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Keller v. Allstate Insurance Co.

filed: May 10, 1996.

LYDIA KELLER AND DELROY KELLER, WIFE AND HUSBAND, APPELLANTS,
v.
ALLSTATE INSURANCE COMPANY, RESPONDENT.



Superior Court of Cowlitz County. Superior Court Docket No. 93-2-01096-7. Date Filed in Superior Court: October 7, 1994. Superior Court Judge Signing: James Edgar Warme.

Written By: Seinfeld, C.j., Concurred by: Bridgewater, J., Morgan, J.

Author: Seinfeld

SEINFELD, C.J. -- A jury awarded Lydia and Delroy Keller substantially more than Allstate Insurance Company (Allstate) had earlier offered as settlement of their personal injury claim. The Kellers then brought this action alleging that Allstate made the low offer in bad faith and in violation of the Consumer Protection Act (CPA). The trial court found for Allstate and the Kellers appeal. We conclude that the trial court properly considered the

settlement offer in light of the circumstances known to Allstate at the time. Thus, we affirm.

FACTS

In November 1989, an underinsured motorist rear-ended Keller's Lincoln Town Car. Keller, a 57-year-old registered nurse, injured her neck and knees. She refused offers by the police at the accident scene to transport her to the hospital. Instead, she drove herself home without assistance.

After arriving home, Keller had her husband, Delroy, take her to an emergency medical center. She presented complaints of neck pain. The staff took x-rays and diagnosed her injury as a neck and upper back strain. They then sent her home with a "soft cervical collar" and pain killers.

Two weeks later, on the advice of her attorney, Keller consulted an orthopedic surgeon, complaining of instability in her right knee and pain in her neck and left knee. The doctor found no evidence of cervical spine injury and found her knees to be "tender" but "otherwise normal." Diagnosing Keller's condition as "bilateral knee contusions,"*fn1 he opined that the pain would subside within six weeks of the accident.

After the accident, Keller also began experiencing pain in her face and jaw. In December 1989, she visited a dentist, who concluded that her jaw was "overclosed."*fn2 X-rays of the jaw did not reveal any "traumatically induced" conditions. The dentist attributed the deviations he did find to the "natural aging process."

Later that month, Keller began treatment for her back

and jaw pain with a physical therapist. She attended 28 therapy sessions over the next six months and reported improvement in her back condition. The physical therapist noted several times during the course of treatment that Keller's physical discomfort increased with psychological stress.

Four months after the accident, Keller visited a second orthopedist with complaints of pain in her right knee. The orthopedist observed some swelling in both of her knees, the right greater than the left, and diagnosed her condition as bruised knees. X-rays of the knees came back "normal" and "looked quite good." The orthopedist found no instability in the knee caps or injury to the ligaments. The range of movement in both knees was "normal and identical." At the end of the examination, the orthopedist prescribed quadriceps strengthening exercises and invited her to return should she need further consultation or direction. She never sought further treatment from this doctor.

Keller's bills for medical treatment resulting from the accident totaled approximately $3,270. Of that amount, she spent approximately $1,700 on physical therapy.

The Kellers recovered the policy limit of $25,000 from the underinsured motorist's insurance carrier. As this amount did not cover all of the Kellers's damages, in late May 1991 she filed an underinsured motorist (UIM) claim for $10,000 with their carrier, Allstate, and demanded arbitration. Allstate offered to settle for $8,000. Shortly after the Kellers rejected the offer, Allstate, exercising a contractual right to resolve the dispute through litigation, filed a complaint in Cowlitz County Superior Court.

At trial in September 1992, the Kellers made an oral claim for damages of $125,000, the total combined coverage of the underinsured motorist's $25,000 policy and their $100,000 UIM policy with Allstate. The jury awarded the Kellers a total of $75,200 in damages. As $25,000 already had been paid by ...


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