Law Blog

Personal Injury Protection (PIP) Benefits are “Business or Property” for Purposes of Consumer Protection Act (CPA) Claims

Krista Peoples was injured in a car crash, and applied for PIP benefits through her auto insurer, USAA.  When USAA eventually denied her benefits, Peoples sued. She alleged that USAA violated Washington insurance regulations when it denied bills without an individualized assessment and when a computerized review process determined that the bills exceeded a predetermined limit. USAA moved to dismiss, arguing that Ms. Peoples (and other plaintiffs) were not injured in their business or property.

This is important because any person who is injured in his business or property by a violation of RCW 19.86.020 may bring a civil action to enjoin further violations (i.e. an injunction) and recover actual damages, together with the costs of the suit, including a reasonable attorney’s fee. The court may, in its discretion, award three times the actual damages, not to exceed $25,000. To prevail in a CPA action, a private plaintiff must prove (1) an unfair or deceptive act or practice (2) in trade or commerce (3) which affects the public interest (4) and causes injury to the plaintiffs business or property, and (5) a causal link between the act and the injury.

The Washington Supreme Court ruled in favor of Ms. Peoples.  The court rejected USAA’s arguments because they were based on cases that said personal injury cases were not proper for CPA claims (See Ambach v. French, 167 Wn.2d 167, 216 P.3d 405 (2009)). Rather, the justices found that Ms. Peoples was seeking to hold her insurance company liable for benefits owed under contract.  The court went on to hold that “the deprivation of contracted-for insurance benefits is an injury to ‘business or property’ regardless of the type of benefits secured by the policy.”

The court ruling in this case is another win for Washington consumers, providing another “arrow in the quiver” when insurance companies greedily and wrongfully withhold contracted-for insurance benefits.