Roxanne Tunison v. Safeco Ins. Company of Il.

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 19, 2021
• Docket: 20-36017
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 19 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

ROXANNE TUNISON; et al., No. 20-36017

Plaintiffs-Appellants, D.C. No. 2:19-cv-00503-RSL

v. MEMORANDUM* SAFECO INSURANCE COMPANY OF ILLINOIS, a foreign corporation,

Defendant-Appellee.

Appeal from the United States District Court for the Western District of Washington Robert S. Lasnik, District Judge, Presiding

Submitted October 4, 2021** Seattle, Washington

Before: TASHIMA, M. SMITH, and NGUYEN, Circuit Judges.

Elias, Jon, and Roxanne Tunison appeal the district court’s order granting

summary judgment in favor of Safeco Insurance Company of Illinois (“Safeco”).

We have jurisdiction under 28 U.S.C. § 1291. Reviewing the district court’s grant

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). of summary judgment de novo, Bravo v. City of Santa Maria, 665 F.3d 1076, 1083

(9th Cir. 2011), we affirm.

1. The district court properly granted summary judgment on the

Tunisons’ breach of contract claim. The Tunisons contend Safeco breached the

insurance contract by applying the Montana underinsured motorist coverage

(“UIM”) limits when they resided in Washington at the time of the accident.

However, prior to the initiation of the underlying proceedings, Safeco agreed to

reform the Tunisons’ policy such that Washington UIM limits applied. Thus, the

Tunisons have failed to raise a genuine issue of material fact. See Urbina v. Nat’l

Bus. Factors Inc., 979 F.3d 758, 762 (9th Cir. 2020) (“Summary judgment is

appropriate when ‘there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.’” (quoting Fed. R. Civ. P.

56(a))).1

After receiving documentation of her injuries and treatment, Safeco paid

Roxanne Tunison the Washington UIM limit. Therefore, her breach of contract

1 The Tunisons waived claims regarding personal injury protection coverage by failing to timely assert them before the district court. The district court accordingly declined to address such claims, as does this court. Navajo Nation v. U.S. Forest Serv., 535 F.3d 1058, 1080 (9th Cir. 2008) (en banc) (holding that district court need not consider claim not included in the complaint and raised for the first time at summary judgment); Crawford v. Lungren, 96 F.3d 380, 389 n.6 (9th Cir. 1996) (declining to consider claim raised for the first time on appeal).

2 claim also fails. There is also no triable issue as to Elias Tunison’s entitlement to

UIM benefits under the policy. Safeco denied the claim as to Elias because he did

not submit supporting documentation for his claimed lost wages and the cause and

extent of his injuries could not be established from the records provided. The

losses he did support with evidence were fully compensated by the settlement

funds from the at-fault driver’s insurer and Safeco’s initial $5,000 payment. And

there is no record support for Elias’ claim of damages for continuing and future

medical treatment in excess of the funds already received.

2. The district court properly granted summary judgment on the

Tunisons’ Washington Consumer Protection Act (“CPA”) claim. The Tunisons

rely on Washington Administrative Code (“WAC”) 284-30-330 which, in relevant

part, prohibits an insurer from refusing to pay a claim without conducting a

reasonable investigation, failing to make a good faith effort to effectuate claim

settlement when liability is reasonably clear, and compelling a claimant to resort to

litigation by offering substantially less than what is ultimately recovered in the

legal action. See Indus. Indem. Co. of the Nw., Inc. v. Kallevig, 792 P.2d 520, 529

(Wash. 1990) (en banc) (holding that a violation of WAC 284-30-330 constitutes a

“per se unfair trade practice” under the CPA).

Safeco promptly communicated with the Tunisons regarding the material

needed to evaluate their claim. When the Tunisons provided records in a form

3 inaccessible to Safeco, Safeco requested records sent through different means on

multiple occasions. Then in denying the Tunisons’ claim, Safeco made clear that it

was willing to re-evaluate the claim if additional records were provided. Once

additional records as to Roxanne Tunison’s medical treatment were submitted,

Safeco paid her the coverage limit. On this record, there is no triable issue of fact

that Safeco acted unreasonably in investigating the Tunisons’ claim.

Nor is there a triable issue that Safeco’s liability was reasonably clear when

it first denied the Tunisons’ claim. As stated above, the record does not support

Elias Tunison’s entitlement to UIM benefits. Therefore, liability as to him was not

reasonably clear. As to Roxanne Tunison, even assuming she could prove the

medical damages alleged at that time, she was already made whole by the

settlement funds and Safeco’s initial $5,000 payment. Her entitlement to benefits

for future medical treatment was not reasonably clear from the records she

provided, nor was it reasonably clear that future treatment would entitle her to

payment beyond the compensation she had already received. Her demand for lost

wages was supported only by sparse documentation that did not make reasonably

clear the extent, if any, of Safeco’s liability.

Finally, there is no triable issue that Safeco’s denial of benefits or failure to

concede the applicability of Washington UIM limits compelled the Tunisons to

litigate. As previously noted, when Safeco denied the Tunisons’ claim it informed

4 them that it was willing to re-evaluate if they submitted additional documentation.

As to the applicability of the Washington UIM limits, the policy was issued in

Montana under Montana law, and Roxanne and Elias Tunison failed to inform

Safeco that they were residing in Washington until after the car accident. Prior to

this litigation, Safeco procured evidence as to the Tunisons’ residency and

reformed the policy consistent with the Washington UIM limits. Further, the fact

that Roxanne Tunison ultimately received a full UIM payout despite the initial

denial is not sufficient by itself to establish Safeco’s liability. See Perez-Crisantos

v. State Farm Fire & Cas. Co., 389 P.3d 476, 483 (Wash. 2017).

3. The district court properly granted summary judgment as to the

Tunisons’ claim under the Washington Insurance Fair Conduct Act (“IFCA”),

which provides a cause of action for those who are “unreasonably denied a claim

for coverage or payment of benefits by an insurer . . . .” Wash. Rev. Code §

48.30.015(1). This claim fails for the same reasons as the claim under the CPA.

4. Finally, the district court properly granted summary judgment on the

Tunisons’ bad faith claim. For bad faith claims, “[t]he determinative question is

reasonableness of the insurer’s actions in light of all the facts and circumstances of

the case.” Anderson v. State Farm Mut. Ins. Co., 2 P.3d 1029, 1033 (Wash. Ct.

App. 2000). No record evidence supports the Tunisons’ claim that Safeco’s

conduct was unreasonable.

5 AFFIRMED.