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)

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THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 DANIIL TROFIMOVICH and BRITTANY TROFIMOVICH, husband and wife, and their marital community, 10 11 CASE NO. C16-1510-JCC ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT Plaintiffs, v. 12 13 PROGRESSIVE DIRECT INSURANCE COMPANY, a foreign insurance company, 14 15 Defendant. 16 17 18 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 19 Insurance Company (Dkt. No. 15). Having thoroughly considered the parties’ briefing and the 20 relevant record, the Court finds oral argument unnecessary and GRANTS Defendant’s motion 21 (Dkt. No. 15) and DENIES Plaintiffs’ motion (Dkt. No. 19) for the reasons explained herein. 22 23 24 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 25 1 26 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 PAGE - 1 1 benefits, including roadside assistance. (Id. at 188, 190.) Trofimovich also had automobile 2 insurance coverage from Defendant Progressive Direct Insurance Company. (Id. at 193.) His 3 plan excluded damages arising out of the use of the vehicle while “carry[ing] persons or property 4 for compensation or a fee.” (Id. at 215.) 5 On the morning of June 17, 2016, Trofimovich received a fare request from non-party 6 Taelor Dinson. (Id. at 8.) During the ride, Dinson told Trofimovich that she was in a tough 7 financial situation and was worried about how to get home. (Id.) Trofimovich testified that he 8 offered to drive her home for free and gave her his cell phone number. (Id.) That afternoon, 9 Dinson texted Trofimovich and asked for a ride home. (Id. at 13.) According to Trofimovich, he 10 logged off Lyft at that time, around 2:18 p.m. (Id.) Trofimovich picked Dinson up and, about 11 five or ten minutes into the trip, collided with another car at an intersection. (Id. at 129-30.) 12 About an hour after the accident, Trofimovich called Progressive to report it and make a 13 claim. (Id. at 110.) He told the customer service representative that the police report said the 14 accident occurred at 2:43 p.m. (Id. at 111.) He also stated, “I was working and I was driving for, 15 uh, what’s it called, Lift [sic],” and he responded in the affirmative when asked if he was 16 “working at the time.” (Id. at 113.) When asked if he had a passenger, he responded, “I did have 17 a passenger.” (Id.) Trofimovich also turned down the representative’s offer to call him a tow, 18 saying, “I’m trying to get Lift [sic] to do it ‘cuz they’re supposed to pay for it, like, or pay for a 19 big chunk of it.” (Id. at 124.) The representative’s initial notes read: “IMMEDIATE 20 CONCERNS: INSURED WAS DRIVING FOR LYFT AT THE TIME OF THE ACCIDENT. 21 [GUEST PASSENGER] WAS A CUSTOMER.” (Id. at 232.) 22 The next day, when speaking with Progressive claims adjuster Amber Sandbergen, 23 Trofimovich stated that Dinson was not a paying customer, but a passenger whom he had 24 transported for free. (Dkt. No. 20-1 at 129.) Trofimovich said, “We had used [Lyft] earlier in the 25 day . . . because I was working . . . and then I was just giving her a ride back home 26 afterwards. . . . [H]er mom’s got cancer or something.” (Id.) Trofimovich further stated that he ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT PAGE - 2 1 was “trying to do a favor.” (Id.) He told Sandbergen that he clocked off an hour before he drove 2 Dinson home. (Id.) According to Trofimovich, he also provided Progressive a screenshot of his 3 ride history that day; however, the evidence he submitted to the Court shows only a portion of 4 the day’s rides and contains no information about the afternoon hours. (See id. at 270.) 5 On June 30, 2016, Progressive sent a letter to Trofimovich advising him that “there is no 6 coverage for this loss because [he was] driving for Lyft at the time of the loss and coverage for 7 this is excluded under [his] policy.” (Dkt. No. 17-4 at 2.) 8 9 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 10 Trofimovich’s counsel regarding the basis for the notice. (See Dkt. No. 17-6 at 3.) On July 27, 11 2016, Counsel responded that Trofimovich had no fare in his car at the time of the accident and 12 that, because Progressive ignored the supporting evidence he offered, he would bring claims 13 under IFCA, the Washington Consumer Protection Act (WCPA), and common law. (Id. at 3-4.) 14 On July 29, 2016, Progressive extended coverage for Trofimovich’s loss. (Dkt. No. 17 at 15 3.) On September 30, 2016, Progressive issued Trofimovich payments for the full amount of the 16 damage to his vehicle. (See Dkt. No. 17-7 at 2-3.) 17 Meanwhile, on August 26, 2016, Trofimovich and his wife, Brittany Trofimovich, filed 18 suit against Progressive, alleging that it “refused and continues to refuse to pay for the full 19 damages it caused Plaintiffs due to its wrongful denial.” (Dkt. No. 1-2 at 5.) Plaintiffs alleged 20 breach of contract, common law bad faith, WCPA violations, and IFCA violations. (Id. at 6-8.) 21 Progressive now moves for summary judgment dismissal of all claims, arguing that it 22 accepted coverage and paid for all damage to Trofimovich’s vehicle and that its previous denial 23 of coverage was reasonable based on Trofimovich’s initial statements. (Dkt. No. 15 at 2.) 24 Plaintiffs bring a cross-motion for summary judgment, arguing that they are entitled to 25 consequential damages, including lost wages and attorney fees, arising out of Progressive’s 26 initial denial of coverage. (Dkt. No. 19 at 3.) ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT PAGE - 3 1 II. DISCUSSION 2 A. Summary Judgment Standard 3 The Court shall grant summary judgment if the moving party shows that there is no 4 genuine dispute as to any material fact and that the moving party is entitled to judgment as a 5 matter of law. Fed. R. Civ. P. 56(a). In making such a determination, the Court must view the 6 facts and justifiable inferences to be drawn therefrom in the light most favorable to the 7 nonmoving party. Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986). Once a motion for 8 summary judgment is properly made and supported, the opposing party must present specific 9 facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Matsushita Elec. Indus. 10 Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Material facts are those that may affect the 11 outcome of the case, and a dispute about a material fact is genuine if there is sufficient evidence 12 for a reasonable jury to return a verdict for the non-moving party. Anderson, 477 U.S. at 248-49. 13 Ultimately, summary judgment is appropriate against a party who “fails to make a showing 14 sufficient to establish the existence of an element essential to that party’s case, and on which that 15 party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). 16 B. Reasonable Denial of Coverage 17 The Court first considers a threshold question that informs the legal questions discussed 18 below: whether Progressive’s initial denial of Trofimovich’s claim was reasonable. The Court 19 concludes that it was. 20 Reasonableness is typically a question of fact, but if reasonable minds could not differ 21 that an insurer’s denial of coverage was reasonable, the Court may reach the conclusion as a 22 matter of law. See Smith v. Safeco Ins. Co., 78 P.3d 1274, 1277 (Wash. 2003); see also Lakehurst 23 Condo. Owners Ass’n v. State Farm Fire and Cas. Co., 486 F. Supp. 2d 1205, 1213 (W.D. Wash. 24 2007). “If the insurer can point to a reasonable basis for its action, this reasonable basis is 25 significant evidence that it did not act in bad faith and may even establish that reasonable minds 26 could not differ that its denial of coverage was justified.” Smith, 78 P.3d at 1278. ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT PAGE - 4 1 Here, Progressive initially denied coverage because it accepted Trofimovich’s first 2 statements that he had a paying customer in his car at the time of the accident. Contrary to 3 Trofimovich’s protestations otherwise, (see Dkt. No. 19 at 2), it was plainly reasonable to 4 interpret his statements as such. He stated that he was a Lyft driver, that he was working at the 5 time, and that he had a passenger. He also told the Progressive representative that he expected 6 Lyft to pay for him to tow the car. The Court rejects Trofimovich’s suggestion that Progressive 7 had a duty to further inquire as to whether his passenger was a paying customer. 8 The Court acknowledges that Trofimovich subsequently clarified—or, in Progressive’s 9 view, amended—his statement. According to Kevin Rehmke, the claims supervisor assigned to 10 Trofimovich’s claim, “[w]hen people report losses from the scene, they don’t generally get the 11 initial facts of the loss wrong.” (Dkt. No. 20-1 at 58.) Progressive made the choice to reject one 12 of two apparently conflicting statements, something that cannot be uncommon in claims 13 adjusting. This alone does not render Progressive’s denial unreasonable. And, while Trofimovich 14 alleges that the screenshot of his ride history “confirms no paid rides at or near the time of the 15 collision,” (Dkt. No. 19 at 10), the evidence before the Court does not actually confirm this.2 16 Thus, the Court concludes as a matter of law that Progressive’s initial denial of coverage 17 was reasonable. 18 // 19 2 20 21 22 23 24 25 26 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. ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT PAGE - 5 1 C. Breach of Contract 2 Plaintiffs fail to identify a contractual duty that Progressive breached. Plaintiffs’ motion 3 notes that “[w]ithout a paying passenger, coverage applies under the terms of the insurance 4 contract” and that “Progressive promised [to] insure [Trofimovich] subject to all the terms, 5 conditions and limitations of this policy.” (Dkt. No. 19 at 13.) Plaintiffs further allege that 6 “Progressive’s denial of all coverage . . . constitutes a breach of the Policy, a contract, and its 7 commitment to its insureds.” (Id. at 14.) However, Plaintiffs do not dispute that Progressive paid 8 for the total damage to the automobile covered by Plaintiffs’ policy. The fact that Progressive 9 allegedly did so as a “business decision,” (see id.), is irrelevant. 10 Plaintiffs’ breach of contract claim is DISMISSED with prejudice. 11 D. 12 The Court analyzes insurance bad faith claims by applying the same principles as any Bad Faith 13 other tort: duty, breach, and damages proximately caused by any breach of duty. Smith, 78 P.3d 14 at 1277. To succeed on a bad faith claim, a policyholder must show that the insurer’s breach of 15 the insurance contract was unreasonable, frivolous, or unfounded. Id. As noted above, the Court 16 concluded that Progressive’s denial of coverage was reasonable. 17 Plaintiffs’ bad faith claim is DISMISSED with prejudice. 18 E. 19 Under IFCA, an insured who is “unreasonably denied a claim for coverage or payment of Washington Insurance Fair Conduct Act 20 benefits by an insurer may bring an action in the superior court of this state to recover the actual 21 damages sustained, together with the costs of the action, including reasonable attorneys’ fees and 22 litigation costs.” Wash. Rev. Code § 48.30.015(1). Again, the Court has concluded that 23 Progressive’s denial of coverage was not unreasonable. 24 Plaintiffs’ IFCA claim is DISMISSED with prejudice. 25 F. 26 Plaintiffs base their WCPA claim on a number of alleged violations of the Washington Washington Consumer Protection Act ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT PAGE - 6 1 Administrative Code (WAC). (See Dkt. No. 19 at 16-18.) However, “an incorrect denial of 2 coverage does not constitute an unfair trade practice if the insurer had reasonable justification for 3 denying coverage.” Keller v. Allstate Ins. Co., 915 P.2d 1140, 1145 (Wash. Ct. App. 1996) 4 (internal quotations omitted). The Court has concluded that Progressive was reasonably justified 5 in initially denying coverage. Plaintiffs’ WCPA claim is DISMISSED with prejudice. 6 7 III. CONCLUSION 8 For the foregoing reasons, Defendant’s motion (Dkt. No. 15) is GRANTED and 9 Plaintiffs’ motion (Dkt. No. 19) is DENIED. The Court ENTERS summary judgment in 10 Defendant’s favor. Plaintiffs’ claims are DISMISSED with prejudice. This ruling nullifies the 11 Court’s previous order directing Dinson to appear for a deposition (Dkt. No. 33). 12 DATED this 8th day of August, 2017. 15 A 16 John C. Coughenour UNITED STATES DISTRICT JUDGE 13 14 17 18 19 20 21 22 23 24 25 26 ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT PAGE - 7

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