WAC violation alone does not support IFCA claim? A recent decision (2/22/12) by Judge Pechman of the U.S. District Court for the Western District of Washington illustrates the ongoing issue of whether violations of the Washington Administrative Code (WAC) alone allow for recovery of treble damages and/or attorneys’ fees under IFCA (RCW 48.30.015). The Court in this case—Pinney v. American Family Mutual Insurance Co.; No. C11-175MJP—followed other Western District of Washington cases and held that there must be an unreasonable denial of coverage or payment to support a cause of action under IFCA, and a violation of one of the enumerated WAC provisions alone is not sufficient to support an IFCA claim. Here, the Court followed the analysis of Judge Lasnik in Lease Crutcher Lewis WA, LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, No. C08–1862RSL, 2010 WL 4272453, at *5 (W.D.Wash. Oct.15, 2010) that, while a “violation of WAC 284-30-030 may justify the imposition of treble damages under RCW 48.30.015(2) and/or an award of fees and costs under RCW 48.30.015(3)… an underlying denial of coverage is still required” to support an IFCA violation.
The Pinney case involved smoke damage to the plaintiff-insureds’ home. After dismissing the plaintiffs’ contractual claims on summary judgment, the Court held that the plaintiffs’ extra-contractual bad faith and CPA claims would survive summary judgment because a genuine issue of material fact existed as to whether Defendant adequately informed Plaintiffs about “additional living expense coverage.” Since, however, the plaintiffs failed to show the insurer denied coverage, the Court dismissed the IFCA claims and denied Olympic Steamship fees.