marinelli and insurance appraisal services hearing demand re … · on september 12, 2016,...

In the Matter of:

BEFORE THE STATE OF WASHINGTON OFFICE OF INSURANCE COMMISSIONER

DocketNo. 16-0155

FILEfi' lGlb NOV -L1 A JJ; 5r; :

Michael R. Marinelli HEARINGS UNIT

ORDER ON THE OIC'S PARTI~~HMrJ[fo~%ss10NER MOTION TO DISMISS · ,

And

Insurance Appraisal Services,

Respondents.

TO: Brian Kreger Kreger Beeghly, PLLC 999 Third Avenue, Suite 3000 Seattle, WA 98104-4088

COPY TO: Mike Kreidler, Insurance Commissioner

Background

James T. Odiorne, J.D., CPA, Chief Deputy Insurance Commissioner Doug Hartz, Deputy Commissioner, Company Supervision Division Jolm Hamje, Deputy Commissioner, Consumer Protection Division AnnaLisa Gellermann, Deputy Commissioner, Legal Affairs Division Office of the Insurance Commissioner PO Box40255 Olympia, WA 98504-0255

Marta Deleon, Assistant Attorney General Attorney General of Washington PO Box40100 Olympia, WA 98504-0100

On Jlme 17, 2016, Drew Stillman, former Insurance Enforcement Specialist with the Office of Insurance Commissioner ("OIC") sent an Order to Cease and Desist and Notice oflntent to Impose Fine ("Order") to Michael R. Marinelli ("Marinelli") and Insurance Appraisal Services ("IAS"), collectively referred to as Respondents. In the Order, the OIC directs Respondents to immediately stop acting or holding out as an adjuster in this state without an adjuster license issued by the OIC, and to stop seeking, pursuing, or obtaining any such business in this state without an adjuster license. In the Order the OIC also seeks to impose a $5,000 fine on Respondents jointly and severally.

On September 12, 2016, Respondents filed a demand for hearing with the OIC, by and through their attorney Brian Kreger, of Kreger Beeghly, PLLC, seeking the following: That the OIC retract its Order; that Commissioner Kreidler retract his allegedly "wrongful and damaging" press release picked up by the NAIC News Wire; an order directing that Commissioner Kreidler issue a public apology to them; and monetary damages for loss of business, loss of business opportunity, interference with business relationships, and harm to personal and professional reputation. Respondents argue that they conduct business only as damage appraisers, not as insurance adjusters.

At the prehearing conference the OIC requested that it be allowed to file a motion regarding whether the Respondents' claims for monetary damages against the OIC for loss of business, loss of business opportunity, interference with business relationships, and harm to personal and professional reputation are within the scope of this adjudicative proceeding, and is an issue that can be decided by the undersigned.

Consistent with the Notice of Hearing, filed in this matter on October 5, 2016, and the briefing schedule set forth therein, on October 14, 2016, the OIC filed a Partial Motion to Dismiss ("Motion") Respondents' claims of monetary damages for loss of business opportunity, interference with business relationships, and harm to personal and professional reputation, alleging among other things, that Respondents have brought these claims in an improper venue, and have failed to state claims upon which relief may be granted. On October 21, 2016, Respondents filed their Response to the OIC's Motion ("Response"). On October 27, 2016, the OIC filed its Reply to the Response. Having considered these pleadings, I now make the following ruling pursuant to RCW 34.05.437(1) and WAC 10-08-200(4).

Analysis

A. The Commissioner's authority under the insurance code

RCW 48.01.010 explains that RCW Title 48 constitutes the insurance code. RCW 48.01.020 addresses the scope of the insurance code, and states: "All insurance and insurance transactions in this state, or affecting subjects located wholly or in part or to be performed within this state, and all persons having to do therewith are governed by this code." RCW 48.02.060 sets out the general powers and duties of the insurance commissioner of the state of Washington ("Commissioner"), and states in part:

(1) The commissioner has the authority expressly conferred upon him or her by or reasonably implied from the provisions of this code.

(2) The commissioner must execute his or her duties and must enforce the provisions of this code.

(3) The commissioner may: (a) Make reasonable rules for effectuating any provision of this code, except those

relating to his or her election, qualifications, or compensation. Rules are not effective prior to their being filed for public inspection in the commissioner's office.

Order on the OIC's Partial Motion to Dismiss No. 16-0155 Page2

(b) Conduct investigations to determine whether any person has violated any provision of this code.

( c) Conduct examinations, investigations, hearings, in addition to those specifically provided for, useful and proper for the efficient administration of any provision of this code.

(Emphasis added).

RCW 48.02.060 is clear that the Commissioner's authority is limited to the provisions of the insurance code (RCW Title 48). As the court states in Premera v. Kreidler, 133 Wn. App. 23, 42, 131 P .3d 93 0 (2006), the position of the Commissioner was created to protect the public as to insurance matters, and the Commissioner garners his authority from RCW Title 48 (i.e., the insurance code):

To protect the public in insurance matters, "the legislature created the office oflnsurance Commissioner and conferred upon that office the duty of enforcing the provisions of the code." Ins. Co. of N Am. v. Kueckelhan, 70 Wn.2d 822, 831, 425 P.2d 669 (1967). To fulfill this mandate, it vested the Commissioner with broad authority. Nat'! Fed'n of Retired Persons, Inc. v. Ins. Comm'r, 120 Wn.2d 101, 109, 838 P.2d 680 (1992). The Commissioner has authority conferred by and reasonably implied from the insurance statutes. RCW 48.02.060(1 ); Nat'! Fed'n of Retired Persons, 120 Wn.2d at 109.

RCW 48.02.080(3) provides the Commissioner with authority to issue cease and desist orders, and states in part: " If the commissioner has cause to believe that any person is violating or is about to violate any provision of this code or any regulation or order of the commissioner, he or she may: a) issue a cease and desist order; .... " RCW 48.17.063(4) states that ifthe Commissioner believes that any person has violated the provisions of RCW 48.17.060 (e.g., holding himself or herself out as an insurance adjuster while unlicensed), the Commissioner may:

(i) Issue and enforce a cease and desist order in accordance with the provisions of RCW 48.02.080; (ii) Suspend or revoke a license; and/or (iii) Assess a civil penalty of not more than twenty-five thousand dollars for each violation, after providing notice and an opportunity for a hearing in accordance with chapters 34.05 and 48.04 RCW.

RCW 48.04.010 explains that the Commissioner may and/or shall hold hearings for certain purposes within the scope of the insurance code, and requires that those demanding a hearing specify the grounds relied upon as the basis for relief requested, and states in part:

(1) The commissioner may hold a hearing for any purpose within the scope of this code as he or she may deem necessary. The commissioner shall hold a hearing:

(a) If required by any provision of this code; or (b) Except under RCW 48.13.475, upon written demand for a hearing made by any

person aggrieved by any act, threatened act, or failure of the commissioner to act, if such

Order on the OIC's Partial Motion to Dismiss No. 16-0155

failure is deemed an act under any provision of this code, or by any report, promulgation, or order of the commissioner other than an order on a hearing of which such person was given actual notice or at which such person appeared as a party, or order pursuant to the order on such hearing.

(2) Any such demand for a hearing shall specify in what respects such person is so aggrieved and the grounds to be relied upon as basis for the relief to be demanded at the hearing.

(Emphasis added). See also WAC 284-02-0?0(l)(a)("Adjudicative proceedings include both contested case hearings and other types of adjudicative proceedings which are required by law. Contested case hearings include appeals from disciplinary actions taken by the commissioner.")

The OrC's issuance of the Order is based directly upon the Commissioner's authority in RCW 48.02.060, RCW 48.02.080(3), and RCW 48.17.063(4), and his ability to issue cease and desist orders, and impose fines. As envisioned by WAC 284-02-0?0(l)(a), Respondents have appealed the underlying basis of the Order issued by the ore. However, the Respondents also demand a hearing before the ore Hearings Unit to request damages in tort. However, nothing in the insurance code (RCW Title 48) permits the. Commissioner to consider actions for damages in tort against the ore, or award damages against the ore to litigants following an administrative hearing per RCW 48.04.010. The Administrative Procedure Act ("APA"), or RCW Ch. 34.05, and case law decided thereunder, is clear that actions for damages or compensation are not a proper subject of administrative hearings before agencies.

B. TheAPA

RCW 34.05.413(1) touches upon the reality that an agency's ability to commence an adjudicative proceeding flows from its jurisdiction, and states: "Within the scope of its authority, an agency may commence an adjudicative proceeding at any time with respect to a matter within the agency's jurisdiction." WAC 284-02-070(2)(a) states: "Provisions applicable to adjudicative proceedings are contained in chapter 48.04 RCW and [the APA], and chapter 10-08 WAC." (Brackets added).

RCW 34.05.510 explains that the APA establishes a process for judicial review of agency actions, except where the sole issue is a claim for money damages or compensation, and the agency lacks authority to decide such claims, and states in part:

This chapter establishes the exclusive means of judicial review of agency action, except:

(1) The provisions of this chapter for judicial review do not apply to litigation in which the sole issue is a claim for money damages or compensation and the agency whose action is at issue does not have statutory authority to determine the claim.

(Emphasis added).

The language of both RCW 34.05.413(1) and RCW 34.05.510(1) demonstrate that the legislature anticipated that agencies would be confronted with claims for damages or compensation that they

Order on the ore's Partial Motion to Dismiss No. 16-0155 Page4

do not have statutory authority or jurisdiction to decide. RCW 34.05.570(3) further cements this conclusion, noting that in reviewing agency orders in adjudicative proceedings, the courts must evaluate, among other things, whether the order( s) exceed the statutory authority or jurisdiction of the agency, stating in part: "Review of agency orders in adjudicative proceedings. The court shall grant relief from an agency order in an adjudicative proceeding only if it determines that: ... (b) The order is outside the statutory authority or jurisdiction of the agency conferred by any provision of law .... "

With regards to potential relief available to litigants in an APA proceeding, in Relchter v. Dep 't of Social and Health Svcs., 180 Wn.2d 102, 147 n. 16, 323 P.3d 1036 (2014) (Stephens, J, dissenting op.) the court stated: "The AP A generally does not provide for monetary damages." See also Creveling v. Dep 't of Fish and Wildlife, 142 Wn. App. 827, 833, 177 P.3d 136 (2008)("Additionally, Mr. Creveling's claim for damages cannot be compensated through the administrative appeal of an agency order."); Reninger v. Dep 't of Corrections, 79 Wn. App. 623, 637, 901 P.2d 325 (1995)("As DOC acknowledges, there will always be a disparity between the relief available in a tort lawsuit as compared to that available following an administrative appeal."); Reninger v. Dep 't of Corrections, 134 Wn.2d 437, 459, 951P.2d782 (1998)(Sanders, J., dissenting op.)(" ... [T]he P AB had no jurisdiction to even consider a cause of action for tortious interference with business expectancy, much less provide a remedy in damages.").

In Washington Trucking Ass'ns v. Emp't Security Dep't, 192 Wn. App. 621, 648-650, 369 P.3d 170 (2016), the court addressed the limitations on remedies (e.g., damages) an administrative law judge ("ALJ") at the Employment Security Department could provide to provide to litigants during an adjudicative proceeding, stating in part:

[23, 24] ~60 Under the [Employment Security Act ("ESA"), RCW Title 50], the ALJ's. authority is limited. As noted above, RCW 50.32.050 authorizes the ALJ only to "affirm, modify or set aside the notice of assessment." On review, the superior court's authority similarly is limited to issues relating to the assessment. Therefore, to the extent that WTA and the Carriers are seeking damages under § 1983 that are independent of the amount of the challenged assessments, the ESA's administrative process does not afford an adequate remedy.

~61 HN33 WTA and the Carriers allege in their complaint that the ESD employees' failure to properly conduct the audits resulting in the assessments violated their due process rights and that the employees' arbitrary and capricious conduct violated their due process and equal protection rights. These allegations can be interpreted as not depending on the invalidity of the assessments. WTA and the Carriers arguably are alleging that the named employees' conduct violated due process regardless of whether the assessments were valid.

~62 WTA and the Carriers request damages under § 1983, but the complaint does not specify the type of damages claimed. As discussed above, the principle of comity bars all § 1983 claims asserting damages for the amount of the challenged assessments. However, the complaint could be interpreted as seeking damages independent of the validity of the assessments. For example, a carrier could allege that it lost income and incurred other


financial losses apart from the amount of the assessment because the assessments and/or audits disrupted its relationship with owner/operators.

~63 WTA and the Carriers have no ability to argue before the ALJ that they are entitled to damages that are unrelated to the amount of the challenged assessment. RCW 50.32.050 simply does not authorize the ALJ to award such damages. The ALJ can only modify or set aside the assessment, which would result in a tax refund. Nor does the AP A authorize the award of such damages on judicial review. RCW 34.05.574. Therefore, the ESA's and AP A's administrative process does not afford an adequate remedy for these types of§ 1983 damages.

[25, 26] ~64 WTA and the Carriers specifically allege two types of damages that are unrelated to the amount of the challenged assessment. First, they allege that they incurred costs and attorney fees in defending against the incorrect assessments. RCW 50.32.050 does not authorize the· ALJ to award reasonable attorney fees. Second, WTA and the Carriers seek an award of punitive damages under§ 1983. Again, RCW 50.32.050 does not authorize the ALJ to award punitive damages.

~65 We hold that WTA and the Carriers do not have an adequate state law remedy for damages that are caused by ESD's assessments or audit procedures that are unrelated to the amount of the challenged assessment. Accordingly, we hold that the principle of comity does not bar a § 1983 claim asserting such damages.

(Emphasis and brackets added).

As in Washington Trucking Ass 'ns, Respondents cannot argue before the undersigned that they are entitled to damages in tort, including those for loss of business, loss of business opportunity, interference with business relationships, and harm to personal and professional reputation, that are unrelated to the lawfulness of the Order. As explained in Rekhter, Creveling, and both Reninger decisions, the ore does not have jurisdiction to consider Respondents' causes of action in tort, or provide a remedy in the form of damages. The proper way for Respondents to assert such causes of action against the ore and the state of Washington, and ultimately litigate the same, is via a claim, as state law requires.

C. Tort claims against the state of Washington

RCW 4.92.100(1) explains that claims for tortious conduct against the state, its officers, or employees, must be presented to the office of risk management, and states in part:

All claims against the state, or against the state's officers, employees, or volunteers, acting in such capacity, for damages arising out of tortious conduct, must be presented to the office of risk management. A claim is deemed presented when the claim form is delivered in person or by regular mail, registered mail, or certified mail, with return receipt requested, or as an attachment to electronic mail or by fax, to the office of risk management. For

Order on the Or C's Partial Motion to Dismiss No. 16-0155

claims for damages presented after July 26, 2009, all claims for damages must be presented on the standard tort claim form that is maintained by the office of risk management.

(Emphasis added).

RCW 4.92.110 provides for a mandatory 60 day waiting period from the date a claim is presented to the office of risk management for actions against the state, and states in part:

No action subject to the claim filing requirements of RCW 4. 92.100 shall be commenced against the state, or against any state officer, employee, or volunteer, acting in such capacity, for damages arising out of tortious conduct until sixty calendar days have elapsed after the claim is presented to the office of risk management in the department of enterprise services. The applicable period of limitations within which an action must be commenced shall be tolled during the sixty calendar day period. For the purposes of the applicable period of limitations, an action commenced within five court days after the sixty calendar day period has elapsed is deemed to have been presented on the first day after the sixty calendar day period elapsed.

RCW 4. 92. 010 addresses the venue of actions against the state of Washington for tortious conduct and states in part: "Any person or corporation having any claim against the state of Washington shall have a right of action against the state in the superior court." (Emphasis added). Finally, RCW 4.92.030 explains who represents the state in such actions, and states: "The attorney general or an assistant general shall appear and act as counsel for the state. The action shall proceed in all respects as in other actions or proceedings .... "

In Wells Fargo Bank, NA v. Dep't of Revenue, 166 Wn. App. 342, 358, 271P.3d268 (2012), the court attempted to harmonize the provisions ofRCW 4.92.010 and the APA, stating in part:

Here, the legislature created a general right to sue the State under RCW 4.92.010. But it specifically set limitations on challenges to state agency actions, expressly stating its intent that the AP A "establishe[ d] the exclusive means of judicial review of agency action." RCW 34.05.510. Harmonizing RCW 4.92.010 and the APA, the legislature intended to limit legal claims involving agency actions to the AP A's procedures. To the extent RCW 4.92.010 and the AP A conflict, the AP A's specific procedures control.

(Emphasis added).

There is no conflict in this matter between RCW 4.92.010 and the AP A. Respondents' request for monetary damages for loss of business, loss of business opportunity, interference with business relationships, and harm to personal and professional reputation, contained within its demand for hearing, is not a request to reverse agency action (e.g., to block the cease and desist order, or have the proposed fine eliminated), the proper subject of an adjudicative proceeding. Rather, Respondents' request for damages represents a claim against the state for tortious conduct governed by RCW Ch. 4.92. On the other harid, the OIC's issuance of a cease and desist order, and proposed imposition of a fine, contained within the Order, and Respondents challenge of the


same, is the proper subject of the adjudicative proceeding before the undersigned, since it involves a review of agency action.

D. Exhaustion of administrative remedies

At 12:10-13 of their Response, Respondents argue that in Laymon v. Dep't of Natural Res., 99 Wn. App. 518, 994 P.2d 232 (2000), appellants failed in their action for damages against the state for negligence, because they failed to bring such claim to the agency in question first for resolution. Respondents also assert at 12:17-22 through 13;2 of their Response that the court's ruling in Laymon makes it clear that state agencies are empowered to hear all claims of an aggrieved person, including tort claims, unless the agency's enabling legislation specifically restricts or prohibits such jurisdiction. I do not read Laymon as Respondents do, and also find that additional case law suggests otherwise.

Appellants in Laymon owned forested land they planned to develop a residential housing tract on. In August 1993, an adjacent landowner to the appellants, opposed to their development plans, reported to the Washington State Department of Fish and Wildlife ("DFW") the existence of a bald eagle on his property. In September 1993, the Department of Natural Resources ("DNR") approved appellant's development project, and in December 1993 appellants began logging operations on their property. On January 13, 1994, a DNR forester learned of the reported eagle nest, and observed the nest with a DFW biologist who surmised it was possibly an eagle nest. On January 18, 1994, the DNR forester served appellants with a stop work order, alleging that they were conducting logging within Y. mile of the known bald eagle nest. The stop work order required appellants to stop immediately all logging within Y. mile of the know bald eagle nest until a bald eagle management plan was written and approved by DFW. The stop work order provided appellants with the opportunity to appeal the stop work order to the Forest Practices Appeals Board. Apparently, on the advice of DNR employees, appellants never appealed the stop work order, citing the fact that such an appeal would be useless because the stop work order concerned a bald eagle management plan, which was within DFW's control, not DNR's. About 10 days after DNR issued the stop work order, DFW presented appellants with a draft bald eagle management plan that contained significant restrictions on development. Appellants refused to sign the plan. When appellants' financial backers learned about the terms of the plan, they withdrew from the project. In June 1994, DFW determined that the bald eagle nest never existed. In 1997, appellants filed a negligence action, including a claim for negligent supervision, against DFW, DNR, and the state of Washington.

In Laymon, the state of Washington moved for summary judgment, arguing that appellants, among other things, failed to exhaust their administrative remedies. The trial court granted the state's motion on this basis, and appellants appealed. In affinning the trial court, the court reasoned in part as follows, stating;

It is well settled that a party aggrieved by governmental action must exhaust all available administrative remedies before filing suit. See CLEAN v. City of Spokane, 133 Wn.2d 455, 465, 947 P.2d 1169 (1997), cert. denied, 525 U.S. 812, 119 S. Ct. 45, 142 L. Ed. 2d 35 (1998); Smoke v. City of Seattle, 132 Wn.2d 214, 223-224, 937 P.2d 186 (1997). "Where


an agency has an appeal procedure in place, an aggrieved person is required to seek redress under that procedure before seeking judicial review." CLEAN, 133 Wn.2d at 465. Where, as here, the aggrieved party fails to show that it attempted to use the appropriate administrative appeals process, the trial court may properly dismiss the claim. Id.

Moreover, a government defendant's claim that a plaintiff failed to exhaust administrative remedies before filing a tort action is really a question of proximate cause. Wolfe v. Bennett PS & E, Inc., 95 Wn. App. 71, 81 n.7, 974 P.2d 355, review denied, 139 Wn.2d 1003, 989 P.2d 1140 (1999). Proximate cause consists of cause in fact and legal causation. City of Seattle v. Blume, 134 Wn.2d 243, 251, 947 P.2d 223 (1997); Hartley v. State, 103 Wn.2d 768, 777, 698 P.2d 77 (1985).

[3] "Legal causation rests on policy considerations determining how far the consequences ofa defendant's acts should extend." Blume, 134 Wn.2d at 252; Wolfe, 95 Wn. App. at 81. A court "must decide based on traditional principles of proximate causation whether or not a defendant was the cause of the injuries suffered and whether the duty to mitigate was met." Blume, 134 Wn.2d at 260. Consequently, a plaintiffs failure to employ available legal remedies to avoid resulting damages is analogous to a failure to mitigate damages. See id.

* * * Moreover, DNR's representations and the text of tl1e bald eagle management plan itself provided clear notice that other administrative remedies were then available. Under WAC 232-12-292(5.2.2), DFW could modify the plan in response to "changing eagle and landowner circumstances." And WAC 232-12-292(7.1, 7 .2) allows the landowner to refer the plan to the bald eagle oversight committee if the landowner and DFW do not agree as to an acceptable plan within 30 days. Finally, the aggrieved landowner may initiate a formal administrative appeal. WAC 232-12-292(7.4).

[8] "Where the record fails to show that an aggrieved party has attempted to use the administrative appeals process, the court will conclude that no appeal was made." CLEAN, 133 Wn.2d at 465 (citing Citizens for Clean Air v. City of Spokane, 114 Wn.2d 20, 27, 785 P.2d 447 (1990)). Apart from the Lavmons' brief contacts with Rogauskas and Gano, they made no effort to challenge administratively either the stop work order or the bald eagle management plan. Thus, the trial court did not err in determining that the Laymons failed to pursue available administrative remedies and, consequently, did not err in granting summary judgment. CLEAN, 133 Wn.2d at 465.

Laymon, 99 Wn. App. 518, 524-525, 527-528.

The coutt in Laymon never concluded that a cause of action for negligence, or other actions sounding in tort, should be handled by agencies whose orders may be appealed. Rather, in Laymon, the court simply concluded that appellants therein did not take advantage of their administrative negotiation and appeal rights concerning a DFW bald eagle management plan, instead choosing to


file suit in court. In Laymon the court held that one could not conclude that either DFW or DNR was the proximate cause of appellants' damages since the appellants made no effort to mitigate those damages by pursuing administrative remedies concerning either the stop work order or bald eagle management plan. Unlike appellants in Laymon, Respondents have timely appealed the OIC's issuance of the Order. Additional case law demonstrates that the courts do not require that litigants exhaust administrative remedies as a prerequisite to all lawsuits against the state of Washington, especially where the agency in question cannot provide the relief requested.

In Milligan v. Thompson, 90 Wn. App. 586, 953 P.2d 112 (1998), respondents, including the Department of Social and Health Services, argued that employees need not exhaust administrative remedies when bringing an action under Washington's Law Against Discrimination, Title VII, or 42 U.S.C. §§ 1981, 1983, or 1985(3), and therefore the statute of limitations to bring such actions is not tolled during the period of time such remedies are sought. Agreeing with respondents, in Milligan the court dismissed appellant's claims as time barred, stating in part:

[12] [13] [14] Generally, a state civil service employee subject to an adverse employment action must present his or her claim to the PAB for resolution before bringing an action to court. RCW 41.06.170(2); Kreager v. Washington State Univ., 76 Wn. App. 661, 664, 886 P.2d 1136 (1994); Kringel v. Department of Social & Health Serv., 47 Wn. App. 51, 53, 733 P.2d 592 (1987). Exhaustion is required when: (1) a claim is cognizable in the first instance by an agency alone; (2) the agency has clearly established mechanisms for the resolution of complaints by aggrieved parties; and (3) the administrative remedies can provide the relief sought. South Hollywood Hills Citizens Ass'n v. King County, 101 Wn.2d 68, 73, 677 P.2d 114 (1984). The exhaustion doctrine furthers the policy of giving deference to an administrative body possessing expertise in areas outside the conventional experience of judges. Id. at 73.

But Congress and the Washington Legislature intended that statutory remedies protecting civil rights and preventing discrimination be independent of state administrative remedies and collective bargaining rights. See Patsy v. Board of Regents, 457 U.S. 496, 502-07, 102 S. Ct. 2557, 73 L. Ed. 2d 172 (1982); Morales v. Westinghouse Hanford Co., 73 Wn. App. 367, 371, 869 P.2d 120 (1994). Thus, Milligan was not required to exhaust his administrative remedies before bringing a cause of action under Washington's Law Against Discrimination, Bruce v. Northwest Metal Prod. Co., 79 Wn. App. 505, 513, 903 P.2d 506 (1995), review denied, 129 Wn.2d 1014 (1996); Morales, 73 Wn. App. at 371; or under any of the federal civil rights laws, Patsy, 457 U.S. 502-07; Johnson v. Greater S.E. Community Hosp. Corp., 951 F.2d 1268, 1276 (D.C. Cir. 1991); Doe ex rel. Doe v. St. Joseph's Hosp., 788 F.2d 411, 425 (7th Cir. 1986).

Nor was Milligan required to exhaust his administrative remedies before bringing his tort actions because there is no showing that those claims were initially cognizable by the P AB alone, were within its special expertise, or that the P AB could provide the relief he sought. See South Hollywood Hills, 101 Wn.2d at 73; see also WAC 358-30-050 and WAC 358-30-180. Because Milligan did not need to exhaust administrative remedies, the statute of


limitations was not tolled during the time of his PAB appeal. Consequently, the trial court properly dismissed his predemotion claims as time barred.

90 Wn. App. at 596-597 (emphasis added).

Similar to the employees in Milligan, and as explained in B. above, Respondents are not required to exhaust their administrative remedies by having their actions in tort for damages considered by the undersigned during this adjudicative proceeding. To reiterate, the Commissioner does not have authority under the insurance code (RCW Title 48) to consider damages claims sounding in tort, or award damages the Respondents seek. Rather, as explained in C. above, RCW Ch. 4.92 is the proper channel for Respondents to pursue claims in tort for damages.

The OIC's Motion is granted.

WILLIAM PARbEE Presiding Officer


CERTIFICATE OF SERVICE

The undersigned certifies under the penalty of perjury under the laws of the state of

Washington that I am now and at all times herein mentioned, a citizen of the United States, a.

resident of the state of Washington, over the age of eighteen years, not a party to or interested in

the above-entitled action, and competent to be a witness herein.

On the date given below I caused to be filed and served the foregoing Order on the OIC's

Partial Motion to Dismiss on the following people at their addresses listed below:

Brian Kreger Kreger Beeghly, PLLC 999 Third Avenue, Suite 3000 Seattle, WA 98104-4088

Mike Kreidler, Insurance Commissioner James T. Odiorne, J.D., CPA, Chief Deputy Insurance Commissioner Doug Hartz, Deputy Commissioner, Company Supervision Division John Hamje, Deputy Commissioner, Consumer Protection Division AnnaLisa Gellermann, Deputy Commissioner, Legal Affairs Division Office of the Insurance Commissioner PO Box40255 Olympia, WA 98504-0255

Marta Deleon, Assistant Attorney General Attorney General of Washington PO Box40100 Olympia, WA 98504-0100

Dated this ~ay of November, 2016, in Tumwater, Washington.

Do< thy '""""m -Toyl~¥/ Paralegal Hearings Unit


marinelli and insurance appraisal services hearing demand re … · on september 12, 2016,...

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