United States District Court, W.D. Washington, Tacoma
ORDER GRANTING THE PARTIES' STIPULATED MOTION TO
CONTINUE, RENOTING AND RESERVING RULING ON THE PARTIES'
CROSS-MOTIONS FOR SUMMARY JUDGMENT, REQUESTING SUPPLEMENTAL
BRIEFING, AND SETTING ORAL ARGUMENT
BENJAMIN H. SETTLE United States District Judge
matter comes before the Court on the cross-motions for
summary judgment of Plaintiff Ohio Security Insurance Company
(“Ohio Security”) and Defendant Axis Insurance
Company (“Axis”). Dkts. 19, 22. Also before the
Court is the parties' stipulated motion to continue the
scheduled trial and related dates. Dkt. 34. The Court has
considered the pleadings filed in support of and in
opposition to the cross-motions and the remainder of the file
and reserves ruling on the cross-motions for the reasons
stated herein. The Court also grants the stipulated motion
for a continuance.
PROCEDURAL AND FACTUAL BACKGROUND
case concerns insurance coverage for a building located at
9625 32nd Ave. S., Lakewood, Washington, that is used to
store ice. In May, 2011, Grosso Enterprises Tacoma, LLC
(“Grosso”) leased the building to Reddy Ice
Corporation (“Reddy Ice”) for a period of ten
years. See Dkt. 21-1. On January 20, 2012, a
snowstorm caused the building's roof to become overloaded
and collapse. Thereafter, Reddy Ice tendered an insurance
claim to Axis and Grosso tendered an insurance claim to Ohio
Security. The Axis insurance policy, issued to Reddy Ice as
the “Named Insured, ” covered a period from
August 25, 2011, to August 25, 2012. Dkt. 21-2. The Ohio
Security policy was issued to Grosso and covered a period
from May 17, 2011, to May 17, 2012. Dkt. 20-1. Both insurance
companies began investigating the loss after claims were
tendered from the respective insureds.
December 2012, Axis retroactively issued an endorsement to
Grosso naming him as an additional insured under the Axis
policy. Dkt. 21 at 2. The endorsement's effective date
was August 25, 2011, and covered the same period as the Axis
policy, ending on August 25, 2012. Dkt. 25 at 4.
providing coverage for the damaged building, Ohio Security
issued the following payments to Grosso:
May 5, 2012 ........................
June 6, 2012 ........................
October 3, 2013 ..................
November 21, 2013 ............
January 16, 2015, Ohio Security filed a complaint in Pierce
County Superior Court, bringing a claim against Axis for
equitable contribution. Dkt. 1-3 at 2. Ohio Security claims
that it is entitled to equitable contribution from Axis on
its payments to Grosso in order to rebuild the building that
collapsed. Dkt. 1-2.
January 28, 2015, Ohio Security caused the summons and
complaint to be served on Edith Green, an employee of Axis,
at Axis's registered address for service of process on
file with the state's insurance commissioner. Dkt. 1-3 at
13-14. On August 25, 2015, Axis moved to dismiss on the
grounds of insufficiency of service of process. Id.
at 51-58. On August 28, 2015, Ohio Security again served the
summons and complaint, this time on the insurance
commissioner. Id. at 175-76.
September 28, 2015, Axis removed, before the motion to
dismiss was addressed by the Superior Court. Dkt. 1. On
October 5, 2017, Axis filed its answer, raising the
affirmative defenses of the statute of limitations. Dkt. 9.
March 9, 2017, the parties filed their cross-motions for
summary judgment and supporting declarations. Dkts. 19-25. On
March 27, the parties filed their responses. Dkts. 26, 29. On
March 31, 2017, the parties filed replies. Dkts. 30, 31. On
April 25, 2017, the parties filed a stipulated motion to
continue the trial and related dates. Dkt. 34.
Summary Judgment Standard
judgment is proper only if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that
there is no genuine dispute as to any material fact and that
the movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c). The moving party is entitled to judgment
as a matter of law when the nonmoving party fails to make a
sufficient showing on an essential element of a claim in the
case on which the nonmoving party has the burden of proof.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
There is no genuine issue of fact for trial where the record,
taken as a whole, could not lead a rational trier of fact to
find for the nonmoving party. Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)
(nonmoving party must present specific, significant probative
evidence, not simply “some metaphysical doubt”).
See also Fed. R. Civ. P. 56(e). Conversely, a
genuine dispute over a material fact exists if there is
sufficient evidence supporting the claimed factual dispute,
requiring a judge or jury to resolve the differing versions
of the truth. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 253 (1986); T.W. Elec. Serv., Inc. v. Pac.
Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.
parties' disputes focus entirely on the construction of
the Ohio Security and Axis insurance policies and the meaning
of the lease agreement between Grosso and Reddy Ice. The
interpretation of insurance policies and lease agreements is
generally a question of law to be decided by the court.
Quadrant Corp. v. Am. States Ins. Co., 154 Wn.2d
165, 171 (2005); Duvall Highlands LLC v. Elwell, 104
Wn.App. 763, 771 n.18 (2001). However, where a material
provision of a contract is ambiguous, “[d]etermining a
contractual term's meaning involves a question of fact
and examination of objective manifestations of the
parties' intent.” Martinez v. Miller Indus.,
Inc., 94 Wn.App. 935, 943 (1999).
Security has advanced a single claim against Axis for
equitable contribution. Axis argues that it is entitled to
summary judgment on the basis that (1) the policies from Axis
and Ohio Security do not cover the same loss, Dkt. 19 at 7-8;
(2) Grosso never tendered a claim to Axis, id. at
9-10; and (3) Ohio Security's claim is barred by the
statute of limitations, id. at 10-11. Ohio Security
argues that it is entitled to summary judgment because the
Axis and Ohio Security policies covered the same loss.
the context of insurance law, contribution allows an insurer
to recover from another insurer where both are independently
obligated to indemnify or defend the same loss.”
Wellman & Zuck, Inc. v. Hartford Fire Ins. Co.,
170 Wn.App. 666, 679 (2012) (quoting Mut. of Enumclaw
Ins. Co. v. USF Ins. Co., 164 Wn.2d 411, 419 (2008)).
For two policies to cover the same loss, the
“polic[ies] must insure  the same property and 
the same interest  against the same risk . . . .”
Kirkland v. Ohio Cas. Ins. Co., 18 Wn.App. 538, 545
(1977). Additionally, for the policies to cover the same
loss, they must run to the same insured because
“[e]quity provides no right for an insurer to seek
contribution from another insurer who has no obligation to
the insured.” Mut. of Enumclaw Ins. Co., 164
Wn.2d at 420. See also Kirkland, 18 Wn.App. at 547
(“The same interest would not be insured under the two
policies if the vendor was the loss payee under one and the
vendee or assignee the loss payee under the other.”).
Axis policy covers damage to real property. See Dkt.
24-1 at 17. Under its plain language, damage to “real
property” would include structural damage such as the
collapsed roof in this case. However, coverage for real
property damage under the Axis policy is limited to real
property “in which the insured has an insurable
interest.” Id. (emphasis added).
Therefore, the parties' dispute as to whether the Axis
and Ohio Security policies covered the same loss depends upon
(1) whether damage to the structure and its roof was an
insurable interest under the Axis policy and (2) whether
Grosso was an insured under both policies.
Reddy Ice's Insurable Interest Under the Axis
Washington law, an “insurable interest” in
property insurance “means any lawful and substantial
economic interest in the safety or preservation of the
subject of the insurance free from loss, destruction, or
pecuniary damage.” RCW 48.18.040. Accordingly, because
RCW 48.18.040 “permit[s] any legal or equitable
interest to create an insurable interest, ”
Wolstein v. Yorkshire Ins. Co., Ltd., 97 Wn.App.
201, 207 (1999), Reddy Ice had an insurable interest to the
extent that it was required under the lease agreement to
obtain insurance. Indeed, it is a longstanding principle that
“a tenant who has agreed . . . to keep the demised
property insured is liable to the lessor for a breach of that
agreement, and has an insurable interest in the property to
the extent of the amount agreed to be insured.”
Berry v. Am. Cent. Ins. Co. of St. Louis, 132 N.Y.
49, 56-57 (1892). Accordingly, the Court will examine the
lease agreement to ascertain the extent of Reddy Ice's
insurable interest in the leased property.
touchstone of contract interpretation is the parties'
intent.” Martinez v. Miller Indus., Inc., 94
Wn.App. 935, 942 (1999) (quoting Tanner Electric Coop. v.
Puget Sound Power & Light, 128 Wash.2d 656, 674
(1996)). In determining the intent of Reddy Ice and Grosso as
it pertains to Reddy Ice's insurable interest, the Court
considers the following:
The intent of the parties in reducing an agreement to writing
may be discovered from  the actual language of the
agreement, as well as from  the contract as a whole, 
the subject matter and objective of the contract,  all the
circumstances surrounding the making of the contract,  the
subsequent acts and conduct of the parties to the contract,
and the  reasonableness of respective interpretations
advocated by the parties.
Martinez v. Miller Indus., Inc., 94 Wn.App. 935, 943
11 (“Insurance and Indemnification”) of the lease
agreement indicates that Reddy Ice is obligated to carry
property damage insurance. Dkt. 21-1 at 14-15. Specifically,
the agreement states:
11.01 Tenant's Insurance Obligation. Tenant
Covenants and agrees that from and after taking possession of
the Premises, Tenant will carry and maintain, at its sole
cost and ...