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Terhune Homes, Inc. v. Nationwide Mut. Ins. Co.

United States District Court, W.D. Washington

May 9, 2014

TERHUNE HOMES, INC., Plaintiff,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant

Page 1075

For Terhune Homes, Inc., a Washington corporation, Plaintiff, Counter Defendant: Brent W Beecher, LEAD ATTORNEY, HACKETT BEECHER & HART, SEATTLE, WA.

For Nationwide Mutual Insurance Company, a foreign insurer, Defendant: David R Greenberg, Jeffrey S Tindal, Joseph D Hampton, Lawrence Gottlieb, Toni Y Anders, BETTS PATTERSON & MINES, SEATTLE, WA.

For Nationwide Mutual Insurance Company, a foreign insurer, Counter Claimant: David R Greenberg, Joseph D Hampton, Lawrence Gottlieb, Toni Y Anders, BETTS PATTERSON & MINES, SEATTLE, WA.

Page 1076

AMENDED[*] ORDER

The Honorable Richard A. Jones, United States District Judge.

I. INTRODUCTION

This matter comes before the court on cross-motions for summary judgment filed by plaintiff Terhune Homes, Inc. (" Terhune" or " plaintiff" ) and defendant Nationwide Mutual Insurance Company (" Nationwide" or " defendant" ). Dkt. ## 15, 19. Terhune argues that it is entitled to summary judgment because defendant unreasonably and in bad faith breached its duty to defend it as an additional insured under the Artwall Designs and Construction Company Inc. (" Artwall" ) insurance policy. Dkt. # 19 at 1. Nationwide argues that it is entitled to summary judgment on all claims related to the insurance policy to Ruslan Yefimchuk (" Ruslan" ) because Terhune was not an additional insured under

Page 1077

that policy. Dkt. # 15 at 2. Nationwide also argues that it is entitled to summary judgment on all claims related to the Artwall policy because Terhune failed to provide timely notice to Nationwide, which caused it prejudice, and that its claim decision and handling were reasonable under the circumstances. Id. at 2. With respect to the Ruslan policy, there is no evidence before the court that Terhune was an additional insured under that policy. Accordingly, Nationwide is entitled to summary judgment as to all claims under the Ruslan Policy.

Having reviewed the motions, exhibits, and the record herein, the court GRANTS in part and DENIES in part Nationwide's motion for summary judgment, and DENIES plaintiff's motion for summary judgment.

II. BACKGROUND

In 2005, Terhune contracted with Richard and Mary Weglin (" Weglins" ) for the construction and improvement of the Weglins' real property. Dkt. # 16-5 at 3 (Ex. 5 to Halstead Decl., Findings of Fact & Conclusions of Law ¶ ¶ 4-5). In April 2005, Terhune began construction. Id. (¶ 6). At some point, a dispute arose with respect to the construction, and the Weglins did not pay all amounts owed. Id. at 3-4 (¶ ¶ 7-12). On August 21, 2006, Terhune recorded a Claim of Lien against the property for the amount owed. Id. at 4 (¶ 13). In April 2007, Terhune filed an action against the Weglins for breach of contract and to foreclose the claim of lien. Id. (¶ 15); Dkt. # 16-3 (Ex. 3 to Halstead Decl.). In June 2007, the Weglins filed a counterclaim for breach of contract. Dkt. # 16-4 (Ex. 4 to Halstead Decl.). In May 2010, the Honorable Timothy Bradshaw entered findings of fact and conclusions of law. Dkt. # 16-5 (Ex. 5 to Halstead Decl.). In November 2010, the trial court entered an corrected judgment. Dkt. # 15-6 (Ex. 6 to Halstead Decl.).

In July 2012, Terhune sent a " tender of defense" as an additional insured under the Artwall policy to the insurance agency that had issued the Artwall policy. Dkt. # 21-3 (Ex. C to Beecher Decl.). Nationwide contends that it did not receive the July 2012 tender until November 2012 when the Office of Insurance Commissioner sent it to Nationwide. See Dkt. # 16-8 at 2 (Ex. 8 to Halstead Decl.). In December 2012, Nationwide denied the " tender of defense," which it viewed as a request for reimbursement for past defense costs. Id. Terhune filed this action in April 2013 in King County Superior Court, and defendant removed the case to this court. Dkt. # 1.

III. ANALYSIS

A. Legal Standard

Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Where the moving party will have the burden of proof at trial, it must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). On an issue where the nonmoving party will bear the burden of proof at trial, the moving party can prevail merely by pointing out to the district court that ...


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