assigned to them by shelby front felder who was undisputedly state farm insured this matter comes before you on two orders from the district court granting summary judgment one order granted summary judgment on plaintiff's coverage claim involving this from felter involving the morales vehicle typical liability disappeared when car was heading southbound in a gated they had a green ball light in front of them the car ending northbound indicated they had a green turn arrow and signed adjustors name was karen for quite clearly even though there was clearly a liability dental for a liability dispute in this case it became very very apparent at least to these that would suggest a state farm that discretion was the better part of valor in this case and that settlement negotiations should be conducted in earnest given the fact that one of the passengers in the other vehicle involved are usually injured as a result of mis front felt their negligence died of  dispute then she's not insured under her father's policy right i don't agree and i don't know why and i don't agree the language used in the father's palsy in any way passive the master of public policy and awash  law but if i could setting aside the public policy question for a moment the policy defines insurers that's people who reside primarily with the name insured given that she mainly lived with her mother on the plane reading the insurance policy the father's insurance policy i don't see how she could be someone who resides primarily with the father who's an insured under that particular policy i didn't hit this hard in my briefing and nor the district court i think we put it all in context if you look at the entirety of the policy you might argue there's no ambiguity there i don't think i'm going to go there are a word primarily in primarily seems to have a pretty good meaning as one it's main not you don't have two primary residence so you can say there's ambiguity but i don't i don't hear it i suppose i could argue your honor that it was fifty percent of our time was here fifty percent but we know it wasn't that way i agree i agree if we go but i think that's not also the argument let's say you  information from the father's insurance policy right and i understand and appreciate the argument that when you're trying to negotiate a settlement as a matter of theory and in fact you want to see what's available before you settle out the case writes that the the crux of the bad faith claim is that you wanted to have all information available including information on the father's policy but you didn't get it and so it presented a barrier to settlement and then you had to take the the trial and you have to remember that not only did i get the gist of that the area correct i think that is correct and it's a little more than that it is literally customary practice if you're done with a claim where there's a likelihood that the valuable insurance is insufficient to fully compensate and i the standard of care but it's pretty darn close to it in personal injury practice that you're going to ask for declarations regarding whatever other assets might be available here was clear that the potential exposure that exposure reached out to the parents but the know he did but this is well before that ever occurred but it's not hard to see that potentially you could reach out right so the first thing you're going to ask for is a declaration where they're going to lay out their assets what's your mortgage what have you policy limits on the mother's insurance policy so that's what you were trying to do yes and but the but the problem that i had is that it appears that under state law in order to succeed on a path a claim you do need to show that the insurers conduct caused harm in other words you need to show that the bad faith alleged bad faith conduct resulted in some sort of prejudice and given that if you lose on on the insured and she's not covered under her father's policy how could there be any harm that would be a necessary element to succeed on the badly feeling because it's a different it's really different now says the coverage issue and the bad faith analysis are mutually exclusive i can lose on coverage and still went on bad faith and the reason it's a state farm policy it doesn't matter analytically it makes no difference and the reason why it makes no difference is that let me hear your reason first and then i'll challenge it the reason why it makes no difference is because at that point in time state farm because she's an insured ozer do things a duty to take equal consideration of her interest and that of the insurance company and when it becomes a request for information settlement issue they have a duty to analyze whether or not giv that information out is in her best interest and it would have been in her best interest to give out information regarding her father's insurance policies in the charbonneau case which represent a third party but it would have been in the interest of her father as the insured because the two the only two put your arguing is a state farm m and ms from founder were the only two people involved and that's not the case because you're now talking about a policy that belongs to still another state farm customer well ok if that's the case one a single adjuster should not be representing all the individuals involved in the claim because there's a conflict to that would require an analysis in other words they have to do once that request is being made under washington law the charbonneau and smith opinion and i'm very familiar with charbonneau because it represented the underlying third party claimants in that case under that analysis they have to do a best interest analysis in other words is it in our best interest to do it at that point they may have to discover there is a conflict but what we have here is an absence of any evidence that they ever considered whether or not it be in shelby's best interest to give that information out and you have to remember it would have been in her best interest to give that information out because we would be able to do an independent analysis and make a determination as to whether or not the analysis that state farm was doing contemporaneously was an accurate analysis or not and what would that have led to we don't know what we do sort of know because you got that information and the case still went to trial we don't go there under watch the law and i suggest this is why we don't go there is because once there has been bad faith or that actual powder they fel information the other end of your presuming bad faith you're at the time the decision is made they are allowed to trace this out and say to themselves ok is this going to be in shelby's best interests they may well include it would not be and indeed when in fact the information was given out it didn't turn out to help shelby at all theoretically i understand what you're saying factually that never happened case with a clear indication of the whole statutory policy scheme were you harmed were not armed again that's speculation we don't know what would have happened had they given that information out at that time as opposed to suggests to me a logical scenario that leads to a different result we don't know is is not a real satisfying answer because if if you look at it i have trouble seeing a scenario that leads to a different result  well that's why we have the presumed harm so we don't engage in that speculation and that's why one of the basis for that the existence of that doctrine is because otherwise we do have to speculate as to what would have been different you know a lot of things could happen in the interim we could have done an analysis and looked at their analysis whatever well what we have here is just and reasoning refusal on state farm to give out that information and the reason why it is incredibly and reasonable one they never asked mr webb whether it was ok with him to it's two distinct policies but let's say that state farm could have gone easily gone to her father and said hey do you mind there's a big this here at the policy in light of the the harm caused by the i don't know why state farm to go to dad to ask if he if he could if he would consent to disclosure of his insurance policy limits and but at most that gets us far as to breach of some duty of good faith and fair dealing with the insured but it doesn't get you all the w to bad faith and i'm not sure that i understand the answer to and i mistral question because under but i'm quoting from butler here the showing of harm is an essential element of an action for bad faith handling of an insurance claim so let's say they did reach some sort of duty but given that she is not covered under dad's policy how can you ultimately show any evidence the meet that element of the back feet claim that's the element of writing files i actually i think i'm the one that actually signed the subpoena in that case seeking the writing files in that case the factual dispute that was occurring that was messing up or so negotiations legal terms are that was the fact that mr charbonneau believed that he just bought it just places covers a par you previously had been covered by a different carrier and he one of the same coverage but from state farm so i wanted four million dollars for the coverage on a single policy for his for businesses state farm instead wrote for one million dollars coverage is for four businesses so that's their position so that's where the dispute existed that's why the underwriting writing files were needed to figure out what is the coverage here well ultimately at the end of the day it was determined that the insurance company would write the it only bought one million dollars worth of coverage as a political soley to each business so there was only one million dollars of coverage available even though at that time using there was for mine so ultimately the determination of what the coverage is at the end of the rainbow is not dispositive the issue is whether or not they failed to give information they didn't consider the best interest  dismissal with prejudice and let her go on with her life then i got there and but isn't that going to be what they're going to their goal is going to be and in light of the fact that they come to a conclusion there is no other coverage i just that seems to be in the fact that we seem to have the opinion that there is that she's not covered as a primary resident it seems it's mr webb's issues under his policy that you would be trying to seek relief from and you don't have any rights under those well yes rights on her own policy to have them to negotiate in good faith the claims are being brought against her as  plaintiff's lawyer after that well yes of course you do sure because that's when the a lot of times other facts come forward and it's not either settle pretty litigation or trial was a lot in between and the whole vanishing trial and one in particular areas the insured definition at five subsection a are matters of public policy that you have force in effect in the state of washington under that statute there is no word primary in it  and defines who is a resident isn't insured includes family members it would include most from shelter he does a site in your supplemental material or as i found this last night i will do a supplemental when i get ok all right  my name is robert manheimer and with co counsel mr young we represent state farm mutual automobile insurance company and state farm fire and casualty company i will be addressing coverage  move to the issue policy i will admit my surprise as a last second literally disclosure of an opinion i don't i'm not aware of i happened brief i haven't had a chance to respond to unfortunately so i mean a position where i'm going to have to if the court's going to review we don't know it either yeah presumably it will get a twenty a j letter and you'll have an opportunity to respond in your version of a twenty a j letter of the case makes any difference i mean we're on the same page about that anyway all right but it affects somewhat of my argument going to the public policy i briefed it unless the court really has an issue with that i'd prefer rather give all my time to ms young and if there's a serious question on coverage or public policy as it currently stands absent consideration of the grand decision which i have no familiarity with i i'm not that familiar with how claims are usually handled is it unusual under these circumstances that you wouldn't go that they are not given that this is a you know kid whose mom has a policy dad has a policy and asked that now they're asking to have this policy disclosed we don't think that she's in insured but there are factual where she primarily one is i really is a factual issue so if it assists in the settlement process to avoid litigation would you care to disclose this i'm not lying policy didn't seem like that ever occurred that's appropriate question for mr young because i'm dealing with the coverage issue but i would indicate there is a record below where mr webb responded i think to your question by saying i never anticipated that shelby from felder would be consider an insured had nothing to do with it wasn't my expectation that she would be insured under my policy she wasn't listed as a driver under any of his policies that's all i can present to you i'm really usually don't have two lawyers arguing for the same client this is one good illustration why but it sounds like it should be miss yon's yes i'm to speak so right i apologize i was brought in on the coverage issue and so unless point in contention their dispute and then not disclose the underlying file well i think with respect to submitting the question to mr webb for because he's the one who has to determine whether or not whether or not the policy would be disclosed did he determine that it's not in the record he was apparently never asked so we go back to the question the judgment has posed to you how come he's not asked well in mr mcgee he's declaration which is at pages  eighty eight to me eighty four to eighty eight he does actually indicate that state farm forwarded the letter from counsel that was november thirteenth two thousand and thirteen which is in the record at page one forty six and one forty seven did actually forward that to state farm was not in the record was his response and you could have he could have i don't know it's not in the record that's why i don't have the answer that's why i'm asking you and i guess it would be a little outside of the record but just seems almost commonsensical that you would ask the insured if there's an objection to disclosure of the underlying file for settlement discussion purposes well i think with respect to to t hat question there was no there was no challenge as to for mr webb as to whether there was coverage under the policy so he didn't have any objection to state farm's coverage determination so whether whether he would have provided the policy or authorize the policy is not in the record well you've got multiple policies multiple insurers and i understand that poses a problem but with regard to the principle actor here the daughter who was driving the car and who's clearly going to be on the hook if found liable she's got a fifty thousand dollars policy which isn't going to be nearly enough so it's not hard to figure out that plaintive as a good attorney would do and did here inquiries to other sources of recovery assets other policies your client has a duty to its insured to decline to give over information because of reported duty to another insured starts to look pale if in fact that other insured isn't asked to mean the failure to give over mr webb's policy information because of your purported duty to mr webb doesn't really fly as a justification if mr webb is ever asked if he's got a problem with that it may be that mr webb never inquired about his coverage but he's not the one asking the question in the first place the plaintiff is so i have the same but will determine the judge when does this to what's the justification an disclose another insurance policy that you are you representing her or somebody is representing her and she is the target of an obvious lawsuit the dollar signs of which greatly exceed the amount of coverage she has available directly and so anybody considering a resolution with her is going to want to know about other assets so how can you how can you say you have a duty to defend her how can you how can you satisfy that duty if you declined to give out information which any injured party is going to seek to obtain and did seek to obtain here well frankly it is unusual to request copies of the policy so the case for example the case of smith the plaintiff relies heavily on the case was not a question of whether to disclose an actual insurance policy the question was what are the limits and it's undisputed here that plaintiff understood what the limits were of the policy he also what claimants council also understood that there was no coverage under that policy understood that was your conclusion but he couldn't draw his own conclusion unless he got the policy that's the reason for asking about the policy and that's not hard to figure correct but state farm had already made the determination that there was no coverage for shelby well never can i stop for a second is the insurance company's word always the last one with respect to what coverages are available when you're entertaining settlement discussions on behalf of one party under one policy and another and i think that the record answer to my question is no because you find yourself in court and everybody knows that everybody knows the plaintiffs is going to make his own analysis isn't going to necessarily accept the insurance company's word for it that's the reason for asking for the policy what's the state farm's legitimate reason for not giving over the policy well one is that they have to protect mr webb centrists only mr webb is never asked about that so that's a little pale the other is a state farm doesn't want to disclose just how liable it might be under mr webster policies that's not serving shelby's interests at all that's the potential bad faith lying now tell me why that isn't a bad fa because how does that serve shelby's interests disclosing the policy didn't serve shelby's interests well isn't that the problem no sorry not disclosed disclosing the policy wouldn't have interests why not because at the point where the policies being requested there was no opportunity for settlement there's nothing in the record that indicates that there was a settlement that was about to happen well there's a real argument about harm i understand that but i'm looking at your duty for shelby and i don't understand how her interests are disserved by giving over the policy information that have been requested just s by providing policy information to give the impression that there is additional money that's never good that was never going to be proffered on behalf of shell but let him make his own analysis i think that's the point right you have a duty to your insured to put her in the best position for settlement and if it can't be settled then ok fine litigated through trial so you have an insured who is covered under one policy where the policy limits is clearly in adequate to meet the harm to the victim of the accident in this case you also have in your very possession another policy that she may not be insured under you made that determination in the dark of your own office they asked to see it so that they could do their only evaluation and you didn't turn it over so i think what judge clifton and i are focusing on the same point is the duty of good faith and fair dealing that you owed to the driver because you had in your information information that the injured parties wanted to know so they can do an evaluation that may be that you turn the information over and they look at it and they say wow this is really tough the policy says people who've primarily or reside primarily with the insured are cover so i think state farm's right in its call that there is no potential coverage and then maybe wouldn't settle anyway in light of the policy limits but i think that's really councils point is that they wanted to know the information so they can conduct their own evaluation and state farm refused to give it to them i don't know why i'm trying to figure that but i still don't have the answer if you if this had been a situation where you had gone to mr webb and you said we don't think there's coverage under this policy and you didn't anticipate coverage either but they're asking for this information would you allow the disclosure of the policy information so that in the evaluation can be conducted and he says no i'm not going to give that consent i don't think it's covered i never intended for to cover it then i think they would be in a difficult position right because you're trying to  reconcile maybe conflicting obligations but that wasn't the situation because they never even reached out and asked mr webb if he would consent to disclosure well it may be that there is no harm which is i think a different policy would have led to a settlement where i know we're not factually in that case but it seems to me if in fact that it would be the situation the disclosing this other information would lead to a settlement and the person who information you're asked to disclose does not object to it may indeed in this case given the relationship between the parties he may well have he probably wanted to get the problem resolved for his daughter why isn't that part of the obligation to the insured who you're trying to defend who you have an obligation to defend well i think it would depend on the facts of the case and i think one of the facts of this case there was there wasn't a bonafide settlement opportunity that plane why there was no harm as a result but at that point in time i don't know how you would have known there wasn't a bona fide a settlement opportunity because the let the language from counsel's letter at one forty six one forty seven indicates that there wasn't a bonafide settlement opportunity what he was requesting were copies of policies from the silos from the web's parenting plan in from declarations on the relationships between the parties he was positing theories of liability as t sources and but it but the stay with me for this because i suppose i am and i don't know how you draft such a term but suppose it was ironclad clear that mr webb's policy could not possibly have provided coverage to the driver by not disclosing that plaintive is plainly not going to settle because he's desperate to find more assets if it turns out this is a dry hole he's not stupid he's not going to waste time on a completely dry hole that might crack the door open towards settlement and i can't see how state farm would have known to the contrary at that time they may have decided this whole thing is futile and in the end fall back on harmless no harm as a result of this but i don't know how they could have been sure that not giving over this information was interests i think the letter speaks for itself with respect to where what that what the posture of the case was at the time that this was being requested i think what it what it evidences is in fact no intent to settle because when you when your letter comes out saying we're going to say we're going to sue the parents too we think we have a negligent entrustment claim we think we have agency theory we think we have a family car doctor an issue you can't get to the parents unless you get to jell b and shelby was contesting liability state farm had made the determination to tender the s or policy limits given the nature of the case but that liability was being contested you can't get to the parents without getting to shelby so when you get it when you're getting a letter that comes in that says we want all this information including parenting plan information and everything else before we even consider talking about settlement that's not that's not a reception for a bona fide settlement for the fifty one hundred policy  when the life of this case the well policyholder movement get disclosed i believe about eight weeks after litigation was filed and then the case went both against the silas the parents the mother the stepfather the father and shelby the case where it was dismissed as to the parents and some of the summary judgment issues went to trial and some in some of the summary judgment give me some of the parent issues and then all to movement to trial against shelby so looking at the procedural history of the case it doesn't it