Progressive Casualty Insurance Company v. Tyler Ainsworth

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
TYLER AINSWORTH, NO. 69433-2-
Respondent, DIVISION ONE
o
wo
—tcz
v.
m C-2
d?—n
PROGRESSIVE CASUALTY UNPUBLISHED OPINION 3>„'
INSURANCE COMPANY, a foreign
insurance company, FILED: February 10, 2014
zr
cr>w
Appellant. —IC3
l_AU] j _ progressive Casualty Insurance Company appeals the order granting
partial summary judgment in Tyler Ainsworth's favor on his income continuation (wage
loss) benefit claim under applicable provisions of his automobile insurance policy.1 We
hold that (1) the plain meaning of the relevant policy provisions entitles Ainsworth to
income continuation benefits under the circumstances here, (2) Progressive
unreasonably denied coverage and payment of benefits under the Insurance Fair
Conduct Act (IFCA), RCW 48.30.015, (3) no material fact issues exist, and (4)
1Progressive filed its notice of appeal from a partial summary judgment order
that resolved Ainsworth's claims for breach of contract and violation of the Insurance
Fair Conduct Act. At the time, additional claims for violation of the Washington
Consumer Protection Act (CPA), insurance bad faith, and negligence remained pending
before the trial court. We stayed appellate proceedings pending entry of CR 54(b)
findings certifying the partial summary judgment orderfor immediate appeal. The trial
court entered an order directing entry of a final judgment on the partial summary
judgment order and declaring Ainsworth's CPA, bad faith, and negligence claims moot.
We lifted the stay and now review the merits of the summary judgment order.
69433-2-1/2
Progressive failed to preserve its "actual damages" claim. Accordingly, we affirm the
partial summary judgment order and the trial court's award of attorney fees and costs.
FACTS
On July 14, 2010, Tyler Ainsworth suffered neck and back injuries on Interstate 5
in Seattle when an "18 wheeler" tractor trailer truck traveling 50 to 55 miles per hour
rear-ended the car he was driving.2 Shortly afterthe accident, he submitted a claim for
income continuation (wage loss) benefits to Progressive. He claimed he lost income
from his warehouse job at Contour Inc.,3 and from his part-time evening delivery job at
Pagliacci Pizza Inc., due to his accident-related bodily injuries.
Progressive's claim representative, Michelle Becerra, calculated the amount of
wage loss benefits.4 Becerra did not include Ainsworth's lost Pagliacci wages in her
wage loss calculation. Progressive paid Ainsworth's wage loss benefits based solely on
lost Contour wages.
Becerra obtained medical updates from Ainsworth's primary care physician,
Dr. Christopher Smith. In a letter dated September 21, 2010, Dr. Smith stated that
Ainsworth was "making excellent progress" and indicated that he could resume full-time
work, "[w]ith [rjestrictions," on October 15, 2010. Dr. Smith specified, "Current
restrictions are lifting no more than 50 pounds. Rarely more than 25 pounds.
[Ainsworth] will need more frequent rest breaks. Ten minutes per hour." He also noted
2 Progressive adjusted Ainsworth's property loss claim and determined that the
vehicle was a total loss due to the damages.
3 At the time Ainsworth submitted his claim, Contour was known as "Twenty20
Inc." We refer to Twenty20, Inc. as "Contour."
4The policy pays no wages lost for the first 14 days after the accident and caps
at 54 weeks from the accident.
-2-
69433-2-1/3
that the restrictions would remain in effect pending a "follow-up visit in 3 to 4 weeks."
Finally, he indicated that he had "not yet determined" the date on which Ainsworth
would regain the ability to work without restrictions.
On September 27, 2010, Becerra noted in Progressive's claim log that she "rcvd
[sic] clarification from Dr. Smith re: Tyler wage loss." (Formatting omitted). Her note
continued, "As of 10/15/10 [Ainsworth] can increase to 8 hrs day." (Formatting omitted.)
Progressive stopped paying Contour wage loss benefits on October 14, 2010.
The next day, Ainsworth returned to work at Contour as a full-time, hourly employee.
He later claimed 60 hours of work missed in October and November 2010 due to
medical appointments with various health care providers for injury-related treatment.
On December 7, 2010, Ainsworth requested additional wage loss benefits for the
Contour wages he lost while attending these medical appointments. Progressive
denied the claim. It concluded that Ainsworth's contractual entitlement to wage loss
benefits ended on October 15, 2010, the date Dr. Smith released him to resume
restricted full-time work. In a letter dated December 29, 2010, Becerra denied
additional benefits, explaining that Progressive's obligation to pay wage loss benefits
under the policy ended on "the date on which the insured person is reasonably able to
perform the duties of his or her usual occupation . . . ." She stated, "We have not
received anything to date that Mr. Ainsworth is not able to perform the duties of his
usual occupation. Therefore, additional wage loss is not owed."
Ainsworth sued Progressive, alleging breach of contract, a violation of IFCA
based on the failure to pay wage loss benefits due under the policy, and other claims
not relevant in this appeal. He then moved for partial summary judgment, arguing it was
-3-
69433-2-1/4
undisputed that he lost Contour and Pagliacci wages due to accident-related bodily
injuries. He calculated that Progressive owed him $5,458.18 in unpaid benefits—
$736.12 for lost Contour wages and $4,722.06 for lost Pagliacci wages. He asked the
court to award unpaid benefits as contract-based damages, along with attorney fees
and costs. He also asked the court to enhance his award under IFCA's treble damages
provision, RCW 48.30.015(2).5
Progressive responded, arguing that its duty to pay wage loss benefits for lost
Contour wages terminated as a matter of law when Ainsworth resumed restricted full-
time employment on October 15, 2010. It also argued, "With regard to Pagliacci,
Plaintiff has never provided any note from a doctor restricting him from Pagliacci and
has admitted that he never received a restriction relating to this employer." It then
argued that no IFCA violation occurred, since the record contained no proof that it
unreasonably denied Ainsworth's claim for wage loss.6
The trial court granted Ainsworth's partial summary judgment motion, ruling, "The
uncontested medical evidence is that Plaintiff, the insured, was not 'reasonably able' to
perform the duties in his two jobs due to the restrictions his doctor placed on him." It
concluded that Ainsworth was entitled to $5,458.18 in unpaid income continuation
benefits, covering both Contour and Pagliacci wage loss. Turning to the IFCA claim, it
5 RCW 48.30.015(2) provides, "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."
6 Progressive's appellate briefing fundamentally misapprehends Ainsworth's
wage loss claims. The partial summary judgment record is clear that Ainsworth sought
Contour wage loss benefits related only to wages lost due to medical appointments in
October 2010 and November 2010. As to Ainsworth's Pagliacci wage loss claim, he
sought wage loss benefits for the period July 14, 2010, to August 2011.
-4-
69433-2-1/5
found, "The Defendant unreasonably denied the 'income continuation benefits' without
adequate investigation, erroneously concluding his return to some work justified the
decision." Citing IFCA's treble damages provision, it stated, "Since the denial [of
income continuation benefits] was not reasonable, the court DOUBLES the amount of
actual damages under RCW 48.30.015(2) to $10,916.36." Finally, the court awarded
Ainsworth attorney fees under IFCA and Olympic Steamship Co. v. Centennial
Insurance Co.. 117 Wash. 2d 37, 811 P.2d 673 (1991). Progressive appeals.
ANALYSIS
In this action to recover personal injury protection (PIP) wage loss benefits,
Progressive contends that it properly paid wage loss benefits "throughout Ainsworth's
convalescence" and stopped payments only when Ainsworth's doctor released him to
work full-time on October 15, 2010. Br. of Appellant at 5. It relies on policy language
that states benefits end when the insured is "reasonably able to perform the duties of
his or her usual occupation." It also contends no benefits are payable for wage loss to
attend medical appointments and Ainsworth failed to mitigate his damages. Ainsworth
responds that Progressive raised no material issues of fact that he "remained medically
restricted" from performing his usual job duties or failed to mitigate his damages.
Resp't's Br. at 20.
Summary Judgment
When reviewing a grant of summary judgment, we engage in the same inquiry as
the trial court. RAP 9.12; Harris v. Ski Park Farms. Inc.. 120 Wash. 2d 727, 737, 844 P.2d
1006 (1993). Summary judgment is appropriate only when, after reviewing all facts and
reasonable inferences in the light most favorable to the nonmoving party and all
-5-
69433-2-1/6
questions of law de novo, there are no genuine issues of material fact and the moving
party is entitled to judgment as a matter of law. CR 56(c); Wilson v. Steinbach, 98
Wash. 2d 434, 437, 656 P.2d 1030 (1982).
An affidavit "'does not raise a genuine issue of fact unless it sets forth facts
evidentiary in nature, i.e., information as to what took place, an act, an incident, a reality
as distinguished from supposition or opinion.'" Johnson v. Recreational Equip., Inc.,
159 Wash. App. 939, 954, 247 P.3d 18 (2011) (quoting Snohomish County v. Ruqq, 115
Wash. App. 218, 224, 61 P.3d 1184 (2002)). "Likewise, ultimate facts, conclusions of fact,
conclusory statements of fact or legal conclusions are insufficient to raise a question of
fact." Ruqq, 115 Wash. App. at 224. A party opposing a motion for summary judgment
may not rely on speculation, argumentative assertions that unresolved factual issues
remain, or its affidavits considered at face value. Rather, the nonmoving party must set
forth specific facts that sufficiently rebut the moving party's contentions and disclose
that a genuine issue as to a material fact exists. Herman v. Safeco Ins. Co. of Am., 104
Wash. App. 783, 787-88, 17 P.3d 631 (2001).
Coverage
"The courts liberally construe insurance policies to provide coverage wherever
possible." Bordeaux, Inc. v. Am. Safety Ins. Co., 145 Wash. App. 687, 694, 186 P.3d
1188 (2008). Construction of an insurance policy is a question of law. Queen City
Farms, Inc. v. Cent. Nat'l Ins. Co. of Omaha, 126 Wash. 2d 50, 65, 882 P.2d 703 (1994).
We examine the policy "to determine whether under the plain meaning of the contract
there is coverage." Kitsap County v. Allstate Ins. Co., 136 Wash. 2d 567, 576, 964 P.2d
1173 (1998). "Terms undefined by the insurance contract should be given their ordinary
-6-
69433-2-1/7
and common meaning, not their technical, legal meaning." Allstate Ins. Co. v. Peasley,
131 Wash. 2d 420, 424, 932 P.2d 1244 (1997). Terms in an insurance policy "must be
given a fair, reasonable, and sensible construction as would be given by an average
insurance purchaser." Mid-Century Ins. Co. v. Henault, 128 Wash. 2d 207, 213, 905 P.2d
379 (1995). We interpret an insurance contract from the point of view of the average
person purchasing insurance. Holden v. Farmers Ins. Co. of Wash., 169 Wash. 2d 750,
756, 239 P.3d 344 (2010).
"A determination of coverage involves two steps: first, '[t]he insured must show
the loss falls within the scope of the policy's insured losses.'" Moeller v. Farmers Ins.
Co. of Wash., 173 Wash. 2d 264, 271-72, 267 P.3d 998 (2011) (alteration in original)
(quoting McDonald v. State Farm Fire & Cas. Co., 119 Wash. 2d 724, 731, 837 P.2d 1000
(1992)). "Then, in order to avoid coverage, the insurer must 'show the loss is excluded
by specific policy language.'" Moeller, 173 Wash. 2d at 272 (quoting McDonald, 119
Wn.2dat731)).
Personal Injury Protection Coverage - Purpose
The no-fault insurance system and personal injury protection (PIP)
benefits are intended to provide victims of motor vehicle accidents adequate and
prompt reparation for certain economic losses at the lowest cost to both the
individual and the no-fault insurance system. The individual victim is benefited
through quick compensation for economic losses incurred as a result of the
accident, [irrespective] of fault and without having to bring a lawsuit.
12 Steven Putt, Daniel Maldonado & Joshua D. Rogers, Couch on Insurance 3d
§ 171:45, at 171-46 (2006) (footnote omitted).
Compensation for lost earnings or wages is generally one of the "basic
economic losses" covered by no-fault and personal injury protection (PIP)
insurance policies. This compensation for lost earnings or wages provides
reimbursement for loss of earnings from work which the injured claimant would
69433-2-1/8
have received had he or she not been injured and provides protection from
economic hardship caused by the loss of a wage earner's income.
12 Putt.etal, supra, § 171:53, at 171-54 to-55 (footnote omitted); see also 5B
Matthew King, Washington Insurance Law and Litigation § 4:1, at 29-30 (2013-14).
Ainsworth's Wage Loss Claims
The relevant PIP policy language here provides:7
PART II - PERSONAL INJURY PROTECTION COVERAGE
INSURING AGREEMENT
Subject to the Limits of Liability, if you pay the premium for Personal Injury
Protection Coverage, we will pay the following benefits to or on behalf of an
insured person for losses or expenses incurred because of bodily injury
sustained by an insured person caused by an accident and arising out of the
ownership, operation, maintenance, or use of an automobile:
2. income continuation benefits to or on behalf of each insured person engaged
in a remunerative occupation at the time of the accident.
ADDITIONAL DEFINITIONS
3. "Income continuation benefits" means payment of an insured person's loss
of income from work, subject to the following:
a. income from work lost between the date of the accident and the 14th day after
the accident will not be paid;
b. [P]ayments will end the earliest of:
(i) the date on which the insured person is reasonably able to perform
the duties of his or her usual occupation;
(ii) 54 weeks from the date of the accident; or
(iii) the date of the insured person's death; and
c. income earned during the period income continuation benefits are being paid
will be deducted from income continuation benefits.
7These policy provisions closely mirror chapter 48.22 RCW's personal injury
protection statutes. On May 7, 1993, Washington State enacted a statute that required
all state auto insurers to offer PIP no-fault coverage that was authorized, but not
required to be offered, by the 1973 regulation. Like the disputed policy clause here,
RCW 48.22.005(3) provides in part: "The benefit payment period begins fourteen days
after the date of the automobile accident and ends at the earliest of the following:
(a) The date on which the insured is reasonably able to perform the duties of his or her
usual occupation." "[U]nlike other types of contracts, insurance policies must be
interpreted in light of important public policy and statutory considerations." Mission Ins.
Co. v. Guarantee Ins. Co.. 37 Wash. App. 695, 699, 683 P.2d 215 (1984).
-8-
69433-2-1/9
EXCLUSIONS - READ THE FOLLOWING EXCLUSIONS CAREFULLY. IF AN
EXCLUSION APPLIES, COVERAGE WILL NOT BE AFFORDED UNDER THIS
PART II.
Coverage under this Part II does not apply to bodily injury:
1. to any person who intentionally causes their own bodily injury;
2. resulting from any pre-arranged or organized racing or speed contest, or in
practice or preparation for any such contest;
3. due to war, whether or not declared, or to an act or condition incident to war;
4. resulting from the radioactive, toxic, explosive, or other hazardous properties
of nuclear material;
5. to you or a relative while occupying a motor vehicle, other than a covered
auto owned by you or furnished for your regular use;
6. to a relative while occupying a motor vehicle, other than a covered auto
owned by the relative or furnished for the regular use of a relative; or
7. to any person who sustains bodily injury while using an automobile in the
commission of a felony.
LIMITS OF LIABILITY
The Limits of Liability for losses or expenses incurred by or on behalf of one
insured person because of bodily injury sustained in any one accident will be as
follows:
2. $10,000 for income continuation benefits, subject to a limit of $200 per week.
However, the combined weekly payment an insured person may receive
under personal injury protection coverage, workers' compensation, disability
insurance, or other income continuation benefits may not exceed 85% of the
insured person's weekly income at the time of the accident.
(Formatting omitted.)
Progressive agreed to pay income continuation benefits if Ainsworth lost income
from work as a result of a bodily injury caused by an automobile accident. The burden
rests on Ainsworth to demonstrate coverage under the policy language quoted above-
that he lost Contour and Pagliacci wages, that all wage loss resulted from bodily injuries
caused by the automobile accident, and that he was not reasonably able to perform the
duties of his usual occupation.8
8We note problems can arise, however, in distinguishing between what must be
proved by the insured in order to establish that a claim comes within the general
coverage of the policy and what constitutes an exception to coverage. Here, the
existence of coverage depends in part on the applicability of the "reasonably able to
-9-
69433-2-1/10
Pagliacci Wage Loss Claim
The following material facts are undisputed. Ainsworth submitted a completed
pre-printed application form for PIP wage loss benefits to Progressive indicating his
current employers as Contour and Pagliacci. He answered, "yes" in response to the
question, "Did you lose wages or salary as a result of your injury?" (Formatting
omitted.) He also reported his "disability from work began" on July 14, 2010, the
accident date. (Formatting omitted.) He signed the application and authorization to
release medical information to Progressive. Six days after the accident, Becerra mailed
letters to Pagliacci and Contour requesting Ainsworth's wage loss information from each
employer. She enclosed Ainsworth's signed authorization to release the information
and a preprinted wage and salary verification form. Pagliacci's payroll accountant,
Pedro Z. Fernandez, completed the verification form on August 13, 2010. He indicated
Ainsworth's job duties as "deliver pizza to customers," wage rate of $8.55 per hour, and
worked an average of 12 hours per week. He also indicated Ainsworth had not returned
to work since the accident date. As to whether Ainsworth was entitled to "a wage or
salary continuation plan," Fernandez indicated "No." In response to a specific wage
perform the duties of his or her usual occupation" clause found under the definition of
"income continuation benefits" in the insuring clause of the policy. In other words, this
clause does not appear under the "Exclusions" or "Limitations" provisions. According to
a noted authority on insurance law, "The best rule, under [these] circumstances, is
probably to place the burden of proving that the proviso is not applicable on the insured.
The insured has the burden of establishing a prima facie case of coverage. The carrier,
therefore, should not automatically have the burden of proof with regard to each
provision in the policy that happens to be written in an exclusionary fashion." 2 Allan D.
Windt, Insurance Claims and Disputes: Representation of Insurance Companies and
Insureds § 9:1, at 10-11 (6th ed. 2013) (footnote omitted).
-10-
69433-2-1/11
information question, Fernandez provided weekly wage information from June 6, 2010,9
through July 18, 2010. For each week, he indicated number of days worked, tip
amounts earned, and gross earnings. He signed the verification form and included his
job title and contact telephone number. He then faxed the completed form to Becerra
the same day he signed it. The fax coversheet included Fernandez's full name, contact
telephone number, fax number, Ainsworth's full name, and Becerra's full name and fax
number.
Based on the wage loss information provided by Contour, Becerra prepared a
PIP wage calculation sheet for Ainsworth's Contour wage loss claim but prepared no
calculations for his Pagliacci wage loss claim. The calculation worksheet shows
Becerra's wage loss calculations for Contour for the period of July 28, 2010, through
October 14, 2010. For this period, Progressive does not dispute that Ainsworth's
treating physician, Dr. Smith, declined to release him to work due to his accident-related
disability.
Progressive periodically obtained medical disability information from Dr. Smith to
determine eligibility for wage loss benefits. Dr. Smith's April 13, 2012 declaration
testimony, submitted in support of Ainsworth's motion for partial summary judgment,
stated:
3. The following points and opinions are on a more probable than not
basis to a reasonable degree of medical certainty.
4. Tyler Ainsworth is my patient at Pacific Medical Center and has been
for many years.
5. Mr. Ainsworth was injured in a motor vehicle collision on July 14, 2010
and I first saw Mr. Ainsworth in relation to his collision-related injuries on July 15,
2010. To this day, I continue to treat Mr. Ainsworth for his collision-related
injuries.
9Ainsworth started working for Pagliacci on July 6, 2010.
-11-
69433-2-1/12
6. I medically cleared Mr. Ainsworth to resume working full time on
October 15, 2010, but with significant restrictions. I informed Mr. Ainsworth's
insurer, Progressive, of this on September 21, 2010. I received no request for
additional information or clarification of any kind from Progressive. Releasing a
patient to work full time is not the same as declaring the patient to be able to
perform their job duties. Progressive never asked me whether Mr. Ainsworth
was unable to perform the duties of his job. I made no distinction between Mr.
Ainsworth's warehouse type job and his job delivering pizzas and was not asked
to make any such distinction by Progressive.
7. I have not yet medically cleared Mr. Ainsworth to resume working
without restrictions. If Mr. Ainsworth's job duties at either job call for frequent
lifting of items weighing close to 25 pounds, then Mr. Ainsworth is not reasonably
able to perform the duties of his job due to his collision-related injuries to this
day. Additionally, I consider being able to show up to work a job duty for both a
warehouse type job and a job delivering pizzas. If Mr. Ainsworth was unable to
show up to work because he was at appointments with his health care providers,
including visits to my office, then he was unable to perform a duty of his job.
8. Mr. Ainsworth received massage therapy and physical therapy on my
referral. Mr. Ainsworth also underwent mental health counseling for the severe
depression he suffered following the collision on my referral. These modalities of
treatment, along with visits to a physiatrist, were reasonable and necessary to
treat Mr. Ainsworth's collision-related injuries. In fact, Mr. Ainsworth's condition
regressed when he was not able to continue with his regular massage therapy.
Ainsworth's May 24, 2012 declaration testimony stated:
3. Christopher Smith, M.D. is my primary care doctor and has been for
many years. I first saw Dr. Smith for treatment the day after the collision. Dr.
Smith referred me to other health care providers and directed my return to work.
As of October 15, 2010, Dr. Smith allowed me to return to work, but with
restrictions. One of the restrictions was that I was not permitted to frequently lift
items weighing close to 25 pounds. Another restriction is that he required me to
take a 10 minute break every hour.
4. At the time of the collision I had two jobs. One job was at Contour, Inc.
and the other was at Pagliacci Pizza. I presently have the same two jobs.
5. My job at Contour, Inc. is full-time. My job duties include moving stock,
shipping and receiving items, and diagnosing and repairing broken cameras.
The job requires frequently lifting items weighing more than 25 pounds. To this
day, I remain unable to perform all of my job duties at Contour, Inc. due to the
restrictions of Dr. Smith.
6. In October and November of 2010, I missed time from work to receive
treatment from my health care providers for my injuries. In October I missed 22
hours and in November I missed 38 hours. My hourly rate of pay at the time was
$13.46. My time loss is reflected on the pay stubs that were provided to
Progressive Insurance. A copy of the pay stubs are attached as Exhibit 1.
-12-
69433-2-1/13
7. My job at Pagliacci Pizza is a part-time job three evenings a week. My
job duties include washing dishes, moving bulk cardboard, making boxes,
restocking items, cleaning, laundry, carrying many pizzas and drinks at one time,
and delivering many pizzas and drinks. The job requires frequently lifting items
weighing more than 25 pounds. To this day, I remain unable to perform all of my
job duties at Pagliacci Pizza due to the restrictions of Dr. Smith.
8. Beginning the day of the crash, I missed time from my job at Pagliacci
Pizza due to my injuries. I could not even return to work at all until September
2010. Even then I continued to miss time from work because Pagliacci Pizza
was reluctant to give me all of my hours back. More than a year after the
collision passed before I was finally able to get all of my hours back. My hourly
rate of pay was $8.55 and I worked an average of 22.95 hours every two week
pay period. I also received tips averaging $236.12 every two week pay period.
My time loss is reflected on the pay summaries from Pagliacci Pizza that were
provided to Progressive Insurance. Copies of my pay summaries are attached
as Exhibit 2.
Ainsworth testified during his deposition, quoted below, that pizza delivery was "not a
light duty job." He stated the work was fast-paced and physically burdensome. He
reiterated that he missed hours after Dr. Smith cleared him for restricted full time work
due to "[excruciating pain from [his] injuries from the accident."
Ainsworth also submitted numerous exhibits, including Progressive's electronic
claim file for Ainsworth through March 25, 2011, and Dr. Smith's medical disability
updates on Ainsworth noted above. In opposition to partial summary judgment,
Progressive submitted Ainsworth's deposition testimony, Ainsworth's responses to
requests for admission and interrogatories, and a declaration from Becerra's supervisor,
Jaimee Manley, with various exhibits attached. It submitted no testimony from Becerra.
Progressive contends that the plain meaning of the income continuation benefit
provision found in paragraph 3(b)(i) controls. That provision provides that wage loss
benefits end when the insured "is reasonably able to perform the duties of his or her
-13-
69433-2-1/14
usual occupation."10 (Emphasis added.) Progressive claims that Ainsworth is able to
perform his usual occupation because Dr. Smith released him to work full-time. Even
viewing the policy clause in a light most favorable to Progressive, its meaning is
susceptible to only one reasonable interpretation. Progressive's argument ignores the
critical term "usual." The common meaning of "usual" is "habitual or customary: her
usual skill." Dictionary.com, http://dictionary.reference.com (last visited Jan. 24,
2014).11 This is the ordinary meaning that an average purchaser of insurance would
give the term. See Holden, 169 Wash. 2d at 756 (courts interpret insurance contracts from
the viewpoint of the average purchaser).
The undisputed evidence shows Dr. Smith released Ainsworth to work full-time
under "significant restrictions." Dr. Smith's written status update to Progressive on
September 21, 2010, indicated those restrictions limited Ainsworth from "lifting no more
than 50 pounds. Rarely more than 25 pounds. He will need more frequent rest breaks.
Ten minutes per hour." On October 15, 2010, Dr. Smith restricted Ainsworth to no
frequent lifting of 25 pound items and 10 minute rest breaks every hour. As of April 13,
2012, Dr. Smith had not yet cleared Ainsworth "to resume working without restrictions."
As quoted below, Dr. Smith's undisputed declaration testimony concluded that so long
as Ainsworth's job duties involve frequent lifting of 25 pound items, he "is not
reasonably able to perform the duties of his job . . . ."
10
Ainsworth does not contend this provision is ambiguous.
11 "'[W]e may discern the plain meaning of nontechnical statutory terms from their
dictionary definitions.'" State v. Kintz. 169 Wash. 2d 537, 547, 238 P.3d 470 (2010)
(alteration in original) (quoting State v. Cooper, 156 Wash. 2d 475, 480, 128 P.3d 1234
(2006)).
-14-
69433-2-1/15
Ainsworth's testimony shows that the "duties of his usual occupation" at Pagliacci
and Contour, require him to routinely lift 25 pounds or more. His November 22, 2011
deposition taken by Progressive establishes his job duties for both employers routinely
require him to lift items over 25 pounds. Progressive's attorney questioned Ainsworth
about the medical restriction's effect on his usual job duties at Contour and Pagliacci.
[Contour]
Q. Your job description, as I understood you to say, was that you would
have to lift a hundred pounds repeatedly, is that correct?
A. Yes.
Q. Okay. Is that what you're actually doing?
A. I can't do that.
Q. Okay, you can't do that—
A. Right now.
Q. Okay. So, if you could do that, would you be repeatedly lifting a
hundred pounds in your current job?
A. I would be lifting 25 to a hundred pounds, moving cases and various
units.
Q. And I understand that you're not currently doing that; why?
A. I'm on weight restrictions from my doctor.
Q. Who has you on the weight restrictions?
A. Dr. Christopher Smith.
[Pagliacci]
Q. You mentioned that you deliver pizza for Pagliacci, so you know it's
not a light duty job; what about the job do you think makes it either medium or
heavy duty?
A. Well, where I work we have anywhere from 500 to 750 pizzas on a
busy night. On a slow night we deliver at least 300 pizzas to 400 pizzas. And in
order to do that, you have to be quick, you have to run fast, you have to carry
large loads of pizzas, put them in your car, get in and out of the car, over and
over and over again. And maybe somebody who's in top physical condition, it's a
very easy job and not very heavy lifting, but to other people, it's difficult. To me,
it's not a light duty job, it's not like other places.
Viewing the evidence in a light most favorable to Progressive, the record
evidence shows Ainsworth was not reasonably able to perform his usual work duties at
Pagliacci due to the significant weight restrictions imposed by Dr. Smith.
-15-
69433-2-1/16
Our review of the record shows, and Progressive does not dispute, that it paid no
wage loss benefits related to Ainsworth's Pagliacci job for any period of time loss. And
it submitted nothing in response to partial summary judgment or on appeal explaining
this failure. Instead, it merely argues that Ainsworth's medical release to return to full-
time work, under the policy, justified the no entitlement to wage loss decision. The
undisputed record shows that Progressive took no further action to adjust his Pagliacci
wage loss claim once it received Pagliacci's completed wage and salary verification
form12 for the undisputed time loss period ofJuly 28, 2010, through October 15, 2010,
and for the period after.
Progressive's response to Ainsworth's partial summary judgment motion consists
almost entirely of conclusory and argumentative assertions and evidence quoted out of
context. For example, Progressive claimed, based on the Manley declaration, that it
"accepted Ainsworth's PIP wage loss claim and began making payments according to
the specific terms and conditions of the policy under Washington law." Br. of Appellant
at 5. It argues, "Progressive continued to make these payments throughout Ainsworth's
convalescence, until October 15, 2010, when he was cleared by his doctor to return to
work full-time." Br. of Appellant at 5. While this testimony may address Progressive's
discussion about the Contour claim, it avoids any discussion about the Pagliacci claim,
for which it paid no benefits for any period. The testimony further states that Ainsworth
amended his complaint "to include an additional claim for wage loss at Pagliacci." As
further example, Progressive argued "Ainsworth deliberately chose treatment
12 There is no mention of the Pagliacci wage loss claim in Progressive's claim file
until Progressive stopped paying wage loss after Ainsworth was released to work full-
time with restrictions and this dispute ensued.
-16-
69433-2-1/17
appointments knowing that they would occur during his working hours." Br. of Appellant
at 3. Progressive failed to cite any record evidence to support this assertion. The clear
implication of this unsupported argument is to suggest an improper motive for
Ainsworth's timing of medical appointments during working hours. We address this
assertion below.
Progressive relies on Tyrrell v. Farmers Ins. Co. of Wash., 140 Wash. 2d 129, 994
P.2d 833 (2000), and Foote v. Viking Ins. Co. of Wisconsin, 57 Wash. App. 831, 790 P.2d
659 (1990), to argue, "In the State of Washington, PIP provisions have been narrowly
construed." Br. of Appellant at 14. Nothing in either of these cases supports this
argument.13 As noted above, "courts liberally construe insurance policies to provide
coverage wherever possible." Bordeaux, 145 Wash. App. at 694. Plaintiff also relies on
Zollerv. Transamerica Ins. Co., 215 N.J. Super. 552, 522 A.2d 479 (1987), to argue that
"if the insured can work, and chooses not to, the policy does not apply." Br. of
Appellant at 15. Zoller is inapplicable because it did not address the policy clause at
issue here.14
In sum, Progressive submitted no evidence that raises a genuine issue of
material fact on the Pagliacci wage loss claim. None of Progressive's partial summary
13 We note Progressive fails to cite any language or page number from Tvrell or
Foote to support this argument.
14 Zoller supports Ainsworth's position. It states, "There may be instances under
the PIP statute where the insured suffers a partial disability and continues to work, but
has a loss of income. In that circumstance, the measure of income loss is the
difference between what the insured would have earned had injury not occurred and
what he or she did earn. However, the insured still must demonstrate that the lost
income was due solely to bodily injury incapacity." Zoller, 215 N.J. Super, at 559
(citation omitted).
-17-
69433-2-1/18
judgment submissions address why it never paid Ainsworth for his undisputed Pagliacci
wage loss for the period from July 28, 2010, through October 15, 2010, even though it
paid his Contour wage loss for this period. Progressive does not dispute that Dr. Smith
confirmed that Ainsworth's disability for this period prevented his release to work. It
submitted no evidence to rebut or raise questions about any of Dr. Smith's opinions or
conclusions.
In addition, Progressive's partial summary judgment submissions failed to raise
any genuine material issues of fact on the question of whether Ainsworth was
"reasonably able to perform the duties of his or her usual occupation."15 Progressive
submitted nothing challenging Dr. Smith's opinions and conclusions and Ainsworth's job
description.
Contour Wage Loss Claim
Progressive argues that "PIP benefits are not intended for attending
appointments." Br. of Appellant at 16 (formatting omitted). It cites to Patton v.
Commissioner of Social Security, No. 10-13314, 2011 WL 4577250 (E.D. Mich. Sept.
30, 2011) (unpublished), and In re Gaqnon, 147 N.H. 366, 787 A.2d 874 (2001). Patton
and Gaqnon are inapposite. Patton involved an administrative Social Security disability
hearing and Gagnon involved a workers' compensation board appeal. Neither case
15 Progressive argues, "The claim of lost wages made byAinsworth [is] wholly
unsupported by anything other than self-serving, conclusory statements." Br. of
Appellant at 20. This argument is unavailing. As discussed above, Ainsworth submitted
sworn testimony via declaration. He also submitted the sworn declaration of Dr. Smith.
Civil Rule 56 permits reliance on affidavits in support of a summary judgment motion,
provided the affiant testifies to admissible facts based on personal knowledge.
CR 56(c), (e). Progressive does not argue that Ainsworth lacked personal knowledge or
testified to inadmissible facts.
-18-
69433-2-1/19
pertains to automobile insurance PIP wage loss benefits. Progressive's assertion
frustrates the very purpose of PIP benefits discussed above—to provide vehicle
accident victims quick and adequate compensation for economic losses regardless of
fault. Wage loss compensation is one of the basic economic losses covered by PIP
insurance policies. As noted above, wage loss compensation reimburses the injured
claimant for wages lost which he would have received had he not been injured. It
"provides protection from economic hardship caused by the loss of a wage earner's
income."16 12 Putt, etal, supra, § 171:53 at 171-54 to -55.
As quoted above, Ainsworth submitted evidence that he missed time from work
for reasonably necessary medical appointments to treat his bodily injuries sustained
in the automobile accident. Ainsworth submitted his pay stubs to verify the time loss.
Dr. Smith testified by declaration that he prescribed massage and physical therapy to
treat Ainsworth's bodily injuries. He also referred Ainsworth for mental health
counseling for severe depression suffered as a result of the accident and injuries. He
also referred Ainsworth for treatment with a physiatrist (rehabilitation physician).
Progressive does not dispute that these medical treatments were reasonable,
necessary, and related to the bodily injuries Ainsworth sustained in the accident. It is
undisputed that Ainsworth would not have lost time from work to attend these medical
appointments had it not been for the accident.
Progressive cites to no policy limitation, exclusion, or provision that precludes
compensation for wages lost while attending reasonable and necessary medical
appointments to treat accident-related bodily injury. The insuring agreement plainly
16 Nothing in our review of the PIP legislative history supports Progressive's
argument.
-19-
69433-2-1/20
covers wage loss benefits for "losses or expenses incurred because of bodily
injury "; see Foster v. Aetna Cas. & Sur. Co., 240 N.J. Super. 122, 572 A.2d 680
(1990) (plaintiff was entitled to reimbursement for gasoline expense, parking fees, tolls,
and lost wages incurred in traveling to medical facility 35 miles from plaintiff's home
where travel was reasonable and necessary because no closer facility was available).
We are unpersuaded by Progressive's unsupported assertion that time loss from
work to attend reasonably necessary medical appointments is not compensable under
PIP benefits. Because Ainsworth lost wages he would have received had it not been for
the accident, in order to obtain reasonably necessary medical treatment, he is entitled to
wage loss compensation under the plain reading of the policy.
Duty to Mitigate
Progressive claims that Ainsworth failed to mitigate his damages by setting
appointments during work hours.17 Progressive specifically argues that Ainsworth
deliberately scheduled appointments during working hours rather than scheduling
appointments on weekends and outside normal work hours. Progressive raises no
genuine issues of material fact on its failure to mitigate claim. The duty to mitigate
damages applies to a claim for lost earnings. Kubista v. Romaine, 87 Wash. 2d 62, 67,
549 P.2d 491 (1976). "The doctrine of mitigation of damages, sometimes referred to as
the doctrine of avoidable consequences, prevents recovery for those damages the
injured party could have avoided by reasonable efforts taken after the wrong was
committed." Bernsen v. Big Bend Elec. Co-op., Inc., 68 Wash. App. 427, 433, 842 P.2d
17 Progressive does not claim failure to mitigate as to Ainsworth's Pagliacci wage
loss claim. Even assuming it asserts this claim, Progressive submitted no evidence that
raises a genuine material fact issue.
-20-
69433-2-1/21
1047 (1993). The party asserting the claim of an unreasonable failure to mitigate
damages bears the burden of proof. Cox v. Keg Rests. U.S., Inc., 86 Wash. App. 239,
244, 935 P.2d 1377 (1997); 6 Washington Practice: Washington Pattern Jury
Instructions: Civil 33.01. Here, Progressive bears the burden to establish that
Ainsworth unreasonably failed to mitigate damages.18 Our review of the record shows
Progressive raised no genuine material issues of fact on its failure to mitigate claim.
Ainsworth submitted evidence that he missed time from work at Contour due to
the following medical appointments:19
October 2010
10/18/2010 at 8:10 am
10/19/2010 at 5:00 pm
10/25/2010 at 12:00 pm
10/25/2010 at 4:00 pm
10/25/2010 at 4:30 pm
10/28/2010 at 9:00 am
November 2010
11/01/2010 at 2:00 pm
11/02/2010 at 8:00 am
11/02/2010 at 9:00 am
11/02/2010 at 5:00 pm
11/04/2010 at 9:00 am
11/08/2010 at 2:00 pm
11/12/2010 at 8:00 am
11/18/2010 at 9:00 am
11/22/2010 at 6:00 pm
18 Progressive improperly places the burden to prove mitigation on Ainsworth. Its
brief on appeal argues, "[Ainsworth] never provided evidence that he could not make
appointments before or after work." Br. of Appellant at 17. It also argues, "Ainsworth
has failed to show that he could not seek appointments with medical providers outside
of work hours, but rather enlarged his alleged damages by voluntarily missing work
when he did not have to. . . . [H]e is intentionally manufacturing his damages
Reply Br. of Appellant at 13.
19 Progressive submitted no evidence to show which ofAinsworth's health care
providers he saw at these times. We also note that these appointments were all
scheduled for early morning, lunch hours, and at the end of the day.
-21-
69433-2-1/22
11/24/2010 at 11:20 am
11/29/2010 at 1:00 pm
Progressive raised no genuine material fact issues that the above appointment
schedule was unreasonable under the circumstances. Progressive assumes without
citation to authority that the duty to mitigate is satisfied only if an injured claimant
schedules medical appointments on weekends or outside of normal business hours.
Progressive also suggests this duty requires an injured claimant to seek out medical
care providers who see patients on weekends and outside of normal business hours.
The burden rests on Progressive to show that the timing of medical appointments with
Ainsworth's health care providers was unreasonable. Progressive's mere submission of
general appointment times for various healthcare providers falls short of meeting its
burden to show Ainsworth unreasonably failed to mitigate his damages.
We conclude that Progressive raises no genuine material issues of fact that
Ainsworth unreasonably failed to mitigate Contour damages related to his medical
appointments.
Insurance Fair Conduct Act Violation (RCW 48.30.015)
Progressive challenges the trial court's IFCA award premised on two grounds.20
First, it contends that it violated no IFCA requirements because it reasonably denied
20 Progressive claims for the first time in its reply brief on appeal that material
issues of fact remain as to whether its wage loss benefit denial was unreasonable. We
will not consider issues argued for the first time in the reply brief. In re Marriage of
Sacco, 114 Wash. 2d 1, 5, 784 P.2d 1266 (1990). The reply brief is limited to a response to
the issues in the responding brief. To address issues argued for the first time in a reply
brief is unfair to the respondent and inconsistent with the rules on appeal. RAP 10.3(c);
State v. Hudson, 124 Wash. 2d 107, 120, 874 P.2d 160 (1994). Even assuming
Progressive timely raised the issue, the record amply demonstrates no genuine material
issues of fact.
-22-
69433-2-1/23
Ainsworth's wage loss claim according to the policy terms, and IFCA only applies to
coverage, not valuation disputes. It also contends that the wage loss benefits awarded
here do not constitute "actual damages" subject to IFCA enhancement. It claims, "The
penalty for IFCA violations, like with bad faith or Consumer Protection Act claims,
should only apply to the harm caused above and beyond the denial of benefits." Br. of
Appellant at 28.
Under IFCA, if the trial court finds that an insurer "acted unreasonably in denying
a claim for coverage or payment of benefits," RCW 48.30.015(2), or that it violated one
ofthe regulations enumerated in RCW 48.30.015(5),21 the court "may . . . increase the
total award of damages to an amount not to exceed three times the actual damages."
RCW 48.30.015(2). Subsection (1) describes two separate acts giving rise to an IFCA
claim. The insured must show the insurer unreasonably denied a claim for coverage or
21 IFCA provides:
"(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';
"(b) WAC 284-30-350, captioned 'misrepresentation of policy provisions';
"(c) WAC 284-30-360, captioned 'failure to acknowledge pertinent
communications';
"(d) WAC 284-30-370, captioned 'standards for prompt investigation of claims';
"(e) WAC 284-30-380, captioned 'standards for prompt, fair and equitable
settlements applicable to all insurers'; or
"(f) An unfair claims settlement practice rule adopted under RCW 48.30.010 by
the insurance commissioner intending to implement this section. The rule must be
codified in chapter 284-30 of the Washington Administrative Code." RCW 48.30.015.
Ainsworth alleged various violations under the insurance commissioner regulations
noted above that support an IFCA violation. We also note that Progressive argues for
the first time in its reply brief that its claim investigation was reasonable. Reply Br. of
Appellant at 17-18. The argument is untimely. RAP 10.3(c); Hudson, 124 Wash. 2d at
120; Sacco. 114 Wash. 2d at 5. Even assuming Progressive timely raised the issue, the
record evidence raises no material issues of fact.
-23-
69433-2-1/24
that the insurer unreasonably denied payment of benefits. Ifeither or both acts are
established, a claim exists under IFCA.
Here, whether cast as an unreasonable denial of a claim for coverage or
payment of benefits, the undisputed record discussed above establishes IFCA violations
premised on both acts—an unreasonable denial of wage loss benefit coverage and
unreasonable denial of wage loss payments—involving both employers.22 For example,
the undisputed record shows Progressive unreasonably denied coverage and payment
for Ainsworth's Pagliacci wage loss. Progressive never adjusted this claim, investigated
it further after receiving wage verification information, or paid any period of time loss. A
reasonable jury could reach only one conclusion on this record—Progressive
unreasonably denied coverage and unreasonably denied payment of Ainsworth's wage
loss benefits.
We are also unpersuaded by Progressive's claim that "payment of benefits for
Ainsworth's loss was based on a reasonable interpretation of the policy ..." Br. of
Appellant at 22. As discussed above, Progressive's interpretation of the policy ignored
the plain text of the income continuation benefit clause. As noted above, Progressive
acknowledged that the relevant income continuation clause is plain and unambiguous.
The record demonstrates that Progressive's coverage and payment denial was
unreasonable as a matter of law.
22 As discussed below, we are unpersuaded by Progressive's attempt to recast
the claims as a "valuation dispute" to avoid IFCA's application. Br. ofAppellant at 23.
23 The goal ofstatutory interpretation is to effectuate the intent ofthe legislature,
and if the meaning of a statute is plain, enforcing it as written effectuates the legislative
intent. Burns v. City of Seattle. 161 Wash. 2d 129, 140, 164 P.3d 475 (2007).
-24-
69433-2-1/25
Progressive next challenges the trial court's IFCA award of "actual damages."
The trial court doubled "the amount of actual damages under RCW 48.30.015(2) to
$10,916.36." Progressive argues the trial court's wage loss benefit award does not
constitute "actual damages" subject to IFCA's treble damages provision. It argues the
trial court relied on "an extra-contractual theory of law." Br. of Appellant at 24. It also
argues, "The penalty for IFCA violations, like with bad faith or CPA claims, should only
apply to the harm caused above and beyond the denial of benefits." Br. of Appellant
at 28. It relies on bad faith and CPA case authority to make its point.
Ainsworth is correct that in Progressive's response to the partial summary
judgment motion, "Progressive's argument that the trial court improperly doubled
Ainsworth's damages is raised for the first time on appeal." Resp't's Br. at 32.
Progressive does not address or rebut this assertion. Our review of Progressive's
partial summaryjudgment response indicates it made the present arguments for the first
time on appeal. It is well settled that "[w]e will not review an issue, theory, argument, or
claim of error not presented at the trial court level." Lindblad v. Boeing Co., 108 Wn.
App. 198, 207, 31 P.3d 1 (2001). A party must inform the court of the rules of law it
wishes the court to apply and afford the trial court an opportunity to correct any error.
Smith v. Shannon, 100 Wash. 2d 26, 37, 666 P.2d 351 (1983). Failure to do so precludes
raising the error on appeal. Smith, 100 Wash. 2d at 37. "While an appellate court retains
the discretion to consider an issue raised for the first time on appeal, such discretion is
rarely exercised." Karlberg v. Often. 167 Wash. App. 522, 531, 280 P.3d 1123 (2012).
Progressive failed to preserve the alleged error it now asserts on appeal. And it fails to
argue why an exception to this rule applies in this case.
-25-
69433-2-1/26
Attorney Fees and Costs
The trial court awarded attorney fees and costs to Ainsworth under IFCA
(RCW 48.30.015(3)) and Olympic Steamship Co. v. Centennial Insurance Co., 117
Wn.2d37, 811 P.2d 673 (1991). CP 438. We affirm the award.
Under Olympic Steamship, "an award of fees is required in any legal action
where the insurer compels the insured to assume the burden of legal action, to obtain
the full benefit of his insurance contract, regardless of whether the insurer's duty to
defend is at issue." Olympic S.S., 117 Wash. 2d at 53. The rule does not apply where the
parties solely dispute "the value of the claim presented under the policy." Dayton v.
Farmers Ins. Grp„ 124 Wash. 2d 277, 280, 876 P.2d 896 (1994). In sum, the rule applies
in coverage disputes but not in valuation disputes. Leingang v. Pierce County Med.
Bureau, Inc., 131 Wash. 2d 133, 147, 930 P.2d 288 (1997).
To avoid the Olympic Steamship rule, Progressive attempts to characterize this
case as a valuation dispute, as opposed to a coverage dispute. We are not persuaded
by this claim. "Coverage disputes include both cases in which the issue of any
coverage is disputed and cases in which 'the extent of the benefit provided by an
insurance contract' is at issue." Leingang, 131 Wash. 2d at 147 (quoting McGreevv v.
Oregon Mut. Ins. Co., 128 Wash. 2d 26, 33, 904 P.2d 731 (1995)). Here, Progressive
denied Ainsworth's claim for lost Contour wages on the basis that payments terminated
under the plain policy language. It never challenged Ainsworth's valuation of the claim.
Further, it never adjusted Ainsworth's Pagliacci claim for any time period. Because this
-26-
69433-2-1/27
case clearly involves a coverage dispute for purposes of an award of fees and costs
under Olympic Steamship, we affirm the trial court's award of fees and costs.24
Ainsworth also requests attorney fees and costs on appeal. Because he prevailed in his
coverage dispute below, we award reasonable appellate costs and fees, subject to
compliance with RAP 18.1. Safeco Ins. Co. v. Woodlev, 150 Wash. 2d 765, 773-74, 82
P.3d 660 (2004); Olympic Steamship. 117 Wash. 2d at 54.
CONCLUSION
In sum, Progressive raised no genuine material issues of fact related to whether
Ainsworth was entitled to wage loss compensation under the policy's insuring
agreement and whether Progressive violated IFCA when it unreasonably denied a claim
for coverage and unreasonably denied payment of benefits. Progressive also failed to
preserve for appeal its challenge to the actual damages awarded under IFCA. We
affirm the trial court's order on partial summary judgment.
7
WE CONCUR:
\+.QuUn4Qte=r
24 Given our disposition, we need not determine whether the trial court properly
awarded fees and costs under RCW 48.30.015(3). We note, however, that
Progressive's sole timely argument against RCW 48.30.015(3) fees and costs is that
Ainsworth failed to prove his IFCA claim. Br. of Appellant at 31-32. This argumentfails
for the reasons discussed above.
-27-