Opinion
Nos. 55869-2-I; 55885-4-I.
May 30, 2006.
Appeals from a judgment of the Superior Court for King County, No. 02-2-11684-1, Linda Lau, J., entered March 3, 2005.
Counsel for Appellant(s), William D. Brandt, 1820 Commercial Street SE, Salem, OR 97302.
Simon Henri Forgette, Attorney at Law, 406 Market St Ste a, Kirkland, WA 98033-6135.
Mark E. Griffin, 215 SW Washington Street, Waldo Block, Suite 202, Portland, OR 97296.
Garth L. Jones, Stritmatter Whelan Withey ET AL, 413 8th St, Hoquiam, WA 98550-3607.
Bradley Jerome Moore, Stritmatter Kessler Whelan ET AL, 200 2nd Ave W, Seattle, WA 98119-4204.
Counsel for Respondent(s), Jill Diane Bowman, Stoel Rives LLP, 600 University St Ste 3600, Seattle, WA 98101-3197.
Margarita V. Latsinova, Stoel Rives LLP, 600 University St Ste 3600, Seattle, WA 98101-3197.
Stevan David Phillips, Stoel Rives LLP, 600 University St Ste 3600, Seattle, WA 98101-3197.
Deirdre L. Runnette, Stoel Rives LLP, 600 University St Ste 3600, Seattle, WA 98101-3197.
Affirmed by unpublished opinion per Agid, J., concurred in by Schindler, A.C.J., and Baker, J.
The trial court denied Patrick Bjorkquist's motion for summary judgment and class certification, dismissed his case with prejudice, and granted summary judgment for Farmers Insurance Co. (Farmers). Bjorkquist appeals, arguing Farmers injured him by enforcing its invalid Election Agreement and Marks v. Washington Ins. Guaranty Ass'n does not control the outcome of his case. But Marks provides the correct analysis. The trial court properly dismissed his claims because he was not harmed by the misstatements in the Election Agreement. He waived only his right to receive the statutory maximum, rather than all UIM coverage, and received floating layer coverage in the amount he selected. Without proof of harm, he could not maintain an action for damages or a Consumer Protection Act claim against Farmers. For the same reason, the trial court did not err by denying his motion for class certification. In the absence of an injury, Bjorkquist could not satisfy the requirements for being a class representative under CR 23. We affirm.
123 Wn. App. 274, 94 P.3d 352 (2004), review denied, 153 Wn.2d 1022 (2005).
FACTS
On October 31, 1994, Patrick Bjorkquist was injured in a car accident caused by a State Farm insured. Bjorkquist's policy included third-party liability coverage of $100,000 per occurrence. Before the accident, his wife executed an Election Agreement that reduced their UIM coverage to $25,000 per person, $50,000 per occurrence. State Farm accepted liability for Bjorkquist's claim, paying him for damage to his vehicle and $95,490.69 for his injuries. Bjorkquist received approximately $9,600 in PIP benefits from Farmers. He asked Farmers to waive its PIP lien on the monies he received from State Farm and filed a $25,000 UIM claim under his policy for additional uncompensated injuries.
On January 27, 1999, Bjorkquist settled his UIM claim for $20,000 plus an agreement by Farmers to waive its PIP lien. Bjorkquist, his wife, and his attorney also signed a settlement agreement and release that stated: In consideration of such payment [Bjorkquist] represents and warrants that this is a full and final release applying to all known claims, unknown and anticipated injuries, deaths or damages arising out of this accident, casualty, or event.
. . . .
I UNDERSTAND THAT THIS IS ALL THE MONEY THAT WILL BE RECEIVED UNDER THE UNINSURED MOTORIST PORTION OF [THIS] POLICY . . . FOR THE DAMAGES RESULTING FROM THIS ACCIDENT.
Farmers admitted it declined coverage to the full extent of Bjorkquist's third-party liability limits based upon the Election Agreement his wife had signed.
Effective January 1, 2000, Farmers revised its Election Agreement when two Clark County Superior Court cases, Irven S. Rackley v. Farmers Insurance Co. of Washington and Jeffrey T. Gray v. Mid-Century Insurance Company, invalidated the form because it misstated the coverage as being decreasing rather than floating layer coverage. On August 11, 2000, Dave Reinhardt, State Farm Regional Claims Manager, sent a memo to its Washington offices stating:
Clark County Cause No. 99-2-02092-1.
Clark County Cause No. 99-2-02814-1.
In two separate cases in Clark County Washington, judges have ruled that our ELECTION AGREEMENT FOR UNDERINSURED MOTORIST COVERAGE is invalid because it does not accurately describe the coverage that the insured is waiving. We initially appealed these Superior Court rulings but have since abandoned those appeals.
. . . .
It is possible that your offices may have denied coverage to an insured based upon the existence of a signed UIM Election Agreement. If you have any coverage denials in your office at this time, you need to reopen them and extend coverage. Also, any UIM waiver CQs that are reported to your office from this date forward that have the 'old' UIM Election Agreement need to have coverage extended to an amount equal to the liability limit. . . .'
(Emphasis added.)
Farmers did not notify its policy holders of the outcome of Rackley and Gray.
Relying on Rackley and Gray, Bjorkquist filed a class action complaint on April 8, 2002, seeking damages for himself and injunctive and declaratory relief for a class described as those denied coverage based on the Election Agreement for Underinsured Motorist Coverage from 1985 to the present. He asserted numerous claims including breach of contract, bad faith, fraud, violation of the Washington Consumer Protection Act, and violations of the Washington Insurance Code and the Unfair Claims Settlement Practice. In his individual action he sought to recover triple damages, but he did not ask for monetary damages for the class. For the class he sought a declaratory judgment that the Election Form was invalid and an order enjoining Farmers from denying UIM claims based on the Election Agreement and compelling it to review all UIM claims from 1985 to the present. On September 8, 2003, Bjorkquist filed a motion for summary judgment and class certification. On July 13, 2004, this court decided Marks, holding that while the Election Form misstated a material provision by describing decreasing rather than floating UIM coverage, the form was sufficiently complete and the decision maker sufficiently informed to satisfy the specificity requirement of RCW 48.22.030(4).
On January 24, 2005, the trial court ruled that, based on the holding in Marks, Bjorkquist suffered no injury. It rejected his collateral estoppel argument and denied his motions for summary judgment and class certification. On March 3, 2005, the trial court dismissed Bjorkquist's claims with prejudice and sua sponte granted summary judgment for Farmers. It also awarded statutory attorney fees and costs to Farmers. Bjorkquist appeals.
DISCUSSION
We review summary judgment orders de novo, engaging in the same inquiry as the trial court. Summary judgment is proper if there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. The motion should be granted if, after reviewing all the evidence, a reasonable person could reach but one conclusion. We consider all facts and reasonable inferences from them in the light most favorable to the nonmoving party.
Bank of Am. v. Hubert, 153 Wn.2d 102, 111, 101 P.3d 409 (2004) (citing Citizens for Responsible Wildlife Mgmt. v. State, 149 Wn.2d 622, 630, 71 P.3d 644 (2003)).
CR 56(c); Bank of Am., 153 Wn.2d at 111.
Trimble v. Wash. State Univ., 140 Wn.2d 88, 93, 993 P.2d 259 (2000).
Id.
In Washington, Underinsured Motorist (UIM) policy limits are the same as third-party liability coverage unless the insured specifically rejects the statutory coverage amount. RCW 48.22.030 provides in relevant part:
Marks, 123 Wn. App. at 277.
(2) No new policy or renewal of an existing policy insuring against loss resulting from liability imposed by law for bodily injury, death, or property damage, suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be issued with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided . . . for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of underinsured motor vehicles, hit-and-run motor vehicles, and phantom vehicles because of bodily injury, death, or property damage. . . .
(3) Except as to property damage, coverage required under subsection (2) of this section shall be in the same amount as the insured's third party liability coverage unless the insured rejects all or part of the coverage as provided in subsection (4) of this section. . . .
RCW 48.22.030 (emphasis added); see Cochran v. Great W. Cas. Co., 116 Wn. App. 636, 641, 67 P.3d 1123 (2003).
Under RCW 48.22.030(4), insureds may reject UIM coverage entirely: 'A named insured or spouse may reject, in writing, underinsured coverage for bodily injury or death, or property damage, and the requirements of subsections (2) and (3) of this section shall not apply.' To satisfy the written rejection requirement under this section, the waiver document must be "specific and unequivocal." Insureds must decline UIM coverage in writing and by an "affirmative and conscious act." The writing must be sufficiently specific and unequivocal to show that the insured understood that the specific amount requested is less than the statutory amount, and that the statutory amount is dictated by the insured's third-party liability coverage.
Galbraith v. Nat'l Union Fire Ins. Co., 78 Wn. App. 526, 532, 897 P.2d 417 (quoting Weir v. Am. Motorists Ins. Co., 63 Wn. App. 187, 190, 816 P.2d 1278 (1991)), review denied, 128 Wn.2d 1005 (1995).
Marks, 123 Wn. App. at 280 (quoting Clements, 121 Wn.2d 243, 254, 850 P.2d 1298 (1993)).
Cochran, 116 Wn. App. at 645.
There are two types of UIM coverage. Under decreasing layer coverage, an insured may collect from his UIM policy the amount an underinsured party's coverage does not pay up to the difference between the insured and the noninsured party's coverage limit. Under floating layer coverage, the UIM coverage 'floats' on top of any recovery from other sources, paying the difference between the total damages and the amount collected from the tortfeasor's insurance up to the insured's total policy limit. In Washington, UIM policies must provide floating layer coverage.
Elovich v. Nationwide Ins. Co., 104 Wn.2d 543, 548-49, 707 P.2d 1319 (1985).
Id.
Greengo v. Pub. Employees Mut. Ins. Co., 135 Wn.2d 799, 809, 959 P.2d 657 (1998); Elovich, 104 Wn.2d at 549.
I. Marks v. Washington Ins. Guaranty Ass'n
Bjorkquist argues that the trial court erred because Marks does not address the issue of the validity and enforceability of an Election Agreement that misstates the nature of the insured's UIM coverage. He underscores the court's statement that it did 'not hold that a rejection form that misstates a material provision of the law satisfies the requirement of a specific and unequivocal written rejection.' And he asserts that collateral estoppel should have applied to the issue of invalidity under the holdings in Rackley and Gray. He contends Farmers injured him, and thousands of others, by using an invalid Election Agreement to limit their UIM coverage. He asserts Farmers admitted liability in a May 19, 2003 memo from Branch Claims Manager Donald Becker which said the Election Agreement 'does not accurately describe the coverage that the insured is waiving. . . . . Therefore it is as if it never existed and we are extending coverage up to the liability limits on all these invalid waivers.' He also argues Farmers' failure to notify him or any other insured that their UIM claims were settled based on an invalid waiver breached Farmers' contractual duty of good faith and fair dealing.
123 Wn. App. at 284 (emphasis omitted).
Farmers asserts Bjorkquist did not waive UIM coverage, but instead selected a specific amount. Therefore, it argues, Cochran v. Great W. Casualty Co. and Marks control because these cases address an election to take less than the maximum statutory UIM coverage. Bjorkquist argues that the holding in Clements v. Travelers Indemnity Ins. Co. controls. In Clement the court delineated the requirements of a valid written rejection of UIM coverage. It held that the insured's intent was irrelevant to the issue of whether the determination of coverage was valid. Clements does not apply here because it applies to cases in which the insured completely rejects UIM coverage. Bjorkquist did not reject all UIM coverage. Rather, he selected an amount less than the statutory maximum. Because Cochran and Marks address the requirements for a valid election to take less than the statutory maximum UIM coverage, those cases are persuasive here.
116 Wn. App. 636, 67 P.3d 1123 (2003).
121 Wn.2d 243, 255, 850 P.2d 1298 (1993).
Clements, 121 Wn.2d at 256.
Cochran was injured in a car accident in the course of his employment and sued his employer's insurer, Great West Casualty Co., under its UIM policy. His employer, CT Express (CTE), had requested a specific amount of UIM coverage, $60,000, rather than the $1 million in coverage that would have been allowed by statute based on its third-party liability coverage. Cochran claimed CTE did not validly waive its statutory maximum coverage amount because the Election Agreement did not require CTE to specifically reject the statutory limit for its UIM policy. This court affirmed summary judgment for Great West and held that by selecting a specific amount lower than the maximum in writing, an insured waives its maximum policy limits as required by RCW 48.22.030(4). We reasoned that:
Cochran, 116 Wn. App. at 638.
Id. at 644.
Id.
[h]aving been advised of the statutory maximum UIM limits requirement, CTE's choice of $60,000 on the UIM selection . . . evidenced the insured's intent to reject UIM coverage above the $60,000 amount requested. The writing is sufficiently specific and unequivocal to establish that CTE knowingly requested that Great West set the policy's UIM limits at $60,000 and thereby rejected statutory UIM limits identical to the policy's liability limits. The factual question of the insured's intent is irrelevant. . . .
Id. at 644-45.
Marks had an accident while driving for his employer, Blue Star. When Blue Star took out its policy, it selected $50,000 in UIM coverage and $299,900 in third-party liability coverage. Marks asserted that Blue Star's UIM policy was improperly limited to $50,000 because the Election Agreement it signed inaccurately described the UIM coverage as decreasing rather than floating. But Washington Insurance Guaranty Association had paid the claim as if Blue Star had a floating layer policy. We held that because Blue Star received floating layer coverage as required by law, the form was sufficiently complete and the decision maker sufficiently informed to meet the specificity requirements of RCW 48.22.030(4).
Id. at 279.
Id. at 284.
Id.
This case is virtually identical to Marks. Bjorkquist selected $25,000 in UIM coverage under an Election Agreement which informed him that 'Underinsured Motorist Coverage may be written for limits as high as the Bodily Injury and Property Damage limits' of his policy. Under the holding in Cochran, Bjorkquist's written selection of a specific amount of coverage was sufficient evidence of his intent to reject higher coverage up to the statutory maximum. And as in Marks, Bjorkquist was not injured by the Election Agreement's inaccurate 'decreasing coverage' language because he received the same benefit he would have received if the Election Agreement correctly described it as floating layer coverage. We are persuaded by the analysis in Marks. Bjorkquist was not injured by the error in the Election Agreement because he received the amount of coverage he chose $25,000 floating layer UIM coverage.
Cochran, 116 Wn. App. at 645.
Marks, 123 Wn. App. at 284.
We also reject Bjorkquist's collateral estoppel argument. He cannot establish the threshold requirement for applying the doctrine; i.e., that there be identical issues raised and resolved in the earlier and current cases. His case does not raise issues identical to those raised in Gray and Rackley. Both of those cases involved a complete waiver of UIM coverage, not selection of a different UIM amount. The trial court correctly decided that Rackley and Gray did not provide a basis for collaterally estopping Farmers from making its argument based on Cochran and Marks.
II. Consumer Protection Act and Unfair Practices Claims
Bjorkquist contends the error in Farmers' Election Agreement was an unfair settlement practice because Farmers breached its duty to correctly disclose the nature of its insured's coverage and settle claims based on the full extent of that coverage. He asserts this unfair settlement practice violated Washington's Consumer Protection Act because Farmers got waivers of full coverage in a deceptive and fraudulent manner. He also argues Farmers violated the Act because it did not extend coverage to the class of insureds whose claims were closed before August 11, 2000, even though Farmers had the records of all wrongly denied UIM claims from at least August 31, 1998.
Bjorkquist cites to alleged violations of WAC 284-30-330(1) and (2), 284-30-350 and RCW 48.30.010 to support his unfair settlement practice claim.
Farmers asserts Bjorkquist cannot support a Consumer Protection Act claim, or any other claim for damages, because he was not harmed by any misstatements on the Election Agreement. We agree. While an Election Agreement that materially misstates the nature of coverage required under Washington law may violate WAC 284-30-330 , there must also be an injury to support a claim for damages. Here, the trial court properly dismissed Bjorkquist's claims because by receiving all that he was entitled to receive $25,000 in floating layer UIM coverage he was not harmed by the Election Agreement.
Sheldon v. Am. States Preferred Ins. Co., 123 Wn. App. 12, 17-18, 95 P.3d 391 (2004), review denied, 153 Wn.2d 1030 (2005).
III. Class Certification
Bjorkquist asserts the trial court erred by denying his motion to certify the class he sought to represent. He identifies the class as all persons affected by Farmer's invalid Election Agreement from 1985 through 2000.
We review a trial court's class certification decision for an abuse of discretion. We will uphold the trial court's decision if the court considers the requirements of CR 23, and its decision is not based on untenable grounds. Plaintiffs seeking class certification must satisfy the requirements of CR 23(a), which require class representatives to have a claim typical of the claims of the class. Because he was not harmed by the Election Agreement, Bjorkquist did not have a claim typical of the class and, at a minimum, could not satisfy the requirement of CR 23(a)(3). We hold the trial court did not err by denying Bjorkquist's motion to certify the class.
State v. Oda, 111 Wn. App. 79, 90, 44 P.3d 8, review denied, 147 Wn.2d 1018 (2002).
Id.
Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. CR 23(a).
CONCLUSION
We affirm.
SCHINDLER and BAKER, JJ., concur.