Oral argument centers on whether insurer’s post-award payment bars IFCA claim in LeBrome v. First National

An appellate panel heard competing arguments over whether an insurer’s payment after an arbitration award prevents a later Insurance Fair Conduct Act (IFCA) claim in 603802 LeBrome v. First National Insurance Company of America.

Counsel for First National argued the trial court should have dismissed the IFCA claim because the insurer paid the arbitration award before the IFCA notice and cause of action were filed. "The insurance fair conduct act authorizes a first party claimant to bring an action for damages, but only when the insurance company has unreasonably denied a claim for coverage or payment of benefits," S3 (Counsel) told the panel, and the statute, he said, concerns an "unreasonable denial," not mere delay.

That view prompted questioning from the panel about whether a persistent lowball offer or lengthy delay can amount to an "effective denial." A questioner asked whether some delays are "essentially an effective denial, like some of the federal case law" that treats certain delays or low offers as denials. S3 responded that treating temporary delays as denials "circumvents the language of the statute," which contains a 20-day notice-and-cure period and, in the drafters' view, excludes unreasonable delay.

Rafael Eriquia, counsel for respondent Jane LeBombe, countered that allowing insurers to pay policy limits only after protracted litigation would defeat IFCA’s remedial purpose. "It makes no sense that the payment of UIM benefits after a fact-finder's award concludes an IFCA claim," Eriquia said, offering a hypothetical in which an insurer refuses to pay $100,000, the insured obtains a multi-million-dollar verdict, and the insurer cures only by paying policy limits afterward.

Eriquia said his client filed an IFCA notice that included the 20-day cure period and an offer to settle for $250,000 (the stated policy limit). He urged the panel that Washington precedent permits extra-contractual claims — including IFCA, common-law bad-faith, and Consumer Protection Act (CPA) claims — to proceed even where an insurer later pays policy limits, and that fact questions about claim-handling are for a jury.

The panel pressed both sides on collateral-estoppel and settlement posture. A questioner asked whether a binding arbitration award or a later settlement could preclude extra-contractual claims; Eriquia pointed to Washington decisions he said are on point (including Leahy v. State Farm and Anderson v. State Farm) and argued those cases support allowing jury consideration of bad-faith and statutory claims despite post-award payments. Eriquia also acknowledged the record lacks a written settlement agreement and relies on his declaration describing a stipulation and dismissal following arbitration.

In brief rebuttal, S3 reiterated that treating temporary denials as IFCA denials would undermine the statute’s notice-and-cure mechanism and argued that, under the record here and the UIM waiver language, a UIM claim is foreclosed as a matter of law in this posture. The panel did not issue a ruling from the bench.

The presiding judge closed the argument, said the remainder of the court’s cases would be considered without oral argument, and adjourned the panel.