Billion Dollar Bust

Claims Alleged: Insurance Bad Faith, CPA Violations, Class Action

Damages Alleged: Property Damage, Attorney Fees, Treble Damages, Class Action Civil Penalties

Admitted Liability: No

The Overview:

It’s not every day that an opposing attorney tells you he thinks his case is worth a billion dollars, but that is exactly what happened in a case that Smith Freed Eberhard partner Cliff Wilson recently concluded. Thankfully, Plaintiff’s counsel’s grand plans for a big payout not only turned out to be a bust, but at the end of the day it was the plaintiff that ended up owing Cliff’s client money. How did Cliff stave off Plaintiff’s attempted class-action attack coupled with incessant motion practice? Read on to find out…

The Background:

Cliff was retained to defend a Washington insurer from an unusual lawsuit filed by an attorney representing a hotel owner.  The lawsuit alleged Washington Consumer Protection Act (CPA) violations, and Insurance Bad Faith based on alleged violations of various CPA statutes and insurance regulatory administrative codes.  The alleged violations stemmed from a third-party property damage claim after a vehicle being operated by one of the hotel’s guests slid on some ice and snow that was allowed to accumulate in the hotel’s parking lot, resulting in minor damage to a sign located in the lot.  The total amount of the damage caused to the sign was alleged to have been around $13,500.  After a great deal of back and forth, the guest’s automobile insurer offered to pay for most of the alleged damages to the sign, conditioned upon a release extinguishing all claims against the driver.  The hotel, which refused to accept any responsibility for the dangerous conditions in its parking lot that led to the accident, wanted more money and refused to provide the driver with a release.      

The hotel’s attorney, apparently believing that he had the case of the century on his hands, decided not to file suit against the alleged negligent driver, but instead, filed suit against the driver’s insurer, basically claiming that by not capitulating to his unreasonable demands, the insurer committed Insurance Bad Faith as well as various violations of the Washington Consumer Protection Act.   

Plaintiff’s Theme:

Instead of bringing property damages claims against the driver, and actually being forced to prove liability and its alleged damages, Plaintiff and its attorney decided instead to sue the driver’s insurance company under the Washington Consumer Protection Act and claims of third-party insurance bad faith. From the very start of the litigation, it became clear that the Plaintiff and its attorney’s theme in the case was to try to seek damages it did not have a right to by raising unfounded claims that, if proven, could generate a right to attorney fees, treble damages, and other potentially high exposure claims.  The strategy employed by Plaintiff’s attorney was to try to mire Cliff’s client in vastly overbroad discovery demands, unsupported motion practice, and even an attempt to obtain certification as a national class action!  In fact, over the course of time that the case was before the trial Court, the Plaintiff’s attorney filed more than a dozen separate (though often repetitive) motions relating to discovery, attempting to avoid discovery, sanctions, class-action certification, summary judgments, and even a motion to disqualify the trial Judge.

Throughout the onslaught of motion practice, Plaintiff’s counsel appeared to be convinced that he had stumbled upon the proverbial “case of the century” against an insurance company that had the audacity to take reasonable steps to protect its insured from the hotel’s unfounded claims and to require a release for its insured in exchange for settlement.  Plaintiff’s attorney was so confident in his unfounded theory and scope of the case, in fact, that he once told Cliff that he thought the case was worth “a billion dollars!”

Our Strategy:

As this was not Cliff and his litigation team’s first brush with an overzealous plaintiff’s lawyer, and the bully tactics they sometimes try to employ, Cliff first tried to explore early reasonable resolution of the matter. When that did not work, Cliff’s team went to work efficiently and successfully fighting Plaintiff’s seemingly never-ending barrage of motions and fishing expedition discovery requests, ultimately exposing Plaintiff’s lawsuit for that it really was… a legally and factually unfounded money grab.   

The Outcome:

Once Cliff had his evidentiary ducks in a row, he filed a succinct, authoritative, Motion for Summary Judgment squarely based on the actual applicable law. Plaintiff’s response, continued to repeat its self-serving theory of the case and the legal authority it wished existed. The trial Court saw through the Plaintiff’s smoke and mirrors arguments and granted summary judgment in favor of Cliff’s client on all claims. 

The hotel, clearly unhappy with the trial Court loss on its “billion dollar” case, filed a misguided attempt to reverse the summary judgment in the Washington Court of Appeals. Cliff responded to the Plaintiff’s frivolous appeal, seeking attorney fees on behalf of his client.  After oral arguments, the Washington Court of Appeals ruled in favor of Cliff’s client in a published opinion, and awarded Cliff’s client its requested attorney fees. Unbelievably, Plaintiff, through its attorney, then filed a Petition for Review with the Washington Supreme Court, which was denied. 

With the denial of Plaintiff’s Petition for Review by the Washington Supreme Court, the case was finally put to rest, ultimately leaving the Plaintiff’s hotel being forced to pay Cliff’s client a substantial amount of money in the form of awarded attorney fees. Plaintiff’s counsel’s “billion dollar case” was a bust.