A recent Washington Court of Appeals ruling opens the door to bad faith lawsuits naming individual insurance adjusters.
The case involves Moun and Aung Keodalah versus Allstate Insurance and Tracey Smith, the adjuster who worked for Allstate and handled his claim.
In April 2007, Moun Keodalah was involved in a collision with a motorcyclist. The motorcyclist who struck Keodalah’s truck was killed and Moun was injured. The motorcyclist was uninsured and Keodalah’s auto insurance policy provided $25,000 in underinsured motorist (UIM) coverage.
Both the Seattle Police Department and Allstate determined the motorcyclist was traveling at a high rate of speed at the time of the collision.
Keodalah requested the policy limit, but Allstate refused and offered $1600 instead. Allstate assessed 70 percent liability on Keodalah. When he requested an explanation for the liability assessment Allstate raised its offer to $5000.
Keodalah sued Allstate, asserting a UIM claim. Allstate designated Smith as its CR 30(b)(6) representative. Despite having the police report and its own report in its possession, Smith claimed Keodalah ran the stop sign and was on his cell phone at the time of the accident. Prior to trial, Allstate upped its settlement offer to $15,000. Keodalah refused and the case proceeded to a jury trial.
Even at trial, Allstate maintained that Keodalah was 70 percent at fault. The jury, however, determined the deceased motorcyclist to be 100 percent at fault and awarded Keodalah $108,868.20 for his injuries, lost wages and medical expenses.
Keodalah proceeded to file a bad faith lawsuit against Allstate and Smith. Allstate filed a motion to dismiss the complaint. The trial court dismissed Keodalah’s claims against Smith only and submitted the case for review.
The appeals court reversed the lower court’s decision, finding that an individual employee insurance adjuster can be liable for bad faith and violation of the Consumer Protection Act (CPA). The case was remanded to the trial court.
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