The plain meaning of IFCA—why is there even a debate?

The plain meaning of IFCA—why is there even a debate?


IFCA is getting short shrift in the federal courts and some of the federal court legal opinions are trickling down to state courts. Federal courts and Washington court’s need only reflect upon all the language in the statute to come to the conclusion that IFCA must apply to more than coverage denial.

The federal court’s current reading treats the phrase “or payment of benefits” as synonymous with coverage denial in RCW 48.30.015(1), and gives no effect to the disjunctive “or” in RCW 48.30.015. What’s more, the Court’s interpretation creates a circumstance where IFCA’s section (2), (3) and (5) cannot be given effect. See City of Bellevue v. East Bellevue Cmty. Council, 138 Wn.2d 937, 946-47, 983 P.2d 602 (1999); see also State v. Bolar, 129 Wn.2d 361, 365-66, 917 P.2d 125, 127 (1996).

The IFCA statute must encompass more than instances of coverage denials because many of the WACS referenced in RCW 48.30.015(5) only apply once coverage exists:

  • “Compelling a first party claimant to initiate or submit to litigation . . . to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in such actions or proceedings.” WAC 284-30-330(7);
  • Attempting to settle a claim for less than the amount to which a reasonable person would have believed he or she was entitled by reference to written or printed advertising material accompanying or made part of an application.” WAC 284-30- 330(8);
  • “Making a claim payment to a first party claimant or beneficiary not accompanied by a statement setting forth the coverage under which the payment is made.” WAC 284-30-330(9);
  • “Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.” WAC 284- 30-330(12);
  • No insurer shall request a first party claimant to sign a release that extends beyond the subject matter that gave rise to the claim payment. WAC 284-30-350(5);
  • No insurer shall issue checks or drafts in partial settlement of a loss or claim under a specific coverage which contain language which release the insurer or its insured from its total liability. WAC 284-30-350(6);
  • No insurer shall make a payment of benefits without clearly advising the payee, in writing, that it may require reimbursement, when such is the case. WAC 284-30- 350(7).

(emphasis added).

RCW 48.30.015(5) unequivocally states: “A violation of any of the following is a violation for the purposes of subsections (2) and (3) of this section.” (emphasis added). The word “any” must be given import and meaning. RCW 48.30.015(5) does not say, any of the following is a violation of subsections (2) and (3) only when coverage denial is at issue, or any of the following except for those not dealing with coverage denial situations. It says “any” of the following. Because many of the above WAC sections only deal with conduct after coverage has been granted, they can never be at issue when coverage is denied and would be rendered completely superfluous.

As written, the “or” in RCW 48.30.013(2) and (3) is disjunctive and means that one can get treble damages, attorneys fees and litigation expenses, when there is a coverage denial, unreasonable payment of benefits or an enumerated WAC violation. Bolar, 129 Wn.2d at 365- 66. The federal court’s current reading leads to a substitution of the word “AND” for “or” in RCW 48.30.015(2) and in RCW 48.30.015(3). Many the WACs outlined in section (5) can only arise once coverage has been granted. The Court’s interpretation effectively removes the “or” and re-writes RCW 48.30.015(2) and (3) to say “AND has violated a rule in subsection (5) of this section.”

The insurance defense position is only possible if the following edits are judicially taken to the IFCA statute:

(1) Any first party claimant to a policy of insurance who is unreasonably denied a claim for coverage or payment of benefits by an insurer may bring an action in the superior court of this state to recover the actual damages sustained, together with the costs of the action, including reasonable attorneys’ fees and litigation costs, as set forth in subsection (3) of this section.

(2)The superior court may, after finding that an insurer has acted unreasonably in denying a claim for coverage or payment of benefits or

[and] has violated a rule in subsection (5) of this section, increase the total award of damages to an amount not to exceed three times the actual damages.


(3) The superior court shall, after a finding of unreasonable denial of a claim for coverage or payment of benefits, or [and] after a finding of a violation of a rule in subsection (5) of this section, award reasonable attorneys’ fees and actual and statutory litigation costs, including expert witness fees, to the first party claimant of an insurance contract who is the prevailing party in such an action.

.. .
(5) A violation of any of the following is a violation for the purposes of subsections (2) and (3) of this section:

It is settled law that in interpreting statutes, courts must “first attempt to effectuate the plain meaning of the words used by the legislature, examining each provision in relation to others in search of a consistent construction of the whole.” In re Lofton, 142 Wn. App. 412, 415, 174 P.3d 703, 705 (2008); see also Dep’t of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 11, 43 P.3d 4 (2002). Each word in a statute must be given meaning and statutes cannot be read to render words superfluous or be read in a manner that reads to a ridiculous result. See East Bellevue Cmty. Council, 138 Wn.2d at 946-47. The defense position and the federal court’s reading denies and precludes IFCA remedies for WAC administrative code provisions specifically mentioned in the IFCA statutory scheme.

The IFCA statute, as drafted, clearly contemplates discretionary treble damages for ANY violations of the WACS listed in RCW 48.30.015(5) and mandates an award of reasonable attorney fees and litigation expenses for the same, whether coverage denial is at issue or not. RCW 48.30.015(2),(3) supra. There can be no other logical result without what amounts to a judicial rewrite of the plain language of the statute.

Contrary to insurance defense bar assertions federal courts are not unanimous. Federal cases opining IFCA applies to coverage denials only fail to be persuasive because their comments about IFCA are either dicta only, as in the retroactivity cases, or fail to engage in the statutory plain language above.

While there should not be a debate on this issue, unfortunately there still is. Washington courts have the right and duty to interpret Washington statutes consistent with rules of statutory construction and are not bound by federal court interpretations of state statutes In re Elliott, 74 Wn. 2d 600, 602, 446 P.2d 347, 350 (1968). Carefully analyzing the plain meaning and critically examining the federal case decisions can go a long way to fight the current unfavorable tide in the federal courts.

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