[00:00:14] Speaker 00: Okay, the next case on the docket is Warheese. [00:00:22] Speaker 00: versus e insurance So we'll proceed with Appellant's argument first the case is set for 15 minutes per side and if you'd like to make The opponent wants to make rebuttal Please try to stop preserving you know while some time is left and [00:00:48] Speaker 05: Thank you, Your Honor. [00:00:49] Speaker 05: Good morning. [00:00:49] Speaker 05: May it please the court? [00:00:51] Speaker 05: I'm Tom Mumford. [00:00:52] Speaker 05: I go by my middle name. [00:00:53] Speaker 05: Council for the Appellant, Justin Voorhees. [00:00:56] Speaker 05: And I would like to reserve four minutes for my time for rebuttal. [00:01:00] Speaker 05: It appears that the crowd has dispersed now, I guess. [00:01:03] Speaker 05: I was going to say, where are your supporters? [00:01:06] Speaker 05: I guess they're not as interested in the issues of insurance claim handling practices. [00:01:10] Speaker 01: No, this is an important case. [00:01:12] Speaker 02: We are. [00:01:12] Speaker 05: It is an important case. [00:01:13] Speaker 05: Thank you, Your Honor. [00:01:14] Speaker 05: And I do want to just say one thing at the beginning about why I feel this is an important case. [00:01:18] Speaker 05: The citizens of the state of Washington enacted the Insurance Fair Conduct Act in 2007 by popular referendum because they were tired of insurance companies delaying and denying payment of meritorious claims and being forced to litigate to obtain insurance benefits that they had paid for. [00:01:34] Speaker 05: That's what this case is about. [00:01:36] Speaker 05: The district court's decision granting summary judgment to insurance was erroneous and should be reversed for three reasons. [00:01:43] Speaker 05: The first one is that the court failed to construe the evidence in the light most favorable to Mr. Voorhees, and I'll go into that at some length. [00:01:52] Speaker 05: Second, the court improperly excluded some of defendant's conduct from the scope of its analysis, particularly the conduct that occurred after the case was filed. [00:02:03] Speaker 05: And third, the decision contains factual assertions that are just flat wrong, not consistent with the record, and the decision itself is internally inconsistent and contradictory. [00:02:14] Speaker 01: What's the second one? [00:02:15] Speaker 01: Sorry. [00:02:15] Speaker 05: The second one was that the court improperly narrowed the scope of its analysis and excluded insurance's conduct after litigation from its analysis of its claims handling practices. [00:02:27] Speaker 05: And that goes to the adversarial issues, which I'm sure we'll talk about and counsel I know we'll talk about. [00:02:33] Speaker 05: So let me go to the first issue, which is construing the evidence in the light most favorable to Mr. Voorhees. [00:02:39] Speaker 05: And by the way, [00:02:42] Speaker 05: All of these claims arise under the Insurance Fair Conduct Act, Common Law, Bad Faith, and the Consumer Protection Act, but that's a mouthful. [00:02:49] Speaker 05: And so for purposes of our argument today, I'm going to just reduce that to extra contractual claims for ease of reference, unless the court has questions. [00:02:56] Speaker 02: I mean, it's the same fact record, right? [00:02:58] Speaker 02: It's just a question of whether it violates one or all of the three. [00:03:01] Speaker 05: Correct. [00:03:02] Speaker 05: And there's so much overlap between the three, it seems easier to do it that way. [00:03:04] Speaker 05: Understood. [00:03:07] Speaker 05: Generally, the reasonableness of an insurer's claim handling conduct [00:03:11] Speaker 05: involves always involves questions of fact that can rarely be resolved on summary judgment and that's why we've cited many cases to the court that show that [00:03:19] Speaker 05: Even just the year or two before this case and the year or two after this case, these issues have come up over and over and over again. [00:03:26] Speaker 05: And the court almost always finds that summary judgment is not appropriate because there's just too many factual issues. [00:03:32] Speaker 05: And that's the case here, too, on the underlying claim. [00:03:35] Speaker 05: There are two exceptions. [00:03:36] Speaker 02: What's your best argument that the offer that insurance made was unreasonable on the facts before us? [00:03:47] Speaker 05: Well, I guess the best argument there and the best evidence for that is that we submitted, originally, e-assurance took that position because they said they didn't have supporting documentation for the income loss portion of the claim. [00:03:59] Speaker 02: And you're not disputing that what you were able to provide was not complete for the entire time period of the claim loss, right? [00:04:08] Speaker 02: some of the records from the business that he started with regard to pay and revenue. [00:04:15] Speaker 05: I would submit that we submitted all the records that were available. [00:04:18] Speaker 02: But my question was, did it cover the entire period of time asserted in his claim for lost revenue? [00:04:27] Speaker 05: It did. [00:04:28] Speaker 05: And I was starting to answer your question. [00:04:30] Speaker 02: I'm sorry. [00:04:31] Speaker 02: Go ahead. [00:04:31] Speaker 05: This is a really important point. [00:04:33] Speaker 05: Yeah. [00:04:33] Speaker 05: Is that we submitted an expert opinion as part of our expert disclosure. [00:04:38] Speaker 05: from our economist expert, and it stated that Mr. Voorhees had $40,000 in economic losses related to the loss of his business. [00:04:49] Speaker 05: that information was never considered by assurance. [00:04:54] Speaker 05: Now I'm getting to my second point, but I'll jump right to it. [00:04:57] Speaker 05: Assurance has a duty to reevaluate the claim in light of new information, even when the case is in litigation, because we're proceeding on two tracks. [00:05:06] Speaker 05: We have the litigation track, but we also have the claims adjusting track. [00:05:10] Speaker 05: This is an open claim. [00:05:12] Speaker 05: This is a dynamic claim. [00:05:13] Speaker 05: It's not a static claim, and the analysis of the court [00:05:15] Speaker 02: Has to be on insurance conduct readjusting the claim at every stage I understand, but I'm still I don't think you've totally answered my question in terms of what was the underlying documentary proof that the claimant submitted to the adjuster to substantiate the claim of $40,000 or whatever it was and [00:05:39] Speaker 05: He submitted all of his business records, his profit and loss statements. [00:05:43] Speaker 05: He submitted his tax returns that he did have. [00:05:47] Speaker 05: He didn't have a tax return for 2018. [00:05:48] Speaker 05: That's why it wasn't submitted. [00:05:50] Speaker 02: And he didn't have payroll or receipt records for all the period as I read the record. [00:05:56] Speaker 02: Did I miss something? [00:05:57] Speaker 05: He had some payroll records and some he didn't. [00:06:00] Speaker 02: OK. [00:06:01] Speaker 02: So there is a gap. [00:06:02] Speaker 02: There's a gap here in terms of his ability because he just didn't have any more record. [00:06:07] Speaker 02: He produced everything he had. [00:06:08] Speaker 05: He produced everything he had. [00:06:09] Speaker 05: But I will also say this. [00:06:10] Speaker 05: This is a very important point. [00:06:12] Speaker 05: The economist that did the calculation used the exact same information that we provided to insurance in calculating that Mr. Voorhees' losses were $40,000. [00:06:23] Speaker 05: as a result of the loss of his business. [00:06:26] Speaker 05: And there's another very important point. [00:06:28] Speaker 05: That's just straight math from an economist's standpoint. [00:06:32] Speaker 05: That doesn't address the issue of general damages. [00:06:34] Speaker 05: The fact that he left his desk job to start a job where he could be out in the field and then had to give up that dream because he could no longer operate his business is a general damages category that insurance didn't categorize. [00:06:47] Speaker 02: I thought there was a dispute between the claimant and the insurance company over whether or not [00:06:54] Speaker 02: The accident was the cause of the failure of the business versus the failure of some principal customers to pay what they owed for work that he'd done for them. [00:07:06] Speaker 05: That's the argument that insurance is trying to make and it's not supported and I'll tell you why. [00:07:11] Speaker 05: He needed to be on site with customers managing jobs in order to maintain good customer relationships. [00:07:18] Speaker 05: He had a problem with one customer in part because he couldn't be there. [00:07:22] Speaker 05: And that was one of the reasons that he had a cash flow problem. [00:07:25] Speaker 02: So there were big customers that didn't pay him what he said they owed him. [00:07:30] Speaker 05: That's correct. [00:07:31] Speaker 02: So he found himself cash short. [00:07:33] Speaker 05: He found himself cash short, and he said in his deposition that that was because he was not able to be there with the customer, and he had to hire replacement managers who were really unreliable, and he ended up firing about five or six of them. [00:07:44] Speaker 05: And one of them stole from him, right? [00:07:46] Speaker 05: And one of them stole from him. [00:07:47] Speaker 05: And that was all because he couldn't be on site to be policing the jobs. [00:07:51] Speaker 01: You mentioned delay and that the state statute was adopted in part because of concern about delayed resolution of claims. [00:08:00] Speaker 01: But the delay record in this case is, I think, not favorable to your client. [00:08:05] Speaker 01: I just want to put that out there so you can respond. [00:08:07] Speaker 01: I agree with you, Your Honor. [00:08:08] Speaker 01: It seemed like there were a lot of calls from their team over to your team that weren't answered. [00:08:13] Speaker 05: That's not part of our claim. [00:08:15] Speaker 05: Claiming that they didn't pay soon enough [00:08:18] Speaker 05: up until we filed our case is not part of our claim. [00:08:22] Speaker 01: Oh, that's good. [00:08:23] Speaker 01: Okay, so what's your best shot at what they did wrong? [00:08:27] Speaker 05: As far as delayed payment, well, there's... I understand delayed payments not part of your claim. [00:08:31] Speaker 01: So what is your claim? [00:08:33] Speaker 05: So what they did wrong is they did an inadequate investigation. [00:08:37] Speaker 05: And what the court did wrong is it didn't read our experts [00:08:40] Speaker 05: 40-page report. [00:08:42] Speaker 05: I can't remember the number of pages, but it was exhaustive and it was very detailed. [00:08:45] Speaker 05: It went through and indicated about six different ways in which insurance failed to follow industry standard in evaluating the claim. [00:08:54] Speaker 01: Your punch line, if you will. [00:08:57] Speaker 01: I think you're telling me that you think that the judge didn't apply the appropriate standard. [00:09:01] Speaker 01: I appreciate that. [00:09:02] Speaker 01: If you could just do it from your team's perspective. [00:09:04] Speaker 01: Do you think the court should have looked at that and decided that the offer that they made was inadequate? [00:09:11] Speaker 05: Yes. [00:09:12] Speaker 05: Why? [00:09:13] Speaker 05: Because let me go through a couple of the things that our expert said. [00:09:17] Speaker 05: The expert failed to, well first of all the insurance, let me back up. [00:09:24] Speaker 05: insurance valued the general damages on speculation and conjecture, which it can't do. [00:09:29] Speaker 05: It based its general damages award on looking at some Facebook posts and drawing medical conclusions from looking at Facebook posts, but the social media report that it commissioned only looked from the date of the accident forward. [00:09:43] Speaker 05: If they had done an adequate investigation and looked at all of his social media posts [00:09:47] Speaker 05: which it could have just done by going to the internet. [00:09:49] Speaker 05: It would have seen that prior to the accident, Mr. Voorhees, who's an extremely active individual, who is a competitive snowboard rider and was in competitions, getting 20 feet off the ground and doing things on almost a daily basis, was not doing those kinds of things after the accident. [00:10:05] Speaker 02: But I thought the social media report included photos of him skiing and engaging in sort of high activity sports. [00:10:14] Speaker 05: It took a hiatus from those activities for a while right after the accident. [00:10:18] Speaker 05: And then he started to test to see whether he could go back to his activities, but not at the same level he had engaged in before. [00:10:25] Speaker 05: He was doing really extreme stuff before. [00:10:27] Speaker 05: He was doing stuff that he loved to do, but it was careful and cautious and limited. [00:10:32] Speaker 05: And insurance didn't look at the right basis for comparison because they didn't look at his social media before the accident, only after the accident. [00:10:40] Speaker 02: To get back to Judge Christian's question though, what's your explanation for why, I don't know if it was you or prior counsel, why there was no response to the multiple requests for information that went unanswered from the insurance company? [00:10:54] Speaker 05: Respectfully, Your Honor, that really is a red herring issue, because we're not claiming that the delay in making the offer or payment is part of our claim. [00:11:02] Speaker 02: But you're saying they conducted an inadequate investigation. [00:11:04] Speaker 02: They're saying we asked multiple times for supporting documentation and more information, and we were met with a wall of silence. [00:11:13] Speaker 02: I don't think I what what they wanted was something that we didn't have they wanted they wanted why couldn't you just Respond, I mean send them a letter or send them the same letter ten times saying I don't have anything more to res to supply [00:11:29] Speaker 05: I don't know, but I don't think that is a pertinent issue to the case. [00:11:33] Speaker 01: Because you're not making a claim for delay? [00:11:36] Speaker 05: Because we're not making a claim for delay and because when we did provide our economist report, e-surance didn't re-evaluate the claim at all. [00:11:43] Speaker 01: Okay, so what's the sequence of events? [00:11:47] Speaker 01: imperfect communication right then there's an offer yes right and of course his spouse's claim was we know what happened over there right but this was a lesser offer right right and then what's the next thing that happened in the time that we should be considering was well there was a complaint to the insurance commissioner [00:12:03] Speaker 05: where insurance responded and said we've made a fair and reasonable offer and then suit was filed then after suit was filed then we submitted our economist report which tabulated the economic loss from the loss of the job which insurance didn't evaluate if they'd evaluate So then keep if you can keep I know that sequence then what happened? [00:12:23] Speaker 05: Then the party's engaged in discovery. [00:12:27] Speaker 01: And there's a social media report. [00:12:29] Speaker 01: I'm trying to figure out what happened if you had an opportunity to respond to the social media report. [00:12:33] Speaker 01: I think the social media report is very damaging to your client. [00:12:36] Speaker 01: And you're making a good point, which is you've got to look at it longitudinally. [00:12:42] Speaker 01: He was even more active before. [00:12:43] Speaker 01: That's correct. [00:12:44] Speaker 01: Did you have an opportunity to communicate that? [00:12:47] Speaker 01: Did you have an opportunity to respond? [00:12:48] Speaker 05: Where did things break down? [00:12:50] Speaker 05: E-assurance did not tell us what the concerns were with the social media report and did not give us an opportunity to respond. [00:12:56] Speaker 05: And our experts specifically highlighted that as one of the deficiencies in their investigation, among many others. [00:13:04] Speaker 00: I thought, counsel, that they had asked you for certain documents and that you didn't respond. [00:13:13] Speaker 05: I think these are the wage loss documents that we've been discussing, which are that we gave him everything that we had. [00:13:19] Speaker 05: We didn't withhold anything. [00:13:20] Speaker 05: We gave them everything that we had. [00:13:22] Speaker 05: It just wasn't what you would hope to have. [00:13:25] Speaker 05: He is starting a business. [00:13:27] Speaker 05: And as you know, self-employed people have a hard time documenting their income loss. [00:13:31] Speaker 05: It's not like he can go to his employer, ask for a doctor's note, and then just show how many hours he didn't work. [00:13:36] Speaker 01: I'm not trying to split hairs, but when you say you gave him everything you had, you gave him everything that existed. [00:13:41] Speaker 01: It's not like you didn't have documents in your possession that it were extant somewhere. [00:13:45] Speaker 01: You're telling us that they didn't exist because it was startup. [00:13:49] Speaker 05: Yep. [00:13:49] Speaker 05: Right. [00:13:49] Speaker 05: We did it three times. [00:13:50] Speaker 05: We did it before suit. [00:13:51] Speaker 05: We did it in our initial disclosures. [00:13:52] Speaker 05: And we did it in discovery. [00:13:54] Speaker 05: And our expert used that same information to come up with his. [00:13:57] Speaker 00: Did you ever respond to their request for documents by saying, we don't have any further documents? [00:14:05] Speaker 05: I do not recall, I'm sorry that I don't remember whether we did. [00:14:10] Speaker 05: I think certainly by the time we got into litigation we did. [00:14:12] Speaker 05: We said you have everything we have. [00:14:14] Speaker 05: This is all we have. [00:14:15] Speaker 01: So your claim is that they breach their duty by inadequately investigating? [00:14:21] Speaker 05: Yes, inadequately investigating. [00:14:23] Speaker 05: And basically, remember we have competing reports from experts that are diametrically opposed. [00:14:28] Speaker 05: That right there is enough to preclude summary judgment. [00:14:31] Speaker 05: The court should have denied summary judgment just based on that. [00:14:34] Speaker 02: Can I ask you a couple of record clarification? [00:14:37] Speaker 02: Did insurance pay the $10,000 personal injury protection to your client? [00:14:43] Speaker 05: Well, they paid for medical bills up to $10,000. [00:14:46] Speaker 02: So they exhausted that $10,000. [00:14:47] Speaker 02: They exhausted the PIP. [00:14:49] Speaker 02: And then with regard to his wife, they gave her the policy limits of $100,000, but she had better documentation with regard to student loan [00:14:59] Speaker 02: She lost a scholarship, so it's pretty easy to see that. [00:15:01] Speaker 02: So it was pretty easy for her, and the insurance company paid that. [00:15:05] Speaker 05: Correct. [00:15:06] Speaker 02: Right. [00:15:06] Speaker 02: So your claim just has to do with the failure to pay more than $10,000 while the insurance company tried to get answers to these questions that we've been asking you about. [00:15:19] Speaker 05: Not so much a failure to pay, but an inadequate investigation. [00:15:22] Speaker 02: And then on our motion for summary judgment... You keep saying inadequate investigation, and then you keep telling us that it's irrelevant that [00:15:28] Speaker 02: that you didn't respond to their request for more information. [00:15:32] Speaker 02: And I'm having a hard time jiving the two. [00:15:35] Speaker 02: It seems to me that if you weren't responding to their request for more documentation, you were causing the delay. [00:15:42] Speaker 02: in payment and the ability to adjust the claim. [00:15:46] Speaker 05: The wage loss portion of the claim is only one part of the claim. [00:15:48] Speaker 05: We also have the general damages, which was inadequate as outlined by our expert. [00:15:53] Speaker 05: I hope you have a chance to take a look at the expert report. [00:15:55] Speaker 03: We did. [00:15:56] Speaker 05: Okay, thank you. [00:15:58] Speaker 05: I see that I'm about out of time. [00:16:00] Speaker 05: Is that my total time or is that only up to my rebuttal? [00:16:04] Speaker 00: That's your full time. [00:16:06] Speaker 05: OK, well, I apologize. [00:16:07] Speaker 05: I did have a few other comments. [00:16:08] Speaker 05: I wanted to make a rebuttal, but it'll be up to the discretion of the court. [00:16:11] Speaker 00: I'll give you an extra two minutes for rebuttals. [00:16:15] Speaker 00: Thank you very much, Your Honor. [00:16:16] Speaker 04: Good morning, Your Honors. [00:16:31] Speaker 04: May it please the court. [00:16:31] Speaker 04: My name is Elliot Harris. [00:16:32] Speaker 04: I'm here on behalf of e-Surance Insurance Company in this case. [00:16:35] Speaker 04: E-surance respectfully requests this court affirm the district court's order granting our motion for summary judgment and denying the motion that was filed by the plaintiff, the cross-motion for summary judgment. [00:16:46] Speaker 04: This is a UIM and bad faith insurance lawsuit. [00:16:49] Speaker 04: I think the court has really hit the main issue, which this is an evaluation dispute between E-surance and the claimant in this case. [00:16:58] Speaker 04: What was the value of the lost wages and what was the value of the general damages? [00:17:03] Speaker 04: This was a challenging case for e-surance to evaluate given the lack of documentation to support the wage loss claim. [00:17:10] Speaker 04: As I think Judge Talman pointed out with regard to the appellant's wife, it was much easier to document the wage loss claim. [00:17:18] Speaker 04: If it was an employee that had a job where they had a doctor's note that said this person can't work for eight weeks and they make X amount of money per week, that's easy to document a wage loss claim. [00:17:32] Speaker 04: In this case, we had a very, bless you, we had a very difficult wage loss claim. [00:17:38] Speaker 04: eSurance, the claim adjuster, had a challenging task to really evaluate how much was this business, how much of a lost wages did Mr. Voorhees sustain. [00:17:49] Speaker 04: We had a business that had only been open for a month. [00:17:52] Speaker 04: He provided limited, very incomplete, lost profit and payroll documentation to eSurance. [00:18:00] Speaker 04: It was difficult to calculate [00:18:02] Speaker 04: was this business going to be successful since it was brand new? [00:18:05] Speaker 04: If so, how successful was it going to be? [00:18:07] Speaker 04: How much money was it going to make? [00:18:10] Speaker 04: It was very, very challenging. [00:18:12] Speaker 04: And to answer, I think, Judge Christian's question about the sequence of events, after the demand is made, the UIM demand is made, that is in May of 2022, [00:18:25] Speaker 04: There was a discussion between the insurance claims representative, his name is Mr. Wilde, and I believe it was with plaintiffs' counsel. [00:18:35] Speaker 04: And then after that, that was when the social media report was run. [00:18:38] Speaker 04: The social media report came back. [00:18:40] Speaker 04: That was discussed then with the appellants' counsel. [00:18:42] Speaker 04: Was it produced? [00:18:43] Speaker 04: I believe it was at one point in time, Your Honor. [00:18:48] Speaker 04: I believe it was. [00:18:49] Speaker 01: It just seems to me, I couldn't actually see that in the record. [00:18:52] Speaker 01: And it seems to me to beg the question of if you've produced it, then he had an opportunity to say, oh, you need to look at the longitudinal history. [00:18:58] Speaker 01: And I didn't see that for what it's worth. [00:19:01] Speaker 04: It was certainly discussed. [00:19:03] Speaker 04: That is in the record. [00:19:04] Speaker 04: And then subsequent to that, there was an impact. [00:19:07] Speaker 01: I'm sorry, can I ask one more question? [00:19:08] Speaker 01: Sure. [00:19:08] Speaker 01: That social media report certainly went to his general damages, because it documents, to use a term, [00:19:16] Speaker 01: It provides evidence of certain activities, but it also goes to wage loss. [00:19:24] Speaker 01: There's one posting about why the business was going to fail because one person hadn't paid. [00:19:31] Speaker 01: Is that right? [00:19:32] Speaker 04: Correct. [00:19:33] Speaker 04: There was a Facebook post that was put up in 2019. [00:19:38] Speaker 04: um, one year after the, after the accident, um, that indicated that the business had to be closed because the number of clients hadn't paid. [00:19:46] Speaker 04: And there was testimony that was taken during the plaintiff's deposition in this case specifically as to what those circumstances were. [00:19:53] Speaker 01: But that's why I'm asking about the sequence of events. [00:19:54] Speaker 01: That seems perfectly reasonable to me, and it's reasonable that an insurance company would have an adjuster that would give them cause for pause. [00:20:00] Speaker 01: And so I'm trying to figure out why we're in court. [00:20:04] Speaker 01: I would think that would be communicated, and there would be a response. [00:20:07] Speaker 01: And what happened? [00:20:08] Speaker 01: Why wasn't that? [00:20:09] Speaker 04: There was. [00:20:11] Speaker 04: That was communicated to the plaintiff. [00:20:14] Speaker 04: The plaintiff said, well, how about I have Mr. Voorhees come and talk to you? [00:20:18] Speaker 04: We'll do it off the record. [00:20:19] Speaker 04: It won't be recorded. [00:20:20] Speaker 04: You can ask him these questions yourself. [00:20:22] Speaker 04: That was done. [00:20:23] Speaker 04: The claim was reevaluated. [00:20:24] Speaker 04: And then another offer was made. [00:20:26] Speaker 01: But what opposing counsel is arguing is that the sequence winds up at a place where there are competing economists' economic reports. [00:20:34] Speaker 01: And his main thesis is that the district court didn't apply the correct [00:20:39] Speaker 01: standard at summary judgment. [00:20:40] Speaker 01: So do you want to move to that? [00:20:41] Speaker 01: Because that seems to be the question. [00:20:44] Speaker 04: There are competing claim handling experts, I think is what he was referring to. [00:20:49] Speaker 04: So each side has a claim. [00:20:51] Speaker 04: The economist report was not produced until the course of the litigation. [00:20:56] Speaker 04: I think it was actually a year after the litigation. [00:20:57] Speaker 01: Oh, wait. [00:20:58] Speaker 01: So that sequence does matter to me. [00:20:59] Speaker 01: So I understood him. [00:21:01] Speaker 01: Maybe he'll have a chance to correct me. [00:21:03] Speaker 01: I understood him to be telling me that there were competing economic reports from economists. [00:21:08] Speaker 01: No? [00:21:09] Speaker 04: One of his criticisms of e-surance is that we did not hire an economist during the course of the claim investigation. [00:21:14] Speaker 04: I believe the record shows that the economist report was produced during the course of the litigation itself, quite a bit after the litigation. [00:21:21] Speaker 01: All right, so I'll go back and look at the chronology, because maybe that's the disconnect. [00:21:26] Speaker 04: And so to get back to your honor's question, though, the social media report did [00:21:32] Speaker 04: relate both to the business and to the general damages. [00:21:36] Speaker 04: And then also, as to other information, in terms of activities that were going on, and we could piece through the medical records, what Mr. Voorhis was reporting to his doctors and what he was actually doing. [00:21:49] Speaker 04: What was in a chronology that was provided to e-Surance to support the UI implement. [00:21:54] Speaker 04: It had conflicting information. [00:21:55] Speaker 04: On the one hand we were being told he couldn't engage in any of these activities such as mountain biking such as hiking We found social media posts that that contradicted that that show that he was still engaging in these activities again getting back to the bigger issue from a claim handling perspective Mr.. Wilde's looking at this thing. [00:22:14] Speaker 04: I'm having a hard time making sense because I've got incomplete conflicting information I'm getting from the insured and [00:22:23] Speaker 04: Despite that, I'm going to give him a $5,000 credit. [00:22:26] Speaker 04: I'm going to say there probably was some lost wages here. [00:22:30] Speaker 04: I can't figure out. [00:22:31] Speaker 04: I can't determine with any certainty, any accuracy, how much he actually sustained in terms of wage loss. [00:22:38] Speaker 04: He then communicated that to the plaintiff and said, here's where I'm at. [00:22:42] Speaker 04: Show me why I'm wrong. [00:22:43] Speaker 04: Give me some other documents, some other evidence. [00:22:45] Speaker 04: That's when suit was filed. [00:22:48] Speaker 01: And then during the suit, an economist report came in showing $40,000 during formal discovery? [00:22:56] Speaker 04: Correct, Your Honor, yes. [00:22:57] Speaker 04: Another thing that came up during the course of formal discoveries, there was a request by e-surance to Mr. Voorhees to produce other social media postings. [00:23:10] Speaker 04: I know this isn't before the court, but I just wanted to point out in terms of the context. [00:23:15] Speaker 04: We actually had to go to court to get an order of compelling production of these additional social media documents. [00:23:21] Speaker 04: I think it is mentioned [00:23:23] Speaker 04: in the record that is before this court, because there was a supplemental brief that was filed as part of the summary judgment. [00:23:28] Speaker 04: Because those documents, those social media postings, were not even produced until during the middle of the summary judgment briefing before the district court. [00:23:38] Speaker 04: I'm happy to address any other issues the court might have. [00:23:41] Speaker 02: Well, I take it your position is that I think there was some dispute between the parties over whether or not [00:23:48] Speaker 02: insurance's internal employees describe the amount included in the offer as a disputed amount or an undisputed amount. [00:23:58] Speaker 02: If you could address that, I would appreciate it. [00:23:59] Speaker 04: Sure, of course. [00:24:00] Speaker 04: We're talking about the Beasley issue, and Beasley is the Washington Court of Appeals decision. [00:24:07] Speaker 04: The Beasley case is a 2022 case, and it's a Court of Appeals case. [00:24:13] Speaker 04: It was petitioned for review by the Washington Supreme Court. [00:24:16] Speaker 04: They denied it. [00:24:17] Speaker 04: It remains the law. [00:24:19] Speaker 04: The courts that have come after Beasley have narrowed it significantly. [00:24:23] Speaker 04: A lot of these are federal... One case. [00:24:25] Speaker 04: I'm sorry? [00:24:25] Speaker 04: Division one. [00:24:27] Speaker 04: Beasley is a Division II case. [00:24:28] Speaker 04: The courts, the decisions mainly out of the federal district courts that have looked at Beasley have narrowed it significantly and limited Beasley really based on the facts of that case where a deposition was taken of the claim handler and the claim handler said, yeah, that amount of money is undisputed. [00:24:49] Speaker 04: There is no set of facts, no scenario I can see where we are not going to owe that amount of money. [00:24:57] Speaker 04: And then they said, okay, well, then why don't you pay it if you're not disputing it at all? [00:25:01] Speaker 04: And they said, well, we're waiting for the claim to settle, finally settle. [00:25:05] Speaker 04: And they said, well, you can't do that. [00:25:06] Speaker 04: You can't use that as leverage to try to negotiate settlement of the overall claim. [00:25:10] Speaker 04: That's not the situation we have in this case. [00:25:14] Speaker 04: The deposition testimony they cite to is testimony taken during this case where they were asked, was the offer that was made during the course of the claim fair and reasonable at the time it was made? [00:25:25] Speaker 04: And then there was some other testimony of insurance's corporate representative. [00:25:31] Speaker 04: Do you still believe that's a fair and reasonable offer? [00:25:34] Speaker 04: Basically saying, yeah, we stand by that it's the same offer that we made. [00:25:39] Speaker 04: It's not that it's undisputed. [00:25:40] Speaker 04: It's not really a magic word. [00:25:42] Speaker 04: We're not saying we owe that amount of money under any circumstances whatsoever in this case. [00:25:47] Speaker 04: And that kind of gets to the counterclaim, which I know we haven't really talked about. [00:25:50] Speaker 04: I'm happy to answer questions about the counterclaim. [00:25:55] Speaker 04: There is a scenario here where we would not owe any money under this policy. [00:25:59] Speaker 04: So it's not an undisputed amount. [00:26:01] Speaker 02: Are you now suggesting he engaged in fraud, which would vitiate the policy altogether? [00:26:07] Speaker 02: Misrepresentation. [00:26:08] Speaker 04: OK. [00:26:09] Speaker 02: Yeah, the policy. [00:26:10] Speaker 04: We don't want to call it fraud, but we're going to use a softer term. [00:26:14] Speaker 04: Well, the policy says it's fraud or misrepresentation. [00:26:17] Speaker 04: You can read the counterclaim is 48 paragraphs. [00:26:21] Speaker 04: A lot of it's based on the social media report, the conflicting information that conflicted with medical records, conflicted with information that was being provided to e-assurance. [00:26:31] Speaker 04: We thought there was a colorable claim for misrepresentation based on that. [00:26:34] Speaker 04: That's the basis for that. [00:26:35] Speaker 02: And so that underlies your earlier answer to our questions that your employees thought that the offer that was made was fair and reasonable to compromise the claim, not that the claim was undisputed. [00:26:47] Speaker 04: Correct. [00:26:47] Speaker 04: E-Surance at no point has said there's no set of circumstances that we will owe X amount of money under the UIM claim. [00:26:54] Speaker 04: They made offers they were trying to negotiate a disputed claim. [00:26:59] Speaker 04: But the medical bills, the special damages minus the wage loss, which we've talked about and was difficult to calculate, those were all paid for out of the PIP and by the payment by the tort fees or $25,000 by the tort fees liability carrier. [00:27:16] Speaker 04: So really what we're talking about is this unclear wage loss claim and general damages, which are what someone says they are. [00:27:27] Speaker 04: There's no mathematical calculation for what those are. [00:27:31] Speaker 04: I'm happy to answer any other questions the court has. [00:27:35] Speaker 04: I don't have anything. [00:27:36] Speaker 00: OK, thank you. [00:27:46] Speaker 05: Thank you, Your Honor. [00:27:46] Speaker 05: I'd like to just speak to the fraud claim very briefly. [00:27:49] Speaker 05: All of the defense witnesses were asked, was there any evidence of fraud in this case? [00:27:53] Speaker 05: Every single one of them said under oath, no, there was no evidence of fraud. [00:27:58] Speaker 05: One of our claims is that maintaining that fraud claim now, after they've also testified under oath that Mr. Voorhees is entitled to UIM benefits, they all said that too. [00:28:09] Speaker 05: They said he's entitled to UIM benefits, and they said that 55,000 is a fair and reasonable amount. [00:28:15] Speaker 00: Council I thought I just heard the Your friend on the other side the case safe that their Statement was about fraud or misrepresentation Well, I asked about fraud, but I assume that that also included misrepresentation well necessarily [00:28:36] Speaker 05: okay well the question so thank you your honor that that's true i did not ask the question about misrepresentation i do want to say also that all the medical bills were accepted by by insurance they didn't quibble with any of the medical bills in other words they were saying he was injured and this treatment was reasonable and necessary and related to the cut to the accident how do you [00:28:56] Speaker 02: Can you help us with regard to Beasley? [00:28:59] Speaker 02: Because it does seem to me to be significant that none of the insurance employees testified that they thought that the amount of the claim was undisputed. [00:29:10] Speaker 02: They were clear, I think, in their answers that they thought the offer that was made was fair and reasonable. [00:29:17] Speaker 05: Let me answer it this way. [00:29:19] Speaker 05: An insurance company is supposed to do a fair and reasonable evaluation of a claim. [00:29:23] Speaker 05: They come up with a claim decision and a claim value. [00:29:26] Speaker 05: I cannot imagine any scenario where insurance could go into court and argue before a jury. [00:29:31] Speaker 05: We said in our depositions that he's entitled to 55,000. [00:29:34] Speaker 05: That's a fair and reasonable amount. [00:29:36] Speaker 05: He gets UIM benefits, but he shouldn't get any because he misrepresented things when they also testified that there's no fraud. [00:29:43] Speaker 05: Now maybe, I'm sure that if I would have asked him was there misrepresentation, I'm sure they would have said there was no misrepresentation because the scope of the question was along that vein. [00:29:51] Speaker 05: Did you see anything? [00:29:52] Speaker 02: But I just, I think the problem I'm having with your argument is that [00:29:56] Speaker 02: Practicing lawyers settle claims all the time without admitting that the amount that they're offering is undisputed. [00:30:05] Speaker 02: They're offering an amount in the hope that they can get the case resolved. [00:30:10] Speaker 02: And it usually is less than the amount that the other side is asking for. [00:30:15] Speaker 02: A good settlement usually is less than what each side wants to accept or to pay. [00:30:21] Speaker 05: Let me come back to Beasley. [00:30:23] Speaker 05: after the Beasley decision came down, I'm a personal injury attorney, so that's most of my practice, we started getting, and this is in the record, we started getting checks from insurance companies on UIM claims saying, per Beasley, we're tendering this amount now because we know that this part, he owed at least this. [00:30:41] Speaker 05: It's not saying this is all you're going to get, it's just saying, [00:30:45] Speaker 05: This part we believe he deserves. [00:30:46] Speaker 05: That's the way insurance companies should operate in the first party context. [00:30:49] Speaker 05: That's what happens in other first party contexts. [00:30:51] Speaker 05: For example, if your house burns down in a fire, they don't say, well, let's evaluate the whole claim and then we'll decide whether to put you in a hotel or whether to start fixing your house. [00:31:00] Speaker 05: They pay as they go because it's a first party claim. [00:31:03] Speaker 05: and the insurance company is supposed to look out for the best interest of the insured and protect them. [00:31:08] Speaker 05: There's no reason why that shouldn't be happening in the UIM context as well. [00:31:12] Speaker 02: I thought state law says that the insurance company is entitled to stand in the shoes of the underinsured party and assert whatever that party would be privileged to do in litigation as long as they're acting in a fair and reasonable manner. [00:31:31] Speaker 05: They're wearing two hats. [00:31:32] Speaker 05: They have the adversarial litigation hat on the claims that are in dispute. [00:31:36] Speaker 05: They also have an ongoing obligation to continue to adjust claims at the same time. [00:31:40] Speaker 02: You don't dispute my recitation of the law, do you? [00:31:44] Speaker 05: No, that's correct as far as the issues that are at issue in the litigation. [00:31:48] Speaker 05: But for example, asserting a fraud claim, that's not something that they could have asserted by stepping into the shoes of the tortfeasor. [00:31:54] Speaker 05: The tortfeasor couldn't have asserted that fraud claim. [00:31:58] Speaker 00: I see a red light here and you're over time on the extra minutes that I already gave you. [00:32:09] Speaker 00: Judge Kristen. [00:32:11] Speaker 01: I just have one. [00:32:12] Speaker 01: Maybe in bullet points because I don't want to get in trouble with my presiding judge here. [00:32:15] Speaker 01: But can you just tell me, you started by saying you thought that the district court didn't correctly apply the summary judgment standard. [00:32:23] Speaker 01: I just would, if you could just give me bullet points of what disputed issue of a fact you think should have prevented entry of summary judgment here. [00:32:32] Speaker 05: Didn't read the expert report in the light most favorable to the non-moving party. [00:32:37] Speaker 05: Mr. Arguello's detailed expert report provides probably five or six different reasons why the claims investigation was inadequate that would preclude summary judgment. [00:32:45] Speaker 01: Okay, so you gave me that one earlier. [00:32:47] Speaker 01: Is there anything else? [00:32:48] Speaker 05: Well, and then the second point was that it artificially truncated its analysis by not looking at the economist report that came in after litigation. [00:32:57] Speaker 05: OK, got it. [00:32:57] Speaker 05: It should have reevaluated the claim. [00:32:58] Speaker 05: And please look at Jeremy Broad's testimony at 58 to 60 in the record. [00:33:03] Speaker 05: That's ER 58 to 60. [00:33:05] Speaker 05: Please take a look at that, because I think it addresses it. [00:33:08] Speaker 05: Thank you, Your Honor, for the extra time. [00:33:09] Speaker 05: I appreciate it. [00:33:10] Speaker 00: Thank you, counsel. [00:33:14] Speaker 00: This case and the others argued shall now be submitted, and the court will adjourn for the day. [00:33:24] Speaker 00: And we thank counsel on both sides of this case for their excellent arguments. [00:33:35] Speaker 00: Thank other counsel as well. [00:33:38] Speaker 00: With that, we are adjourned.