United States District Court, W.D. Washington
CONTRIBUTION BAR ORDER
L. ROBART United States District Judge
the court is Defendant Discover Property & Casualty
Insurance Company ("Discover") and Plaintiff
Nautica Condominium Owners Association's
("Nautica") (collectively, "Moving
Parties") motion for a contribution bar order and
dismissal of all claims against Discover with prejudice.
(Mot. (Dkt. # 75).) Defendant Commonwealth Insurance Company
of America ("Commonwealth") opposes the entry of
the contribution bar order as proposed by the Moving Parties.
(Resp. (Dkt. # 79).) The court has reviewed the parties'
submissions, the relevant portions of the record, and the
applicable law. Being fully advised,  the court GRANTS the Moving
Parties' motion for a contribution bar order and
dismissal of all claims against Discover with prejudice.
BACKGROUND & ANALYSIS
an insurance coverage action brought by Nautica against
multiple defendants. Eight defendant insurers have been
dismissed from the instant suit with no contribution bar
order. (See Dkt. ## 7-9, 21, 23, 32, 50, 66, 71,
73.) The Moving Parties have reached a settlement of $140,
000 through a mediation conducted on February 9, 2017. (Mot.
at 1; see also Ortiz-Cotto Decl. (Dkt. # 76)
¶¶ 10-11, Ex. 8 "Settlement Agreement".)
Four non-settling defendants remain. (See Mot. at
of their settlement, the Moving Parties seek an order barring
any non-settling defendant from seeking contribution from
Discover. (Id. at 1-2.) Commonwealth objects that
the proposed contribution bar "does not provide any
protection to the non-settling insurers" and thus must
be rejected. (Resp. at 2.) If the court were to enter a
contribution bar order, Commonwealth requests that the court
include two provisions: (1) "offsetting any future
judgment by the settlement amount"; and (2) placing any
risk of the settlement being inadequate on Nautica, rather
than on the non-settling defendants. (Mat 3.)
has the "inheritable equitable authority to enter an
order precluding subsequent claims for contribution and
indemnity by non-settling parties." Canal Indem. Co.
v. Glob. Dev., LLC, C14-0823RSM, 2015 WL 347753, at *3
(W.D. Wash. Jan. 26, 2015). Contribution bar orders are
"consistent with the public policy in Washington of
encouraging settlement." Puget Sound Energy v.
Certain Underwriters at Lloyd's, 138 P.3d 1068, 1079
(Wash.Ct.App. 2006). Without such orders:
Any single defendant who refuses to settle, for whatever
reason, forces all others to trial. Anyone foolish enough to
settle without barring contribution is ... allowing the total
damages from which their ultimate share will be derived to be
determined in a trial where they are not even represented.
v. Kaypro Corp., 884 F.2d 1222, 1229 (9th Cir. 1989)
(quoting In re Nucorp Energy Sec. Litig.,
661 F.Supp. 1403, 1408 (S.D. Cal. 1987)).
the public policy favoring settlement and the expeditious
resolution of disputes must be balanced against the need for
factual fairness and the correct application of legal
principles. See Bank of Am. v. Travelers Indem. Co.,
C07-0322RSL, 2009 WL 529227, at *1 (W.D. Wash. Mar. 2, 2009).
Thus, in considering whether a contribution bar is
appropriate, the court requires that (1) the proposed
settlement is reasonable, and (2) the interests of the
non-settling defendants are protected. See Canal Indem.
Co., 2015 WL 347753, at *3.
parties agree that the proposed settlement is reasonable.
(Mot. at 14; Resp. at 2 ("Commonwealth does not
generally object to the reasonableness of the settlement
amount[.]"); Nautica Reply (Dkt. # 81) at 3; Discover
Reply (Dkt. # 82) at 2.) But the parties disagree over
whether the contribution bar order, as requested, would
adequately protect Commonwealth's interests.
(Compare Mot. at 14-15, with Resp. at 2-6.)
is no single formula for determining whether non-settling
parties' rights are protected when a bar order is
entered." CanalIndem. Co., 2015 WL 347753, at
*3. But the prospect that the non-settling defendant may face
greater financial exposure if it is barred from seeking
contribution does not, in itself, render a bar order
inappropriate. King Cty. v. Travelers Indem. Co.,
C14-1957BJR, 2017 WL 785186, at *3 (W.D. Wash. Mar. 1,
2017). Courts have recognized a variety of ways
to protect the non-settling parties' rights. A
non-settling defendant can be protected by its retention of
the right to litigate coverage defenses, which if successful,
may end up excusing that party from paying anything.
Canal Indem. Co., 2015 WL 347753, at *4. Moreover, a
non-settling defendant may be protected if the contribution
bar leaves open the possibility for it to seek a future
determination relating to the percentage of its liability or
forcing the plaintiff to absorb the loss resulting from an
inadequate settlement. Id. Or, the non-settling
defendant may be protected by its ability to seek
contribution from additional sources. For example, mKing
County v. Travelers Indemnity Co., the court concluded
that the non-settling defendants' rights were adequately
protected because there were several remaining defendants
from whom contribution could be sought. 2017 WL 785186, at
the court concludes that Commonwealth's interests as a
non-settling defendant are sufficiently protected. First,
Commonwealth retains its right to seek coverage defenses, and
if successful, Commonwealth would avoid payment obligations
altogether. See CanalIndem. Co., 2015 WL 347753,
at'*5; (see also Resp. at 3-4.) Moreover, the
contribution bar order leaves open the possibility that
Nautica will absorb any resulting shortfall from the
settlement. See Id. Thus, if Commonwealth does not
prevail on its defenses, it is free to seek a determination
relating to the percentage of its liability or to attempt to
force Nautica to bear the burden of the inadequate
settlement. See id.; see also Cadet Mfg. Co. v. Am. Ins.
Co., C04-5311FDB, 2006 WL 910000, at *2 (W.D. Wash. Apr.
7, 2006). Lastly, Commonwealth is free to seek contribution
from the remaining non-settling defendants or the many
defendants who do not have a contribution bar order in place.
See King Cty., 2017 WL 785186, at *3. Commonwealth
does not contend otherwise. (See generally Resp.)
Thus, the court finds that Commonwealth's interests are
contends that two provisions must be added to sufficiently
protect its rights as a non-settling defendant: first, that
the settlement amount be offset from any award of damages at
trial, and second, that any risk of an inadequate settlement
be placed on Nautica. (Resp. at 5-6.) Commonwealth seems to
believe that these two ...