United States District Court, W.D. Washington, Seattle
ORDER DENYING DEFENDANT'S MOTION FOR PARTIAL
RICARDO S. MARTINEZ CHIEF JUDGE.
matter comes before the Court upon Defendant Allstate Fire
and Casualty Insurance Company's (“Allstate”)
Motion for Partial Summary Judgment. Dkt. #16. Plaintiff
Michael Vario sued Allstate after his claim for underinsured
motorist (“UIM”) benefits was denied.
See Dkt. #1, Ex. A ¶¶ 12-23. Mr. Vario
submitted this claim following his involvement in a three-
car accident in which one driver was underinsured. Following
the accident, Mr. Vario sued, and eventually settled, his
claims against the underinsured driver and the insured
driver. Given those settlements, Allstate now asks the Court
to determine if it can reduce its potential UIM coverage
liability by both settlement amounts. Because Mr. Vario will
ask a jury to apportion fault for the accident between the
underinsured motorist and the insured driver, Mr. Vario
contends Allstate can only reduce its UIM coverage liability
by the amount the underinsured driver, but not the insured
driver, paid to settle. Considering the text and purpose of
Washington State's UIM statute, along with Allstate's
UIM policy, the Court agrees Allstate cannot reduce its
potential UIM coverage by the insured driver's settlement
amount. For the reasons stated herein, Allstate's Motion
for Partial Summary Judgment is DENIED.
12, 2014, Mr. Vario was involved in a three-car accident on
Interstate 5 in Whatcom County. Dkt. #1, Ex. A at
¶¶ 1, 9-11. At the time, Mr. Vario was a passenger
in his co-worker's car. Id. ¶ 3. The two
other drivers involved in the accident were Douglas McAcy and
Homadokht Fattahi. Id. ¶¶ 2, 9-10. Mr.
Vario alleges the car he was in was struck by McAcy's
car, after Mr. McAcy swerved to avoid hitting Ms.
Fattahi's car. Id. ¶¶ 9-11. Mr. Vario
was injured in the collision. Id. ¶ 14. After
the accident, Mr. Vario sued Mr. McAcy and Ms. Fattahi.
Id. ¶¶ 14, 16. Ms. Fattahi's liability
insurance policy limit was $3 million dollars; Mr.
McAcy's liability insurance policy limit was $50, 000.
Id. ¶¶ 17-18. Mr. McAcy and Ms. Fattahi
denied liability. Id. ¶ 16.
2015, because Mr. Vario's co-worker's UIM policy
includes passengers as “covered person[s], ” and
because Mr. McAcy's liability insurance policy limit was
less than the damages Mr. Vario claims Mr. McAcy caused him,
Mr. Vario filed a UIM claim with Allstate for the damages
caused by Mr. McAcy. Id. ¶¶ 12-14. In July
2015, Allstate denied Mr. Vario's UIM claim. Id.
2016, Mr. McAcy offered to settle with Mr. Vario for $50,
000. Id. ¶ 16. Mr. Vario informed Allstate of
Mr. McAcy's offer, and allowed Allstate an opportunity to
buy out Mr. Vario's claim against Mr. McAcy. Id.
¶ 17. Allstate declined, and Mr. Vario settled with Mr.
McAcy for $50, 000. Id. Mr. Vario eventually also
settled his claim against Ms. Fattahi for $245, 000. Dkts.
#16 at 4 and #19 at 2.
Mr. Vario settled with Mr. McAcy and Ms. Fattahi, Allstate
continued to deny Mr. Vario's UIM claim. In November
2016, Mr. Vario sued Allstate in the Superior Court of
Washington for Whatcom County. See Dkt. #1, Ex. A at
1. In his Complaint, Mr. Vario alleges Allstate's denial
of his UIM claim violates several provisions of the
Washington Administrative Code and Washington State's
Insurance Fair Conduct Act. Id. ¶¶ 15,
18-23. Allstate removed Mr. Vario's suit to this Court on
December 13, 2016.
judgment is appropriate where “the movant shows 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); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247 (1986). When ruling on summary judgment,
courts do not weigh evidence to determine the truth of the
matter, but “only determine whether there is a genuine
issue for trial.” Crane v. Conoco, Inc., 41
F.3d 547, 549 (9th Cir. 1994) (citing Fed. Deposit Ins.
Corp. v. O'Melveny & Meyers, 969 F.2d 744, 747
(9th Cir. 1992), rev'd on other grounds, 512
U.S. 79 (1994)).
contends, and Mr. Vario does not dispute, the question before
the Court solely involves a question of law. See
Dkts. #16 at 7, #19, and #22 at 2. Under Washington State
law, the Court is to construe Allstate's UIM policy as a
contract. Nordstrom, Inc. v. Chubb & Son,
Inc., 54 F.3d 1424, 1429 (9th Cir. 1995). This means
Allstate's UIM policy is “to ‘be given a
fair, reasonable, and sensible construction, ' that
comports with how the average purchaser of insurance would
view the policy.” Id. (quoting Grange Ins.
Co. v. Brosseau, 776 P.2d 123, 125 (Wash. 1989)).
asks the Court to determine if its UIM policy allows it to
reduce its potential UIM liability by the settlement amounts
Mr. Vario received from Ms. Fattahi and Mr. McAcy. Dkt. #16
at 6. According to Allstate, Washington State's UIM
statute, its own UIM policy language, and a recent decision
in this district allow it to set off Ms. Fattahi's
settlement amount. Id. at 7.
response, Mr. Vario concedes Allstate may reduce its UIM
liability by Mr. McAcy's settlement amount, but disagrees
that Allstate can set off the amount Ms. Fattahi paid to
settle Mr. Vario's suit against her. Dkt. #19 at 2. To
support his position, Mr. Vario relies on the Washington
State Supreme Court decision in Allstate ...