United States District Court, W.D. Washington, Tacoma
ORDER DENYING DEFENDANTS' MOTION FOR
ATTORNEY'S FEES AND COSTS WITHOUT PREJUDICE
BENJAMIN H. SETTLE United States District Judge
matter comes before the Court on Defendants Andy Rhee, Kevin
Rhee, Lisa H. Rhee, and So Y. Rhee's
(“Rhees”) motion for attorney's fees and
costs (Dkt. 25). The Court has considered the pleadings filed
in support of and in opposition to the motion and the
remainder of the file and hereby denies the motion without
prejudice for the reasons stated herein.
December 31, 2015, Plaintiff Allstate Property and Casualty
Insurance Co. (“Allstate”) filed a declaratory
judgment action against the Rhees Defendants and Richard
Giroux (“Giroux”). Dkt. 1. Allstate seeks an
order that it does not have a duty to defend or indemnify the
Rhees in the lawsuit filed against them by Giroux.
Id. ¶ 14. On March 15, 2016, the Rhees filed an
answer and asserted counterclaims against Allstate. Dkt. 7.
The Rhees allege Allstate breached its duty to investigate
and duty of good faith and fair dealing. Id. ¶
20, 2016, Allstate moved for summary judgment on the duty to
defend and indemnify. Dkt. 16. On July 7, 2016, the Court
denied the motion concluding that, on the duty to defend,
Allstate had failed to show that the claims in the underlying
complaint were not “conceivably covered” and that
any consideration of the duty to indemnify was premature.
Dkt. 22 On November 7, 2016, Allstate filed a notice stating
that this action was now moot because the claims in the
underlying case had been settled. Dkt. 23. On November 9,
2016, the Rhees responded that the case is not moot because
their counterclaims are still pending. Dkt. 24.
November 23, 2016, the Rhees filed a motion for
attorney's fees and costs. Dkt. 25. On December 5, 2016,
Allstate responded. Dkt. 27. On December 8, 2016, the Rhees
replied. Dkt. 28.
Rhees request an order awarding “attorney's fees
and costs from Allstate for the expense incurred in answering
Allstate's complaint for declaratory relief and
responding to a motion for summary judgment.” Dkt. 25
at 2. Allstate counters that the Rhees are entitled to fees
and costs only if they prevail on the issue of coverage or if
they establish that they are the substantially prevailing
party. Dkt. 27 at 3. Based on the lack of authorities
directly addressing this issue and the barebones briefing
provided by the parties, the Court concludes that Allstate
has presented the better argument at this time.
“Olympic S.S. Co. v. Centennial Ins. Co., 117
Wn.2d 37, 811 P.2d 673 (1991) . . . held that an insurer is
required to pay attorney fees for the declaratory judgment
action if the court finds that there is coverage. The payment
is required after the judicial determination is made and fees
under Olympic are awarded only if the insured
prevails.” Alaska Nat. Ins. Co. v. Bryan, 125
Wn.App. 24, 36 (2004).
case, the issue of coverage has not been determined and
neither party has yet prevailed. First, based on an almost
identical case in this district, settlement of the underlying
suit does not moot the declaratory judgment action. See
Century Sur. Co. v. Belmont Seattle, LLC, C12-823 MJP
(W.D. Wash.). In April 2014, Judge Pechman denied a similar
motion for attorney's fees and costs when the underlying
suit had been settled and both the claims and counterclaims
were pending. Century Sur. Co. v. Belmont Seattle,
LLC, C12-823 MJP, 2014 WL 1386540, (W.D. Wash. Apr. 9,
2014). The matter proceeded to cross-motions for summary
judgment, and Judge Pechman ruled against the insured on the
issue of coverage. Century Sur. Co. v. Belmont Seattle,
LLC, C12-823 MJP, 2014 WL 6608550 (W.D. Wash. Nov. 19,
2014). That order is currently on appeal and is set for oral
argument in April 2017. See Century Sur. Co. v. Belmont
Seattle, LLC, C 14-36002 (9th Cir. Dec. 19, 2016).
According to the briefs, the issues on appeal include whether
an underlying settlement moots a declaratory judgment action
and whether the insured is entitled to fees and costs under
Olympic. While binding law on the instant disputes
may issue within a few months, the Court concludes that, at
this time, the Rhees have failed to show that coverage has
been resolved in their favor.
even if the Rhees prevail on the coverage issue, the Court
concludes that an award of fees will depend upon which party,
if any, will be deemed the prevailing party. See,
e.g., Nw. Mut. Life Ins. Co. v.
Koch, C08-5394BHS, 2010 WL 519727, at *4 (W.D. Wash.
Feb. 10, 2010), aff'd, 424 Fed.Appx. 621 (9th
Cir. 2011). Because some claims are outstanding, the Court is
unable to assess whether either party prevailed. Therefore,
the Rhees' motion is premature.
it is hereby ORDERED that Rhees's motion for
attorney's fees and costs (Dkt. ...