Complaint: Durant v. State Farm
Complaint: Durant v. State Farm
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IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON
IN AND FOR KING COUNTY
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CLASS ACTION
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Plaintiffs,
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vs.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, a foreign
automobile insurance company,
Defendant.
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The Plaintiff, by and through his attorneys of record, Van Siclen, Stocks & Firkins,
and the Law Office of David Nauheim, complains and alleges as follows:
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I.
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1.1
has engaged in a systematic practice of prematurely and unlawfully depriving its injured
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claimants of their medical benefits. Like most insurance policies, State Farms policies
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contain personal injury protection (PIP) clauses. These clauses promise that State Farm
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COMPLAINT FOR DECLARATORY JUDGMENT AND
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1.2
only one of four reasons: if treatment is not (1) reasonable, (2) necessary, (3) related to the
accident, or (4) incurred within three years. WAC 284-30-395(1). Insurance regulations are
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unequivocal: no other reasons are permitted. Despite this, for over twenty years, Defendant
State Farm has issued insurance policies that purport to allow termination of benefits when it
finds that continued treatment is not essential in achieving maximum medical improvement
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for the bodily injury . . . . This action concerns thousands of consumers who had their PIP
benefits by State Farm terminated under this illegitimate standard.
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II.
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2.1
This Court has jurisdiction over Plaintiffs claims pursuant to RCW 2.08.010,
This Court has jurisdiction over State Farm because State Farm systematically
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Venue is proper in this county under RCW 4.12.025 because State Farm
transacts business in this county, the contract in question was entered into in this county, and
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III.
3.1
Plaintiff Brett Durant was, and at all times material hereto is, a resident of
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COMPLAINT FOR DECLARATORY JUDGMENT AND
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3.2
Defendant State Farm Automobile Insurance Company was, and at all times
material hereto is, an insurance company licensed to provide insurance under the laws of the
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insurance with Defendant and dutifully paid all material sums and premiums on said contract
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since 1995. On July 21, 2012, Plaintiff was injured in an automobile accident. In order to
obtain treatment for his injuries, Plaintiff opened a PIP claim with Defendant.
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IV.
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4.1
Plaintiff brings all claims herein as class claims pursuant to Civil Rule (CR)
23 and Local Rule (LR) 23. As explained herein, the requirements of these rules are met
with respect to the class defined below.
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4.2
The class consists of all insured, as defined in the medical payments coverage
portions of State Farm policies, and all third-party beneficiaries of such coverage, under any
State Farm insurance policy issued in the state of Washington with respect to whom State
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Farm terminated, or limited benefits, based upon its determination that its insured had
reached maximum medical improvement or that such benefits were not essential in
achieving maximum medical improvement for the bodily injury.
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4.3
members of the class is impracticable because the class consists of hundreds of persons
located throughout Washington that have been impacted by the abovementioned practices of
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Defendant. The exact number of class members can be determined by appropriate discovery.
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COMPLAINT FOR DECLARATORY JUDGMENT AND
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4.4
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questions of law and fact common to the class, including, but not limited to, the following:1
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A. Whether it is lawful for State Farm to terminate or limit benefits based upon
language that it employs in its insurance policy that is not permitted under insurance
regulations and statutes pertaining to Personal Injury Protection?
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C. Whether State Farm should be enjoined from such further unlawful conduct?
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D. Whether State Farms unlawful conduct damaged class members?
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4.5
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Plaintiff in this matter are the same as those of the rest class members. His claim arises from
the same practice and course of conduct that gives rise to the claims of other potential class
members. See Smith v. Behr Process Corp., 113 Wash. App. 306 (2002) (also noting that
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varying fact patterns in individual claims do not defeat the typicality requirement for class
certification where the same unlawful conduct is alleged to have affected both the named
plaintiffs and the class members).
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4.6
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Plaintiff is committed to vigorously pursuing this action on behalf of the class and has
retained counsel competent to handle class actions of this sort. Plaintiff will fairly and
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The commonality requirement is qualitative rather than quantitative. Schwendeman v. USAA Cas. Ins. Co.,
116 Wash. App. 9 (2003). Courts will find commonality where the facts indicate that the defendant was engaged
in a common course of conduct in relation to all the potential class members. Id.
COMPLAINT FOR DECLARATORY JUDGMENT AND
VAN SICLEN, STOCKS & FIRKINS
A Professional Service Corporation
DAMAGES - 4
721 45th Street N.E.
Auburn, WA 98002-1381
(253) 859-8899 Fax (866) 947-4646
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adequately represent the interests of the class members and has no interests that conflict with
those of the rest of the class.
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4.7
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actions by members of the class would create a risk of establishing incompatible standards of
conduct for State Farm. For example, one court might determine that the challenged actions
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are illegal and enjoin them, while another might decide that those same actions are
permissible. Similarly, individual actions may, as a practical matter, be dispositive of the
interests of the class.
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4.8
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Farm has acted in a consistent manner towards all class members such that a pattern of
activity is apparent. That is, State Farm, has imposed an illegal and unfair practice that
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affects all class members. See FRIEDENTHAL, KANE & MILLER, CIVIL PROCEDURE
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(West Hornbook, 4th ed.). State Farms actions are, therefore, generally applicable to the
class as a whole and Plaintiff seeks, inter alia, equitable remedies with respect to the entire
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class.
4.9
law and fact enumerated above predominate over those questions that affect only individual
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members of the class. Moreover, a class action is the superior method for fair and efficient
adjudication of this controversy because State Farms practice is pervasive across a great
many policy-holders with PIP protection. For similar reasons, the likelihood that individual
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members of the class will prosecute separate actions is remote due to the time and expense
necessary to conduct this litigation.
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currently pending by other members of the class. Plaintiffs counsel, experienced in class
actions, foresees little difficulty in managing this case as a class action.
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4.10
exist in this case. If injunctive relief is not granted, great harm and irreparable injury to
Plaintiff and members of the class will continue. The proposed class has no adequate remedy
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at law for the injuries which will surely recur given that, absent action from this Court, State
Farm will continue to mislead and cause economic and noneconomic injury to its policyholders and third-party beneficiaries. An order finding, money damages alone would be
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meaningless to those who will be injured in the future if the challenged conduct is allowed to
continue, and for those who rely on State Farm in choosing an insurance provider and seeking
care for their accidental injuries.
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V.
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5.1
STATEMENT OF FACTS
the State of Washington. For over twenty years, State Farm has issued automobile liability
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policies in the State of Washington That policy requires State Farm to pay its insureds
reasonable medical expenses for up to three years for bodily injury sustained in an
automobile accident. However, the policy defines reasonable medical expenses as expenses
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that are incurred for medical services that are essential in achieving maximum medical
improvement for the bodily injury sustained in the accident. The most recent version of
State Farms automobile liability in Washington is known as Form 9847A and has been in
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effect since 2006 and contains this illegitimate standard. (Exhibit 1.)
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(4) if the treatment was not incurred within three years of the motor vehicle accident.
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WAC 284-30-395(1) (These are the only grounds for denial, limitation, or termination of
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Yet for over twenty years, State Farm has terminated or limited coverage
while their insureds were still treating for their injuries when it found that further treatment
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was not essential to achieving maximum medical improvement or that their insured had
reached maximum medical improvement.
5.5
The central dispute in this action is whether State Farm conduct violated its
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duty of good faith, violated the Insurance Fair Conduct Act, breached the insurance contract,
and violated the Consumer Protection Act; and if so, what should be the remedy for the
thousands of insureds who were denied medical treatment for their injuries, or who incurred
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out of pocket expenses for medical treatment that should have been covered by their State
Farm PIP policy, or who paid subrogation to State Farm, when in fact State Farms right to
subrogation had been extinguished by its bad faith and breach of contract.
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5.6
Brett Durant, the Representative Plaintiff in this action, has been a policy
holder with State Farm since 1995 and has dutifully paid his premiums for 19 years. He chose
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to carry $35,000 in PIP coverage. On July 21, 2012, Mr. Durant was injured in a motor
vehicle accident when another driver failed to obey a yield sign and struck the left front side
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of his vehicle. There was $11,501.56 in property damage to Mr. Durants vehicle and he and
his fiance, Sarah Durant, were injured.
5.7
Three days later, Mr. Durant sought treatment with chiropractor Harold
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Rasmussen, DC, who diagnosed him with cervical, thoracic, sacral and bilateral sacroiliac
sprain condition with fixation of the right shoulder, headache and dizziness. He began
chiropractic treatment and massage therapy. When his shoulder did not improve, he was
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referred him for a shoulder MRI, which showed for a sprain of the middle glenohumeral
ligament and a possible small type I SLAP tear. He was referred to orthopedic surgeon Scott
Hormel, who diagnosed mild bursitis/tendinitis. This was treated with physical therapy and
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On October 18, 2012four months after the accidentState Farm sent Dr.
Rasmussen a form letter inquiring as to Mr. Durants progress. Notably, the form letter did
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not inquire about any of the standards listed in WAC 284-30-395(1). Rather, it only asked
about the illegitimate standard: Has the patient reached maximum medical improvement?
and, If the patient has not reached maximum medical improvement, when is your target
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date? This form letter is the same letter that State Farm systematically uses on all of its PIP
claims in the State of Washington. Dr. Rasmussen responded that Mr. Durant was not at
MMI, but that his target date was February 2, 2013.
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5.9
However, Mr. Durants injuries were not recovered by that date and he
continued to receive chiropractic adjustment and massage therapy. On April 2, 2013, State
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Farm sent another letter to Dr. Rasmussen asking again whether Mr. Durant was at MMI and
if not, when he was expected to do so. Dr. Rasmussen listed 3/27/13 as the date of MMI. This
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time the letter asked, You have treated Brett past his given MMi [sic] date of 2/1/2013.
Please explain. Dr. Rasmussen stated, Patient was not stable and needed treatment to
3/27/2013.
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5.10
However, while Mr. Durant may have been stable as of 3/27/2013, this was
not the end of the problems he would have with his accident-related injuries. He had
continued instability throughout the thoracocervical, thoracolumbar, lumbosacral, and
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bilateral sacroiliac joints as well as instability of the right shoulder due to the SLAP tear. Like
many patients, he had achieved MMI by sustained treatment and avoiding activities that
would aggravate his injuriesactivities that he had been able to engage in before the motor
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vehicle accident, like playing golf, snowboarding, running, mountain biking, doing yard
work, etc. Without the benefit of ongoing treatment, whenever Mr. Durant attempted to
return to any of his pre-accident activities, he aggravated his injuries from the motor vehicle
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accident. What is more, Mr. Durant works as a Data Center Technician for Motricity and
singlehandedly maintains a 6000 square foot data center, which requires varying amounts of
physical work. From time to time, his physical duties aggravated his injuries from the motor
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vehicle accident. On these occasions, Mr. Durant sought chiropractic treatment or massage
therapy.
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aggravations is reasonable, necessary, related to the motor vehicle accident, and incurred
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within three years, his providers billed State Farm under Mr. Durants PIP claim. State Farm
denied each of these medical bills. The basis given by State Farm for each denial was that:
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Services are not covered, as your provider advised us you previously reach maximum
medical improvement. The denials made no mention of whether the treatment was
reasonable, necessary, or related to the motor vehicle accident.
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5.12
By this point, Mr. Durant had retained an attorney to represent him in his
personal injury claim. His attorney wrote to State Farm asking them to pay for the
outstanding medical bills. The letter explained that State Farm must pay for treatment under
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that met the standard in WAC 284-30-395(1). The attorney asserted that unless State Farm
had a competent medical opinion that Mr. Durants treatment did not meet this appropriate
legal standard, State Farm must resume payment of the plaintiffs medical bills. The attorney
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requested that State Farm provide legal authority supporting its denials of Mr. Durants
medical bills. He pointed out that the demanding physical nature caused aggravations of his
injuries. Finally, the attorney provided State Farm a letter from Dr. Rasmussen explaining
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that while Mr. Durant had reached MMI, his prognosis was guarded, and that instability
throughout the thoracocervical, thoracolumbar, lumbosacral, and bilateral sacroiliac joints as
well as instability of the right shoulder due labrum tear would mean that Mr. Durant would
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require conservative care on and off for his spinal and pelvic dysfunction. He would also
experience a definite increase in degenerative joint disease throughout his neck, spine and his
right shoulder due to his injuries. He recommended that during periods of aggravation Mr.
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Durant should receive conservative treatment to restore biomechanics reduce his symptoms
of pain. He opined that these aggravations would each require 3-4 treatments to stabilize.
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5.13
State Farm ignored Dr. Rasmussens opinion and did not relent on its position
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5.14
Mr. Durant, through his attorney, responded by letter that Mr. Durant needed
medical treatment from time to time to due to aggravations in order to stay at MMI, and that
this treatment should be considered reasonable, necessary and related under WAC 284-30-
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395(1). He pointed out that under RCW 48.18.510 to the extent that the insurance policy
contradicted insurance regulations, it must be read as if it were in compliance with the code.
At this point Mr. Durant had unpaid medical bills of $1,131.16, which had been denied by
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State Farm ($391.16 in chiropractic treatment and $920 in massage therapy). The letter
notified State Farm that its conduct gave rise to a claim under the Insurance Fair Conduct Act
(IFCA) and gave State Farm 20 days to correct its position. This letter was carbon copied to
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the Insurance Commissioner. State Farm made no substantive response to the IFCA letter and
did not pay Mr. Durants outstanding medical bills.
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Ultimately, Mr. Durant obtained a policy limits settlement from the tortfeasor
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that was liable for the motor accident. He offered State Farm an opportunity to buy out his
claim pursuant to Hamilton v. Farmers Insurance Co., 107 Wn.2d 721 (1987). State Farm
declined to buy out the settlement. He informed State Farm that since he had received the
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policy limits, he was not made whole as a matter of law. State Farm did not pay Mr. Durants
outstanding medical bills.
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contracts, tort, etc., and also by state statutes and regulations protection consumers and
regulating insurance companies.
6.2
The Washington Consumer Protection Act provides that any deceptive acts
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or practices in the conduct of any trade or commerce [are unlawful]. RCW 19.86.020. It
also creates a private right of action to enjoin violations and to recover damages and
attorneys fees. RCW 19.86.090.
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6.3
The Washington insurance code declares, inter alia, that [t]he business of
insurancerequir[es] that all persons be actuated by good faith, abstain from deception, and
practice honesty and equity in all insurance matters. RCW 48.01.030. It also prohibits
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insurance companies from engaging in unfair or deceptive acts or practices in the conduct of
their business. RCW 48.30.010.
6.4
Specific acts that the Insurance Commissioner has defined to be unfair claims-
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WAC 284-30-330.
COMPLAINT FOR DECLARATORY JUDGMENT AND
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6.5
promptly provide necessary claim forms, instructions, and reasonable assistance so that first
party claimants can comply with the policy conditions and the insurer's reasonable
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thirty days after notification of claim, unless such investigation cannot reasonably be
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And [w]ithin fifteen working days after receipt by the insurer of properly
executed proofs of loss, the first party claimant shall be advised of the acceptance or denial of
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The foregoing provisions of the insurance code can be enforced through the
private right of action created by the state legislature in the Washington Consumer Protection
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Act: actions and transactions prohibited or regulated under the laws administered by the
insurance commissioner shall be subject to the provisions of RCW 19.86.020 and all sections
of chapter19.86 RCW which provide for the implementation and enforcement of RCW
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Very simply, State Farm violated WAC 284-30-395(1), which provides the
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exclusive reasons that PIP benefits may be terminated. There are only four such reasons:
benefits may be lawfully terminated for only one of four reasons: if treatment is not (1)
reasonable, (2) necessary, (3) related to the accident, or (4) incurred within three years. WAC
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284-30-395(1). No other reasons are permitted. Despite this, Defendant State Farm has
COMPLAINT FOR DECLARATORY JUDGMENT AND
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terminated or limited coverage based on a reason not listed, that is, whether the treatment is
not essential in achieving maximum medical improvement for the bodily injury . . . . State
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Farm is not permitted to violate insurance regulations, and yet it has systematically and
intentionally chosen to do so.
VIII.
CLAIMS
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Plaintiff realleges each of the paragraphs above as if fully set forth herein.
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inequitable, unfair, and deceptive acts or practices prohibted by the Washington Consumer
Protection Act, the insurance code, and regulations promulgated thereunder, including but not
limited to RCW 48.01.030, RCW 48.30.010, RCW 19.86.170, RCW 19.86.020, RCW
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State Farms practices alleged herein are unfair and deceptive, committed in
the course of trade or commerce, impact the public interest, and are the proximate cause of
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harm to Plaintiff and the proposed class members. See RCW 48.01.030. Pursuant to RCW
chapter 19.86, Plaintiff is entitled to damages, including treble damages, in addition to
prejudgment interest, cost, expenses and attorneys fees.
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Breach of Contract
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8.4
Plaintiff realleges each of the paragraphs above as if fully set forth herein.
8.5
State Farm, by its acts and omissions described in this complaint, breached
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and continues to breach its duties of good faith and fair dealing and its enhanced obligation
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of fairness towards its insured, which are all implicit in State Farm insurance contracts. See
Safeco Ins. Co. of Amer. v. Butler, 118 Wn.2d 383, 393 (1992).
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8.6
State Farms specific breaches include, but are not limited to (a) refusing to
pay the amount of medical benefits it is contractually obligated to pay, and (b) failing to meet
its duties of good faith.
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8.7
Plaintiff and the proposed class have been damaged by State Farms breaches,
while State Farm has unreasonably profited from them. Plaintiff and the proposed class are
entitled to declaratory and injunctive relief prohibiting State Farm from engaging in the
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breaches alleged in this complaint. They are also entitled to damages in an amount to be
proven at trial, together with prejudgment interest, expenses, and costs.
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8.8
Plaintiff realleges each of the paragraphs above as if fully set forth herein.
8.9
State Farm, by its acts and omissions described in this complaint, committed
the tort of bad faith handling of insurance claims. See Butler, 118 Wash. 2d at 389.
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8.10
State Farms specific tortious activities include, but are not limited to (a)
refusing to pay the amount of medical benefits it is obligated to pay, and (b) handling
insurance claims in bad faith and in direct violation of the Washington Adminstrative Code.
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8.11
Plaintiff and the proposed class have been damaged by State Farms tortious
conduct, while State Farm has unreasonably profited from it. Plaintiff and the proposed class
are entitled to declaratory and injunctive relief prohibiting State Farm from engaging in the
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conduct alleged in this complaint. They are also entitled to damages in an amount to be
proven at trial, together with prejudgment interest, expenses, and costs.
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Plaintiff realleges each of the paragraphs above as if fully set forth herein.
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8.13
Pursuant to RCW 48.30.015, the plaintiff asserts that State Farm did
unreasonably deny and terminate benefits. The plaintiff seeks a determination that the
defendant did act unreasonably in denying the plaintiffs PIP claims for coverage or payment
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of benefit. The plaintiff seeks the amount of the benefits improperly withheld, repayment of
subrogation payments made to State Farm by it insured, and noneconomic damages for the
prolonged pain and suffering and loss enjoyment of life its insured were subjected to due to
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the denial of medical care, together with and award of reasonable attorneys' fees and actual
and statutory litigation costs, including expert witness fees, to the first party claimant of an
insurance contract who is the prevailing party in such an action and treble damages.
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IX. DEMAND FOR JURY
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9.1
right. In the event this matter is removed, then this prayer for a jury trial should be construed
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1.
A declaration that State Farm has violated and continues to violate the
Washington Consumer Protection Act and the Washington insurance code by limiting
coverage in violation of WAC 284-30-395.
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2.
A declaration that, by committing the acts alleged herein, State Farm has
breached and continues to breach its insurance contracts with Plaintiff and the proposed class.
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3.
A declaration that, by committing the acts alleged herein, State Farm has
committed and continues to commit tortious bad faith handling of insurance claims.
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4.
A declaration that, by committing the acts alleged herein, State Farm has
A declaration that, by violating its duty of good faith and by breaching the
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insurance
contract,
State
Farms
has
extinguished
its
equitable
right
to
An injunction requiring State Farm to cease and desist using the wrong
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injury, to clearly inform injured insureds and third-party beneficiaries that State Farm may
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only disallow charges that are not reasonable and necessary, and shall discontinue using
terms involving maximum medical improvement or any such equivalent.
8.
An award to Plaintiff and the class compelling State Farm to pay any and all
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outstanding medical bills that were due and owing at the time it unilaterally and without
justification cut off insurance benefits, together with collection fees and all consequential
damages flowing from State Farms failure to pay said amounts.
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9.
An award to the Plaintiff and the class compelling State Farm to pay
noneconomic damages for the prolonged pain and suffering, mental and emotional distress
and loss of enjoyment of life sustained by its insureds due to their inability to obtain medical
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10.
Repayment to its insureds of any subrogation payments received from State Farm
by its insureds arising from benefits paid by State Farm on its insureds PIP claims.
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11.
An award to Plaintiff and the class for any and all of their damages to be proven at
trial, together with costs and prejudgment interest at the maximum rate allowable by law.
12.
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19.86.090.
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Treble and all other damages allowed by the Insurance Fair Conduct Act.
14.
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A waiver of State Farms subrogation interest of all PIP claims in which treatment
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Any and all further relief as the Court may deem just and equitable.
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