United States District Court, W.D. Washington, Seattle
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
J. Pechman United States District Judge.
MATTER comes before the Court on Defendant's Motion for
Summary Judgment. (Dkt. No. 22.) Having reviewed the Motion,
the Response (Dkt. No. 31), the Reply (Dkt. No. 35) and all
related papers, the Court GRANTS in part and DENIES in part.
The Court declines to hear oral argument on this matter.
Reverse Now VII, LLC brings this action against Defendant
Oregon Mutual Insurance Company (“Oregon
Mutual”). Plaintiff is the owner of an apartment
complex in Seattle, Washington that was insured by Oregon
Mutual. (Dkt. No. 41.)
February 2, 2014, the apartment complex was damaged by fire.
(Dkt. No. 23, Ex. D; see also Dkt. No. 32, Ex. 9 at
3.) Relevant to this dispute is damage to portions of the
apartment's exterior marbleCrete. MarbleCrete is a
cement, stucco-type overlay made with crushed marble, and
often used in exterior surfacing. (Dkt. No. 22 at 3; Dkt. No.
31 at 1.) While it is possible in some cases to
“match” the color and texture of replacement
marbleCrete with that of existing marbleCrete, this process,
as well as the “tie in” process, was apparently
complicated by the age and condition of the apartment's
existing surfacing. (See Dkt. No. 32, Ex. 8.)
Accordingly, although only a portion of the west elevation
was damaged by the fire, Plaintiff sought to have the entire
building - and at a minimum, the entire west elevation -
reclad. (Dkt. No. 32, Ex. 9 at 3-4.)
receiving notice of the claim on February 3, 2014, Oregon
Mutual accepted coverage and assigned internal adjuster James
Rumppe and independent adjuster John Colvard to investigate
the scope of repairs and adjust loss. (Dkt. No. 22 at 3;
see also Dkt. No. 24, Exs. 2, 7.)
March 4, 2014, Oregon Mutual paid Plaintiff $65, 352.74, an
amount representing the estimated value of
repairs. (Dkt. No. 22 at 4; Dkt. No. 24, Ex. 12.)
Plaintiff expressed concerns about the estimate, and in
particular, whether it would cover the cost of matching the
replacement and existing marbleCrete. (Dkt. No. 24, Ex. 7.)
March 26, 2014, Plaintiff retained insurance adjuster Paul
Moreland to represent it in its claim. (Dkt. No. 24, Ex. 14.)
After conferring with Mr. Moreland, Mr. Colvard requested
additional estimates from three marbleCrete subcontractors.
(Id., Ex. 18.) Each advised Mr. Colvard that
matching was “not feasible.” (Id.)
According to Mr. Colvard's report to Oregon Mutual, the
subcontractors agreed it would not be possible to
“effectively replace just a portion of the west
elevation with no breaking points of control joints or
separated corners, ” and at a minimum, they would need
to repair “the north/south elevations to the vertical
control joints on those elevations.” (Id., Ex.
19.) Further, they agreed they could not “guarantee a
color match on the north and south elevations.”
August 6, 2014, Mr. Rumppe provided an internal report to
Oregon Mutual's claim manager. (Dkt. No. 32, Ex. 9.) The
internal report included the following note regarding repairs
to the marbleCrete:
A partial repair of the west elevation does not appear to be
a viable option; so at a minimum [best case scenario] the
stucco repairs will cost at least $387, 750.63 if we do the
full elevation. It's likely that we will get pulled into
the west, and north/south elevations [which will take us
around the ends of the building and stop at a vertical
control joint at covered area]. If so, the stucco repairs
will total $542, 925.43 [this is not best case scenario but
would represent a good compromise].
(Id. at 4-5.)
Rumppe's report noted that coverage for matching is
“traditionally a difficult issue to fight.”
(Id. at 4.) In particular:
If the marblecrete is in its natural finish most carriers
have typically agreed to elevation replacement but if [it]
has been painted they will not replace. In this instance, all
of the marblecrete is in its natural finish. Accordingly,
it's going to be a tough fight on the aesthetics.
Mr. Rumppe reported that Mr. Moreland had agreed to a test
repair, the outcome of which would determine the amount of
Oregon Mutual's ACV payment for the marbleCrete.
(Id. at 6.)
Mutual claims that, despite several attempts, it was unable
to contact Plaintiff or Mr. Moreland for approximately one
year. (Dkt. No. 22 at 5.) In March 2015, Oregon
Mutual sent Plaintiff and Mr. Moreland correspondence asking
if they disputed the ACV calculation and stating that if no
response was received by April 2015, it would conclude there
was no ongoing dispute. (Dkt. No. 22 at 6; Dkt. No. 24, Exs.
4, 16.) In May 2015, having received no response, Oregon
Mutual closed the claim. (Dkt. No. 22 at 6; Dkt. No. 24, Ex.
November 6, 2015, Mr. Moreland reported to Mr. Colvard the
results of a test repair. Mr. Moreland reported that the
subcontractor had been unable to match the color, size, and
texture of the existing marbleCrete, and that the WRB under
the marbleCrete was not in a condition to be tied into a new
section. (Dkt. No. 24, Ex. 17.) Mr. Moreland explained that,
due to concerns about the tie in, the subcontractor refused
to warranty the replacement marbleCrete. (Id.)
Further, Mr. Moreland explained that a marbleCrete product
representative stated “it would be unwise to try and
tie into the existing system.” (Id.)
November 11, 2015, Mr. Rumppe sent Mr. Colvard a report
regarding the test repair. (Id., Ex. 25.) The report
noted that the test repair appeared “brighter/whiter
than the surrounding material, ” and that “[t]he
pebble grain and color does not quite match.”
December 3, 2015, Mr. Colvard reported to Oregon Mutual that
he had contacted the subcontractor who performed the test
repair and learned that Plaintiff had instructed him not to
attempt to match the color. (Id., Ex. 26.) The
subcontractor told Mr. Colvard he thought he could have
matched the color, but not the texture, of the existing
December 14, 2015, Mr. Moreland notified Mr. Colvard of
Plaintiff's intent to enter the appraisal process.
(Id., Ex. 27.) In the same correspondence, Mr.
Moreland stated that “Oregon Mutual is in violation of
the Washington Administrative Code, ” including WAC
284-30-330(3), (6), (7), (8), and (18); WAC 284-30-370; and
WAC 284-30-380(4) and (7). (Id.) Further, Mr. Moreland
noted that Plaintiff “will be forced to take action
under RCW 48.30.015” if Oregon Mutual failed to cure
these alleged violations. (Id.) The following day,
Mr. Moreland sent a letter to the Washington State ...