United States District Court, W.D. Washington, Tacoma
ORDER ON MISC. MOTIONS DKT. #146, 147, 161
B. Leighton United States District Judge
MATTER is before the Court on the following motions:
• Eagle Harbour's Motion for Partial Summary
Judgment against Defendants Commonwealth's and
Fireman's Fund late notice defense [Dkt. #146];
• Eagle Harbour's Motion for Summary Judgment
against Commonwealth's and Fireman's suit limitations
defenses [Dkt. #147]; and
• Commonwealth's Motion to Strike Eagle
Harbour's Summary Judgment Motions against it [Dkt.
Eagle Harbour Condominium Association seeks dismissal of
Defendants Commonwealth's and Fireman's Fund
affirmative late notice and suit limitations defenses. [Dkt.
##146, 147]. Commonwealth asks the Court to strike the
Association's contemporaneous motions, [Dkt. #161], and
Fireman's joins the motion to strike. [Dkt. #182 at 2].
Association manages two stucco-clad condominium buildings
built in approximately 1980 on Bainbridge Island. The
buildings suffered from ongoing and progressive damage:
decades of water intrusions caused hidden decay. The
Association sues its insurers for denying coverage. At issue
is whether Commonwealth's and Fireman's defenses that
the Association tendered its claim too late and that the
policy's limitations period expired before it sued have
merit. Commonwealth insured the Association from 2005 to
2007, and Fireman's insured it from 2010 to 2012.
Association periodically addressed the water damage brought
to its attention. For example, between 2004 and 2007, it paid
over $2 million to repair all damage identified by Building
Envelope Technology & Research. It also applied an
elastomeric coating in September 2007 to prevent future
damage. This coating failed years before expected, and the
Association continued to have problems with mold and decay.
In November 2013, the Association discovered mold in a stair
tower. It tendered a claim to Commonwealth (and others) for
this damage in July 2014, entered into a tolling agreement,
and invited Commonwealth to participate in its investigation
of a potential larger problem.
August 2014, the Association hired BET&R to investigate
whether the buildings' exterior walls' sheathing and
framing continued to suffer from hidden water damage. At that
time, the Association realized Eagle Harbour's
buildings' envelope suffered from a systemic problem.
Commonwealth denied coverage on July 6, 2015. Once the
Association realized Fireman's insured it, the
Association alleges, it tendered a claim and entered into a
tolling agreement with it, too: in March 2016. Fireman's
denied coverage on November 30, 2016.
Association seeks to prevent Commonwealth and Fireman's
from asserting their defenses that (1) the Association
tendered its claim late, prejudicing each, and (2) the
limitation period on each policy ran before the Association
sued. First, the Association argues it tendered its claims
within a “practicable” and “prompt”
time after learning of Eagle Harbour's hidden and
systemic damage under Greenlake Condominium Association
v. Allstate Insurance Company, No. C14-1860-BJR, at *7-8
(W.D. Wash. Apr. 25, 2016), but even if it did not, neither
Commonwealth nor Fireman's were prejudiced: Commonwealth
identified no prejudice, as is its onus, and Fireman's
could have paid to investigate the damage if it had needed to
gather its own or additional information.
argues that whether it and Fireman's were prejudiced is a
question for the factfinder. Fireman's claims it was
prejudiced because it did not receive notice until after
Eagle Harbour's hidden damage had been investigated. Both
argue whether the Association provided late notice concerns
its potential entitlement to Olympic Steamship fees,
a question not yet before the Court.
the Association argues it tendered its claim to Commonwealth
and to Fireman's within each policy's limitations
period by suing Commonwealth one year after finding hidden
damage at Eagle Harbour and suing Fireman's within two
years of that date, August 2014, in accordance with each
policy and Panorama Village Condominium Owners