In an Unpublished Decision, Alaska Supreme Court Upholds Motion to Dismiss for Failure to State a Claim
Zane Ulin v. GEICO General Insurance Company, James M. and Jane S. Kurth; the Estate of James M. Kurth; and Barry A. Cape (Supreme Court of Alaska, November 27, 2019) Memorandum decisions do not create legal precedent. This case should be treated as persuasive authority only.
Zane Ulin was injured in December 2015 in a hit-and-run accident involving three vehicles, one driven by Barry A. Cape and another owned by James M. Kurth (driven by an unknown driver). The car owned by Kurth and insured by GEICO left the scene of the accident, and Ulin filed a complaint in the Superior Court at Anchorage in December 2017 against all parties involved including GEICO. Ulin alleged that both the unknown driver of Kurth’s vehicle and Cape negligently operated their vehicles, resulting in the accident, but failed to raise any specific cause of action against GEICO. Consequently, GEICO filed a motion to dismiss the suit for failure to state a claim for which any relief could be granted. GEICO does not dispute the fact that it is the insurer of Kurth’s vehicle, but claimed that Alaska state law precluded a plaintiff from bringing suit directly against an alleged tortfeasor’s insurer for bad faith and that a plaintiff cannot sue an alleged tortfeasor’s insurer directly for alleged negligence of its insured.
Ulin responded to GEICO’s motion to dismiss, claiming that GEICO owed Ulin a duty due to the damages caused by GEICO’s insured. Ulin also claimed that GEICO acted in bad faith and unfair dealing with Ulin and Ulin’s counsel regarding Ulin’s claims and requests for information, which Ulin states is an actionable claim. Unswayed by Ulin’s response, the Superior Court granted GEICO’s motion to dismiss for failure to state a claim in April 2018. Ulin filed a motion for reconsideration, stating that the court erred by not considering the Alaska statutes that govern unfair claim settlement practices and failed to recognize that GEICO intentionally violated these statutes by withholding information that GEICO was required to disclose to Ulin. The Superior Court denied this motion in May 2018.
On appeal, Ulin again argued that the Superior Court erred when it granted GEICO’s motion to dismiss for failure to state a claim. Ulin further alleged that it was an abuse of discretion to deny his motion for reconsideration. The Alaska Supreme Court, looking at the facts anew, in the light most favorable to Ulin, rejected Ulin’s claim that GEICO owed him a general duty of good faith and fair dealing. The Court also rejected Ulin’s position that it was an abuse of discretion for the Superior Court to deny the motion for reconsideration because AS 21.36.125 (the statute that governs unfair claim settlement practices) does not create or imply a private cause of action for any violations of the section. AS 21.36.125(b). Because none of Ulin’s claims against GEICO were a cause of action for which relief could be granted, the Court upheld the Superior Court’s order of dismissal for failure to state a claim.
To support its ruling to uphold the Superior Court’s decision that GEICO owed no duty of good faith or fair dealing toward Ulin, the Court cited O.K. Lumber Co. v. Providence Wash. Ins. Co., 759 P.2d 523 (Alaska 1988). In this case, it found that “the duty of good faith and fair dealing is a product of the fiduciary relationship created by the contract between the insurer and its insured.” Id. at 526. Thus, Ulin was unable to make an actionable claim on these grounds against GEICO. Additionally, in O.K. Lumber Co., the Court ruled that AS 21.36.125 does not provide a private cause of action for damages by a third party against the insurer for violation of the Unfair Claim Settlement Practices Act, because the statute does not suggest that the legislature intended to create such a provision. Id. at 527.
Accordingly, the Court affirmed the Superior Court’s judgment.
By Jenna Sutton