United States District Court, W.D. Washington, Tacoma
ORDER ON PLAINTIFFS KIRSTEN AND BRYAN KRAMER'S
MOTION FOR PARTIAL SUMMARY JUDGMENT
J. BRYAN United States District Judge.
matter comes before the Court on Plaintiff's Kirsten and
Bryan Kramer's Motion for Partial Summary Judgment (Dkt.
14) and the Defendant Safeco Insurance Company of
Oregon's (“Safeco”) motion for partial
summary judgment (Dkt. 20). The Court has considered the
pleadings filed in support of and in opposition to the
motions and the file herein.
case arises from a dispute about uninsured/underinsured
motorist (“UIM”) coverage. Dkt. 1. In the pending
motions, the Plaintiffs move for summary judgment on their
claims for bad faith and violation of the Washington Consumer
Protection Act, RCW 19.86 et. seq.,
(“CPA”) based on Safeco's handling of its
rights pursuant to Hamilton v. Farmers Ins. Co. of
Washington, 107 Wash.2d 721 (Wash. 1987). Dkt. 14
and 23. In its response, Safeco opposes the Plaintiffs'
motion and cross-moves for summary judgment on both the bad
faith and CPA claims, maintaining that both claims should be
dismissed. Dkt. 20. For the reasons provided below,
Plaintiffs' motion (Dkt. 14) should be granted, in part,
and denied, in part, and Safeco's motion (Dkt. 20) should
RELEVANT FACTS AND PROCEDURAL HISTORY
parties agree that there are issues of fact as to the
underlying accident and agree that those issues are not
relevant to the pending motion. Dkts. 14 and 20. For
background only, the following paragraph is taken from the
Complaint. The Complaint alleges that on September 6, 2016,
Plaintiff Kristen Kramer's car was rear-ended by a
company van owned by Poulsbo Cleaning Company. Dkt. 1-2.
According to the Complaint, Ms. Kramer's car was totaled
and she suffered physical injuries, including broken bones.
Id. The Complaint maintains that the Kramers filed a
lawsuit against Poulsbo Cleaning Company, its owner and the
employee-driver. Id.; Kramer v. Poulsbo Cleaning
Services, LLC, et. al., filed in the Kitsap
County, Washington, Superior Court, Case No. 18-2-01587-18.
The Complaint asserts that after Progressive Insurance, the
insurer for Poulsbo Cleaning Company, informed the Plaintiffs
that Poulsbo Cleaning Company was out of business and had no
assets, and that the employee-driver had no insurance or
assets, Progressive Insurance offered the policy limits of
$50, 000 conditioned upon a full release of all claims. Dkt.
following facts are relevant to the pending motions.
time of the accident, the Plaintiffs had an automobile
insurance policy, which included uninsured/underinsured
motorist coverage, with Defendant Safeco. Dkt. 16. After
receiving the July 10, 2018, offer of settlement from Poulsbo
Cleaning's insurance company, on July 12, 2018, the
Plaintiffs' lawyer wrote Safeco to: (1) “involve
[it] in the decision to resolve the case by accepting the
$50, 000 offer so as not to ‘compromise [Safeco's]
lien without [its] prior consent, ” (2) make a claim
for UIM coverage and (3) to discuss Safeco's demand for
payment of subrogation damages. Dkt. 17-3, at 2-3. On July
30, 2018, having not heard from Safeco, Plaintiffs'
counsel emailed Safeco to inquire on the status of the claim.
Dkt. 17-4, at 2.
records indicate that the July 12, 2018 letter from Seattle,
Washington was received on July 20, 2018 in Portland, Oregon.
Dkt. 21, at 6. In an email dated August 1, 2018, Safeco's
claims representative states that she did not get notice of
the claim until July 24, 2018. Dkt. 21, at 9. At that time,
Safeco requested more information; it did not take a position
as to the offer of settlement from Progressive (the Poulsbo
Cleaning Company's insurance carrier). Dkt. 21, at 11.
Plaintiffs provided a majority of the requested information
on August 20, 2018 (Dkt. 17-9), and by September 13, 2018,
the rest was provided (Dkt. 21, at 13).
September 14, 2018, Safeco wrote the Plaintiffs and their
counsel. Dkt. 17-6. That letter provided that:
In response to your July 12, 2018 letter, we elect to
exercise our buyout rights as expressed in Hamilton v.
Farmers, 107 Wn.2d 721 (1987), and advance the $50,
000.00 policy limit offer extended by Progressive for the
September 6, 2016 accident. In doing so, Ms. Kramer does not
need nor should she sign any release or dismissal of the
lawsuit in favor of Meagan Johnston [the employee-driver] or
Poulsbo Cleaning Services, LLC . . . Instead, Ms. Kramer
should continue with her lawsuit against Ms. Johnston and
Poulsbo Cleaning as set forth in the case entitled Kirsten
and Bryan Kramer v. Poulsbo Cleaning Services, LLC aka Viking
Janitorial and Meagan L. Johnston, filed in the Kitsap County
Superior Court, Case No. 18-2-01587-18.
Dkt. 17-6, at 3. Safeco offered to pay a pro-rata share of
the costs (excluding attorneys' fees) to continue with
the case but, informed the Plaintiffs that it did not intend
to intervene in the Kitsap County case. Id.
Ms. Kramer and Mr. Kramer state that after being told that
Safeco was insisting on them continuing with the underlying
case in Kitsap County, they were “angry and upset and
anxious” about the need to proceed to trial even
“though the policy limits had been offered to resolve
the matter.” Dkts. 19 and 20.
September 25, 2018, the Plaintiffs' counsel wrote Safeco
and indicated that the offer failed to comport with
Washington law under Hamilton. Dkt. 17-7. The letter
asserts that “there is nothing in the Hamilton
decision that allows Safeco to only advance the settlement
offer, refuse to pay out UIM benefits and force the Kramers
to litigate their claim against Progressive's
insured.” Id., at 3-4. The letter asked Safeco
to let them know by October 5, 2018 if it still wished
“to buyout the Kramers' claim against
Progressive.” Id., at 4. They informed Safeco
that they would not continue the lawsuit against Poulsbo
Cleaning Co., et. al. but that Safeco was free to do so.
Id. They stated that if Safeco did not confirm by
October 5, 2018 that they intended to buyout the claim, the
“Kramers will accept the Progressive policy limits
offer and execute whatever release is required.”
Id. They indicated that they will then look to
Safeco to “satisfy its legal obligations to pay out the
difference between the policy limits and [the Kramers']
October 4, 2018, Safeco responded by email and asked for a
teleconference with Safeco's newly hired outside counsel.
Dkt. 17-8, at 2. After a phone call and more email, on
October 15, 2018, Safeco wrote the Plaintiffs and informed
them that it was not going to exercise its rights under
Hamilton to buyout the claim against Progressive.
Dkt. 17-10, at 2. It agreed that a settlement with
Progressive, including an executed release of all claims,
would not prejudice Ms. Kramer's right to purse an UIM
claim under the policy. Dkt. 17-10, at 2. Safeco indicated
that it would still seek applicable offsets. Id.
next day, on October 16, 2018, Safeco emailed Plaintiffs'
counsel, reiterated that they were not exercising
Safeco's rights under Hamilton and stated,
“[r]ather than substituting payment, we agree to
intervene in the underlying lawsuit to litigate the value of
you client's UIM claim if you feel there is UIM value
after your client accepts the $50, 000 policy limits from
Progressive.” Dkt. 17-11. Plaintiff's counsel
states that he contacted Safeco at that point and
“explained that Safeco's intent to intervene [in
the lawsuit against Poulsbo Cleaning Company] makes no sense
because Poulsbo Cleaning Company will not settle with the
Kramers absent a full release of claims.” Dkt. 17, at
three months after the Plaintiffs informed Safeco of the
offer of $50, 000 from Progressive, the Plaintiffs were able
to and did accept the offer. Dkts. 19 and 20. They deposited
the check in the bank right away but, testified that they
lost the interest they should have earned had ...