Tribble v. Allstate Property and Cas. Ins.

• Decision Date: 24 July 2006
• Docket Number: No. 56496-0-I.,56496-0-I.
• Citation: 134 Wn. App. 163,139 P.3d 373
• Parties: Michelle T. TRIBBLE, Respondent, v. ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, a foreign insurance company; Jacquelyn H. Williams and John Doe Williams, individually and the marital community composed thereof, Appellants.
• Court: Washington Court of Appeals

139 P.3d 373

134 Wn. App. 163

Michelle T. TRIBBLE, Respondent, v. ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, a foreign insurance company; Jacquelyn H. Williams and John Doe Williams, individually and the marital community composed thereof, Appellants.

No. 56496-0-I.

Court of Appeals of Washington, Division 1.

July 24, 2006.

Christopher Michael Davis, Bellevue, WA, for Respondent.

Marilee C. Erickson, Pamela A. Okano, Terry Jay Price, Reed McClure, Anthony Joseph Vidlak, Seattle, WA, for Appellants.

DWYER, J.

¶ 1 Michelle T. Tribble was injured by an uninsured motorist and sought uninsured motorist (UIM) benefits from her insurer, Allstate Property and Casualty Insurance Company. Pursuant to a provision of the insurance policy, which did not provide for private arbitration, Tribble commenced an action against Allstate in the King County Superior Court. The case was submitted to mandatory arbitration and the arbitrator awarded Tribble $35,000. Allstate then requested a trial de novo. The jury returned a verdict in Tribble's favor in the amount of $373,542.50. The trial court entered judgment for that amount over Allstate's objection.

¶ 2 Under a UIM policy, an insurer is contractually obligated to pay an insured's uncompensated damages up to the limits of the policy or until the insured receives full compensation, whichever occurs first.¹ In this case, Tribble's policy had a $50,000 limit. Accordingly, we reverse the judgment and remand for entry of a judgment in Tribble's favor in the principal amount of $50,000. We also vacate the trial court's attorney fee award and remand that issue for reconsideration in light of our reversal of the judgment. Finally, we award Tribble her attorney fees on appeal because Allstate still has not improved its position as measured against the arbitrator's $35,000 award.

FACTS

¶ 3 On May 9, 2002, Michelle Tribble's vehicle was struck by a vehicle driven by Jacquelyn H. Williams. Williams had in effect an insurance policy with liability limits of $100,000.²

¶ 4 On July 23, 2002, Tribble's vehicle was struck again, this time by a vehicle driven by Lv Winters, an uninsured motorist. When this collision occurred, Tribble had purchased another automobile insurance policy from Allstate, including UIM coverage of $50,000.

¶ 5 After the second collision, Tribble filed suit against both (1) Allstate, under the UIM provision of her insurance policy, to recover her uncompensated damages related to the July 23 collision, and (2) Williams, to recover damages caused by the May 9 collision. Allstate admitted that Tribble was entitled to receive UIM benefits for those damages she sustained that were proximately caused by the July 23 collision. The case was transferred to mandatory arbitration and the arbitrator awarded Tribble $35,000 on her claim against Allstate.

¶ 6 Allstate requested a trial de novo to a 12-person jury. Tribble settled her claim against Williams and the case proceeded to trial against Allstate.

¶ 7 After a four-day trial, the jury found that Tribble's injuries from the two collisions were indivisible and returned a total verdict in favor of Tribble in the amount of $373,542.50.

¶ 8 The trial court entered judgment against Allstate for the entire verdict amount, as well as Tribble's uncontested attorney fees of $27,000 and expenses of $9,270. The court then applied a 1.5 multiplier to adjust Tribble's attorney fees upward, resulting in a fee award of $40,500. Allstate moved for reconsideration of the judgment and the application of the attorney fee multiplier. The trial court denied the motion.

¶ 9 Allstate appeals.

DISCUSSION

I. UIM Policy Limits

¶ 10 Allstate argues that the trial court erred in entering judgment in the amount of $373,542.50, instead of the $50,000 UIM policy limit contained in Tribble's insurance contract. We agree.

¶ 11 Interpretation of an insurance contract is a question of law and is reviewed de novo. Solnicka v. Safeco Ins. Co., 93 Wash.App. 531, 533, 969 P.2d 124 (1999). UIM insurance provides a second layer of excess insurance coverage that "floats" on top of recovery from other sources for the injured party. Blackburn v. Safeco Ins. Co., 115 Wash.2d 82, 87, 794 P.2d 1259 (1990) (citing Elovich v. Nationwide Ins. Co., 104 Wash.2d 543, 549, 707 P.2d 1319 (1985)). Coverage eligibility requires the insured to demonstrate that he or she is "legally entitled to recover" in tort from the underinsured motorist. RCW 48.22.030(2). The insurer must pay its insured's uncompensated damages "`until the underinsurance policy coverage is exhausted or until the insured is fully compensated, whichever occurs first.'" Mencel v. Farmers Ins. Co., 86 Wash.App. 480, 484, 937 P.2d 627 (1997) (quoting Hamilton v. Farmers Ins. Co., 107 Wash.2d 721, 723, 733 P.2d 213 (1987)). Because Tribble's UIM policy limit was $50,000, Allstate is contractually obligated to pay only up to that amount, irrespective of a jury award in excess of that amount.

¶ 12 Tribble nonetheless argues that Mencel and Hamilton do not require a reversal of her judgment. First, she contends that Allstate is precluded from asserting that the policy limits apply because such a claim constitutes an affirmative defense based upon a contract that was neither pleaded nor presented to the jury. We disagree.

¶ 13 Allstate's claim on this matter cannot properly be deemed a "contract defense." As a matter of law, contract defenses are defenses to a valid contract and generally include fraud, duress, and unconscionability. See, e.g., Adler v. Fred Lind Manor, 153 Wash.2d 331, 342, 103 P.3d 773 (2004). The concept does not apply here. Moreover, Allstate was not required to offer the insurance contract to the jury, as doing so would not have aided the jury in performing its function, which was determining the amount of damages incurred by Tribble.

¶ 14 Tribble next relies on Safeco Insurance Company v. Butler, 118 Wash.2d 383, 394, 823 P.2d 499 (1992), Hamilton v. State Farm Insurance Company, 83 Wash.2d 787, 523 P.2d 193 (1974), and Tyler v. Grange Insurance Association, 3 Wash.App. 167, 473 P.2d 193 (1970), to argue that the trial court properly entered judgment in excess of the policy limits. However, all three cases are inapplicable because they are not UIM cases but, rather, are liability cases involving claims of bad faith conduct.

¶ 15 In this case, Tribble sued Allstate to recover damages pursuant to her UIM policy. She did not raise negligence or bad-faith claims against Allstate. Therefore, Tyler, Hamilton, and Butler are inapplicable. Tribble's public policy arguments are similarly unavailing because, as a matter of law, the insured is only entitled to recover damages up to the insurance policy limits. Hamilton, 107 Wash.2d at 723, 733 P.2d 213; Mencel, 86 Wash.App. at 484, 937 P.2d 627. Accordingly, we reverse the judgment and remand for entry of judgment in the principal amount of $50,000, the insurance policy limit.³

II. Attorney Fee Award

¶ 16 Allstate also argues that the trial court abused its discretion in employing an attorney fee multiplier of 1.5 to increase Tribble's attorney fee award.⁴ We review an award of attorney fees for abuse of discretion. Boeing Co. v. Heidy, 147 Wash.2d 78, 90-91, 51 P.3d 793 (2002). A trial court abuses its discretion when its decision is "manifestly unreasonable, or exercised on untenable grounds, or for untenable reasons." State ex rel. Carroll v. Junker, 79 Wash.2d 12, 26, 482 P.2d 775 (1971).

¶ 17 "To withstand appeal, a fee award must be accompanied by findings of fact and conclusions of law to establish a record adequate for review." Eagle Point Condo. Owners Ass'n v. Coy, 102 Wash.App. 697, 715, 9 P.3d 898 (2000). Here, the trial court specifically provided five grounds for its application of the fee multiplier:

an upward contingency adjustment to the lodestar amount is reasonable and appropriate in this case given [1] the results obtained, [2] the court's consideration of the factors set forth in RPC 1[.5](a),⁵ [3] the existence of a contingency fee agreement, [4] the increased risk to plaintiff's counsel of trying this case on contingency, and [5] this court's desire to make plaintiff Michelle T. Tribble whole as the prevailing party.

Conclusion of law 4. Allstate assigns error to several of the trial court's findings of fact and conclusions of law, each of which is addressed in our discussion of conclusion of law 4.

¶ 18 First we address Allstate's central argument regarding the fee multiplier, that the trial court abused its discretion in basing its fee award on the risk assumed by Tribble's attorney. Allstate claims that the trial court erred because Tribble's attorney was not at risk of receiving no compensation. We disagree.

¶ 19 Trial courts are not constrained such that they may only employ attorney fee award adjustments where the prevailing party proves that it might not have obtained a monetary judgment sufficient to pay any of its attorney's fees. Rather, adjustments to the lodestar fee (the total number of hours reasonably expended multiplied by the reasonable hourly rate of attorney compensation) "are considered under two broad categories: the contingent nature of success, and the quality of work performed." Bowers v. Transamerica Title Ins. Co., 100 Wash.2d 581, 598, 675 P.2d 193 (1983). The phrase "contingent nature of success," is broad enough to allow the trial court, in its discretion, to consider the degree to which the prevailing party risked receiving either no recovery at all or a monetary judgment insufficient to adequately compensate its counsel for all work performed. In exercising its discretion, a trial court is entitled to consider the risk borne by the attorney of recovering objectively inadequate compensation, not just the risk of recovering no compensation whatsoever.

¶ 20 Furthermore, Allstate is incorrect in its assertion that there was no possibility that Tribble would not be awarded...