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Susan L. Carlson Supreme Court Clerk

IN THE SUPREME COURT OF THE STATE OF WASHINGTON CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON IN KRISTA PEOPLES,

Plaintiff,

V. UNITED SERVICES AUTOMOBILE ASSOCIATION and USAA CASUALTY INSURANCE COMPANY, Defendants.

JOEL STEDMAN and KAREN JOYCE, Plaintiffs,

V. PROGRESSIVE DIRECT INSURANCE COMPANY, No. 96931-1

Filed 2 7 2013Peoples V. USAA,No.96931-1 ) Defendant. )

) GonzAlez,J.—The Consumer Protection Act (CPA),ch. 19.86 RCW, 

### prohibits unfair and deceptive trade practices and can be enforced by private citizens. Any person who is "injured in [their]business or property"by a violation ofthe CPA may bring a civil suit for injunctive relief, damages,attorney costs and fees,and treble damages. RCW 19.86.090. Krista Peoples and Joel Stedman filed CPA suits against their insurance carriers for violating Washington claimshandling regulations and wrongfully denying them personal injury protection (PIP) benefits. We are asked by the United States District Court for the Western District ofWashington whether Peoples and Stedman allege an injury to "business or property." We hold they do.
Facts Washington law requires insurers to offer PIP coverage to all automobile liability policyholders. RCW 48.22.085(1). "PIP insurance is designed to provide the insured with an immediate source ofpayment for out-of-pocket expenses resulting from [a car]accident,"regardless offault. Barriga Figueroa v. Prieto Mariscal, 193 Wn.2d 404,411,441 P.3d 818 (2019). Under the PIP statute, insurers are required to pay "all reasonable and necessary" medical expenses for treating an insured's injuries arising from a covered event. RCW 48.22.085,Peoples V. USAA,No. 96931-1



### .005(7). Under Washington insurance regulations,it is an unfair practice for an insurer to deny payment ofa claim without first conducting a reasonable investigation. WAC 284-30-330(4). These regulations also make it an unfair practice to deny,limit,or terminate PIP benefits for any reason other than that the medical bills "(a)[a]re not reasonable;(b)[a]re not necessary;(c)[a]re not related to the accident; or (d)[a]re not incurred within three years ofthe automobile accident." WAC 284-30-395(1). Peoples and Stedman purchased PIP coverage.After they were injured in car accidents,they made claims for PIP benefits. After their PIP benefits were terminated or denied,they filed class action suits against their respective insurance carriers under several causes ofaction, including the CPA,claiming their insurers violated Washington insurance regulations. Specifically,Peoples alleges that USAA refuses,without any individualized assessment,to pay medical provider bills whenever a computerized review process determines that the bill exceeds a predetermined limit. According to Peoples,USAA's failure to investigate or make
an individualized determination regarding the reasonableness or necessity ofa provider's charges before denying payment violates WAC 284-30-330(4)and WAC 284-30-395(1). She alleges that due to this practice ofalgorithmic review, USAA routinely fails to pay all reasonable medical expenses for treating an insured's injuries arising from a covered event,in violation ofRCW 48.22.005(7).Peoples V. USAA,No. 96931-1



### She and class members seek actual damages,including unpaid medical bills and 

### expenses incurred to investigate USAA's wrongful conduct. Stedman alleges Progressive terminates PIP benefits whenever an insured reaches "Maximum Medical Improvement" and this practice violates WAC 284- 30-395(1),which lists the only permissible reasons to terminate PIP benefits. He alleges that by terminating benefits on the basis of"Maximum Medical Improvement,"Progressive routinely fails to pay all reasonable medical expenses for treating an insured's injuries arising from a covered event, in violation ofRCW 48.22.005(7). He and class members seek to enjoin Progressive from using "Maximum Medical Improvement" to limit PIP claims and seek actual damages, including unpaid medical bills. USAA and Progressive moved to dismiss the CPA claims on the grounds the insured was not "injured in [their] business or property." The federal district court consolidated the cases solely for the purpose ofasking this court whether the plaintiffs allege cognizable CPA injuries. See Order Consolidating Cases & Certifying Question to Wash. Supreme Ct.,No. C18-1254RSL at 8 (Order). The certified questions are as follows: With regards to the injury to "business or property" element ofa CPA claim, can insureds in Ms.Peoples' and/or Mr. Stedman's circumstances,who were 

### physically injured in a motor vehicle collision and whose Personal Injury Protection ("PIP")benefits were terminated or limited in violation ofWAC 284-30-330,bring a CPA claim against the insurer to recover out-of-pocketPeoples V. USAA,No. 96931-1



### medical expenses and/or to compel payments to medical providers? With regards to the "injury to business or property" element ofa CPA claim, can insureds in Ms.Peoples' and/or Mr. Stedman's circumstances,who were physically injured in a motor vehicle collision and whose Personal Injury Protection ("PIP")benefits were terminated or limited in violation ofWAG 284-30-330,bring a CPA claim against the insurer to recover excess 

### premiums paid for the PIP coverage,the costs ofinvestigating the unfair acts, and/or the time lost complying with the insurer's unauthorized demands? Id. Analysis Certified questions are matters oflaw we review de novo. Parents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1, 149 Wn.2d 660,670, 72P.3d 151 (2003) (citing Rivett v. City ofTacoma, 123 Wn.2d 573,578, 870 P.2d 299 (1994) overruled inpart on other grounds by Chong Yim v. City of Seattle,No. 96817-9 (Wash.Nov. 14,2019)). We consider the legal issues presented based on the certified record provided by the federal court. Bradburn v. N. Cent. Reg7Library Dist., 168 Wn.2d 789, 799,231 P.3d 166 (2010)(citing RCW 2.60.030(2)). The certified questions in this case turn on the meaning ofinjury to "business or property" in the CPA. RCW 19.86.090. Our fundamental objective in interpreting
a statute is to "ascertain and carry out the Legislature's intent," which we discern "from all that the Legislature has said in the statute and related statutes which disclose legislative intent about the provision in question." Dep't ofEcology v. Campbell & Gwinn,LLC, 146 Wn.2d 1, 9, 11,43 P.3d 4 (2002).
5Peoples V. USAA,No. 96931-1



### The CPA prohibits unfair or deceptive practices in trade or commerce. RCW 19.86.020. Originally, only the attorney general could enforce the act. See Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 784,719 P.2d 531 (1986). In 1970,in response to "the escalating need for additional enforcement capabilities," the legislature "amended the CPA to provide for a private right ofaction whereby individual citizens would be encouraged to bring suit to enforce the [act]." Id. Today,a civil action for injunctive relief, damages,attorney costs and fees, and treble damages may be brought by any person who is "injured in [their] business or property" by a violation ofthe CPA. RCW 19.86.090. To prevail in a CPA action, a private plaintiffmust prove (1)an unfair or deceptive act or practice (2)in trade or commerce (3)which affects the public interest (4)and causes injury to the plaintiffs business or property, and (5)a causal link between the act and the injury. Hangman Ridge, 105 Wn.2d at 784-85. It is well established that insureds may bring private CPA actions against their insurers for breach ofthe duty ofgood faith or for violations ofWashington insurance regulations. See, e.g., Coventry Assocs. v. Am. States Ins. Co., 136 Wn.2d 269,281-83, 961 P.2d 933 (1998);Indus. Indem. Co. ofNw. v. Kallevig, 114 Wn.2d 907,923, 792 P.2d 520 (1990);Salois v. Mut. ofOmaha Ins. Co., 90 Wn.2d 355, 581 P.2d 1349 (1978);Levy v. N. Am. Co. for Life & Health Ins., 90 Wn.2d 846, 586 P.2d 845 (1978). The legislature has expressly declared that thePeoples V. USAA,No. 96931-1



### insurance business is one "affected by the public interest" and has prohibited insurers from engaging in unfair or deceptive acts as defined by the legislature or the insurance commissioner. See RCW 48.01.030; RCW 48.30.010(l)-(2). The insurance commissioner has defined unfair settlement practices both generally and in the context ofPIP claims. WAC 284-30-330,-395. The legislature has made 

### actions prohibited by the insurance laws subject to the CPA's enforcement provisions. RCW 19.86.170. Based on this legislative scheme,we have held that a violation ofan insurance regulation is a per se unfair or deceptive act or practice. See Kallevig, 114 Wn.2d at 923. In this case, we are asked whether the wrongful denial ofPIP benefits is an injury to "business or property" under RCW 19.86.090. The insurance companies argue,undQV Ambach v. French, 167 Wn.2d 167, 216 P.3d 405 (2009),that it is not and,therefore, an insured cannot bring a CPA action for a violation ofthe insurance regulations when their policy is for PIP. In Ambach,we found traditional personal injury claims are not within the scope ofthe CPA. 167 Wn.2d at 174 (citing Wash. State Physicians Ins. Exch. & Ass 'n v. Fisons Corp., 122 Wn.2d 299, 318, 858 P.2d 1054 (1993)). Ambach does not apply here because the plaintiffs do not seek to hold their insurance companies liable for their underlying personal injuries. Instead,they seek to hold their insurance companies liable for benefits owed under contract. We conclude that the deprivation ofPeoples V. USAA,No. 96931-1



### contracted-for insurance benefits is an injury to "business or property" regardless ofthe type ofbenefits secured by the policy. We first addressed the intersection ofthe CPA and personal injury actions in 

### Fisons,where we approved the Court ofAppeals' decision in Stevens v. Hyde Athletic Industries, Inc., 54 Wn.App. 366,367,773 P.2d 871 (1989). See Fisons, 122 Wn.2d at 318. In Stevens, a woman severely broke her anlcle during a softball game while wearing shoes she alleged were unreasonably dangerous. 54 Wn.App.
at 367. She sued the manufacturer and the seller ofthe shoes under several causes ofaction, including the CPA. Id. at 367-68. The Court ofAppeals held the plaintiffcould not sue the defendants under the CPA for causing her ankle injury. Id. at 370. The court reasoned that the legislature's choice ofthe words "injured in [their] business or property" demonstrated an intent to exclude traditional personal injury claims.Id. Even though the personal injury caused by the CPA violation ultimately led to a downstream property injury—the plaintiffhad to pay medical bills related to her broken ankle—those downstream financial consequences ofthe personal injury did not bring the claim for personal injury within the ambit ofthe
CPA. Id. In Amhach,we reaffirmed that personal injuries are not cognizable under the CPA. 167 Wn.2d at 173. In Ambach,the plaintiffhad serious complications from shoulder surgery. Id. at 170. She sued the surgeon for medical negligence andPeoples V. USAA,No. 96931-1

also alleged he violated the CPA by performing an unnecessary surgery for financial gain. Id. Ambach's "CPA injury was 'part and parcel of[her]personal injury.'" Id. at 174; cf. Williams v. Lifestyle LiftHoldings,Inc., 175 Wn.App.62, 74,302 P.3d 523 (2013). Even though Ambach argued her CPA injury was '"the cost ofa product. . .acquired due to fraud or deception,'"Ambach, 167 Wn.2d at 174 (alteration in original),her actual CPA damages "[sought]redress for her personal injuries" caused by the surgery. Id. at 179. We explained the CPA was not designed to give personal injury claimants "backdoor access"to compensation from a tortfeasor. Id. at 179 n.6. TheAmbach line ofcases does not bar claims by insureds who seek to
recover wrongfully denied PIP benefits. Unlike in Stevens and Ambach,the plaintiffs here do not allege the defendants caused their personal injuries. Their CPA suits do not seek to vindicate their right to be free ofbodily harm but,rather, their property interest in the benefits they bargained for in their insurance contracts. When parties enter an insurance contract,the insured obtains a legal right to benefits upon the happening ofa particular event. See Colo. Structures, Inc. V. Ins. Co. ofW., 161 Wn.2d 577,603-04, 167 P.3d 1125 (2007)(plurality opinion). An insurance contract also gives rise to a quasi-fiduciary relationship between the parties,which requires them to deal in good faith. Barriga Figueroa, 193 Wn.2d at 411. An insured,therefore,has a legally protected property interestPeoples V. USAA,No.96931-1



### in benefits due under the contract and a related right to insurance dealings free from bad faith. Claims mishandling and wrongful denial ofbenefits invade this 

### property interest,regardless ofthe type ofeventthat triggers coverage. Indeed,in Levy,we held that an insured alleging bad faith and wrongful rescission ofa disability insurance policy stated all the elements ofa CPA claim,even though the event triggering his rights to the disability benefits was a personal injury. 90 Wn.2d at 850. 

### Ultimately,the insurance companies' interpretation ofAmbach and RCW 19.86.090's injury requirement would thrust violations ofWashington's PIP regulations entirely outside the reach ofthe CPA's private enforcement provision. It would also exclude violations ofWashington's general claims-handling 

### regulations whenever PIP benefits are involved. Such a result would undermine 

### the provision ofthe CPA that makes violations ofthe insurance laws subject to the CPA's private enforcement provision. See RCW 19.86.170 ("[Ajctions . . . 

### prohibited . . . under the laws administered by the insurance commissioner shall be subject to . . . all sections of. . . chapter 19.86 RCW which provide for the 

### implementation and enforcement ofRCW 19.86.020."). Construing the CPA as a whole,we find that the legislature intended for insureds to be able to enforce 

### Washington insurance regulations regardless ofthe type ofbenefits secured by 

### their policies. Accordingly,we answer the first certified question yes and hold

10Peoples V. USAA,No.96931-1



### insureds who are wrongfully denied PIP benefits are injured in their "business or property." A person injured in their business or property by a CPA violation may seek,among other things,injunctive reliefand actual damages. See RCW 19.86.090. Therefore,to the extent proved,the plaintiffs may recover actual damages,including out-of-pocket medical expenses that should have been covered, and can seek injunctive reliefto compel the payment ofbenefits to medical 

### providers.' Finally,the second certified question asks us whether "excess premiums 

### paid for the PIP coverage,the costs ofinvestigating the unfair acts,and/or the time lost complying with the insurer's unauthorized demands"are injuries to "business
or property." Order at 8. We decline to reach the portion ofthe question that asks 

### about excess premiums.^ With respect to the remainder ofthe question,we hold that when a CPA claim is predicated on an insurer's mishandling ofa PIP claim, 

### ordinary CPA principles govern whether investigation costs or time lost are injuries to business or property. We have recognized that other business or

^ Werecognize that the local federal bench has reached a contrary conclusion in several decisions. See Kovarik v. State Farm Mut.Auto. Ins. Co.,No.C15-1058-TSZ,2016 WL 4555465,at *3 (W.D.Wash.Aug. 31,2016)(court order)(collecting eases). We respectfully disagree with our federal colleagues on this point. ^ As used by Peoples,the phrase "excess premiums"is an alternative way ofcharacterizing unpaid benefits. See Appellee/Pl.Krista Peoples' Answering Br. at 41-42 (explaining that the inquiry about "excess premiums"highlights the '"flip-side"'ofthe loss ofbenefits). Because we find that the deprivation ofPP benefits is an injury to business or property,it is unnecessary to address Peoples' alternative theory about "excess premiums."

11Peoples V. USAA,No. 96931-1



### property injuries, apart from the wrongful deprivation ofbenefits, can be caused when an insurer engages in unfair or deceptive practices. In Coventry,we held a CPA claim for insurance bad faith was actionable even though the insurer properly 

### denied coverage. 136 Wn.2d at 285. The costs incurred by the plaintiffto investigate the claim established injury and were recoverable as actual damages. Id. Since Coventry,we have continued to recognize that expenses incurred to investigate a deceptive act or practice are cognizable injuries and damages under the CPA. Trujillo v. Nw. Tr. Servs., Inc., 183 Wn.2d 820, 837, 355 P.3d 1 ICQ (2015);Frias v. AssetForeclosure Servs., Inc., 181 Wn.2d 412,432, 334 P.3d 529 (2014);Panagv. Farmers Ins. Co. ofWash., 166 Wn.2d 27,62,204 P.3d 885 (2009). The Court ofAppeals has also held that taking time away from business to respond to unfair practices may satisfy the injury requirement. See Sign-O-Lite Signs, Inc. v. DeLaurentiFlorists, Inc., 64 Wn.App. 553, 564, 825 P.2d 714 

### (1992). The principles articulated in these cases apply when a CPA claim is predicated on an insurer's mishandling ofa PIP claim. Conclusion We hold an insurance carrier's wrongful withholding ofPIP benefits injures the insured in their "business or property." An insured in these circumstances may 

### recover actual damages,ifproved,including out-of-pocket medical expenses that should have been covered,and can seek injunctive relief, such as compelling

12Peoples V. 96931-1



### payment ofthe benefits to medical providers. Other business or property injuries, apart from the wrongful denial ofbenefits,that are caused by an insurer's mishandling ofa PIP claim are also cognizable under the CPA.

13Peoples V. USAA,No. 96931-1

WE CONCUR: 

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