Justia Consumer Law Opinion Summaries

Articles Posted in Washington Supreme Court
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Krista Peoples and Joel Stedman filed Washington Consumer Protection Act ("CPA") suits against their insurance carriers for violating Washington claims-handling regulations and wrongfully denying them personal injury protection (PIP) benefits. The federal district court for the Western District of Washington certified a question of law relating to whether Peoples and Stedman alleged an injury to "business or property" to invoke their respective policies' PIP benefits. Peoples alleged her insurance carrier refused, without any individualized assessment, to pay medical provider bills whenever a computerized review process determined the bill exceeded a predetermined limit, and that the insurance company's failure to investigate or make individualized determinations violated WAC 284-30-330(4) and WAC 284-30-395(1). Due to this practice of algorithmic review, the insurance carrier failed to pay all reasonable medical expenses arising from a covered event, in violation or RCW 48.22.005(7). Stedman alleged his carrier terminate PIP benefits whenever an insured reached "Maximum Medical Improvement," which he alleged violated WAC 284-30-395(1). The Washington Supreme Court held an insurance carrier's wrongful withholding of PIP benefits injures the insured in their "business or property." An insured in these circumstances may recover actual damages, if proved, including out-of-pocket medical expenses that should have been covered, and could seek injunctive relief, such as compelling payment of the benefits to medical providers. Other business or property injuries, apart from wrongful denial of benefits, that are caused by an insurer's mishandling of PIP claims are also cognizable under the CPA. View "Peoples v. United Servs. Auto. Ass'n" on Justia Law

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While driving his truck, Moun Keodalah and an uninsured motorcyclist collided. After Keodalah stopped at a stop sign and began to cross the street, the motorcyclist struck Keodalah's truck. The collision killed the motorcyclist and injured Keodalah. Keodalah's insurance policy with Allstate Insurance Company included underinsured motorist (UIM) coverage. Keodalah requested Allstate pay him his UIM policy limit of $25,000. Allstate refused, offering $1,600 based on its assessment Keodalah was 70% at fault for the accident. After Keodalah asked Allstate to explain its evaluation, Allstate increased its offer to $5,000. Keodalah sued Allstate asserting a UIM claim. The ultimate issue before the Washington Supreme Court in this case was whether RCW 48.01.030 provided a basis for an insured's bad faith and Consumer Protection Act claims against an insurance company's claims adjuster. The Supreme Court held that such claims were not available, and reversed the Court of Appeals. View "Keodalah v. Allstate Ins. Co." on Justia Law

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At issue in this case was whether a first-party insurer, after obtaining a partial recovery in a subrogation action, had to reimburse its fault-free insureds for the full amount of their deductibles before any portion of the subrogation proceeds could be allocated to the insurer. Lazuri Daniels brought claims, and sought class action status, in a lawsuit against State Farm Mutual Automobile Insurance Company arguing that by failing to fully reimburse its insureds for their deductibles, State Farm violated both Washington law and the terms of its own insurance policy. The trial court dismissed the claims, and the Court of Appeals affirmed. In addressing conflicts between subrogated insurers and injured insureds, Washington law generally establishes priority for the interests of the insured through the "made whole doctrine." "Out of the recovery from the third party the insured is to be reimbursed first, for the loss not covered by insurance ,and the insurer is entitled to any remaining balance, up to a sum sufficient to reimburse the insurer fully, the insured being entitled to anything beyond that." If the insured still has uncompensated injuries, both the insurer and insured will generally be looking to recover from the same third party, and that party's own insurance and assets are not always sufficient to cover both claims. In such circumstances, there is a high potential for conflict between insureds who wish to be compensated for the full extent of the damages they have suffered, and first-party insurers who expect to be reimbursed for amounts they have advanced to the insured. Daniels argued that insureds' right to be fully compensated for their losses, including full reimbursement for deductibles, takes priority over an insurer's interest in recouping its payments through a direct subrogation action. The Washington Supreme Court concluded Daniels' complaint asserted valid claims for relief under the common law, under Washington insurance regulations, and under State Farm's own policy language. As such, dismissal was improper. The matter was remanded to the trial court for further proceedings. View "Daniels v. State Farm Mut. Auto. Ins. Co." on Justia Law

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Kenneth Wright received an unsolicited text message that appeared to come from an acquaintance inviting him to download Lyft's cellphone application. Wright sued as a putative class member. The federal district court has certified questions of Washington law to the Washington Supreme Court pertaining to the Washington Consumer Electronic Mail Act (CEMA) and the Washington Consumer Protection Act (CPA). The questions centered on whether (1) the recipient of a text message that violates the CEMA has a private right of action for damages (as opposed to injunctive relief) directly under the statute; and (2) whether the liquidated damages provision of CEMA establish a causation and/or injury elements of a claim under the CPA, or must a recipient of a text in violation of CEMA prove injury-in-fact before s/he can recover the liquidated amount. The Washington Supreme Court answered "no" to the first question, and "yes" to the second. View "Wright v. Lyft, Inc." on Justia Law

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In 2004, respondents Robert Ingersoll and Curt Freed began a committed, romantic relationship. In 2012, the Washington legislature passed Engrossed Substitute Senate Bill 6239, which recognized equal civil marriage rights for same-sex couples. Respondents intended to marry in September 2013. By the time he and Freed became engaged, Ingersoll had been a customer at Arlene's Flowers for at least nine years, purchasing numerous floral arrangements from Stutzman and spending an estimated several thousand dollars at her shop. Baroronelle Stutzman owned and was the president of Arlene's Flowers. Stutzman knew that Ingersoll is gay and that he had been in a relationship with Freed for several years. The two men considered Arlene's Flowers to be "[their] florist." Stutzman’s sincerely held religious beliefs included a belief that marriage can exist only between one man and one woman. Ingersoll approached Arlene's Flowers about purchasing flowers for his upcoming wedding. Stutzman told Ingersoll that she would be unable to do the flowers for his wedding because of her religious beliefs. Ingersoll did not have a chance to specify what kind of flowers or floral arrangements he was seeking before Stutzman told him that she would not serve him. They also did not discuss whether Stutzman would be asked to bring the arrangements to the wedding location or whether the flowers would be picked up from her shop. Stutzman asserts that she gave Ingersoll the name of other florists who might be willing to serve him, and that the two hugged before Ingersoll left her store. Ingersoll maintains that he walked away from that conversation "feeling very hurt and upset emotionally." The State and the couple sued, each alleging violations of the Washington Law Against Discrimination and the Consumer Protection Act (CPA). Stutzman defended on the grounds that the WLAD and CPA did not apply to her conduct and that, if they did, those statutes violated her state and federal constitutional rights to free speech, free exercise, and free association. The Superior Court granted summary judgment to the State and the couple, rejecting all of Stutzman's claims. Finding no reversible error in that judgment, the Supreme Court affirmed. View "Washington v. Arlene's Flowers, Inc." on Justia Law

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In 2007, the legislature passed, and the voters ratified, the Insurance Fair Conduct Act (IFCA), RCW 48.30.015. IFCA gave insureds a new cause of action against insurers who unreasonably deny coverage or benefits. IFCA also directed courts to grant attorney fees and authorizes courts to award triple damages if the insurer either acts unreasonably or violates certain insurance regulations. The issue this case presented for the Supreme Court's review was 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. The Court concluded it did not and affirmed. View "Perez-Crisantos v. State Farm Fire & Cas. Co." on Justia Law

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Historically, sovereigns were not subject to statutes of limitations without their explicit consent. Washington State consented to some statutes of limitations but not to others. The issue this case presented for the Washington Supreme Court's review in this case was whether Washington consented to a statute of limitations that would bar this antitrust suit filed by the Washington State attorney general on behalf of the State against more than 20 foreign electronics manufacturing companies. The State alleged that between at least March 1, 1995, through at least November 25, 2007, the defendants violated RCW 19.86.030, which prohibited any "contract, combination ... or conspiracy in restraint of trade or commerce," by agreeing to raise prices and agreeing on production levels in the market for CRTs (cathode ray tubes) used in televisions and computer monitors before the advent of LCD (liquid crystal display) panels and plasma display technologies. Due to this unlawful conspiracy, the State alleges, Washington consumers and the State of Washington itself paid supracompetitive prices for CRT products. Ten of the defendants filed a motion to dismiss, arguing the claims were time barred because Washington's Consumer Protection Act (CPA) must be brought within four years. The State responded that RCW 19.86.120's statute of limitations did not apply to its claims under RCW 19.86.080. After review, the Supreme Court concluded the State's action for injunctive relief and restitution was exempt from the statute of limitations in RCW 19.86.120 and from the general statutes of limitations in chapter 4.16 RCW. View "Washington v. LG Elecs., Inc." on Justia Law

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Plaintiff Laura Jordan defaulted on a mortgage payment, and one day after returning home from work, she could not enter the house: the locks had been changed without warning. Nationstar Mortgage left a notice on the house that she needed to contact them to retrieve her belongings. Jordan removed those belongings the next day, and did not return. The house was secured by a deed of trust that contained provisions that allowed Nationstar to enter her home upon default without providing any notice. The issue this case presented for the Washington Supreme Court's review was whether those provisions conflicted with Washington law. Jordan represented a class action proceeding in federal court, which certified two questions of Washington law: (1) whether the deed of trust provisions conflicted with a Washington law that prohibited a lender from taking possession of property prior to foreclosure; and (2) whether Washington's statutory receivership scheme was the exclusive remedy by which a lender may gain access to the property. The Washington Supreme Court held that the deed of trust provisions in this case conflicted with Washington law because they allowed Nationstar to take possession of the property after default. Furthermore, the Court held that nothing in Washington law established the receivership statutes as an exclusive remedy. View "Jordan v. Nationstar Mortg., LLC" on Justia Law

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Plaintiff in this putative class action was a Texas resident. Plaintiff alleged she received deceptive debt collection letters from defendant Seattle Service Bureau Inc. (SSB), a corporation with its principal place of business in Washington, pursuant to the referral of unliquidated subrogation claims to SSB by State Farm Mutual Automobile Insurance Company, a corporation with its principal place of business in Illinois. Plaintiff alleges these letters constitute CPA violations by both SSB and State Farm as its principal. Plaintiff asserted she incurred damages caused by the alleged deceptive acts. This case involved two certified questions from the United States District Court for the Western District of Washington. First, the Washington Supreme Court was asked to determine whether the Washington Consumer Protection Act (CPA), chapter 19.86 RCW) allowed a cause of action for a plaintiff residing outside Washington to sue a Washington corporate defendant for allegedly deceptive acts. Second, the Court was asked to determine whether the CPA supported a cause of action for an out-of-state plaintiff to sue an out-of-state defendant for the allegedly deceptive acts of its instate agent. The United States District Court noted an absence of Washington case law providing guidance on these issues. The Washington Supreme Court answered both certified questions in the affirmative. View "Thornell v. Seattle Serv. Bureau, Inc." on Justia Law

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The issue before the Supreme Court in this case was whether particular officers and employees of a bank owed a quasi-fiduciary duty to particular bank depositors. Michael and Theresa Annechino deposited a large amount of money at a bank specifically to ensure that their savings would be protected by the Federal Deposit Insurance Corporation (FDIC). The Annechinos relied on bank employees’ recommendations of how to structure their accounts to meet FDIC coverage rules. Unfortunately, the bank went into receivership, and the FDIC found that nearly $500,000 of the Annechinos’ deposits were not insured. The Annechinos alleged that individual officers and employees of the bank owed them a duty, the breach of which resulted in their loss. The trial court granted summary judgment in favor of the individual defendants, and the Court of Appeals affirmed. Upon review, the Supreme Court affirmed the Court of Appeals. The officers and employees of the bank did not owe the Annechinos a quasi-fiduciary duty. Holding the officers and employees personally liable under these facts would have contravened established law regarding liability for acts committed on behalf of a corporation or principal. View "Annechino v. Worthy" on Justia Law