United States District Court, W.D. Washington, Seattle
C. COUGHENOUR, UNITED STATES DISTRICT JUDGE
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.
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.)
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.)
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.
removed to this Court (Dkt. No. 1) and now moves to dismiss
without prejudice (Dkt. No. 13). 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.
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 to Dismiss
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.)
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
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 ...