Vorhees v. Esurance Insurance Services Inc

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 16, 2025
• Docket: 24-4512
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 16 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

JUSTIN R. VORHEES; KASSI L. No. 24-4512 BLANCHARD, D.C. No. 2:23-cv-00420-RAJ Plaintiffs - Appellants,

v. MEMORANDUM*

ESURANCE INSURANCE SERVICES INC, foreign corporations doing business in the State of Washington,

Defendant - Appellee.

Appeal from the United States District Court for the Western District of Washington Richard A. Jones, District Judge, Presiding

Argued and Submitted May 21, 2025 Seattle, Washington

Before: GOULD, TALLMAN, and CHRISTEN, Circuit Judges.

Justin Vorhees and Kassi Blanchard (“Appellants”) appeal the district court’s

order granting summary judgment in favor of Esurance Insurance Services Inc.

(“Esurance”) on Appellants’ claims for insurance bad faith and violations of the

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

1 Washington Insurance Fair Conduct Act (“IFCA”) and the Washington Consumer

Protection Act (“CPA”). We have jurisdiction under 28 U.S.C. § 1291. We review

de novo. See Animal Legal Def. Fund v. FDA, 836 F.3d 987, 988 (9th Cir. 2016) (en

banc) (per curiam).

The IFCA 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). Washington law recognizes that “an insurer has a duty of good faith

to its policyholder and violation of that duty may give rise to a tort action for bad

faith.” Smith v. Safeco Ins. Co., 78 P.3d 1274, 1276 (Wash. 2003). To prevail in a

CPA action, a plaintiff must establish five elements, including: (1) an unfair or

deceptive act or practice: (2) occurring in trade or commerce, which may be

established by proving a violation of WAC 284-30-330. Indus. Indem. Co. of the

Nw., Inc. v. Kallevig, 792 P.2d 520, 529 (Wash. 1990).

Appellants contend that Esurance violated the IFCA and the CPA and

committed insurance bad faith by: (1) failing to adequately investigate Vorhees’

underinsured motorist (“UIM”) claim and making an unreasonable offer; (2) failing

to tender due and payable benefits; and (3) filing a counterclaim for fraud. We

address each issue in turn and conclude that Appellants have not raised a genuine

dispute of material fact. See United States v. JP Morgan Chase Bank Account No.

Ending 8215, 835 F.3d 1159, 1162 (9th Cir. 2016).

2 1. There is no genuine issue of fact that Esurance acted unreasonably. Appellants

contend that Esurance acted unreasonably in assessing the value of Vorhees’ loss of

earnings claim. But the only evidence of lost earnings that Appellants provided to

Esurance before Esurance made its offer was Vorhees’ business’s profit and loss

records for June to December 2018, handwritten payroll summaries from July 2018

to July 2019, and a victim impact statement. In his deposition, Vorhees stated that

he was unsure how he came up with the numbers for his profit and loss records and

admitted that his bookkeeping was incomplete and did not give an accurate picture

of the business’s activities from January 2019 on. After determining that this

documentation was insufficient, Esurance repeatedly contacted Appellants’ counsel

to request additional supporting documentation, which was never provided.

Esurance’s offer was based on a lack of supporting documentation as a result of

Vorhees’ failure, and not a failure of the insurance company.

Appellants contend that they provided “substantial documentation and an

economist report estimating Mr. Vorhees’ losses at more than $40,000.” They also

contend that the expert report constitutes evidence that Esurance acted unreasonably.

But the reports they cite, which were written after they filed suit against Esurance,

do not provide evidence of what Esurance “knew or should have known at the time

that the offer was made.” Heide v. State Farm Mut. Ins. Co., 261 F. Supp. 3d 1104,

1108 (W.D. Wash. 2017). Moreover, the expert report focuses on “what could have

3 been done,” when the relevant inquiry is “what was actually done.” Hanson v. State

Farm Mut. Auto. Ins. Co., 261 F. Supp. 3d 1110, 1117 (W.D. Wash. 2017).

Appellants also point to Esurance reducing its reserves as evidence of

unreasonableness. But Esurance lowered its reserves based on its investigation, and

Appellants do not explain how the readjustment is evidence of unreasonableness.

Cf. Miller v. Kenny, 325 P.3d 278, 298 (Wash. Ct. App. 2014) (maintaining a high

reserve while making low settlement offers may be unreasonable). Appellants also

contend the use of the social media report of Vorhees was unreasonable, but they do

not cite supporting case law or provide evidence that Esurance made an unreasonable

offer as a result of the social media report.

2. Nor is there a triable issue of fact as to whether Esurance failed to tender due and

payable benefits. Appellants rely on the unpublished portion of a Washington Court

of Appeals case, Beasley v. GEICO Gen. Ins. Co., 517 P.3d 500 (Wash. Ct. App.

2022), to contend that Esurance has a duty to tender undisputed amounts under its

policy. But in Beasley, the claims adjusters who handled the plaintiff’s claim both

testified that they did not dispute that $10,000 was owed to the plaintiff. Id. at 506–

07.

Here, none of Esurance’s witnesses testified that Esurance’s $55,676.78 offer

was undisputed. While Esurance witnesses stated that Vorhees was entitled to UIM

benefits and characterized the offer made by Esurance as “fair” and “reasonable,”

4 they also described the offer as “generous” and a “compromise,” and Esurance’s

corporate representative noted that Esurance disputes that Vorhees is entitled to

compensation for his loss of earnings claim. This is insufficient to infer that the

$55,676.78 offer was an undisputed amount.

3. Finally, there is no triable issue that Esurance’s counterclaim for fraud violates

the IFCA or the CPA or is an act of insurance bad faith. “UIM coverage requires

that a UIM insurer be free to be adversarial within the confines of the normal rules

of procedure and ethics.” Ellwein v. Hartford Acc. & Indem. Co., 15 P.3d 640, 647

(Wash. 2001), overruled on other grounds by Smith v. Safeco Ins. Co., 78 P.3d 1247,

1276 (Wash. 2003). While violating the rules of procedures and ethics may be

evidence of bad faith, see id., Appellants have not provided evidence sufficient to

infer that Esurance’s counterclaim is “unreasonable, frivolous, or unfounded” in

violation of Fed. R. Civ. P. 11. Esurance’s counterclaim, which alleges that its

investigation contradicted both Vorhees’ wage loss and his medical necessity claims,

has at least some factual basis in Vorhees’ social media report.

AFFIRMED.