1 2 3 4
5 6 7 8 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 9 AT SEATTLE 10 11 ZIWEN LI, CASE NO. 2:25-cv-01249-TL
12 Plaintiff, ORDER ON MOTION TO DISMISS 13 v. 14 AMERICAN FAMILY MUTUAL INSURANCE COMPANY S.I. d/b/a 15 CONNECT POWERED BY AMERICAN FAMILY INSURANCE and AMERICAN 16 FAMILY CONNECT PROPERTY AND CASUALTY INSURANCE COMPANY 17 f/k/a IDS PROPERTY CASUALTY INSURANCE COMPANY, 18 Defendants. 19
20 This matter is before the Court on Defendant American Family Mutual Insurance 21 Company, S.I.’s (“Connect”) Motion to Dismiss. Dkt. No. 10. Having considered the motion, 22 Plaintiff’s response (Dkt. No. 12), Defendant Connect’s reply (Dkt. No. 13), and the relevant 23 record, the Court GRANTS IN PART and DENIES IN PART the motion. 24 1 I. BACKGROUND 2 A. Parties 3 Plaintiff is Ziwen Li, a resident of Issaquah, Washington. Dkt. No. 1-2 (amended state- 4 court complaint) ¶ 1.1. Prior to the events giving rise to this matter, Plaintiff purchased an
5 automobile insurance policy that was underwritten by IDS Property Casualty Insurance 6 Company (“IDS”). Id. ¶ 1.5. 7 There is considerable confusion surrounding the identity of, and respective naming 8 conventions for, the two Defendants. The Parties have not agreed on consistent nomenclature, 9 and the similarity of the entities’ names, combined with Plaintiff’s pleading decision to identify 10 “American Family Mutual” as “Connect,” while identifying “American Family Connect” as 11 “American Family,” adds to the ambiguity. See Dkt. No. 1-2 ¶¶ 1.2, 1.4. Plaintiff attempted to 12 clarify the situation in his opposition to the instant motion to dismiss, but the result is further 13 confusion. See Dkt. No. 12 at 6–7. The problem is further compounded by Plaintiff’s pleading 14 practice of grouping both Defendants together as a single unit. That is, Plaintiff directs the
15 overwhelming majority of his allegations toward “Defendants,” without differentiating which 16 Defendant might be liable for which misconduct. “In general, a complaint which ‘lump[s] 17 together . . . multiple defendants in one broad allegation fails to satisfy [the] notice requirement 18 of Rule 8(a)(2).’” Seeno v. Discovery Builders, Inc., No. C23-4072, 2024 WL 694490, at *5 19 (N.D. Cal. Feb. 20, 2024) (quoting Brown Prods., LLC v. Muzooka, Inc., 143 F. Supp. 3d 1026, 20 1037 (N.D. Cal. 2015)). But Because Defendant Connect does not object to this convention, and 21 because the Court can adjudicate the instant motion without further clarification, the Court will 22 overlook the issue. 23 In the face of such confusion, the Court will cut through the problem by considering the
24 Amended Complaint (Dkt. No. 1-2) to be the definitive indicator of who is whom. The Court 1 will thus employ the nomenclature as Plaintiff has pleaded it. In sum: 2 • Defendant American Family Mutual Insurance Company S.I. d/b/a Connect Powered by American Family Insurance is “Defendant Connect.” See id. 3 ¶ 1.2. 4 • Defendant American Family Connect Property and Casualty Insurance Company f/k/a IDS Property Casualty Insurance Company is “Defendant 5 American Family.” See id. ¶ 1.4. 6 The first Defendant is American Family Mutual Insurance Company S.I. (“Connect”). Id. 7 During the time period relevant to this case, Defendant Connect did business as “Connect 8 Powered by American Family Insurance.” Id. ¶ 1.2. Plaintiff alleges that “[a]t all times material 9 to this Complaint, Plaintiff had a ‘Connect powered by American Family Insurance’ policy.” Id. 10 ¶ 1.3. 11 The second Defendant is American Family Connect Property and Casualty Insurance 12 Company (“American Family”). Id. ¶ 1.4. Plaintiff alleges that in early 2020, Defendant 13 American Family acquired IDS, the original underwriter of Plaintiff Li’s automobile insurance 14 policy, thus becoming the underwriter of Plaintiff’s automobile insurance policy.1 Id. ¶¶ 1.5, 1.6. 15 B. Facts 16 The primary issues in this case are Plaintiff’s underinsured motorist (“UIM”) coverage 17 and/or his waiver thereof.2 On or about June 21, 2024, Plaintiff’s vehicle was rear-ended by 18 motorist Andrew Bendokas. Id. ¶ 3.1. Bendokas had only $25,000 in insurance coverage through 19 his insurer. Id. ¶ 3.4. Plaintiff’s insurance policy “included liability coverage with coverage 20 limits of $100,000 per occurrence.” Id. ¶ 3.8. Plaintiff’s “Policy included an indication that 21
1 Defendants deny these allegations. See Dkt. No. 9 (Defendant American Family’s Answer) ¶ 1.6. 22 2 “An ‘underinsured motor vehicle’ is defined as a vehicle with insufficient insurance to compensate the plaintiff’s 23 damages[.]” Hamilton v. Farmers Ins. Co. of Wash., 107 Wn.2d 721, 726, 733 P.2d 213 (1987). “The purpose of UIM coverage is to allow an injured party to recover those damages the injured party would have received had the responsible party been insured with liability limits as broad as the injured party’s UIM limits.” Devaney v. Farmers 24 Ins. Co., 134 Wn. App. 204, 207, 139 P.3d 352 (2006). 1 underinsured motorist coverage was rejected, and property damage coverage was rejected.” Id. 2 ¶ 3.9. 3 Under WAC 284-20-300(3), 4 The “written rejection of [UIM] coverage . . . must include the following statement: ‘In order to provide for an informed decision 5 of the potential consequences of rejecting underinsured motorist coverage; the undersigned acknowledges that by rejecting 6 underinsured motorist coverage there is exposure to the risk of not being sufficiently insured for injury and/or damages when involved 7 in an accident with a driver of an underinsured vehicle.’”
8 The regulation requires further that that “[s]uch notice shall be prominently placed above the 9 signature area and be bold.” WAC 284-30-300(3). 10 On or about June 28, 2024, Plaintiff’s counsel “requested verification of the extent of 11 coverage available in a Letter of Representation.” Dkt. No. 1-2 ¶ 3.10. Defendants claimed that 12 Plaintiff had waived UIM coverage (id. ¶ 3.11), and Plaintiff requested a copy of the waiver (id. 13 ¶ 3.12). On January 8, 2025, Plaintiff received an email “indicating that [Plaintiff] completed his 14 application for insurance coverage online and, therefore, Defendants do not require the paper 15 forms.” Id. ¶ 3.13. On January 16, 2025, “the adjuster for Defendants provided an alleged copy 16 of an online application for insurance with a ‘check box’ waiving UIM coverage, along with a 17 scanned document with UIM waiver language, that was not signed by Plaintiff.” Id. ¶ 3.16. 18 On February 19, 2025, Plaintiff initiated the administrative process for filing an Insurance 19 Fair Conduct Act (“IFCA”) complaint, sending a 20-day Notice for Violations to the State Office 20 of the Insurance Commissioner and to Defendants. Id. ¶ 3.18; see Dkt. Nos. 1-3 (Letter to 21 Defendant American Family), 1-9 (Insurance Commissioner cover sheets). On June 2, 2025, 22 Plaintiff filed a civil action against Defendants in King County Superior Court. Dkt. No. 1-1 23 (state-court complaint). On June 24, 2025, Plaintiff filed an Amended Complaint. Dkt. No. 1-2. 24 1 On July 3, 2025, Defendants jointly removed the case to this Court. Dkt. No. 1 (Notice of 2 Removal). 3 On July 10, 2025, Defendant Connect filed the instant motion to dismiss (Dkt. No. 10), 4 along with a simultaneous request that the Court take judicial notice of the insurance policy at
5 issue in this case (Dkt. No. 11). On July 31, 2025, Plaintiff responded to the motion (Dkt. 6 No. 12), and on August 7, 2025, Defendant Connect filed a reply (Dkt. No. 13). 7 II. LEGAL STANDARD 8 A defendant may seek dismissal when a plaintiff fails to state a claim upon which relief 9 can be granted. Fed. R. Civ. P. 12(b)(6). In reviewing a Rule 12(b)(6) motion to dismiss, the 10 Court takes all well-pleaded factual allegations as true and considers whether the complaint 11 “state[s] a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 12 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While “[t]hreadbare 13 recitals of the elements of a cause of action, supported by mere conclusory statements,” are 14 insufficient, a claim has “facial plausibility” when the party seeking relief “pleads factual content
15 that allows the court to draw the reasonable inference that the defendant is liable for the 16 misconduct alleged.” Iqbal, 556 U.S. at 672. When reviewing a dismissal pursuant 17 to Rule 12(b)(6), “we accept as true all facts alleged in the complaint and construe them in the 18 light most favorable to plaintiff[], the non-moving party.” DaVinci Aircraft, Inc. v. United States, 19 926 F.3d 1117, 1122 (9th Cir. 2019) (alteration in original) (quoting Snyder & Assocs. 20 Acquisitions LLC v. United States, 859 F.3d 1152, 1156–57 (9th Cir. 2017)). 21 III. DISCUSSION 22 A. Incorporation By Reference 23 On a motion to dismiss, a court may “consider certain materials—documents attached to
24 the complaint, documents incorporated by reference in the complaint, or matters of judicial 1 notice—without converting the motion to dismiss into a motion for summary judgment.” United 2 States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). “[T]he incorporation by reference doctrine 3 [applies] to situations in which the plaintiff’s claim depends on the contents of a document, the 4 defendant attaches the document to its motion to dismiss, and the parties do not dispute the
5 authenticity of the document, even though the plaintiff does not explicitly allege the contents of 6 that document in the complaint.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). A 7 document may be incorporated by reference “if the plaintiff refers extensively to the document or 8 the document forms the basis of the plaintiff’s claim.” Ritchie, 342 F.3d at 908. 9 Here, Defendant Connect requested that the Court take judicial notice of “the insurance 10 Policy referenced in Plaintiff’s Complaint and Amended Complaint[.]” Dkt. No. 11 at 1. 11 Defendant Connect’s request is more appropriately considered a request that the Court consider 12 Plaintiff’s insurance policy as part of the Amended Complaint under the incorporation-by- 13 reference doctrine, which is distinct and separate from judicial notice. See Khoja v. Orexigen 14 Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018) (“Unlike rule-established judicial notice,
15 incorporation-by-reference is a judicially created doctrine that treats certain documents as though 16 they are part of the complaint itself.”). The purpose behind incorporation-by-reference is to 17 “[p]revent[] plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting references 18 to documents upon which their claims are based.” Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th 19 Cir. 1998), superseded by statute on other grounds as recognized in Abrego Abrego v. Dow 20 Chem. Co., 443 F.3d 676, 681–82 (9th Cir. 2006). 21 It is entirely appropriate here for the Court to consider the insurance policy at issue here 22 as part of the Amended Complaint, without converting Defendant Connect’s motion to dismiss 23 into a motion for summary judgment. See Biltmore Assocs., LLC v. Twin City Fire Ins. Co., 572
24 F.3d 663, 665 n.1 (9th Cir. 2009) (holding in the context of ruling on a motion to dismiss that 1 “[a] court may consider documents, such as the insurance policies, that are incorporated by 2 reference into the complaint.”); Enger v. Allstate Ins. Co., 682 F. Supp. 2d 1094, 1096 (E.D. Cal. 3 2009) (applying incorporation-by-reference doctrine to insurance policy where plaintiff had 4 alleged breach of that policy). After all, Plaintiff’s first cause of action is for breach of contract;
5 the allegedly breached contract is the “[P]olicy of insurance in force at the time of the loss[.]” 6 Dkt. No. 1-2 ¶ 4.2. Simply put, the policy forms the basis for the Amended Complaint. See 7 Ritchie, 342 F.3d at 908 (“The doctrine of incorporation by reference may apply, for example, 8 when a plaintiff’s claim about insurance coverage is based on the contents of a coverage 9 plan[.]”). 10 Defendant Connect has attached the relevant policy (Dkt. No. 11 at 4–26) to its request 11 for judicial notice (id. at 1–2), which it filed two minutes after it filed its motion to dismiss. 12 Under such circumstances, the Court will consider the policy to have been attached to the motion 13 to dismiss. 14 And although Plaintiff objects to Defendant Connect’s request, Plaintiff does not dispute
15 the authenticity of the document that Defendant Connect has presented as the relevant policy. 16 See Dkt. No. 12 at 11–12. Plaintiff refers to Defendant Connect’s use of the policy as Defendant 17 Connect’s “present[ing] [its] own version of the facts at the pleading stage.” Id. at 12 (quoting 18 Pirani v. Netflix, Inc., 710 F. Supp. 3d 756, 766 (N.D. Cal. 2024)). But in merely providing the 19 contract that Plaintiff alleges was breached, Defendant Connect is hardly presenting its own 20 version of the facts. Given that Plaintiff does not dispute the authenticity of the contract while 21 maintaining that it forms the basis of his allegation, it follows that Plaintiff relies on these same 22 facts to plead his claim for breach of contract. In other words, the contract represents Plaintiff’s 23 facts, too.
24 1 Therefore, the Court will consider the policy to have been incorporated by reference into 2 the Amended Complaint. 3 B. Specific Claims 4 Plaintiff has pleaded six causes of action against both Defendant Connect and Defendant
5 American Family. In considering Defendant Connect’s motion to dismiss, the Court will address 6 each cause of action as against Defendant Connect. 7 1. Breach of Contract 8 “A breach of contract is actionable only if the contract imposes a duty, the duty is 9 breached, and the breach proximately causes damage to the claimant”—in other words, 10 (1) contract; (2) breach; and (3) damages. P.E.L. v. Premera Blue Cross, 2 Wn.3d 460, 481, 540 11 P.3d 105 (2023) (quoting Nw. Indep. Forest Mfrs. v. Dep’t of Lab. & Indus., 78 Wn. App. 707, 12 712, 899 P.2d 6 (1995)). Defendant Connect argues that Plaintiff’s policy did not impose a 13 contractual duty on Defendant Connect, because Plaintiff’s policy was issued by Defendant 14 American Family. Defendant Connect asserts, “Plaintiff’s Policy is unequivocal in naming
15 [Defendant American Family] as Plaintiff’s insurer.” Dkt. No. 10 at 3. 16 The Court agrees. Plaintiff’s policy states: “We agree with you, in return for your 17 premium payment, to insure you subject to the terms of this policy. We will insure you for the 18 coverages and limits of liability for which a premium is shown in the declarations of this policy.” 19 Dkt. No. 11 at 19. As provided in the definitions section of the policy, “We, us and our means 20 American Family Connect Property and Casualty Insurance Company.” Id. As discussed above, 21 American Family Connect Property and Casualty Insurance Company is the Defendant whom 22 Plaintiff identifies as “American Family.” See Dkt. No. 1-2 at ¶ 1.4. Therefore, the contract 23 clearly identifies Defendant American Family as the insurer that is contractually obligated to
24 Plaintiff, not Defendant Connect. 1 For his part, Plaintiff argues that he “reasonably believed he had a [Defendant Connect] 2 policy, and the insurance claim handling, investigation, and claim decisions, including the denial, 3 were conducted by [Defendant Connect], who is seeking dismissal.” Dkt. No. 12 at 13. This is 4 unpersuasive. Plaintiff provides no case law to suggest why the Court should consider what
5 Plaintiff “reasonably believed” to be more indicative of the contractual terms than the 6 unambiguous—and the definitions section quoted above is decidedly unambiguous with respect 7 to who is insuring whom—contractual language. See Mayer v. Pierce County Med. Bureau, Inc., 8 80 Wn. App. 416, 420, 909 P.2d 1323 (1995) (“Interpretation of an unambiguous contract is a 9 question of law.”). Nor does Plaintiff provide any authority to indicate that an extracontractual 10 entity that conducts the “insurance claim handling, investigation, and claim decisions” is 11 somehow subsumed into the role of contracting party. Moreover, as Defendant Connect correctly 12 points out, “handling an insurance claim does not appear in Washington’s definition of insurer.” 13 Dkt. No. 13 at 6 (citing RCW 48.01.050 (“‘Insurer’ defined”)). 14 As the Washington Supreme Court has established, “It is the contractual nature of the
15 undertaking that determines the insurer status.” Washington Ins. Guar. Ass’n v. Dep’t of Labor & 16 Indus., 122 Wn.2d 527, 532, 859 P.2d 592 (1993). That is, whether an entity is an “insurer” for 17 the purpose of Washington insurance law is based on the contractual relationship between the 18 purported insured and the purported insurer. See id. (discussing relationship between statutory 19 definitions of “insurance” and “insurer”). The corollary here is that where there is no contract, 20 there is no insurer. 21 Plaintiff next points the Court to his pleading, asserting that in his Amended Complaint, 22 he has “plausibly alleged that he had an American Family Mutual policy.” Dkt. No. 12 at 13. But 23 the language of the policy, upon the document’s incorporation by reference into the pleading,
24 makes such an allegation implausible. Where, as here, the contract has been incorporated by 1 reference into the complaint, the Court “may treat such a document as part of the complaint, and 2 thus may assume that its contents are true for purposes of a motion to dismiss under Rule 3 12(b)(6).” Ritchie, 342 F.3d at 908. Taking the contractual language as true, it is clear that 4 Defendant American Family owed Plaintiff a contractual duty, not Defendant Connect.
5 Therefore, this claim, as against Defendant Connect, is DISMISSED. 6 2. Bad Faith 7 Washington insurance law contemplates two different kinds of bad faith: common-law 8 bad faith and statutory bad faith. See St. Paul Fire & Marine Ins. Co. v. Onvia, Inc., 165 Wn.2d 9 122, 128, 196 P.3d 664 (2008) (“Washington’s insurance bad faith law derives from statutory 10 and regulatory provisions, and the common law.”). But “[a]lthough the duty to act in good faith 11 is memorialized by RCW 48.01.030, insurance bad faith is a common law tort, not a statutory 12 cause of action.” P.E.L., 2 Wn.3d at 499. 13 Washington courts have located insurance law’s common-law duty of good faith in “the 14 fiduciary relationship existing between the insurer and insured.” Tank v. State Farm Fire & Cas.
15 Ins. Co., 105 Wn.2d 381, 385, 715 P.2d 1133 (1985). This fiduciary relationship “exists not only 16 as a result of the contract between insurer and insured, but because of the high stakes involved 17 for both parties to an insurance contract and the elevated level of trust underlying insureds’ 18 dependence on their insurers.” Id. 19 Here, Defendant Connect asserts that “Plaintiff’s cause of action . . . fails where his 20 theory against [Defendant Connect] is that it purportedly adjusted Plaintiff’s claim[.]” Dkt. 21 No. 13 at 8. Defendant Connect’s position is that while Defendant American Family actually 22 insured Plaintiff and, consequently, owed Plaintiff a duty of good faith, Defendant Connect 23 merely adjusted and handled Plaintiff’s claim. Consequently, Defendant Connect argues,
24 Defendant Connect did not owe Plaintiff a duty of good faith. See id. In support of its position, 1 Defendant Connect cites Keodalah v. Allstate Insurance Company, 194 Wn.2d 339, 449 P.3d 2 1040 (2019). Dk. No. 13 at 8. In that case, the Washington Supreme Court held that a plaintiff 3 could not maintain a cause of action for bad faith against “someone outside the quasi-fiduciary 4 relationship” between the insurer and the insured. Keodalah, 194 Wn.2d at 352–53. In Defendant
5 Connect’s presentation of Keodalah, this means that only the contracted insurer is liable for bad 6 faith. 7 But as Justice Yu pointed out in her dissenting opinion in Keodalah, although the court 8 had held that a defendant who existed outside the quasi-fiduciary relationship between insurer 9 and insured did not owe a plaintiff a statutory duty of good faith under the IFCA and its 10 implementing regulations, the court said nothing as to whether that defendant owed a plaintiff a 11 common-law duty of good faith. See id. at 357–64 (Yu, J., dissenting) (noting, in particular, that 12 “the tort of insurance bad faith ‘derives from statutory and regulatory provisions, and the 13 common law.’” (quoting St. Paul Fire, 165 Wn.2d at 128, (emphasis added))). Subsequent case 14 law, particularly in courts in this District, has held that, as Justice Yu wrote, the Keodalah ruling
15 does not bar common law bad-faith insurance claims against non-insurers. As Judge Robart has 16 helpfully explained: 17 Keodalah did not address or analyze whether an insured may bring a common law bad faith insurance claim against an individual 18 insurance adjuster in Washington. In a dissenting opinion that garnered four votes, Justice Mary I. Yu recognized the limits of 19 the Keodalah majority’s holding, noting that the plaintiff-insured had raised both statutory and common law bad faith claims but that 20 the majority failed to even acknowledge the latter claim. 21 Hoglund v. Allstate Ins. Co., No. C23-1575, 2023 WL 8528495, at *3 (W.D. Wash. Dec. 8, 22 2023); see also Lee v. Amica Mut. Ins. Co., No. C24-591, 2024 WL 3293353, at *3 (W.D. Wash. 23 July 3, 2024) (collecting cases). In other words, Keodalah does not support Defendant Connect’s 24 1 argument that Washington law forecloses all bad-faith claims against non-insurers. Common-law 2 claims remain viable. 3 Here, Plaintiff has plausibly alleged a common-law bad-faith claim against Defendant 4 Connect. See Dkt. No. 1-2 ¶¶ 5.4–5.8. Defendants, including Defendant Connect, “cho[se] to
5 unreasonably deny payment of benefits despite Plaintiff Li’s cooperation” and “utilized unfair 6 claims handling practices to delay the payment of owed benefits.” Id. ¶¶ 5.6, 5.7. Therefore, this 7 claim survives Defendant Connect’s motion. 8 3. Consumer Protection Act 9 There are two types of CPA claims: per-se and non–per se. A per-se claim “exists where 10 the legislature declares that a statutory violation constitutes an unfair or deceptive act.” Preston 11 v. SB&C, Ltd., 588 P.3d 371, 375 (Wash. 2026). For example, an alleged violation of 12 Washington’s insurance regulations might be pleaded as a per-se violation of the CPA. See, e.g., 13 Hell Yeah Cycles v. Ohio Sec. Ins. Co., 16 F. Supp. 3d 1224, 1230–31 (E.D. Wash. 2014) (“‘A 14 violation of WAC 284–30–330 constitutes a violation of RCW 48.30.010(1), which in turn
15 constitutes a per se unfair trade practice by virtue of the legislative declaration in RCW 16 19.86.170.’” (quoting Indus. Indem. Co. of the Nw., Inc. v. Kallevig, 114 Wn.2d 907, 923, 792 17 P.2d 520 (1990)). In contrast, “[a] plaintiff can pursue a non-per-se CPA claim absent a clear 18 statutory violation.” Preston, 588 P.3d at 375. 19 Under Washington law, however, as explained in Keodalah, a plaintiff can only bring a 20 per-se CPA claim against their insurer because, as enacted and promulgated, only the insurer is 21 bound by the statutory and regulatory framework. See, e.g., Connelly Law Offices, PLLC v. 22 Cowbell Cyber, Inc., No. C25-302, 2025 WL 2256657, at *10 (W.D. Wash. Aug. 7, 2025) 23 (holding that “WAC 284-30-330 applies only to insurers because ‘that regulation defines only
24 unfair acts or practices of the insurer.’”) (quoting Keodalah, 194 Wn.2d at 350)). Here, the 1 insurer—as demonstrated by the terms of Plaintiff’s policy—is Defendant American Family, not 2 Defendant Connect. Although Plaintiff argues that Defendant Connect was, in fact, Plaintiff’s 3 insurer (see Dkt. No. 12 at 17), the terms of Plaintiff’s insurance policy clearly indicate that 4 Defendant American Family was his insurer, not Defendant Connect. See supra Section III.B.1.
5 That Defendant Connect allegedly “participated in the claims process, directed claims decisions, 6 and held itself out as the insurer” (see Dkt. No. 12 at 17) does not, as Plaintiff argues, necessarily 7 make it Plaintiff’s insurer for the purposes of enforcing Washington insurance law. See Connelly 8 Law Offices, 2025 WL 2256657, at *10 (“That Cowbell sells insurance, . . . performed the 9 coverage evaluations, and denied coverage for Plaintiff’s claim does not show Cowbell is an 10 insurer. These functions say nothing about whether Cowbell is in the business of making 11 contracts of insurance.” (citation omitted)).3 Thus, per-se CPA claims, which apply only to “the 12 insurer,” cannot proceed against Defendant Connect. 13 Even so, Plaintiff may still plead viable non-per-se CPA claims against Defendant 14 Connect, as long as he properly pleads all five elements of a CPA claim. See Preston, 588 P.3d at
15 375. “[T]o prevail in a private CPA action . . . , a plaintiff must establish five distinct elements: 16 (1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest 17 impact; (4) injury to plaintiff in his or her business or property; (5) causation.” Hangman Ridge 18 Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 780, 719 P.2d 531 (1986). 19 Plaintiff’s pleading is deficient with respect to the fourth element, damages. “[T]he 20 business and property injuries compensable under the CPA are relatively expansive.” Brown v. 21 22 3 Plaintiff alleges in his Amended Complaint that Defendant Connect “is a foreign insurer licensed and doing 23 business in King County, Washington.” Dkt. No. 1-2 ¶ 1.2. This characterization is a conclusion of law, however, which the Court does not accept as true when considering a Rule 12(b)(6) motion. See Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003) (“[W]e do not . . . assume the truth of legal conclusions cast in the form of factual 24 allegations.”). 1 Transworld Sys. Inc., 646 F. Supp. 3d 1328, 1343 (W.D. Wash. 2022) (quoting Frias v. Asset 2 Foreclosure Servs., Inc., 181 Wn.2d 412, 431, 334 P.3d 529 (2014)). A plaintiff that is 3 demonstrably inconvenienced when a defendant gives them the runaround maintains a basis for 4 alleging CPA damages. See, e.g., Frias, 181 Wn.2d at 431 (“Where a business demands payment
5 not lawfully due, the consumer can claim injury for expenses he or she incurred in responding, 6 even if the consumer did not remit the payment demanded.”). But Plaintiff’s pleading does not 7 meet even this lax standard. Plaintiff “seeks actual damages and exemplary damages against 8 Defendants for each of its violations.” Dkt. No. 1-2 ¶ 6.9. What those actual damages are, 9 however, goes completely unexplained. 10 In Paris v. Steinberg & Steinberg, a court in this District found that the plaintiff had 11 insufficiently pleaded damages in a CPA claim where “[p]laintiff pa[id] only lip-service to 12 damages by pleading for an award of ‘actual damages pursuant to Chapter 19.16 of the Revised 13 Washington Code.’” 828 F. Supp. 2d 1212, 1217 (W.D. Wash. 2011). In the Paris court’s 14 estimation, “[t]he complaint lack[ed] any factual allegations that would support a finding of
15 actual damages.” Id. “CPA claims are commonly dismissed under similar circumstances where a 16 plaintiff fails to allege injury and causation with any factual support.” Sherlock Invs.-Duvall LLC 17 v. Intercoastal Auto Brokers & Logistics, LLC, No. C20-129, 2020 WL 4729066, at *7 (W.D. 18 Wash. Apr. 7, 2020) (collecting cases). Here, Plaintiff’s assertion that he is entitled to “[a]n 19 award of for [sic] compensatory damages, (actual damages) including economic and non- 20 economic damages” (Dkt. No. 1-2 ¶ 10.g) is, without any description or explanation of what 21 those damages might be, mere “lip-service to damages.” Paris, 828 F. Supp. 2d at 1217. 22 For his part, Plaintiff’s opposition to Defendant Connect’s motion fails to explain how he 23 has properly pleaded damages in his Amended Complaint. Plaintiff argues that “‘[i]njury’ under
24 the CPA is broad and can even be loss of time or costs to investigate the unfair or deceptive 1 acts.” Dkt. No. 12 at 18. This may be so. But Plaintiff does not allege that he spent either time or 2 money investigating the allegedly unfair or deceptive acts, at least insofar as the alleged non-per- 3 se CPA violations are concerned. To be sure, Plaintiff alleges that he “suffered emotional 4 distress, inconvenience and other damages.” Dkt. No. 1-2 ¶ 7.7. But these damages are
5 specifically alleged as having been caused by “conduct that violated the Insurance Fair Conduct 6 Act.” Id. In other words, these damages were caused by the alleged per-se violations of the CPA. 7 As discussed above, however, Keodalah bars Plaintiff from pleading per-se CPA violations 8 against Defendant Connect. Although Plaintiff asserts that he has pleaded “both per se and non- 9 per se CPA violations” (Dkt. No. 12 at 18), he has not actually pleaded any damages resulting 10 from the non-per-se claim(s). In cabining his alleged damages as having been caused by IFCA 11 violations (see Dkt. No. 1-2 ¶ 7.7), Plaintiff alleges that he sustained these damages as a result of 12 the alleged per-se CPA violations, not the non-per-se CPA violations. See id. ¶¶ 6.1–6.10. 13 Simply put, the pleading does little more than “pay lip service” to damages stemming from non- 14 per-se violations.
15 The structure of Plaintiff’s pleading dooms his efforts here. In pleading his CPA claim(s), 16 Plaintiff “re-alleges paragraphs 1.1 through 5.10 as though fully set forth fully [sic] in this 17 section.” Id. ¶ 6.1. But the IFCA claim, where Plaintiff actually alleges “emotional distress” and 18 “inconvenience” (id. ¶ 7.7), appears after the CPA claim in the Amended Complaint. As a result 19 of Plaintiff’s tactical decision on how to order his allegations, as well as the Russian-doll 20 structure of his pleading, the allegations of the IFCA claim are not incorporated into the 21 allegations of the non-per-se CPA claim, and the causal link between the per-se CPA violations 22 23
24 1 and Plaintiff’s damages is missing.4 Consequently, the claim cannot survive a motion to dismiss. 2 See id. (citing Iqbal, 556 U.S. at 678). 3 Therefore, this claim, as against Defendant Connect, is DISMISSED.5 4 4. Insurance Fair Conduct Act
5 “IFCA provides a private right of action for first-party claimants who are ‘unreasonably 6 denied a claim for coverage or payment of benefits by an insurer.’” Cohodas v. Cont’l Ins. Co., 7 717 F. Supp. 3d 1008, 1013 (W.D. Wash. 2024) (quoting RCW 48.30.015(1)). But in Lease 8 Crutcher v. National Union Fire Insurance Co. of Pittsburgh, a court in this District noted that, 9 in “creat[ing] a private cause of action in favor of first-party claimants who have been 10 unreasonably denied insurance coverage,” IFCA “does not . . . specify the proper defendant[.]” 11 No. C08-1862, 2009 WL 3444762, at *3 (W.D. Wash. Oct. 20, 2009). The Lease Crutcher court 12 engaged in an involved process of statutory construction to determine whether “an adjuster 13 handling a claim can be sued for its participation in an unreasonable denial[.]” Id. Upon 14 considering “the statute as a whole,” including “other sections of the IFCA” and “the legislative
15 history regarding IFCA,” the court “conclude[d] that the legislature intended to create a private 16 cause of action for damages and attorney’s fees against only the insurer, not its employees or 17 agents.” Id. 18 The Lease Crutcher holding applies here. In addition to that holding, the Court here finds 19 that the emphasis on the contractual nature of insurance in Washington law’s definition of 20 “insurer,” as discussed above, see supra Section III.B.3, complements the Lease Crutcher court’s 21
22 4 The Ninth Circuit recently joined other circuits in expressly disfavoring this pleading format, in which “a party indiscriminately incorporates assertions from one count to another . . . by incorporating all facts or defenses from all 23 previous counts into each successive count[,]” as an impermissible “shotgun pleading.” See Gibson v. City of Portland, 165 F.4th 1265, 1288 (9th Cir. 2026) (internal citation omitted). 24 5 Neither Defendant has moved to dismiss this claim as against Defendant American Family. 1 reasoning. Plaintiff attempts to locate Defendant Connect’s liability under the IFCA by relying 2 on the statute’s use of the indefinite article “an,” pointing to the statute’s authorization of a “first- 3 party claimant to bring an action against ‘an insurer engaged in the business of insurance’ that 4 has ‘unreasonably deni[ed] a claim for coverage or payment of benefits.’” Dkt. No. 12 at 16
5 (quoting RCW 48.30.015(1)). But as the court in Connelly Law Offices found, what Defendant 6 Connect is alleged to have done here “say[s] nothing about whether [Defendant Connect] is in 7 the business of making contracts of insurance.” Connelly Law Offices, 2025 WL 2256657, at *10 8 (emphasis added). That is, Plaintiff has alleged that Defendant Connect did a great many things 9 (see, e.g., Dkt. No. 1-2 ¶¶ 7.2–7.7)—but as Plaintiff’s policy clearly shows, selling a contract of 10 insurance was not one of them.6 11 Plaintiff argues that WAC 284-30-320 “specifies that an insurer can be an ‘individual, 12 corporation, association, partnership, reciprocal exchange, interinsurer, fraternal mutual insurer, 13 fraternal mutual life insurer, and any other legal entity engaged in the business of insurance,’ or 14 even a person or entity ‘authorized or licensed to issue, or who issues any insurance policy in the
15 state.’” Dkt. No. 12 at 16 (quoting WAC 284-30-320). And so it can be. But the principle that 16 any of these things can be an insurer does not necessarily make them an insurer—selling a 17 contract of insurance, however, does, and this crucial fact has not been plausibly alleged. 18 In Seaway Properties, LLC v. Fireman’s Fund Insurance Co., a court in this District held 19 that where Fireman’s Fund was merely an insurer’s agent, it was not liable on plaintiff’s IFCA 20 claim, even where it had served as “the face of [plaintiff’s] insurer for many of the events giving 21 rise to this lawsuit.” 16 F. Supp. 3d 1240, 1256 (W.D. Wash. 2014). Moreover, as alleged in the 22 Amended Complaint, Defendant Connect’s alleged violations were regulatory. “Defendants’ 23
6 The Court’s finding in this regard is limited to what Plaintiff pleaded. That is, the issue is not whether Defendant 24 Connect is an insurer; it is whether Plaintiff has pleaded that Defendant Connect is an insurer. 1 acts, omissions, or practices alleged in this Complaint exhibit violations of WAC 284-30-330, 2 WAC 284-30-350, WAC 284-30-360, WAC 284-30-370, and other Unfair Claims Settlement 3 Practice Rules adopted under RCW 48.30.010 by the insurance commissioner and codified in 4 chapter 284-30 of the Washington Administrative Code.” Dkt. No. 1-2 ¶ 7.8. But “[b]y its plain
5 language, IFCA gives an insured no right to sue solely for a violation of a Washington insurance 6 regulation.” Seaway Props., 16 F. Supp. 3d at 1255; see Perez-Crisantos v. State Farm Fire & 7 Cas. Co., 187 Wn.2d 669, 684, 389 P.3d 476 (2017) (“IFCA does not create an independent 8 cause of action for regulatory violations.”). “Regulatory violations matter only when deciding 9 whether to award attorney fees or enhance damages.” Seaway Props., LLC, 16 F. Supp. 3d at 10 1255. Here, while Defendant Connect might have mishandled Plaintiff’s claim by violating 11 “Unfair Claims Settlement Practice Rules,” it was Defendant American Family that allegedly 12 violated the law by denying the claim. 13 Therefore, this claim, as against Defendant Connect, is DISMISSED. 14 5. Negligence
15 “A negligence claim requires the plaintiff to establish (1) the existence of a duty owed, 16 (2) breach of that duty, (3) a resulting injury, and (4) a proximate cause between the breach and 17 the injury.” Pellham v. Let’s Go Tubing, Inc., 199 Wn. App. 399, 408, 398 P.3d 1205 (2017). 18 Here, as discussed above, Defendant Connect owed Plaintiff a common-law duty of good faith, 19 and Plaintiff has sufficiently alleged that Defendant Connect breached that duty. Defendant 20 Connect asserts—wrongly, given the pleaded allegation—that “Plaintiff alleges only a defect in 21 the documentation of the written rejection of UIM coverage under the Policy (a ‘defect’ which 22 [Defendant Connect] does not believe exists).” Dkt. No. 10 at 6. Plaintiff’s Amended Complaint 23 alleges more than a mere record-keeping problem. Rather, Plaintiff broadly alleges that his
24 insurance claim was handled improperly. See generally Dkt. No. 1-2. Such improper handling 1 || might have ultimately derived from—or might include, in part—defective record-keeping, but at 2 || this stage in the litigation, the allegation is one of negligence. Plaintiff alleges that he “suffered 3 || emotional distress, inconvenience, and other damages[.]” Dkt. No. 1-2 § 7.7. The claim, as 4 || pleaded, is thin, but it is sufficient to withstand Defendant Connect’s motion. 5 6. Declaratory Judgment 6 Defendant Connect’s motion to dismiss does not discuss Plaintiff’s sixth cause of action, 7 || for Declaratory Judgment (see Dkt. No. 1-2 94 9.1-9.5). The Court will not manufacture an 8 || argument for Defendant Connect in this regard. Therefore, this claim survives Defendant 9 || Connect’s motion. 10 IV. CONCLUSION 11 Therefore, Defendant Connect’s Motion to Dismiss (Dkt. No. 10) is GRANTED IN PART 12 || and DENIED IN PART. It is hereby ORDERED: 13 1. Plaintiffs First cause of action for, Breach of Contract as against Defendant Connect, is DISMISSED WITH PREJUDICE. 14 2. Plaintiff's Third and Fourth causes of action, for CPA and IFCA violations as 15 against Defendant Connect, are DISMISSED WITHOUT PREJUDICE, with leave to amend. 16 Dated this 18th day of June 2026. 17
Tana Lin 19 United States District Judge 20 21 22 23 24
ORDER ON MOTION TO DISMISS — 19