OREGON COURT HOLDS THAT INSURED MUST ATTEND EUO AS CONDITION PRECEDENT TO COVERAGE DESPITE OREGON STATUTE REQUIRING PROMPT PAYMENT OF PIP BENEFITS
Quarterly Newsletter Fall 2018 The majority of automobile insurance policies contain a clause providing that the insurer may require the insured to submit to an examination under oath (“EUO”) to assist with the insurer’s investigation of the claim. Many policies include the EUO provision in the conditions section of the policy and expressly make the...
WASHINGTON FEDERAL COURT FINDS NO BAD FAITH FOR INSURER’S FAILURE TO RESPOND TO ROOFER’S TENDER WHEN INSURED CANNOT SHOW HARM
Quarterly Newsletter Summer 2018 The United States District Court for the Western District of Washington recently held in Diamond Constr., LLC v. Atl. Cas. Ins. Co., 2018 U.S. Dist. LEXIS 136335 (W.D. Wash., Aug. 14, 2018) that an insurance company’s failure to respond to its insured’s tender of defense did not constitute bad faith because...
WASHINGTON FEDERAL COURT REJECTS INSURANCE FAIR CONDUCT ACT CLAIM ABSENT EVIDENCE OF UNREASONABLE DENIAL OF COVERAGE
Quarterly Newsletter Summer 2018 In 2007, Washington voters passed Referendum 67, which gave rise to Washington’s Insurance Fair Conduct Act (“IFCA”), codified in RCW 48.30 et . seq. Generally speaking, IFCA provides for a cause of action by a “first party claimant to a policy of insurance who is unreasonably denied a claim for coverage...
ALASKA SUPREME COURT FINDS MOTOR VEHICLE ACCIDENT CLAIMANT WAS NOT “OCCUPYING” INSURED’S VEHICLE TO SEEK UIM COVERAGE UNDER INSURED’S POLICY
Quarterly Newsletter Summer 2018 Many automobile insurance policies provide underinsured motorist (UIM) coverage to the named insured, as well as others that are “occupying” an insured automobile during an accident . The interpretation of what circumstances constitute occupancy of an insured automobile by a person that is not other wise an insured under the policy...
WASHINGTON SUPREME COURT FINDS THAT EXCLUSIVE MEANS OF SERVICE FOR AUTHORIZED FOREIGN INSURER IS THROUGH WASHINGTON STATE INSURANCE COMMISSIONER
Quarterly Newsletter Spring 2018 Similar to the vast majority of other states, service of legal process is governed by statute in Washington. RCW 48.05.200(1) states that an “authorized foreign or alien insurer must appoint the commissioner as its attorney to receive service of, and upon whom must be served, all legal process issued against it...
WASHINGTON COURT FINDS NO BAD FAITH DESPITE PROLONGED CLAIM RECONCILIATION PERIOD
Quarterly Newsletter Spring 2018 An insurer’s excessively low claim settlement offer can give rise to a claim under Washington’s Insurance Fair Conduct Act (“IFCA”) if the insurer made the offer knowing that the value of the claim was actually much higher. In a recent opinion, however, a Washing ton court rejected an insured’s bad faith...
OREGON FEDERAL COURT FINDS NO BREACH OF DUTY OF GOOD FAITH DESPITE INSURER’S BREACH OF CONTRACT
Quarterly Newsletter Spring 2018 In a recent decision, an Oregon Court rejected an insurer’s position that the terms “surface water” and “flood water” referred to natural water sources as well as man-made sources, thereby finding that the insurers breached the contract by denying coverage. However, the Court reinforced the general rule in Oregon that, despite...
WASHINGTON COURT FINDS NO BAD FAITH DESPITE INCORRECT ASSESSMENT BY INSURER ON COVERAGE ISSUES
Quarterly Newsletter Winter 2017 Insurers and policyholders are often faced with a situation of whether depreciation may be recovered when the insured sustains a covered loss but does not use “new construction materials” to rebuild their house. In a recent opinion, a Washington Court rejected an insurer’s position that the term “new,” in the replacement...
WASHINGTON COURT LIMITS DISCOVERY OF INSURER’S CLAIMS-HANDLING MANUALS AND GUIDELINES FOR UNRELATED LINES OF COVERAGE
Quarterly Newsletter Winter 2017 Insurers faced with a bad faith lawsuit are often asked in discovery to produce copies of claim handling manuals and guidelines. Oftentimes such discovery requests are broad and request any manuals or guidelines used by the insurer regardless of whether it specifically applies to the policy at issue. Courts in various...
WASHINGTON COURT OF APPEALS REFUSES TO ALLOW PRODUCTION OF POST-LITIGATION COMMUNICATION BETWEEN INSURER AND COVERAGE COUNSEL IN DEFENSE OF UIM CLAIM
Quarterly Newsletter Fall 2017 Ever since the Washington Supreme Court rendered its decision in Cedell v. Farmers Ins. Co. of Washington, 176 Wn.2d 686, 295 P.3d 239 (2013), state and federal courts in Washington have grappled with the fallout. One of key questions is when, and to what extent, policyholders are entitled to discovery of...
WASHINGTON APPELLATE COURT FINDS INSURER NOT COLLATERALLY ESTOPPED FROM CONTESTING LIABILITY ISSUES IN DECLARATORY JUDGMENT ACTION
Quarterly Newsletter Summer 2017 In Washington, insurers can be subject to collateral estoppel, which bars litigation of the same issue in a subsequent declaratory judgment action, when that issue was actually litigated in the underlying proceeding. The circumstances that allow collateral estoppel to apply vary on a case-by-case basis, but generally turn on whether the...
OREGON COURT OF APPEALS RENDERS IMPORTANT DECISION ON VARIOUS COVERAGE ISSUES ARISING OUT OF CONSTRUCTION DEFECT LAWSUIT
Quarterly Newsletter Summer 2017 In an effort to stem the flood of claims for coverage arising out of construction defect lawsuits, insurers have included various exclusions and endorsements to limit coverage for such claims in their commercial general liability policies issued to construction contractors and subcontractors. One such exclusion, titled the “Multi-Unit New Residential Construction”...