United States District Court, W.D. Washington, Seattle
ORDER GRANTING PLAINTIFF'S MOTION FOR LEAVE TO
J. Pechman, United States District Judge.
MATTER comes before the Court on Plaintiff's Motion for
Leave to Amend Complaint. (Dkt. No. 19). The Court has
reviewed the Motion, the Response (Dkt. No. 26), the Reply
(Dkt. No. 28) and all related papers.
Reverse Now VII, LLC filed suit against Defendant Oregon
Mutual Insurance Company in February 2016. (See Dkt.
No. 1.) Plaintiff is the owner of an apartment building that
was damaged by fire and the holder of a casualty insurance
policy from Defendant. (Id. at 2.) Plaintiff's
Complaint alleged that Defendant failed to provide the full
amount of damages due under the policy, and included claims
for breach of contract and unreasonable denial of a claim for
coverage or payment of benefits under RCW 48.30.015.
(Id. at 3-6.) Plaintiff filed its Complaint while
the appraisal process was still pending. (Id. at 3.)
issue in the appraisal was whether the building's
exterior siding required complete or partial replacement.
(Dkt. No. 27 at 5.) At the appraisal hearing, Plaintiff
presented testimony that complete replacement was needed
because the existing marblecrete siding could not be matched
with new marblecrete siding. (Id.) Defendant
presented testimony by a contractor who stated he could
satisfactorily match the siding and who offered photographs
purporting to show successful matching under similar
circumstances. (Id.) The appraisal concluded in
February 2017, with the panel awarding Plaintiff the cost of
partial replacement. (Dkt. No 19 at 2; Dkt. No. 27 at 55.)
Upon investigating the contractor's testimony, Plaintiff
learned that the contractor's testimony before the
appraisal panel had been false. (Id. at 6.)
Plaintiff moved to have the appraisal re-opened on this
basis. (Id. at 11.) In June 2017, the panel denied
the motion. (Dkt. No. 23 at 54.)
now seeks to amend its Complaint to add claims for (1) breach
of contract; (2) violations of Washington's Consumer
Protection Act (“WCPA”); and (3) fraud in the
appraisal process. (See Dkt. No. 19 at 2; Dkt. No.
20-1.) Plaintiff did not include these claims in its
Complaint because it did not learn of the alleged fraud until
after the appraisal hearing. (Dkt. No. 19 at 3.) Defendant
opposes the motion and contends that each of the proposed
claims is futile. (Dkt. No. 26 at 5-7.) In particular,
Defendant contends: (1) no breach of contract occurred; (2)
the WCPA and fraud in the appraisal claims are barred by
issue preclusion and collateral estoppel; and (3) the IFCA
claim is barred by Plaintiff's failure to comply with the
statute's notice provisions.
Court finds that Plaintiff should be granted leave to amend
to include the proposed claims.
the appraisal process was not a final adjudication on the
merits such that Plaintiff's proposed claims are
precluded. An appraisal award is not an adjudication on the
merits until judicially confirmed. See Caldeira v. County
of Kauai, 866 F.2d 1175, 1178 (9th Cir. 1989)
(“[A]n unreviewed arbitration decision does
not preclude a federal court action”) (emphasis in
original). Additionally, the appraisal panel's authority
is limited to the measure of damages for loss. See, e.g.,
Keesling v. W. Fire Ins. Co., 10 Wn.App. 841, 845
(“An appraisal provision provides a method for
establishing the dollar value of damage sustained. . . . The
authority and control over the ultimate disposition of the
subject matter remains with the courts.”). “[A]n
appraisal award might be challenged where the fairness of the
appraisal process is questioned by the insured, through
allegations of bias, prejudice, or lack of disinterestedness
on the part of either an appraiser or the umpire.”
Pinney v. Am. Family Mutual Ins. Co., No.
C11-175MJP, 2011 WL 13232603, at *1 (W.D. Wash. Dec. 8, 2011)
(citing Bainter v. United Pacific Ins. Co., 50
Wn.App. 242, 246 (1988)).
there is no evidence that Plaintiff failed to comply with the
notice requirements of the IFCA. Plaintiff apparently faxed
and mailed notice of alleged IFCA violations to Defendant on
December 16, 2015. (Dkt. No. 32-14.) Plaintiff served its
Complaint more than twenty days later, on February 11, 2016.
(Dkt. No. 1). The IFCA provides only that “[t]wenty
days prior to filing an action . . . claimant must provide
written notice of the basis for the cause of action to the
insurer . . .” RCW 48.30.015. The record shows
Defendant received this notice. (Dkt. No. 32-15)
(“Oregon Mutual also notes for its file that your
letter of December 16, 2015, has threatened
found that Plaintiff's proposed claims are not futile,
the Court GRANTS Plaintiff's Motion for Leave to Amend.
Within ten (10) days of the date of this Order, Plaintiff
shall file an Amended Complaint consistent with the Proposed