Pivotal Law Group

Toll Free 866-884-2417

The Pivotal Law Blog

Court of Appeals Clears the Way for Bad Faith Suits Against Individual Insurance Adjusters

Posted Wednesday, April 4, 2018 by McKean J. Evans

On March 26, 2018, the Court of Appeals (Division One) issued an important published ruling upholding claims against an individual insurance adjuster for insurance bad faith and violations of the Consumer Protection Act (Ch. 19.86 RCW). In Keodalah v. Allstate Insurance Company and Smith, No. 75731-8-I, the court ruled the bad faith and CPA claims could proceed against the Allstate adjuster in the adjuster’s individual capacity: “we hold that an individual insurance adjuster may be liable for bad faith and CPA violations.” This significant ruling has several implications for future insurance bad faith litigation.

I. The Trial Court Dismissed the Insured’s Claims Against the Adjuster

Keodalah made a UIM claim under his Allstate auto policy after being injured when a motorcyclist struck his truck as Keodalah proceeded through an intersection. Allstate’s internal investigation, the report of Allstate’s accident reconstructionist, and the police report uniformly established the motorcyclist was solely at fault for the collision. Specifically, the investigations confirmed the motorcyclist was speeding, that Keodalah stopped at the stop sign, and Keodalah was not using his cell phone at the time of the collision.

Allstate nevertheless insisted Keodalah was 70 percent at fault and tendered a lowball offer on the UIM claim. Despite the above reports exonerating Keodalah, Allstate’s adjuster, Smith, asserted Keodalah had run the stop sign and had been on his cell phone. Smith later admitted these claims were false. The parties tried the UIM claim and the jury determined the motorcyclist was 100 percent at fault, awarding Keodalah $108,868.20. Allstate’s highest offer had been $15,000.00.

Keodalah subsequently filed suit against Allstate as well as Smith individually, asserting claims for bad faith, violations of the CPA, and violations of the Insurance Fair Conduct Act (“IFCA”). The trial court dismissed Keodalah’s claims against Smith and certified the case for discretionary review pursuant to RAP 2.3(b)(4).

II. The Court of Appeals Reinstated the Bad Faith and CPA Claims Against the Adjuster

The Court of Appeals determined insureds may bring bad faith claims against individual insurance adjusters pursuant to RCW 48.01.030. The court reasoned RCW 48.01.030 imposes a duty of good faith on “all persons” engaged in the business of insurance, including specifically “the insurer…and their representatives.” (emphasis added).

Because Ms. Smith, as an insurance adjuster, “was engaged in the business of insurance and was acting as an Allstate representative,” the court had no difficulty concluding Smith owed Keodalah a duty of good faith and could be sued for breaching that duty. Besides the statute, the court also relied on Division Three’s ruling in Merriman v. Am. Guarantee & Liability Ins. Co., 198 Wn. App. 594, 396 P.2d 351 (2017), and the Western District of Washington’s ruling in Lease Crutcher Lewis WA, LLC v. Nat’l. Union Fire Ins. Co., 2009 WL 3444762 (2009), that corporate adjusters could be sued for bad faith, finding no distinction between corporate and individual adjusters. The court explicitly distinguished a conflicting federal court ruling, Garoutte v. Am. Family Mutual Ins. Co., 2013 WL 231104 (2013) as incorrectly reading the “representatives” language out of RCW 48.01.030. And the court ruled RCW 48.01.030 is not limited by narrower WAC provisions which were expressly “not exclusive.”

As for the CPA claim, the court rejected Smith’s argument the claim was barred because policyholders have no contractual relationship with adjusters. The court relied on a straightforward interpretation of the Washington Supreme Court’s ruling in Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 43-44 204 P.3d 885, 892 (2009), in which the Supreme Court explicitly ruled “a private CPA action may be brought by one who is not in a consumer or other business relationship with the actor against whom the suit is brought.” The Court of Appeals recognized Panag abrogated the Court of Appeals’ contrary rulings in International Ultimate, Inc. v. St. Paul Fire & Marine Ins. Co., 122 Wn. App. 736, 87 P.3d 774 (2004). Smith also relied on Ninth Circuit authority, but the court determined that authority was based on California insurance law.

III. Can Policyholders Bring IFCA Claims Against Individual Adjusters?

Despite reinstating the bad faith and CPA claims against the adjuster, the Court of Appeals affirmed dismissal of the IFCA claim against the adjuster. That ruling is limited to the narrow nature of Keodalah’s IFCA claims, which were not premised on unreasonable coverage denials but instead were limited explicitly to WAC violations. In light of the Supreme Court’s holding WAC violations alone cannot support IFCA claims, the Court of Appeals dismissed that claim with minimal discussion. An IFCA suit against an individual adjuster premised on unreasonable coverage denials or malfeasance beyond mere WAC violations would not be barred by Keodalah.

Despite Keodalah, IFCA claims against adjusters, while theoretically possible, are likely problematic. RCW 48.30.015(1) grants policyholders a cause of action if they are “unreasonably denied a claim for coverage or payment of benefits by an insurer” without limiting the cause of action to the insurer itself. IFCA’s treble damages provision is expressly limited to cases in which “an insurer has acted unreasonably” (RCW 48.30.015(2) (emphasis added)); the presence of this limiting language with respect to the discretionary treble damages subsection might suggest its absence from the cause of action arguably evidences an intent to permit IFCA suits (but not treble damages) against adjusters.

However, the Washington Supreme Court already rejected one invitation to read IFCA broadly in Perez-Crisantos. Further, IFCA is written in terms of “first party claimants” and misconduct “by an insurer” which suggests IFCA is limited to suits against insureds. See RCW 48.30.15(1). And it is counterintuitive to suggest IFCA would permit a cause of action against adjusters while restricting treble damages against adjusters.

IV. Other Future Issues

Keodalah has several potential implications for future insurance disputes. Obviously, the adjuster’s personal exposure adds a significant dimension to the dispute. And foreign insurers employing Washington adjusters could likely be sued in state court without removal to federal court, because federal courts typically only have diversity in insurance disputes where all the parties are citizens of different states. It’s also noteworthy Keodalah declined to address Smith’s argument that she could not be held liable for her conduct in the prior UIM action in a subsequent bad faith action. Adjusters might assert this defense in future disputes.

Finally, Keodalah could be read as supporting bad faith claims against the policyholder’s representatives, such as attorneys or public adjusters. The Court of Appeals never states this, but the court’s reliance on RCW 48.01.030 might support such claims since the statute imposes the duty of good faith on “the insured…and their representatives” as well as the insurer and its representatives. The assumption that there is no bad faith cause of action against the insured and the insured’s representatives was the basis for the Garoutte decision, which the Court of Appeals specifically rejected in Keodalah.

McKean Evans is an attorney at Pivotal Law Group representing insurance policyholders and ERISA plan participants and beneficiaries. McKean blogs regarding insurance and ERISA issues at https://seattleinsuranceanderisablog.com/.

Alternative Text

(Internet image - author and date unknown)

Permalink to this entry

McKean Evans Speaks at Continuing Legal Education Event

Posted Friday, March 30, 2018 by Pivotal Law Group

This morning, attorney McKean Evans spoke regarding Washington’s newly-revised Uniform Power of Attorney Act at a Continuing Legal Education seminar hosted by the King County Bar Association. McKean discussed how Washington lawyers can best address their clients’ needs for powers of attorney regarding health care, family, financial and other matters under the revised Act.

In addition to estate planning matters, McKean represents clients regarding insurance and ERISA employee benefit disputes. McKean blogs regarding insurance and ERISA issues at https://seattleinsuranceanderisablog.com/.

Permalink to this entry

A Property Lawyer’s Story

Posted Thursday, March 29, 2018 by Kim Sandher

Kim Sandher (ksandher@pivotallawgroup.com) is an attorney with Pivotal Law Group, PLLC, in Seattle, Washington. She has a Bachelor’s degree in Political Science and Economics from the University of British Columbia in Vancouver, Canada, and a Juris Doctor from Seattle University, with a business focus. She is a current young scholar with the American College of Real Estate Lawyers. With a background in litigation, her primary practice is transactional commercial real estate and business law. Kim’s work includes acquisition, purchase, sale, leasing, and financing of businesses and commercial real estate. Outside of work, Kim enjoys volunteering, traveling, sunshine, and Orangetheory Fitness classes.

For as long as I can remember, I wanted to become a commercial real estate attorney. If you asked me what a real estate attorney did, I probably couldn’t tell you beyond “write contracts and stuff.” It was “and stuff” because I myself didn’t really know what the “stuff” was. Despite this, I knew, with bright eyes, this was what I wanted to do with my life.

Even before law school, I was fascinated by big buildings, cranes, and anything and everything relating to construction. A lot of this likely had to do with my dad working in construction when I was a child. I remember excitedly riding to pick him up after work, when he worked on the tear-down of the local Woolco. For anyone that doesn’t remember, Woolco was an American retail store that shut down in the early 1980s. In Canada, it lasted into the mid-1990s. Seeing the building being torn down bit by bit was incredibly exciting to me – and it was equally as exciting to think about what was going to spring up on that lot.

The other part of my fascination with commercial real estate probably has to do with being raised on a mushroom farm in a small, rural farming community that has now become the second-largest city in British Columbia, Canada. Watching Surrey’s transformation from what was then a small, rural town, into a large suburban city amazed me because it seemed so different. I loved watching buildings and infrastructure go up and down, and I wanted to be a part of it. I wanted to be high in the sky, without ever touching anything dirty to get there.

Now that I finally am a real estate attorney, I feel I should be able to define what “and stuff” is. I’ve met with countless attorneys to try to figure it out, brilliant folks who have become my mentors along the way. Even though I’ve been practicing for several years now, it’s when non-lawyers ask me what I do that I realize clearly that even with all my daily experience and all the people I speak to or work with, I haven’t come up with a succinct answer for what I do. What I do know is that I love it.

These are my takeaways for what I do and my best explanation for what it’s like:


I attended my very first real property conference in Stevenson, Washington, through the Washington State Bar Association. Like many firsts, it was a memorable experience. My sister joined me for the four-hour road trip from Seattle to what I thought were the boonies of Washington, near the Oregon border. We were both excited about being out in the wilderness for three days and living in the mountains Skamania Lodge was actually a pretty gorgeous, fancy resort that just happened to be in the mountains, but most of all, I was going to learn all about what it’s like to be a real estate attorney—with my non-lawyer sister by my side.That weekend when I walked into the massive conference room full of roughly three hundred people, my first though was, “Wow, there are a lot of men here. They’re all white. They’re also all older than me.” Of course, not every single person in there was male and white; there were several women and maybe a handful of minorities. Everyone there was definitely older than me. At the end of the day, I saw that most of them fit neatly into a certain type of demographic profile that I did not. I also learned quickly that most people had brought their spouse or significant other, not their sister.


Something I realize every day is that I am different. I am different from many of my peers, and I am different from many of my clients. I am born and raised in Vancouver. I moved to the United States a little over 11 years ago. My parents are immigrants from Northern India. As a result, my skin is slightly tanned, I have long, dark hair, and I pronounce pasta as pass-ta instead of pah-sta because we say things a little different up in Canada. I get called out on it often enough that I consciously try not to “talk Canadian.” My experience in Seattle is that few people know to classify me as “Indian.”Over the years, I’ve found I get a lot of the “so what are you?” question because people can’t place me neatly into a box. I look a little different, but I don’t have an exotic accent, and my name is “Kim.” They’re not being rude. They know that I am human. They’re often just curious and maybe perplexed, because there are not a lot of real property attorneys who look like me.The other thing I hear often is “you’re so young!” or “are you an attorney?” I personally don’t think this has anything to do with how confident I am or how capable I am. I do look young, and I take it as a compliment and will enjoy it for as long as it lasts. I choose to see it as a strength rather than a detriment. With the world having changed so much in the past decade or so, I have had the opportunity to live through the days of dial-up Internet where we would get disconnected when someone picked up the landline, to now having a smartphone attached to us every waking hour (and sometimes even sleeping hours).Lastly, no one wants to outright say that I am a woman or a “little girl,” but a lot of times I know they are thinking it because so few women work in commercial real estate. This makes me even more passionate about my involvement with organizations such as the American Bar Association and the RPTE Section, to be visible and to help other women and young attorneys excel in the profession. I want to give them a voice and encourage them to get involved in the section, and to pursue leadership roles. I want to be an example of a diverse woman lawyer passionate about commercial real estate, and I want to make it known that women belong in this field and can also achieve success.


Being different works because I stand out. I’ve learned that using unique traits about yourself helps empower others—whether that’s growing up on a farm, being from a small town, looking different, or maybe even having a quirky laugh that makes you stand out. Using these unique characteristics is all advantageous because this is how people remember you and connect with you. This is what makes you real and what makes you human.


One day, fresh out of law school, while I was doing everything I could to land my dream job, I came across an e-mail blast for an ABA Young Lawyer Division scholarship. I had been meeting people for coffee and lunch and volunteering for anything and everything I could to get the experience I wanted and needed. I had a vague idea of what the ABA did, but I was not too familiar with it, other than that it was an organization for lawyers—on a national level. Based on what I read, I loved the idea that I would get to travel to different cities throughout the United States a few times a year and meet motivated young lawyer leaders who were also going to help me be better at what I do.

I discussed the opportunity with two of my mentors, who both encouraged me to apply and spoke fondly of their experiences with the ABA. I applied, not sure if I would be accepted, since my research showed the amazing things past scholars had done with their local bar associations and other organizations. I didn’t think of myself as a leader at that point. Shy and reserved, I thought I was still figuring out what it really meant to be a lawyer. I didn’t think I was in any position to be a leader for other young lawyers. Thus, I was beyond thrilled to learn I was selected as a YLD scholar.


More than seven years later, I have made so many meaningful connections and great friends through the ABA. Every single one of them has been extremely motivated and passionate about helping people, helping the profession, and bettering him– or herself along the way. I have had the opportunity to do things I never would have thought to do on my own, such as present in front of a group of over 300 people. The first time I did this, I was nervous to the point where I couldn’t even hear myself think, but in retrospect, the experience was thrilling. Perhaps that’s why I’ve volunteered to speak and present many times again after that. My ABA experience has even made me more confident in court for trials and hearings, even though I am now mostly a transactional lawyer. I’ve made friends all over the country who are not only colleagues I can bounce ideas off or see a new perspective from, but people who are like family now. They often refer clients to me when they have someone needing help in the Seattle area.


In 2014, when the managing partner at my firm encouraged me to attend the Spring Symposia for the Real Property Trust and Estate Law Section (RPTE) of the ABA, I knew I couldn’t pass up the opportunity. I was excited for the several days of learning all about current topics in real property. I was serving as chair of the Real Property Trust and Estate Law Committee of the ABA YLD, and I was very involved with my local bar association’s real property section. This conference meant I could experience all this at a national level with the “big bar” and not just young lawyers.

That May I went to Chicago. I met with an attorney friend, and we went to the conference together. I learned a lot about real property law. Seeing as it was my first RPTE conference, and I had only been practicing for four years, some of it went over my head, but I knew that I would pick it up one day. I wanted to become as knowledgeable as the people giving the talks at the seminars.

RPTE has a two-year fellowship program for young lawyers. It provides fellows with funding and a mentor , and puts them directly into the leadership pipeline of the section. I was encouraged to apply for the RPTE fellowship at that first conference. Since I’ve always known that real property is the area of law that I want to focus on, it was a natural fit for me. I applied without hesitation and was excited when I learned I was chosen as a 2014-2016 RPTE Fellow.

I got paired with an amazing mentor who lived all the way on the other side of the country in Florida, but she met up with me in Seattle to introduce herself. She was so friendly, helpful, and well connected; she set up meetings for me with people she knew locally in the Seattle area. Today I work regularly with those same people. I am also now a scholar with the American College of Real Estate Lawyers (ACREL) and have made several local connections in Seattle through ACREL.

THERE’S A LOT OF “STUFF”Through my journey, I have learned a lot of real property “stuff” through the courses I’ve attended at the ABA conferences, the local conferences I’ve attended, the leadership positions I’ve held, the people I’ve met, and the clients I’ve met as a result. I’ve learned that the field of real property law is diverse and can’t be put into a neat little box. It actually is like me. There are many things I get to touch and learn on a day-to-day basis, and every transaction is a little different than the last.


I have been practicing as an attorney for almost eight years now. There’s still a lot of “stuff” I am learning every single day. This is why I never get bored of my job. I am constantly learning new things, and I hope to continue to learn and expand my knowledge every single day. Each morning I wake up excited to see what new challenge will present itself. I wouldn’t change this for the world.

©2018. Published in GPSOLO, Vol. 35, No. 2, March/April 2018, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

Permalink to this entry

Washington and Seattle Legislative Roundup – Police, Discrimination, Litigation and Housing

Posted Wednesday, March 21, 2018 by McKean J. Evans

Washington’s 2018 legislative session recently closed. The legislative session resulted in a number of important changes to Washington law.

The Washington legislature enacted significant police reforms. Initiative 940 requires law enforcement officers undergo de-escalation training to help defuse situations before they become violent, and removes the requirement that officers be found to have acted with “malice” to be prosecuted for shootings. Because the legislature voted to enact Initiative 940, the measure becomes law without going to the ballot.

The legislature enacted several measures aimed at protecting women in the workforce from illegal discrimination. The legislature significantly curtailed the use of non-disclosure agreements that would otherwise require complainants in sexual harassment or assault cases to agree not to disclose the unfair treatment they experienced. Finally, the legislature enacted rules promoting gender pay equity by requiring compensation be based on bona fide job criteria and giving workers the right to openly discuss compensation.

In regards to civil litigation, the legislature updated the procedures for mandatory arbitration proceedings. Mandatory arbitration awards may now rise as high as $100,000; parties (as opposed to merely their lawyers) are required to sign off on appeals from mandatory arbitration awards; and arbitrators’ minimum qualifications were enhanced.

In Seattle, the City Council recently voted 8-0 to impose a one-year moratorium on so-called “rent bidding” websites. These websites are used by residential landlords to drive up rents by requiring prospective tenants to bid against each other to pay higher rent in order to rent apartments. The city council called out these practices as driving up the cost of housing in a city where housing costs already contribute to an existing homelessness crisis. The operator of one such rent-bidding platform claims the practice could benefit tenants, but also touts his platform to landlords as increasing rental profits up to five percent. The ban expires in one year, but may be renewed.

McKean Evans is an attorney at Pivotal Law Group representing insurance policyholders and ERISA plan participants and beneficiaries. McKean blogs regarding insurance and ERISA issues at https://seattleinsuranceanderisablog.com/.

Alternative Text

(Internet image - author and date unknown)

Permalink to this entry

Can Towns Ban Retail Marijuana Sales? Court of Appeals Says Yes

Posted Wednesday, March 14, 2018 by McKean J. Evans

With states increasingly legalizing recreational marijuana retail sales, one question is whether specific towns that prefer not to have marijuana sold at retail can prohibit marijuana stores from opening within their borders. The Court of Appeals’ March 13, 2018 decision in Emerald Enterprises, LLC v. Clark County answers “yes.”

Retail sales of recreational marijuana became legal in Washington after the voters approved Initiative 502 on November 6, 2012 (subsequently codified by the legislature as Washington’s Uniform Controlled Substances Act (“USCA”). The USCA legalized the limited production and sale of recreational marijuana under a licensing and regulatory system operated by the Washington State Liquor and Cannabis Board (the “Board”). The Board has final authority to issue retail licenses to persons desiring to sell marijuana at retail.

On May 27, 2014, Clark County passed an Ordinance banning the retail sale of recreational marijuana in unincorporated Clark County. Emerald Enterprises obtained a retail marijuana license from the Board, over Clark County’s objection. Emerald Enterprises then challenged the Clark County retail marijuana ban in court. While the dispute made its way through the lower courts, Emerald Enterprises began selling marijuana in Clark County despite the ban. Clark County ordered Emerald Enterprises to cease and desist, and revoked Emerald Enterprises’ building permit.

The Court of Appeals upheld Clark County’s marijuana retail ban. The court determined the USCA did not prohibit Clark County from banning retail marijuana. Emerald Enterprises claimed the Washington Constitution prohibited the Ordinance because it irreconcilably conflicts with the USCA, and because the USCA impliedly preempts local regulation of marijuana retail sales. Disagreeing, the court noted local governments in Washington historically “wield significant regulatory powers,” that local governments are presumed autonomous, and that Emerald Enterprises failed to overcome that presumption as applied to retail marijuana sales. The Court reasoned the USCA permits the sale of retail marijuana but grants no affirmative right to sell marijuana. Because the Ordinance did not prohibit the exercise of a right affirmatively granted by Washington law, no irreconcilable conflict existed.

The Court of Appeals also determined the Ordinance did not “thwart[] the will of voters and the legislative purpose” of the USCA. The Court held the USCA’s purpose was not to encourage the retail sale of marijuana but only to regulate and tax marijuana sales without any mandate to maximize or encourage sales. The Court also inferred the Washington legislature intended to permit local governments to ban marijuana sales from the legislature’s provision that local governments may derive certain financial benefits under the USCA only if they do not prohibit marijuana operations.

Finally, for many of the same reasons, the Court of Appeals also held the USCA did not preempt local regulation of marijuana sales. Since the USCA did not grant the affirmative right to sell marijuana and the Ordinance did not conflict with the USCA’s purpose, the USCA did not preempt local marijuana regulation.

Alternative Text

(Internet image - author and date unknown)

Permalink to this entry

DISCLAIMER: This blog is not legal advice. This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice under any circumstances, nor should it be construed as creating an attorney-client relationship. The information on this blog is a general statement of the law and may not be up to date, accurate or applicable to your specific circumstances. Prior success in litigation is not an indication of future results; each case is unique and past results cannot predict future outcomes.

Pivotal Law Group, PLLC Pivotal Law Group, PLLC
47.6084840 -122.3330190
of vital or central importance; crucial