Court Opinion

ID: 4716865
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:45:47.890803+00
Date Added: 2024-06-11T08:07:28.896424
License: Public Domain

Stephens, J.
(concurring in result only)
¶27 In 2007, the legislature enacted and the people ratified the Insurance Fair Conduct Act (IFCA), RCW 48.30.015, to strengthen the remedies and penalties available for the unfair handling of first-party insurance claims. To date, *687litigation under IFCA has proceeded mainly in federal court, with this case marking the first time this court has been asked to entertain arguments as to the statute’s meaning. Encouraged by amici, the majority embraces this opportunity to offer an interpretation, even though interpreting IFCA is unnecessary and irrelevant to the resolution of this case.
¶28 We should await an appropriate case before taking such a significant step, and instead resolve this appeal on the grounds reached below. The superior court dismissed this case on summary judgment because the plaintiff could not establish a violation of Washington Administrative Code (WAC) 284-30-330(7). The majority affirms this holding. It is therefore entirely unnecessary to decide whether a WAC violation gives rise to an implied cause of action under IFCA. I fear that the majority’s gratuitous “holding” on IFCA will lead to confusion and will frustrate the intent of this remedial statute. I respectfully dissent from that holding, though I concur in the decision to affirm the superior court’s order on summary judgment.

I. This Appeal Does Not Require the Court To Decide Whether a WAC Violation Supports Remedies and Penalties under IFCA

¶29 The majority frames the issue in this case as whether a violation of WAC 284-30-330(7) supports an implied cause of action under IFCA. Majority at 672, 676. Nonetheless, it ultimately agrees with the superior court that Isidoro Perez-Crisantos failed to present sufficient evidence of a violation of the insurance regulation. It thus affirms the dismissal of his claims based on the Consumer Protection Act, chapter 19.86 RCW, and bad faith and negligence, as well as IFCA. I agree with this decision.
¶30 In granting summary judgment of dismissal, the superior court drew no distinction between the plaintiff’s allegations based on the WAC provision and his overarching allegation that State Farm Fire and Casualty Com*688pany acted unreasonably. The court noted, “We do not have a lot of law on IFCA. We have quite a bit of law on some of these WACs. The point is that the issue for the court is to determine if the insurance company is acting reasonably or unreasonably.” Verbatim Report of Proceedings (Aug. 21, 2015) (VRP) at 23. The court continued, “The issue before the court is whether or not State Farm reasonably handled this claim, and that their position was a reasonable position. And that they did not ‘lowball’ their insured such that their insured was required to litigate. That is what this claim is about.” Id. at 24. Here, the superior court was plainly describing a claim under WAC 284-30-330(7), which addresses unfair settlement conduct that forces an insured to arbitrate or litigate. That provision states:
The following [practices] are hereby defined as unfair methods of competition and unfair or deceptive acts or practices of the insurer in the business of insurance, specifically applicable to the settlement of claims:

(7) Compelling a first party claimant to initiate or submit to litigation, arbitration, or appraisal to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in such actions or proceedings.
WAC 284-30-330(7). The superior court explained:
The gravamen of the WAC is that the plaintiff is being forced to [arbitrate or litigate] because of the intransigence and unreasonableness of the first party insurance company. My view is that is not what . . . went on in this case. There was a reasonable dispute between the two parties that ultimately had to be resolved through an arbitration proceeding, and it was.
VRP at 26-27. Having concluded that State Farm did not violate WAC 284-30-330(7)—or more generally act unreasonably—the superior court determined that further proceedings (including additional discovery) were unnecessary. Id. at 29 (“Really, the discussion ends at that point.”).
*689¶31 Understanding the basis for the superior court’s summary judgment ruling, which the majority affirms, this case is not an appropriate vehicle for deciding whether a WAC violation (if proved) could support liability under IFCA. While the briefing before this court invites consideration of that broader issue, we should resist. I would await better briefing and a full opportunity to consider the impact of an IFCA holding in a case where it matters.

II. The Majority’s Putative “Holding” Adds to the Confusion Surrounding IFCA’s Purpose and Scope

¶32 The majority concludes that “an IFCA claim cannot be predicated on a regulatory violation alone.” Majority at 686. To reach this conclusion, it frames the issue in terms of whether the cause of action created in IFCA’s subsection (1) is exclusive, or whether instead “IFCA also created a new and independent private cause of action for violation of these regulations in the absence of any unreasonable denial of coverage or benefits.” Id. at 672 (emphasis added). This framing of the issue is somewhat confusing and leaves many questions unanswered.
¶33 As the majority notes, federal district courts in Washington have considered whether there is an implied cause of action under IFCA premised on violations of certain WAC provisions. See Langley v. GEICO Gen. Ins. Co., 89 F. Supp. 3d 1083 (E.D. Wash. 2015) (holding there is an implied cause of action); Workland & Witherspoon, PLLC v. Evanston Ins. Co., 141 F. Supp. 3d 1148 (E.D. Wash. 2015) (disagreeing with Langley). These courts have found it difficult to make sense of all the language in IFCA under such a framework, with Judge Rosanna Malouf Peterson noting in Workland that the relationship between subsections (2), (3), and (5) is “vexing.” Workland, 141 F. Supp. 3d at 1155. It may be that the difficulty arises not from any inherent flaw in IFCA but from addressing the question in terms of an implied cause of action separate from that provided in subsection (1), rather than reading IFCA in light of its purpose under chapter 48.30 RCW.
*690¶34 Chapter 48.30 RCW addresses unfair practices and fraud in the business of insurance. RCW 48.30.010 generally outlines available “remedies and penalties” against insurers who engage in unfair or deceptive acts or practices. Amended alongside the enactment of RCW 48.30.015, RCW 48.30.010(7) references IFCA’s language prohibiting insurers from “unreasonably denying] a claim for coverage or payment of benefits to any first party claimant.” Importantly, chapter 48.30 RCW does not purport to enumerate all available causes of action; instead, it contemplates a range of possible private actions, in addition to enforcement actions by the insurance commissioner. Private actions may include claims sounding in bad faith, negligence, or breach of contract, as well as statutory claims.
¶35 IFCA, as part of chapter 48.30 RCW, must be understood in this context. While RCW 48.30.015(1) creates a new cause of action based on unreasonable denials of claims for coverage or benefits, subsections (2) and (3) speak to new remedies and penalties superior courts are authorized or required to impose when certain findings are made. Subsections (2) and (3) refer to remedies and penalties based upon a 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.” RCW 48.30.015(2), (3) (emphasis added). The majority’s interpretation renders the second half of this sentence inoperative, requiring the superior court to find a violation of subsection (1) as a precondition to affording IFCA remedies and penalties—despite the obvious disjunctive phrasing.
¶36 I believe a problem with the majority’s analysis is that it asks the wrong question, i.e., whether subsections (2), (3), and (5) of IFCA create an implied cause of action in addition to that expressly created in subsection (l).6 Rather than asking what the statute implies, we should consider *691what it actually says. Subsections (2) and (3) expressly provide that the superior court may treble the proven actual damages and shall award reasonable attorney fees and costs upon finding a violation of the insurance regulations identified in subsection (5). Additionally, subsection (6) emphasizes that IFCA “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.” RCW 48.30.015(6). Reading IFCA’s language in context, it reflects the legislature’s awareness—an awareness that permeates chapter 48.30 RCW—that claims alleging unfair or deceptive insurance conduct may take a variety of forms. Indeed, multiple claims based on the same underlying conduct are generally brought in a single action, and the language in subsection (1) intending to broaden available remedies should not be misread to restrict them.
¶37 After the dust settles on this case, questions will remain as to what remedies and penalties IFCA authorizes, even if we accept as a holding the majority’s unnecessary conclusion that subsections (2), (3), and (5) do not create an implied cause of action. I believe today’s opinion will engender only further debate and not the definitive interpretation the majority is apparently reaching for. I would resolve this case on the grounds reached by the court below without addressing the question of whether a WAC violation alone can support a claim under IFCA. Accordingly, I dissent from the majority’s analysis of IFCA but concur in its decision to affirm the summary judgment order of dismissal.

 In fairness to the majority, the parties and amici sometimes frame the question this way, following the analysis of the federal district court in Langley. See Langley, 89 E Supp. 3d at 1084-85; Appellant’s Br. at 22-27; Br. of Resp’t State *691Farm at 16-20; Br. of Amicus Curiae Am. Ins. Assn at 7-11; Br. of Amicus Curiae Wash. State Assn for Justice Found, at 14.