Whether the term “actual damages” as used in RCW 48.30.015 includes noneconomic damages is an issue of first impression under Washington law. On April 19, 2022, the Court of Appeals, in Beasley v. GEICO General Insurance Company, et al., 2022 WL 1151426 (Wash. Ct. App. 2022), held that the legislative history demonstrates that noneconomic damages are “actual damages” under RCW 48.30.015 and reversed the trial court.
In this underinsured motorist (UIM) case, when instructing the jury on the elements of the IFCA claim, the trial court included the following language: “The Court has determined that [GEICO] unreasonably denied the payment of benefits by failing to pay the undisputed $10,000 offer of UIM benefits made on October 23, 2015.” However, the trial court refused to provide the jury with Beasley’s proposed instruction on damages under IFCA that included noneconomic damages based on the trial court’s ruling 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 had proved his insurance bad faith claim and that he had incurred $400,000 in noneconomic damages related to that claim. Beasley appealed the trial court’s ruling that IFCA does not include noneconomic damages.
The Court of Appeals determined that the legislature intended “actual damages” to include noneconomic damages under IFCA because this legislation was intended to protect insureds from an insurer’s unreasonable actions and remanded the matter to the trial court for a new trial on noneconomic damages related to the IFCA claim.
The Court of Appeals held that merely tripling the bad faith noneconomic damages was not an appropriate remedy. Rather, the Court held that the “proper remedy is based on an understanding that although not all bad faith conduct constitutes an IFCA violation, we can presume under the facts of this case that GEICO’s IFCA violations also constituted bad faith” and that “[b]ecause a violation of IFCA also would constitute bad faith under the facts of this case, any IFCA noneconomic damages necessarily would have been included in the $400,000 the jury awarded in bad faith damages.” The Court remanded for a new trial on the issue of IFCA noneconomic damages only, noting that the “IFCA noneconomic damages may be less than the bad faith damages because the bad faith cause of action is much broader.” The Court of Appeals further noted that Beasley is not automatically entitled to treble damages. RCW 48.30.015(2). The Court also ruled that Beasley is not entitled to double recovery.