Washington Case Law Update: Final Judgment in UIM Action does not Bar Subsequent Bad Faith, IFCA Claims
From the desk of Kyle Riley: Insurers generally prefer to resolve uninsured and underinsured motorist (“UIM”) claims separately from bad faith claims to avoid prejudice. But when the insured does not bring a bad faith claim at the same time as a UIM claim, does claim preclusion prevent the insured from bringing the bad faith claim at a later time? Read on to find out.
Claims Pointer: In this case arising out of a hit-and-run accident, the Washington Court of Appeals held that because the insurer has a different quality as a party in a UIM claim than in a bad faith claim, the UIM action did not act to preclude the bad faith claim. This case is one of first impression in Washington, and it puts insurers on notice of possible additional exposure where an insured does not allege bad faith in an action to recover UIM benefits.
Forston-Kemmerer v. Allstate Ins. Co., No. 34640-4-III, Washington Court of Appeals, Div. III (March 28, 2017)
In December 2005, Anastasia Forston-Kemmerer (“Forston-Kemmerer”) was in a collision with a motorist who fled the scene, was never identified, and was presumed uninsured. She demanded $75,000 in underinsured motorist (“UIM”) benefits from her insurer, Allstate Insurance Company (“Allstate”), for damages she incurred as a result of the collision. Allstate offered $9,978, which she rejected. She later sued Allstate, seeking $75,000 in UIM benefits. Following mandatory arbitration, she was awarded $44,151.11. Allstate made a post-award offer of $25,000 that she rejected, after which Allstate paid the award.
Forston-Kemmerer then filed suit against Allstate again, this time alleging it had acted in bad faith and violated Washington’s Insurance Fair Conduct Act (“IFCA”) by failing to conduct a reasonable investigation into her claim, constructively denying her claim, and compelling her to bring a lawsuit to recover...