                                                                                              Filed
                                                                                        Washington State
                                                                                        Court of Appeals
                                                                                         Division Two

                                                                                       December 23, 2015

    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                        DIVISION II
 CHARLES HAYS and KRISTA HAYS,                                      No. 46679-1-II
 each individually and the marital
 community comprised thereof,


                               Appellants,

        v.

 STATE FARM INSURANCE COMPANY, a
 foreign insurance company,                                  UNPUBLISHED OPINION

                               Respondent.

       WORSWICK, P.J. — Charles and Krista Hays appeal the superior court’s summary

dismissal of their claims of bad faith claims practices and Washington Consumer Protection Act

(CPA) violations against State Farm Insurance Company (State Farm). The Hayses’ 38-year-old

manufactured home was a total loss following a February 19, 2010 fire. After the fire, the

Hayses filed a claim under their State Farm homeowner’s insurance policy. Over the next two

years, the Hayses and State Farm disagreed over their home’s valuation and engaged in a series

of back and forth communication. In February 2013, the Hayses filed a lawsuit against State

Farm alleging bad faith claims practices and CPA violations. The superior court granted State

Farm’s motion for summary judgment dismissing the Hayses’ claims. The Hayses argue the

court erred by dismissing their claims because genuine issues of material facts exist regarding (1)

whether State Farm acted in good faith in handling the Hayses’ claim and (2) whether State Farm

violated Washington’s CPA.
No. 46679-1-II


       We affirm the superior court’s summary dismissal of the Hayses’ claims insofar as they

are based on State Farm’s investigation of the Hayses’ claim and alleged violation of WACs

284-30-370, 284-30-330(4), and 284-30-330(7). However, we reverse and remand for trial on

the Hayses’ bad faith and CPA claims based on State Farm’s delay of the Hayses’ claim and

State Farm’s alleged violation of WACs 284-30-330(2), 284-30-330(6), and 284-30-330(13).

                                                 FACTS

       Charles and Krista Hays own real property in Monroe, Washington. A manufactured

home was situated on the property. In 2000, the Hayses spent approximately $30,000 to remodel

and update their home. The Hayses purchased a homeowner’s insurance policy from State Farm

for actual value coverage.

       In February, 2010, fire totally destroyed the Hayses’ home. The Hayses submitted a

claim for benefits under their policy. State Farm obtained an appraisal on the home placing the

home’s value at $16,458. Lindsay Person, the State Farm claim representative originally

assigned to the Hayses’ claim, noted that this amount seemed low. When Person informed the

Hayses of the valuation, they were dissatisfied with the low appraisal, and the Hayses sent State

Farm a copy of a Town & Country appraisal done before the Hayses remodeled and updated.

State Farm contacted Town & Country to issue an updated appraisal report for the property that

would reflect the updates on the home. Town & Country valued the Hayses’ home at $30,000.1


1
 State Farm contends that the second Town & Country appraisal considered the remodel and
upgrades, valuing the home’s replacement cost, including the porch at $86,000. State Farm also
contends the appraiser determined the Hayses’ house was effectively half its real age, or 19
years, because of the updates. According to State Farm, the appraiser divided the home’s
economic life by its effective age according to industry standard, resulting in a 63 percent
depreciation in value.



                                                2
No. 46679-1-II


       State Farm claims that on May 3, 2010, it sent a letter to the Hayses enclosing a copy of

the appraisal and a final check for coverage of their property damage in the amount of $32,580.

The Hayses claim that they never received this letter. Rather, the Hayses contend they received

only the check for $32,580, and they argue that between June 2010 and October 2010 they made

repeated attempts to contact State Farm regarding the status of their claim and the manner in

which State Farm conducted their valuation, but received no response.

       On October 17, 2010, the Hayses sent a letter to a supervisor at State Farm articulating

their frustration with their claims process, requesting their claim be assigned to a different claims

representative, and seeking clarification of the valuation method. On October 26, 2010, State

Farm responded to the Hayses’ October 17 letter showing the payments made to the Hayses up to

that date and explaining that the actual cash value at the time of the loss was established by the

Town & Country appraisal. State Farm sent a proof of loss form and another copy of the

appraisal with the letter and also alerted the Hayses that State Farm had requested a certified

copy of their manufactured home policy and it would be forwarded on receipt. The letter further

notified the Hayses that they had reassigned the claim to Robert Nakashima. This

correspondence was returned to State Farm because it was sent to the Hayses’ old address. On

December 10, 2010, Nakashima re-sent the Hayses the original letter, and on December 14, sent

the Hayses the certified copy of their policy to the correct address.

       In January 2011, the Hayses retained the services of a public adjuster to assist them with

their claim. In March 2011, through their public adjuster, the Hayses submitted a formal proof

of loss to State Farm, claiming an amount of $123,634.00. The parties agreed to submit the

disputed valuation to an arbitrator through an alternative dispute resolution (ADR) tool provided



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No. 46679-1-II


by the policy. In December 2011, the arbitrator issued an award with an actual cash value award

of $70,603.21. State Farm paid the remaining ADR award balance in January 2012.

       In February 2013, the Hayses filed a lawsuit against State Farm alleging several theories

of liability under common law, RCW 48.01.030, and Washington’s CPA. They alleged that

State Farm engaged in bad faith under the common law and RCW 48.01.030 by failing to

reasonably investigate and by delaying the Hayses’ claim. They also alleged that State Farm

violated Washington’s CPA by engaging in bad faith and by violating WACs 284-30-370, 284-

30-330(2), 284-30-330(4), 284-30-330(6), 284-30-330(7) and 284-30-330(13). In August 2014,

the superior court granted State Farm’s motion for summary judgment dismissal of Hayses’

claims. The Hayses appeal.

                                            ANALYSIS

                                     I. STANDARD OF REVIEW

       We review a summary judgment order de novo. Owen v. Burlington N. Santa Fe R.R.

Co., 153 Wn.2d 780, 787, 108 P.3d 1220 (2005). Summary judgment is appropriate when there

is no genuine issue of material fact and the moving party is entitled to judgment as a matter of

law. CR 56(c). As the moving party, State Farm has the initial burden of showing the absence

of an issue of material fact. Safeco Ins. Co. of Am. v. Butler, 118 Wn.2d 383, 395, 823 P.2d 499

(1992). The burden then shifts to the Hayses to set forth specific facts establishing that there is a

genuine issue of material fact for trial. Young v. Key Pharms. Inc., 112 Wn.2d 216, 225, 770

P.2d 182 (1989). A motion for summary judgment accepts all facts and reasonable inferences in

the light most favorable to the nonmoving party. Owen, 153 Wn.2d at 787. Considering the

facts in the light most favorable to the nonmoving party, the motion for summary judgment



                                                  4
No. 46679-1-II


should be granted only if, from all the evidence, reasonable persons could reach but one

conclusion. Failla v. FixtureOne Corp, 181 Wn.2d 642, 649, 336 P.3d 1112 (2014).

              II. BAD FAITH — VIOLATION OF COMMON LAW AND RCW 48.01.030

       The Hayses argue the superior court erred by granting summary dismissal of their bad

faith claims because issues of material fact exist regarding State Farm’s failure to reasonably

investigate and its unreasonable delay of the Hayses’ claim by failing to provide information

about the Hayses’ claim. We disagree that issues of material fact exist regarding State Farm’s

investigation, but agree that issues of material fact exist regarding delay of the Hayses’ claim.

       Insurers in Washington have a duty to act in good faith and deal fairly with their insured.

Smith v. Safeco Ins. Co., 150 Wn.2d 478, 484, 78 P.3d 1274 (2003). This duty of good faith for

the insurance industry is required by statute:

       The 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. Upon the insurer, the insured, their providers, and
       their representatives rests the duty of preserving inviolate the integrity of insurance.

RCW 48.01.030.

       A violation of this duty gives rise to a common law tort cause of action for bad faith.

Smith, 150 Wn.2d at 484.2 An insurer may breach its broad duty to act in good faith by conduct

short of intentional bad faith or fraud, although not by a good faith mistake. Anderson v. State

Farm Mut. Ins. Co., 101 Wn. App. 323, 329, 2 P.3d 1029 (2000); see also Sharbono v. Universal



2
  The Hayses correctly note that a violation of the duties enumerated in the WAC regulating the
actions of insurance companies during claims administration may give rise to a bad faith claim
under Washington law. On appeal the Hayses focus their discussion of State Farm’s alleged
WAC violations as part of their CPA claims, and therefore we address these alleged violations in
the following section.


                                                  5
No. 46679-1-II


Underwriters Ins. Co., 139 Wn. App. 383, 161 P.3d 406 (2007). An insurer does not act in bad

faith where it “‘acts honestly, bases its decision on adequate information, and does not

overemphasize its own interest.’” Lloyd v. Allstate Ins. Co., 167 Wn. App. 490, 496, 275 P.3d

323 (2012) (quoting Werlinger v. Clarendon Nat’l Ins. Co., 129 Wn. App. 804, 808, 120 P.3d

593 (2005).

       Under Washington law every insurer has a duty to act promptly, in both communication

and investigation in response to a claim or tender of defense. St. Paul Fire and Marine Ins. Co.

v. Onvia, Inc., 165 Wn.2d 122, 132, 196 P.3d 664 (2008). Insurers have not only a general duty

of good faith, but also a specific duty to act with reasonable promptness in investigation and

communication with their insureds following a notice of a claim. 165 Wn.2d at 132. An insurer

must give equal consideration to its policyholder’s interests as well as its own. Am. States Ins.

Co. v. Symes of Silverdale, Inc., 150 Wn.2d 462, 470, 78 P.3d 1266 (2003).

       The question in bad faith claims is always whether the insurer acted reasonably under the

facts and circumstances of the case. Indus. Indem. Co. of the NW, Inc. v. Kallevig, 114 Wn.2d

907, 920, 792 P.2d 520 (1990); Lloyd, 167 Wn. App. at 496. To establish bad faith, an insured is

required to show the insurer’s action was unreasonable, frivolous, or unfounded. Mut. of

Enumclaw Ins. Co. v. Dan Paulson Const., Inc., 161 Wn.2d 903, 916, 169 P.3d 1 (2007).

       Whether an insurer acted in bad faith is a question of fact. Smith, 150 Wn.2d at 485.

Accordingly, an insurer is entitled to a dismissal on summary judgment of a policyholder’s bad

faith claim only if there are no disputed material facts pertaining to the reasonableness of the

insurer’s conduct under the circumstances, or the insurance company is entitled to prevail as a

matter of law on the facts construed most favorably to the nonmoving party. Lloyd, 167 Wn.



                                                 6
No. 46679-1-II


App. at 496. Where reasonable minds could not differ as to the reasonableness of the insurer’s

actions, summary judgment is appropriate. 167 Wn. App. at 496.

       The issue before us is whether the Hayses established a question of material fact

sufficient to defeat summary judgment as to whether State Farm breached its duty of good faith

to the Hayses. To affirm, there must be no disputed facts pertaining to the reasonableness of

State Farm’s action in light of all the facts and circumstances of the case. Lloyd, 167 Wn. App.

at 496. Here, the Hayses specifically contend that State Farm breached its duty of good faith by

failing to reasonably investigate the Hayses’ claim and by unreasonably delaying the claim by

failing to provide information.

A.     Failure To Reasonably Investigate

       The Hayses argue that State Farm failed to reasonably investigate and value their claim.

We disagree.

       The Hayses provide no evidence to support this allegation. Rather, the uncontested

evidence shows that State Farm timely and reasonably investigated their claim by obtaining two

independent appraisals and issuing a check for the amount most favorable to the Hayses. The

Hayses contend that the second appraisal by Town & Country did not take the remodel and

updates into consideration, but they present no evidence to support their contention. On the

contrary, the evidence shows the appraisal did consider the Hayses’ improvements. In her

declaration, Lindsay Person states that the appraisal was obtained specifically to take the updates

into consideration, and noted that the appraisal considered a newer roof, new vinyl windows,

carpet, drywall, and wood finishes as well as a covered porch and deck. A letter sent to the




                                                 7
No. 46679-1-II


Hayses from State Farm in April 2011 further explains the valuation and states that Town &

Country took the improvements into consideration.

          Moreover, State Farm contacted Town & Country for an updated appraisal after the

Hayses sent State Farm a previous Town & Country appraisal done on their home. It is

incongruous for the Hayses to now argue that use of an appraisal by Town & Country constituted

an unreasonable investigation.

          The Hayses further point to the ADR award as evidence that State Farm’s investigation

was unreasonable, arguing that the higher award is evidence of State Farm’s failure to reasonably

investigate. While it is true that the ADR award applied a lower depreciation value than the

Town & Country appraisal, this fact alone does not establish that State Farm acted unreasonably

or in bad faith. Am. Mfrs. Mut. Ins. Co. v. Osborn, 104 Wn. App. 686, 700-01, 17 P.3d 1229

(2001).

          The Hayses presented no evidence showing that State Farm’s investigation was

unreasonable. Therefore, the Hayses fail to raise an issue of material fact to support their claim

that State Farm violated its duty of good faith on this ground.

B.        Delay of Claim

          The Hayses next argue that State Farm violated its duty of good faith by delaying the

Hayses’ claim when it refused to provide information regarding the home’s valuation and a copy

of their policy. Viewing the evidence in the light most favorable to the Hayses, we hold that

reasonable persons could differ as to whether State Farm’s actions were unreasonable.

          The Hayses argue that in May 2010 they received a check for $32,580 from State Farm

with no explanation of what the check was for or how State Farm calculated the amount. State



                                                  8
No. 46679-1-II


Farm claims it sent a cover letter explaining the valuation of their claim along with a copy of the

updated Town & Country appraisal when it sent the check. The Hayses contend they never

received the letter or appraisal. The Hayses further claim they repeatedly attempted to contact

State Farm for an explanation of the amount but did not receive any response to the appraisal

valuation issue.

         On October 17, 2010, the Hayses wrote a letter to a supervisor at State Farm requesting a

copy of the policy, further explanation of the valuation, and for their claim to be reassigned to a

new representative. It is undisputed that on October 26, State Farm sent a letter responding to

the Hayses’ concerns to the Hayses’ old address, and did not re-send the letter until seven weeks

later.

         The evidence, taken in the light most favorable to the Hayses, shows that State Farm sent

a check with no explanation to the Hayses in May, and despite the Hayses’ repeated requests for

additional information, State Farm did not respond until December 14. Because we take all facts

and reasonable inferences in the light most favorable to the nonmoving party, we hold that the

Hayses successfully raise an issue of material fact as to whether State Farm violated its duty of

good faith by unreasonably failing to provide information regarding the Hayses’ claim and thus

delaying their claim.

                                 III. CONSUMER PROTECTION ACT

         The Hayses also argue that State Farm violated Washington’s Consumer Protection Act

by violating its common law duties of good faith and by violating WACs 284-30-370 and 284-

30-330. We disagree that any genuine issue of material fact exists as to whether State Farm

acted in bad faith in its investigation of the Hayses claim or whether State Farm violated WACs



                                                 9
No. 46679-1-II


284-30-370, 284-30-330(4), or 284-30-330(7), but we agree that genuine issues of material fact

exist as to whether State Farm acted in bad faith by unreasonably delaying the Hayses’ claim and

whether State Farm violated WACs 284-30-330(2), 284-30-330(6), and 284-30-330(13).3

       Washington’s CPA prohibits “[u]nfair methods of competition and unfair or deceptive

acts or practices in the conduct of any trade or commerce.” RCW 19.86.020. To prevail in an

action under the CPA, the Hayses must establish the following five elements: (1) State Farm

engaged in an unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) that

impacts the public interest; (4) the Hayses have suffered injury in their business or property; and

(5) a causal link exists between the unfair or deceptive act and the injury suffered. Panag v.

Farmers Ins. Co. of Washington, 166 Wn.2d 27, 37, 204 P.3d 885 (2009). The first two

elements of a CPA action may be satisfied by a legislatively declared per se unfair trade practice.

Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 791, 719 P.2d

531 (1986). The public interest element may be satisfied per se by a showing that a statute has

been violated which contains a specific legislative declaration of public interest impact.

Hangman Ridge, 105 Wn.2d at 791.

       We first address the various grounds on which the Hayses attempt to satisfy the first three

elements of their CPA claims before addressing their alleged injury.

A.     Duty of Good Faith

       The insurance code begins with recognition that “[t]he business of insurance is one

affected by the public interest, requiring that all persons be actuated by good faith, abstain from


3
 Insofar as a genuine issue of material fact exists as to State Farm’s alleged violations of the
WAC, summary judgment dismissal of the Hayses’ CPA and bad faith claims based on these
WAC violations is inappropriate.


                                                 10
No. 46679-1-II


deception, and practice honesty and equity in all insurance matters.” RCW 48.01.030. The

legislature’s specific declaration of public interest in insurance matters makes an insurer’s

violation of the duty of good faith under RCW 48.01.030 a per se violation of the public interest

requirement of a CPA claim. Hangman Ridge, 105 Wn.2d at 791. Whether an insurer acted in

good faith in administrating a claim, for purposes of Washington’s CPA, depends on the

reasonableness of its actions. Gingrich v. Unigard Sec. Ins. Co., 57 Wn. App. 424, 433, 788

P.2d 1096 (1990). An insurer violates the CPA if it acts without reasonable justification in

handling a claim by its insured. Unigard Ins. Co. v. Leven, 97 Wn. App. 417, 434-35, 983 P.2d

1155 (1999).

       As discussed above, taking all facts in the light most favorable to the Hayses, an issue of

material fact exists as to whether State Farm violated its duty of good faith by unreasonably

delaying the Hayses’ claim by not promptly providing information regarding the Hayses’ claim.

B.     Alleged Violations of the Washington Administrative Code

       The insurance code permits the insurance commissioner to promulgate administrative

regulations governing the claims-handling process. RCW 48.30.010. To this end, the

commissioner adopted chapter 284-30 WAC. A violation of the insurance code or a regulation

promulgated thereunder constitutes a per se unfair practice under the CPA, and satisfies the first

two elements of a CPA claim. Onvia, Inc., 165 Wn.2d at 134. Furthermore, given the

legislature’s mandate of a public interest in the business of insurance, it follows that an insurer’s

violation of the insurance code or insurance regulations thereunder impacts the public interest for

purposes of the third element of a CPA claim. RCW 48.01.030; Hangman Ridge, 105 Wn.2d at

791.



                                                 11
No. 46679-1-II


        1. WAC 284-30-370

        The Hayses argue that State Farm violated WAC 284-30-370 by failing to complete its

investigation within thirty days after notice of the claim. The Hayses misrepresent the

regulation’s full text.

        WAC 284-30-370 requires that an insurance company complete its investigation within

thirty days after the notice of the claim, unless the investigation cannot reasonably be completed

within that time. The record shows that State Farm immediately began its investigation into the

claim. The Hayses acknowledge that within approximately one month of the fire, State Farm

had obtained an appraisal of the home and issued the Hayses a check in accordance with that

appraisal. State Farm and the Hayses thought the first appraisal seemed low, and after receiving

an older appraisal on the home from the Hayses, State Farm contacted Town & Country

Appraisal for an updated valuation. State Farm issued a new payment in accordance with the

updated Town & Country appraisal on May 3, 2010.

        We hold that reasonable minds could not differ that it was reasonable for State Farm to

take the time to obtain a second appraisal as part of its investigation, even if that meant extending

the investigation beyond thirty days. We hold that the Hayses’ CPA claim fails on this ground.

        2. WAC 284-30-330(4)

        The Hayses next argue that State Farm violated WAC 284-30-330(4) which lists the

refusal “to pay claims without conducting a reasonable investigation” as an unfair or deceptive

act or practice of insurers. Br. of Appellants at 25. We disagree.

        State Farm did not refuse to pay the claim. Rather, State Farm and the Hayses had a

valuation dispute regarding how much should be paid under the claim. Moreover, State Farm



                                                 12
No. 46679-1-II


conducted a reasonable investigation. After obtaining an appraisal that was notably low, State

Farm obtained a second appraisal from Town & Country. Contrary to the Hayses’ argument, the

Town & Country appraisal did take the remodel and updates into consideration in calculating the

home’s value. Furthermore, there is no evidence that using the Town & Country appraisal, a

company the Hayses suggested to State Farm, was unreasonable.

        The Hayses argue that if State Farm had conducted a reasonable investigation, it would

have concluded their home was, in part, a “residential structure” instead of a “manufactured

home” and, therefore, held greater value. Br. of Appellants at 25. The Hayses point to the ADR

valuation, which described the home as “part manufactured home and part residential

construction,” in applying a lower depreciation rate than the Town & Country appraisal as

evidence that State Farm did not conduct a reasonable investigation. CP at 226. But the fact that

the ADR award applied a lower depreciation rate of the home does not mean that State Farm’s

original investigation was unreasonable. See Osborn, 104 Wn. App. at 701 (the disparity

between the [insurer’s] offer and the subsequent arbitration award alone does not provide a basis

to evaluate the insurer’s conduct). Because State Farm neither refused to pay the Hayses’ claim

nor failed to conduct a reasonable investigation we hold that State Farm did not violate WAC

284-30-330(4), and therefore the Hayses’ CPA claim fails on this ground as well.

        3. WAC 284-30-330(7)

        The Hayses also argue that State Farm violated WAC 284-30-330(7), which prohibits

“[c]ompelling a first party claimant to initiate or submit to litigation, arbitration, or appraisal to

recover amounts due under an insurance policy by offering substantially less than the amounts

ultimately recovered in such actions or proceedings.” To overcome State Farm’s summary



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No. 46679-1-II


judgment motion, the Hayses need to establish the existence of a question of fact as to whether

State Farm acted reasonably. Osborn, 104 Wn. App. at 700. They fail to meet this burden.

       The Hayses rely on the disparity in values between the Town & Country appraisal and

the ADR award as evidence of a material question of fact as to whether State Farm compelled

the Hayses into litigation or appraisal. We rejected this line of reasoning in Osborn, 104 Wn.

App. at 700-02. There, the court held that in comparing a settlement offer to the ultimate ADR

award, the court must consider the circumstances and reasoning underlying the original offer.

Osborn, 104 Wn. App. at 700-01. In concluding that Osborn had failed to raise an issue of

material fact to support her claim of bad faith, the court explained “the disparity between the

offer and the subsequent arbitration award was the only evidence that the insured provided to

support her allegation of an unreasonably low offer. That evidence alone provides no basis to

evaluate the insurer’s conduct.” Osborn, 104 Wn. App. at 701.

       The Hayses make the same offer of evidence as Osborn and likewise fail to raise an issue

of material fact to support their claim that State Farm violated WAC 284-30-330(7). The

Hayses’ CPA claim fails on this ground as well.

       4. WAC 284-30-330(2)

       The Hayses argue State Farm violated WAC 284-30-330(2) by failing to act reasonably

promptly when communicating with them about their claim. WAC 284-30-330(2) lists the

failure “to acknowledge and act reasonably promptly upon communications with respect to

claims arising under insurance policies” as an unfair or deceptive act or practice of the insurer.

The Hayses argue that in May 2010, they received a check for $32,580 from State Farm with no

explanation of what the check was for or how State Farm calculated the amount. State Farm



                                                 14
No. 46679-1-II


claims it sent a cover letter explaining the valuation of their claim along with a copy of the

updated Town & Country appraisal when it sent the check. The Hayses contend they never

received the letter or appraisal. The Hayses further argue that they repeatedly attempted to

contact State Farm for an explanation of the amount but did not receive any clarification on the

valuation until December 2010. Because we take all facts and reasonable inferences in the light

most favorable to the nonmoving party, we hold that the Hayses successfully raise an issue of

material fact as to whether State Farm failed to act reasonably promptly when communicating

with respect to the Hayses’ claim.

       5. WAC 284-30-330(6)

       The Hayses next argue that State Farm violated WAC 284-30-330(6), which requires an

insurer to attempt “in good faith to effectuate prompt, fair and equitable settlements of claims in

which liability has become reasonably clear.” Br. of Appellants at 26. The Hayses base their

argument on State Farm’s failure to provide information regarding the manner in which they

obtained their valuation. As noted above, the Hayses successfully raise an issue of material fact

as to whether State Farm unreasonably failed to act in good faith by providing information about

their valuation.

       6. WAC 284-30-330(13)

       Finally, the Hayses argue that State Farm violated WAC 284-30-330(13) by failing to

“promptly provide a reasonable explanation of the basis in the insurance policy in relation to the

facts or applicable law for . . . the offer of a compromise settlement.” Br. of Appellant at 27.

The Hayses base their argument on State Farm’s failure to provide information regarding their

valuation of the Hayses’ claim. As noted above, taking the facts in the light most favorable to



                                                 15
No. 46679-1-II


the Hayses, the Hayses successfully raise an issue of material fact as to whether State Farm

failed to provide any reasonable explanation, based on the insurance policy or otherwise, for

their valuation.

C.     Damage to Business or Property

       In order to defeat State Farm’s motion for summary judgment, the Hayses must also raise

an issue of material fact as to whether State Farm’s alleged breach of their duty of good faith and

their alleged WAC violations proximately caused injury to the Hayses’ business or property.

Mason v. Mortg. America, Inc., 114 Wn.2d 842, 854, 792 P.2d 142 (1990).

       For purposes of Wasington’s CPA, the Hayses are not required to prove monetary

damages. Panag, 166 Wn.2d at 58. Rather, loss of use of property which is causally related to

an unfair or deceptive act or practice is sufficient injury to constitute the fourth element of a CPA

violation. Mason, 114 Wn.2d at 854. The injury element will be met if the consumer’s property

interest or money is diminished because of the unlawful conduct even if the expenses caused by

the statutory violation are minimal. Mason, 114 Wn.2d at 854.

       The Hayses’ briefing on this element appears to be a case of “copy and paste gone

wrong.” Their argument focuses on parties and facts not relevant to this case. However, the

Hayses appear to correct this error in their reply brief where they argue that because of State

Farm’s bad faith actions and its violation of the insurance regulations, the Hayses were left

without the use of their property for two years after the fire. The Hayses acknowledge that State

Farm ultimately paid the ADR award, but contend that the delay prevented them from meeting

their mortgage obligations. The evidence shows that as of January 21, 2011, less than one year

after the fire, State Farm had paid $40,453.69 in dwelling coverage, $5,000.00 for personal



                                                 16
No. 46679-1-II


property coverage, and $33,419.31 for loss of use coverage which included paying the Hayses’

living expenses. By the time of the arbitration award in December 2011, State Farm had paid

$49,343.03 in benefits under the Hayses’ dwelling coverage and $28,449.53 in personal property

coverage. State Farm was also paying the Hayses’ living expenses from the date of loss through

February 19, 2012, under their policy. However, the Hayses argue that the burden of paying

their mortgage on the damaged property and rent for their temporary housing contributed to their

financial struggles.

         Taking all the facts and reasonable inferences in the light most favorable to the Hayses,

genuine issues of material fact exist as to whether any alleged CPA violations proximately

injured the Hayses’ property interest.

                                           CONCLUSION

         Considering all facts and taking all reasonable inferences in the light most favorable to

the Hayses, we find that a genuine issue of material fact exists as to whether State Farm violated

its duty of good faith and Washington’s CPA by delaying the Hayses’ claim by failing to provide

information about their claim. Thus, we reverse the superior court’s summary judgment

dismissal and remand the Hayses’ claim of bad faith for delay of their claim, and the Hayses’

CPA claims based on bad faith and WACs 284-30-330(2), 284-30-330(6), and 284-30-330(13)

for trial.

         However, the Hayses fail to raise an issue of material fact as to the reasonableness of

State Farm’s investigation. Therefore, we affirm the superior court’s summary judgment

dismissal of the Hayses’ bad faith claim based on State Farm’s alleged failure to reasonably




                                                  17
No. 46679-1-II


investigate, and the Hayses’ CPA claims based on WACs 284-30-370, 284-30-330(4), and 284-

30-330(7).

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

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2.06.040, it is so ordered.



                                                                      Worswick, P.J.
 We concur:



 Lee, J.




 Sutton, J.




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