WPI 320.02 Insurer's Duty of Good Faith—General Duty

Use the bracketed language in the first paragraph for cases in which the duty of equal consideration applies. The instruction may be incorporated with one of the more specific pattern instructions that are designed to apply to particular duties of the insurer.

RCW 48.01.030 sets forth the duty of good faith, providing:

RCW 48.01.030 is relied on by almost every appellate court that has decided issues involving insurance bad faith. It is the legislative cornerstone of insurance bad faith actions in this state. Instructions based on the statute were approved in Safeco Ins. Co. v. JMG Rests., 37 Wn.App. 1, 680 P.2d 409 (1984). See Tank v. State Farm Fire & Cas. Co., 105 Wn.2d 381, 715 P.2d 1133 (1986).

Prior to 2004, the instruction directly quoted this statutory language. The instruction was rewritten in 2004 in order to use clearer language, to more completely state the insurer's duty, and to focus the jurors on the issues in the particular case at hand. In an appropriate case, however, the court may wish to quote the statutory language.

Equal consideration. The test for equal consideration was set out in Tank and continues to be followed. See Mutual of Enumclaw Ins. Co. v. Dan Paulson Constr., Inc., 161 Wn.2d 903, 169 P.3d 1 (2007). At first, the duty of equal consideration was discussed in cases involving an enhanced duty of good faith, such as reservation of rights cases. Recent case law, however, has applied the duty more broadly. See, e.g., St. Paul Fire & Marine Ins. Co., v. Onvia, Inc., 165 Wn.2d 122, 129, 196 P.3d 664 (2008) (type of case: bad faith claim handling under a liability insurance policy); Am. States Ins. Co. v. Symes of Silverdale, Inc., 150 Wn.2d 462, 470, 78 P.3d 1266 (2003) (type of case: bad faith denial of coverage under a property insurance policy); Sharbono v. Universal Underwriters Ins. Co., 139 Wn.App. 383, 411, 161 P.3d 406 (2007) (type of case: liability insurer's bad faith refusal to produce underwriting file); see also Harris, Washington Insurance Law, § 2.02 (3d ed.); DeWolf & Allen, 16A Washington Practice, Tort Law & Practice § 28:9 (4th ed.).

General duty of good faith. To prove bad faith, the policyholder must show that the insurer's conduct was “unreasonable, frivolous, or unfounded.” Am. Best Food, Inc. v. Alea London, Ltd., 168 Wn.2d 398, 412–13, 229 P.3d 693 (2010) (specially noting the disjunctive nature of this standard); Smith v. Safeco Ins. Co. 150 Wn.2d 478, 78 P.3d 1274 (2003); Am. States Ins. Co. v. Symes of Silverdale, Inc., 150 Wn.2d at 469; Barstad v. Stewart Title Guar. Co, 145 Wn.2d 528, 543, 39 P.3d 984 (2002); Griffin v. Allstate Ins. Co., 108 Wn.App. 133, 143–44, 29 P.3d 777 (2001).

An insured need not prove that the insurer's bad faith was intentional or fraudulent. See Coventry Assoc. v. Am. States Ins. Co., 136 Wn.2d 269, 961 P.2d 933 (1998); Sharbono v. Universal Underwriters Ins. Co., 139 Wn.App. at 410–11 (“An insurer may breach its broad duty to act in good faith by conduct short of intentional bad faith or fraud, although not by a good faith mistake.”); Int'l Ultimate, Inc. v. St. Paul Fire & Marine Ins. Co., 122 Wn.App. 736, 756, 87 P.3d 774 (2004).