On July 29, 2025, the United States District Court for the Western District of Washington issued a summary judgment ruling in a matter entitled Ngethpharat v. State Farm Mut. Auto. Ins. Co., regarding State Farm’s methods for determining actual cash value (ACV) for total losses in Auto Physical Damage (APD) claims. Ngethpharat is an ongoing class action against State Farm accusing the carrier of violating Washington law by applying a “typical negotiation” deduction in calculating ACV.
A “typical negotiation” deduction is a reduction in the ACV calculation based upon a presumption that an advertised price for a comparable auto could be negotiated at the point of sale. The Washington Office of the Insurance Commissioner has promulgated WAC 284-30-391, which sets forth the methods and standards of practice for settlement of total loss vehicle claims. In its July 29, 2025 ruling, the Court held that “typical negotiation” deductions are not permitted under this regulation and that State Farm’s violation of the WAC constituted a per se violation of the Washington Consumer Protection Act (CPA), RCW 19.86 et seq.
As a demonstration of the potential implications of this type of ruling, the Court held that the Class Plaintiffs had produced uncontroverted evidence of CPA damages in the amount of $54,650,595.28.
The Ngethpharat matter is ongoing and is certain to include additional motions practice and likely appeals to the Ninth Circuit Court of Appeals. The question of whether these types of discounts rise to the level of an actual CPA violation has not been decided by any Washington appellate court, and the District Judge’s decision in Ngethpharat is ultimately not binding on any other court. This issue may ultimately need to be brought before the Washington State Supreme Court before there is any ultimate resolution.
Lether Law Group has, for over 35 years, represented insurers, businesses, and individuals in significant claims. Lether Law Group is currently involved in some of the most high-value claims in the State of Washington. We pride ourselves on our track record of fair and equitable resolutions in tough cases.
If you have questions about total loss valuation practices, class exposure, or compliance risks arising from this decision, we invite you to contact us directly.
