Trofimovich et al v. Progressive Direct Insurance Company

Filing 34

ORDER granting defendant's 15 Motion for Summary Judgment; denying plaintiffs' 19 Motion for Summary Judgment signed by U.S. District Judge John C Coughenour.(RS)

THE HONORABLE JOHN C. COUGHENOUR

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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DANIIL TROFIMOVICH and
BRITTANY TROFIMOVICH, husband
and wife, and their marital community,

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CASE NO. C16-1510-JCC
ORDER ON CROSS-MOTIONS
FOR SUMMARY JUDGMENT

Plaintiffs,
v.

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PROGRESSIVE DIRECT
INSURANCE COMPANY, a foreign
insurance company,

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Defendant.

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This matter comes before the Court on the cross-motions for summary judgment by
Daniil Trofimovich and Brittany Trofimovich (Dkt. No. 19) and Defendant Progressive Direct

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Insurance Company (Dkt. No. 15). Having thoroughly considered the parties’ briefing and the

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relevant record, the Court finds oral argument unnecessary and GRANTS Defendant’s motion

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(Dkt. No. 15) and DENIES Plaintiffs’ motion (Dkt. No. 19) for the reasons explained herein.

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I.

BACKGROUND
Plaintiff Daniil Trofimovich1 is a Lyft driver. (Dkt. No. 20-1 at 4.) At the time relevant to

these motions, Trofimovich had “Platinum” status with Lyft, meaning he was entitled to certain

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Because Plaintiff Brittany Trofimovich does not have an active role in the events
leading to this lawsuit, the facts section will largely refer to Daniil Trofimovich alone.
ORDER ON CROSS-MOTIONS FOR SUMMARY
JUDGMENT
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benefits, including roadside assistance. (Id. at 188, 190.) Trofimovich also had automobile

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insurance coverage from Defendant Progressive Direct Insurance Company. (Id. at 193.) His

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plan excluded damages arising out of the use of the vehicle while “carry[ing] persons or property

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for compensation or a fee.” (Id. at 215.)

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On the morning of June 17, 2016, Trofimovich received a fare request from non-party

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Taelor Dinson. (Id. at 8.) During the ride, Dinson told Trofimovich that she was in a tough

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financial situation and was worried about how to get home. (Id.) Trofimovich testified that he

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offered to drive her home for free and gave her his cell phone number. (Id.) That afternoon,

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Dinson texted Trofimovich and asked for a ride home. (Id. at 13.) According to Trofimovich, he

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logged off Lyft at that time, around 2:18 p.m. (Id.) Trofimovich picked Dinson up and, about

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five or ten minutes into the trip, collided with another car at an intersection. (Id. at 129-30.)

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About an hour after the accident, Trofimovich called Progressive to report it and make a

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claim. (Id. at 110.) He told the customer service representative that the police report said the

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accident occurred at 2:43 p.m. (Id. at 111.) He also stated, “I was working and I was driving for,

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uh, what’s it called, Lift [sic],” and he responded in the affirmative when asked if he was

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“working at the time.” (Id. at 113.) When asked if he had a passenger, he responded, “I did have

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a passenger.” (Id.) Trofimovich also turned down the representative’s offer to call him a tow,

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saying, “I’m trying to get Lift [sic] to do it ‘cuz they’re supposed to pay for it, like, or pay for a

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big chunk of it.” (Id. at 124.) The representative’s initial notes read: “IMMEDIATE

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CONCERNS: INSURED WAS DRIVING FOR LYFT AT THE TIME OF THE ACCIDENT.

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[GUEST PASSENGER] WAS A CUSTOMER.” (Id. at 232.)

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The next day, when speaking with Progressive claims adjuster Amber Sandbergen,

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Trofimovich stated that Dinson was not a paying customer, but a passenger whom he had

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transported for free. (Dkt. No. 20-1 at 129.) Trofimovich said, “We had used [Lyft] earlier in the

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day . . . because I was working . . . and then I was just giving her a ride back home

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afterwards. . . . [H]er mom’s got cancer or something.” (Id.) Trofimovich further stated that he
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was “trying to do a favor.” (Id.) He told Sandbergen that he clocked off an hour before he drove

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Dinson home. (Id.) According to Trofimovich, he also provided Progressive a screenshot of his

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ride history that day; however, the evidence he submitted to the Court shows only a portion of

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the day’s rides and contains no information about the afternoon hours. (See id. at 270.)

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On June 30, 2016, Progressive sent a letter to Trofimovich advising him that “there is no

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coverage for this loss because [he was] driving for Lyft at the time of the loss and coverage for

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this is excluded under [his] policy.” (Dkt. No. 17-4 at 2.)

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On July 20, 2016, Trofimovich sent Progressive an Insurance Fair Conduct Act (IFCA)
notice, indicating his intent to sue Progressive. (Dkt. No. 17-5 at 2.) Progressive contacted

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Trofimovich’s counsel regarding the basis for the notice. (See Dkt. No. 17-6 at 3.) On July 27,

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2016, Counsel responded that Trofimovich had no fare in his car at the time of the accident and

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that, because Progressive ignored the supporting evidence he offered, he would bring claims

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under IFCA, the Washington Consumer Protection Act (WCPA), and common law. (Id. at 3-4.)

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On July 29, 2016, Progressive extended coverage for Trofimovich’s loss. (Dkt. No. 17 at

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3.) On September 30, 2016, Progressive issued Trofimovich payments for the full amount of the

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damage to his vehicle. (See Dkt. No. 17-7 at 2-3.)

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Meanwhile, on August 26, 2016, Trofimovich and his wife, Brittany Trofimovich, filed

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suit against Progressive, alleging that it “refused and continues to refuse to pay for the full

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damages it caused Plaintiffs due to its wrongful denial.” (Dkt. No. 1-2 at 5.) Plaintiffs alleged

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breach of contract, common law bad faith, WCPA violations, and IFCA violations. (Id. at 6-8.)

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Progressive now moves for summary judgment dismissal of all claims, arguing that it

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accepted coverage and paid for all damage to Trofimovich’s vehicle and that its previous denial

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of coverage was reasonable based on Trofimovich’s initial statements. (Dkt. No. 15 at 2.)

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Plaintiffs bring a cross-motion for summary judgment, arguing that they are entitled to

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consequential damages, including lost wages and attorney fees, arising out of Progressive’s

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initial denial of coverage. (Dkt. No. 19 at 3.)
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II.

DISCUSSION

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A.

Summary Judgment Standard

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The Court shall grant summary judgment if the moving party shows that there is no

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genuine dispute as to any material fact and that the moving party is entitled to judgment as a

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matter of law. Fed. R. Civ. P. 56(a). In making such a determination, the Court must view the

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facts and justifiable inferences to be drawn therefrom in the light most favorable to the

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nonmoving party. Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986). Once a motion for

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summary judgment is properly made and supported, the opposing party must present specific

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facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Matsushita Elec. Indus.

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Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Material facts are those that may affect the

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outcome of the case, and a dispute about a material fact is genuine if there is sufficient evidence

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for a reasonable jury to return a verdict for the non-moving party. Anderson, 477 U.S. at 248-49.

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Ultimately, summary judgment is appropriate against a party who “fails to make a showing

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sufficient to establish the existence of an element essential to that party’s case, and on which that

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party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).

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B.

Reasonable Denial of Coverage

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The Court first considers a threshold question that informs the legal questions discussed

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below: whether Progressive’s initial denial of Trofimovich’s claim was reasonable. The Court

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concludes that it was.

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Reasonableness is typically a question of fact, but if reasonable minds could not differ

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that an insurer’s denial of coverage was reasonable, the Court may reach the conclusion as a

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matter of law. See Smith v. Safeco Ins. Co., 78 P.3d 1274, 1277 (Wash. 2003); see also Lakehurst

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Condo. Owners Ass’n v. State Farm Fire and Cas. Co., 486 F. Supp. 2d 1205, 1213 (W.D. Wash.

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2007). “If the insurer can point to a reasonable basis for its action, this reasonable basis is

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significant evidence that it did not act in bad faith and may even establish that reasonable minds

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could not differ that its denial of coverage was justified.” Smith, 78 P.3d at 1278.
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Here, Progressive initially denied coverage because it accepted Trofimovich’s first

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statements that he had a paying customer in his car at the time of the accident. Contrary to

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Trofimovich’s protestations otherwise, (see Dkt. No. 19 at 2), it was plainly reasonable to

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interpret his statements as such. He stated that he was a Lyft driver, that he was working at the

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time, and that he had a passenger. He also told the Progressive representative that he expected

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Lyft to pay for him to tow the car. The Court rejects Trofimovich’s suggestion that Progressive

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had a duty to further inquire as to whether his passenger was a paying customer.

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The Court acknowledges that Trofimovich subsequently clarified—or, in Progressive’s

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view, amended—his statement. According to Kevin Rehmke, the claims supervisor assigned to

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Trofimovich’s claim, “[w]hen people report losses from the scene, they don’t generally get the

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initial facts of the loss wrong.” (Dkt. No. 20-1 at 58.) Progressive made the choice to reject one

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of two apparently conflicting statements, something that cannot be uncommon in claims

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adjusting. This alone does not render Progressive’s denial unreasonable. And, while Trofimovich

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alleges that the screenshot of his ride history “confirms no paid rides at or near the time of the

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collision,” (Dkt. No. 19 at 10), the evidence before the Court does not actually confirm this.2

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Thus, the Court concludes as a matter of law that Progressive’s initial denial of coverage

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was reasonable.

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Both parties include the same single page of the screenshot in their evidence
submissions. (Dkt. No. 20-1 at 270; Dkt. No. 17-3 at 2.) The ride history goes in reverse
chronological order, showing an 11:26 a.m. ride as his latest. However, it also appears that
Trofimovich told Sandbergen he had passengers after his noon lunch break: “I had like one or
two passengers, and then I was meeting a friend for lunch and then I had . . . to pick up some
stuff at the store, and on the way back I picked them up.” (See Dkt. 20-1 at 129.) This statement
is admittedly unclear, but to the extent it adds any confusion, this tends in Progressive’s favor,
not Trofimovich’s.
Moreover, the screenshot is taken at 1:07 p.m. on an unspecified date. From a subpoena
to Lyft, Progressive obtained further records showing that Trofimovich logged onto Lyft at 1:51
p.m., off at 2:18 p.m., and back on again at 2:42 p.m. (Id. at 12-13.) This suggests that the
screenshot was taken at 1:07 p.m. on the day of the accident, before it occurred.
In sum, Trofimovich’s evidence does not show that Progressive acted unreasonably.
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C.

Breach of Contract

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Plaintiffs fail to identify a contractual duty that Progressive breached. Plaintiffs’ motion

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notes that “[w]ithout a paying passenger, coverage applies under the terms of the insurance

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contract” and that “Progressive promised [to] insure [Trofimovich] subject to all the terms,

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conditions and limitations of this policy.” (Dkt. No. 19 at 13.) Plaintiffs further allege that

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“Progressive’s denial of all coverage . . . constitutes a breach of the Policy, a contract, and its

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commitment to its insureds.” (Id. at 14.) However, Plaintiffs do not dispute that Progressive paid

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for the total damage to the automobile covered by Plaintiffs’ policy. The fact that Progressive

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allegedly did so as a “business decision,” (see id.), is irrelevant.

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Plaintiffs’ breach of contract claim is DISMISSED with prejudice.

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D.

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The Court analyzes insurance bad faith claims by applying the same principles as any

Bad Faith

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other tort: duty, breach, and damages proximately caused by any breach of duty. Smith, 78 P.3d

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at 1277. To succeed on a bad faith claim, a policyholder must show that the insurer’s breach of

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the insurance contract was unreasonable, frivolous, or unfounded. Id. As noted above, the Court

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concluded that Progressive’s denial of coverage was reasonable.

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Plaintiffs’ bad faith claim is DISMISSED with prejudice.

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E.

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Under IFCA, an insured who is “unreasonably denied a claim for coverage or payment of

Washington Insurance Fair Conduct Act

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benefits by an insurer may bring an action in the superior court of this state to recover the actual

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damages sustained, together with the costs of the action, including reasonable attorneys’ fees and

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litigation costs.” Wash. Rev. Code § 48.30.015(1). Again, the Court has concluded that

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Progressive’s denial of coverage was not unreasonable.

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Plaintiffs’ IFCA claim is DISMISSED with prejudice.

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F.

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Plaintiffs base their WCPA claim on a number of alleged violations of the Washington

Washington Consumer Protection Act

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Administrative Code (WAC). (See Dkt. No. 19 at 16-18.) However, “an incorrect denial of

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coverage does not constitute an unfair trade practice if the insurer had reasonable justification for

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denying coverage.” Keller v. Allstate Ins. Co., 915 P.2d 1140, 1145 (Wash. Ct. App. 1996)

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(internal quotations omitted). The Court has concluded that Progressive was reasonably justified

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in initially denying coverage.
Plaintiffs’ WCPA claim is DISMISSED with prejudice.

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III.

CONCLUSION

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For the foregoing reasons, Defendant’s motion (Dkt. No. 15) is GRANTED and

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Plaintiffs’ motion (Dkt. No. 19) is DENIED. The Court ENTERS summary judgment in

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Defendant’s favor. Plaintiffs’ claims are DISMISSED with prejudice. This ruling nullifies the

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Court’s previous order directing Dinson to appear for a deposition (Dkt. No. 33).

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DATED this 8th day of August, 2017.

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A

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John C. Coughenour
UNITED STATES DISTRICT JUDGE

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