Bankruptcy and the Surety – Now What?
Surety Law Update Summer 2016 “We received notice that a bankruptcy was filed related to XYZ Project.” These words can cause fear and confusion for sureties and other parties involved. Bankruptcy on a construction project affects the rights and obligations of all parties, including sureties. Many of the typical ways in which a surety handles...
CD CLAIMS FROM THE PERSPECTIVES OF THE INSURER AND THE POLICYHOLDER
Quarterly Newsletter Summer 2016 This article aims to provide a brief overview of common insurance-coverage issues in construction-defect disputes, from both the policyholder and insurer perspectives. By combining both a primer on Oregon law and where needed the different perspectives of the two sides we hope to provide some guidance to the general practitioner in...
WASHINGTON COURT DENIES CLASS CERTIFICATION FOR PUNITIVE CLASS ACTION REGARDING COVERAGE FOR DIMINISHED VALUE
Quarterly Newsletter Summer 2016 Over the past decade, policyholders across the country have sought recovery for so-called “diminished value” of their vehicles following repairs after a covered loss. Though Washington recognized certain diminished value claims in Moeller v. Farmers Ins. Co. of Wash., 173 Wn.2d 264 (2011), policyholders have not always been successful in seeking...
WASHINGTON COURT FINDS NO DUTY TO DEFEND FOR “BODILY INJURY” OR “PROPERTY DAMAGE” THAT HAS NOT YET OCCURRED DESPITE ALLEGATION THAT SUCH DAMAGES ARE LIKELY TO OCCUR IN THE FUTURE
Quarterly Newsletter Summer 2016 Washington Courts generally determine the existence of a duty to defend based on the “eight corners” rule. Given this limited review of just the insurance contract and the underlying complaint, some Washington Courts have found a duty to defend when there are allegations in the complaint that covered damages will occur...
WASHINGTON FEDERAL COURT DECLINES TO RULE ON WHETHER NEGLIGENT CLAIM HANDLING AND BAD FAITH CLAIMS ARE DISTINCT CAUSES OF ACTION UNDER WASHINGTON LAW
Quarterly Newsletter Summer 2016 Despite the fact that no Washington appellate court has explicitly recognized a cause of action for negligent claims handling separate and apart from a claim for insurance bad faith in first-party claims, many policy holders have asserted such claims in the past. On June 6, 2016, Judge Richard A. Jones for...
MONTANA FEDERAL COURT FINDS NO COVERAGE FOR STAND-ALONE CLAIMS BY HEIRS OF DECEASED EMPLOYEE WHO WAS INJURED FROM EXCLUDED CAUSE OF LOSS
Quarterly Newsletter Summer 2016 On June 8, 2016, Judge Carolyn S. Ostby for the United States District Court for the District of Montana held that an insurer owed no duty to defend an insured for stand-alone claims filed by heirs of a deceased person when the injury to the decedent was caused by an excluded...
WASHINGTON SUPREME COURT UNANIMOUSLY FINDS NO COVERAGE FOR WATER DAMAGE IN VACANT BUILDING UNDER ENDORSEMENT IN COMMERCIAL PROPERTY POLICY
Quarterly Newsletter Summer 2016 On June 9, 2016, the Washington State Supreme Court unanimously found that a commercial property insurer need not provide coverage for water damage in a vacant building when the policy specifically excluded coverage for such damage per endorsement. In Lui v. Essex Ins. Co., 2016 WL 3320769, the insured owned a...
WASHINGTON FEDERAL COURT ALLOWS DECLARATORY JUDGMENT ACTION AGAINST EXCESS INSURER TO CONTINUE DESPITE LACK OF EXHAUSTION OF UNDERLYING POLICY LIMIT
Quarterly Newsletter Summer 2016 On May 27, 2016, Judge Robert S. Lasnik for the United States District Court for the Western District Washington denied an excess insurer’s motion to dismiss a declaratory judgment action despite the fact that the underlying policy limits had not been exhausted. Please click here to read the full article.
WASHINGTON FEDERAL COURT REFUSES TO EXTEND COVERAGE TO SPOUSE OF NAMED INSURED WHEN NOT QUALIFIED AS AN “INSURED” UNDER PROFESSIONAL LIABILITY POLICY
Quarterly Newsletter Summer 2016 On May 19, 2016, Judge John C. Coughenour for the United States District Court for the Western District of Washington granted a motion to dismiss a coverage lawsuit filed by an insured, finding the insurers did not have a duty to defend the insured’s spouse when the spouse was not a...
WASHINGTON COURT DISMISSES BAD FAITH AND IFCA CLAIMS WHEN INSURED DID NOT PROPERLY OR TIMELY DISCLOSE ALLEGED DAMAGES TO UIM INSURER
Quarterly Newsletter Summer 2016 On May 11, 2016, Judge Richard A. Jones for the United States District Court for the Western District of Washington rendered an important decision limiting an insurer’s potential liability for bad faith and violations of Washington’s Insurance Fair Conduct Act (IFCA) arising from its handling of an Underinsured Motorist (UIM) claim....
WASHINGTON FEDERAL COURT DENIES INSURER’S ATTEMPT TO ESCAPE WASHINGTON COURTS, BUT FINDS THAT EXTRA-CONTRACTUAL CLAIMS ARE GOVERNED BY LAWS OF ANOTHER STATE
Quarterly Newsletter Summer 2016 When dealing with a coverage lawsuit in Washington State, insurers often seek to transfer the case to another state or application of another state’s law. On April 14, 2016, Judge James L. Robart for the United States District Court for the Western District of Washington denied an insurer’s attempt to transfer...
IT’S more OF A GUIDELINE THAN A CODE: WASHINGTON FEDERAL COURT DISMISSES BAD FAITH CLAIMS AGAINST INSURER THAT ENFORCED ITS LITIGATION MANAGEMENT GUIDELINES AGAINST DEFENSE COUNSEL
Quarterly Newsletter Spring 2016 On March 26, 2016, Judge Barbara J. Rothstein for the United States District Court for the Western District of Washington entered summary judgment for an insurer on the insured’s claims of bad faith and violation of Washington’s Insurance Fair Conduct Act (IFCA) and Consumer Protection Act (CPA). In Evanston Ins. Co....