Ruiz & Smart represented the homeowner in a first-party insurance bad faith case arising from a devastating residential fire in Tacoma, Washington. After a multi-day bench trial in the U.S. District Court for the Western District of Washington, the court entered judgment in favor of our client, finding that State Farm Fire and Casualty Company breached its insurance contract and violated Washington’s Consumer Protection Act through unreasonable claims handling.
The case stemmed from a 9 fire that severely damaged a long-held rental property. Although State Farm promptly acknowledged that the loss was covered, its handling of the claim quickly went off track. The insurer cycled the claim through four different adjusters in a matter of months and relied on a preliminary, low-end repair estimate generated through Xactimate software by a preferred contractor. When the insured obtained a higher repair estimate and repeatedly asked State Farm to meet on site with his contractor to reconcile the discrepancies, State Farm refused.
That refusal proved central at trial. As the court found, meaningful communication with the insured’s contractor was a necessary step to properly investigate the scope of loss and move the repairs forward. Instead, State Farm continued to rely on its initial estimate, failed to adequately investigate structural, mold, and code-related issues, and left the property unrepaired while water intrusion and deterioration worsened the damage. The insured was forced to retain his own experts—an industrial hygienist, structural engineer, architect, and remediation professionals—and to advance significant costs out of pocket simply to protect and restore the property.
At trial, Ruiz & Smart presented a detailed factual record showing that our client acted reasonably and transparently at every step, while State Farm’s rigid and hands-off approach caused unnecessary delay, additional damage, and financial harm. The court agreed. In its findings of fact and conclusions of law, the court held that State Farm breached the insurance contract and that its continued reliance on an inadequate estimate, combined with its refusal to meet and confer, violated Washington’s insurance claims-handling regulations and the Consumer Protection Act.
The court awarded our client $160,398.06 in contract damages, representing unpaid covered benefits, and also awarded the full measure of reasonable attorney’s fees and costs—more than $269,000—recognizing that State Farm’s conduct compelled litigation to recover benefits that should have been paid without a lawsuit. While the court declined to award treble damages, it made clear that State Farm’s investigation and valuation of the claim were inadequate and unlawful.
This trial result underscores a core principle of Washington insurance law: insurers must conduct a fair, thorough, and timely investigation and engage meaningfully with their insureds. When they fail to do so, courts will hold them accountable. Ruiz & Smart is proud to have secured this outcome and to have helped our client finally obtain justice after years of delay and frustration.