United States District Court, W.D. Washington, Seattle
PATRICIA S. HAWTHORNE, individually, and as assignee of Oklahoma Court Services, Inc., Plaintiff,
MID-CONTINENT CASUALTY COMPANY, OKLAHOMA SURETY COMPANY, an Oklahoma Insurance Company, Defendant.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS FOR
LACK OF PERSONAL JURISDICTION
S. LASNIK, UNITED STATES DISTRICT JUDGE
matter comes before the Court on defendant Oklahoma Surety
Company's motion to dismiss under Rule 12(b)(2) for lack
of personal jurisdiction (Dkt. # 9). For the reasons set forth
below, the Court denies the motion.
Court Services (“OCS”) provides probation and
supervision services to Oklahoma state courts. Dkt. # 9 at 3.
Beginning in September 2013, OCS had an insurance agreement
with Oklahoma Surety Company (“Oklahoma Surety”).
Dkt. # 14 at 4-7. That general commercial liability policy
provides that Oklahoma Surety has “a right and duty to
defend” OCS against suits that seek damages resulting
from events covered by the policy. Dkt. # 10-2 at 10, ¶
I.1.a. The policy covers “bodily injuries”
resulting from an “occurrence” within the
coverage territory. Dkt. # 10-2 at 7-8. The policy's
coverage territory includes the entire United States. Dkt. #
10-2 at 21, ¶ V.4.a.
January 2014, Christopher A. Brown was convicted of burglary
in Oklahoma and received a sentence of seven years'
confinement, suspended, with two years' probation under
OCS's supervision. Dkt. # 14 at 3. Per the conditions of
Brown's probation, OCS allowed Brown to spend time in
Washington while on probation on the condition that he check
in with OCS weekly. Dkt. # 10-3 at 5, ¶ 9. While in
Washington in March 2014, Brown assaulted and raped plaintiff
Patricia Hawthorne. Dkt. # 14 at 4. Brown pleaded guilty to
multiple serious charges in King County in September 2014.
Dkt. # 15-3 at 10.
February 2016, plaintiff filed suit against OCS and Brown in
King County Superior Court, alleging that OCS's
negligence in monitoring Brown had caused her injuries. Dkt.
# 15-1. In June 2016, citing the duty-to-defend clause in its
insurance policy, OCS tendered its defense to Oklahoma
Surety. Dkt. # 15-9 at 2. On August 3, 2016, a Senior Claim
Manager for Mid-Continent Casualty Company
(“Mid-Continent”) accepted the defense under a
reservation of rights. Dkt. # 15-11 at 2. On August 16, 2016,
however, the same claim manager informed OCS that the
insurance policy did not cover plaintiff's damages claims
against OCS. Dkt. # 15-12 at 2.
plaintiff and OCS agreed to mediate plaintiff's damages
claims in Tacoma on November 22, 2016. Dkt. # 15-20 at 6;
Dkt. # 14 at 11. Both Mid-Continent and OCS's
professional liability insurer agreed to participate in the
mediation. Dkt. # 15-20. During that mediation, Mid-Continent
continued to deny coverage, and plaintiff and OCS agreed to
enter into a covenant judgment in which OCS would assign to
plaintiff all claims against Mid-Continent arising from the
insurance policy coverage dispute. See Dkt. # 15-21.
November 22, 2016, Oklahoma Surety filed a declaratory
judgment action in Oklahoma state court, seeking a
declaration that plaintiff's claims against OCS were not
covered by OCS's insurance policy, and thus that Oklahoma
Surety had no duty to indemnify or defend OCS. Dkt. # 10-5 at
November 23, 2016, acting in her individual capacity and as
assignee of OCS's insurance claims per the covenant
judgment, plaintiff filed this action in King County Superior
Court against Oklahoma Surety for bad faith, violation of
Washington's Unfair Trade Practices Act, and breach of
the contractual duties to defend, settle, and indemnify. Dkt.
December 5, 2016, in plaintiff's case against OCS in King
County Superior Court, plaintiff and OCS stipulated to a
judgment against OCS of $7.2 million, plus costs and
attorney's fees. Dkt. # 15-22 at 3.
December 21, 2016, Oklahoma Surety removed this case to
federal court. Dkt. # 1. After Oklahoma Surety filed this
motion to dismiss for lack of personal jurisdiction,
plaintiff amended her complaint to include additional facts
regarding the corporate relationship between Oklahoma Surety
and Mid-Continent. Dkt. # 13.
that defendant moves to dismiss under Rule 12(b)(2),
plaintiff has the burden of demonstrating that the Court may
exercise personal jurisdiction over defendant. Harris
Rutsky & Co. Ins. Services, Inc. v. Bell & Clements
Ltd., 328 F.3d 1122, 1128-29 (9th Cir. 2003). The Court
has not held an evidentiary hearing, so “the plaintiff
need only make a prima facie showing of jurisdiction to avoid
the defendant's motion to dismiss.” Id. at
1129. Plaintiff's version of the facts are taken as true,
and “conflicts between the facts contained in the
parties' affidavits must be resolved in [plaintiff's]
favor for purposes of deciding” whether plaintiff has
met her burden. Id. (Internal quotation marks and
process requires a district court to have personal
jurisdiction over a defendant in order to adjudicate a claim
against it. Daimler AG v. Bauman, 134 S.Ct. 746, 753
(2014). Provided the long-arm statute of the state in which
the Court sits permits the Court's exercise of personal
jurisdiction,  there are two ways to establish that a
defendant's due process rights ...