                                                                           ~lAR   12 lOB 




      COURT OF APPEALS, DIVISION III, STATE OF WASfU~ON'~:ii~::,:;                           


JANICE COURCHAINE, a single person;         )         No. 30020-0-111
and EVA VOSS, a single person,              )         (consolidated with
                                            )          No. 30021-8-111)
                    Respondents,            )
                                            )
             v.                             )
                                            )         ORDER GRANTING MOTION
COMMONWEALTH LAND TITLE                     )          TO PUBLISH OPINION
INSURANCE COMPANY; and FIDELITY             )
NATIONAL TITLE INSURANCE GROUP,             )
                                            )
                    Appellants,             )
                                            )
SPOKANE COUNTY TITLE,                       )
                                            )
                    Defendant.              )

      THE COURT has considered a third party's motion to publish the court's opinion

of December 13, 2012, and the record and 'file herein, and is of the opinion the motion

should be granted. Therefore,

      IT IS ORDERED, the motion to publish is granted. The opinion filed by the court

on December 13, 2012 shall be modified on page 1 to designate it is a published

opinion and on page 25 by deletion of the following language:

             A majority of the panel has determined that this opinion will not be
      printed in the Washington Appellate Reports but it will be filed for public
      record pursuant to RCW 2.06.040.

      DATED: March 12, 2013 

      PANEL: Judges Siddoway, Korsmo, Sweeney. 

      FOR THE COURT: 



                                            Ki2<IiNM:oRSMO, ChieJUdge
                                                                             FILED 


                                                                     December 13,2012 


                                                                In tne Office oftne Clerk of Court 

                                                              W A State Court of Appeals. Division III 





           IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON 

                              DIVISION THREE 


JANICE COURCHAINE, a single person;          )
and EVA VOSS, a single person,               )         No. 30020-0-III
                                             )         (consolidated with
                    Respondents,             )          No. 30021-8-III)
                                             )
      v.                                     )
                                             )
COMMONWEALTH LAND TITLE                      )
INSURANCE COMPANY; and                       )
FIDELITY NATIONAL TITLE                      )
INSURANCE GROUP,                             )
                                             )
                    Appellants,              )
                                             )
SPOKANE COUNTY TITLE,                        )         UNPUBLISHED OPINION
                                             )
                    Defendant.               )


       SIDDOWAY, J.   - Janice Courchaine and Eva Voss sued Commonwealth Land

Title Insurance Company and its parent, Fidelity National Title Insurance Group, over an

undisclosed easement burdening property whose title Commonwealth insured.

Courchaine and Voss prevailed at trial. Commonwealth and Fidelity appeal, arguing that

(1) Commonwealth did not breach the title policy and Fidelity has no liability for

coverage; (2) Commonwealth did not breach the Consumer Protection Act (CPA),
No. 30020-0-III; 30021-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



chapter 19.86 RCW; and (3) even if Commonwealth did violate the CPA, Fidelity is not

separately and additionally chargeable for that violation.

       We reverse the trial court's judgment against Fidelity on the policy and against

Commonwealth under the CPA but otherwise affirm.

                     FACTS AND PROCEDURAL BACKGROUND

       In September 2008, Janice Courchaine and Eva Voss entered into a purchase and

sale agreement for real property located on Cataldo Avenue in Spokane Valley. A single

family home existed on the west half of the very large lot and there was room to build a

second, adjoining home on the east half, which suited the women's plans to build duplex

homes for their families.

       Before closing, Courchaine and Voss obtained a preliminary commitment for title

insurance from Commonwealth. They reviewed it, considered each of its exceptions, and

found nothing that would frustrate their construction plans. Schedule B to the

commitment, identifying specific exceptions to coverage, revealed an easement in favor

of Modern Electric Company, their utility company. But the easement was consistent

with the seller disclosure statement that disclosed a "power company easement" on the

property and consistent with the distribution and service lines delivering electricity to the

home. Ex. 4. On October 15,2008, they purchased the property and acquired title by

statutory warranty deed.




                                              2

No. 30020-0-III; 30021-8-III
Courchaine v. Commonwealth Land Title Ins. Co.


       Shortly after purchasing the property, they learned from a neighbor that the

Bonneville Power Administration (BP A) may have an as-yet unused easement across

their property, which was confirmed when they attempted to get a building permit and

were denied. They learned that construction on the east half of the lot would interfere

with a 75-foot easement for transmission lines, in favor ofBPA.

       The women submitted a claim under their Commonwealth title policy, which did

not list the BPA easement as an exception to coverage. Commonwealth originally

accepted the claim, acknowledging coverage. But it then reassigned responsibility to

Lisa Leick, a claims adjuster for Fidelity, its corporate parent. Leick thereafter notified

the women in a four-page letter that their claim was not covered.

       Among other reasons offered by Leick for denying the claim was that the recorded

plat for the Guthrie's Valley View 4th Addition, by which their lot was created in 1954,

disclosed an easement along the eastern half of the lot for BPA transmission lines. The

women did not see the 1954 plat before purchasing the property.

       Courchaine and Voss commenced the action below in March 2010. A three-day

bench trial was conducted a year later. The trial court delivered its oral decision at the

conclusion of the evidence, finding that the claim was covered and that both

Commonwealth and Fidelity had violated the CPA. Its judgment imposed liability under

the insurance policy against both Commonwealth and Fidelity.

       Commonwealth and Fidelity timely appealed.

                                              3

No. 30020-0-III; 30021-8-III
Courchaine v. Commonwealth Land Title Ins. Co.


                                        ANALYSIS

       Commonwealth and Fidelity assign error to the trial court's conclusion that

Courchaine's claim was covered by the Commonwealth policy, to its finding of a

violation of the CPA against Commonwealth, and to its finding Fidelity separately and

additionally liable under the policy and chargeable for the CPA violation. We address

their assignments of error to the coverage issue first, and thereafter their assignments of

error to the findings of CPA violations. In discussing the parties' positions hereafter, we

refer to Courchaine and Voss collectively as Courchaine, for simplicity.

                                             I

       Commonwealth was the issuer of the title insurance policy. Its first and second

assignments of error essentially challenge the sufficiency of the evidence to establish a

breach of its policy. It concedes that many of the facts are undisputed, focusing instead

on what it argues are the trial court's unwarranted conclusions of law.

       When a trial court enters findings of fact and conclusions of law following a bench

trial, review is limited to determining whether substantial evidence supports the findings,

and if so, whether the findings support the trial court's conclusions of law and judgment.

Saviano v. Westport Amusements, Inc., 144 Wn. App. 72,78, 180 P.3d 874 (2008). We

review only the findings to which appellant assigns error; unchallenged findings are

treated as verities on appeal. Nordstrom Credit, Inc. v. Dep't ofRevenue, 120 Wn.2d

935,941,845 P.2d 1331 (1993).

                                             4

No. 30020-0-III; 3002l-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



       Commonwealth has not assigned error to any finding of fact, so our review is

limited to determining whether the findings support the trial court's conclusions. Fenton

v. Contemporary Dev. Co., 12 Wn. App. 345, 347, 529 P.2d 883 (1974). The

interpretation of insurance policies is a question of law that we review de novo. State

Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477,480,687 P.2d 1139 (1984).

       The trial court's first conclusion of law states:

               1. The Commitment was a contract for title services between the
       Plaintiffs and the Defendants. The Defendants' Title policy was a
       statement of terms and conditions upon which the issuer was willing to
       issue its title policy. The Commitment failed to except the seventy five
       (75') foot easement. Therefore, Commonwealth breached the contract with
       the Plaintiffs. The Plaintiffs' damages based upon breach of contract are
       $23,500.00.

Clerk's Papers (CP) at 167.

                       A. Alleged Error in Finding a "Duty to Except"

       Commonwealth first argues that the trial court erred in concluding that the

preliminary commitment was a contract for "title services" and that Commonwealth was

required by its contract to except all matters of the public record that touched and

concerned the land. It argues that this conclusion confuses title insurance with abstracts

of title. It points out that title insurance is an indemnity contract and exceptions from

coverage are for the benefit of the insurer, not the insured. For that reason, a title insurer

is not required to except anything from coverage. Here, Commonwealth is correct.




                                               5

No. 30020-0-III; 30021-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



       The Washington Supreme Court recognized in Shotwell v. Transamerica Title

Insurance Co., 91 Wn.2d 161, 165,588 P.2d 208 (1978) that a duty to disclose title

defects might arise from the combined expectations of a title policy applicant and the

service to be performed by title insurance companies. But it declined to decide the issue

then, or in three later cases, deciding each case on other grounds. See Barstad v. Stewart

Title Guar. Co., 145 Wn.2d 528,534-35,39 P.3d 984 (2002) (citing Shotlvell, 91 Wn.2d

161; Transamerica Title Ins. Co. v. Johnson, 103 Wn.2d 409, 693 P .2d 697 (1985);

Klickman v. Title Guar. Co. ofLewis County, 105 Wn.2d 526, 716 P.2d 840 (1986);

Lombardo v. Pierson, 121 Wn.2d 577,852 P.2d 308 (1993)).

       Before the court could reach and decide the issue, the legislature acted. In 1997, it

amended the insurance code to clarify the distinction between preliminary reports or

commitments, on the one hand, and abstracts oftitle on the other, including to clarifY

some of the responsibilities associated with each form. LAWS OF 1997, ch. 14, § 1

(adding a new subsection (3) to RCW 48.29.010); Barstad, 145 Wn.2d at 536. As a

result of the amendment, "title policy" means, by statute, "any written instrument,

contract, or guarantee by means of which title insurance liability is assumed." RCW

48.29.010(3)(a).1 A preliminary commitment "is not a representation of the condition of



       I A property purchaser is generally not required by law to obtain title insurance,
but a mortgage lender typically requires a borrower to buy title insurance in order to
protect the lender's interest in the property . WASH. STATE OFFICE OF THE INS. COMM' R,
REpORT OF THE TITLE INSURANCE REVIEW TASK FORCE, TITLE INSURANCE IN

                                             6

No. 30020-0-III; 30021-8-II1 

Courchaine v. Commonwealth Land Title Ins. Co. 



title, but a 'statement of terms and conditions upon which the issuer is willing to issue its

title policy, if such offer is accepted.'" Barstad, 145 Wn.2d at 536 (quoting former RCW

48.29.01 0(3)(c) (1997)). 	By contrast, "abstract of title" means

       a written representation, provided under contract, whether written or oral,
       intended to be relied upon by the person who has contracted for the receipt
       of this representation, listing all recorded conveyances, instruments, or
       documents that, under the laws of the state of Washington, impart
       constructive notice with respect to the chain of title to the real property
       described.

RCW 48.29.010(3)(b). The definition of "abstract of title" expressly provides that "[a]n

abstract of title is not a title policy as defined in this subsection." ld.

       This 1997 amendment to RCW 48.29.010 "resolve[d] the obligations associated

with a preliminary commitment and an abstract oftitle," and did so in favor of the

position of title insurers, who had "'roundly den[ied] they have the abstracter's duty,'"

and "'argue[d] that the preliminary commitment merely discloses what the policy will

and will not cover, that their only legal obligation is to pay losses under the policy, and

that an insured has no reasonable expectation of anything more. ", Barstad, 145 Wn.2d at

536,539 (quoting 18 WILLIAM B. STOEBUCK, WASHINGTON PRACTICE: REAL ESTATE:

TRANSACTIONS § 13.18, at 147 (1995)).




WASHINGTON: IMPROVING COMPETITION AND CONSUMER CHOICE at 9 (Sept. 2007).

                                                7
No. 30020-0-III; 30021-8-II1 

Courchaine v. Commonwealth Land Title Ins. Co. 



       The trial court's challenged conclusion was not that Commonwealth had a duty to

disclose the easement, but that it had a duty to except it. 2 Yet even that is not strictly

correct. The duty undertaken by Commonwealth in issuing the title policy was not to

except every limitation on title. Its duty was, instead, to indemnify against any limitation

on title that it did not except.

       While Commonwealth is correct in arguing that Courchaine and the court

sometimes relied, in error, on a nonexistent "duty to except," we can look beyond that

characterization error to the essence of the complaint, the evidence, and the findings.

Breach of the duty to indemnify is the substance of Commonwealth's breach as framed

by Courchaine's contract claim, the first claim for relief set forth in the complaint. It is

the substance of Commonwealth's breach as testified to by Commonwealth's former

employee, Kennard Goodman, whom Courchaine called as a witness and who the trial

court found credible and persuasive. Goodman testified:

       Q      So although you could not hire an appraiser [after Fidelity acquired 

       Commonwealth], it was still your professional opinion that [Courchaine's] 

       claim should be accepted, correct? 

       A      Yes. That's what my letter said. 

       Q      And that is because the Bonneville Power Administration easement, 

       the 75 foot easement, was not disclosed? 



       2 Commonwealth has argued, in part, from the language of proposed conclusions
that the court modified in some respects, in light of Commonwealth's objections. We
review whether the findings support the conclusions as entered by the court and disregard
Commonwealth's arguments to the extent it relies on findings that were dropped or
modified.

                                               8

No. 30020-0-III; 30021-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



       A       It was not excepted from the policy and I-all the preliminary
       commitment does is state these are the terms on which we are willing to
       give you an insurance policy. So it's not an abstract. And I try to be very
       strict about that. So it's not a question of disclosure. It's an insurance
       policy. It's a risk that's insured against and there is no exception for that
       risk.
       Q       And there should have been an exception for that risk, in your
       opinion?
       A       If the title company didn't want to cover the loss resulting from that
       risk, yes, there should have been a separate exception for it.

Report of Proceedings (RP) (Mar. 7,2011) at 18-19 (emphasis added). It was a gist of

the trial court's oral decision, which it incorporated by reference into its findings and

conclusions. In its oral decision, the court stated, in part:

       I cannot believe that they in goodfaith knew at that point or believed at
       that point they didn't have a valid claim, that the plaintiff didn't have a
       valid claim. It seems so apparent that the plaintiff had a valid claim and
       yet they did playa shell game.

RP (Mar. 10,2011) at 239 (emphasis added).

       On appeal, '''[w]e may affirm the [lower] court on any grounds established by the

pleadings and supported by the record.'" In re Marriage ofRideout, 150 Wn.2d 337,

358, 77 P.3d 1174 (2003) (alterations in original) (quoting Truck Ins. Exch. v. VanPort

Homes, Inc., 147 Wn.2d 751, 766, 58 P.3d 276 (2002)). Commonwealth had no duty to

except the BP A easement. But it did have a duty to indemnify Courchaine against any

actual loss on account of the BPA easement ifit did not except it.




                                               9

No. 30020-0-III; 30021-8-II1 

Courchaine v. Commonwealth Land Title Ins. Co. 



       Courchaine made a claim and demonstrated actual loss. Given the pleadings, the

evidence, and the gist of the trial courf s decision, judgment on the policy can be affirmed

if the record supports Commonwealth's breach ofa contractual duty to indemnify.

                    B. Alleged Exclusion by Description of Covered Land

       Commonwealth contends that the trial court made a further error in finding in

Courchaine's favor on the coverage issue, however. It argues that the lot purchased by

Courchaine was created by a plat, the title that it insured was defined in terms of the plat,

any restrictions or easements identified on the plat were thereby part of the legal

description of the property, and the BPA easement was reflected on the plat map. With

the insured title already subject to any limitations notated on the plat, it argues, it needed

to except only matters not disclosed by the plat. It makes a related argument that its title

commitment and policy excepted coverage for "restrictions" shown on the plat.

       The standard offer made by Commonwealth's commitment for title insurance was

set forth in the preprinted terms of its policy cover, which stated Commonwealth's

commitment to issue a policy of title insurance in favor of the proposed insured as owner

or mortgagee

       of the estate or interest covered hereby in the land described or referred to
       in Schedule A. upon payment of the premiums and charges therefor; all
       subject to the exceptions and conditions and stipulations shown herein, the
       Exclusions from Coverage, the Schedule B exceptions, and the conditions
       and stipulations of the policy or policies requested.

CP at 33.

                                              10 

No. 30020-0-III; 30021-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



       Schedule A provided that the estate or interest in the land described was "FEE

SIMPLE" and described the land as:

       Lot 11~ Block 1, GUTHRIE'S VALLEY VIEW 4TH ADDITION, as per
       plat recorded in Volume 3 of Plats, page 62, records of Spokane County.

CP at 36,37.

       The policy that Commonwealth offered to issue, and ultimately did issue, insured

Courchaine against actual loss resulting from "COVERED RISKS" set forth in the

policy. CP at 46. Among the covered risks were that "[s]omeone else has an easement

on the Land." Id. (Covered Risk 4). Courchaine was therefore insured against actual loss

resulting from the BPA easement unless (1) coverage was limited by her title, which was

already limited by that easement, or (2) the easement was addressed in an exception,

condition, stipulation, or exclusion.

       Commonwealth's argument that Courchaine's coverage was confined to the limits

of her title is readily addressed. In Shotwell, the conveyance to the insured had

concluded its description of the land conveyed with the language, "'EXCEPT right of

way for existing roads. ", 91 Wn.2d at 163 (emphasis omitted). The insured's title policy

described the land with identical language. The title insurer argued that inasmuch as the

language of the conveyance effectively excluded an existing but as-yet-unused road

easement, then the identical language, incorporated in its policy, must be sufficient to

exclude the same easement from coverage. The court disagreed, holding that "[i]n


                                             11 

No. 30020-0-III; 3002l-8-III
Courchaine v. Commonwealth Land Title Ins. Co.


construing a policy of insurance the rules of conveyancing do not necessarily apply." 91

Wn.2d at 170.

       In arriving at its holding, the Shotwell court cited, with approval, a Texas decision

rejecting an argument that is on all fours with Commonwealth's argument here. In San

Jacinto Title Guaranty Co. v. Lemmon, 417 S.W.2d 429,431 (Tex. App. 1967), the title

insurer argued that because it described the insured land as a numbered lot, '''as shown

by the map or plat Thereof now of record ... to which reference is here made for all

pertinent purposes,'" then an easement for a waterline identified on the recorded plat was

excluded from the terms of the policy without the need for a specific exception. The

Texas court rejected the argument. Our Supreme Court, in Shotwell, quoted and adopted

its reasoning:

       "Unquestionably, the reference in the warranty deed to the recorded map or
       plat contemplated the purposes of the deed. The description ofthe land in
       the policy 'was for the purpose ofidentifYing the land covered by the policy
       and not, as appellant contends, for the purpose oflimiting the insurance
       protection purchased. In our opinion, this was the clear and unambiguous
       meaning of the policy. To hold otherwise would, in effect, require
       appellees, who have purchased title insurance, to be their own insurer in so
       far as their title to the land, in the respect here under consideration, is
       concerned. Such a result would not be in keeping with the principal
       purpose of the policy ...."

Shotwell, 91 Wn.2d at 169-70 (quoting Lemmon, 417 S.W.2d at 431-32); cf Denny's

Restaurants, Inc. v. Sec. Union Title Ins. Co., 71 Wn. App. 194, 859 P.2d 619 (1993)

(finding coverage even where the land covered by the insured's claim was clearly


                                             12 

No. 30020-0-III; 30021-8-III
Courchaine v. Commonwealth Land Title Ins. Co.


excluded by the policy's description of land, because other provisions of the policy

reasonably implied coverage).

       There is an additional reason why this argument fails in light of the terms of

Commonwealth's policy. Its commitment states that the estate or interest it offers to

insure is "fee simple," in land it proceeds to describe. A party who has a "fee simple"

interest or estate holds her interest free of easements. See Wingard v. Copeland,64

Wash. 214, 218,116 P. 670 (1911) (appellant was unable to convey full fee simple title

where his land was subject to an easement). Commonwealth's argument that the land

described by its policy was already subject to the BPA easement is irreconcilable with its

offer to insure a fee simple estate or interest in that land, subject only to the exceptions,

conditions, stipulations, and exclusions provided by the policy.

                             C. Alleged Exception as a Restriction

       Commonwealth must therefore identify an exception, condition, stipulation, or

exclusion that prevents the BPA easement from falling within the scope of the policy's

coverage. It relies on only the following exception, included in Schedule B to the

commitment and policy:

       RESTRICTIONS contained on the face of [the Guthrie's Valley View] plat,
       but omitting any covenants or restrictions, if any, based upon race, color,
       religion, sex, sexual orientation, familial status, marital status, disability,
       handicap, national origin, ancestry, or source of income, as set forth in
       applicable state or federal laws, except to the extent that said covenant or
       restriction is permitted by applicable law.


                                               13
No. 30020-0-III; 30021-8-III
Courchaine v. Commonwealth Land Title Ins. Co.


CP at 39.

       Courchaine argues that the trial court's findings adopt trial testimony from

Commonwealth's former employee, Goodman, that easement and restriction are "two

different terms of art" and that "there is a difference between restrictions as noted in

schedule B # 7 of the preliminary title report and easements." CP at 164, 166 (Findings

of Fact 16,25). Commonwealth has not assigned error to these two findings, which are

verities on appeal.

       Even if we examine the meaning of "restriction" as an issue of insurance policy

construction and therefore an issue of law, Commonwealth's position is not persuasive.

"Restriction" is not defined by either the commitment or the policy. If there were no

policy, its meaning in the commitment might be ambiguous. But the policy treats

easements and restrictions as separate and distinct. "Easement" is defined by the policy,

to mean "the right of someone else to use the Land for a special purpose." CP at 50.

       "Restriction," on the other hand, is used in the policy to refer to a rule or condition

for the owner's use of the land. The policy treats "restrictions" as things that can be

violated or enforced. One of the covered risks under the policy is:

       Your Title is lost or taken because of a violation of anv ... restriction,
       which occurred before You acquired Your Title, even if the covenant,
       condition or restriction is excepted in Schedule B.

CP at 46 (Covered Risk 13) (emphasis added). Another is:




                                              14
No. 30020-0-III; 30021-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



       Someone else tries to enforce a discriminatory ... restriction that they
       claim affects Your Title which is based upon race, color, religion, sex,
       handicap, familial status, or national origin.

Id. (Covered Risk 23) (emphasis added).

       Easements are addressed separately, as presenting distinct risks. Consistent with

the policy's definition, "easement" is used to refer to rights of other parties. Reference to

easements appears first in the covered risk triggering coverage in this case:

       Someone else has an easement on the Land.

Id. (Covered Risk 4). Elsewhere, easements present a covered risk if:

       You are forced to remove Your existing structures because they encroach
       onto an easement or over a building set-back line, even if the easement or
       building set-back line is excepted in Schedule B.

       Your existing structures are damaged because of the exercise of a right to
       maintain or use any easement affecting the Land, even if the easement is
       excepted in Schedule B.

Id. (Covered Risks 20, 21).

       Interpretation of insurance policies is a question of law; the policy is construed as

a whole with the court giving force and effect to each clause in the policy. Am. Star Ins.

Co. v. Grice, 121 Wn.2d 869, 874,854 P.2d 622 (1993). The language of an insurance

policy is to be interpreted in accordance with the way it would be understood by the

average person, rather than in a technical sense. Id. (citing Boeing Co. v. Aetna Cas. &

Sur. Co., 113 Wn.2d 869, 881, 784 P.2d 507 (1990)). Ifpolicy language is clear and

unambiguous, the court may not modity the contract or create an ambiguity. Id.

                                             15 

No. 30020-0-III; 30021-8-111 

Courchaine v. Commonwealth Land Title Ins. Co. 



       We find no ambiguity. A "restriction," as that term is used in Commonwealth's

commitment and policy, is fundamentally different from an easement. Given its

meaning, it cannot be understood to include easements. And if we were to find an

ambiguity, well-settled principles of insurance policy construction would require us to

give the commitment and policy a meaning and construction favorable to the insured.

Bordeaux, Inc. v. Am. Safety Ins. Co., 145 Wn. App. 687, 694,186 PJd 1188 (2008).

Coverage exclusions "are contrary to the fundamental protective purpose of insurance,"

"will not be extended beyond their clear and unequivocal meaning," and "should also be

strictly construed against the insurer." Stuart v. Am. States Ins. Co., 134 Wn.2d 814, 818­

19,953 P.2d 462 (1998).

       Because Commonwealth's policy did not exclude or except the BPA easement, it

breached its duty to indemnify Courchaine when it failed to compensate her loss. The

trial court correctly found in her favor in light of her breach of contract claim.

                              D. Liability of Fidelity for the Policy

       The trial court also imposed liability on Fidelity to indemnify Courchaine against

loss under the policy. Fidelity assigns error to that part of Courchaine's judgment,

pointing out that Courchaine presented no evidence or argument as to a basis on which it

could be liable for the policy it did not issue. Courchaine provides no rationale for

Fidelity's liability in her response.




                                              16
No. 30020-0-III; 30021-8-III
Courchaine v. Commonwealth Land Title Ins. Co.


       To the extent that the judgment imposes liability against Fidelity under the policy,

it appears inconsistent with the court's conclusions oflaw, which state, "The

Commitment failed to except the seventy five (75') ,foot easement. Therefore,

Commonwealth breached the contract with the Plaintiffs. The Plaintiffs' damages based

upon breach of contract are $23,500.00." CP at 167. There being no evidence ofa basis

for Fidelity's liability for Commonwealth's policy, that portion of the judgment against it

must be reversed.

                                              II

       Commonwealth and Fidelity also challenge the trial court's conclusions that they

violated the CPA. The CPA provides that "[ u]nfair methods of competition and unfair or

deceptive acts or practices in the conduct of any trade or commerce are hereby declared

unlawful" and provides for a private right of action. RCW 19.86.020, .090. To prevail

on a CPA claim alleging an unfair or deceptive act or practice, the plaintiff must establish

that (1) the defendant has engaged in an unfair or deceptive act or practice, (2) in trade or

commerce, (3) that impacts the public interest, (4) the plaintiff has suffered injury in his

or her business or property, and (5) a causal link exists between the unfair or deceptive

act and the injury suffered. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins.

Co., 105 Wn.2d 778,780,719 P.2d 531 (1986). Commonwealth and Fidelity challenge

the sufficiency of the evidence to support an unfair or deceptive act or practice that

impacts the public interest.

                                              17
No. 30020-0-III; 30021-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



       The public interest impact element may be satisfied per se, by showing that a

statute has been violated that contains a specific legislative declaration of public interest

impact. Id. at 791. In RCW 48.01.030 the legislature has provided that "[tJhe business of

insurance is one affected by the public interest, requiring that all persons be actuated by

good faith, abstain from deception, and practice honesty and equity in all insurance

matters." See Salois v. Mut. a/Omaha Ins. Co., 90 Wn.2d 355,359 & n.1, 581 P.2d 1349

(1978). The public interest impact element is therefore satisfied per se.

       An unfair trade practice may also be established per se, by showing that the

defendant has engaged in an act or practice that the legislature has declared to constitute

an unfair or deceptive act in trade or commerce. Hangman Ridge, 105 Wn.2d at 786. In

addition, and because the CPA expressly applies to "actions and transactions prohibited

or regulated under the laws administered by the insurance commissioner," an unfair trade

practice may be established per se by showing that it has been declared an unfair practice

in regulations adopted by the insurance commissioner. RCW 19.86.170 (emphasis

added); Indus. Indem. Co. a/the Nw., Inc. v. Kallevig, 114 Wn.2d 907,920,792 P.2d 520

(1990). The insurance commissioner has declared a number of claims settlement

practices unfair or deceptive in WAC 284-30-330. The trial court's findings do not

include a finding of a per se unfair trade practice.

       Where a plaintiff cannot point to a statute or regulation declaring an act or practice

unfair or deceptive, she may still independently demonstrate that the practice is unfair or

                                              18 

No. 30020-0-III; 30021-8-II1 

Courchaine v. Commonwealth Land Title Ins. Co. 



deceptive by showing that the practice has the capacity to deceive a substantial portion of

the pUblic. Hangman Ridge, 105 Wn.2d at 785. While the CPA does not define the term

"deceptive" the court has held that "implicit in that term is 'the understanding that the

actor misrepresented something of material importance.'" Stephens v. Omni Ins. Co.,

138 Wn. App. 151, 166, 159 PJd 10 (2007) (quoting Hiner v. BridgestonelFirestone,

Inc., 91 Wn. App. 722, 730, 959 P.2d 1158 (1998), rev'd in part on other grounds, 138

Wn.2d 248, 264,978 P.2d 505 (1999», aff'd sub nom. Pangv. Farmers Ins. Co., 166

Wn.2d 27, 204 P.3d 885 (2009).

       The trial court's second and third conclusions of law identified the following acts

or practices that it concluded violated the CPA:

                2. Defendant Commonwealth violated the [CPA] by unfair or
       deceptive acts or practices, namely failing to include and except in the title
       insurance policy the easement filed of record in September of 1945, under
       recording number 666726A . . .. Commonwealth also failed to issue the
       final title policy for six (6) months. When they finally issued the final
       policy in April of2009, it was back dated to October 17, 2008.
                3. Defendant Fidelity failed to pay the Plaintiffs' claim when said
       failure to except the BPA easement was brought to Fidelity'S attention.
       Further, both Defendants misled the Plaintiffs into believing that they were
       two separate legal entities acting independent of one another.

CP at 167-68.

                        A. Commonwealth's Liability Under the CPA

       We first address Commonwealth's liability under the CPA. In concluding that

Commonwealth was liable for trebled damages, attorney fees, and costs under the CPA,


                                             19 

No. 30020-0-III; 30021-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



the trial court relied upon (1) Commonwealth's failure to identify the BP A easement as

an exception to coverage in its commitment and policy; (2) its failure to issue the final,

back-dated title policy for six months; and (3) along with Fidelity, its misleading

Courchaine into believing that the two companies were separate legal entities acting

independent of one another.

       As already addressed, Commonwealth had no duty to identify the BP A easement

as an exception to coverage in its commitment and policy. Given the clear language of

RCW 48.29.01 0(3)(c) that a preliminary commitment "is not a representation as to the

condition of the title," Commonwealth's nondisclosure of the BPA easement cannot be

considered unfair or deceptive.

       As to the delay in issuing the title policy, the trial court does not address in its

findings how or why the delay in issuing or transmitting the policy was unfair or deceptive.

The trial court's oral decision, incorporated in the findings, reveals only speculation that

the delay in receipt of the policy might have been to create obstacles or inconvenience for

the insured. 3 Review of the record reveals that the only testimony addressing the delay

noted the fact of the delay, but without indicating that it presented any problem.


       3 The trial court stated in its oral decision:
       [TJwo months later comes [aJn e-mail on March 24 of '09 from someone
       who says all ofa sudden "I'm the new claims adjuster. You're dealing with
       me, and by the way, you get me Commonwealth's information and give it
       to me," which is a total mystery. Was that meant to deceive or infer to the
       plaintiff that Fidelity was not affiliated with Commonwealth because they

                                              20 

No. 30020-0-III; 30021-8-III 

Courchaine v. Commonwealth Land Title Ins. Co. 



       Finally, the trial court's conclusion that Commonwealth violated the CPA on

account of confusion created as to the relationship between Commonwealth and Fidelity

relies on findings that upon assuming responsibility for the claim, Lisa Leick, acting for

Fidelity, corresponded with Courchaine and first asked Courchaine to provide materials

from Commonwealth, later stating that the claim submitted to Commonwealth '''is now

handled by Fidelity.'" CP at 166 (Findings of Fact 27,30). The trial court also found

that

              28. Janice Courchaine and [her mother] believed they were working
       with a separate entity regarding the claim.
              29. Although Commonwealth is a subsidiary of Fidelity, they acted
       in such a manner that it was reasonable for the Plaintiffs to believe they
       were separate, unrelated entities.

              31. [The newly-assigned adjuster], an employee and agent of
       Fidelity, led Janice Courchaine to believe that Fidelity ... was not affiliated
       with Commonwealth or Spokane County Title.

              34. The Defendants played a shell game with the Plaintiffs by ...
       delay[ ] and obfuscation regarding who the Plaintiffs were dealing with.

CP 166-67.

       The record reveals that Commonwealth is a subsidiary of Chicago Title Insurance

Company, which is a subsidiary of Chicago Title and Trust Company, which is a

subsidiary of Fidelity. They are reportedly separate companies, with separate operations,


     couldn't get records from Commonwealth, the client had to? Or was it to
     create a hoop and a delay for the plaintiff. It's just really unclear to me.
RP (Mar. 10,2011) at 236.

                                             21
No. 30020-0-III; 30021-8-III
Courchaine v. Commonwealth Land Title Ins. Co.


and generally do act independently of each other. Evidently they use a common claims

processing center for handling insurance claims.

       The trial court did not find that the representations about the two companies'

independent operations were false, and apparently they were not. The findings do not

support a violation of the CPA.

       The findings are insufficient to support the conclusion that Commonwealth is

liable for a violation of the CPA.

                                     B. Fidelity's Liability

       In concluding that Fidelity was separately liable for violating the CPA, the trial

court relied on (1) its failure to accept the claim and pay the loss once it assumed the

claim adjustment responsibility, and (2) along with Commonwealth, misleading

Courchaine into believing the companies were separate legal entities acting

independently. We have already addressed the insufficiency of the findings to sustain the

second basis for CPA liability.

       As a threshold matter, Fidelity argues that any CPA liability on its part must rely

on a theory of vicarious liability or corporate disregard, because it had no direct

involvement in the handling of the claim. Yet most of the claim handling evidence

admitted at trial supports direct involvement by Fidelity. Two pieces of electronic mail

admitted at trial were from Leick, who identified herself in those communications as

"Claims Administrator, Fidelity National Title Group." Ex. 16. In corresponding with

                                             22 

No. 30020-0-III; 30021-8-II1 

Courchaine v. Commonwealth Land Title Ins. Co. 



Courchaine, Leick stated that the claim Courchaine submitted to Commonwealth is "now

being handled by Fidelity National Title." Id. Leick also indicated that she did not have

access to the Commonwealth paperwork and requested that Courchaine mail ittoher.ld.

Ample evidence supported a finding by the trial court that denial of the claim, if an unfair

trade practice, was the responsibility of Fidelity.

       The criteria for deciding whether an insurer is liable for bad faith failure to pay a

claim are well settled. An insurer's denial of coverage without reasonable justification

constitutes an unfair act under the CPA. Kallevig, 114 Wn.2d at 917. "[R]efusal must be

based upon reasonable grounds." Safeco Ins. Co. ofAm. v. JMG Restaurants, Inc., 37

Wn. App. 1, 15, 680 P.2d 409 (1984). However, if a denial of coverage is incorrect but

based on reasonable conduct of the insurer, it does not constitute an unfair trade practice.

Villella v. Pub. Emps. Mut. Ins. Co., 106 Wn.2d 806,821,725 P.2d 957 (1986). Acts

performed in good faith under an arguable interpretation of existing law do not constitute

unfair conduct that violates the consumer protection law. Perry v. Island Savs. & Loan

Ass'n, 101 Wn.2d 795,810,684 P.2d 1281 (1984). The question of whether a particular

action gives rise to a CPA violation is a question of law. Seattle Pump Co. v. Traders &

Gen. Ins. Co., 93 Wn. App. 743,752,970 P.2d 361 (1999).

       The trial court found that Fidelity acted in bad faith when it failed to abide by

Kennard Goodman's initial assessment and cover the claim. The court credited

Goodman's testimony, as Courchaine's witness, that Leick's explanation of Fidelity's

                                              23 

No. 30020-0-III; 30021-8-II1 

Courchaine v. Commonwealth Land Title Ins. Co. 



basis for denial was "horrible   l"   and that ifhe ",vas teaching a class and [her letter] was

the final exam, [he] would give her a D or F." RP (Mar. 7,2011) at 24,40.

       The trial court found that "Fidelity knew that the Plaintiffs had a valid claim." CP

at 167 (Finding of Fact 33). It found that the actions by Fidelity were "frivolous and

unfounded" and there was "no reasonable justification for denying the claim and a good

faith mistake was not made." Id. Fidelity has not assigned error to these findings.

       The fact that an insurer reexamines its coverage position and rejects a claim after

first accepting it is not, standing alone, insurance bad faith. But here, Fidelity does not

even attempt to defend several of the bases for denying the claim identified by Leick's

letter denying coverage. And the two arguments that it offers in support of denying

coverage fail in light of existing law and the plain terms of its policy, as discussed in

section I.B and C, supra. Substantial evidence supports the trial court's finding of a bad

faith denial of the claim.

                                                  III

       Courchaine seeks attorney fees and costs on appeal as the prevailing party under

the CPA. RCW 19.86.090. Commonwealth and Fidelity assert that the award of attorney

fees based on RCW 19.86.090 was erroneous and must be reversed because there was no

violation of the CPA.

       The findings do not support Commonwealth's violation of the CPA, so the trial

court's award of attorney fees and costs against it is reversed.

                                                  24
No. 30020-0-III; 30021-S-III
Courchaine v. Commonwealth Land Title Ins. Co.


       Where a statute or contract allows an award of attorney fees at trial, an appellate

court has authority to award fees on appeal. Standing Rock Homeowners Ass In v. Misich,

106 Wn. App. 231, 247, 23 P.3d 520 (2001). The CPA provides a basis for an award of

attorney fees for those portions of the appeal related to the CPA claim against Fidelity.

Because the trial court will need to revisit the amount of attorney fees and costs awarded

Courchaine for proceedings in the trial court, we direct that the amount of fees and costs

on appeal be determined by the trial court at the same time. RAP IS.I(i).

       We reverse judgment against Commonwealth on the CPA claim, reverse judgment

against Fidelity on the contract claim, and otherwise affirm. We award attorney fees and

costs of appeal against Fidelity, and remand for proceedings consistent with this opinion.

       A majority of the panel has determined that this opinion will not be printed in the

Washington Appellate Reports but it will be filed for public record pursuant to RCW

2.06.040.


                                              Sid~/?t-
WE CONCUR:



Ko smo, C.J.




                                             25 

