Opinion
No. 30140-7-II (consolidated with 30210-1)
Filed: December 7, 2004 UNPUBLISHED OPINION
Appeal from Superior Court of Pierce County. Docket No: 02-2-14103-5. Judgment or order under review. Date filed: 03/14/2003.
Counsel for Appellant(s), Gailann Y. Stargardter, Reed McClure, Two Union Square, 601 Union St Ste 1500, Seattle, WA 98101-1363.
Counsel for Respondent(s), Dan Matthew Albertson, Attorney at Law, 711 Court a Ste 200, Tacoma, WA 98402-5228.
State Farm Mutual Insurance Company appeals the trial court's denial of its motion for change of venue in Carla Boswell's suit for bad faith and damages for its administration of her insurance claim following an automobile accident. State Farm asserts that the insurance policy and RCW 4.12.030 require Boswell to file the action in King County because the action requests the appointment of an arbitrator. We hold that the action is primarily one in tort, not in contract, and therefore Boswell's choice of venue under RCW 4.12.025 is proper for the tort claims, but that arbitration must take place in King County pursuant to the terms of the insurance contract.
Facts
King County resident Carla Boswell was injured in an automobile collision in King County. State Farm is her insurer. Boswell submitted a claim to State Farm under the personal injury protection (PIP) provision of her policy. State Farm paid Boswell's collision related expenses until it requested an examination by a physician of its choice to determine the necessity for her treatment. Thereafter, Boswell and State Farm disagreed about the necessity of additional examinations, the qualifications of the examiners, and the payment of expenses. A dispute arose over $300 of Boswell's expenses that State Farm refused to pay.
Boswell's State Farm PIP coverage requires arbitration of disputes about the amount of claims. The policy also requires that arbitration take place in the county in which the insured resides and dictates that the parties jointly select an arbitrator. If they are unable to agree, either party may request a judge of a court of record in the county where the arbitration is pending to select the arbitrator. Boswell notified State Farm of her request for arbitration and of her choice for the arbitrator. Boswell alleges that State Farm untimely notified Boswell that it disagreed with her choice of arbitrator.
Boswell sued State Farm for bad faith and damages in Pierce County Superior Court. She alleged State Farm had engaged in a pattern and practice of bad faith by failing to pay under the PIP provisions of her policy and by requesting that she be examined by unqualified health care providers. Boswell claimed that State Farm did not respond to her arbitrator nomination in a timely manner and that this failure demonstrated State Farm's pattern of bad faith. Boswell also requested that the court appoint an arbitrator.
State Farm moved to transfer venue to King County Superior Court. It argued that the policy language controlled venue and, in the alternative, change of venue was necessary for the convenience of witnesses and the ends of justice. Boswell replied that under RCW 4.12.025, the plaintiff may elect to file an action in any county where the defendant does business, and State Farm does business in Pierce County.
The trial court denied State Farm's motion to transfer venue, ruling that RCW 4.12.025(3) allows the plaintiff to sue a corporate defendant in any county where the corporation has its residence.
Analysis I. Insurance Contract Venue for Arbitration
State Farm argues that the following provision of Boswell's insurance policy dictates the arbitration location and venue for disagreements over arbitrators.
1. Deciding Amount
The amount due under this coverage shall be decided by agreement. If the insured and we cannot agree, it will be decided by arbitration upon mutual written consent of both parties. Both parties shall jointly select a competent and impartial arbitrator. If unable to agree on the arbitrator within 30 days, either party may request a judge of a court of record in the county in which the arbitration is pending to make the selection. The written decision of the arbitrator shall be binding on each party.
The arbitration shall take place in the county in which the insured resides unless the parties agree to another place. State court rules governing procedure and admission of evidence shall be used.
Clerk's Papers at 22.
We construe insurance policies as contracts, interpreting them as a matter of law. Allstate Ins. Co. v. Peasley, 131 Wn.2d 420, 423-24, 932 P.2d 1244 (1997). We interpret the language of an insurance contract in the way it would be understood by the average insurance purchaser. State Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477, 480, 687 P.2d 1139 (1984). We give undefined terms their ordinary and common meaning, not their technical, legal meaning. Peasley, 131 Wn.2d at 424 (citing Kish v. Ins. Co. of North Am., 125 Wn.2d 164, 170, 883 P.2d 308 (1994)). Clear and unambiguous language must be enforced as written. Washington Pub. Util. Dists. Utils. Sys. v. Pub. Util. Dist. No. 1 of Clallum County, 112 Wn.2d 1, 10, 771 P.2d 701 (1989).
The policy language here is clear and unambiguous about where arbitration, or a dispute about arbitration, must occur in the county where the plaintiff resides. And Boswell agrees that arbitration and any dispute over choice of arbitrator should occur in King County, her county of residence. But she argues that a dispute over the arbitrator is not the issue; rather, her complaint is for bad faith, and the policy is silent as to venue for claims sounding in tort.
A plaintiff's choice of forum should rarely be disturbed. J.H. Baxter Co. v. Cent. Nat'l Ins. Co. of Omaha, 105 Wn. App. 657, 661, 20 P.3d 967 (2001); see Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507-08, 67 S. Ct. 839, 91 L. Ed. 1055 (1947). Any action against an insurance company by an insured upon the contract shall be brought in the county where the cause of action arose. RCW 48.05.220. But it has long been the law in Washington that an action against an insurance company by an insured for negligence and bad faith constitutes a tort claim, not a contract claim, for purposes of venue. Murray v. Aetna Cas. Sur. Co., 61 Wn.2d 618, 624, 379 P.2d 731 (1963); see also Murray v. Mossman, 56 Wn.2d 909, 912, 355 P.2d 985 (1960); Tyler v. Grange Ins. Ass'n, 3 Wn. App. 167, 172, 473 P.2d 193 (1970). There is no evidence in the record that the State Farm policy has a venue selection clause regarding tort actions.
II. Venue for Tort Action
Boswell cites the general venue statute, RCW 4.12.025, as controlling here:
(1) For the purpose of this section, the residence of a corporation defendant shall be deemed to be in any county where the corporation: (a) Transacts business; (b) has an office for the transaction of business; (c) transacted business at the time the cause of action arose; or (d) where any person resides upon whom process may be served upon the corporation.
. . . .
(3) The venue of any action brought against a corporation, at the option of the plaintiff, shall be: (a) In the county where the tort was committed; (b) in the county where the work was performed for said corporation; (c) in the county where the agreement entered into with the corporation was made; or (d) in the county where the corporation has its residence.
RCW 4.12.025. This statute gives the plaintiff the right to choose venue and allows the plaintiff to bring a tort action in any county where a corporate defendant does business, which for State Farm includes Pierce County. State Farm's brief acknowledges that RCW 4.12.025 is the appropriate venue statute for tort actions.
Under the second sentence of RCW 4.12.025(1), Pierce County is a county of State Farm's `residence' because it `transacts business' in Pierce County.
Nonetheless, along with the bad faith tort claim, Boswell's complaint asks the court to choose an arbitrator in accord with the insurance policy provisions. Because her complaint contains both a request to enforce the arbitrator selection portion of the insurance contract and multiple tort claims, we must first decide which type of claim predominates in order to determine what rule controls venue.
III. Mixed Action
We decide whether an action is primarily in contract or tort by examining the essential allegations of the complaint, rather than the form or title the plaintiff adopted or counsel's or the trial court's understanding. Yeager v. Dunnavan, 26 Wn.2d 559, 562, 174 P.2d 755 (1946). We consider the complaint as a whole and view particular words or allegations in context. Yeager, 26 Wn.2d at 562. Here, the complaint sounds primarily in tort.
When a contract for services forms a relationship between the parties and, in attempting to perform the promised services, one of the parties violates a duty imposed by law as a result of the relationship, then the action sounds in tort. Yeager, 26 Wn.2d at 562 (citing Compton v. Evans, 200 Wash. 125, 132, 93 P.2d 341 (1939)). In such cases, the contract is considered merely the `inducement' of the relationship that gave rise to the legal duty, and the basis of the claim is a breach of the duty, not a breach of the contract. Yeager, 26 Wn.2d at 562; see Murray 61 Wn.2d at 622; Thao v. Control Data Corp., 57 Wn. App. 802, 807, 790 P.2d 1239 (1990).
Here, as an insurer, State Farm has a duty to administer the terms of its insurance policies in good faith. See Tank v. State Farm Fire Cas. Co., 105 Wn.2d 381, 385-86, 715 P.2d 1133 (1986). Boswell alleges that State Farm breached its good faith duty in administering the PIP provision of her insurance policy by failing to pay claims, by requesting that she submit to medical examinations by unqualified providers, and by delaying response to her requests for an arbitrator. These claims sound in tort. Boswell alleges that State Farm breached its contractual duty to notify her of its disapproval of her choice of arbitrator within 30 days, as further basis of her bad faith claim. In this, along with other allegations, Boswell's action primarily claims that State Farm breached its duty of good faith and fair dealing, which sounds in tort.
We are not asked to consider the merits of any claim and would decline to do so at this point.
Only one paragraph of Boswell's complaint requests that the court appoint an arbitrator under the terms of the contract, and although this request does not determine the nature of the action, Boswell must also abide by the terms of the contract with regard to arbitration. The proper recourse for State Farm's alleged failure to timely respond to her nomination of an arbitrator was to ask King County Superior Court to appoint an arbitrator. Thus, Boswell can dismiss that request for relief or may sever it and proceed in King County for the appointment. Orsi v. Aetna Ins. Co., 41 Wn. App. 233, 246, 703 P.2d 1053 (1985) (complaint may be amended under CR 15 to allow dismissal of a claim); see also CR 21 (`Any claim against a party may be severed and proceeded with separately.').
But Boswell's bad faith claim for failure to timely respond to her request for appointment of a particular arbitrator would remain part of her Pierce County tort claim.
We hold, therefore, that Boswell's complaint is primarily a tort action. Accordingly, RCW 4.12.025 governs venue and the choice is Boswell's with regard to the tort claims. Because State Farm does business in Pierce County, the trial court did not err in allowing Boswell to sue State Farm in Pierce County on the tort claims, but the appointment of an arbitrator must occur in King County.
IV. Transfer of Venue
State Farm contends RCW 4.12.025 and .030 support its motion to transfer venue to King County because such a transfer would advance `the convenience of witnesses or the ends of justice.' RCW 4.12.030(3). State Farm argues that King County has the only logical connection to the litigants and the subject matter of the lawsuit, and all the witnesses reside in King or Snohomish Counties.
RCW 4.12.030 provides:
The court may, on motion, in the following cases, change the place of trial when it appears by affidavit, or other satisfactory proof:
(1) That the county designated in the complaint is not the proper county; or,
(2) That there is reason to believe that an impartial trial cannot be had therein; or,
(3) That the convenience of witnesses or the ends of justice would be forwarded by the change.
We review a trial court's decision on a motion to transfer venue for an abuse of discretion. Hickey v. City of Bellingham, 90 Wn. App. 711, 719, 953 P.2d 822 (1998). A trial court abuses its discretion when it exercises it on untenable grounds or for untenable reasons. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
In deciding a motion to transfer venue, the trial court may consider the distances various witnesses would be required to travel. But it may also consider the relative importance of travel distances taking into account the efficiency of available transportation facilities. Baker v. Hilton, 64 Wn.2d 964, 966, 395 P.2d 486 (1964). The trial court ruled that Pierce County did not appear inconvenient to witnesses. The trial court did not abuse its discretion in ruling that travel inconvenience did not outweigh the plaintiff's right to choose the venue under RCW 4.12.025.
We infer from reference to witness convenience that the trial court was taking into account the well known fact that Pierce and King are neighboring counties connected by a vast freeway used by daily commuters and various public transit options. We take judicial notice of this commonly known fact. See State ex rel. Washington Toll Bridge Authority v. Yelle, 56 Wn.2d 86, 351 P.2d 493 (1960) (Appellate court takes judicial notice of the commonly known situation in the Seattle area: traffic congestion and residential expansion.).
In summary, the gravamen of Boswell's complaint is a tort claim, and venue is governed by RCW 4.12.025 for the tort claims. This statute expands a plaintiff's choice of venue when suing a corporate defendant. Davidson v. Weyerhaeuser Co., 36 Wn. App. 150, 153, 672 P.2d 767 (1983). State Farm failed to demonstrate a compelling reason to change Boswell's choice of venue. The trial court did not abuse its discretion in denying State Farm's motion.
We therefore reverse in part with regard to where the appointment of an arbitrator must occur and affirm that venue for the tort claims is proper in Pierce County.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
ARMSTRONG, P.J. and HUNT, J., Concur.