Bowles v. Allstate Vehicle and Property Insurance Company

• Court: District Court, W.D. Washington
• Decided: February 6, 2025
• Docket: 2:24-cv-01642
• Status: Unknown

Opinion

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5 6 7 8 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 9 AT SEATTLE 10 11 TREVOR BOWLES, CASE NO. 2:24-cv-01642-TL 12 Plaintiff, ORDER ON MOTION TO DISMISS v. 13 ALLSTATE VEHICLE AND PROPERTY 14 INSURANCE COMPANY, 15 Defendant. 16

17 This is an action by an insured against their insurer for damages for breach of contract, 18 breach of the duty of good faith, and breach of fiduciary duty. This matter is before the Court on 19 Defendant Allstate Vehicle and Property Insurance Company’s Motion to Dismiss. Dkt. No. 7. 20 Having reviewed Plaintiff Trevor Bowles’s response (Dkt. No. 13), Defendant’s reply (Dkt. 21 No. 14), and the relevant record, the Court GRANTS the motion. 22 I. BACKGROUND 23 Plaintiff is the owner of a residence located in Enumclaw, Washington. Dkt. No. 1 ¶ 1. 24 Defendant is a foreign insurance company with its principal office located in Illinois. Id. ¶ 2. 1 Plaintiff purchased an insurance policy from Defendant that covered his residence in Enumclaw. 2 Id. ¶ 5. On July 12, 2023, that property experienced vandalism and water damage in an alleged 3 amount of $180,000. Id. Pursuant to Plaintiff’s insurance policy, Defendant had a contractual 4 duty to properly investigate the loss, determine the coverage, and pay the amount. Id. ¶ 6.

5 Plaintiff alleges that Defendant unreasonably refused to pay the full extent of the loss (Defendant 6 has only made a partial payment) and has failed to share an expert report on the structure of the 7 home, as well as other relevant information. Id. ¶ 7. 8 In the Complaint, Plaintiff asserts claims for breach of contract, breach of the duty of 9 good faith and breach of fiduciary duty. See Dkt. No. 1 ¶¶ 4–18. In its motion,1 Defendant argues 10 that Washington law does not acknowledge a claim of breach of fiduciary duty in the insurance 11 context and, therefore, the claim should be dismissed. Dkt. No. 7 at 1–2. Plaintiff also filed a 12 motion to amend the Complaint, which remains pending. See Dkt. Nos. 21, 23. 13 II. LEGAL STANDARD 14 A defendant may seek dismissal when a plaintiff fails to state a claim upon which relief

15 can be granted. Fed. R. Civ. P. 12(b)(6). In reviewing a Rule 12(b)(6) motion to dismiss, the 16 Court takes all well-pleaded factual allegations as true and considers whether the complaint 17 “state[s] a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 18 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While “[t]hreadbare 19 recitals of the elements of a cause of action, supported by mere conclusory statements” are 20 insufficient, a claim has “facial plausibility” when the party seeking relief “pleads factual content 21 that allows the court to draw the reasonable inference that the defendant is liable for the 22

23 1 Plaintiff asserts that Defendant did not confer in good faith before filing the motion. See Dkt. No. 13 at 13–14. However, based on Defendant’s representations, including a declaration and documentary evidence (see Dkt. No. 15), 24 the Court finds that Defendant’s counsel did, in good faith, confer with or attempt to confer with Plaintiff’s counsel. 1 misconduct alleged.” Iqbal, 556 U.S. at 672. “When reviewing a dismissal pursuant to 2 Rule . . . 12(b)(6), ‘we accept as true all facts alleged in the complaint and construe them in the 3 light most favorable to plaintiff[ ], the non-moving party.’” DaVinci Aircraft, Inc. v. United 4 States, 926 F.3d 1117, 1122 (9th Cir. 2019) (alteration in original) (quoting Snyder & Assocs.

5 Acquisitions LLC v. United States, 859 F.3d 1152, 1156–57 (9th Cir. 2017)). 6 III. DISCUSSION 7 First, Defendant argues that Plaintiff’s claim for breach of fiduciary duty is incognizable 8 against insurers under Washington law due to the “quasi-fiduciary” relationship between insurer 9 and insured. Dkt. No. 7 at 4–5. Second, Defendant argues that a claim for breach of the quasi- 10 fiduciary duty is duplicative of a claim for breach of the duty of good faith. Dkt. No. 7 at 5–8. 11 The Court considers each argument in turn. 12 A. Relationship Between Insurer and Insured 13 To plead a claim for breach of fiduciary duty, the plaintiff must prove that a fiduciary 14 relationship exists. See Micro Enhancement Int’l, Inc. v. Coopers & Lybrand, LLP, 110 Wn.

15 App. 412, 433, 40 P.3d 1206 (2002). Defendant argues that a “true” fiduciary relationship does 16 not exist in the insurance context, and therefore no breach of fiduciary duty can exist. See Dkt. 17 No. 7 at 4–5. In opposition, Plaintiff argues that “an insurer owes its insureds a fiduciary 18 obligation beyond mere good faith and fair dealing.” Dkt. No. 13 at 3. 19 Washington courts have characterized an insurer’s duty of good faith as one that comes 20 from a kind of fiduciary relationship. See Tank v. State Farm Fire & Cas. Co., 105 Wn.2d 381, 21 7115 P.2d 1133 (1986). Tank explains that “[t]his fiduciary relationship, as the basis of an 22 insurer’s duty of good faith, implies more than the ‘honesty and lawfulness of purpose’ . . . [i]t 23 implies ‘a broad obligation of fair dealing’ and a responsibility to give ‘equal consideration’ to

24 the insured’s interests.” Id. at 385 (quoting Tyler v. Grange Ins. Ass’n, 3 Wn. App. 167, 173, 1 177, 473 P.2d 193 (1970)). However, the question here is not whether the insurer has any 2 fiduciary relationship with the insured, but whether it is a traditional fiduciary relationship or 3 something other than that. 4 The characterization by Washington courts of the insurer’s fiduciary duty has at times

5 been muddled and unclear. However, several cases after Tank attempted to clarify that this 6 relationship is something other than a “true” fiduciary relationship, such as a quasi-fiduciary 7 relationship. See Safeco Ins. Co. of Am. v. Butler, 118 Wn.2d 383, 389, 823 P.2d 499 (1992) (“It 8 is clear from the language of Tank, however, that the fiduciary relationship between an insurer 9 and an insured is not a true fiduciary relationship.”); see also Van Noy v. State Farm Mut. Auto. 10 Ins. Co., 142 Wn.2d 784, 16 P.3d 574 (2001) (stating that the court of appeals correctly defined 11 the relationship between insurer and insured as quasi-fiduciary). The Butler court noted that 12 under a true fiduciary relationship, the insurer would have to place the insured’s interests above 13 its own. Butler, 118 Wn.2d at 389. However, the court understood Tank to hold that while the 14 insured must be given equal consideration, the insurer is not required to put the insured above

15 itself. Id. This language indicates that something other than a true fiduciary relationship exists. Id.2 16 Defendant, using the cases above, argues that a relationship between an insurer and 17 insured is quasi-fiduciary and not a true fiduciary relationship, which precludes an independent 18 breach-of-fiduciary-duty claim. See Dkt. No. 7 at 4. Plaintiff appears to have misunderstood 19

20 2 Plaintiff contends that Defendant’s reliance on Butler is incorrect because Butler is a flawed case (for deviating from the rule established in Tyler and Tank) and its holding is an outlier. Dkt. No. 13 at 9. However, Butler relied on 21 both Tank and Tyler in rejecting the argument that a “true” fiduciary relationship exists. Butler, 118 Wn.2d at 389. Furthermore, Butler is apparently not an outlier, as later cases—including cases cited by Plaintiff—cited Butler and 22 Tank to affirm that a quasi-fiduciary relationship exists instead. See Dkt. No. 13 at 11–12; see, e.g., Coventry Assocs. v. Am. States Ins. Co., 136 Wn.2d 269, 280, 961 P.2d 933 (1998); McGreevy v. Or. Mut. Ins. Co., 128 Wn.2d 26, 36, 904 P.2d 731 (1995); Cedell v. Farmers Ins. Co. of Wash., 176 Wn.2d 686, 696, 295 P.3d 239 (2013); 23 Barriga Figueroa v. Prieto Mariscal, 193 Wn.2d 404, 411–12, 441 P.3d 818 (2019). The holding that a quasi- fiduciary relationship exists between an insurer and an insured is also consistent with other jurisdictions. See St. 24 Paul Fire & Marine Ins. Co. v. Onvia, Inc., 165 Wn.2d 122, 130 n.3, 196 P.3d 664 (2008). 1 Defendant’s argument, contending that Defendant “tries to say that the duty of good faith and 2 fair dealing is the same duty as the fiduciary duty that it claims does not exist.” Dkt. No. 13 at 3. 3 This misunderstanding has led Plaintiff to cite several cases that recognize some type of fiduciary 4 relationship between the insurer and the insured. See Dkt. No. 13 at 3–9; see, e.g., Tank, 105

5 Wn.2d at 385; Van Noy, 142 Wn.2d at 793–94; Dussault ex rel. Walker-Van Buren v. Am. Int’l 6 Grp., Inc., 123 Wn. App. 863, 869, 99 P.3d 1256 (2004) (citing Tank to reemphasize that a 7 fiduciary relationship exists); Coventry Assocs. v. Am. States Ins. Co., 136 Wn.2d 269, 280, 961 8 P.2d 933 (1998) (holding that there is a general duty of good faith for insurers that stems from 9 the fiduciary relationship with the insured, as explained in Tank). 10 The Court understands the Parties to agree that some type of fiduciary relationship exists 11 between an insurer and its insured, even if they disagree on its precise nature. However, even 12 some of the cases cited by Plaintiff specifically describe the relationship between an insurer and 13 insured as “quasi-fiduciary.” See, e.g., Cedell v. Farmers Ins. Co. of Wash., 176 Wn.2d 686, 698, 14 295 P.3d 239 (2013) (stating that first-party bad-faith claims in the insurance context are unique

15 because an insurer has a quasi-fiduciary duty to its insured); Barriga Figueroa v. Prieto 16 Mariscal, 193 Wn.2d 404, 412, 441 P.3d 818 (2019) (stating that under Washington law, insurer 17 and insured are in a quasi-fiduciary relationship). The Court ultimately understands Washington 18 law to recognize that a “quasi-fiduciary” relationship exists, rather than a “true” fiduciary 19 relationship, between an insurer and its insured. 20 B. Whether Plaintiff’s Claims Are Duplicative 21 Defendant argues that the quasi-fiduciary duty of an insurer to its insured is encompassed 22 by the insurer’s contractual duty of good faith. Dkt. No. 7 at 5–7. Further, Defendant argues that 23 courts have routinely dismissed fiduciary-duty claims because they are duplicative of bad-faith

24 claims. Dkt. No. 7 at 7–8. Plaintiff does not appear to address this argument, though Plaintiff 1 states that “a review of the Washington appellate cases . . . reveals that the duty of good faith and 2 fair dealing emanates from the fiduciary duty that insurers in Washington owe their 3 policyholders.” Dkt. No. 13 at 3 (emphasis added). 4 In Van Noy, Justice Talmadge stated in a concurring opinion that an insurer did not owe a

5 fiduciary duty in a first-party insurance context, but rather, only a duty of good faith. 142 Wn.2d 6 at 800. Using the reasoning in Tank, the majority responded to Justice Talmadge, stating that “we 7 have long held that the duty of the insurer to act in good faith toward the insured is the same as 8 the fiduciary relationship that the insurer has to the insured.” Id. at 793 n.2 (emphasis added); see 9 also Tank, 105 Wn.2d at 385 (“[W]hether a good faith duty in the realm of insurance is cast in 10 the affirmative or the negative, the source of the duty is the same . . . [which] is the fiduciary 11 relationship existing between the insurer and insured.”). Still, the majority indicated that even 12 though it doubted that the duty of good faith differed from a fiduciary duty, it “disagree[d] with 13 the notion that an insurer only has a duty of ‘good faith.’” Van Noy, 142 Wn.2d at 793 n.2. 14 Ultimately, Van Noy did not directly address the issue of whether an insured can maintain

15 two separate claims for breach of fiduciary duty and breach of duty of good faith. The decision 16 thus left an open door suggesting that a plaintiff may proceed under both theories. However, this 17 door has largely not been chosen since Van Noy, as most courts to examine the issue have 18 dismissed breach-of-fiduciary-duty claims as duplicative. See, e.g., Metro. Grp. Prop. & Cas. 19 Ins. Co. v. Fite, 738 F. Supp. 3d 1371, 1382 n.8 (W.D. Wash. 2024) (“Claims against insurers for 20 both breach of fiduciary duty and breach of duty of good faith are duplicative.”); Bryant v. 21 Country Life Ins. Co., 414 F. Supp. 2d 981, 1003 (W.D. Wash. 2006) (relying on Van Noy to 22 dismiss a breach of fiduciary duty claim, holding that the claims “for breach of fiduciary duty are 23 merely its bad faith claims under another name”); O’Malley v. Grp. Health Co-op. of Puget

24 Sound, 109 Wn. App. 1026, 2001 WL 1515874, at *2 (2001) (“An insurer’s fiduciary duty is the 1 equivalent of its duty to act in good faith.”). Indeed, it appears Washington courts have not yet 2 recognized a breach of fiduciary duty as an independent claim in the insurance context. See, e.g., 3 Baker v. Phoenix Ins. Co., No. C12-1788, 2014 WL 241882, at *3 (W.D. Wash. Jan. 22, 2014) 4 (“Washington courts have yet to recognize a claim for breach of fiduciary duty by an insured

5 against an insurer”); Beasley v. State Farm Mut. Auto. Ins. Co., No. C13-1106, 2014 WL 1494030, 6 at *7 (W.D. Wash. Apr. 16, 2014) (“Plaintiff’s claim for breach of fiduciary duty fails as a matter 7 of law because no Washington court has recognized a claim for breach of fiduciary duty by an 8 insured.”); Neyens v. Am. Family Mut. Ins. Co., No. C12-1038, 2012 WL 5499870, at *2 (W.D. 9 Wash. Nov. 13, 2012) (stating that it “will not blaze a new path for Washington law where the case 10 law suggests it should not”). The Court finds the reasoning of these decisions persuasive. 11 Further, Plaintiff fails to explain how its claim for breach of fiduciary duty differs from 12 its claim for breach of the duty of good faith. Defendant points out that Plaintiff has alleged no 13 facts that distinguish these two claims. Dkt. No. 7 at 3 (“Plaintiff alleges almost identical 14 language [and basis] for his breach of duty of good faith claim . . . [and] Plaintiff seeks the same

15 amount of damages for this claim as the breach of fiduciary duty claim, approximately 16 $150,000.”). Although Plaintiff’s claim for breach of fiduciary duty is based on certain language 17 in Washington caselaw characterizing the insurer’s duty as “fiduciary relationship,” “special 18 fiduciary relationship,” and “quasi-fiduciary relationship,” see supra Section III.A, Plaintiff does 19 not provide any authority recognizing this claim as independent from a claim for breach of the 20 duty of good faith. 21 Therefore, the Court finds that, under the weight of persuasive authority and the 22 circumstances of this case, Plaintiff’s claims for breach of fiduciary duty and breach of the duty 23 of good faith are duplicative, and the claim for breach of fiduciary duty must be dismissed. The

24 1 Court notes that Plaintiff will still have his day in court under his other claims, including a claim 2 for breach of the duty of good faith. 3 IV. CONCLUSION 4 Accordingly, Defendant Allstate Vehicle and Property Insurance Company’s Motion to

5 Dismiss (Dkt. No. 7) is GRANTED without leave to amend. 6 Dated this 6th day of February 2025. 7 A 8 Tana Lin United States District Judge 9

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