Court Opinion

ID: 9628505
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:22:27.768117+00
Date Added: 2024-06-11T18:07:06.625560
License: Public Domain

*677Pearson,
(concurring in part, dissenting in part) — I concur with parts I and II of the majority opinion. However, I am unable to fully concur with part III of that opinion wherein the majority remands to the trial court for a determination of whether Federated American Insurance Company (FAIC) has violated the Consumer Protection Act (RCW 19.86) by engaging in conduct defined as "unfair or deceptive" by WAC 284-30-330, which provides in relevant part:
The following are hereby defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:
(6) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.
(13) Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.
I think it inappropriate to remand this case for a determination of whether FAIC's denial of coverage violated WAC 284-30-330(6). In order to find that FAIC acted in bad faith, the trial court would have to find that FAIC's denial of benefits was "frivolous and unfounded". Miller v. Indiana Ins. Cos., 31 Wn. App. 475, 479, 642 P.2d 769 (1982). Such a finding would be unsupportable in this case. FAIC's denial of coverage was grounded on genuine public policy concerns. The reasonableness of FAIC's arguments is attested to by the fact that the trial court and Court of Appeals both held in favor of FAIC. I am sure the majority does not intend to characterize the decisions of the learned judges below as frivolous or unfounded. Yet, it seems to me that by remanding this case for a determination of whether FAIC acted in good faith, the majority has done just that.
FAIC's denial of coverage, although it was incorrect, was reasonable. An insurer who reasonably disputes a claim does not act in bad faith as a matter of law. Miller, at 479. *678Thus, I would limit the scope of the trial court's inquiry on remand to a determination of whether FAIC engaged in the conduct described in WAC 284-30-330(13). The issue of good faith should not be considered.
Utter, Dolliver, and Dimmick, JJ., concur with Pearson, J.