Washington

Automobile Total Loss Thresholds

Total Loss Formula (TLF).

Insurer determines whether cost of parts and labor plus salvage value has made it uneconomical to repair and vehicle must be more than six-years-old. R.C.W.A. § 46.04.514.

“Total loss means that the insurer has determined that the cost of parts and labor, plus the salvage value, meets or exceeds, or is likely to meet or exceed, the “actual cash value” of the loss vehicle. Other factors may be considered in reaching the total loss determination, such as the existence of a biohazard or a death in the vehicle resulting from the loss.” Wash. Admin. Code § 284-30-320(18).

Deductible Reimbursement

Automobile and Property: Reimburse deductible (less pro-rata expenses) first; then carrier’s subrogation interests. W.A.C. § 284-30-393 provides: “The insurer must include the insured’s deductible, if any, in its subrogation demands. Any recoveries must be allocated first to the insured for any deductible(s) incurred in the loss, less applicable comparable fault. Deductions for expenses must not be made from the deductible recovery unless an outside attorney is retained to collect the recovery. The deduction may then be made only as a pro-rata share of the allocated loss adjustment expense. The insurer must keep its insured regularly informed of its efforts related to the progress of subrogation claims. ‘Regularly informed’ means that the insurer must contact its insured within 60 days after the start of the subrogation process, and no less frequently than every 180 days until the insured’s interest is resolved.”

In Daniels v. State Farm Mut. Auto. Ins. Co., 2019 WL 2909308 (Wash. 2019), the court said that the amount of the deductible reimbursed to the insured may be reduced based on the comparative fault of the insured. It is unclear if this comparative fault must be judicially determined. A footnote in this case suggests that future courts may question that approach. Subrogation practitioners are advised to reimburse their insured’s deductible 100% following this decision, absent a ruling of comparative fault (court or arbitration).

Deductible must be included in any subrogation demand.

Diminution of Value

First Party: The Washington Supreme Court in the dissent of a non-auto case, on subjects not involving diminution, stated the general rule that: “Damages for injury to property are measured in terms of the amount necessary to compensate for the injury to the property interest… Therefore, damages for injury to property are limited under Washington law to the lesser of diminution in value of the property or the cost to restore or replace the property.” Certification From United States Dist. Court for Western Dist. of Wash. v. Aetna Casualty & Surety Co., 784 P.2d 507 (Wash. 1990). The Washington Supreme Court has also stated that, where the damage to real property is permanent, a plaintiff is entitled to recover, not only for the costs of restoration and repair, but also for the property’s diminished value. Kurtis R. v. Sto Industries, Inc., 132 P.3d 115 (Wash. 2006).

Third Party: Washington Practice Series, Pattern Jury Charges states that the measure of damages to personal property is: The lesser of the following: (1) The reasonable value of necessary repairs to any property that was damaged; or (2) The difference between the fair cash market value of the property immediately before the occurrence and the fair cash market value of the unrepaired property immediately after the occurrence. 6 Wash. Prac., Wash. Pattern Jury Instr. Civ. WPI 30.11 (6^th ed.). Owner of vehicle may recover for diminution in value if a repaired car cannot be fully restored to its pre-loss condition. Grothe v. Kushnivich, 521 P.3d 228 (Wash. App. 2022)  (vehicle was not a total loss).

First Come, First Served: Subrogating Multiple Claims in Excess of Policy Limits

Washington has no authority directly addressing whether a liability insurer may settle with one of several claimants bringing claims against its insured without settling with the remainder of the claimants. However, Washington Civil Rule of Procedure 54(b) does provide as follows:

RULE 54. JUDGMENT AND COSTS.

(b) Judgment Upon Multiple Claims or Involving Multiple Parties. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross claim, or third party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination in the judgment, supported by written findings, that there is no just reason for delay and upon an express direction for the entry of judgment. The findings may be made at the time of entry of judgment or thereafter on the court’s own motion or on motion of any party. In the absence of such findings, determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties. Washington Rule of Civil Procedure 54(b).

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination (in the judgment,) that there is no just reason for delay and upon an express direction for the entry of judgment. Id.

Washington does encourage the use of Interpleader. Farmers Ins. Co. of Wash. v. Romas, 947 P.2d 754 (Wash. App. 1997).

Funeral Procession Traffic Laws

There are no state laws governing funeral processions, however, the Supreme Court of Washington held that a vehicle that is separated from the procession is no longer in the procession, and as such, has no rights of the procession, assuming there were rights. Smith v. Ashmore, 413 P.2d 651 (Wash. 1966).

Imputing Contributory Negligence of Driver to Vehicle Owner

Imputed Contributory Negligence Law:  A tortfeasor cannot impute the contributory negligence of the permissive user of a vehicle, in a suit by the owner for damages to the vehicle, unless there was more than a mere “right to control” the driver – there must be a valid contract between the driver and the owner. Poutre v. Saunders, 143 P.2d 554 (Wash. 1943).

Vicarious Liability/Family Purpose Doctrine:  No Vicarious Liability Statute.

Washington recognizes the Family Car Doctrine. Liability is established under the Family Car Doctrine when (1) the car is owned, provided, or maintained by the parent, (2) for the customary conveyance of family members and other family business, (3) and at the time of the accident, the car is being driven by a member of the family for whom the car is maintained, and (4) with the express or implied consent of the parent. Kaynor v. Farline, 72 P.3d 262 (Wash. App. 2003).

Sponsor Liability for Minor’s Driving: No sponsorship liability statute. However, R.C.W.A. § 4.24.190 imposes liability on parents when a child willfully or maliciously injures s person or defaces or destroys property.

Keep Right Traffic Laws

Statute: R.C.W.A. § 46.61.100 and R.C.W.A. § 46.61.110.

Summary: Drivers must drive in the right lane except when passing another vehicle; when an obstruction exists in the right half of the roadway; on a roadway with three marked traffic lanes; upon a roadway restricted to one-way traffic, or when approaching a stationary authorized emergency or police vehicle with warning lights on a highway having three lanes or less. Vehicles or combinations weighing more than 10,000 lbs. must keep right except when passing and may not use left lane of a limited access roadway with three or more lanes, except to turn left. May not use left lane of two-lane roadway except to pass, when traveling at greater speed than traffic, to avoid merging traffic, turn left, or exit.

Flow of Traffic: Except when overtaking and passing on the right is permitted, overtaken traffic shall give way to the right in favor of an overtaking vehicle on audible signal.

Laws Regarding Using Cell Phones/Headphones/Texting While Driving

Cell Phone/Texting:  Drivers may use a cell phone if it is used in a hands-free manner. R.C.W.A. § 46.37.480.

Hand-held phone use while driving is prohibited. Exceptions include emergency situations, reporting illegal activity, and preventing injury to a person or property.  R.C.W.A. § 46.61.667 (1)(a).

No driver may operate a motor vehicle while texting. Exceptions include when a vehicle is parked and off the road, reporting illegal activity, summoning emergency personnel, or to prevent injury to a person or property.  R.C.W.A. § 46.61.668.

Other Prohibitions:  No driver while operating a vehicle may use headphones, earbuds or a headset if it is for listening to a radio or to receive a radio broadcast.  R.C.W.A. § 46.37.480.

Loss Of Use

Loss of Use: Yes. R.C.W.A. § 4.56.250(1)(a) defines economic damages as including “loss of use of property.” Holmes v. Raffo, 374 P.2d 536 (Wash. 1962) (approving damages for loss of use of a vehicle). Damages to compensate for this loss may only take into account the reasonable time in which the vehicle should have been repaired. 5 Berry, Law of Automobiles § 5.233 (1935); Madden v. Nippon Auto Co., 206 P. 569 (Wash. 1922). Right to compensation for loss of use of a vehicle is not dependent upon owner having hired a substitute vehicle during period when his vehicle was being repaired. Id. Even though plaintiff did not rent a substitute vehicle, he was nevertheless entitled to receive as general damages such sum as would compensate him for his inconvenience, and proof of what it reasonably would have cost to hire a substitute vehicle was sufficient to present question of such damages to jury. Id. Loss of use is recoverable even when the vehicle is a total loss, however this is limited to the period between the date of accident, and the date on which the owner was paid for the cost of the vehicle. Straka Trucking, Inc. v. Estate of Peterson, 989 P.2d 1181 (Wash. 1999).

Lost Profits: Yes. Principles for mitigation of damages would cause lost profits claim to exist only when there was no available rental vehicle. Damages for loss of use of a chattel may be measured by: (1) lost profit; (2) cost of renting a substitute chattel; (3) rental value of the plaintiff’s own chattel; or (4) interest. Straka Trucking, Inc. v. Estate of Peterson, supra.; Ackerman v. Tonkoff, 435 P.2d 31 (Wash. 1967). Moreover, the owner who uses a chattel in the production of income is always entitled to claim profits lost when the chattel is unavailable during a reasonable period for repair or replacement as a result of tortious destruction [or] damage. The claim may be that inability to use the chattel reduced the plaintiff’s income or that it increased his expenses, either way reducing his net profit, which is recoverable if the proof is adequate. Any such claim is subject to normal rules for special damages, duplication of damages, and mitigation of damages. Id. Recovery of lost profits allowed where a reasonable estimation of damages can be made based on an analysis of the profits of an identical or similar business under substantially the same market conditions. No Ka Oi Corp. v. Nat’l 60 Minute Tune, Inc., 863 P.2d 79 (Wash. 1993).

Comments: Expert testimony alone is enough basis for an award of lost profits. No Ka Oi Corp. v. Nat’l 60 Minute Tune, Inc., supra.

Med Pay/PIP Subrogation

Med Pay: Safeco Ins. Co. v. Woodley, 8 P.3d 304 (Wash. App. 2000).

PIP: PIP carrier has right to be reimbursed for PIP payments made to fault-free insured where the policy so provides. Mahler v. Szucs, 957 P.2d 632 (Wash. 1998). A PIP carrier can also recover from an insured’s UIM benefits (usually UIM carrier and insured agree that PIP carrier will only pay common fund fees). Winters v. State Farm Mut. Auto. Ins. Co., 994 P.2d 881 (Wash. App. 2000). This right of reimbursement also extends to UM benefits. Hamm v. State Farm, 88 P.3d 395 (Wash. 2004).

• “Add-On” PIP State. No limitations on tort claims. $10,000 medical coverage/$10,000 income continuation PIP coverage must be offered and can be rejected in writing. R.C.W.A. § 48.22.085.

Made Whole: Can be overridden with policy language. Thiringer v. American Motorist Co., 588P.2d 191 (Wash. 1978) (note that Thiringer is a policy limits case). Cannot be overridden with policy language. Mahler v. Szucs, 957 P.2d 632 (Wash. 1998). Made whole applies to PIP, Med Pay, and Collision subrogation, when policy requires the insured to be made whole “for the bodily injury, property damage or loss.” Our right to recover our payments applies only after the insured has been fully compensated for the bodily injury, property damage or loss. Daniels v. State Farm Mut. Auto. Ins. Co., 2019 WL 2909308 (Wash. 2019).

Statute of Limitations: The three (3) year personal injury statute of limitations runs from date of insured’s accident. R.C.W.A. § 4.16.100.

Owner Liability For Stolen Vehicles

Key In The Ignition Statutes: R.C.W.A. § 46.61.600.

Common Law Rule: Although generally a vehicle owner is not liable for the conduct of a thief after stealing a car, the right set of circumstances can create a duty for the driver. Pratt v. Thomas, 80 Wash.2d 117, 491 P.2d 1285 (1971); Sailor v. Ohlde, 71 Wash.2d 646, 430 P.2d 591 (1967); Parrilla v. King County, 157 P.3d 879 (Wash. Ct. App. 2007) (holding that a duty was created where a bus driver left keys in the bus and the bus running when a “visibly erratic” passenger was on the bus).

Additionally, R.C.W.A. § 46.61.600 did not represent intent by the legislature to create a duty for owners to prevent theft of their vehicles, nor did the statute apply to vehicles on private property. Kim v. Budget Rent a Car Systems, Inc., 15 P.3d 1283 (Wash. 2001).

Payment of Sales Tax After Vehicle Total Loss

First-Party Claims: Insurer may (1) offer a comparable vehicle, including all applicable taxes, license fees, or other fees, or (2) offer cash settlement including all applicable taxes, license fees, or other fees. Wash. Admin. Code § 284-30-391. License fees, weight-based fees, and other regional fees (urban areas of King, Pierce, or Snohomish counties, an insured may be required to pay Regional Transit Authority (RTA) tax to pay for their local transit-related projects) are calculated on a pro-rata basis so that the insured is compensated for the “unused” portion of the annual taxes and fees. After the ACV, sales tax and applicable pro-rated taxes and fees are added together, the insurer deducts the salvage value from the total amount.

First-party coverage under clear ACV provision does not include sales tax because replacement cost considerations apply only when the property is actually replaced. Holden v. Farmers Ins. Co. of Wash., 175 P.3d 601 (Wash. App. 2008). However, if ACV provision is ambiguous, policy must be read to include sales tax in calculating the FMV of damaged property, regardless of whether insured replaced the damaged property. Holden v. Farmers Ins. Co. of Wash., 239 P.3d 344 (Wash. 2010).

Third-Party Claims:  As part of the settlement amount, include all applicable government taxes and fees that would have been incurred by the claimant if the claimant had purchased the loss vehicle immediately prior to the loss. These taxes and fees must be included in the settlement amount whether or not the claimant retains or subsequently transfers ownership of the loss vehicle. Wash. Admin. Code 284-30-391(4)(e).

Sales tax must be dealt with by insurers “in good faith.” Wash. Office of Ins. Comm., Bulletin No. 89-3 (Apr. 5, 1989). The bulletin notes that in ACV claims, “the cost of repairing and restoring a building or other object to the condition it was in before the loss is not only material, but is the most persuasive evidence of the amount of loss for which the insurer is liable. Obviously, such costs will include sales tax.” WA Bulletin 89-3, 1989; See Holden, supra.

Pedestrian and Crosswalk Laws

Statute:

R.C.W.A. § 46.61.235: Vehicles must yield to pedestrian in crosswalk. Pedestrians must not step off curb and into path of vehicle when vehicle does not have time to stop.

R.C.W.A. § 46.61.240: Pedestrians must yield to vehicles when crossing outside crosswalk. Pedestrians must use crosswalk at intersections with traffic control devices. Pedestrians may not cross diagonally.

Summary: Failure of pedestrian to yield the right-of-way when crossing outside crosswalk in violation of statute was contributory negligence as a matter of law. Myers v. West Coast Fast Freight, 42 Wash.2d 524, 256 P.2d 840 (1953).

Rental Car Company Physical Damage and Loss of Use Claims

Recovery From Renter: Recovery of physical damage and loss of use are not prohibited or otherwise regulated. Terms of rental agreement control. Collision Damage Waivers not regulated.

Recovery From Third-Party: Case law allows for owner of commercial vehicle (commercial truck). Nothing specifically for rental cars. Damages for loss of use of a vehicle which owner uses in the production of income may be measured by: (1) lost profit; (2) cost of renting a substitute chattel; (3) rental value of the plaintiff’s own chattel; or (4) interest. Straka Trucking, Inc. v. Estate of Peterson, 989 P.2d 1181 (Wash. App. 1999).

Rental Car Company’s Liability Insurance Primary or Excess

Summary: No case or statutory law dealing specifically with car rental companies. Terms of rental agreement and renter’s liability policy should be compared to determine which is primary. If the driver is intoxicated, the renter’s insurance is primary. PEMCO v. Hertz, 800 P.2d 831 (Wash. 1990). A “super-escape clause” in a rental contract making liability coverage provided by a self-insured car rental company inapplicable until after exhaustion of all auto liability insurance and/or any other protection or indemnification, whether primary, excess, or contingent, was enforceable and made the liability coverage of the lessee’s policy primary despite its “excess clause” making its coverage excess over any other valid and collectible insurance with respect to non-owned auto. N.H. Indem. Co. v. Budget Rent-A-Car Sys., Inc., 64 P.3d 1239 (Wash. 2003).

Sudden Medical Emergencies While Driving

Unavoidable Accident Instruction or Sudden Mental Incapacity Defense. A driver who becomes suddenly stricken by an unforeseen loss of consciousness, and is unable to control the vehicle, is not chargeable with negligence. Presleigh v. Lewis, 534 P.2d 606 (Wash. 1975).

Washington recognizes Sudden Mental Incapacity as a defense and precludes liability for negligence while operating a vehicle. The Breunig test has two parts: (1) the person has no prior notice or forewarning of his or her potential for becoming disabled, and (2.) the disability renders the person incapable of conforming to the standards of ordinary care. Ramey v. Knorr, 124 P.3d 314 (Wash. 2005).

Suspension of Drivers’ Licenses

Administrative Suspension: If the person required to deposit security fails to do so, the Department will suspend the driver’s license of such persons. R.C.W.A. § 46.29.110. Suspension will end once the person deposits the required security, or after three years, provided no action for damages has been filed. R.C.W.A. § 46.29.170.

Judgment: If a person fails to pay a judgment within 30 days, the clerk/judge will immediately forward a certified copy of the judgment to the Department. They will immediately suspend the license of the judgment debtor. R.C.W.A. § 46.29.310; R.C.W.A. § 46.29.330. License suspension will continue until the judgment is stayed or satisfied, and until proof of financial responsibility is shown. R.C.W.A. § 46.29.370.

Contact Information: State of Washington, Department of Licensing, P.O. Box 9030, Olympia, WA 98507-9030, (360) 902-3900, http://www.dol.wa.gov/.

Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles

Authority: R.C.W.A. § 46.71.025.

Summary: A written estimate must be provided to the insured or the designee before any repairs are performed. The insured must also be informed of the use of any non-OEM parts in keeping with the standards of the statute.

Municipal/County/Local Governmental Immunity and Tort Liability

Legal Authority: 

Actions Against Political Subdivisions, Municipal and Quasi-Municipal Corporations:  R.C.W.A. §§ 4.96.010 to 50 (1967).  “Local governmental entity” means a county, city, town, special district, municipal corporation.

Notice Deadlines:  Notice of claim on standard form must be presented to appointed agent of local government within applicable statute of limitations. R.C.W.A. § 4.96.020.  Suit can be filed sixty (60) days after filing of Standard Notice of Claim Form.

Claims/Actions Allowed:  Local governmental entities liable for both governmental and proprietary acts to the same extent as if they were a person. R.C.W.A. § 4.96.010(1).

Comments/Exceptions:  No liability for discretionary functions (planning or operational level). R.C.W.A. § 4.96.010(2); Evangelical United Brethren Church of Adna v. State, 407 P.2d 440 (Wash. 1965).

Damage Caps:  None.

State Sovereign Immunity And Tort Liability

Tort Claims Act:  Actions and Claims Against State.R.C.W.A. § 4.92.090, et seq. (1963).

Whether acting in governmental or proprietary capacity, State and its employees liable for torts the same as private person. R.C.W.A. § 4.92.090. One of the broadest waivers of sovereign immunity in the country.

Notice Deadlines:  Verified Notice of Claim form must be filed with Washington Office of Risk Management prior to the expiration of the statute of limitations for the claim (running of statute of limitations not affected). R.C.W.A. § 4.92.100.  Must describe time, place, conduct and circumstances of injury, names of all witnesses and relevant persons, amount of damages, and address of claimant.

Suit cannot be filed until 60 days after standard tort claim form filed. R.C.W.A. § 4.92.110.

Claims/Actions Allowed:  There is no immunity and State is liable if:

(1) police high speed chase;

(2) discharge of raw sewage into river: and

(3) operating motor vehicle.

Rahman v. State, 1246 P.3d 182 (Wash. 2011), overturned due to legislative action.  No immunity for discretionary activities, unless the government could show that a “policy decision.” King v. City of Seattle, 525 P.2d 228 (Wash. 1974).

Comments/Exceptions:  No liability can be imposed against State for “discretionary acts” of State. Evangelical United Brethren Church of Adna v. State, 407 P.2d 440 (Wash. 1965).

Guidelines used to determine if act “discretionary”:

(1) involve basic government policy, program, or objective?;

(2) is act essential to realization of that policy, program or objective?; and

(3) does act involve judgment?

Policy-making is immune. Evangelical Church of Adna v. State, 407 P.2d 440 (Wash. 1965).  Discretionary decisions must be made at a “truly executive level” rather than an operational level. Mason v. Bitton, 534 P.2d 1360 (Wash. 1975).

Damage Caps:  No caps or limitations. State liable for damages arising out of tortuous conduct, whether acting in governmental or proprietary capacity, to same extent as if it were a private person or corporation. R.C.W.A. § 4.92.090.

Anti-Indemnity Statutes

Prohibits Intermediate Indemnity. Applies to Construction Contracts or Agreements. Wash. Rev. Code § 4.24.115.

Contribution Actions

Modified Joint and Several Liability. Joint and several liability where plaintiff is not at fault, cases of vicarious liability, and where the defendants act in concert – otherwise several liability. R.C.W.A. § 4.22.070.

A vehicle’s diminution in market value due to additional mileage and the marketplace perception that a fully repaired vehicle was inferior was not part of the insurer’s obligation to repair the vehicle after a theft under the policy. Because the vehicle was fully repaired, the insurer was not required to pay its inherent diminished value, i.e., the difference between the value before the loss and after repair. Where an insurer has fully, completely, and adequately repaired or replaced the property with other of like kind and quality, any reduction in market value of the vehicle due to factors that are not subject to “repair or replacement” cannot be deemed a component part of the cost of repair or replacement. Carlton v. Trinity Universal Ins. Co., 32 S.W.3d 454 (Tex. App. 2000).

The one (1) year statute of limitations is from the date of judgment. If no judgment has been rendered, the contribution plaintiff must have (a) discharged by payment the common liability within the period of the statute of limitations applicable to the claimant’s right of action against him or her and commenced the action for contribution within one (1) year after payment, or (b) agreed while the action was pending to discharge the common liability and, within one (1) year after the agreement, have paid the liability and commenced an action for contribution. R.C.W.A. § 4.22.050.

Contributory Negligence/Comparative Fault

Pure Comparative Fault: Damaged parties can recover even if 99% at fault. Plaintiff’s negligence will be allocated their own percentage portion, for which defendants will not be held responsible. R.C.W.A. §§ 4.22.005-015.

Dog Bite Laws

Dog owner will be held liable for damages, regardless of prior knowledge of dog’s vicious propensities, absent provocation. Wash. Rev. Code § 16-08-040.

Economic Loss Doctrine

Intermediate Rule. In 1976, Washington adopted a minority view and permitted a plaintiff to recover damages in tort for purely economic damages (lost profits) after a defectively manufactured engine malfunctioned during a commercial fishing trip. Berg v. General Motors Corp., 555 P.2d 818 (Wash. 1976). The Berg decision was short-lived, however, as the Legislature effectively overruled Berg in 1981 with the enactment of the Washington Products Liability Act (WPLA), R.C.W.A. § 7.72. Under the WPLA, the Legislature specifically excluded a recovery in tort for economic losses, deferring such claims instead to the U.C.C. Architectural services, engineering services, and inspection services are not “products” under the WPLA. Washington analyzes interrelated factors such as the nature of the defect, the type of risk, and the manner in which the injury arose. These factors bear directly on whether the safety-insurance policy of tort law or the expectation-bargain protection policy of warranty law is most applicable to the claim in question. Washington Water Power Co. v. Graybar Elec. Co., 774 P.2d 1199 (Wash. 1989). Washington recognizes an exception to the ELD, known as the Independent Duty Doctrine. Under this Doctrine, an injury is remediable in tort if it traces back to the breach of a tort duty arising independently of the terms of the contract. Affiliated FM Ins. Co. v. LTK Consulting Servs., Inc., 2010 WL 4350338 (Wash. 2010). Washington courts apply this Doctrine rather than superficially classify the plaintiff’s injury as economic or non-economic. Washington recognizes a “Sudden and Dangerous Event” exception to the ELD. Washington Water Power Co., supra. Courts must consider the nature of the defect, type of risk, and manner the injury arose.

Parental Responsibility

Willful Misconduct. Liability imposed on parents when child willfully or maliciously injures person or defaces or destroys property. R.C.W.A. § 4.24.190.

The limit of liability is $5,000.00. Child must be under 18-years-old.

Spoliation

Adverse Inference/Rebuttable Presumption: In Cook v. Tarbert Logging, Inc., 360 P.3d 855 (Wash. App. 2015), the court held that actions with regard to evidence committed before a lawsuit is filed do not amount to spoliation if done in good faith, even if that behavior results in destruction of evidence. Raymond Cook was in an accident with an employee of Tarbert Logging. Cook’s expert took photographs and measurements but did not access the truck’s airbag control monitor, which might have provided information about the speed of the truck at the moment of the crash. Two years later, Cook filed suit against Tarbert Logging and the county, who was unable to inspect the truck because it had been sold. The county argued that Cook had breached a duty to preserve the truck as evidence and asked the court to impose an inference that the truck’s airbag-control monitor would have shown that Cook was speeding at the time of the accident. The court concluded that there is no general duty to preserve evidence before a lawsuit is filed. Even when litigation is foreseeable, destruction or loss of documents in itself is not spoliation. For the court-sanctionable act of spoliation to occur before a lawsuit is filed, there must be some bad-faith intent to “get rid of the evidence.” The spoliation here was found not to be purposeful and intentional so the court held that the destruction was not spoliation.

In Pier 67, Inc. v. King County, 89 Wash.2d 379, 573 P.2d 2 (Wash. 1977), the Court held: “where relevant evidence which would properly be a part of a case is within the control of a party whose interests it would naturally be to produce it and he fails to do so, without satisfactory explanation, the only inference which the finder of fact may draw is that such evidence would be unfavorable to him.” 89 Wash.2d at 385-86, 573 P.2d 2. To remedy spoliation the court may apply a rebuttable presumption, which shifts the burden of proof to a party who destroys or alters important evidence. In deciding whether to apply a rebuttable presumption in spoliation cases, two factors control: “(1) the potential importance or relevance of the missing evidence; and (2) the culpability or fault of the adverse party.” Marshall v. Bally’s Pacwest, Inc., 94 Wash. App. 372, 381-383, 972 P.2d 475, 480 (Wash. App. Div. 2, 1999). In weighing the importance of the evidence, the court considers whether the adverse party was afforded an adequate opportunity to examine it. Culpability turns on whether the party acted in bad faith or whether there is an innocent explanation for the destruction. Id. 

Statute of Limitations

Personal Property/Intentional Act2 YearsR.C.W.A. § 4.16.100

Personal Property/Negligence3 YearsR.C.W.A. § 4.16.080

Personal Injury/Death/Intentional Act2 YearsR.C.W.A. § 4.16.100

Personal Injury/Death/Negligence3 YearsR.C.W.A. § 4.16.080

Personal Injury/Medical Malpractice/Date of Act3 YearsR.C.W.A. § 4.16.350

Personal Injury/Death/Medical Malpractice/Discovery Date1 YearR.C.W.A. § 4.16.350

Breach of Contract/Written6 YearsR.C.W.A. § 4.16.040(1)

Breach of Contract/Oral3 YearsR.C.W.A. § 4.16.080(3)

Breach of Contract/Sale of Goods4 YearsR.C.W.A. § 62A.2-725

Statute of Repose/Products12 YearsR.C.W.A. § 7.72.060*

Statute of Repose/Real Property6 YearsR.C.W.A. § 4.16.310**

Statute of Repose/Medical Malpractice8 YearsR.C.W.A. § 4.16.080*

Breach of Warranty/U.C.C.4 YearsR.C.W.A. § 62A.2-725

Workers’ Comp Third Party Case3 YearsR.C.W.A. § 51.24.030

Strict Product Liability3 YearsR.C.W.A. § 7.72.060(3)

Statute of Limitations Exceptions

*After 12 years, rebuttable presumption that useful safe life has expired.

**6 years from substantial completion of construction on improvement to real property. This specifically does not apply to product manufacturers. R.C.W.A. § 4.16.310; R.C.W.A. § 4.16.300.

Health and Disability Insurance

Statute of Limitations:  Intentional Acts – 2 Years. R.C.W.A. § 4.16.100. Negligence Claims – 3 Years. R.C.W.A. § 4.16.080. Medical Malpractice – Later of 3 years from date of act or 1 year from discovery of injury. R.C.W.A. § 4.16.350.

Subrogation of Medical and Disability Benefits are allowed. Daniels v. State Farm Mut. Auto. Ins. Co., 193 Wash.2d 563, 576, 444 P.3d 582 (2019) (explaining “[w]hether in the context of a reimbursement request, offset, or direct subrogation action, a fault-free insured must be made whole for their entire loss before an insurer may offset or recover its own payments”). Made-Whole and Common Fund Doctrines apply. Thiringer v. Am. Motors Ins. Co., 91 Wash. 2d 215, 588 P.2d 191 (1978); Grp. Health Coop. v. Coon, 193 Wash. 2d 841, 856, 447 P.3d 139, 146 (2019); Hamm v. State Farm Mut. Auto. Ins. Co., 88 P.3d 395 (Wash. 2004).

Admissibility of Expert Testimony

Admissibility Standards:  Frye

Case/Statutory Law:  State V. Riker, 869 P.2d 43 (Wash. 1994).

Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims

Duty To Disclose: No.

Comments: There is an absence of a statute or rule requiring disclosure. However, disclosure is required if a reasonable insurer in the same or similar circumstance would believe that disclosure is in the insured’s best interest. Smith v. Safeco Ins. Co., 150 Wash. 2d 478, 78 P.3d 1274 (2003).

Recording Conversations

All-Party Consent: It is unlawful for an individual to record and or disclose the content of any electronic of in-person communication without the consent of all parties. Exceptions: where there is no expectation of privacy, which is determined based on topic and length of communication, where the communication took place and whether a third party could have or did overhear it, and the actions of the party who did not consent and their relationship with the party who did. Wash. Rev. Code Ann. § 9.73.030; Wash. Rev. Code Ann. § 9A.44.115(2)(a); Lewis v. Washington, 139 P.3d 1078 (Wash. 2006).

Product Liability Law

Statute of Limitations/Repose: 3 years for personal injury and wrongful death. R.C.W.A. § 4.16.080.

Liability Standards: Negligence, Strict Liability, Warranty.

Fault Allocations:  Pure Comparative. R.C.W.A. §§ 4.22.005-015.

Non-Economic Caps/Limits On Actual Damages: No.

Punitive Y/N and Limits: No.

Heeding Presumption?: Yes. Luttrell v. Novartis Pharmaceutical Corp., 894 F. Supp.2d 1324, 1345 n.16 (E.D. Wash. 2012).

Innocent Seller Statute: Yes (With Exceptions).

Joint and Several Liability: Several Only (With Exceptions). R.C.W.A. § 4.22.070.

Available Defenses: Assumption of Risk; Presumption; Misuse; Alteration; Learned Intermediary; State of the Art; Government Contractor Defense; Compliance With Government Standards; Seatbelts; Alcohol/Drugs.

Restatement 2nd or 3rd?: Both.

“Matching Regulations” And Laws Affecting Homeowners Property Claims

Statute/Regulation: None.

Caselaw: None.

Condominium/Co-Op Waiver of Subrogation Laws

Associations shall maintain property insurance and liability insurance. Additionally, insurers must waive rights of subrogation against any unit owner, member of their household, or lessee of unit owner. R.C.W.A. § 64.34.352.

Damage to Property Without Market Value

Service Value:  “Accordingly, we hold that Puget Power is entitled to recover the full replacement cost of a new pole.” Puget Sound Power & Light Co. v. Strong, 816 P.2d 716 (Wash. 1991).

Intrinsic Value:  “…if destroyed property has no market value but can be replaced or reproduced, then the measure is the cost of replacement or reproduction; if the destroyed property has no market value and cannot be replaced or reproduced, then the value to the owner is to be the proper measure of damages…” McCurdy v. Union Pac. R. Co., 413 P.2d 617 (Wash. 1966).

Sentimental Value:  “Recognizing that value to the owner encompasses a subjective element, the rule has been established that compensation for sentimental or fanciful values will not be allowed.” Mieske v.Bartell Drug Co., 593 P.2d 1308 (Wash. 1979).

General Contractor Overhead And Profit Payments In First-Party ACV Property Damage Claims

Payment And Depreciation Of GCOP/Sales Tax: No applicable case law, statutes, administrative rules, or other guidance with regard to the calculation and/or depreciation of GCOP.

Landlord/Tenant Subrogation

A landlord is presumed to carry insurance for the tenant’s benefit, as an implied co-insured, absent express lease provision to the contrary. Therefore, without more, the landlord’s fire insurer has no subrogation rights against the tenants for loss to leased premises. Cascade Trailer Court v. Beeson, 749 P.2d 761 (Wash. App. 1988). A mutual understanding that a tenant will be relieved of liability for his own negligence may be inferred from provisions of the parties’ lease. For example, the lease may expressly require the lessor to carry fire insurance covering the leased building, or it may prohibit the tenant from performing any acts which would raise the cost of insurance. Other circumstances may also give rise to an inference that the parties have mutually understood that the lessor would provide the insurance. Rizzuto v. Morris, 592 P.2d 688 (Wash. App. 1979). In Trinity Universal Ins. Co. v. Cook, 276 P.3d 372 (Wash. App. 2012), the Court held that a tenant is a co-insured under its landlord’s policy for the entire building, not only the unit she occupies. It also held that a tenant’s spouse is a co-insured under the landlord’s insurance policy.

Anti-Subrogation Rule

An insurer has no right of subrogation against their own insured since, by definition, subrogation exists only with respect to rights of the insurer against third persons to whom the insurer owes no duty. Sherry v. Financial Indem. Co., 160 P.3d 31 (Wash. 2007). It is well established in Washington that “the insurance company, having paid a loss to one insured, cannot, as subrogee, recover from another of the parties for whose benefit the insurance was written even though his negligence may have occasioned the loss, there being no design or fraud on his part.” General Ins. Co. of America v. Stoddard Wendle Ford Motors, 410 P.2d 904 (Wash. 1966). Co-insured status for any loss under a builder’s risk policy does not automatically insulate the co-insured from subrogation by the insurer for damage to all property covered therein; instead, the first question is whether the owner and the contractor agreed that the owner would purchase insurance to cover damage to the project caused by the contractor’s negligence. See Western Washington Corp. of Seventh Day Adventists v. Ferrellgas, Inc., 7 P.3d 861 (Wash. Ct. App. 2000). An insurer that issued separate policies to the subrogor and target may not subrogate. Royal Exchange Assur. of America, Inc. v. SS President Adams, 510 F.Supp. 581 (W.D. Wash. 1981). In Royal Exchange Assurance v. SS President Adams, 510 F.Supp. 581 (W.D. Wash. 1981), machinery, which the Lee Torgerson Machinery Company (“Torgerson”) had hired the American President Lines (“American”) shipping company to transport across the ocean, was damaged during transport. Torgerson’s insurer, the Royal Exchange Assurance of America, attempted to subrogate against American for the money they had paid to Torgerson for the damaged machinery. The court blocked subrogation though, as American had an unrelated liability policy from Torgerson for American’s stevedoring operations. In Ferrellgas, a partially completed church was destroyed by a fire negligently caused by Art & Sons, Inc., and the propane supplier, Ferrellgas, Inc. The court found that Ferrellgas was a co-insured on the Church’s policy because the policy extended protection to Ferrellgas’ propane tanks, but the court rejected the doctrine that the policy extending protection to Ferrellgas’ property made Ferrellgas a co-insured for damage to all insured property. The court instead ruled that the first question the court should ask is “whether the owner and the contractor agreed that the owner would purchase insurance to cover damage to the project caused by the contractor’s negligence.” The court found that Ferrellgas presented no evidence that the Church had intended to purchase builder’s risk insurance on behalf of Ferrellgas and, therefore, Ferrellgas was not protected from subrogation for damage done to the Church’s property.

Criminal Restitution

Under the Washington statute on restitution, a court will determine the amount of restitution after its application has been ordered. R.C.W.A. § 9.94A.753. According to applicable case law, an insurer will qualify as a “victim” under the statute, and therefore, be entitled to restitution. State v. Barnett, 675 P.2d 626 (Wash. Ct. App. 1984).

Made Whole Doctrine

Washington adheres to the Made Whole Doctrine. Mattson On Behalf of Mattson v. Stone, 648 P.2d 929 (Wash. App. 1982); Mahler v. Szucs, 957 P.2d 632 (Wash. 1998). An injured party must be made whole before the injured party’s insurer may require the injured party to reimburse the insurer for a subrogation or reimbursement claim. Skiles v. Farmers Ins. Co., Inc., 814 P.2d 666 (Wash. App. 1991). Known as the Thiringer Doctrine, the general rule is that while an insurer is entitled to be reimbursed to the extent that its insured recovers payment for the same loss from the tortfeasor responsible for his damage, it can recover only the excess which the insured has received from the wrongdoer, remaining after the insured is fully compensated for his loss. Thiringer v. American Motorist Co., 588 P.2d 191 (Wash. 1978). However, the Thiringer case indicates the Thiringer Doctrine may be overridden by specific Plan or policy language to the contrary. Id. In order to determine if the insured is “made whole”:

The proceeds of the settlement should be applied first toward the payment of the insured’s general damages and then, if any excess remained, toward the payment of his special damages covered by the PIP provision. The principle upon which this holding was based was that the insured was entitled to be made whole, and that only after he had made a full recovery for his damages did the insurer’s right of subrogation arise.

The insurance policy in Thiringer reserved to the insurer a right of subrogation and provided that the insured should do nothing to prejudice such right. The Supreme Court agreed with the trial court’s conclusion that in the context of a general settlement involving automobile personal injury protection the proceeds should be first applied toward the payment of the insured’s general damages and then, if any excess remains, toward the payment of the special damages covered by personal injury protection insurance.

An insured may be considered fully compensated by a less-than-limits settlement with a tortfeasor, despite reduction of its final recovery by his attorney’s fees, where he has settled with full knowledge of his obligation to pay fees, and thus he had an obligation to reimburse his insurer for its subrogated interest. Peterson v. Safeco Ins. Co. of Ill., 976 P.2d 632 (Wash. App. 1999). It also appears an insured must only be made whole for the particular category of damages being sought by the insurance company, in order to allow the insurance company’s subrogation rights. Mahler, supra. The property damage subrogation does not relate to the right of reimbursement for personal injuries under the policy.

Disputes between insureds and subrogating carriers with regard to the Made Whole Doctrine are resolved on a case-by-case basis upon a consideration of “the equitable factors involved, guided by the principle that a party suffering compensable injury is entitled to be made whole but should not be allowed to duplicate his recovery.” Leader Nat’l Ins. Co. v. Torres, 779 P.2d 722, 723 (Wash. 1989). Washington law provides a number of factors to be considered when resolving a subrogation or reimbursement dispute between an insurer and its insured where the insured executes a general release with the tortfeasor: (1) knowledge of insureds and tortfeasors as to outstanding subrogation claims; (2) extent of the prejudice to insurer’s subrogation interests; (3) desirability of encouraging settlements; (4) possibility of sharp practices by tortfeasors, insureds or their insurance carriers; and (5) general public policy that persons suffering compensable injuries are entitled to be made whole. Torres, supra. While the insured is entitled to recoup his general damages from the tortfeasor before subrogation is permitted, in doing so it may not do anything to prejudice the rights of the insurer. B.C. Ministry of Health v. Homewood, 970 P.2d 381, 386 (Wash. Ct. App. 1999) (concluding that general settlement involving health insurance should be apportioned first to general damages and then any excess to special damages). As explained by the court of appeals in British Columbia Ministry of Health v. Homewood:

[T]o establish prejudice [the insurer] must show (1) the percentage of negligence of [each of three tortfeasors]; (2) the total losses the plaintiff suffered; [and] (3) that the settlement as a percentage of plaintiff’s total injuries was less than the percentage of the settling entities’ comparative negligence. Only if the latter percentage exceeds the former will [the insurer’s] subrogation rights have been prejudiced…. Homewood, supra.

The holding in Thiringer was also construed by the Court of Appeals in Fisher to allow the parties to the contract to modify subrogation standards developed at common law. Fisher v. Aldi Tire, Inc., 902 P.2d 166 (Wash. App. 1995). However, the language purporting to change the common law standards must be clear and unambiguous.

A self-insured retention (SIR) of $100,000 paid by an insured under a CGL policy does not constitute “primary insurance” for purposes of subrogation, according to the Washington Court of Appeals. Bordeaux, Inc. v. American Safety Ins. Co, 186 P.3d 1188 (Wash. App. 2008). Therefore, the CGL carrier was not be entitled to any portion of a third-party subrogation recovery unless and until the insured was “made whole” under Thiringer for the SIR payment it had made.

Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule

Collateral Source Rule: Common law CSR. No reduction for collateral sources received by plaintiff. Wheeler v. Catholic Archdiocese of Seattle, 880 P.2d 29 (Wash. 1994). Evidence of collateral sources may be excluded even if relevant for another purpose. Cox v. Spangler, 5 P.3d 1265, 22 P.3d 791 (Wash. 2000).

Recovery Of Medical Expenses Rule:

Private Insurance: Write-downs and write-ups are both evidence of the reasonable value of medical services. Plaintiff cannot recover either; jury must find reasonable value. Paid amounts arguably inadmissible and may be excluded based on discretion of court. Hayes v. Wieber Enterprises, Inc., 20 P.3d 496 (Wash. App. 2001). In Hayes, Court of Appeals did not address whether evidence the physician had accepted the $3,300 as payment in full was barred by the CSR. Instead, the court relied on doctor’s testimony that his $5,800 bill was reasonable, and that defendant did not present testimony the bill was unreasonable. Plaintiff has burden to prove reasonable value. Torgeson v. Hanford, 139 P. 648 (Wash. 1914).

Medicare/Medicaid: Medicare Part A payments are collateral sources. Ciminski v. SCI Corp., 585 P.2d 1182 (Wash. 1978); 16 Wash. Prac., Tort Law and Practice § 6:35 (3^rd Ed.).

Related Law/Comments:

Medical Malpractice: Evidence of collateral sources allowed, except the plaintiff’s personal assets, his representative’s or family’s assets, or insurance purchased with such assets. If evidence of collateral source payments is admitted, the plaintiff may present evidence of subrogation. Insurance obtained through one’s employment is considered insurance purchased with the assets of the employee. Wash. Rev. Code § 7.70.080. CSR does not apply to collateral sources that are not independent of the tortfeasor (such as PIP payments made by tortfeasor’s auto policy). Maziarski v. Bair, 924 P.2d 409 (Wash. App. 1996).

Employee Leasing Laws

Neither the Washington Workers’ Compensation Act nor case law directly give us guidance on employee leasing situations, and such questions will be answered by common law under Washington case decisions.

Hospital Lien Laws

Statute: R.C.W.A. §§ 60.44.010 — 60.44.060. Lien of Doctors, Nurses, Hospitals, Ambulance Services

Perfecting Lien:

(1) Must disclose the use of liens in billing/collection. § 60.44.020(2).

(2) Must record lien with county auditor in county in which care was rendered either within 20 days after date of injury or receipt of care or, if settlement has not been made, then at any time before settlement and payment. § 60.44.020(3).

(3) Once paid, a hospital must prepare and execute a release of lien within 30 days. § 60.44.060(2).

(4) Can be enforced by civil action brought by claimant (or assignee) within one year after filing of lien. § 60.44.060(1).

Comments: Allows lien for hospitals (public and private), nurse practitioners, physicians, and surgeons rendering service, transportation, and care. Allows lien on any recovery in third-party tort claim, but not workers’ compensation benefits. Lien cannot exceed 25% of an award, verdict, report, decision, decree, judgment, or settlement. § 60.44.010. In order to enforce hospital lien against portion of settlement, claimant must establish alleged tortfeasor’s negligence; fact that alleged tortfeasor has made payment or settlement constitutes prima facie evidence of negligence, rather than conclusive evidence, and may be rebutted. U.S. v. Deaconess Medical Center Empire Health Service, 994 P.2d 830 (Wash. 2000).

OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases

OCIP Law: No statute or case law specifically dealing with effect of OCIP/CCIP. (Monopolistic State Fund).

Statutory Employer Law: An owner or general contractor who contracts with the employer acts as a surety for the payment of workers’ compensation benefits in the event of an injury to an employee of a subcontractor. R.C.W. § 51.12.070; Hildahl v. Bringolf, 5 P.3d 38 (Wash. App. 2000).

Comments: Payment of premiums does not create immunity. The remedy of a general contractor or owner who is obligated to provide workers’ compensation coverage for the employees of an independent contractor appears to be a right of reimbursement from the independent contractor, rather than statutory immunity from a third-party suit. Hildahl v. Bringolf, 5 P.3d 38 (Wash. App. 2000); Greenleaf v. Puget Sond Bridge & Dredging Co., 5 P.3d 38 (Wash. App. 2000).

Recovery Of Increased Workers’ Compensation Premiums By Employer

Recovery For Increased Premiums? Undecided.

Statute/Case Law: None.

Rule Summary: There is no authority or precedent regarding the attempted recovery of damages for increased workers’ compensation insurance premiums by an employer from a third-party tortfeasor.

Which Workers’ Compensation “Benefits” Can Be Subrogated?

Cost of independent medical examinations, not requested by employee, was an administrative expense and not reimbursable because benefit to employee was incidental. Ziegler v. Dept. of Lab. and Industries, 708 P.2d 1212 (Wash. App. 1985). Section 51.24.030 describes a workers’ compensation carrier’s subrogation lien as follows: … for benefits paid. R.C.W.A. § 51.24.030.

Workers’ Compensation Subrogation Waiver Endorsements

Subrogation Statute: R.C.W.A. § 51.24.050

Waiver Allowed? Nothing in the Washington Workers’ Compensation Act or applicable case law prohibits the use or efficacy of a waiver of subrogation. Monopolistic state.

Effect Of Waiver Endorsement on Carrier’s Right To Assert A Lien On Claimant’s Recovery: The effect of a waiver of subrogation on the carrier’s rights, including its right to enforce its statutory lien, has not yet been decided.

Other Applicable Law: Workers’ compensation department able to waive workers’ compensation lien in light of third-party claim. Hadley v. Dept. of Labor & Indus., 810 P.2d 500 (Wash. 1991).

Workers’ Compensation

Statute of Limitations:  3 Years. R.C.W.A. § 51.24.030.

Can Carrier Sue Third Party Directly:  Yes.

Right to Intervene:  Yes.

Recovery from UM/UIM Benefits:  Yes, possibly Employer’s Policy Only.

Subrogation Against Medical Malpractice:  Yes?

Subrogation Against Legal Malpractice:  Yes.

Recovery Allocation/Equitable Limitations:  (1) Fees, Expenses; (2) 25% to Plaintiff; (3) Carrier Reimbursed Fully, Less Pro-Rata Fees/Costs; and (4) Net to Plaintiff. No recovery from pain and suffering damages.

Employer Contribution/Negligence:  No.

Attorney’s Fees/Costs:  Pro-Rata.

Future Credit:  Yes.

Auto No-Fault:  No.

Workers’ Compensation Claims by Undocumented Employees

Y/N/U:  U

Statute:  The statute is silent on illegal aliens as employees. Wash. Rev. Code § 51-08-185.

Case Law: Undecided

Comments/Explanation/Other: The statute broadly defines worker/employee. It is any person in the state who is engaged in the employment of an employer. Wash. Rev. Code. §§ 51-04-030-2 and 51-32-110 state that a non-resident alien is covered for medical benefits and exams under these statutes.