by Geoff Bedell | Oct 22, 2018 | Blog News, Publications
On October 17, 2018, the Oregon Court of Appeals held that a risk pool had the authority for its assessment of a former member. In Capital Credit & Collection Serv., Inc. v. Kerr Contractors, Inc., 294 Or App 486 (2018), a workers’ compensation risk pool assessed current and former members in response to the state raising capitalization requirements. A former member (the “Member”) refused to pay the assessment, contending that the risk pool did not have the authority on two grounds. First, the Member contended that, under the terms of the pooling agreement, the risk pool’s authority to assess former members was limited to two situations, neither of which was involved: payments to injured workers; and payments to the Workers’ Compensation Division. The Oregon Court of Appeal rejected the contention, finding that the assessment authority was broader. Second, the pooling agreement permitted assessments for former members as follows: “You are assessable while this agreement is in effect and for three years following its termination.” (Emphasis added). Focusing on the word “termination,” the Member contended that it was not subject to the assessment because its participation had been “cancelled” rather than “terminated.” The court rejected the argument, finding that the pooling agreement used the two words interchangeably.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Cristin Cavanaugh | Oct 22, 2018 | Blog News, Publications
In Baker v. Fireman’s Fund Insurance Company, et al., Case No. 76218-4-I (October 15, 2018), the Court of Appeals of the State of Washington held that the trial court acted well within its discretion in determining the insureds’ reasonable attorney fees in the amount of $1,209,757.25, through the use of the lodestar method and a 1.3 multiplier.
The Court of Appeals addressed both an appeal by the insureds and a cross-appeal by the insurance company. There was no dispute that the insureds were the prevailing party and thus entitled to reasonable attorney fees under Washington law. Consequently, the court’s analysis focused on whether the trial court abused its discretion in determining the insureds’ reasonable attorney fees.
As to the insureds’ appeal, the Court of Appeals held the trial court did not abuse its discretion in determining the reasonable attorney fees. The court held that the “primary consideration” in determining an appropriate award of attorney fees is reasonableness. The court held that the lodestar method is an established method of determining a reasonable attorney fee award. The Court of Appeals agreed with the trial court’s determination in excluding or reducing hours billed for fees related to the following: (1) tax foreclosure, as Fireman’s Fund promptly paid the bill after being notified, and the property tax bill was at best tangential to the Bakers’ claims against Fireman’s Fund; (2) fees related to PRP claims, as the Bakers failed to carry their burden to demonstrate the fees were non-duplicative or necessary for the Bakers’ claims against Fireman’s Fund; (3) fees incurred litigating against OneBeacon, as the common-fund doctrine did not apply and Fireman’s Fund likely secured its right to contribution from OneBeacon at the time the Bakers tendered their claim to OneBeacon, as the right was created by the continuous-trigger doctrine; and (4) fees for acting as Bakers’ personal counsel, as the tax consequences of the settlement were irrelevant to establishing Fireman’s Fund’s liability to the Bakers and the record showed that the parties agreed to settlement in principle.
The Court of Appeals also held that there was not an abuse of discretion by applying a 1.3 multiplier instead, of the insureds’ requested 2.5 multiplier. It reasoned that the trial court considered the risk (albeit not large) that no recovery might be obtained, the length of time it took to resolve, that the insureds’ private counsel recovered no fees or costs for up to nine years and the contingent nature of Bakers’ fee agreement, as proper reasons supporting a multiplier. The court’s decision was supported by its findings and substantial evidence and did not abuse its discretion in awarding a 1.3 multiplier to the lodestar fee.
As to the cross-appeal, the Court of Appeals found that the record before them demonstrated that the trial court had considered the entire record, and that the insurance company had failed to show that the trial court’s decision was manifestly unreasonable. The Court of Appeals also rejected the insurance company’s argument that it was error to calculate the lodestar without evidence of actual hourly rates. The Court of Appeals held that the trial court’s determination of reasonable hourly rates was supported by substantial evidence and was not an abuse of discretion.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Geoff Bedell | Oct 18, 2018 | Blog News, Publications
In two related cases, Unigard Ins. Co. v. Metro Metals Nw., Inc., 17-CV-05743-RBL (W.D. Wash. Oct. 11, 2018) and Alaska Nat’l Ins. Co. v. Metro Metals Nw., Inc., 1:17-CV-05765-RBL (W.D. Wash. Oct. 11, 2018), the federal district court held that the insurance companies’ policies did not provide coverage for the underlying claims against their mutual insureds.
The insureds had entered into an agreement with a port to use a dock for loading scrap metal onto ships. The dock was damaged, and the port demanded reimbursement for repairs, consistent with their agreement. The port subsequently sued the insureds. In separate opinions, the federal district court held that there was no coverage for the port’s underlying claims against the insureds. It reasoned that Exclusion j.(5), the Ongoing Operations Exclusion, applied to the claims. This exclusion bars coverage for property damage to “[t]hat particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations[.]” Soha & Lang, P.S., represented one of the insurance companies.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Jennifer Dinning | Sep 24, 2018 | Blog News, Publications
In Reverse Now VII, LLC v. Oregon Mutual Insurance Company, Case No. C16-209-MJP, 2018 WL 4510071 (W.D Wash. Sep. 18, 2018), the federal district court found that the insurance policy at issue was void as a matter of law due to material misrepresentation and concealment by the insured and its purported public adjuster.
The insurance claim underlying this litigation arose from a fire in an apartment unit in the building owned by the insured. The fire damaged the unit’s interior and approximately 2% of the building’s exterior cladding. The parties engaged in appraisal pursuant to the policy terms to determine the extent of the loss to the building’s exterior. The insured filed suit against Oregon Mutual before the appraisal was complete.
Through the course of litigation, Oregon Mutual learned that the insured’s purported public adjuster had applied for a public adjuster’s license, but failed to complete his application. Nonetheless, he held himself out as a public adjuster and performed the responsibilities of a public adjuster on behalf of the insured for more than two and a half years in violation of RCW 48.17.060.
Oregon Mutual also learned that the appraiser named by the insured was not impartial, but instead that the appraiser had been best friends with the purported public adjuster for decades and that the two were former business partners who had often worked on claims together.
On Oregon Mutual’s motion for summary judgment, the Court found that these misrepresentations were material as a matter of law. The Court rejected the insured’s argument that public adjuster licensing was an administrative issue that was irrelevant to the investigation of the insurance claim. The Court also found that the failure to disclose the long-term relationship between the purported public adjuster and the appraiser was material as a matter of law. The Court rejected the insureds’ argument that misrepresentations made by its agents could not be imputed to it.
On the basis of the insured’s material misrepresentations, the Court found the policy was void, and dismissed all claims, both contractual and extra contractual, against Oregon Mutual. Soha & Lang, P.S., represented Oregon Mutual in this matter.
by Jillian Henderson | Sep 19, 2018 | Blog News, Publications
In Emrys v. Farmers Ins. Co., 294 Or App 107, __ P3d ___ (Sept. 12, 2018), the insured owned two adjacent properties, with addresses at 106 Cofey Crossing Lane (“106 Property”) and 108 Cofey Crossing Lane (“108 Property”), insured under two separate policies. The insured let the policy for the 106 Property lapse. After the insured’s death, the estate’s personal representative learned of the properties and informed the insurer she wanted to continue the existing policy. After a fire loss at the 106 Property, the insurer denied the claim because it had only issued coverage for the 108 Property. The personal representative filed a lawsuit seeking to reform the policy to include the 106 Property. On remand from a prior appeal,[1] the trial court concluded that the reformation claim failed because there was no showing of the requisite antecedent agreement. The Court of Appeals reversed. The appellate court exercised its power to review the case de novo because, among other things, the matter was on appeal for the second time on virtually the same issue. The Court of Appeals found that, on the undisputed facts, the parties had reached an antecedent agreement to insure the 106 Property and, therefore, reform was warranted.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
[1] See Emrys v. Farmers Ins. Co., 275 Or App 691, 365 P3d 1119 (2015).
by Rachel Rubin | Jul 20, 2018 | Blog News, Publications
In a 5-4 split decision, the Washington Supreme Court held in
Afoa v. Port of Seattle, No. 94525-0 (July 19, 2018) that RCW 4.22.070.(1)(a) preserves joint and several liability when a defendant is vicariously liable for another’s fault, but whether vicarious liability exists is a factual question.
The Plaintiff, Brandon Apela Afoa, commenced this action against the Port of Seattle for injuries sustained during his employment with an independent contractor operating at Sea-Tac International Airport. At trial, the Port asserted an empty chair defense against four non-party airlines. The jury found the Port retained control over Afoa’s employer’s work, which gave rise to a duty of care to Afoa. The $40 Million verdict was apportioned by the jury as follows: 0.2% to Plaintiff, 25% to the Port, and 74.8% split equally to the four airlines. Plaintiff appealed alleging the Port was vicariously liable for the airlines’ portion of the damages because it had a nondelegable duty to provide a safe workplace.
The Court answered in the negative. The Court found that the meaning of RCW 4.22.070 is clear and unambiguous in that it generally abolishes joint and several liability for concurrent negligence. In examining the legislative intent behind RCW 4.22.070, the Court stated that liability for breach of a nondelegable duty does not undermine the fault allocation under the statute. The Court noted that while the dissent correctly recognized an exception under the statute which would allow a nondelegable duty to result in vicarious liability for an independent contractor’s fault, the Court declined to apply this exception because the jury did not make a factual finding that that the Port retained control over the airlines’ work. The Court held that “[A]n entity that delegates its nondelegable duty will be vicariously liable for the negligence of the entity subject to its delegation, but an entity’s nondelegable duty cannot substitute for a factual determination of vicarious liability when RCW 4.22.070(1) clearly requires apportionment to “every entity which caused the claimant’s damages.””
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Andrew Kamins | Jun 11, 2018 | Blog News, Publications
In an unanimous decision, the Washington Supreme Court held in Durant v. State Farm Mutual Automobile Insurance Company, No. 94771-6 (June 7, 2018), that Washington regulations require automobile policies containing personal injury protection (“PIP”) coverage to pay for all medical and hospital services related to an accident that are reasonable, necessary, and incurred within three years of the accident. The issue came before the Court in the form of two certified questions submitted by the United State District Court for the Western Division in Washington which was adjudicating Durant’s claim that State Farm had wrongly refused to pay PIP benefits for chiropractic treatments arising out of his automobile accident based upon his achieving maximum medical improvement (“MMI”) where his doctor continued to prescribe the treatment as necessary. The Court found that State Farm’s policy violated the plain language of Washington Administrative Code 284-30-395(1) by limiting coverage to those medical expenses that are essential in achieving MMI for the bodily injury sustained in the accident.
The Court answered the first certified question in the affirmative: “Does State Farm’s limitation of medical claims based on its MMI provision violate WAC 284-30-395(1)(a) or (b)?” The Court held that the plain language of the WAC says that an “insurer may deny, limit, or terminate benefits if the insurer determines that the medical and hospital services: (a) Are not reasonable; (b) Are not necessary; (c) Are not related to the accident; or (d) Are not incurred within three years of the accident.” As these are “the only grounds for denial, limitation, or termination of medical and hospital services permitted,” the Court determined that State Farm’s additional MMI requirement violated the statute.
The Court answered the second certified question in the negative: “Is the term ‘maximum medical improvement’ consistent with the definition of ‘reasonable’ or ‘necessary’ as those terms appear in WAC 284-30-395(1)?” The Court found that the MMI limitation “denies Durant his PIP medical benefits necessary to return him to his pre-injury state.” The Court held that the MMI provision was inconsistent with the terms reasonable and necessary because it would exclude palliative care from reasonable and necessary medical expenses which would not fully compensate the insured for actual damages from automobile accidents as required under PIP coverage.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Sarah Davenport | Apr 19, 2018 | Uncategorized
On April 12, 2018, the Washington Supreme Court held in Bearden v. McGill, No. 94320-6, that statutory costs are included when determining whether a party has improved its position at a trial de novo after a mandatory arbitration award.
In the underlying matter, the parties went to mandatory arbitration, and the arbitrator awarded damages plus statutory costs to the plaintiff. The defendant requested a trial de novo, and at trial, the jury awarded the plaintiff less in damages but more in statutory costs, for a total award that was greater than the amount the plaintiff was awarded in mandatory arbitration. The trial court also granted the plaintiff attorney fees and costs, on the basis that the defendant’s position did not improve from the arbitration award to the trial de novo.
The defendant appealed, and the appellate court reversed and vacated the award of attorney fees and costs, holding that the only comparison between the arbitration award and the trial award should be the common elements of the awards in each proceeding and only include “those costs and fees litigated before the arbitrator and the trial court.” On remand, the appellate court again reversed, holding that the comparison should only include the damages portions of each award and not the statutory costs awarded in either proceeding.
The Washington Supreme Court reversed the appellate court, holding that based on the language and legislative history of the Mandatory Arbitration Rules and applicable statutes, as well as what an ordinary person would understand in comparing an arbitration award and a trail award, statutory costs are included in the calculations of a party considering a trial de novo. However, if a substantial change of parties or claims brought occurs after the arbitration award and at the trial de novo, then this comparison may be unfair and need to be considered further by the trial court.
Justice Yu concurred, arguing that the holding could be more succinct, and Justice Wiggins dissented, arguing that the amount of costs awarded does not have anything to do with the merits of the dispute and should therefore not be considered when determining whether a party has improved its position.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Paul Rosner | Mar 30, 2018 | Blog News, Publications
Soha & Lang, P.S. Shareholder Paul Rosner will be speaking about insurance bad faith as part of a panel on reputational management at the Puget Sound Adjuster Association’s Spring Symposium on April 6th in Seattle. For more information, go to the PSAA website or click on the link below.
https://drive.google.com/file/d/1PbDj39us_TK3X41mJxW6aklXt1VQtqNL/view
by sohalang | Mar 27, 2018 | Blog News, Publications
In Keodalah v. Allstate Insurance Company, No. 75731-8-1 (Mar. 26, 2018), the Washington Court of Appeals held that an insurance adjuster that handles claims may be held individually liable for bad faith and violation of the CPA. The case involved allegations of bad faith and CPA against an Allstate insurance adjuster in an automobile claim.
The insured was involved in a fatal auto accident with a motorcycle, and made a UIM policy limits demand of $25,000. Allstate assessed the claim and found the insured was 70% at fault, and offered $1,600 to settle the claim. The adjuster was designated as Allstate’s 30(b)(6) witness and claimed that the insured had run the stop sign and been on his cell phone. The adjuster later admitted that was not the case. Allstate then tried to settle the claim for $15,000. The insured declined. At trial, the jury found zero liability on behalf of the insured and awarded him $108,868 for injuries, lost wages and medical expenses. The insured then brought IFCA, bad faith and CPA claims against both Allstate and the adjuster.
The trial court dismissed the individual claims. The Court of Appeals, however, found that the Washington bad faith regulations and CPA both apply to individual adjusters, even if they are working within the scope of their employment. The court concluded: “We hold that an individual employee insurance adjuster can be liable for bad faith and a violation of the CPA”.
If you have any questions regarding this case, please do not hesitate to contact Soha & Lang, P.S.
Disclaimer: Any opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
