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Bush v. O'Connor5/31/1990
John L. O'Connor petitioned for discretionary review of a partial summary judgment holding him liable to Ethel and Walter Bush for legal malpractice. We accepted review. The Bushes alleged Mr. O'Connor negligently failed to file an action against State Farm, their underinsured motorist (UIM) carrier, before the effective date of the tort reform act of 1986, Laws of 1986, ch. 305. We hold Mr. O'Connor correctly determined Washington law did not apply to the Bushes' action. We therefore reverse the partial summary judgment obtained by the Bushes, and direct entry of summary judgment in Mr. O'Connor's favor.
On March 5, 1986, Mr. and Mrs. Bush, Washington residents, were seriously injured in an automobile accident in Florida. The driver of their vehicle, a resident of Florida, was the negligent party. His insurance liability limits were $100,000 for each individual and $300,000 per accident.
This amount was inadequate to cover the Bushes' damages as well as the damages to other persons in their car and in the car with which they collided. The Bushes also had two policies with State Farm Insurance which provided UIM coverage -- an automobile policy with $100,000/$300,000 limits and an umbrella policy with a limit of $1 million.
On March 12, 1986, through the Bushes' son, attorney John O'Connor undertook to represent the Bushes and continued to do so until October, when the Bushes hired another attorney. In March 1987, the Bushes settled with the driver's insurance company.
On May 11, 1987, State Farm informed the Bushes that their claim for UIM coverage was subject to the provisions of the 1986 tort reform act, since they had not filed suit prior to the act's effective date, August 1, 1986. The act placed a cap on noneconomic damages. See RCW 4.56.250(2), subsequently held unconstitutional in Sofie v. Fibreboard Corp., 112 Wash. 2d 636, 771 P.2d 711, 780 P.2d 260 (1989). The cap varied according to the circumstances. In the Bushes' case, the cap was $120,605.55.
In July, State Farm paid Walter $40,608.55 and Ethel $20,608.55. These payments were without prejudice to their claims for additional coverage and brought their recovery up to the amount provided for by the tort reform act. The Bushes brought an action against State Farm for additional coverage. In April 1988, they settled that action for $125,000.
In September 1988, Walter and Ethel Bush filed actions for legal malpractice against Mr. O'Connor, alleging:
The defendant negligently pursued the Plaintiff's claim, failed to make a reasonable and diligent inquiry concerning insurance coverages and failed to file an action prior to the effective date of the 1986 tort reform act. As a proximate cause of such negligence on the part of Defendant . . ., Plaintiff's under-insured motorist carrier took the position that coverage for non-economic damages under the under-insured motorist policies issued to Plaintiff was limited by the 1986 tort reform act.
They moved for partial summary judgment on the issue of liability.
In his affidavit, Mr. O'Connor states he was aware of the tort reform act and had filed at least three other actions prior to the August 1, 1986, effective date of the act. He did not file the Bushes' claim because he determined that the act did not affect it. In his analysis, the act affected only tort actions, not contract claims such as the Bushes' claim against their insurer for UIM coverage. In his legal opinion, any attempt by State Farm to apply the act to the existing insurance contract would be an unconstitutional impairment of contract. He also be
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