Tacoma S. Hospitality, LLC v. Nat'l Gen. Ins. Co.

494 P.3d 450

TACOMA SOUTH HOSPITALITY, LLC, and all others similarly situated throughout Washington State and the United States of America, Appellants,

v.NATIONAL GENERAL INSURANCE COMPANY, an insurance company, and Integon National Insurance Company, an insurance company, Respondents.

No. 55168-3-II

Court of Appeals of Washington, Division 2.

Filed September 8, 2021

Seth Michael Reynolds, Attorney at Law, 980 Lancaster Rd., Selah, WA, 98942-9499, for Appellant(s).

Clifford J. Wilson, Smith Freed Eberhard PC, 111 Sw Columbia St., Ste. 800, Portland, OR, 97201-5813, Matthew Robert Taylor, Attorney at Law, 15610 Se 12th St., Vancouver, WA, 98683-8969, for Respondent(s).

PUBLISHED OPINION

Cruser, J. ¶ 1 Tacoma South Hospitality, LLC (Tacoma South) filed an action under the Consumer Protection Act (CPA) against Integon National Insurance Company and National General Insurance Company (collectively Integon) after Integon's insured collided into a pylon sign advertising Tacoma South's hotel. Tacoma South argues that the trial court erred in dismissing its CPA claim by denying its motion for partial summary judgment and granting Integon's motion for summary judgment. Tacoma South alleged that the insurers engaged in an unfair claims settlement practice by conditioning payment on Tacoma South's agreement to release the insured from liability for excess damages. In addition, Tacoma South argues that the trial court abused its discretion when it denied its motion seeking recusal of the trial court judge, delayed ruling on class certification until after it decided Integon's motion for summary judgment, and when it denied its motions to compel discovery.

¶ 2 We hold that the trial court did not abuse its discretion when it denied the motion seeking recusal. We further hold that because Tacoma South has not provided an adequate record for this court to review the trial court's order granting Integon's motion for summary judgment, we cannot review that error. Therefore, we do not reach Tacoma South's assignment of error regarding the trial court's order denying its motion for partial summary judgment. Finally, we hold that the trial court did not abuse its discretion when it deferred ruling on Tacoma South's motion for class certification, or when it denied Tacoma South's motions to compel discovery pending the parties’ motions for a protective order.

¶ 3 Accordingly, we affirm.

FACTS

I. COLLISION AND SETTLEMENT NEGOTIATION

¶ 4 Cristian Altamirano was a guest staying in a hotel owned by Tacoma South. On the day of the collision, there had been a heavy snowfall, and the parking lot of the hotel was covered in accumulated ice and snow. As Altamirano pulled into the hotel parking lot, he lost control of his car and collided into the hotel's pylon sign.

¶ 5 Altamirano was insured by National General Insurance Company, which is underwritten by its member, Integon National Insurance Company. Altamirano's policy with Integon carried a property damage policy limit of $10,000.

¶ 6 Tacoma South submitted a repair estimate of $12,769 for the damaged sign to Integon. An adjuster for Integon responded by informing Tacoma South that there was a policy limit issue because the property damage coverage was limited to $10,000, and he advised Tacoma South to contact its insurer so that Integon could arrange a settlement with Tacoma South's insurer. Tacoma South declined to involve its own insurer, stating that its insurer advised it to deal directly with Integon.

¶ 7 Thereafter, Integon offered Tacoma South $10,000 to pay the claim. Before it would issue a check, Integon required Tacoma South to sign a liability release as to any further claims against either Integon or Altamirano. When Tacoma South indicated that it would not sign the release, Integon explained that it could not pay more than $10,000 because of the policy limit.

¶ 8 Tacoma South retained an attorney to handle the claim and negotiations moving forward. Through its attorney, Tacoma South asserted that it did not seek more than $10,000 from Integon, but because Tacoma South believed Altamirano was liable, it did not want to release him from liability for damages above policy limits. Integon explained that because it owed a duty to its insured, it would not agree to issue its payment without the release. In addition, Integon clarified that requiring the release was a standard practice in settling claims that exceed property damage policy limits. An excerpt from Integon's claims handling manual instructs adjusters to require releases in property damage policy limits cases.

¶ 9 In two emails sent during the settlement discussion, Integon offered to contact Altamirano to determine whether Altamirano would agree to pay the claimed damages above the policy limits. Tacoma South did not directly respond to Integon's proposals to settle the matter by making an arrangement with Altamirano for the excess damages. Instead, Tacoma South declined to sign the release and filed suit alleging that Integon violated the CPA. After Tacoma South filed the CPA suit, Integon contacted Tacoma South confirming that Altamirano agreed to pay excess damages and was hoping to devise a payment schedule.

II. PROCEDURAL HISTORY

¶ 10 During the pretrial proceedings, Tacoma South filed a motion to compel discovery after Integon objected to several of Tacoma South's discovery requests. Integon responded to the first motion by highlighting the need for a protective order. The trial court deferred ruling on that motion until the parties conferred regarding the scope of the discovery requests, and it directed the parties to provide the court with a stipulated protective order, with any further disagreements regarding scope to be submitted electronically without the need for a hearing.

¶ 11 The parties were unable to agree to a stipulated order and Tacoma South renewed its motion to compel. The trial court denied Tacoma South's motion "at this time," and ordered Integon to file a motion for a protective order within one week of its ruling. Clerk's Papers (CP) at 186. Integon filed the motion as directed, and the trial court granted a protective order.¹

¶ 12 Tacoma South filed a motion seeking class certification under CR 23. It asserted that every individual or entity involved in an auto collision with an Integon insured would be a putative class member given Integon's admission that it requires releases as a standard practice.

¶ 13 During the hearing on the motion for class certification, the trial court interrupted Tacoma South's argument and asked the parties whether it would make sense for the court to reserve ruling on the motion for class certification until Integon filed its motion for summary judgment. Tacoma South objected to the trial court's proposal, while Integon agreed that it would be appropriate for the court to defer its ruling. The trial court acknowledged that "this is a case that potentially would be certified for a class action," but because Integon disputed the underlying claim, it would reduce the cost of litigation to first address a motion for summary judgment. Verbatim Report of Proceedings (VRP) (Feb. 7, 2020) at 10. Tacoma South expressed concern that a deferred decision on class certification would prevent its case from moving forward because Integon could delay filing its motion. The trial court responded that it anticipated Tacoma South's concern and set a deadline by which Integon could either file its motion or the trial court would revisit the class certification issue.

¶ 14 On reviewing the superior court's electronic filing system records, Tacoma South noticed an entry indicating that Integon scheduled an unconfirmed "11:39 Exparte Action Mail," and that there was an ex parte order held. CP at 210. Based on this entry, Tacoma South filed a motion seeking recusal of the trial court judge and vacation of several adverse orders on the grounds that the trial judge's partiality could reasonably be questioned following his alleged surreptitious contact with Integon. Tacoma South also argued that the trial judge covertly changed the record because Tacoma South accessed the same electronic system several days later, but the outcome designation changed to state "Ex-Parte w/o Order Held." Id. at 215.

¶ 15 Integon denied having any ex parte contact with the trial judge. Integon explained that the entry was likely due to several filings it submitted electronically on the same date as the alleged ex parte contact. The trial court found that based on "objective and subjective evidence," the trial judge did not engage in an ex parte contact with Integon. Id. at 280. The trial court denied Tacoma South's motion for recusal.

¶ 16 Thereafter, Tacoma South filed a motion for partial summary judgment, arguing that it established each necessary element of its CPA claim based on Integon's violations of regulations that govern unfair claims settlement practices in insurance, and that it was entitled to judgment in its favor as a matter of law. The only remaining issue to resolve, Tacoma South argued, was damages. The trial court denied Tacoma South's motion for partial summary judgment.

¶ 17 Integon also filed a motion for summary judgment. In ruling on the motion for summary judgment, the trial court considered Integon's motion and attached declarations and exhibits, Tacoma South's response, and Integon's reply and attached declarations and exhibits. The trial court granted Integon's motion, dismissing Tacoma South's claims. Tacoma South appeals.

DISCUSSION

I. MOTION FOR RECUSAL

¶ 18 Tacoma South contends that the trial judge violated several canons of the Code of Judicial Conduct (CJC), and that as a result, his impartiality could reasonably be questioned. Because of the appearance of partiality, Tacoma South asserts that the trial judge abused his discretion in denying Tacoma South's motion to recuse and vacate orders. We disagree.

LEGAL PRINCIPLES A.

¶ 19 Due process entitles parties in both civil and criminal cas...