Court Opinion

ID: 4711562
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:37:02.789235+00
Date Added: 2024-06-11T08:07:09.380798
License: Public Domain

Durham, C.J.
(concurring) — I agree with the majority that neither a presumption of harm nor coverage by estop*286pel applies when an insurer conducts a bad faith investigation of a first-party insured’s claim. I write separately to clarify that actual harm remains an essential element of a cause of action for bad faith handling of an insurance claim.
The majority identifies the first issue as whether a first-party insured may state a bad faith or Consumer Protection Act (RCW 19.86) (CPA) cause of action in the absence of coverage. In my view, this is a nonissue because the Court of Appeals’ decision below recognizes that a first-party insured may maintain a bad faith or CPA claim in the absence of coverage where the bad faith investigation actually harms the insured. Coventry Assocs. v. American States. Ins. Co., 86 Wn. App. 845, 851, 939 P.2d 1245 (1997) (“We hold that an insured may not bring a bad faith or Consumer Protection Act claim based on procedural errors or shortcomings in an insurer’s investigation unless the insurer wrongfully denies the claim or the errors harm the insured.” (emphasis added)). The majority, in resolving this nonissue, states that when an insurer breaches its duty to act in good faith, “a cause of action exists.” Majority at 281. At first blush, it might appear that the majority is suggesting that insurer bad faith alone is actionable.
Yet, the majority correctly observes that harm is an essential element of both bad faith and CPA causes of action and that the Plaintiff is entitled to recover only to the extent it can establish that it incurred expenses as a direct result of any bad faith on the part of the Defendant. Majority at 276, 283. Therefore, when an insurer breaches its duty to act in good faith, a cause of action exists only if such bad faith causes resulting harm to the insured. Because there are unresolved questions of fact as to whether the Defendant acted in bad faith and, if so, whether the Plaintiff suffered resulting harm, I agree with the majority that summary judgment was improperly granted.