Court Opinion

ID: 4122730
Source: CourtListenerOpinion
Date Created: 2017-02-02 17:20:00.980794+00
Date Added: 2024-06-11T09:20:29.751998
License: Public Domain

This opinion was filed for record

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                                               ~~ SUSAN L. CARLSON
                                                         SUPREME COURT CLERK

     IN THE SUPREME COURT OF THE STATE OF WASHINGTON

ISIDORO PEREZ-CRISANTOS,           )
a single man,                      )
                                   )
                    Appellant,     )          No. 92267-5
                                   )
       v.                          )
                                   )          EnBanc
STATE FARM FIRE AND                )
CASUALTY COMPANY,                  )
a foreign insurance company, and   )
DOE CORPORATIONS I through V, )
                                   )
                    Respondents.   )          Filed FEB 0 2      2017
                               ___ )

      GONZALEZ, J. - In 2007, the legislature passed, and the voters of this

state ratified, the Insurance Fair Conduct Act (IFCA), RCW 48.30.015.

IFCA gives insureds a new cause of action against insurers who

unreasonably deny coverage or benefits. RCW 48.30.015(1). IFCA also

directs courts to grant attorney fees and authorizes courts to award triple

damages if the insurer either acts unreasonably or violates certain insurance

regulations. RCW 48.30.015(2)-(3), (5). These regulations broadly address

unfair practices in insurance, not just unreasonable denials of coverage or
Perez-Crisantos v. State Farm, No. 92267-5

benefits. RCW 48.30.015(5). We are asked to decide whether 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. 1 We conclude it did not and affirm.

                                        FACTS

       In November 2010, Isidoro Perez-Crisantos was waiting to turn left

off snowy Wellesley Avenue in Spokane when his car was struck from

behind by Martin Reyes. Clerk's Papers (CP) at 5, 391. Perez-Crisantos

was injured and incurred more than $50,000 in medical bills that he contends

were the result of the accident. Perez-Crisantos had first party personal

injury protection (PIP) and underinsured motorist insurance (UIM) coverage

from State Farm Fire and Casualty Company. State Farm paid the PIP

coverage limits of $10,000 in medical expenses and $400 in lost wages.

Reyes carried $25,000 in liability insurance. Perez-Crisantos settled with

Reyes for his policy limits and made a first party UIM claim to State Farm

for the remaining damages resulting from the accident.            State Farm did not

pay benefits under the UIM policy. According to Perez-Crisantos, State

1
  The concurrence objects to the way we have framed the issue, suggesting that this
caused us to stray from the language and intent of IF CA. But it is the concurrence that
strays from RCW 48.30.015. Rather than insert language into the statute that the
legislature purposefully omitted, our decision comports with the actual language ofRCW
48.30.015 and is framed consistently with the way the parties have framed the issue.

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Perez-Crisantos v. State Farm, No. 92267-5

Farm denied his UIM claim after its adjustor, who was not a medical expert,

concluded that Perez-Crisantos was seeking benefits for excessive

chiropractic treatment and an unrelated shoulder surgery. According to State

Farm, it has "not denied underinsured motorist benefits to Mr. Perez-

Crisantos. It does disagree with the valuation [counsel] has placed on his

claim." CP at 386. Either way, after Perez-Crisantos objected to the denial,

State Farm sent the file to a doctor, who concurred with the lay adjustor's

conclusions.

      Perez-Crisantos sued on a variety of grounds. Among other things, he

alleged that State Farm had violated IFCA, several of IFCA' s implementing

regulations, and the Consumer Protection Act (CPA), chapter 19.86 RCW.

He also brought bad faith and negligence claims. Most of the claims were

stayed while the UIM claim was sent to arbitration. The arbiter largely

found for Perez-Crisantos. Based on the damages awarded, it appears the

arbiter concluded the shoulder injury was related to the accident, disallowed

some of the chiropractic physical therapy treatments as excessive, and

awarded Perez-Crisantos a gross amount of about $51,000. After adjusting

for Reyes's settlement, PIP benefits, and attorney fees, Perez-Crisantos

received about $24,000 from the UIM arbitration. The court lifted the stay,

and Perez-Crisantos amended his complaint to make clear he was alleging an

                                       3
Perez-Crisantos v. State Farm, No. 92267-5

IFCA claim based on the violation of IFCA regulations relating to unfair

settlement practices. Specifically, he alleged that State Farm forced him to

litigate in order to get payments that were due to him.

      Meanwhile, Perez-Crisantos sought discovery about State Farm's

incentive programs and the personnel files of State Farm employees

involved in processing his claim, apparently seeking evidence that State

Farm's incentive program was improperly encouraging its employees to

deny claims or settle them for unreasonably low amounts. While it is not in

the record, it appears State Farm provided discovery on the incentive

programs but resisted release of the personnel files. The trial court allowed

some discovery about the employee compensation and reviewed some

materials under seal. The judge declined to order State Farm to release the

personnel files themselves, finding Perez-Crisantos had not made a

sufficient showing.

      State Farm moved for summary judgment dismissal, largely on the

merits. It argued that there was no genuine dispute that it had acted

reasonably and in good faith throughout the claims process, that Perez-

Crisantos had not alleged a cognizable claim, and that the parties merely had

a reasonable disagreement about the value of the claim. Unfortunately, the

record does not reveal State Farm's valuation of the UIM claim. Relying

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Perez-Crisantos v. State Farm, No. 92267-5

largely on unreported cases out of federal court, State Farm argued that a

delay in payment of UIM benefits until after arbitration is not a denial of

payment under IFCA. CP at 56-57 (citing Beasley v. State Farm Mut. Auto.

Ins. Co., 2014 WL 1494030, at *6 (W.D. Wash. Apr. 16, 2014) and Country

Preferred Ins. Co. v. Hurless, 2012 WL 2367073, at *4 (W.D. Wash. June

21, 2012)). Perez-Crisantos moved for partial summary judgment,

contending that State Farm had violated WAC 284-30-330(7)'s prohibition

on making a first party claimant litigate to recover '"amounts due under an

insurance policy by offering substantially less than the amounts ultimately

recovered in such actions.'" CP at 104 (quoting WAC 284-30-330(7)). He

also argued that State Farm's summary judgment motion was premature

because discovery on State Farm's employee incentive program was not

complete.

      At the summary judgment hearing, the trial judge took issue with

Perez-Crisantos's characterizing State Farm as having "made a zero offer"

on the UIM claim. Verbatim Report of Proceedings (VRP) at 10-11. In the

judge's view, "it verges on being misleading in terms of trying to evaluate

whether or not you have a basis for a summary judgment." Id. at 11.

Instead, the judge characterized State Farm as arguing that Perez-Crisantos

had been fully compensated for his injuries from Reyes's policy limits and

                                       5
Perez-Crisantos v. State Farm, No. 92267-5

State Farm's PIP payment. She concluded that "[t]here has never been one

scintilla of evidence" that State Farm's actions were "unreasonable and there

must have been some ulterior motive" for them, such as "some sort of

incentive program to 'lowball claims."' ld. at 27. She dismissed the case

with prejudice on the merits. Perez-Crisantos sought direct review, which

we granted.

                                   ANALYSIS

      This case is before us on appeal from summary judgment and asks us

to interpret a statute. Our review of both is de novo. Auto. United Trades

Org. v. State, 183 Wn.2d 842, 853-54,357 P.3d 615 (2015) (citing

Freeman v. State, 178 Wn.2d 387, 393, 309 P.3d 437 (2013); Lummi Indian

Nation v. State, 170 Wn.2d 247, 257-58, 241 P.3d 1220 (2010)). Summary

judgment "may be granted if the pleadings, affidavits, and depositions

before the trial court establish that there is no genuine issue of material fact

and that as a matter of law the moving party is entitled to judgment." Ruffv.

County ofKing, 125 Wn.2d 697,703,887 P.2d 886 (1995) (citing Dickinson

v. Edwards, 105 Wn.2d 457, 461, 716 P.2d 814 (1986)).

                          1. IFCA CAUSE OF ACTION

      For many years, insureds have been able to sue their insurers for

violations of certain insurance regulations in a CPA or bad faith action. See

                                        6
Perez-Crisantos v. State Farm, No. 92267-5

Truck Ins. Exch. v. VanPort Homes, Inc., 147 Wn.2d 751,764, 58 P.3d 276

(2002); Indus. Indemn. Co. v. Kallevig, 114 Wn.2d 907, 921-22, 792 P.2d

520 (1990). We must decide whether first party insureds can also sue their

insurance companies under IFCA for regulatory violations. This requires us

to determine the legislature's intent, which in this case includes the intent of

the voters who ultimately ratified IFCA. Dep 't ofEcology v. Campbell &

Gwinn, LLC, 146 Wn.2d 1, 9-10, 43 P.3d 4 (2002) (citing State v. J.M., 144

Wn.2d 472, 480, 28 P.3d 720 (2001)); see also Parents Involved in Cmty.

Sch. v. Seattle Sch. Dist. No. 1, 149 Wn.2d 660, 671, 72 P.3d 151 (2003)

(citing State v. Thorne, 129 Wn.2d 736,763, 921 P.2d 514 (1996)). If the

statute, read in the context of all the legislature has said on the subject, is

plain on its face, we will give it that plain meaning. Campbell & Gwinn,

146 Wn.2d at 11-12. If after reading the statute in context, it "remains

susceptible to more than one reasonable meaning, the statute is ambiguous

and it is appropriate to resort to aids to construction, including legislative

history." !d. at 12 (citing Cockle v. Dep 't ofLabor & Indus., 142 Wn.2d

801, 808, 16 P.3d 583 (2001)).

       RCW 48.30.015 says in most relevant part:

       (1) Any first party claimant to a policy of insurance who is
       unreasonably denied a claim for coverage or payment of benefits by
       an insurer may bring an action in the superior court of this state to
       recover the actual damages sustained, together with the costs of the

                                         7
Perez-Crisantos v. State Farm, No. 92267-5

      action, including reasonable attorneys' fees and litigation costs, as set
      forth in subsection (3) of this section.

             (2) The superior court may, after 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,
      increase the total award of damages to an amount not to exceed three
      times the actual damages.

             (3) The superior court shall, after a finding of unreasonable
      denial of a claim for coverage or payment of benefits, or after a
      finding of a violation of a rule in subsection (5) of this section, award
      reasonable attorneys' fees and actual and statutory litigation costs,
      including expert witness fees, to the first party claimant of an
      insurance contract who is the prevailing party in such an action.

            (5) A violation of any of the following is a violation for the
      purposes of subsections (2) and (3) of this section:

             (a) WAC 284-30-330, captioned "specific unfair claims
      settlement practices defined."

      The relationship between subsections (2), (3), and (5) is, as Judge

Peterson put it, "vexing." Workland & Witherspoon, PLLC v. Evanston Ins.

Co., 141 F. Supp. 3d 1148, 1155 (E.D. Wash. 2015). Subsections (2) and (3)

give the trial court the discretion to award triple damages and directs that it

award attorney fees if the insurer is found to have acted unreasonably or

violated listed insurance regulations. Subsection (5) lists the relevant

regulations. But given that the trier of fact must find that the insurer acted

unreasonably under subsection (1 ), and that such a finding mandates

                                        8
Perez-Crisantos v. State Farm, No. 92267-5

attorney fees under subsection (3) and gives the trial court discretion to

award treble damages under subsection (2), it is not clear what a finding of a

regulatory violation accomplishes.

      The regulations in question are long-standing and have long been

enforceable by the insurance commissioner, and, in some cases, by first

party insureds in bad faith or CPA actions. LAWS OF 1947, ch. 79 § 30.01

(partially codified at RCW 48.30.010); Wash. St. Reg. 78-08-082 (Aug. 16,

1978); Truck Ins. Exch., 147 Wn.2d at 764; Kallevig, 114 Wn.2d at 921-22.

These regulations largely direct insurance companies to act fairly and

promptly. WAC 284-30-330, -350, -360, -370, -380. The violation of some

of these regulations could themselves be potentially actionable under IFCA

for that reason. See, e.g., WAC 284-30-330( 4) (declaring "[r]efusing to pay

claims without conducting a reasonable investigation" unfair). The violation

of some of these regulations are not necessarily enough, on their own, to be

actionable. For example, insurers are required to respond within 10 working

days to "communications from [an individual] claimant reasonably

suggesting that a response is expected." WAC 284-30-360(3). This would

be violated by a response on the 11th day.

       Perez-Crisantos argues that State Farm compelled him to litigate his

UIM claim through "a pre-suit offer of $0," CP at 104, which, he contends,

                                        9
Perez-Crisantos v. State Farm, No. 92267-5

violated insurance regulations that deem it unfair or deceptive to "[c]ompel[]

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). He contends that this regulatory

violation is independently actionable under IFCA. State Farm contends that

the statute clearly sets forth the basis for private causes of action and those

causes of action do not include regulatory violations.

       Local federal courts have split on this question. 2 For example, last

year, one judge found that IFCA does create an implied cause of action

under Washington law for violation of the listed regulations. Langley v.

GEICO Gen. Ins. Co., 89 F. Supp. 3d 1083, 1085 (E.D. Wash. 2015).

Another judge on the same bench found it did not. Workland, 141 F. Supp.

3d at 1156.

       Perez-Crisantos urges us to follow the Langley decision. 3 In Langley,

the court applied the three-part test set forth in Bennett v. 1-lardy, 113 Wn.2d

2
  A learned practitioner has observed that IFCA cases tend to be heard in federal court
sitting in diversity jurisdiction. Shannon M. Kilpatrick, Sounding the Alarm: Is Diversity
Jurisdiction Interfering with Washington State's Development ofits Own Body of Law
Related to the Insurance Fair Conduct Act?, 49 GONZ. L. REv. 553, 554 (2014). Many of
the cases are unreported.
3
  Perez-Crisantos also cites three cases for the proposition that recent federal cases allow
IFCA claims based on regulatory violations. Appellant's Br. at 22 (citing Merrill v.
Crown Life Ins. Co., 22 F. Supp. 3d 1137 (E.D. Wash. 2014); Hell Yeah Cycles v. Ohio

                                             10
Perez-Crisantos v. State Farm, No. 92267-5

912, 920-21, 784 P.2d 1258 (1990) and concluded that IFCA contains an

implied cause of action for violation of the listed regulations. Langley, 89 F.

Supp. 3d at 1089. Under that test, "we must resolve the following issues:

first, whether the plaintiff is within the class for whose 'especial' benefit the

statute was enacted; second, whether legislative intent, explicitly or

implicitly, supports creating or denying a remedy; and third, whether

implying a remedy is consistent with the underlying purpose of the

legislation." Bennett, 113 Wn.2d at 920-21 (quoting In re Wash. Pub.

Power Supply Sys. Sec. Litig., 823 F.2d 1349, 1353 (9th Cir. 1987)). The

Langley opinion concluded that the plaintiff was '"within the class for whose

especial benefit the statute was enacted."' Langley, 89 F. Supp. 3d at 1089

(quoting Bennett, 113 Wn.2d at 920). As Langley properly noted, the

specific purpose of IFCA was to provide insureds with another legal

resource against their insurer for wrongful denials. I d. The opinion

concluded that the implied remedy is consistent with IFCA's purpose of

protecting insureds. I d. at 1090-91 (citing Trinity Universal Ins. Co. ofKan.

v. Ohio Cas. Ins. Co., 176 Wn. App. 185,201,312 P.3d 976 (2013)).

Sec. Ins. Co., 16 F. Supp. 3d 1224 (E.D. Wash. 2014); Hover v. State Farm Mut. Auto.
Ins. Co., 2014 WL 4239655 (E.D. Wash. 2014)). All three cases say in passing that an
IFCA claim can be based on a regulatory violation, but none explain or apply that
statement. Merrill, 22 F. Supp. 3d at 1148; Hell Yeah Cycles, 16 F. Supp. 3d at 1235-36;
Hover, 2014 WL 4239655, at *4. We do not find them illuminating.

                                           11
Perez-Crisantos v. State Farm, No. 92267-5

      We respectfully disagree with the Langley opinion that legislative

intent supports creating an implicit IFCA cause of action. IFCA explicitly

creates a cause of action for first party insureds who were "unreasonably

denied a claim for coverage or payment ofbenefits." RCW 48.30.015(1).

IFCA does not state it creates a cause of action for first party insureds who

were unreasonably denied a claim for coverage or payment of benefits or

"whose claims were processed in violation of the insurance regulations listed

in (5)," which strongly suggests that IFCA was not meant to create a cause

of action for regulatory violations. '" [W]here a statute specifically

designates the things upon which it operates, there is an inference that the

Legislature intended all omissions."' State v. LG Elecs., Inc., 186 Wn.2d 1,

9, 375 P.3d 636 (2016) (quoting In re Pers. Restraint ofHopkins, 137 Wn.2d

897, 901, 976 P.2d 616 (1999)). And where the legislature includes

particular language in one section of a statute but omits it in another, the

exclusion is presumed intentional. Millay v. Cam, 135 Wn.2d 193, 202, 955

P.2d 791 (1998).

      We recognize that IFCA is ambiguous, and as it is ambiguous, courts

have appropriately turned to extrinsic evidence of legislative intent. See

Campbell & Gwinn, LLC, 146 Wn.2d at 12 (citing Cockle, 142 Wn.2d at

                                       12
Perez-Crisantos v. State Farm, No. 92267-5

808). The Langley court found evidence of legislative intent in the 2007

Voters' Pamphlet, which explained that

      "ESSB 5726 would authorize any first party claimant to bring a
      lawsuit in superior court against an insurer for unreasonably denying a
      claim for coverage or payment of benefits, or violation of specified
      insurance commissioner unfair claims handling practices regulations,
      to recover damages and reasonable attorney fees, and litigation costs."

Langley, 89 F. Supp. 3d at 1090 (emphasis added) (quoting Explanatory

Statement, Referendum Measure 67, State of Washington Voters Pamphlet,

General Election 14 (Nov. 6, 2007)). This court has considered the official

voter's pamphlet to determine the meaning of initiatives before. Parents

Involved in Cmty. Sch., 149 Wn.2d at 671 (citing Thorne, 129 Wn.2d at

763). The Langley court reasonably found the emphasized language

evidence of legislative intent to create a private cause of action for violation

of insurance regulations. See also FINAL B. REP. ON ENGROSSED SUBSTITUTE

S.B. 5726, at 1-2, 60th Leg., Reg. Sess. (Wash. 2007) (noting that under the

act, "[a] plaintiff may also recover damages upon a finding that the insurer

violated one of five rules adopted by the Office of the Insurance

Commissioner").

      However, as amicus curiae the American Insurance Association notes,

the ballot title that would have been in front of voters as they voted on IFCA

                                       13
Perez-Crisantos v. State Farm, No. 92267-5

did not suggest IFCA creates private cause of action for regulatory

violations. The official ballot title said:

       The legislature passed Engrossed Substitute Senate Bill 5726 (ESSB
       5726) concerning insurance fair conduct related to claims for
       coverage or benefits and voters have filed a sufficient referendum
       petition on this bill.

       This bill would make it unlawful for insurers to unreasonably deny
       certain coverage claims, and permit treble damages plus attorney fees
       for that and other violations. Some health insurance carriers would be
       exempt.

StateofWashington Voters Pamphlet, General Election 13 (Nov. 6, 2007),

http://www.sos.wa.gov/_assets/elections/Voters'%20Pamphlet%202007.pdf,

[https://perma.cc/9QB9-Y9QU].         This language does not suggest an intent

to create a private cause of action for regulatory violations. Quite the

opposite: it suggests that IFCA creates a cause of action for unreasonable

denials of coverage and also permits treble damages in some circumstances.

On balance, we conclude that the legislative history suggests that IFCA does

not create a cause of action for regulatory violations.

       We recognize that the pattern jury committee recently came to the

opposite conclusion. The pattern jury instruction for an IFCA claim

provides:

              (Name of plaintiff) claims that (name of insurer) has violated
       the Washington Insurance Fair Conduct Act. To prove this claim,
       (name of plaintiff) has the burden of proving each of the following
       propositions:

                                         14
Perez-Crisantos v. State Farm, No. 92267-5

             (1) That (name of insurer) [unreasonably denied a claim for
                 coverage] [unreasonably denied payment of benefits] [or]
                 [violated a statute or regulation governing the business of
                 insurance claims handling];

             (2) That (name ofplaintiff) was [injured] [damaged]; and

             (3) That (name of insurer's) act or practice was a proximate
                 cause of(name ofplaintiff'§} [injury] [damage].

             If you find from your consideration of all of the evidence that
      each of these propositions has been proved, your verdict [on this
      claim] should be for (name of plaintiff). On the other hand, if any of
      these propositions has not been proved, your verdict [on this claim]
      should be for (name of insurer).

6A WASHINGTON PRACTICE: WASHINGTON PATTERN JURY INSTRUCTIONS:

CNIJ_, 320.06.01 (6th ed. 2013 Supp.) (alterations in original). Put another

way, the pattern jury committee concluded that IFCA created a cause of

action if an insurer "unreasonably denied a claim for coverage," or

"unreasonably denied payment of benefits," or "violated a statute or

regulation governing the business of insurance claims handling." !d.

(emphasis added). That last alternative contemplates, at least, violations of

the regulations listed in RCW 48.30.015(5).

      But jury instn1ctions are not the law. State v. Brush, 183 Wn.2d 550,

557, 353 P.3d 213 (2015). It is not at all clear that implying a cause of

action is consistent with the legislature's intent as expressed in the actual

statutory language. As the Workland opinion observed in rejecting the claim

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Perez-Crisantos v. State Farm, No. 92267-5

that IFCA made regulatory violations actionable, "If the legislature truly

intended to create a third IFCA cause of action arising out of subsection (5),

they would have utilized the same or similar language as in subsection (1)."

Workland, 141 F. Supp. 3d at 1155. See also Morella, 2013 WL 1562032,

at *3 n.2 (rejecting similar claim); Hurless, 2012 WL 2367073, at *3-4

(same); Cardenas v. Navigators Ins. Co., 2011 WL 6300253, at* 6 (W.D.

Wash. Dec.16, 2011) (same). Instead, IFCA makes regulatory violations

relevant to the apportioned attorneys' fees and damages associated with that

derivative violation. See Mut. ofEnumclaw Ins. Co. v. Myong Suk Day, No.

75633-8-I, 2016 WL 7210718, at *8 (Wash. Ct. App. Dec. 12, 2016)

(apportioning attorney fees based on the issues prevailed upon at appeal).

This interpretation is consistent with our canons of statutory construction

prohibiting us from reading language into subsection (1) that the legislature

expressly omitted and from rendering any portion of subsections (2) and (3)

superfluous. Moreover, this interpretation is consistent with existing

precedent and avoids absurd results.    We note that the only reported

Washington state case on IFCA described the statute consistently with

Workland. See Ainsworth v. Progressive Cas. Ins. Co., 180 Wn. App. 52,

79,322 P.3d 6 (2014). Ainsworth notes that "[s]ubsection (1) describes two

separate acts giving rise to an IFCA claim. The insured must show that the

                                       16
Perez-Crisantos v. State Farm, No. 92267-5

insurer unreasonably denied a claim for coverage or that the insurer

unreasonably denied payment of benefits. If either or both acts are

established, a claim exists under IFCA." Id. (citing RCW 48.30.015).

      Finally, we note that it is unlikely the legislature would have intended to

create a private cause of action for violation of only some of the specific

regulations listed in RCW 48.30.015(5). For example, if we found that

violation of regulations listed in IFCA was independently actionable, then

"[m]aking a claim payment to a first party claimant or beneficiary not

accompanied by a statement setting forth the coverage under which the payment

is made," not responding until the 11th working day to "pertinent

communications from a claimant reasonably suggesting that a response is

expected," and notifying a claimant on the 16th day that a claim had been

accepted would all be actionable even if the insured was never unreasonably

denied coverage or the payment of benefits. See WAC 284-30-330(9), -360(3),

-380(1 ).

       We conclude that IFCA does not create an independent cause of

action for regulatory violations. 4

4
 The concurrence, purporting to avoid confusion surrounding IFCA's purpose and
scope, instead would perpetuate the confusion that already exists. Compare
Langley, 89 F. Supp. 3d 1083 (implied cause of action), with Workland, 141 F.
Supp. 3d 1148 (no implied cause of action). It simply prefers the current
confusion to a clear holding that subsections (2), (3), and (5) ofiFCA do not

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Perez-Crisantos v. State Farm, No. 92267-5

                            2. SUMMARY JUDGMENT

      Perez-Crisantos argues that summary judgment dismissal of his claims

was inappropriate because there were material facts in dispute. He also

contends that his partial summary judgment motion should have been

granted and that more discovery into State Farm's incentive programs was

required. The trial judge dismissed the case on the merits because she

concluded that State Farm had acted reasonably and that State Farm had not

'"lowball[ ed]' their insured such that their insured was required to litigate."

VRP at 24.

      Disparity between an offer and an arbitration award alone does not

establish a violation of WAC 284-30-330(7). Am. Mfrs. Mut. Ins. Co. v.

Osborn, 104 Wn. App. 686, 701, 17 P.3d 1229 (2001) (citing Keller v.

Allstate Ins. Co., 81 Wn. App. 624, 915 P.2d 1140 (1996)). There has to be

something more. !d. In this case, Perez-Crisantos suggests that something

more can be found in the fact PIP benefits were allowed based on the same

evidence and his suspicion that the incentive program created bad incentives.

But State Farm never disputed that some ofPerez-Crisantos's injuries came

from the accident; it is not necessarily inconsistent for an insurer to pay the

one and balk at the other based on its valuation of the claim. The fact State

create an independent implied cause of action in addition to that expressly created
in subsection (1 ).

                                         18
Perez-Crisantos v. State Farm, No. 92267-5

Farm paid PIP benefits is not sufficient to create a material question of fact

that State Farm violated insurance regulations by rejecting some ofPerez-

Crisantos' s UIM claim.

      As to the CPA claim, in order to prevail "a plaintiff must establish

five distinct elements: (1) unfair or deceptive act or practice; (2) occurring in

trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or

her business or property; (5) causation." Hangman Ridge Training Stables,

Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 780, 719 P.2d 531 (1986). A

CPA claim can be predicated on a violation of WAC 284-30-330. Kallevig,

114 Wn.2d at 923 ("A violation of WAC 284-30-330 constitutes a violation

ofRCW 48.30.010(1), which in turn constitutes a per se unfair trade practice

by virtue of the legislative declaration in RCW 19.86.170."). State Farm

agrees that an insured can establish the first and second elements of a CPA

claim by showing the insurer violated one of the relevant WAC provisions.

But State Farm contends that Perez-Crisantos has failed to make that

showing because he did not present a genuine issue of fact that it violated

any provision of WAC 284-30-330. We agree. Even taking the facts in the

light most favorable to Perez-Crisantos, as we must, he has not shown a

genuine issue that State Farm acted unreasonably.

                                        19
Perez-Crisantos v. State Farm, No. 92267-5

      Perez-Crisantos also argues that summary judgment was premature

because more discoveryinto State Farm's incentive programs was needed.

State Farm argues that Perez-Crisantos failed to object to summary judgment

on the record before the trial court. State Farm observes, correctly, that a

party can move for summary judgment before discovery is complete: "A

trial court may continue a summary judgment hearing if the nonmoving

party shows a need for additional time to obtain additional affidavits, take

depositions, or conduct discovery." Bldg. Indus. Ass 'n of Wash. v.

McCart~y,   152 Wn. App. 720, 742, 218 P.3d 196 (2009) (citing CR 56(f)).

"The trial court may deny a motion for a continuance when (1) the

requesting party does not have a good reason for the delay in obtaining the

evidence, (2) the requesting party does not indicate what evidence would be

established by further discovery, or (3) the new evidence would not raise a

genuine issue of fact." Butler v. Joy, 116 Wn. App. 291, 299, 65 P.3d 671

(2003) (citing Tellevik v. 31641 W. Rutherford St., 120 Wn.2d 68, 90, 838

P.2d 111, 845 P.2d 1325 (1992)). At the summary judgment hearing, the

trial judge specifically declined to allow more discovery into personnel files

of State Farm employees because she found insufficient evidence that such

an intrusion was appropriate to show the incentive program was having a

malign effect on claims processing. Perez-Crisantos did not specifically

                                       20
Perez-Crisantos v. State Farm, No. 92267-5

assign error to that ruling or show that it was in error. Given the facts

before trial judge at the time of summary judgment, we find no error. 5

                                 CONCLUSION

      We hold that an IFCA claim cannot be predicated on a regulatory

violation alone. We find that summary judgment was appropriately granted

and affirm.

5Perez-Crisantos's motion for attorney fees under RCW 48.30.015(3) and RCW
19.86.090 is denied.

                                        21
Perez-Crisantos v. State Farm, No. 92267-5

WE CONCUR:

                                    22
Perez-Crisantos v. State Farm Fire & Casualty Co.

                                    No. 92267-5

      STEPHENS, J. (concurring in result only)-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, litigation 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.

      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 ofWashington Administrative Code (WAC) 284-30-330(7). The majority

affirms this holding. It is therefore entirely unnecessary to decide whether a WAC
Perez-Crisantos v. State Farm Fire & Casualty Co., 92267-5
(Stephens, J., concurring in result only)

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

       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 2, 7.

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 (CPA),

chapter 19.86 RCW, and bad faith and negligence, as well as IFCA. I agree with

this decision.

       In granting summary judgment of dismissal, the superior court drew no

distinction between the plaintiffs allegations based on the WAC provision and his

overarching allegation that State Farm Fire and Casualty Company 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 ofProceedings (Aug. 21, 2015) (VRP) at 23. The court continued,

                                            -2-
Perez-Crisantos v. State Farm Fire & Casualty Co., 92267-5
(Stephens, J., concurring in result only)

"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." Jd. 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.").

                                              -3-
Perez-Crisantos v. State Farm Fire & Casualty Co., 92267-5
(Stephens, J., concurring in result only)

       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

       The majority concludes that "an IFCA claim cannot be predicated on a

regulatory violation alone." Majority at 21. 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." I d. at 2 (emphasis added). This framing of the issue

is somewhat confusing and leaves many questions unanswered.

       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)

                                            -4-
Perez-Crisantos v. State Farm Fire & Casualty Co., 92267-5
(Stephens, J., concurring in result only)

(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 Work/and that the relationship between subsections (2), (3), and (5) is

"vexing." Work/and, 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.

      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 ofRCW 48.30.015, RCW 48.30.010(7) references IFCA's

language prohibiting insurers from "unreasonably deny[ing] 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.

       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

                                          -5-
Perez-Crisantos v. State Farm Fire & Casualty Co., 92267-5
(Stephens, J., concurring in result only)

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.

      I believe a problem with the majority's analysis is that it asks the wrong

question, i.e., whether subsections (2), (3), and (5) ofiFCA create an implied cause

of action in addition to that expressly created in subsection (1). 1 Rather than asking

what the statute implies, we should consider what 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

       1 Infairness 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 F.
Supp. 3d at 1084-85; Appellant's Br. at 22-27; Br. ofResp't State Farm at 16-20; Br. of
Amicus Curiae Am. Ins. Ass'n at 7-11; Br. of Amicus Curiae Wash. State Ass'n for Justice
Found. at 14.

                                            -6-
Perez-Crisantos v. State Farm Fire & Casualty Co., 92267-5
(Stephens, J., concurring in result only)

(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 (I) intending to broaden available remedies should not be misread to

restrict them.

      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 ofiFCA but concur in its decision to affirm the

summary judgment order of dismissal.

                                          -7-
 Perez-Crisantos v. State Farm Fire & Casualty Co., 92267-5
(Stephens, J., concurring in result only)

                                           -8-