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WASHINGTON COURT OF APPEALS WITHDRAWS OPINION ADDRESSING THE INSURANCE FAIR CONDUCT ACT IN THE CONTEXT OF UM/UIM INSURANCE

 As noted in a previous newsletter, Division Two of the Washington State Court of Appeals issued an opinion on April 19, 2022 in Beasley v. Geico General Insurance Company and Aaron Yaws, No. 54997-2-II, which addressed the meaning of the term “actual damages” under the Washington Insurance Fair Conduct Act (IFCA), RCW 48.30.015 and holding that the term “actual damages” includes noneconomic damages. Beasley v. Geico General Insurance Company and Aaron Yaws, No. 54997-2-II.  The unpublished part of the opinion also addressed the issue of tendering “undisputed” amounts in the context of UM/UIM claims, which had not been addressed in prior case law in Washington.

 Last week, The Court of Appeals withdrew the Beasley opinion in response to a Motion for Reconsideration filed by GEICO. The Order granted the Motion for Reconsideration in part, withdrew the earlier opinion, and advised that a revised opinion would be filed.  To date, the revised opinion has not yet been issued. As a result, there is no information regarding which portion of the prior opinion has been reconsidered. Nevertheless, and as a result of the withdrawal, the earlier Beasley opinion is no longer good law and should be disregarded by insureds and insurers alike. 

Lether Law Group currently represents multiple insurers in coverage litigation in state and federal courts in Washington involving claims under IFCA. If you have questions about the implications of Beasley or general questions in regard to pending insurance claims and compliance with Washington insurance law, please feel free to contact our office.

 

Ellen Mcgraw

Ellen Mcgraw

Associate Attorney

Meg is from Oklahoma City, Oklahoma. She received a bachelor’s degree in Environmental Sustainability from the University of Oklahoma, where she graduated with honors. She went on to receive her Juris Doctor from Lewis & Clark Law School, graduating cum laude. Before joining Lether Law Group, Meg served as a judicial extern for the Honorable Chief Judge Marco A. Hernández in the U.S. District Court for the District of Oregon.

The Sky is the Limit! The Tenuous State of Constitutional Limitations on Punitive Damages

One of the core principles of Constitutional law and interpretation that has recently come under greater scrutiny is the principle of substantive due process rights. Recent decisions from the United States Supreme Court have reshaped our understanding as to the viability of substantive due process protections and made clear that reliance on stare decisis may be tenuous relative to this principle.  Substantive due process protections are often framed relative to rights implicit in the concept of ordered liberty or deeply rooted in American history and tradition. However, one protection, comparatively minor in comparison, is the prohibition of excessive punitive damage awards.

Constitutional limits as to punitive damages have been acknowledged by the Court for over 100 years. See: Seaboard Air Line R. Co. v. Seegers, 207 U.S. 73, 78 (1907).  The notion is restated in Txo Prod. Corp. v. Alliance Res. Corp. 509 U.S. 443 (1993) where it was made clear that the constitutional prohibition of excessive punitive damage awards exists through substantive due process.  In their dissent in TXO, Justice Scalia joined by Justice Thomas expressed disdain for the very existence of the proposition of substantive due process. More recently, Justice Thomas has urged in dicta that “in future cases, we should reconsider all of this Court’s substantive due process precedents…”.  This dicta and recent Supreme Court holdings have increased the uncertainty of the viability of Substantive Due Process and the holdings which rely upon it.Justice Thomas’s prior concurrence in Cooper Indus. v. Leatherman Tool Grp., Inc., 532 U.S. 424, 443-44 (2001) compounds concern regarding the future viability of Constitutional protections against excessive punitive damage awards. “I continue to believe that the Constitution does not constrain the size of punitive damages awards…”  Justice Thomas’s view is voiced again in his concurrence in Timbs v. Indiana, 586 U. S.  (2019) “I decline to apply the ‘legal fiction’ of due process incorporation.”, and again in his concurrence in Ramos v. Louisiana, 140 S. Ct. 1390, 1424 (2020) “Due process incorporation is a demonstrably erroneous interpretation of the Fourteenth Amendment.”

While a bright line mathematical formula demarcating excessive vs. reasonable punitive damages was never judicially established, the due process protections were a safety valve against excessive awards.  For over 100 years, parties relied on Constitutional limitations on punitive damages when contracting, underwriting, evaluating exposure, and analyzing risk. Considering the Court’s recent shift, reliance on this long-standing precedent may not be prudent.

Lether Law Group currently represents multiple insurers in coverage litigation in State and Federal Courts in Washington, Oregon, Idaho, Alaska, Hawaii, and Louisiana. If you have questions in regard to pending insurance claims and compliance with insurance law, please feel free to contact our office.

Kevin Kay

Kevin Kay

Shareholder

   Kevin is a graduate of Pacific Lutheran University and Seattle University School of Law. He is licensed to practice in the state and federal courts of Washington and admitted to practice before the Ninth Circuit Court of Appeals. In addition, Kevin has appeared pro hac vice in courts in Louisiana and California. Kevin has represented insurers and insureds in coverage for 16 years. These claims involve personal and commercial auto policies, commercial general liability, professional liability, and E&O insurance. Kevin has also advised and represented risk pools, insurers, and insured in matters ranging from automobile/bus accidents to catastrophic landslides. His practice also includes construction defect disputes, personal injury claims, commercial leases, and significant property damage disputes.

 

Lether Law Group Welcomes 5 New Legal Professionals

Chance Laboda

Chance Laboda

Senior Associate Attorney

Chance’s practice involves insurance coverage and litigation of first and third party disputes involving both contractual and extra-contractual claims, including insurance bad faith, negligence, and violation of the Washington State Consumer Protection Act and Insurance Far Conduct Act. Chance’s experience includes coverage analysis and litigation of disputes arising from commercial general liability, business owners, and automobile insurance policies. Chance also has experience providing legal services to individuals, businesses, and real estate developers in a broad range of real estate disputes

Dan Schilling

Dan Schilling

Associate Attorney

Dan has a practice background in family law, personal injury, workers’ compensation law, and formerly worked as a public defender in the 24th Judicial District Court for Jefferson Parish in Louisiana. Dan is licensed in both Washington and Louisiana.

Ryan Bisel

Ryan Bisel

Associate Attorney

Ryan graduated from Seattle University School of Law. Ryan is a licensed attorney in Washington and has recently passed the Hawaii State Bar.

Tate Kirk

Tate Kirk

Associate Attorney

Tate has a practice background in workers’ compensation law and is licensed in both Washington and Oregon.

Matt Allinder

Matt Allinder

Rule 9 Intern

Matt earned his Juris Doctor from Loyola University Chicago School of Law. Currently working remote, he will join us at the Seattle office in June.