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Akhavuz v. Moody

Court of Appeals of Washington, Division 1

December 23, 2013

Dana Akhavuz et al., Appellants,
v.
Tracy Arnold Moody et al., Respondents

Appeal from King County Superior Court. Docket No: 11-2-16823-9. Date filed: 07/25/2012. Judge signing: Honorable Mary I Yu.

Pellegrino L. Circa and Cheryl J. Farrish (of Certa Law Group PS ); and Gregory M. Miller (of Carney Badley Spellman PS ), for appellants.

Gabriel Baker and Jennifer K. Sheffield (of Lane Powell PC ), for respondents.

Becker, J. WE CONCUR: Lau, J. Dwyer, J.

OPINION

Page 573

[178 Wn.App. 528] Becker, J.

¶ 1 At issue is an order vacating a default judgment almost a year after it was entered. The motion to vacate should have been denied because the insurer and defense counsel who failed to respond to the complaint offered no excuse for the long delay. There is no " innocent [178 Wn.App. 529] insured" doctrine that allows an insurer to escape responsibility by keeping its insured unaware that the matter is being neglected.

BACKGROUND

¶ 2 Studio Seven, a heavy metal nightclub in Seattle, held a party on Halloween night in 2010. Appellant Dana Akhavuz claims she attended the party at Studio Seven and slipped and fell on fake blood that the performers were using. Akhavuz had to undergo surgery for a broken ankle under general anesthesia. A hairdresser, she was unable to work for months.

Page 574

¶ 3 According to a declaration she filed in connection with the default judgment proceedings, Akhavuz called Studio Seven in November and December 2010 to discuss her injuries and obtain information about the club's insurance carrier. Akhavuz says the club's manager, Nicole Russell, was hostile and refused to provide information about the insurer. Akhavuz and her husband then retained attorney Pellegrino Certa.

¶ 4 Certa wrote to Studio Seven in January 2011, asking the club to tender the claim to its insurer and to acknowledge receipt. Certa's letter said that once Studio Seven provided the insurer's information, " we will deal directly with your insurer regarding this claim."

¶ 5 On February 4, 2011, Studio Seven faxed Certa's letter to its insurer, Founders Insurance Company. Russell and club owner Tracy Moody say in their declarations that they provided information to Founders to assist in an investigation, including a list of potential witnesses. Neither Founders nor Studio Seven responded to Certa's letter.

¶ 6 Akhavuz filed a personal injury suit against Studio Seven in May 2011. She named Moody and his company, Seven Entertainment Inc., as defendants. Moody was served with the summons and complaint, discovery requests, and a trial schedule on May 24, and his company [178 Wn.App. 530] was served 2 days later. Under Civil Rule 4, the defendants had 20 days after the service of summons to appear and answer the complaint.

¶ 7 On May 25, 2011, Moody faxed the summons and complaint to Carlos Ortiz, an insurance adjuster at Founders. On May 27, Ortiz contacted attorney Certa and asked that Akhavuz submit a demand package to Founders. On June 13, Certa responded with Akhavuz's offer to settle the claim for $195,000. The letter said the settlement offer would remain open for 30 days. Ortiz did not respond to the settlement offer. And the defendants did not appear or answer.

¶ 8 On June 16, 2011, three days after sending the demand letter, Akhavuz filed a motion for default against Studio Seven. The court entered an order of default the next day. On June 28, Akhavuz obtained a default judgment for $433,046.58, including costs and statutory attorney fees.

¶ 9 Akhavuz heard nothing further from Studio Seven or its insurer until five months later.

¶ 10 In November 2011, Ortiz, the claims adjuster for Founders, checked the trial docket online and saw the order of default. Upon this discovery, Founders retained Lane Powell attorney Barry Mesher as counsel for Studio Seven. Mesher obtained a copy of all the pleadings and retained an investigator to evaluate the allegations in the complaint.

¶ 11 On November 16, 2011, Mesher called Certa. According to Certa, Mesher indicated the defendants were aware of the default judgment and were considering whether settlement was feasible or whether they would move to vacate the default judgment. On November 25, Certa followed up this conversation with an ...


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