46 Trial Lawyer • Spring 2023 By Mona Moghimian OTLA Guardian Envision calling your client with the great news that her personal injury protection (PIP ) carrier has agreed to resume paying her medical bills because of your letter to PIP, which warned PIP its wrongful denial of medical bills violated Oregon’s insurance bad faith laws, giving rise to extracontractual damages. As a result of regaining her PIP benefits, your client expresses she finally feels comfortable completing her doctor’s recommended treatment plan, and moreover, she is relieved she can stop worrying about the potential of owing thousands of dollars for her collision-related medical care. When reading the scenario above, it may be hard to imagine a PIP carrier would stop — or even correct — its Mona Moghimian WASHINGTON VS. OREGON INSURANCE BAD FAITH misconduct with a single letter, except maybe on rare occasions. This would be a pleasant and unusually quick victory, mainly due to the minimal time and effort employed, compared to many typical PIP battles in Oregon.1 However, such quick PIP victories are far from rare for my clients with PIP claims governed by Washington law. This is because Washington state has insurance bad faith laws with a private right of action, protecting insureds and governing insurers. I began my legal career as a personal injury and insurance bad faith attorney in Washington state, before practicing law in Oregon. I now represent individuals who suffered catastrophic injuries in claims arising out of Oregon and/or Washington. Now practicing injury law in both states, I have observed clear differences between Oregon versus Washington PIP misconduct and resulting outcomes. Washington’s insurance bad faith laws arm insureds. Based on my experience with Washington and Oregon claims (especially in Oregon, where PIP is mandatory coverage), the most frequent culprit of insurance bad faith stems from PIP misconduct. My goal with this article is to highlight certain distinctions between Washington and Oregon’s insurance bad faith laws, and my observations of how their differences affect claimants/ insureds, their claims and their attorneys. Significance of PIP misconduct The first paragraph of this article — asking attorneys to envision a scenario where PIP corrects misconduct with a single letter — is based on the real case of my client. My client was a college student living in Washington. She had a Washington auto policy. After being in a collision in Washington, she began medical care for her injuries caused by the crash, which included physical therapy, among other treatment modalities. Prior to retaining me as her attorney, she suddenly discovered her physical therapist was seeking several thousand dollars from her because PIP denied her collision-related physical therapy bills. This young college student was overwhelmed with shock and fear upon realizing she owed thousands of dollars in medical bills. Unfortunately, PIP’s decision to deny my client’s medical bills caused several negative consequences. She began to suffer emotional distress because she was told she owed several thousand dollars for physical therapy. She had no means of paying out of pocket. She understood there was no guarantee of a third party settlement. My client’s physical therapy office repeatedly mailed her invoices seeking payment for the entire outstanding balance. Each invoice highlighted the substantial outstanding balance and the number of days the invoice was past due. Each invoice served as another terrifying
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