Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Premier Harvest, LLC v. Axis Surplus Insurance Co.

United States District Court, W.D. Washington, Seattle

October 12, 2017

PREMIER HARVEST LLC, et al., Plaintiffs,
v.
AXIS SURPLUS INSURANCE COMPANY, et al., Defendants.

          ORDER

          JOHN C. COUGHENOUR, UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendant Axis Surplus Insurance Company's (“Axis”) motion to dismiss (Dkt. No. 13) and motion for a protective order (Dkt. No. 33). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby DENIES Axis' motions to dismiss (Dkt. No. 13) and for a protective order (Dkt. No. 33) for the reasons explained herein.

         I. BACKGROUND

         Plaintiffs are three related entities: Premier Harvest LLC, a Washington Limited Liability Company; Premier Harvest LLC, an Alaskan Limited Liability Company; and Premier Harvest Adak LLC, an Alaskan Limited Liability Company. (Dkt. No. 1-6 at 1-2.) They own and operate a crab and fish processing facility in Adak, Alaska, one of the “most remote inhabited places on earth.” (Id. at 3.) The facility was damaged by two separate windstorms during December 2015 and a freeze event in January 2016. (Id. at 3-4.)

         Defendant Axis is Plaintiffs' insurer. (Id. at 2.) Plaintiffs purchased the policy through an insurance broker in Seattle. (Id. at 3.) The policy covers property damage of up to $5 million per occurrence, with no aggregate limit. (Id.) Axis engaged Defendant Cunningham Lindsey U.S., Inc. (“Cunningham”) to investigate Plaintiffs' claims of loss resulting from the windstorms and freeze event. (Id. at 2-4.)

         Plaintiffs brought suit against Defendants in King County Superior Court in May 2017 (Dkt. No. 1), approximately sixteen months after the freeze event. They allege that even though Cunningham representatives informally indicated to Plaintiffs that the value of their claims exceeded $12 million, Axis has advanced only $3 million to date, has failed to reasonably investigate Plaintiffs' claims, and has failed to make a final coverage determination. (Dkt. No. 1-6 at 3-4.) They further allege this is the result of Defendants' bad faith and negligence, is a breach of the policy, and violates various insurance and consumer protection statutes and regulations. (Id. at 11-12.) Plaintiffs also allege that due to inadequate advances under the policy, they have been unable to make the necessary repairs to secure or operate the facility, thereby suffering additional physical damage and lost income. (Id. at 9.) Plaintiffs seek a declaratory judgment that Defendants have breached the insurance policy, violated various consumer protection and claim processing insurance regulations and statutes, and negligently handled its claims. (Id. at 10.) Plaintiffs also seek damages and an injunction. (Id. at 14.)

         Axis removed to this Court (Dkt. No. 1) and now moves to dismiss without prejudice (Dkt. No. 13).[1] Axis asserts the action is not ripe because it has not completed its investigation and has not denied the claim. (Id. at 8-9.) Axis also moves for a protective order staying further discovery. (Dkt. No. 33.)

         II. DISCUSSION

         Axis does not cite a procedural basis for its motion to dismiss. The Court will treat it as a motion brought under Federal Rule of Civil Procedure 12(b)(1). See St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989) (treating a motion asserting lack of ripeness as a 12(b)(1) motion).[2]

         A. Motion to Dismiss

         Axis asserts it is continuing to investigate Plaintiffs' losses and, therefore, Plaintiffs' claims are not yet ripe. (Dkt. No. 13 at 8.) It further asserts any delay in its investigation is the result of Plaintiffs' failure to timely fulfill their policy obligations. (Id. at 8-9.) On this basis, it moves to dismiss. (Dkt. No. 13.) Plaintiffs assert they have provided supporting information to Defendants but Defendants have been negligent and shown bad faith in continuing to seek additional information. (Dkt. No. 18 at 7, 12, 16-18.) Plaintiffs also assert that Defendants have had sufficient time to investigate the matter and are dragging their feet. (Id. at 10-13.)

         Defendants, in asserting that Plaintiffs have not yet fulfilled their policy obligations, primarily focus on two requirements: (1) inadequate proof of loss statements supporting funds advanced to date and (2) the failure of Plaintiffs' principals to submit to an examination of the insured under oath. (Dkt. No. 13 at 6.) According to the insurance policy, Plaintiffs are to provide a “signed sworn proof of loss containing the information we request to investigate the claim” and must do so “within 60 days” of Axis' request. (Dkt. No. 21-2 at 21.) Plaintiffs allege they have met this obligation for the $3 million already advanced. (Dkt. No. 18 at 16-17.) Axis asserted the original accounting to support the statements was insufficient. (Dkt. No. 23 at 3.) In response, Plaintiffs provided a “lengthy narrative with supporting documents.” (Dkt. No. 18 at 7.) Axis again asserted the documentation was inadequate to support funds advanced to date. (Dkt. No. 23 at 3.) In response, Plaintiffs provided spreadsheets, bank records, and receipts. (Id.) Based on the information Plaintiffs provided, Axis determined that of the $3.8 million Plaintiffs allegedly spent, only $1.36 million was adequately documented as relating to insurable losses. (Id.) Also according to the policy, Axis “may examine any insured under oath.” (Dkt. No. 21-2 at 21.) At the time Axis filed its motion to dismiss, it had sought to examine Plaintiffs' principal Dustin Anderson. (Dkt. No. 23 at 4-5.) But it had been unable to do so due to Anderson's medical condition. (Id.) On this basis, Axis claimed dismissal was warranted. (Dkt. No. 13 at 6.) Axis has since examined Anderson. (Dkt. No. 31.) It now asserts the examination was inadequate and that further examination is required. (Id. at 3.) Otherwise, it “cannot in good faith make a final determination of its further payment obligations.” (Id.) Plaintiffs assert they fully complied with the examination obligation, no further examination is warranted, and that Axis is using the requirement to “further delay adjustment of the claim.” (Id.)

         1. Declaratory Judgment

         Plaintiffs seek a declaratory judgment that Defendants have demonstrated bad faith and negligence in failing to fully investigate their claim within a reasonable time and, as a result, have breached the insurance policy and violated various consumer protection and insurance regulations and statutes. (Dkt. No. 1-6 at 10.) Axis moves to dismiss on the basis that Plaintiffs' claims are not yet ripe because it has not yet made “a final ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.