Jerymaine Beasley, V. Geico General Insurance Company

Filed
Washington State
Court of Appeals
Division Two
April 19, 2022
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
JERYMAINE BEASLEY,
No. 54997-2-II
Appellant/Cross Respondent,
v.
GEICO GENERAL INSURANCE PART PUBLISHED OPINION
COMPANY, a foreign insurer,
Respondent/Cross Appellant,
and
AARON YAWS and JANE DOE YAWS,
husband and wife and their marital community,
Defendants.
CRUSER, A.C.J. — This case involves an action under RCW 48.30.015, a provision of the
Insurance Fair Conduct Act1 (IFCA). The primary issue is whether the term “actual damage” as
used in RCW 48.30.015 includes noneconomic damages.
The appellant/cross respondent, Jerymaine Beasley, challenges the trial court’s orders (1)
granting the uninsured motorist (UIM) insurer GEICO General Insurance Company’s motion to
exclude noneconomic damages from the actual damages recoverable under IFCA and not
instructing the jury on noneconomic damages related to the IFCA claim, and (2) denying Beasley’s
1
Laws of 2007, ch. 498 § 1.
No. 54997-2-II
post-trial motion for reconsideration. GEICO cross appeals, arguing that (1) the IFCA claim was
not proper because it was based on regulatory violations, (2) the trial court erred when it granted
Beasley’s motion as a matter of law and found that GEICO had unreasonably denied payment of
benefits by failing to pay the agreed-to portion of a settlement offer, and (3) the trial court erred
when it granted Beasley’s request to treble the IFCA damages award because that decision was
based on a mischaracterization of the evidence.
In the published portion of this opinion, we hold that noneconomic damages are available
under IFCA, reverse the trial court’s orders related to noneconomic damages under IFCA, and
remand for a new trial on noneconomic damages. In the unpublished portion of this opinion, we
reject the cross appeal arguments.
FACTS
I. ACCIDENT AND DEMAND
Jerymaine Beasley was injured in a car accident that occurred when he was the passenger
in Anar Askerov’s vehicle. The accident was caused by the driver of the other car, who had policy
limits of $25,000 and therefore was “underinsured.” Clerk’s Papers (CP) at 3. Askerov’s insurance
policy with GEICO included UIM coverage.
Beasley demanded that GEICO pay the $100,000 limit of Askerov’s UIM policy. GEICO
offered to pay $10,000 to settle Beasley’s UIM claim. Beasley rejected the offer as insufficient,
but his counsel requested that GEICO pay the $10,000 as an undisputed UIM amount. GEICO did
not issue the $10,000 payment.
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No. 54997-2-II
II. LAWSUIT
Beasley sued GEICO. Among other claims, Beasley alleged that GEICO had violated
RCW 48.30.015 of IFCA, breached the duty of insurance good faith, breached its fiduciary duty,
violated the Consumer Protection Act2 (CPA), acted negligently, and breached the insurance
contract. Beasley sought a broad range of relief including “special, general and/or actual damages;”
“exemplary/punitive damages;” “costs, including reasonable attorney’s fees;” and “treble damages
. . . for each violation by [GEICO] of [IFCA].” Id. at 7-8. The case proceeded to a jury trial.
A. TRIAL TESTIMONY
1. GARY WILLIAMS
At trial, Gary Williams, an attorney and former insurance adjuster, testified for Beasley.
Williams testified that even when the ultimate amount of the claim is in dispute, “[i]nsurance
companies should pay what we call ‘undisputed amounts,” the amount “that this case is not going
to go below.” 3 Report of Proceedings (RP) at 353.
Williams further testified that GEICO made a settlement offer of $10,000 in exchange for
Beasley “ ‘drop[ping] all [of his] claims.’ ” Id. at 356. He noted that GEICO did not dispute that it
owed Beasley $10,000, but it never paid Beasley the $10,000.
2. MICHAEL MURPHY
Michael Murphy, the claims supervisor at GEICO who initially handled Beasley’s UIM
claim, also testified for Beasley. Murphy testified that he was taken off the claim after Beasley
filed his IFCA notice and was replaced by claims adjuster Lawrence Bork.
2
Chapter 19.86 RCW.
3
No. 54997-2-II
Murphy also testified about his training at GEICO when he joined the company in 2010.
Murphy testified that pain and suffering were two types of noneconomic damages and that he was
trained on how to evaluate pain and suffering claims. He admitted that he was not “to [his]
knowledge” ever trained “on any other elements of noneconomic damages.” 4 RP at 473. And he
agreed that during his tenure as a bodily injury adjuster supervisor, he had “never valuated and
paid for any noneconomic damages other than pain and suffering.” Id. at 474. But he acknowledged
that “loss of enjoyment of life, embarrassment, inconvenience, noneconomic damages, other than
pain and suffering,” could “sometimes be part of the claim that’s being made.” Id. at 475-76. And
he stated that he recalled cases in which such damages were awarded.
In response to a jury question, Murphy testified that there were times GEICO would pay
undisputed benefits in a UIM claim before the case was final. Murphy then testified about what
“undisputed benefits in UIM cases” were:
Q. [Beasley’s counsel] So what are undisputed benefits in UIM cases?
A. [Murphy] Okay. So my understanding is that if we’re in the phase of
negotiation where there’s an offer and a demand, a dollar figure, then there
would be an undisputed amount.
If the offer is lower than the demand, then the offer—usually, it would be
outside of our procedure to pay the offer before there’s an agreed-upon
amount, but it could be possible. I’ve heard of situations where it could be.
Q. So a settlement offer is what an undisputed benefit is in the UIM context
under your definition?
A. In my understanding, yeah.
Q. So if an offer is made in a UIM case, and you told us earlier that undisputed
UIM benefits should be paid as soon as possible, then whatever that amount
of the offer is, it should be paid as soon as possible, right?
A. Yes.
4
No. 54997-2-II
Q. And not paying that would be a violation of insurance standards, wouldn’t
it?
A. Yes.
Id. at 616-17.
3. LAWRENCE BORK
Bork testified that after he was assigned to Beasley’s UIM claim, he made “a settlement
offer of $10,000.” Id. at 620. In response to Beasley’s counsel asking if “those would be undisputed
UIM benefits,” Bork responded, “[t]hat was the offer that was made, yes.” Id.
Counsel then asked Bork if “those would be undisputed UIM benefits that the claim[ant]
is entitled to?” Id. at 621. Bork responded, “It was the—it was the offer made as settlement that—
that we believe was fair and reasonable as a settlement offer.” Id. Counsel then asked Bork if he
disputed whether those benefits were owed, and Bork responded, “No.” Id. Bork later agreed that
he had valued Beasley’s UIM claim at $10,000. Bork also testified that he did not issue a check to
Beasley for $10,000.
B. MOTION TO EXCLUDE NONECONOMIC DAMAGES UNDER IFCA CLAIM AND IFCA DAMAGES
JURY INSTRUCTION
After Beasley presented his case-in-chief, GEICO moved to prevent him from arguing that
he was entitled to noneconomic damages under the IFCA claim or from presenting any jury
instructions to that effect. GEICO admitted that there was no state case law addressing the
availability of noneconomic damages in an IFCA claim, but it directed the trial court to two federal
cases, Schreib v. American Family Mutual Insurance Co., 129 F. Supp. 3d 1129, (W.D. Wash.
2015), and Dees v. Allstate Insurance Co., 933 F. Supp. 2d 1299 (W.D. Wash. 2013).
5
No. 54997-2-II
Relying on Schreib, the trial court concluded that the IFCA claim did not include
noneconomic damages because the claim sounded in negligence rather than intentional tort, and
granted GEICO’s motion. Based on this ruling, the trial court refused to provide the jury with
Beasley’s proposed instruction on damages under IFCA that included noneconomic damages.
C. BEASLEY’S CR 50 MOTION
During trial, Beasley moved under CR 50 for the trial court to decide as a matter of law
that GEICO had violated IFCA based on GEICO’s “fail[ure] to pay undisputed UIM benefits and
refus[al] to pay them as soon as possible.” 1 RP at 32. GEICO opposed this motion, arguing that
the $10,000 was a compromise offer rather than an undisputed amount and that the jury, not the
court, should determine if the $10,000 was an undisputed amount.
The trial court granted Beasley’s motion, stating:
At this point we have no evidence in contradiction. We have the letter, but
it’s just an interpretation. But the person who’s somewhat behind the authoring of
that letter says, “I construed that as 10,000 undisputed.”
Based on the evidence, I think I have to rule in favor of plaintiffs on this.
Id. at 54.
When instructing the jury on the elements of the IFCA claim, the trial court included the
following language: “The Court has determined the [GEICO] unreasonably denied the payment of
benefits by failing to pay the undisputed $10,000 offer of UIM benefits made on October 23,
2015.” CP at 164.
6
No. 54997-2-II
D. VERDICT
The jury found that Beasley had proven his IFCA claim and that Beasley’s IFCA-related
damages were $84,000. The jury further found that Beasley had proved his insurance bad faith
claim and that he had incurred $400,000 in noneconomic damages related to that claim.
E. BEASLEY’S MOTION FOR RECONSIDERATION AND TREBLING OF IFCA DAMAGES
After the verdict, Beasley moved for reconsideration of the trial court’s exclusion of
noneconomic damages under the IFCA claim. Beasley also requested that the trial court treble the
IFCA damages awarded by the jury. He further argued that if the trial court reconsidered the
exclusion of the noneconomic damages under IFCA, the court should treble the noneconomic
damages awarded for the insurance bad faith claim because the noneconomic damages under IFCA
would be the same. This would result in an additional damages of $800,000.
Relying on Schreib, the trial court denied Beasley’s “motion for reconsideration regarding
[noneconomic] damages under [IFCA].” Id. at 267. But the trial court granted Beasley’s trebling
request as to the IFCA damages awarded by the jury. The court’s order granting this motion stated,
At one point in the trial this court was shocked by the testimony of Mr. Murphy . . .
that he did not in this case or ever in any case consider any [noneconomic]
damages other than pain and suffering and has never been trained to consider any
other [noneconomic] damages. This court in exercising its discretion believes it is
appropriate to treble the award of the $84,000 as found by the jury to $252,000 as
a deterrence to [GEICO] to not use unfair practices as found by the jury and the
Court.
Id. at 269-70 (emphasis added).
7
No. 54997-2-II
Beasley appeals the trial court’s ruling that IFCA does not include noneconomic damages.3
GEICO cross appeals the verdict on the IFCA claim, the trial court’s decision on Beasley’s CR 50
motion, and the trial court order trebling the IFCA damages.
ANALYSIS
BEASLEY’S APPEAL
Beasley argues that the trial court erred when it ruled that noneconomic damages4 are not
“actual damages” under RCW 48.30.015 and that they are therefore not “recoverable and subject
to trebling under IFCA.”5 Br. of Appellant/Cross Respondent at 12 (boldface omitted). He
contends that “the plain language” of RCW 48.30.015 and the “purpose of IFCA” demonstrate that
“actual damages” include noneconomic damages. Id. at 2. And he asks us to remand for the trial
court to decide whether to treble the noneconomic damages awarded by the jury for the insurance
bad faith claim rather than remand for a new trial on damages.
3
Beasley initially sought direct review with our supreme court. Our supreme court denied direct
review and transferred the appeal to this court. Order, Beasley v. Geico Gen. Ins. Co., No. 98255-
4 (Wash. July 8, 2020).
4
“ ‘Noneconomic damages’ means subjective, nonmonetary losses, including, but not limited to
pain, suffering, inconvenience, mental anguish, disability or disfigurement incurred by the injured
party, emotional distress, loss of society and companionship, loss of consortium, injury to
reputation and humiliation, and destruction of the parent-child relationship.” RCW 4.56.250(1)(b).
5
Beasley assigns error to the trial court’s ruling that RCW 48.30.015 does not allow for
noneconomic damages, its subsequent refusal to instruct the jury that “actual damages” under the
IFCA claim included noneconomic damages, and its denial of Beasley’s motion for
reconsideration and request to treble the noneconomic damages awarded in the bad faith claim.
But Beasley does not differentiate between these decisions in his argument. Because each of the
trial court’s challenged decisions are based on the legal question of whether “actual damages”
under RCW 48.30.015 includes noneconomic damages, this opinion likewise does not present a
separate analysis for each trial court decision.
8
No. 54997-2-II
GEICO responds that (1) we should dismiss the appeal regardless of whether the trial court
erred because we cannot grant the sole relief Beasley is seeking, and (2) the trial court did not err
when it excluded noneconomic damages from the damages available under IFCA because such
damages are limited to intentional torts and because the legislative history and purpose of the
statute do not demonstrate the legislature intended to include noneconomic damages.
We hold that (1) our inability to provide the exact relief Beasley requests does not preclude
consideration of Beasley’s appeal, (2) the term “actual damages” is ambiguous and not subject to
a plain language interpretation, (3) following our supreme court’s decision in Segura v. Cabrera,6
the intentional tort test established in White River Estates v. Hiltbruner7 does not apply when
determining the meaning of the term “actual damages,” (4) the legislative history demonstrates
that the legislature intended “actual damages” to include noneconomic damages under IFCA
because this legislation was intended to protect insureds from an insurer’s unreasonable actions,
and (5) the appropriate remedy is to reverse the trial court’s decision excluding noneconomic
damages under the IFCA claim and to remand this matter to the trial court for a new trial on
noneconomic damages related to the IFCA claim.
A. GEICO’S REQUEST TO DISMISS APPEAL
As a preliminary matter, GEICO contends that we “should dismiss the appeal and not reach
any of the issues in this appeal because the [sole] relief requested is not allowed under Washington
law” Br. of Resp’t/Cross Appellant at 12. As discussed below, GEICO is correct that we cannot
6
184 Wn.2d 587, 595-96, 362 P.3d 1278 (2015).
7
134 Wn.2d 761, 953 P.2d 796 (1998).
9
No. 54997-2-II
grant the precise relief Beasley requests. See infra Part C. But we are not required to dismiss the
appeal because the sole relief requested is not available.
Citing RAP 2.5(a) and Hammond v. Hammond, 26 Wn. App. 129, 133, 611 P.2d 1352(1980), GEICO contends that because Beasley did not request the remedy of a new trial on
damages in the trial court, we cannot substitute that remedy for the remedy requested in Beasley’s
motion for reconsideration. As to RAP 2.5(a), that rule applies to “claim[s] of error,” not the nature
of the remedy requested. The rule is also discretionary, and we have the discretion to consider an
issue even if it was not raised in the trial court. State v. Blazina, 182 Wn.2d 827, 834-35, 344 P.3d
680 (2015). And Hammond is inapposite because it addresses an attempt to modify a preexisting
divorce decree. 26 Wn. App. at 133. Here, in contrast, we are addressing trial court rulings and a
jury verdict, not a prior final decree or agreement. Additionally, Beasley clearly sought a jury
verdict on noneconomic damages and requested that the trial court treble those damages at trial.
GEICO fails to direct us to any authority establishing that we are limited to the remedy
requested by the appellant in a motion for reconsideration. And even if we cannot grant the specific
relief Beasley requests, that does not mean that we cannot provide effective relief if Beasley’s
argument is successful. See RAP 1.2 (the appellate court liberally interprets the rules of appellate
procedure “to promote justice and facilitate the decision of cases on the merits.”); RAP 12.2 (“The
appellate court may reverse, affirm, or modify the decision being reviewed and take any other
action as the merits of the case and the interest of justice may require.”). Accordingly, we reject
GEICO’s request to dismiss the appeal and address the merits of Beasley’s appeal.
10
No. 54997-2-II
B. MEANING OF “ACTUAL DAMAGES”
Beasley argues that the trial court erred when it ruled that noneconomic damages are not
“actual damages” under RCW 48.30.015 and are therefore not “recoverable and subject to trebling
under IFCA.” Br. of Appellant/Cross Respondent at 12 (boldface omitted). He contends that “the
plain language” of RCW 48.30.015 and the “purpose of IFCA” demonstrate that “actual damages”
include noneconomic damages. Id. at 2.
GEICO responds that the trial court did not err when it excluded noneconomic damages
from the damages available under RCW 48.30.015. GEICO argues that noneconomic damages are
not available because White River Estates limits noneconomic damages to intentional torts and
because the legislative history and purpose of the statute do not demonstrate that the legislature
intended to include noneconomic damages.
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No. 54997-2-II
Whether the term “actual damages” as used in RCW 48.30.015 includes noneconomic
damages is an issue of first impression under Washington law.8 We hold that the legislative history
8
Although there has been considerable IFCA litigation, the bulk of that litigation has occurred in
the federal courts under diversity jurisdiction. See Perez-Crisantos v. State Farm Fire & Cas. Co.,
187 Wn.2d 669, 678 n.2, 389 P.3d 476 (2017) (citing Shannon M. Kilpatrick, Sounding the Alarm:
Is Diversity Jurisdiction Interfering with Washington State’s Development of Its Own Body of Law
Related to the Insurance Fair Conduct Act?, 49 Gonz. L. Rev. 553, 554 (2013-14)). GEICO argues
that we should adopt the reasoning in one of those cases, Schreib. But “[f]ederal cases are not
binding on this court, which is ‘free to adopt those theories and rationale which best further the
purposes and mandates of our state statute[s].’ ” Kumar v. Gate Gourmet Inc., 180 Wn.2d 481,
491, 325 P.3d 193 (2014) (quoting Grimwood v. Univ. of Puget Sound, Inc., 110 Wn.2d 355, 361-
62, 753 P.2d 517 (1988), abrogated on other grounds by Mikkelsen v. Pub. Util. Dist. No. 1 of
Kittitas County, 189 Wn.2d 516, 404 P.3d 464 (2017)). While we can look to federal cases for
guidance when the federal court is interpreting a parallel federal counter part, the parties do not
argue that there is a federal counterpart to IFCA, so the federal cases are even less relevant in this
case. Notably, although the federal district court certified this issue to our supreme court in 2013,
the issue was never addressed because that case settled. See Raymond Bishop, Morella: What
Might Have Been, 49 Gonz. L. Rev. 583, 584 (2014).
Beasley cites to two Washington cases, Mutual of Enumclaw Insurance Co. v. Myong Suk
Day, 197 Wn. App. 753, 769, 393 P.3d 786 (2017), and the unpublished case Nelson v. Geico
General Insurance Co., No. 72632-3-I, slip op. at 19-20 (Wash. Ct. App. Jan. 11, 2016),
https://www.courts.wa.gov/opinions/pdf/726323.pdf, for his assertion that Washington courts
have interpreted “actual damages” as used in RCW 48.30.015 as including noneconomic damages.
Neither case is helpful here. Although the issue of whether “actual damages” includes
noneconomic damages was raised in Day, Division One of this court declined to address the issue
since it was being raised for the first time on appeal. Day, 197 Wn. App. at 769. And in Nelson,
Division One did not address the issue because the insurer did not dispute that these damages were
“actual damages” under IFCA. Nelson, No. 72632-3-I, slip op. at 19-20.
Additionally, although two cases state that IFCA’s use of the term “actual damages” limits
treble damages to economic damages, neither of those cases analyzes the meaning of “actual
damages” under IFCA. In Pendergrast v. Matichuck, 189 Wn. App. 854, 874, 355 P.3d 1210(2015), aff’d, 186 Wn.2d 556, 379 P.3d 96 (2016), Division One of this court stated, “Certain other
Washington statutes with similar [trebling] provisions explicitly limit treble damages to actual,
economic damages. The Insurance Fair Conduct Act, chapter 48.30 RCW, provides that the
superior court may increase an award to ‘an amount not to exceed three times the actual damages.’
” Similarly, in Pendergrast, our supreme court stated that IFCA “limit[ed]” damages to actual
damages, and thus, excluded noneconomic damages. 186 Wn.2d at 567. But Division One and our
supreme court merely assumed, without analysis or citation to authority, that “actual damages”
under IFCA are limited to economic damages.
12
No. 54997-2-II
demonstrates that noneconomic damages are “actual damages” under RCW 48.30.015 and reverse
the trial court.
1. RCW 48.30.015
This appeal requires us to interpret RCW 48.30.015. RCW 48.30.015 was enacted by the
legislature as part of IFCA and ratified by referendum measure in 2007. LAWS OF 2007, ch. 498,
§3; Referendum Measure 67 (approved Nov. 6, 2007). RCW 48.30.015 provides in part:
(1) Any first party claimant to a policy of insurance who is unreasonably
denied a claim for coverage or payment of benefits by an insurer may bring an
action in the superior court of this state to recover the actual damages sustained,
together with the costs of the action, including reasonable attorneys’ fees and
litigation costs, as set forth in subsection (3) of this section.
(2) 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.
(3) The superior court shall, after a finding of unreasonable denial of a claim
for coverage or payment of benefits, or after a finding of a violation of a rule in
subsection (5) of this section, award reasonable attorneys’ fees and actual and
statutory litigation costs, including expert witness fees, to the first party claimant
of an insurance contract who is the prevailing party in such an action.
....
(5) A violation of any of the following is a violation for the purposes of
subsections (2) and (3) of this section:
[Listing various insurance regulations]
....
(6) This section does not limit a court’s existing ability to make any other
determination regarding an action for an unfair or deceptive practice of an insurer
or provide for any other remedy that is available at law.
....
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No. 54997-2-II
(8)(a) Twenty days prior to filing an action based on this section, a first
party claimant must provide written notice of the basis for the cause of action to the
insurer and office of the insurance commissioner. Notice may be provided by
regular mail, registered mail, or certified mail with return receipt requested. Proof
of notice by mail may be made in the same manner as prescribed by court rule or
statute for proof of service by mail. The insurer and insurance commissioner are
deemed to have received notice three business days after the notice is mailed.
(b) If the insurer fails to resolve the basis for the action within the twenty-
day period after the written notice by the first party claimant, the first party claimant
may bring the action without any further notice.
(c) The first party claimant may bring an action after the required period of
time in (a) of this subsection has elapsed.
(d) If a written notice of claim is served under (a) of this subsection within
the time prescribed for the filing of an action under this section, the statute of
limitations for the action is tolled during the twenty-day period of time in (a) of this
subsection.
(Emphasis added).
2. LEGAL PRINCIPLES
Whether the term “actual damages” as used in RCW 48.30.015 includes noneconomic
damages is a question of statutory interpretation. We review issues of statutory interpretation de
novo. Perez-Crisantos v. State Farm Fire and Cas. Co., 187 Wn.2d 669, 675, 389 P.3d 476 (2017).
Our goal when interpreting a statute “is to ascertain and carry out the legislature’s intent.”
Keodalah v. Allstate Ins. Co., 194 Wn.2d 339, 344, 449 P.3d 1040 (2019). The primary indicator
of legislative intent is the plain and unambiguous meaning of the words in a statute. State v.
Johnson, 104 Wn.2d 179, 181, 703 P.2d 1052 (1985). When considering the plain meaning of the
words in a statute, this court must examine the meaning of the words in the context of the statute
as a whole and related provisions, related amendments, and “ ‘the statutory scheme as a whole.’ ”
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No. 54997-2-II
Keodalah, 194 Wn.2d at 344 (internal quotation marks omitted) (quoting State v. Evergreen
Freedom Found., 192 Wn.2d 782, 789, 432 P.3d 805 (2019)).
“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.’ ” Perez-Crisantos, 187 Wn.2d at 676 (quoting Dep’t of Ecology v. Campbell
& Gwinn, LLC, 146 Wn.2d 1, 12, 43 P.3d 4 (2002)). Because IFCA was ratified by referendum
measure, this court must also consider “the intent of the voters who ultimately ratified IFCA” when
examining legislative intent. Id.
3. BEASLEY’S PLAIN LANGUAGE ARGUMENT
Citing Rasor v. Retail Credit Co., 87 Wn.2d 516, 554 P.2d 1041 (1976), and Martini v.
Boeing Co., 137 Wn.2d 357, 971 P.2d 45 (1999), Beasley argues that the term “actual damages”
has a plain language meaning that unambiguously includes noneconomic damages. Beasley asserts
that even though these cases interpret different statutes, the Washington Law Against
Discrimination9 (WLAD) and the federal Fair Credit Reporting Act10 (FCRA), we should hold that
the same definition of “actual damages” applies here.
Although Rasor and Martini appear at first blush to rely on a plain language interpretation
of “actual damages,” our supreme court expressly rejected this interpretation of Rasor and Martini
in Segura. Instead, the court held that the term “actual damages” is ambiguous and that Rasor and
Martini had in in fact concluded that “actual damages” included compensatory, noneconomic
9
Chapter 49.60 RCW.
10
15 U.S.C. § 1681 et seq.
15
No. 54997-2-II
damages based on the legislative purposes of their respective statutes.11 Segura, 184 Wn.2d at 594-
96. We are bound by the Segura court’s holding that “actual damages” is an ambiguous term.
Accordingly, Beasley’s plain language argument fails.
4. GEICO’s INTENTIONAL TORT ARGUMENT
Relying on White River Estates, GEICO argues that the trial court did not err in refusing to
allow Beasley to seek “emotional distress” damages under RCW 48.30.015 because such damages
are only available for statutory violations when they amount to intentional torts and an action under
IFCA is not an intentional tort. Br. of Resp’t/Cross Appellant at 28. Because White River Estates
did not address the definition of “actual damages” and Segura provides a more specific analytical
framework that applies when the statute in question requires interpretation of “actual damages,”
we reject GEICO’s intentional tort argument.
Before our supreme court decided Segura in October 2015, it addressed the availability of
“emotional distress” damages, a form of noneconomic damages, based on statutory violations of
the Mobile Home Landlord Tenant Act12 (MHLTA) in White River Estates. 134 Wn.2d at 765. In
White River Estates, a landlord appealed a jury award of emotional distress damages for a violation
of RCW 59.20.073(5), a provision of the MHLTA, that provided, in part, “Consent to an
assignment [of a rental agreement] shall not be unreasonably withheld.” RCW 59.20.073(5); White
River Estates, 134 Wn.2d at 765.
11
A four-justice concurrence disagreed, stating that “the majority [had rejected] the definition of
‘actual damages’ established by [our supreme court’s] prior decisions,” specifically Rasor and
Martini. Segura, 184 Wn.2d at 600-602 (McCloud, J. concurring in result only).
12
RCW 59.20.010.
16
No. 54997-2-II
Our supreme court held that “in the absence of a clear mandate from the Legislature,”
emotional distress damages were not available for a violation of [the MHLTA] because RCW
59.20.073(5) could be violated by negligent, rather than intentional, conduct. White River Estates,
134 Wn.2d at 766-69. In reaching its conclusion, the court noted that the statute was silent
regarding what damages were available if the statutory provision at issue was violated. Id. at 766.
But our supreme court’s decision in Segura brings White River Estates intentional tort approach
into question.
In Segura v. Cabrera, 179 Wn. App. 630, 635, 637, 319 P.3d 98 (2014), aff’d, 184 Wn.2d
at 591-94, a two judge majority of Division Three of the Court of Appeals followed the White
River Estates intentional tort approach to conclude that “actual damages” as used in the Residential
Landlord Tenant Act13 (RLTA) did not include emotional distress damages. But a five-justice
majority of our supreme court abandoned the intentional tort approach. Segura, 184 Wn.2d at 591-
96. Instead, our supreme court resolved the issue as a matter of statutory interpretation by
examining the broader statutory language and legislative intent, with a particular focus on the type
of interest the statute was intended to protect. Id.
Unlike White River Estates, the issue here is what types of damages are included in the
term “actual damages.” Thus, this case is more similar to Segura. And, in light of our supreme
court’s refusal to apply the intentional tort approach under similar circumstances in Segura,
accordingly, we decline to apply the White River Estates intentional tort test and apply the statutory
interpretation test described in Segura instead.
13
Chapter 59.18 RCW.
17
No. 54997-2-II
5. Segura Test
As mentioned above, in Segura our supreme court considered whether the term “actual
damages” in a provision of the RLTA included emotional distress damages. Id. The court held that
there is no single definition for the term “actual damages” and that the term “actual damages” can
have different meanings depending on context. Id. at 595-96. The court held that this ambiguity
requires that the reviewing court examine legislative intent to determine the meaning of “actual
damages.” Id. at 594. The court emphasized that the legislative intent must be examined in the
specific legislative context with a particular focus on the type of interest the legislation was
intended to protect. Id.
Washington Practice provides a succinct summary of this approach:
Some statutes provide for “actual damages.”[14] The Washington Supreme Court
has interpreted the statutory phrase “actual damages” in different ways, depending
upon the context.[15] The term “actual damages” is sometimes interpreted to mean
“compensatory damages,” and is distinguished from damages that are nominal,
exemplary, or punitive.[16] On the other hand, “actual damages” may mean the
measure of pecuniary harm, as distinguished from compensation for other types of
harm such as emotional distress.[17] In interpreting the meaning of “actual
damages” in a statute, the court should focus on legislative intent, in particular the
14
Citing Segura, 184 Wn.2d at 596 (addressing damages under RLTA); Lian v. Stalick, 106 Wn.
App. 811, 25 P.3d 467 (2001) (addressing damages under RLTA); Martini, 137 Wn.2d at 367-68(addressing damages under the WLAD).
15
Citing Segura, 184 Wn.2d at 596.
16
Citing Martini, 137 Wn.2d at 367-68 (addressing WLAD); Rasor, 87 Wn.2d at 529 (addressing
FCRA).
17
Citing Segura, 184 Wn.2d 587 (emotional distress damages not available for violation of the
RLTA); Wash. State Physicians Ins. Exch. & Ass’n v. Fisons Corp., 122 Wn.2d 299, 318, 322, 858
P.2d 1054 (1993) (personal injury damages not available under the Consumer Protection Act
(CPA), chapter 19.86 RCW, and third party emotional distress injuries not available under the
Product Liability Act (PLA), chapter 7.72 RCW).
18
No. 54997-2-II
type of interest the statute is designed to protect.[18] For example, [WLAD], which
uses the term “actual damages” but also directs that the statute should be liberally
construed to effect its purpose, allows the recovery of emotional distress damages
as part of the “actual damages” authorized by the statute.[19]
16 WASHINGTON PRACTICE: TORT LAW AND PRACTICE § 6:2 (5th ed. 2021) (emphasis added). As
the Washington Practice notes, the focus of our examination should be on legislative intent and,
“in particular the type of interest the statute is designed to protect.” Id.
6. LEGISLATIVE INTENT OF IFCA
Beasley argues that under our supreme court’s decision in Segura, noneconomic damages
are available under RCW 48.30.015 because the statute was intended to protect insureds. GEICO
argues that Beasley “overstates the purpose of IFCA,” and asserts that IFCA was “not necessary
to provide an insured recourse,” but merely “provided an additional avenue of potential recovery.”
Br. of Resp’t/Cross Appellant at 22. GEICO also asserts that the voters’ pamphlet’s emphasis on
punitive damages and lack of reference to meaning of actual damages supports the conclusion that
the legislative intent was to not include noneconomic damages.
Under Segura, we must examine the legislative intent of IFCA with particular focus on the
type of interest the legislation was intended to protect. 184 Wn.2d at 593-96. Considering IFCA’s
legislative history, taking into account the referendum measure, we hold that “actual damages” as
used in RCW 48.30.015 includes noneconomic damages.
18
Citing Segura, 184 Wn.2d at 596.
19
Citing Ellingson v. Spokane Mortg. Co., 19 Wn. App. 48, 56-58, 573 P.2d 389 (1978) (mental
anguish and emotional distress damages available under WLAD).
19
No. 54997-2-II
a. CONTEXT OF LEGISLATION: PREVIOUSLY AVAILABLE CLAIMS
Before the enactment and adoption by referendum of IFCA, an insured party could pursue
claims against an insurer for (1) breach of contract, (2) the breach of the duty of good faith, and
(3) violation of the CPA. Each category of claim allows for specific types of damages.
Breach of contract claims allow for the recovery of the benefits due under the contract plus
interest and, under certain circumstances, for the recovery of attorney fees and costs. Woo v.
Fireman’s Fund Ins. Co., 150 Wn. App. 158, 170-71, 208 P.3d 557 (2009). Breach of contract
claims do not generally allow for noneconomic damages or trebling of damages. See Repin v. State,
198 Wn. App. 243, 256, 392 P.3d 1174 (2017).
Tort claims for the breach of the duty of good faith, also known as insurance bad faith
claims,20 allow for recovery of expenses; consequential damages; and “general tort damages,”
including noneconomic damages such as emotional distress caused by the breach of the duty of
good faith. St. Paul Fire & Marine Ins. Co. v. Onvia, Inc., 165 Wn.2d 122, 133, 196 P.3d 664(2008) (general tort damages); Coventry Assocs. v. Am. States Ins. Co., 136 Wn.2d 269, 284-85,
961 P.2d 933 (1988) (expenses); Hamblin v. Castillo Garcia, 9 Wn. App. 2d 78, 89, 441 P.3d 1283(2019) (emotional distress); Singh v. Zurich Am. Ins. Co., 5 Wn. App. 2d 739, 759-60, 428 P.3d
1237 (2018) (emotional distress). But insurance bad faith claims do not allow for trebling of
damages.
And CPA claims allow “[a]ny person who is injured in his or her business or property by
a violation” of various statutes to seek injunctive relief or seek to recover “actual damages
20
Tank v. State Farm Fire & Cas. Co., 105 Wn.2d 381, 385, 715 P.2d 1133 (1986) (the duty to
act in good faith and liability for bad faith “generally refer[ ] to the same obligation” and these
terms are used interchangeably).
20
No. 54997-2-II
sustained by him or her . . . together with the costs of the suit, including a reasonable attorney’s
fee.” RCW 19.86.090. The CPA also permits the trial court to treble the actual damages up to a
maximum of $25,000. Id. But the CPA damages are limited to injuries to business or property, so
the CPA does not allow plaintiffs to seek recovery for personal injuries, whether economic or
noneconomic. Wash. State Physicians Ins. Exch. & Ass’n v. Fisons Corp., 122 Wn.2d 299, 318,
858 P.2d 1054 (1993).
b. IFCA ENACTMENT
In 2007, the legislature passed the legislation enacting IFCA. LAWS OF 2007, ch 498. That
same year, the legislation was ratified by referendum. State of Washington Voters’ Pamphlet,
General Election 13-15 (Nov. 6, 2007),
https://www.sos.wa.gov/_assets/elections/voters'%20pamphlet%202007.pdf. (Voters’ Pamphlet).
IFCA permitted plaintiffs to seek relief, including treble damages and attorney fees, for
unreasonable denial of a claim for coverage or payment of benefits under an insurance policy and
for violation of certain regulations adopted by the Washington State Insurance Commissioner.21
RCW 48.30.010(7) (prohibiting unreasonable denial of claim for coverage or payment of benefits);
RCW 48.30.015(1)-(6)). And the legislative history shows that IFCA was intended to be an
independent, but not exclusive, remedy. See S.B. 5726 §4 (4), 60th Leg., Reg. Sess. (Wash. 2007);
RCW 19.86.090; ENGROSSED SECOND SUBSTITUTE S.B. 5726 H. IFCP Comm. Amd. §§2, 3, 5,
21
Our supreme court has clarified that IFCA does not allow for claims based on violations of
certain regulations and that these regulatory violations are only relevant to RCW 48.30.015(2) and
(3), which pertain to the trebling provision and the award of reasonable attorney fees and costs.
Perez-Crisantos, 187 Wn.2d at 683-84.
21
No. 54997-2-II
60th Leg., Reg. Sess., (Wash. 2007); ENGROSSED SECOND SUBSTITUTE S.B. 5726 H. Amd. to IFCP
Comm. Amd. 541, §6.
The Governor signed the bill as passed in the House without comment. The bill was then
submitted for approval by the voter as a referendum measure. Voters’ Pamphlet at 13.
c. REFERENDUM MEASURE
The voters’ pamphlet for the referendum measure summarized the existing law and the
provisions of the new law and contained statements for and against IFCA. Voters’ Pamphlet at 13-
15. The official ballot title stated:
The legislature passed Engrossed Substitute Senate Bill 5726 (ESSB 5726)
concerning insurance fair conduct related to claims for coverage or benefits and the
voters have filed a sufficient referendum petition on this bill.
This bill would make it unlawful for insurers to unreasonably deny certain coverage
claims, and permit treble damages plus attorney fees for that and other violations.
Some health insurance carriers would be exempt.
Id. at 13.
The explanatory statement provided the voters with information about the then-existing
state of the law and the effect of the proposed legislation. It stated a claim based on an unfair denial
of an insurance claim could be pursued on several legal grounds but that IFCA would create a new,
independent legal basis for such a claim and broaden the scope of recovery, in particular by
allowing for punitive damages and the tripling of damages. Id. at 14.
The statement in favor of the referendum “emphasize[d] that [the legislation] w[ould]
provide a remedy for, and deter, delay of payment in addition to denial of valid insurance claims,”
stating, in part, that the legislation “would help make the Insurance Industry honor its
22
No. 54997-2-II
commitments by making it against the law to unreasonably delay or deny legitimate claims.”22 Id.
at 15. The statement in favor did not mention the specific types of damages that an insured could
seek. Id. Instead, the statement focused on the need for legislation that would allow insureds to
seek redress for unreasonable denials of claims and discourage the insurance industry from
engaging in unreasonable delay or denial of “legitimate claims.” Id.
The statement against the referendum did not discuss the nature of the damages. Instead, it
emphasized IFCA’s potential effect on insurance premiums and the number of lawsuits and
asserted that this legislation was being promoted by trial lawyers to create “new opportunities to
file frivolous lawsuits and collect fat lawyers’ fees” at the consumers’ expense. Id. (emphasis
omitted). The referendum passed. See also November 06, 2007 General Election Results:
Referendum Measure 67 Concerns Insurance Fair Conduct Related to Claims for Coverage or
Benefits, WASH. SECRETARY OF ST., https://results.vote.wa.gov/results/20071106/referendum-
measure-67-concerns-insurance-fair-conduct-related-to-claims-for-coverage-or-benefits.html
(last updated Nov. 29, 2007).
d. LEGISLATIVE INTENT
To determine the meaning of “actual damages,” we must look to legislative intent, with a
particular focus on the type of interest the legislation was intended to protect. Segura, 184 Wn.2d
at 594-96. Although nothing in IFCA’s legislative history directly addresses the meaning of “actual
damages,” the legislative history demonstrates that the legislation was intended to protect the
insureds by creating a new remedy for insureds harmed by the unreasonable delay in payment of
22
The Chair of the House Insurance, Financial Services, and Consumer Protection Committee was
one of the individuals who prepared the statement in favor of the referendum. Voters’ Pamphlet at
15.
23
No. 54997-2-II
valid insurance claims and by encouraging insurers to honor their commitments by making it
illegal to unreasonably delay or deny legitimate claims. Voters’ Pamphlet at 15. Notably, our
supreme court has recognized that “the specific purpose of IFCA was to provide insureds with
another legal resource against their insurer for wrongful denials.” Perez-Crisantos, 187 Wn.2d at
679.
The legislative history also suggests that the legislation was in part intended to serve a
punitive purpose because it allows trial courts to treble damages. But a punitive purpose is not
inconsistent with a legislative purpose of protecting insureds because the punitive aspects of the
legislation also serve as a deterrent purpose that may provide insureds with additional protection.
Additionally, although the trebling provision may suggest that IFCA was at least partially
punitive, the fact that the trebling was not mandatory but, rather, at the trial court’s discretion,
tempers this focus and suggests that punishment was not the primary purpose of the legislation.
And the inclusion of a notice and cure period that offered the insurer an opportunity to correct any
unreasonable behavior before being hauled into court also suggests that the intent of the legislation
was to protect the insured rather than punish the insurer. RCW 48.30.015(8). Overall, these factors
weigh in favor of finding that the intent was to protect insureds by providing a new, independent
remedy for unreasonable behavior without limiting the type of damages available.23
23
One could argue that we also consider that when IFCA was enacted our supreme court had not
yet decided Segura and the legislature could be deemed to have been aware that Rasor and Martini
appeared to define “actual damages” as including noneconomic damages. But in Segura, our
supreme court held that Rasor and Martini did not establish a common definition of “actual
damages,” and that these cases were instead decided based on the nature of the interest the
legislation at issue was designed to protect. 184 Wn.2d at 594-95. We are bound by our supreme
court’s characterization of the analysis in Rasor and Martini, so we cannot assume that the
legislature construed Rasor and Martini otherwise.
24
No. 54997-2-II
Furthermore, IFCA can be easily distinguished from the legislation addressed in Segura,
where our supreme court determined that the legislature did not intend to include noneconomic
damages as part of the “actual damages” allowed under the RLTA. 184 Wn.2d at 596. The court’s
decision in Segura was based on (1) the existence of specific statutory language focusing on the
return of tenants’ funds, and (2) a legislative history of the RLTA that demonstrated that the act
was intended to ensure the return of tenants’ money rather than to provide for personal redress or
to protect tenants against harm. Id. at 593-96. Here, in contrast, nothing in IFCA specifies the type
of damages envisioned by the legislature or suggests any limitation on damages. And the
legislative history discloses that IFCA was intended to provide additional protections and avenues
for relief for insureds. Unlike the restrictive statutory language and legislative history in Segura,
the broad language and legislative purpose here suggests that the legislature intended “actual
damages” under IFCA to be interpreted broadly and to include noneconomic damages.
This case can also be distinguished from Fisons Corp., which interpreted the CPA as not
permitting recovery of personal noneconomic damages. 122 Wn.2d at 317-18. Unlike here, the
legislation at issue in Fisons expressly permitted damages only when those damages related to the
harm of business or property. Id. Here, there are no similar limitations in the relevant legislation.
The legislative history here discloses a purpose more similar to those in Rasor and Martini,
which interpreted “actual damages” as including noneconomic damages. In Segura, our supreme
court stated that the statutes at issue in Rasor and Martini, FRCA and WLAD, were both intended
to “guard against harm to the person,” so “[t]he inclusion of emotional distress damages in in those
cases is not surprising, as such provision comports with the purpose and protections afforded by
25
No. 54997-2-II
the statutes in question.” 184 Wn.2d at 594. Similarly, here, allowing noneconomic damages
comports with the purpose of protecting insureds against unfair conduct by insurers.
Accordingly, we hold that because the term “actual damages” as used in IFCA is
ambiguous and, as in Rasor and Martini, the legislative history of IFCA demonstrates that the act
was intended to protect insureds and provide additional remedies, “actual damages” includes
noneconomic damages and the trial court erred by refusing to so instruct the jury.
C. REMEDY
Beasley argues that because the noneconomic damages for the insurance bad faith claim
and the IFCA claim are identical, we should remand only to allow the trial court to determine
whether to triple the noneconomic damages awarded in the insurance bad faith claim.24 Beasley
also argues that because the damages for the insurance bad faith and IFCA claims are identical,
“GEICO should be collaterally estopped from relitigating the amount of Beasley’s [noneconomic]
damages.” Br. of Appellant/Cross Respondent at 27.
But Beasley cites no authority establishing that noneconomic damages for the insurance
bad faith claims and the IFCA claims are identical, and his argument ignores the elements of each
type of claim and causation. Although both types of claims rest on an insurer’s unreasonable
behavior, they are not identical.
24
GEICO also argues that by asking us to hold that the IFCA damages are the same as the insurance
bad faith damages, Beasley “is essentially seeking double recovery.” Br. of Resp’t/Cross Appellant
at 14. Beasley contends that he is not seeking double recovery because he is asking only that we
remand to allow the trial court to consider whether to treble the insurance bad faith damages.
Beasley is correct that he does not seek an award of the same damages awarded under the insurance
bad faith claim; he merely seeks remand for the trial court to determine whether those damages
can be trebled under IFCA.
26
No. 54997-2-II
Insurance bad faith claims require, among other elements, that the insurer have acted in its
own interest over the insured’s interest and that the damages be proximately caused by the insurer’s
bad-faith actions. Mut. of Enumclaw Ins. Co. v. Dan Paulson Constr., Inc., 161 Wn.2d 903, 916,
169 P.3d 1 (2007) (damages in an action for insurance bad faith must be proximately caused by
breach of duty of good faith); Coventry Assocs. v. Am. States Ins. Co., 136 Wn.2d 269, 280, 961
P.2d 933 (1998) (insurance bad faith exists when an insurer acts in its own interest above that of
the insured). Insurance bad faith claims do not require that the insurer’s acts result in unreasonable
denial of a claim. See Coventry, 136 Wn.2d at 279 (first-party insured has a cause of action for bad
faith investigation even where there is ultimately no coverage); see also St. Paul Fire & Marine
Ins. Co. v. Onvia, Inc., 165 Wn.2d 122, 131-32, 196 P.3d 664 (2008) (holding that an action for
bad faith is not dependent on the duty to indemnify).
In contrast, IFCA claims require that the insurer’s unreasonable act or acts result in the
unreasonable denial of the insured’s claim, and any IFCA damages must be caused by that denial.
W. Beach Condo. v. Commonwealth Ins. Co. of Am., 11 Wn. App. 2d 791, 805, 455 P.3d 1193,
review denied, 195 Wn.2d 1026 (2020). IFCA does not require that the insurer have been acting
in its own interest over the insured’s interest.
In addition, the trial court in this case gave an unchallenged jury instruction that a finding
of bad faith can be based on a violation of the insurance regulations contained in WAC 284-30-
330. In contrast, the supreme court held in Perez-Crisantos that IFCA does not provide a cause of
action for regulatory violations. 187 Wn.2d at 684.
Although some insurance bad faith and IFCA claims could overlap, it is possible that some
of an insurer’s self-serving actions or violations of insurance regulations may not ultimately result
27
No. 54997-2-II
in the unreasonable denial of a claim and, thus, would establish only an insurance bad faith claim.
Because the claims may differ, the damages could also differ. And because the damages under
each category of claim are not necessarily the same, we cannot presume that the bad faith damages
the jury awarded also were caused by the IFCA violations. Accordingly, we hold that merely
tripling the bad faith noneconomic damages is not an appropriate remedy.25
Beasley argues that because the bad faith and IFCA damages are identical, GEICO should
be estopped from relitigating the amount of noneconomic damages. Because Beasley premises this
argument on his assertion that the noneconomic damages for each claim are identical and we hold
that the damages are not identical, Beasley’s estoppel argument fails.
GEICO argues that “[t]he only appropriate remedy would be to remand for a new trial.”
Br. of Resp’t/Cross Appellant at 13. A new trial on the claims themselves is not appropriate
because Beasley does not challenge the verdicts on the substantive claims, and, as discussed below,
GEICO’s cross-appeal arguments fail. But a new trial on noneconomic damages under IFCA is
appropriate because the trial court prevented Beasley from arguing that noneconomic damages
were available under the IFCA claim, and the jury was not instructed to determine the
noneconomic damages under the IFCA claim.26
25
GEICO asserts that the relief requested by Beasley would be an improper reformation of the
jury verdict and that Beasley’s reliance on Eagle Point Condo. Owners Ass’n v. Coy, 102 Wn.
App. 697, 9 P.3d 898 (2000) does not support the remedy Beasley requests. Because we reject
Beasley’s requested relief on other grounds, we do not address whether it would be an improper
reformation of the jury verdict.
26
Washington courts have repeatedly held that duplicative damage awards are void against public
policy. See, e.g., Conrad ex rel. Conrad v. Alderwood Manor, 119 Wn. App. 275, 290, 78 P.3d
177 (2003) (“a double damage award is contrary to Washington law”); Eagle Point Condo. Owners
Ass’n, 102 Wn. App. at 702 (“It is a basic principle of damages, both tort and contract, that there
shall be no double recovery for the same injury.”).
28
No. 54997-2-II
The proper remedy is based on an understanding that although not all bad faith conduct
constitutes an IFCA violation, we can presume under the facts of this case that GEICO’s IFCA
violations also constituted bad faith. The trial court instructed the jury that an IFCA violation
required an unreasonable denial of benefits and instructed that “[t]he Court has determined that
[GEICO] unreasonably denied the payment of benefits by failing to pay the undisputed $10,000
offer of UIM benefits made on October 23, 2015.” CP at 164. An unreasonable denial of benefits
under the facts of this case necessarily constituted bad faith. E.g., Robbins v. Mason County Title
Ins. Co., 195 Wn.2d 618, 633, 462 P.3d 430 (2020) (bad faith exists if a breach of contract is “
‘unreasonable, frivolous, or unfounded’ ”) (internal quotation marks omitted) (quoting Am Best
Food, Inc. v. Alea London, Ltd., 168 Wn.2d 398, 412, 229 P.3d 693 (2010)). Further, GEICO’s
denial of payment of benefits here arguably constituted a violation of WAC 284-30-330(7)–
compelling a first party claimant to litigate by offering substantially less than the amount
ultimately recovered. Such a violation would constitute bad faith under the court’s instructions.
Because a violation of IFCA also would constitute bad faith under the facts of this case,
any IFCA noneconomic damages necessarily would have been included in the $400,000 the jury
awarded in bad faith damages. But as noted above, the IFCA noneconomic damages may be less
than the bad faith damages because the bad faith cause of action is much broader. Therefore, we
much remand for a new trial on the issue of IFCA noneconomic damages only.
Once a jury determines the amount of IFCA noneconomic damages, Beasley is not
automatically entitled to treble damages. RCW 48.30.015(2) states that the superior court “may . .
. increase the total award of damages to an amount not to exceed three times the actual damages.”
(Emphasis added.) Therefore, after the jury determines the amount of IFCA noneconomic
29
No. 54997-2-II
damages, the trial court in its discretion will decide whether to increase the amount of actual
damages.
However, if the trial court increases actual damages, Beasley is not entitled to double
recovery. Therefore, Beasley is not entitled to recover the amount the jury awards in IFCA
noneconomic damages. That amount is included in the $400,000 in bad faith damages that Beasley
already will recover. Instead, Beasley will be entitled to recover only the increased amount the
trial court awards.27
In addition, Beasley cannot relitigate the $400,000 in bad faith damages the jury awarded
in the first trial, which necessarily included IFCA damages. Therefore, Beasley cannot recover any
amount above $400,000 in IFCA noneconomic damages and the trial court must disregard any
amount the jury awards in IFCA noneconomic damages that exceeds $400,000 in determining the
amount (if any) of increased damages.28
A majority of the panel having determined that only the foregoing portion of this opinion
will be printed in the Washington Appellate Reports and that the remainder shall be filed for public
record in accordance with RCW 2.06.040, it is so ordered.
Unpublished text follows.
27
For example, if the jury awards $100,000 in IFCA noneconomic damages and the trial court
increases that amount to $300,000, Beasley will be entitled to recover only $200,000.
28
For example, if the jury awards $500,000 in IFCA noneconomic damages, Beasley could not
recover the additional $100,000 and the most the trial court could award in increased damages
would be $800,000 (three times the $400,000 cap less the $400,000 Beasley already recovered in
bad faith damages).
30
No. 54997-2-II
GEICO’S CROSS APPEAL
We next turn to GEICO’s cross appeal. In its cross appeal, GEICO argues that (1) Beasley’s
IFCA claim cannot stand because the claim was premised on a violation of a regulation and such
claims are not permitted under Perez-Cristanos, (2) “the [trial] court erred in granting [Beasley’s]
motion for directed verdict/judgment as a matter of law that GEICO violated IFCA by failing to
pay the $10,000 offer,” and in instructing the jury that the court had determined that GEICO had
unreasonably denied payment of benefit by not paying the $10,000 offer, and (3) the trial court
erred when it granted Beasley’s post-trial motion to treble the IFCA damages. Br. of Resp’t/Cross
Appellant at 35. These arguments fail.
A. BEASLEY’S RIGHT TO BRING AN IFCA CLAIM
GEICO argues that Beasley’s IFCA claim cannot stand because the claim was premised on
a violation of a regulation and such claims are not permitted under Perez-Cristanos. Beasley does
not address this argument. GEICO is correct that an IFCA claim cannot be based on a violation of
an insurance regulation. Perez-Crisantos, 187 Wn.2d at 672. But that is not what happed here.
In Perez-Crisantos, our supreme court addressed whether the appellant could bring an
IFCA claim based on the premise that the insurer “compelled him to litigate his UIM claim” by
offering him nothing prior to his filing suit and that this was a violation of WAC 284-30-330(7),
which prohibited insurers from forcing insured’s to “litigate to recover” benefits that they were
entitled to by making lowball offers. 187 Wn.2d at 678, 675. Our supreme court held that IFCA
did not create “a new and independent private cause of action for violation of [certain insurance]
regulations in the absence of any unreasonable denial of coverage or benefits.” Id. at 672.
31
No. 54997-2-II
But, unlike here, Perez-Cristanos addressed a suit premised on an insurer’s alleged
violation of a WAC that prohibited lowball offers. Id. at 675. Here, in contrast, the claim was based
on GEICO’s failure to pay an undisputed amount, not a violation of the WACs, so GEICO’s
reliance on Perez-Cristanos is inapposite, and GEICO does not demonstrate that there was no legal
basis for the IFCA claim.
B. CR 50 MOTION
GEICO further argues that the trial court erred in granting Beasley’s CR 50 motion and
instructing the jury that GEICO’s failure to pay the $10,000 offer was an unreasonable denial of
payment of benefits. GEICO asserts that because it presented evidence that the insurance “policy
required the parties to agree on the amount,” the $10,000 offer was only “a compromise offer that
was not accepted and therefore was not due” and, thus, failure to pay this amount could not be a
denial of payment.29 Br. of Resp’t/Cross Appellant at 37, 38. This argument fails under the specific
facts of this case.
CR 50(a)(1) provides that a trial court may grant a motion for judgment as a matter of law
on an issue when “a party has been fully heard with respect to an issue and there is no legally sufficient
evidentiary basis for a reasonable jury to find or have found for that party with respect to that issue.”
We review de novo a trial court’s decision on a motion for judgment as a
matter of law on a particular issue under CR 50. Like the trial court, we must
determine whether there is any legally sufficient evidentiary basis for a reasonable
jury to have found for a party with respect to the issue. CR 50. We view all
conflicting evidence in the light most favorable to the nonmoving party, here
[GEICO].
29
To the extent GEICO is also citing Perez-Crisantos to support this argument, that case has no
relationship to whether a failure to pay an unaccepted offer is a refusal to pay for purposes of
IFCA.
32
No. 54997-2-II
HBH v. State, 197 Wn. App. 77, 85, 387 P.3d 1093 (2017) (case citations omitted), aff’d, 192
Wn.2d 154, 429 P.3d 484 (2018).
Although an insurer is not always obligated to pay an offer that is not accepted by the
insured, the evidence here clearly shows that GEICO did not dispute that Beasley was entitled to
receive the $10,000 before any final settlement. Bork testified that there was no disagreement
regarding whether the damages were at least $10,000, and that the $10,000 offer represented a
“fair and reasonable . . . settlement offer” and “undisputed UIM benefits.” 4 RP at 621. And the
evidence here similarly shows that Beasley accepted the $10,000 amount as an undisputed portion
of the damages because he demanded payment of that portion of the damages.
GEICO’s argument that the insurance policy required the parties to agree on the total
amount of damages before any portion of it was due is not supported. The insurance policy
provision that GEICO cites to provides, “If you and we do not agree . . . to the proper amount of
such damages, the dispute may be resolved: (a) In a binding, voluntary arbitration proceeding as
described in paragraph 2 below, or (b) [b]y civil lawsuit brought by you in a court of competent
jurisdiction.” CP at 29 (boldface omitted). Although this provision provides a mechanism for
resolving a dispute over the “proper amount” of damages, it does not say when any undisputed
portion of the damages may or may not became due.
Importantly, in this case Bork did not dispute that undisputed UIM benefits were “owed.”
4 RP at 621. And Murphy agreed that “an insurer should pay the undisputed UIM benefits as soon
as possible” and that, although it was not normal practice, there were instances “when undisputed
portions of claims are paid prior to the final evaluation and/or settlement.” Id. at 545, 609. Geico
presented no contrary evidence. The evidence presented at trial, even in the light most favorable
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to GEICO, supports the trial court’s conclusion. Accordingly, we affirm the trial court’s CR 50
order.
C. TREBLING
Finally, GEICO contends that the trial court erred in granting Beasley’s motion for treble
damages under RCW 48.30.015(2). GEICO argues that the decision to award treble damages was
based on untenable grounds because the trial court’s order refers to testimony that is not in the
record. Specifically, GEICO asserts that Murphy “did not testify that he never considers
noneconomic damages beyond pain and suffering.” Br. of Resp’t/Cross Appellant at 40. GEICO
asserts that Murphy instead testified that he “considers how the injury affected the insured and
those factors which can be monetarily calculated.” Id. (citing 4 RP 472-73).
RCW 48.30.015(2) provides that the trial court “may” “increase the total award of damages
[under the IFCA claim] to an amount not to exceed three times the actual damages,” if the court
finds “that an insurer has acted unreasonably in denying a claim for coverage or payment of
benefits or has violated a rule in [RCW 48.30.015(5)]. We review challenged findings of fact for
substantial evidence. Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wn.2d 873, 879, 73 P.3d 369(2003). Substantial evidence is “defined as a quantum of evidence sufficient to persuade a rational
fair-minded person the premise is true.” Id.In its ruling on the treble damages, the trial court stated that it was basing its ruling on the
following: “At one point in the trial this court was shocked by the testimony of Mr. Murphy, an
adjuster handling the claim, that he did not in this case or ever in any case consider any
[noneconomic] damages other than pain and suffering and has never been trained to consider any
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No. 54997-2-II
other [noneconomic] damages.” CP at 269-70. Murphy’s testimony provides substantial evidence
to support this finding.
As noted above, Murphy testified that pain and suffering were two types of noneconomic
damages and that he was trained on how to evaluate pain and suffering claims. Although Murphy
initially testified that GEICO trained him on “special” damages, which included anything “outside
of the . . . things that can be monetarily defined,” he clarified that he was not “to [his] knowledge”
trained “on any other elements of noneconomic damages” beyond pain and suffering. 4 RP at 473.
And he agreed that during his tenure as a bodily injury adjuster supervisor, he had “never valuated
and paid for any noneconomic damages other than pain and suffering.” Id. at 474. This testimony
supports the trial court’s finding.
Although Murphy also acknowledged that “loss of enjoyment of life, embarrassment,
inconvenience, noneconomic damages, other than pain and suffering,” could “sometimes be part
of the claim that’s being made” and that he was aware of cases in which such damages were
awarded, that testimony does not change Murphy’s testimony that he was not trained on other
types of noneconomic damages and that he had “never valuated and paid for any economic
damages other than pain and suffering.” Id. at 474, 475-76. Because Murphy’s testimony provides
substantial evidence in support of the trial court’s finding, GEICO fails to show that the trial court
erred in granting Beasley’s request for treble damages.
ATTORNEY FEES
Beasley requests reasonable attorney fees and costs on appeal under RAP 18.1(b) and RCW
48.30.015(3). Beasley also requests reasonable attorney fees and costs under IFCA for responding
to GEICO’s cross appeal. GEICO argues that Beasley should not be awarded attorney fees under
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No. 54997-2-II
IFCA because Beasley has not prevailed on his IFCA claim. GEICO does not argue that it is
entitled to attorney fees.
Because we grant relief under Beasley’s appeal and reject GEICO’s cross appeal
arguments, we grant Beasley’s request for reasonable attorney fees and costs.
CONCLUSION AND REMAND INSTRUCTIONS
We hold that noneconomic damages are available under IFCA and reverse the trial court’s
rulings related to this issue and remand for a new hearing on noneconomic damages and reject
GEICO’s cross appeal arguments. Following a jury verdict on noneconomic IFCA damages, the
trial court must engage in further proceedings consistent with the direction in this opinion.
CRUSER, A.C.J.
We concur:
MAXA, J.
LEE, J.
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