HARTFORD CASUALTY INSURANCE, an Indiana insurance corporation, Plaintiff,
CHRISTINE MARK; KATHLEEN MARK; BRENDA LEUNG; and SUSAN LEUNG, Defendant.
ORDER ON CROSS MOTIONS FOR PARTIAL SUMMARY JUDGMENT
ROBERT J. BRYAN, District Judge.
This matter comes before the Court on Defendants' Motion for Summary Judgment re: Plaintiff's First Cause of Action for Declaratory Judgment (Dkt. 16) and Hartford Casualty Insurance Company's ("Hartford") Motion for Partial Summary Judgment (Dkt. 22). The Court has considered the pleadings filed in support of and in opposition to the motions and the file herein.
This insurance coverage dispute case arises as a result of damage to 936 Pacific Avenue, Tacoma, Washington from a sewer back up. Plaintiff Hartford contends that the premises were vacant at the time of the loss and that the policy's vacancy clause's water damage exclusion applies. The Defendants argue that the vacancy provision does not apply. They maintain that because the property at issue is an office suite in a larger building, the vacancy provision's definition of "building" does not include their property, and so the exclusion does not apply. For the reasons set forth below, the vacancy provision should be held to apply. Hartford's motion should be granted as to application of the vacancy provision and denied without prejudice as to application of the water damage exclusion. Defendants' motion should be denied.
I. BACKGROUND FACTS AND PROCEDURAL HISTORY
A. RELEVANT FACTS
Defendants are family members who, as a partnership, own an office located at 936 Pacific Avenue, Tacoma, Washington ("premises"). Dkt. 18, at 1. The premises is 7, 429 square feet and is on the first floor. Dkt. 23, at 8. On either side of the premises are separately owned units, each with their own tax parcel number. Dkt. 23, at 5-12. The Pierce County Assessor Treasurer tax parcel number for the premises is XXXXXXXXXX, and its legal description, in part, "excludes therefrom all second, third, fourth, fifth, sixth & seventh decks of the building constructed thereon." Dkt. 23, at 5. To the left of the premises is a 6, 000 square foot unit commonly known as 928 Pacific Avenue, tax parcel number XXXXXXXXXX, owned by ISA LLC. Dkt. 23, at 14-21. To the right is an 8, 400 square foot unit commonly known as 942 Pacific Avenue, tax parcel number XXXXXXXXXX, owned by the City of Tacoma. Dkt. 23, at 22-27. The premises and these units share common walls. On top of these units is a 158, 350 square foot parking structure owned by the City of Tacoma, with an address of 919 Commerce Street, Tacoma, Washington, tax parcel number XXXXXXXXXX. Dkt. 23, at 29.
In December of 2008, Defendants applied for a commercial lessor's risk property insurance policy with Hartford. Dkt. 23, at 31. Hartford issued Spectrum Policy No. 52 SBA IJ42323, ("policy") providing commercial property and lessor's risk liability coverage for the premises. Dkt. 23, at 36. The policy renewed annually. Id.
On January 23, 2012, sewage backed up into the premises and caused damage. Dkt. 26, at 1. Defendants were notified that day by one of the occupants of an adjacent unit. Dkt. 26, at 2. The premises had been vacant for several months at the time of the damage. Id.
Defendants notified Hartford of the loss. Dkt. 17-6. Hartford initially denied their claim on February 23, 2012. Id. After correspondence with Defendants' lawyers, Hartford again denied their claim on August 29, 2013, relying on the policy's vacancy clause's water damage exclusion. Dkt. 17-9.
B. PROCEDURAL HISTORY
On February 14, 2013 Defendants filed a notice pursuant to RCW 48.30.015(8) of their intent to sue Hartford for bad faith. Dkt. 8.
On June 5, 2013, Hartford filed this case, seeking declaratory relief that it has no duty to provide coverage for any property damage to the building. Dkt. 1. In the alternative, it seeks a declaration "as to the exact amount due, if any, to the [Defendants] for any coverage under the policy." Id.
Defendants filed an answer and assert counterclaims under Washington law for: 1) bad faith, 2) Consumer Protection Act violations, 3) negligence, and 4) breach of contract. Dkt. 8.
C. PENDING MOTIONS
Defendants filed a motion for partial summary judgment, seeking an order dismissing Hartford's first claim for relief and declaring that Hartford has a duty to provide coverage for the property damage. Dkt. 16. In support of their motion, Defendants argue that the policy's vacancy provision does not apply to them and therefore Hartford must provide coverage. Dkts. 16, 24 and 29.
Hartford also has pending a motion for partial summary judgment, seeking a declaration that the vacancy provision applies. Dkt. 22. Hartford argues that the vacancy provision precludes coverage for the sewer back up damage, and so Hartford has no duty to provide coverage for the loss. Dkts. 22, 28, and 32.
A. SUMMARY JUDGMENT STANDARD
Summary judgment is proper only if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party is entitled to judgment as a matter of law when the nonmoving party fails to make a sufficient showing on an essential element of a claim in the case on which the nonmoving party has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1985). There is no genuine issue of fact for trial where the record, taken as a whole, could not lead a rational trier of fact to find for the non moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)(nonmoving party must present specific, significant probative evidence, not simply "some metaphysical doubt."). See also Fed.R.Civ.P. 56(e). Conversely, a genuine dispute over a material fact exists if there is sufficient evidence supporting the claimed factual dispute, requiring a judge or jury to resolve the differing versions of the truth. Anderson v. Liberty Lobby, Inc., 477.S. 242, 253 (1986); T.W. Elec. Service Inc. v. Pacific Electrical Contractors Association, 809 F.2d 626, 630 (9th Cir. 1987).
The determination of the existence of a material fact is often a close question. The court must consider the substantive evidentiary burden that the nonmoving party must meet at trial - e.g., a preponderance of the evidence in most civil cases. Anderson, 477 U.S. at 254, T.W. Elect. Service Inc., 809 F.2d at 630. The court must resolve any factual issues of controversy in favor of the nonmoving party only when the facts specifically attested by that party contradict facts specifically attested by the moving party. The nonmoving party may not merely state that it will discredit the moving party's evidence at trial, in the hopes that evidence can be developed at trial to support the claim. T.W. Elect. Service Inc., 809 F.2d at 630 (relying on ...