Washington State has seen an increase in bad faith claims against insurers regarding settlement of uninsured/underinsured (“UIM”) motorist claims in the past decade. One of the primary reasons for this increase is the development of a duty by a UIM insurer to pay so-called “undisputed” amounts arising out of Beasley v. GEICO Gen. Ins. Co., 517 P.3d 500 (Wash. Ct. App. 2022). While many Washington federal courts have limited the application of bad faith liability based on an insurer’s failure to pay “undisputed” amounts, a recent ruling by the 9th Circuit Court of Appeals goes further to recognize how Beasley applies to a narrow set of circumstances.
On June 16, 2025, the 9th Circuit Court of Appeals issued its decision in Vorhees v. Esurance Insurance Services, Inc., 2025 WL 1682180 (9th Cir. 2025), which affirmed a Washington Federal District Court’s decision dismissing all extracontractual claims against the insurer for its handling of the plaintiff’s UIM claim. The Vorhees case arises out of two-car accident, in which the plaintiff sustained personal injuries and received $10,000 in personal injury protection (“PIP”) payments from Esurance and the $25,000 policy limits from the at-fault driver.
In May 2022, the plaintiff demanded the $100,000 UIM policy limits, claiming $24,918.80 in medical expenses and over $75,000 in lost income. After review of the demand and supporting documentation, Esurance determined the plaintiff’s total damages ranged between $45,000 – $54,000. Esurance informed Plaintiff that it did not dispute the medical expenses and that the range did not include the lost income claim because of insufficient documentation to establish lost income. Between 2021 and 2022, Esurance repeatedly asked the plaintiff to provide documentation to support his lost income claim. The plaintiff only provided incomplete profit and loss records for his handyman business that he had started just months before the accident. Esurance then offered $5,000 for lost income due to the insufficient documentation. Esurance also interviewed the plaintiff to ascertain additional information about the claimed damages. Esurance later increased the total estimated value of the claim to $73,916.56, plus $3,280.20 in Winter’s fees, but minus the PIP and at-fault driver’s payments. Esurance never issued a payment to the plaintiff under the UIM policy. The plaintiff continued to demand the UIM policy limits and filed suit, which included claims for bad faith, violation of Washington’s Consumer Protection Act (“CPA”) and violation of Washington’s Insurance Fair Conduct Act (“IFCA”).
During discovery, the plaintiff took the depositions of various Esurance claims personnel as well as Esurance’s bad faith claim handling expert. During those depositions, the witnesses testified that Esurance’s offer was “fair,” “reasonable,” and “considered,” but never said that it was “undisputed,” and never conceded that Esurance’s failure to pay the offered amount constituted a violation of the CPA or IFCA. During his deposition, the plaintiff testified that he was unsure how he came up with the numbers for his profit and loss records and admitted that his bookkeeping was incomplete and did not give an accurate picture of the business’s activities during the relevant time period.
Esurance moved for summary judgment on the bad faith, CPA, and IFCA claims, which the District Court granted. In doing so, the District Court rejected the plaintiff’s argument that, under Beasley, Esurance’s failure to pay the amount offered to settle the UIM claim was an “undisputed” amount, and that failure to make this payment may create extra-contractual liability. The District Court further noted that the plaintiff had presented no evidence that he actually requested that Esurance tender the supposedly undisputed amounts to him. The plaintiff appealed to the 9th Circuit Court of Appeals, which affirmed.
The 9th Circuit Court of Appeals held that there were no genuine issues of material fact that Esurance acted reasonably because Esurance’s UIM settlement offer was based on a lack of supporting documentation as a result of the plaintiff’s failure, and not a failure of the insurance company. In addressing Beasley, the 9th Circuit Court of Appeals held that Beasley was distinguishable from the present case because there was no testimony by the adjusters who handled the plaintiff’s claim that they did not dispute the amount owed to the plaintiff, but instead conceded only that the offers were “fair” and “reasonable,” and described the offers as “generous” and a “compromise.” The 9th Circuit found that this testimony was insufficient to infer that the UIM settlement offer was an undisputed amount to trigger an obligation to make payment under Beasley.
The Vorhees case not only provides an example of how to limit the application of Beasley for potential extra-contractual liability in UIM litigation, but serves as an example of how important the claim handlers’ depositions can be towards the determination of extra-contractual liability. Even when extra-contractual claims have not been filed in a UIM lawsuit, a plaintiff may amend the complaint to add such claims after a claim handlers’ deposition. As a result, insurers defending against UIM litigation must be adequately prepared for how to avoid Beasley-type questions both before and after suit is filed, even if extra-contractual claims have not yet been asserted.
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