Opinion ID: 2567250
Heading Depth: 2
Heading Rank: 2

Heading: private cause of action under utah code section 31a-26-301

Text: ¶ 22 The second certified question asks: Did Utah Code Ann. § 31A-26-301, entitled Timely Payment of Claims, allow a private cause of action by the insured against his or her insurer for violation of the statute in 2000? ¶ 23 We have previously recognized the four-factor test established by the United States Supreme Court in Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), as providing guidance for the determination of whether an individual has a private right of action to enforce a state statute. We have articulated the relevant factors under Cort as: (1) whether the plaintiff is a member of a class for whose special benefit the statute was enacted; (2) whether [the legislature] intended to create or deny a private remedy; (3) whether a private remedy would be consistent with the Statute's underlying purposes; and (4) the extent to which the cause of action is traditionally relegated to state law. Buckner v. Kennard, 2004 UT 78, ¶ 39, 99 P.3d 842 (alteration in original) (internal quotation omitted). We have pointed out, however, that a Utah court is not bound to apply the Cort factors in a manner identical to a federal court. Id. Moreover, we have generally observed that, in the absence of statutory language expressly indicating a legislative intent to grant a private right of action, Utah courts are reluctant to recognize an implied right. Id. at ¶ 40 (citing Miller v. Weaver, 2003 UT 12, ¶ 20, 66 P.3d 592). ¶ 24 As our criterion is legislative intent, [w]hether a particular statute provides a private right of action is a question of statutory interpretation. Id. at ¶ 41. We therefore look first to the plain language of the statute for an express indication that a private right of action was intended. See id. at ¶ 44. ¶ 25 Utah Code section 31A-26-301, as it existed in 2000, provided in relevant part: (1) Unless otherwise provided by law, an insurer shall timely pay every valid insurance claim made by an insured. By rule the commissioner may prescribe the kinds of notice and proof of loss that will establish validity, the manner in which an insurer may make a bona fide denial of a claim, the periods of time within which payment is required to be made to be timely, and the reasonable interest rates to be charged upon late claim payments. .... (3) This section applies only to claims made by claimants in direct privity of contract with the insurer. Utah Code Ann. § 31A-26-301 (2000) (amended 2002). Nothing in this language expressly indicates that an individual insured may bring a claim against an insurer to enforce the timely payment requirement. ¶ 26 Machan argues that we should infer a legislative intent to grant a private right of action because one of the stated purposes of Chapter 26 of the Utah Insurance Code, in which this provision is located, is to protect claimants under insurance policies from unfair claims adjustment practices. Id. § 31A-26-101(3). However, the same provision also indicates the additional goals of promot[ing] the professional competence of those engaged in claims adjusting, id. § 31A-26-101(1), and encourag[ing] fair and rapid settlement of claims, id. § 31A-26-101(2). It appears from these stated intentions that Chapter 26 is primarily aimed at promoting fair and professional conduct among insurance adjusters. ¶ 27 In the same vein, we note that the title of Chapter 26 is Insurance Adjusters. Part 2 of Chapter 26 is devoted to the topic of insurance adjuster licensing. See id. §§ 31A-26-201 to -215. Part 3 of Chapter 26, which contains the provision at issue, appears, to a large extent, to be aimed at regulating the insurance adjuster's performance of professional duties. See id. §§ 31A-26-301 to -311. Section 31A-26-213 provides a remedy for violation of insurance statutes and regulationsthe termination of the insurance adjuster's license through an administrative proceeding. Id. § 31A-26-213(2). Based on this statutory scheme, we are reluctant to infer that the legislature intended to create a private right of action without explicit statutory language to that effect. ¶ 28 Moreover, the language in section 31A-26-101(3) quoted by Machan appears more closely related to section 31A-26-303, entitled Unfair claim settlement practices. See id. § 31A-26-303. That section explicitly states that it does not create any private cause of action. Id. § 31A-26-303(5). We cannot conclude, as Machan urges, that the legislature intended to grant a private right of action to enforce section 31A-26-301 simply because that section omits the explicit denial of a private right contained in section 31A-26-303. Rather, the denial of the private right of action in section 31A-26-303 likely represents the legislature's rejection of the foreseeable argument that such a right should be inferred based on section 31A-26-101(3). ¶ 29 In further support of his argument, Machan cites the legislative history of the 2001 amendment to section 31A-26-303, indicating that the amendments may have been intended to allow named insureds, other than the insured who holds the contract with the insurer, to enforce the timely payment requirement. However, as we are concerned here only with the 2000 version of the statute, the history of the 2001 amendment is of little relevance. We express no opinion on whether the current version of the statute provides a private right of action. ¶ 30 In addition, here, Machan, as the policyholder, does have a contract remedy against UNUM for any breach of either the express terms of the contract or the implied covenant of good faith and fair dealing. Even in the absence of a private right of action under section 31A-26-301, we would deem it proper for a court to take into account the legislature's mandates, as well as the insurance commissioner's regulations, regarding insurance adjuster duties when making a determination of the parties' reasonable expectations under the contract. See, e.g., Utah Admin. Code R590-192-10 (2005) (indicating what the commissioner has determined to be the minimum standards for income replacement benefit determination); id. R590-192-12 (containing the commissioner's findings regarding what constitutes unfair claim settlement practices). The presence of a contract remedy, we think, weighs against any inference that the legislature intended to allow separate claims under section 31A-26-301. ¶ 31 Based on these considerations, we conclude the 2000 version of Utah Code section 31A-26-301 did not allow a private cause of action by an insured against an insurer.