|In a matter of first impression, the Washington Court of Appeals Division 2 has held noneconomic damages are available in Insurance Fair Conduct Act (“IFCA”) claims.
The case involved a claim by Jerymaine Beasley, who was a passenger in a vehicle driven by Anar Askerov. Askerov had a UIM policy with Geico. They were involved in an accident and the at-fault driver had a policy limit of $25,000, implicating Askerov’s UIM policy. Geico offered $10,000 to settle, and Beasley demanded $100,000. Beasley sued Geico for insurance bad faith, violation of the Consumer Protection Act (“CPA”), breach of contract, and IFCA violations.
At trial, the court granted Geico’s motion to exclude noneconomic damages claimed by Beasley. In doing so, the trial court concluded that the IFCA claim did not include noneconomic damages because the claim sounded in negligence rather than intentional tort.
The jury found that Beasley had proven his IFCA claim and that Beasley’s IFCA-related damages were $84,000. The jury further found that Beasley proved his insurance bad faith claim and that he had incurred $400,000 in noneconomic damages related to that claim. Beasley appealed as to the grant of Geico’s motion to exclude noneconomic damages, as well as on other matters. Geico cross-appealed on other issues.
On appeal, Beasley argued that the trial court erred when it ruled that noneconomic damages are not “actual damages” under RCW 48.30.015, and that they are therefore not recoverable and subject to trebling under IFCA. Beasley argued “the plain language” of RCW 48.30.015 and the “purpose of IFCA” demonstrate that “actual damages” include noneconomic damages. GEICO argued the trial court did not err when it excluded noneconomic damages from the damages available under IFCA, because such damages are limited to intentional torts under prior case law, and because the legislative history was void of evidence the legislature intended to include noneconomic damages as actual damages under IFCA.
The Washington Court of Appeals held the legislative history demonstrated noneconomic damages were included in “actual damages” under RCW 48.30.015. In arriving at this conclusion the court looked to the statutory language as well as a prior available remedy under the CPA, which precluded recovery for personal injuries. The Court then found the voters’ pamphlet for the referendum stated the purpose of IFCA was to deter unreasonable delay of payment and denial of legitimate insurance claims.
The natural result of this case is increased exposure for insurers in insurance bad faith litigation. We would be happy to chat further about this important update in Washington law. For more information, please contact Christina Anh Ho.