United States District Court, W.D. Washington, Tacoma
ORDER DKT. ##12O, 13O, 131, 137, 139, 141
B. Leighton United States District Judge
MATTER is before the Court on the following motions:
● Defendant Fireman’s Fund Insurance
Company’s Motion for Summary Judgment [Dkt. #120];
● Defendant St. Paul Fire and Marine Insurance
Company’s Motion for Summary Judgment [Dkt. #130];
● Plaintiff Eagle Harbour Condominium
Association’s Motion for Partial Summary Judgment
against St. Paul [Dkt. #131];
● Eagle Harbour’s Motion for Partial Summary
Judgment against Commonwealth Insurance Company [Dkt. #137];
● Defendant Commonwealth’s Motion for Summary
Judgment [Dkt. #139]; and
● Defendant Eagle West Insurance Company’s Motion
for Partial Summary Judgment [Dkt. #141].
Eagle Harbour Condominium Association sues Defendants St.
Paul, Commonwealth, Fireman’s Fund, and Eagle West each
for denying that its policy covered hidden water damage at
the Eagle Harbour Condominium complex. The complex comprises
two buildings on Bainbridge Island built in the late
seventies and early eighties. At one building, the exterior
walls are clad with cement plaster stucco over building paper
over gypsum sheathing. At the other, the exterior walls are
clad with cement plaster stucco over building paper attached
directly to the framing.
companies have insured the complex:
Allstate (September 1, 1988–97 and September
St. Paul (September 1, 1997–1998);
Commonwealth (August 31, 2005–06 and August 31,
Farmers (August 31, 2005 to March 1, 2010);
Fireman’s Fund (March 1, 2010–11 and March 1,
Eagle West (March 1, 2012–13, March 1, 2013–14,
and March 1, 2014–15).
Association has settled its claim with Allstate and Farmers,
but sues the other four. The Defendants’ policies are
“all-risk” policies that cover all fortuitous
losses not explicitly excluded. Commonwealth’s all-risk
policy is a supplemental, difference-in-conditions policy
that explicitly excludes coverage for any losses
contemporaneously covered by Farmers.
Association claims the Defendants wrongfully denied it
coverage. It asserts wind-driven rain and inadequate
construction allowed water to penetrate the buildings’
sheathing and framing, causing decades of deterioration and
decay, until the damage was exposed to view in August 2014.
It claims the damage was incremental and progressive and
occurred during each policy period, worsening with each of 60
storm events. The testimony of its expert, Michael Ludwig,
and the technical consulting firm that investigated the
buildings’ damage, Building Envelope Technology &
Research (BET&R), supports its claims.
the Defendants claim the Association’s loss results
from its poor decisions to construct and inadequately
maintain a stucco building in the wet and windy Pacific
Northwest. Each argues it appropriately denied coverage
because no covered peril caused the Association’s loss.
Eagle West, St. Paul, and Commonwealth each argue its policy
excludes coverage for weather-related water damage, and even
if it does not, wind-driven rain is not a fortuitous, covered
peril. Commonwealth also argues it is not liable for the
Association’s loss because Farmers’ policy
covered it. Fireman’s Fund argues the Association
cannot demonstrate any damage commenced during its policy
Association argues the Defendants’ policies do not
explicitly exclude, so cover, damage caused by wind-driven
rain. It asks the Court to engage in an efficient proximate
cause analysis to determine that no matter whether inadequate
construction or wind-driven rain caused its loss, the loss is
covered. It also argues the Defendants are joint and
severally liable for its loss.
Standard of Review.
judgment is proper “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(a). In determining whether an issue of
fact exists, the Court must view all evidence in the light
most favorable to the nonmoving party and draw all reasonable
inferences in that party’s favor. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248–50 (1986);
see also Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th
Cir. 1996). A genuine issue of material fact exists where
there is sufficient evidence for a reasonable factfinder to
find for the nonmoving party. See Anderson, 477 U.S.
at 248. The inquiry is “whether the evidence presents a
sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a
matter of law.” Id. at 251–52. The
moving party bears the initial burden of showing no evidence
exists that supports an element essential to the
nonmovant’s claim. See Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). Once the movant has
met this burden, the nonmoving party then must show the
existence of a genuine issue for trial. See
Anderson, 477 U.S. at 250. If the nonmoving party fails
to establish the existence of a genuine issue of material
fact, “the moving party is entitled to judgment as a
matter of law.” Celotex, 477 U.S. at