While a majority of the orders coming out of Federal Court regarding IFCA continue to contain language that is either disappointing for plaintiffs or a mixed bag, examining these orders with an eye towards mining the small wins inside them, may help you with your next IFCA case.
Judge Jones recently wrote a footnote that has punch. Footnote 3 of Freeman v. State
Farm Mutual Auto. Ins. Co., states:
State Farm insists that it did not deny coverage because it never denied that Mr. Freeman was entitled to UIM benefits, it merely disagreed about the amount of those benefits. For purposes of an insured’s extracontractual claim, a failure to pay the amount the insured requests is a denial of coverage. Were it otherwise, an insurer could avoid extracontractual liability merely by conceding coverage, paying its insured one dollar, and refusing to pay any more.
Freeman v. State Farm Mut. Auto. Ins. Co., C11-761RAJ, 2012 WL 2891167, *3 (W.D. Wash. July 16, 2012).
This provides a foothold for arguing that low ball offer by UIM carriers made without reasonable investigation can be a denial of the payment of benefits and therefore subject to IFCA. In Freeman, the IFCA claim was dismissed on notice grounds, serving as a reminder that IFCA has specific notice provisions as a pre-requite to an IFCA cause of action.
Other recent Federal Court orders have recognized that IFCA claims include the actual amounts that should have been paid under the insurance policy—presumably under the unreasonable failure to pay benefits section. Tavakoli v. Allstate Prop. & Cas. Ins. Co., C11- 1587RAJ, 2012 WL 6677766 (W.D. Wash. Dec. 21, 2012); Yancey et al v. The Auto. Com. Hartford, case # 2:11-CV-01329 RAJ (Docket 68, 10/23/12)1.
These pronouncements have great import for statute of limitations issues and for the kinds of damages subject to trebling. Judge Jones, in Tavakoli v. Allstate Prop. & Cas. Ins. Co., a UIM case, stated the following:
IFCA provides yet another way to recover damages. Any first-party insured “who is unreasonably denied a claim for coverage or payment of benefits,” can sue to recover “the actual damages sustained ….“ The actual damages sustained from an “unreasonbl