Court | Washington Supreme Court |
| Parties | Isidoro PEREZ-CRISANTOS, a single man, Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY, a foreign insurance company, and Doe Corporations I through V, Respondents. |
Mark J. King, IV, Craig Swapp & Associates, 16201 E. Indiana Ave., Ste. 1900, Spokane Valley, WA, 99216-6031, for Appellant.
Vincent Andrew Cass, Gregory S. Worden, Lewis Brisbois Bisgaard & Smith LLP, 1111 3rd Ave., Ste. 2700, Seattle, WA, 98101-3224, Emmelyn Hart, Antioch University Seattle, 2400 3rd Ave., Ste. 200, Seattle, WA, 98121-1429, for Respondents.
Bryan Patrick Harnetiaux, Attorney at Law, 517 E. 17th Ave., Spokane, WA, 99203-2210, Daniel Edward Huntington, Richter-Wimberley PS, 422 W. Riverside Ave., Ste. 1300, Spokane, WA, 99201-0305, Valerie Davis Mcomie, Attorney at Law, 4549 N.W. Aspen St., Camas, WA, 98607-8302, as Amicus Curiae on behalf of Washington State Association for Justice Foundation.
Joseph D. Hampton, Daniel L. Syhre, Kathryn Naegeli Boling, Betts, Patterson, & Mines, P.S., 701 Pike St., Ste. 1400, Seattle, WA, 98101-3927, as Amicus Curiae on behalf of American Insurance Association.
González, J.¶1 In 2007, the legislature passed, and the voters of this state ratified, the Insurance Fair Conduct Act (IFCA), RCW 48.30.015. IFCA gives insureds a new cause of action against insurers who unreasonably deny coverage or benefits. RCW 48.30.015(1). IFCA also directs courts to grant attorney fees and authorizes courts to award triple damages if the insurer either acts unreasonably or violates certain insurance regulations. RCW 48.30.015(2) -(3), (5). These regulations broadly address unfair practices in insurance, not just unreasonable denials of coverage or benefits. RCW 48.30.015(5). We are asked to decide whether IFCA also created a new and independent private cause of action for violation of these regulations in the absence of any unreasonable denial of coverage or benefits.1 We conclude it did not and affirm.
FACTS
¶2 In November 2010, Isidoro Perez-Crisantos was waiting to turn left off snowy Wellesley Avenue in Spokane when his car was struck from behind by Martin Reyes. Clerk's Papers (CP) at 5, 391. Perez-Crisantos was injured and incurred more than $50,000 in medical bills that he contends were the result of the accident. Perez-Crisantos had first party personal injury protection (PIP) and underinsured motorist insurance (UIM) coverage from State Farm Fire and Casualty Company. State Farm paid the PIP coverage limits of $10,000 in medical expenses and $400 in lost wages. Reyes carried $25,000 in liability insurance. Perez-Crisantos settled with Reyes for his policy limits and made a first party UIM claim to State Farm for the remaining damages resulting from the accident. State Farm did not pay benefits under the UIM policy. According to Perez-Crisantos, State Farm denied his UIM claim after its adjustor, who was not a medical expert, concluded that Perez-Crisantos was seeking benefits for excessive chiropractic treatment and an unrelated shoulder surgery. According to State Farm, it has CP at 386. Either way, after Perez-Crisantos objected to the denial, State Farm sent the file to a doctor, who concurred with the lay adjustor's conclusions.
¶3 Perez-Crisantos sued on a variety of grounds. Among other things, he alleged that State Farm had violated IFCA, several of IFCA's implementing regulations, and the Consumer Protection Act (CPA), chapter 19.86 RCW. He also brought bad faith and negligence claims. Most of the claims were stayed while the UIM claim was sent to arbitration. The arbiter largely found for Perez-Crisantos. Based on the damages awarded, it appears the arbiter concluded the shoulder injury was related to the accident, disallowed some of the chiropractic physical therapy treatments as excessive, and awarded Perez-Crisantos a gross amount of about $51,000. After adjusting for Reyes's settlement, PIP benefits, and attorney fees, Perez-Crisantos received about $24,000 from the UIM arbitration. The court lifted the stay, and Perez-Crisantos amended his complaint to make clear he was alleging an IFCA claim based on the violation of IFCA regulations relating to unfair settlement practices. Specifically, he alleged that State Farm forced him to litigate in order to get payments that were due to him.
¶4 Meanwhile, Perez-Crisantos sought discovery about State Farm's incentive programs and the personnel files of State Farm employees involved in processing his claim, apparently seeking evidence that State Farm's incentive program was improperly encouraging its employees to deny claims or settle them for unreasonably low amounts. While it is not in the record, it appears State Farm provided discovery on the incentive programs but resisted release of the personnel files. The trial court allowed some discovery about the employee compensation and reviewed some materials under seal. The judge declined to order State Farm to release the personnel files themselves, finding Perez-Crisantos had not made a sufficient showing.
¶5 State Farm moved for summary judgment dismissal, largely on the merits. It argued that there was no genuine dispute that it had acted reasonably and in good faith throughout the claims process, that Perez-Crisantos had not alleged a cognizable claim, and that the parties merely had a reasonable disagreement about the value of the claim. Unfortunately, the record does not reveal State Farm's valuation of the UIM claim. Relying largely on unreported cases out of federal court, State Farm argued that a delay in payment of UIM benefits until after arbitration is not a denial of payment under IFCA. CP at 56-57 ().
Perez-Crisantos moved for partial summary judgment, contending that State Farm had violated WAC 284-3 0-330(7)'s prohibition on making a first party claimant litigate to recover " ‘amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in such actions.’ " CP at 104 (quoting WAC 284–30–330(7) ). He also argued that State Farm's summary judgment motion was premature because discovery on State Farm's employee incentive program was not complete.
¶6 At the summary judgment hearing, the trial judge took issue with Perez-Crisantos's characterizing State Farm as having "made a zero offer" on the UIM claim. Verbatim Report of Proceedings (VRP) at 10-11. In the judge's view, "it verges on being misleading in terms of trying to evaluate whether or not you have a basis for a summary judgment." Id. at 11. Instead, the judge characterized State Farm as arguing that Perez-Crisantos had been fully compensated for his injuries from Reyes's policy limits and State Farm's PIP payment. She concluded that "[t]here has never been one scintilla of evidence" that State Farm's actions were "unreasonable and there must have been some ulterior motive" for them, such as "some sort of incentive program to ‘lowball claims.’ " Id. at 27. She dismissed the case with prejudice on the merits. Perez-Crisantos sought direct review, which we granted.
ANALYSIS
¶7 This case is before us on appeal from summary judgment and asks us to interpret a statute. Our review of both is de novo. Auto. United Trades Org. v. State , 183 Wash.2d 842, 853–54, 357 P.3d 615 (2015) (citing Freeman v. State , 178 Wash.2d 387, 393, 309 P.3d 437 (2013) ; Lummi Indian Nation v. State , 170 Wash.2d 247, 257–58, 241 P.3d 1220 (2010) ).
Summary judgment "may be granted if the pleadings, affidavits, and depositions before the trial court establish that there is no genuine issue of material fact and that as a matter of law the moving party is entitled to judgment." Ruff v. County of King , 125 Wash.2d 697, 703, 887 P.2d 886 (1995) (citing Dickinson v. Edwards , 105 Wash.2d 457, 461, 716 P.2d 814 (1986) ).
¶8 For many years, insureds have been able to sue their insurers for violations of certain insurance regulations in a CPA or bad faith action. See Truck Ins. Exch. v. VanPort Homes, Inc. , 147 Wash.2d 751, 764, 58 P.3d 276 (2002) ; Indus. Indemn. Co. v. Kallevig , 114 Wash.2d 907, 921–22, 792 P.2d 520 (1990). We must decide whether first party insureds can also sue their insurance companies under IFCA for regulatory violations. This requires us to determine the legislature's intent, which in this case includes the intent of the voters who ultimately ratified IFCA. Dep't of Ecology v. Campbell & Gwinn, LLC , 146 Wash.2d 1, 9–10, 43 P.3d 4 (2002) (citing State v. J.M. , 144 Wash.2d 472, 480, 28 P.3d 720 (2001) ); see also Parents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1 , 149 Wash.2d 660, 671, 72 P.3d 151 (2003) (citing State v. Thorne , 129 Wash.2d 736, 763, 921 P.2d 514 (1996) ). If the statute, read in the context of all the legislature has said on the subject, is plain on its face, we will give it that plain meaning. Campbell & Gwinn , 146 Wash.2d at 11–12, 43 P.3d 4. If after reading the statute in context, it "remains susceptible to more than one reasonable meaning, the statute is ambiguous and it is appropriate to resort to aids to construction, including legislative history." Id. at 12 (citing Cockle v. Dep't of Labor & Indus. , 142 Wash.2d 801, 808, 16 P.3d 583 (2001) ).
¶9 RCW 48.30.015 says in most relevant part:
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