MOUN KEODALAH and AUNG KEODALAH, husband and wife, Plaintiffs-Respondents,
ALLSTATE INSURANCE COMPANY, a corporation, and TRACEY SMITH and JOHN DOE SMITH, husband and wife, Defendants-Petitioners.
issue in this underinsured motorist case is whether RCW
48.01.030 provides a basis for an insured's bad faith and
Consumer Protection Act (CPA), chapter 19.86 RCW, claims
against an employee claims adjuster. For the reasons
discussed below, we hold that such claims are not available
and reverse the Court of Appeals.
driving his truck, Moun Keodalah and an uninsured
motorcyclist collided in April 2007. After Keodalah stopped
at a stop sign and began to cross the street, the
motorcyclist struck Keodalah's truck. The collision
killed the motorcyclist and injured Keodalah. Keodalah
carried auto insurance with Allstate Insurance Company that
included underinsured motorist (UIM) coverage.
Seattle Police Department (SPD) investigated the collision
and determined that the motorcyclist was traveling between 70
and 74 m.p.h. in a 30 m.p.h. zone. SPD also reviewed
Keodalah's cell phone records, which showed that Keodalah
was not using his cell phone at the time of the collision.
also investigated the collision, interviewing several
witnesses who said the motorcyclist was traveling faster than
the speed limit, had proceeded between cars in both lanes,
and had sped into the intersection. Allstate hired an
accident reconstruction firm, Traffic Collision Analysis Inc.
(TCA), to analyze the collision. TCA found that Keodalah
stopped at the stop sign, the motorcyclist was traveling at a
minimum of 60 m.p.h., and the motorcyclist's excessive
speed caused the collision.
asked Allstate to pay him his UIM policy limit of $25, 000.
Allstate refused, offering $1, 600 to settle the claim based
on its assessment that Keodalah was 70 percent at fault.
After Keodalah asked Allstate to explain its evaluation,
Allstate increased its offer to $5, 000.
sued Allstate, asserting a UIM claim. Allstate designated
claims adjuster Tracey Smith as its CR 30(b)(6)
representative. Although Allstate possessed both the SPD
report and TCA analysis, Smith claimed that Keodalah had run
the stop sign and had been on his cell phone. Smith later
admitted, however, that Keodalah had not run the stop sign
and had not been on his cell phone. Before trial, Allstate
offered Keodalah $15, 000 to settle the claim. Keodalah again
requested the $25, 000 policy limit, and the case proceeded
to a jury trial.
trial, Allstate contended that Keodalah was 70 percent at
fault. The jury determined the motorcyclist to be 100 percent
at fault and awarded Keodalah $108, 868.20 for his injuries,
lost wages, and medical expenses. The trial court entered
judgment against Allstate for $25, 302.95.
filed a second lawsuit against Allstate and included claims
against Smith. These included alleged violations of the
Washington Insurance Fair Conduct Act (IFCA), chapter 48.30
RCW; insurance bad faith; and CPA violations. Allstate and
Smith moved to dismiss the complaint under CR 12(b)(6)
("failure ... to state a claim upon which relief can be
granted"). The trial court granted the motion in part,
dismissing Keodalah's claims against Smith and certifying
the partial dismissal for discretionary review under RAP
Court of Appeals granted discretionary review of three
issues: (1) whether IFCA creates a private cause of action
for violation of a regulation, (2) whether an individual
insurance adjuster may be liable for bad faith, and (3)
whether an individual insurance adjuster may be liable for
violation of the CPA. The Court of Appeals held that this
court's decision in Perez-Crisantos v. State Farm
Fire & Casualty Co., 187 Wn.2d 669, 672, 389 P.3d
476 (2017), which held that the IFCA does not create an
independent private cause of action for violation of a
regulation, foreclosed Keodalah's IFCA
Court of Appeals reversed the trial court's CR 12(b)(6)
dismissal, holding that the statutory duty of good faith
imposed by RCW 48.01.030 applied to individual insurance
adjusters and breach of that statutory duty could serve as a
basis for Keodalah's bad faith and CPA claims against
Smith. Smith filed a petition for review, which this court
granted. 191 Wn.2d 1004 (2018).
court applies de novo review to questions concerning
statutory interpretation and dismissal under CR 12(b)(6).
State v. Evergreen Freedom Found., 192 Wn.2d 782,
789-90, 432 P.3d 805 (2019), cert, denied, 139 S.Ct.
2647 (2019); Tenore v. AT&T Wireless Servs., 136
Wn.2d 322, 329-30, 962 P.2d 104 (1998). In construing a
statute, the fundamental objective is to ascertain and carry
out the legislature's intent. Evergreen Freedom
Found., 192 Wn.2d at 789. We look to "the entire
'context of the statute in which the provision is found,
[as well as] related provisions, amendments to the provision,
and the statutory scheme as a whole.'" Id.
(alteration in original) (internal quotation marks omitted)
(quoting State v. Conover, 183 Wn.2d 706, 711, 355
P.3d 1093 (2015); see also G-P Gypsum Corp. v. Dep't
of Revenue, 169 Wn.2d 304, 310, 237 P.3d 256 (2010)
("enacted statement of legislative purpose is included
in a plain reading of a statute"). As this court opined
in Evergreen Freedom Foundation,
"The meaning of words in a statute is not gleaned from
[the] words alone but from all the terms and provisions of
the act in relation to the subject of the legislation, the
nature of the act, the general object to be accomplished and
consequences that would result from construing the particular
statute in one way or another."
192 Wn.2d at 790 (alteration in original) (internal quotation
marks omitted) (quoting Burns v. City of Seattle,
161 Wn.2d 129, 146, 164 P.3d 475 (2007)); see also
id. (citing Dep't of Ecology v. Campbell &
Gwinn, LLC, 146 Wn.2d 1, 11, 43 P.3d 4 (2002), for the
proposition that "plain meaning" is "discerned
from all that the Legislature has said in the statute and
related statutes which disclose legislative intent about the
provision in question").
CR 12(b)(6), dismissal of a complaint for "failure ...
to state a claim upon which relief can be granted"
involves a question of law, and such dismissal is appropriate
"only if it appears beyond doubt that the plaintiff
cannot prove any set of facts which would justify
recovery." Tenor e, 136 Wn.2d at 330. In such a
case, a "plaintiffs allegations are presumed to be true
and a court may consider hypothetical facts not included in
the record." Id. "CR 12(b)(6) motions
should be granted 'sparingly and with care' and
'only in the unusual case in which plaintiff includes
allegations that show on the face of the complaint that there
is some insuperable bar to relief.'" Id.
(quoting Orwick v. City of Seattle, 103 Wn.2d 249,
254, 692 P.2d 793 (1984); Hoffer v. State, 110 Wn.2d
415, 420, 755 P.2d 781 (1988)). As discussed below, in our
view, this is such a case.
Court of Appeals' decision turned on the statutory duty
it found in RCW 48.01.030, which provides:
The business of insurance is one affected by the public
interest, requiring that all persons be actuated by good
faith, abstain from deception, and practice honesty and
equity in all insurance matters. Upon the insurer, the
insured, their providers, and their representatives rests the
duty of preserving inviolate the integrity of insurance.
echoes the Court of Appeals, arguing that by imposing a duty
on "all persons" to act in good faith, the plain
language of the statute subjects employee adjusters to bad
faith and CPA claims premised on breach of the noted
argues that not every duty imposed by a statute is an
actionable tort, that RCW 48.01.030 does not expressly create
a private right of action, and that the Court of Appeals did
not employ the three-pronged test articulated in Bennett
v. Hardy, 113 Wn.2d 912, 784 P.2d 1258 (1990), for
determining whether a statute includes an implied cause of
action, to wit: (1) whether the plaintiff is within the class
for whose benefit the statute was enacted, (2) whether
legislative intent, explicitly or implicitly, supports
creating or denying a remedy, and (3) whether implying a
remedy is consistent with the underlying purpose of the
legislation. See Swank v. Valley Christian Sch., 188
Wn.2d 663, 675-76, 398 P.3d 1108 (2017) (discussing the
Bennett test). We agree with Smith.
first Bennett factor (benefited class) is not met if
the statute in question benefits the general public rather
than an identifiable class of persons. As this court stated
in Fisk v. City of Kirkland, 164 Wn.2d 891, 895, 194
P.3d 984 (2008), "Plaintiffs, basing their claims on a
statute, must establish that they fall within the class of
persons intended to be protected by that statute." And
"if the statute serves the general public welfare
instead of an identifiable class of persons, then there is no
duty to any individual unless a specific exception
applies." Id.; see also Protect the Peninsula's
Future v. City of Port Angeles, 175 Wn.App. 201, 210,
304 P.3d 914 (2013) (because the legislature enacted the
statute at issue "to protect the general public from
risks posed by legend drugs," complainant cannot qualify
as a member of a "class for whose especial benefit"
the legislation was enacted); see also Cannon v. Univ. of
Chi., 441 U.S. 677, 690 n.l3, 99 S.Ct. 1946, 60 L.Ed.2d
560 (1979) (noting that "the Court has been especially
reluctant to imply causes of actions under statutes that
create duties on the part of persons for the benefit of the
public at large").
the interest addressed in RCW 48.01.030 is expressly stated
to be the "public interest," and the statute
indicates that its purpose is to protect the "integrity
of insurance." Accordingly, it cannot be said that the
statute was enacted for the particular benefit of insureds;
thus, the first Bennett factor does not support
finding an implied cause of action for a violation of RCW
second Bennett factor, regarding legislative intent
to create a remedy, also concerns statutory interpretation.
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. See Campbell & Gwinn, 146
Wn.2d at 11-12. But 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. Here, RCW 48.01.030 expressly recognizes
a "duty," but it fails to provide an express cause
of action based on violations of that duty. Given this
seeming ambiguity, we further consider the relevant statutory
and historical context.
the statutory context, we find it significant that the
insurance code contains several specific enforcement
mechanisms. The insurance commissioner has broad authority to
make rules and conduct investigations to give effect to the
insurance code. RCW 48.02.060(3). The commissioner also has
authority to suspend or revoke the licenses of insurers and
adjusters, and may subject them to fines. RCW 48.05.130,
.140, .185 (insurers); RCW 48.17.530, .560 (adjusters).
Criminal liability may attach where service providers make
payments to get claimant referrals. RCW 48.30A.015. The
insurance code provides generally that "[e]xcept as
otherwise provided in this code, any person violating any
provision of this code is guilty of a gross
misdemeanor." RCW 48.01.080. In our view, the presence
of such specific provisions for enforcement of the insurance
code suggests that the legislature's omission of a
provision creating a private cause of action for violations
of RCW 48.01.030's duty of good faith was intentional.
See Davenport v. Wash. Educ. Ass'n, 147 Wn.App.
704, 718-19, 197 P.3d 686 (2008) (noting the ease with which
the drafters could have expressed a private statutory cause
of action, "we think that the omission implies the
absence ... of intent to create a private statutory
cause of action"); see also ...