Laurie Bridgham-Morrison v. National General Assurance Co. ( 2018 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 22 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LAURIE BRIDGHAM-MORRISON and No. 16-35479
DEREK MORRISON,
D.C. No. 2:15-cv-00927-RAJ
Plaintiffs-Appellants,
v. MEMORANDUM*
NATIONAL GENERAL ASSURANCE
COMPANY, a foreign insurer,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Washington
Richard A. Jones, District Judge, Presiding
Submitted May 7, 2018**
Seattle, Washington
Before: GOULD and IKUTA, Circuit Judges, and FREUDENTHAL,*** District
Judge.
Laurie Bridgham-Morrison (Plaintiff) appeals the district court’s grant of
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Nancy D. Freudenthal, United States District Judge for
the District of Wyoming, sitting by designation.
summary judgment in favor of National General Assurance Co. (NGAC) on her
claims for insurance bad faith and for violations of the Washington Insurance Fair
Conduct Act (IFCA). We review de novo and affirm the district court’s grant of
summary judgment.
After an automobile accident, NGAC paid Plaintiff the policy maximum
under her personal injury protection (PIP) policy, and the motorist who struck
Plaintiff’s vehicle paid his insurance policy maximum. Plaintiff then sought to
recover additional damages under her underinsured motorist (UIM) policy. In fall
2013, after offsetting for money already received under the PIP policy and from
the motorist’s insurer, NGAC offered Plaintiff an additional $20,000 to settle her
claim. In total, the insurance payments covered Plaintiff’s then-documented
economic damages and gave an additional sum for non-economic damages based
on internal NGAC estimates. Plaintiff rejected this offer and negotiations stalled
and no settlement was reached.
Plaintiff hired a new attorney in late 2013, and between December 2013 and
October 2014, Plaintiff’s new attorney sent many letters demanding a payment
higher than the $20,000 that NGAC had previously offered. Those letters gave
little to no explanation for why a higher payment would be appropriate, and they
did not document a justification for additional payments. In early 2014 an NGAC
claims adjuster had some questions about causation and asked Plaintiff for
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additional employment and medical documentation. Despite repeated requests,
Plaintiff refused to turn over these documents until April 2015, on the eve of
litigation. Eventually, but only after litigation started, NGAC tendered the policy
maximum.
Under both the common law tort of insurance bad faith and the IFCA, the
controlling question is whether the insurer acted unreasonably. See Mut. of
Enumclaw Ins. Co. v. Dan Paulson Constr., Inc., 161 Wash. 2d 903, 916 (2007);
Wash. Rev. Code § 48.30.015. Plaintiff argues that NGAC’s investigation was
unreasonable because it did not include certain categories of economic and non-
economic damages. Most of these claimed damages were never mentioned by
Plaintiff before litigation, and they were not included in Plaintiff’s initial demands.
Plaintiff contends that NGAC had a duty to investigate these damages whether or
not she ever claimed them. We reject this argument.
Here, NGAC granted coverage for all documented economic damages, and
estimated non-economic damages based on the records Plaintiff provided. In early
communications with NGAC, Plaintiff’s counsel represented that Plaintiff had
“largely recovered from her injuries” and “was able to get back to work” after her
second shoulder surgery. In such circumstances, NGAC could reasonably have
concluded that the information given before NGAC’s settlement offer was all that
was necessary to evaluate the claim. That NGAC may not have covered some
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categories of damages does not make their investigation unreasonable, especially
where, as here, Plaintiff was represented by counsel, those damages were never
claimed by Plaintiff, and Plaintiff refused to turn over medical and employment
documents requested by NGAC.
We see no basis in Washington law to require an insurer to discover
additional damages that the insured never claimed or documented. Without some
contrary guidance from the Washington courts, we decline to hold that Washington
law imposes a duty on an insurer to intuit what a plaintiff’s damages might be.
The investigation here, which involved a police report, medical records, an earning
loss statement from Plaintiff’s employer, and a damage statement listing medical
expenses and lost wages, is not meaningfully distinguishable from the investigation
in Anderson v. State Farm Mut. Ins. Co., 101 Wash. App. 323, 334 (2000). In
Anderson, a Washington court of appeals affirmed a grant of summary judgment in
favor of an insurer on a failure to investigate claim. Id. at 335. Plaintiff claims that
the valuation of her non-economic damages was too low. But disagreement about
the amount of damages based on available evidence cannot ground a claim for
failure to investigate. See id. at 334.
Plaintiff also argues that NGAC’s settlement offers were unreasonable
because NGAC offered less than was ultimately recovered, and because NGAC
forced Plaintiff into litigation to recover what she was owed under the policy. In
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Perez-Crisantos v. State Farm Fire & Cas. Co., the Washington Supreme Court
held that a disparity between an offer and the amount ultimately recovered does
not, on its own, give a basis for a claim of bad faith—the plaintiff must show
something more. 187 Wash. 2d 669, 684 (2017).
Plaintiff has the burden of establishing that NGAC’s offer was not
“reasonable in light of evidence available at the time the offer was made.” Lloyd v.
Allstate Ins. Co., 167 Wash. App. 490, 497 (2012); see also, Smith v. Safeco Ins.
Co., 150 Wash. 2d 478, 485-86 (2003) (“[T]he insured must come forward with
evidence that the insurer acted unreasonably. The policyholder has the burden of
proof.”). Plaintiff presented no evidence that the settlement offer was
unreasonably low based on the information NGAC had when it made the offer.
Plaintiff contends that NGAC had two different internal estimates of
damages for her shoulder injury, and that NGAC’s initial offer was based on the
lower estimate. This, she claims, supports her contention that the offer was
unreasonably low. But assessing non-economic damages is hardly scientific. See
Dayton v. Farmers Ins. Grp., 124 Wash. 2d 277, 280–81 (1994) (noting that in
assessing personal injury damages, there is “no precise valuation formula with
which to calculate awards” and that “[l]egitimate differences of opinion in the
value of a claim negotiated in good faith do not deprive an insured of the benefit of
coverage bargained for”). An internal disagreement within NGAC about the
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amount of non-economic damages does not show that the second estimate on
which the offer was based was unreasonable.
Plaintiff also argues that violations of Washington state insurance
regulations are per se IFCA violations and per se good faith violations, and that
there are material disputes of fact as to whether NGAC violated some of the
regulations. The Washington Supreme Court has held that merely violating a
regulation is not a per se violation of the IFCA. See Perez-Crisantos, 187 Wash.
2d 669 at 683–84. A court must still assess whether the insurer acted
unreasonably. We hold that based on the record presented, no reasonable juror
could conclude that NGAC acted unreasonably. For the same reason, we reject
Plaintiff’s argument that a violation of the Washington state insurance regulations
constitutes a per se breach of the duty of good faith.
AFFIRMED.
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