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. We conclude it
did not and affirm.
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 "not denied underinsured
motorist benefits to Mr. Perez-Crisantos. It does disagree
with the valuation [counsel] has placed on his claim."
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 adjuster's conclusions.
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.
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.
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 (citing Beasley v. State Farm
Mut. Auto. Ins. Co., 2014 WL 1494030, at *6 (W.D. Wash.
Apr. 16, 2014) and Country Preferred Ins. Co. v.
Hurless, 2012 WL 2367073, at *4 (W.D. Wash. June 21,
2012)). Perez-Crisantos moved for partial summary judgment,
contending that State Farm had violated WAC 284-3 0-33 0(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.
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.
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 Wn.2d 842,
853-54, 357 P.3d 615 (2015) (citing Freeman v.
State, 178 Wn.2d 387, 393, 309 P.3d 437 (2013);
Lummi Indian Nation v. State, 170 Wn.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 Wn.2d 697, 703, 887 P.2d 886 (1995) (citing Dickinson
v. Edwards, 105 Wn.2d 457, 461, 716 P.2d 814 (1986)).
IFCA Cause of Action
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 Wn.2d 751, 764, 58 P.3d 276 (2002);
Indus. Indemn. Co. v. Kallevig, 114 Wn.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 Wn.2d 1, 9-10, 43 P.3d 4 (2002) (citing State v.
J.M., 144 Wn.2d 472, 480, 28 P.3d 720 (2001)); see
also Parents Involved in Cmty. Sch. v. Seattle Sch.
Dist. No. 1, 149 Wn.2d 660, 671, 72 P.3d 151 (2003)
(citing State v. Thorne, 129 Wn.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 Wn.2d at 11-12. 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 Wn.2d
801, 808, 16 P.3d 583 (2001)).
48.30.015 says in most relevant part:
(1) Any first party claimant to a policy of insurance who is
unreasonably denied a claim for coverage or payment of
benefits by an insurer may bring an action in the superior
court of this state to recover the actual damages sustained,
together with the costs of the action, including reasonable
attorneys' fees and litigation costs, as set forth in
subsection (3) of this section.
(2)The superior court may, after finding that an insurer has
acted unreasonably in denying a claim for coverage or payment
of benefits or has violated a rule in subsection (5) of this
section, increase the total award of damages to an amount not
to exceed three times the actual damages.
(3)The superior court shall, after a finding of unreasonable
denial of a claim for coverage or payment of benefits, or
after a finding of a violation of a rule in subsection (5) of
this section, award reasonable attorneys' fees and actual
and statutory litigation costs, including expert witness
fees, to the first party claimant of an insurance contract
who is the prevailing party in such an action.
(5) A violation of any of the following is a violation for
the purposes of subsections (2) and (3) of this section:
(a) WAC 284-30-330, captioned "specific unfair claims
settlement practices defined."
relationship between subsections (2), (3), and (5) is, as
Judge Peterson put it, "vexing." Workland &
Witherspoon, PLLC v. Evanston Ins. Co., 141
F.Supp.3d 1148, 1155 (E.D. Wash. 2015). Subsections (2) and
(3) give the trial court the discretion to award triple
damages and directs that it award attorney fees if the
insurer is found to have acted unreasonably or violated
listed insurance regulations. Subsection (5) lists the
relevant regulations. But given that the trier of fact must
find that the insurer acted unreasonably under subsection
(1), and that such a finding mandates attorney fees under
subsection (3) and gives the trial court discretion to award
treble damages under subsection (2), it is not clear what a
finding of a regulatory violation accomplishes.
regulations in question are long-standing and have long been
enforceable by the insurance commissioner, and, in some
cases, by first party insureds in bad faith or CPA actions.
LAWS OF 1947, ch. 79 § 30.01 (partially codified at RCW
48.30.010); Wash. St. Reg. 78-08-082 (Aug. 16, 1978);
Truck Ins. Exck, 147 Wn.2d at 764;
Kallevig, 114 Wn.2d at 921-22. These regulations
largely direct insurance companies to act fairly and
promptly. WAC 284-30-330, -350, -360, -370, -380. The
violation of some of these regulations could themselves be
potentially actionable under IFCA for that reason. See,
e.g., WAC 284-30-330(4) (declaring "[Refusing to
pay claims without conducting a reasonable
investigation" unfair). The violation of some of these
regulations are not necessarily enough, on their own, to be
actionable. For example, insurers are required to respond
within 10 working days to "communications from [an
individual] claimant reasonably suggesting that a response is
expected." WAC 284-30-360(3), This would be violated by
a response on the 11th day.
argues that State Farm compelled him to litigate his UIM
claim through "a pre-suit offer of $0, " CP at 104,
which, he contends, violated insurance regulations that deem
it unfair or deceptive to "[c]ompel a first party
claimant to initiate or submit to litigation, arbitration, or
appraisal to recover amounts due under an insurance policy by
offering substantially less than the amounts ultimately
recovered in such actions or proceedings." WAC
284-30-330(7). He contends that this regulatory violation is
independently actionable under IFCA. State Farm contends that
the statute clearly sets forth the basis for private causes
of action and those causes of action do not include
federal courts have split on this question. For example, last
year, one judge found that IFCA does create an implied cause
of action under Washington law for violation of the listed
regulations. Langley v. GEICO Gen. Ins. Co., 89
F.Supp.3d 1083, 1085 (E.D. Wash. 2015). ...