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Beasley v. State Farm Mutual Automobile Insurance Co.

United States District Court, W.D. Washington, Seattle

April 16, 2014



ROBERT S. LASNIK, District Judge.


This matter comes before the Court on "Defendant State Farm's Motion for Summary Judgment on Causation, and on Fiduciary Duty, Contract and IFCA Claims, " dkt. # 35, and "Plaintiff's Motion for Partial Summary Judgment, " dkt. # 40. Having reviewed the memoranda, declarations, and exhibits submitted by parties, the Court finds as follows:


A. Background Facts

This matter arises out of a car accident that occurred more than twelve years ago. At the time of the accident Plaintiff was driving his girlfriend's car, which was insured by Defendant State Farm Automobile Insurance Company ("Defendant" or "State Farm"). Dkt. # 28 ¶ 2; Dkt. # 36 at 6. The policy contained personal injury protection ("PIP") up to $35, 000 per person and underinsured motorist ("UIM")[1] coverage up to $100, 000 per person. Dkt. # 36 at 6, 9.

On December 10, 2001, Plaintiff made a left turn during a yellow light and was struck by an oncoming car driven by an uninsured motorist. Dkt. # 45-1 at 29. Plaintiff and his girlfriend, who was five months pregnant at the time, suffered serious injuries, which resulted in the loss of Plaintiff's unborn child. See id. at 30; Dkt. # 45-1 at 37. State Farm hired an attorney to represent Plaintiff against the claims filed by his passengers and the passengers and driver of the other vehicle. Dkt. # 28 ¶ 4; Dkt. # 29 ¶

3. In early 2002, Plaintiff submitted a claim for PIP benefits and executed a release for medical and employment records. Dkt. # 45-1 at 37, 41. However, Plaintiff revoked this release less than one month later. Dkt. # 40 at 68. Plaintiff did not submit a formal claim for UIM benefits. Instead, Plaintiff's lawyer sent State Farm a letter that referenced a UIM claim generally. Id . In July 2002, State Farm determined that Plaintiff was entitled to PIP benefits and UIM benefits for 50% of damages because it found that both drivers were equally at fault for the accident. Id. at 70. Plaintiff received PIP benefits totaling $15, 301.33. Dkt. # 14 ¶¶ 2.26, 2.28.

The parties resumed communication in 2005 when they began discussing arbitration of Plaintiff's UIM claim.[2] Dkt. # 40 at 86. In April of that year, Defendant served Plaintiff with discovery requests for the arbitration. Id. at 91-134. Defendant also requested a statement of damages from Plaintiff. Id. at 88-90. Several months later, Plaintiff sent Defendant his complete PIP file, which included a few medical records. Id. at 71, 74. Despite repeated reminders from Defendant, Plaintiff did not provide responses to Defendant's discovery requests until March 25, 2008, nearly three years after Defendant served them. Dkt. # 28-2 at 5-12; Dkt. # 40 at 79. The parties exchanged limited communications for the following three years, but did not make any significant progress until March 2011, when Plaintiff executed a release for his medical, employment and tax records. Dkt. # 40 at 83. After Plaintiff's deposition in the fall of 2011, State Farm determined that two independent medical examinations ("IMEs") were necessary and arbitration was scheduled for July 5-6, 2012. Dkt. # 28 at 3.

In March 2012, Plaintiff sent Defendant a letter demanding payment of the UIM policy limits and providing the requisite 20-day notice of his intent to file an action under the Washington Insurance Fair Conduct Act ("IFCA"). Dkt. # 36 at 72-78. In his letter, Plaintiff claimed that he suffered damages of more than $500, 000, including past and future medical expenses, loss of past and future income, and noneconomic damages. Id. at 73-74. On June 29, 2012, Defendant offered to settle Plaintiff's claim for $25, 000. Id. at 82. No explanation of how this number was generated was provided to Plaintiff. Plaintiff made a counter-offer to settle his claims, including any IFCA claims, for $97, 000. Id. at 80. No additional negotiations took place and the parties proceeded to arbitration on July 5, 2012.

The arbitrator found both drivers to be at fault and awarded Plaintiff $72, 500 in total damages. Dkt. # 28-7 at 3, 5. The award was confirmed in a state court action filed by Plaintiff in September 2012, dkt. # 42 at 21-22, and State Farm paid the award, costs, and interest, dkt. # 28-8 at 2; dkt. # 28-9 at 2.

Plaintiff then filed this action in state court asserting claims of breach of contract, bad faith, breach of fiduciary duty, negligence, and violations of the Washington Consumer Protection Act ("CPA") and IFCA. Dkt. # 1 at 18-19. The action was removed to this Court in June 2013 and both parties have moved for summary judgment. Defendant seeks summary dismissal of all of Plaintiff's claims. Through his motion for partial summary judgment, Plaintiff seeks summary determinations that (a) State Farm violated WAC 284-30-330(7) and other regulations, (b) State Farm unreasonably denied payment of UIM benefits, (c) State Farm violated IFCA, (d) State Farm breached the insurance contract, and (e) Plaintiff suffered actual damages for purposes of IFCA in the amount of $72, 500.

B. Summary Judgment Standard

Summary judgment is appropriate when, viewing the facts in the light most favorable to the nonmoving party, the records show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Once the moving party has satisfied its burden, it is entitled to summary judgment if the non-moving party fails to designate, by affidavits, depositions, answers to interrogatories, or admissions on file, ...

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