United States District Court, W.D. Washington, Seattle
ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL
SUMMARY JUDGMENT AND DENYING DEFENDANT CITIZENS' MOTION
FOR SUMMARY JUDGMENT
RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE.
matter comes before the Court on the parties' Motions for
Summary Judgment. Dkts. #12 and #15. Plaintiff Asko
Processing, Inc. (“Asko”) argues for partial
summary judgment on its claims for reformation and breach of
contract, citing to evidence of mutual mistake in the
insurance contract's formation. Dkt. #12. Defendant
Citizens Insurance Company of America
(“Citizens”) opposes that Motion and argues in a
separate Motion that all of Asko's claims should be
dismissed. Dkts. #24 and #15. For the reasons set forth
below, the Court DENIES both parties' Motions for Summary
Asko provides electroplating, anodizing, and other related
metal finishing treatment services for the aerospace and
electronics industries. Dkt. #13 at 1-2. Asko operates out of
several locations in the Puget Sound area of Western
Washington. For the time period relevant to this case, these
locations included three buildings located at 434, 456, and
462 North 35th Street in Seattle. Id. at
2. For clarity, the parties refer to the buildings by
address. The 456 location served as a shipping and receiving
terminal for Asko's customer's parts before and after
work was performed on them, housed Asko offices, and provided
storage for supplies. Id. Parts from Asko's
customers were stored at the 462 location before being
processed at the 434 location and then returned to 456 for
shipment back to Asko's customers. Id. Asko has
testified that the 462 location served as its
“warehouse” on the 400 block of N. 35th Street,
storing “customers' merchandise.”
Id.; Dkt. #14-1, Ex. A at 183:23-184:8.
September 30, 2011, Asko first obtained insurance on its
properties from Defendant Citizens through its broker, Kibble
& Prentice (“Kibble”). See Dkt.
#16-1 at 118. Throughout the relevant time period, Citizens
provided $200, 000 in business income (“BI”)
coverage for the 462 location and $1, 190, 000 in
BI coverage for the 456 location. Asko renewed that coverage
annually. How those two coverage figures came to be applied
to those two addresses is at issue. Representatives from
Citizens and K&P have testified at deposition that they
intended for Citizens to provide BI coverage for Asko's
“warehouse” on the 400 block of North 35th Street
in the amount of $1, 190, 000. Dkt. #14-1, Ex. C, at
68:24-69:11; Ex. D, at 63:10-64:2. However, the parties do
not appear to agree that Asko's 462 location-and that
location alone-served as Asko's warehouse on the 400
block of N. 35th Street. See Dkt. #14-1, Ex. C at
43:22-44:4 (“Q. Can you agree that on the date of the
loss there was no warehouse at 456 North 35th Street in
Seattle? A. I don't know that I can agree with that. My
understanding is there is storage at that facility.”);
Dkt. #13 at 2. In any event, the $1, 190, 000 in BI coverage
was placed on the 456 location explicitly, which
Citizens' underwriting documents described as a
warehouse. Dkt. #14-1, Ex. B at 42:16-21.
at least 2005, and before Defendant Citizens involvement, the
property at 462 had BI insurance in the amount of $200, 000.
See Dkt. #16-1, Ex. B at 20:14-21:4, and Ex. J.
Kibble prepared annual insurance summaries for Asko that
showed the $200, 000 BI limit on 462. Dkt. #16-1, Ex. B at
77:23-78:18. Kibble also prepared “statements of
value” (“SOV”), which reflect the amount of
insurance coverage, including BI limits, associated with each
of Asko's properties. These SOV's show a $200, 000 BI
limit on 462. Dkt. #16-1, Ex. J. Importantly, these SOV's
listed the Asko property at 456 N 35th as
“ASKO - Warehouse.” Id.
September 30, 2014, a fire occurred at Asko's 462
location. Id. at 3. This fire was significant enough
to “essentially shut down Asko's entire
the fire, Kibble sought reformation of the policy on
Asko's behalf so that there would be $1, 190, 000 in BI
limits for the damaged 462 building instead of just $200,
000. Citizens refused to reform the policy. Dkt. #14-1, Ex. I
and Ex. J. Asko originally filed this suit in King County
Superior Court; Citizens removed on September 15, 2017. Dkt.
#1. Asko brings claims against Citizens for reformation,
breach of contract, insurance bad faith, and claims under the
Insurance Fair Conduct Act (“IFCA”) and
Washington State's Consumer Protection Act
(“CPA”). Dkt. #1-3. On October 26, 2017, Asko and
Citizens each filed a Motion for Summary Judgment. Dkts. #12
and #15. Pursuant to stipulation, Responses were filed on
November 13, 2017, and no reply briefs were filed.
See Dkt. #11.
judgment is appropriate where “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247 (1986). Material facts are those which
might affect the outcome of the suit under governing law.
Anderson, 477 U.S. at 248. In ruling on summary
judgment, a court does not weigh evidence to determine the
truth of the matter, but “only determine[s] whether
there is a genuine issue for trial.” Crane v.
Conoco, Inc., 41 F.3d 547, 549 (9th Cir. 1994) (citing
Federal Deposit Ins. Corp. v. O'Melveny &
Meyers, 969 F.2d 744, 747 (9th Cir. 1992)).
motion for summary judgment, the court views the evidence and
draws inferences in the light most favorable to the
non-moving party. Anderson, 477 U.S. at 255;
Sullivan v. U.S. Dep't of the Navy, 365 F.3d
827, 832 (9th Cir. 2004). The Court must draw all reasonable
inferences in favor of the non-moving party. See
O'Melveny & Meyers, 969 F.2d at 747,
rev'd on other grounds, 512 U.S. 79 (1994).
However, the nonmoving party must make a “sufficient
showing on an essential element of her case with respect to
which she has the burden of proof” to survive summary
judgment. Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). Further, “[t]he mere existence of a
scintilla of evidence in support of the plaintiff's
position will be insufficient; there must be evidence on
which the jury could reasonably find for the
plaintiff.” Anderson, 477 U.S. at 251.
Reformation of the Insurance Contract
Washington law, insurance contracts are subject to
reformation like any other contract when there is a showing
of mutual mistake. Rocky Mt. Fire & Cas. Co. v.
Rose, 62 Wn.2d 896, 902, 385 P.2d 45 (1963). A trial
court may use its equitable power to reform a contract where
there is clear, cogent and convincing evidence of a mutual
mistake or a unilateral mistake together with inequitable
conduct. Wilhelm v. Beyersdorf, 100 Wn.App. 836,
843, 999 P.2d 54 (2000); See also Wash. Mut. Savings Bank
v. Hedreen, 125 Wn.2d 521, 886 P.2d 1121 (1994).
“Mutual mistake occurs if the intention of the parties
is identical at the time of the transaction and the writing
executed by them does not express that intention.”
Wilhelm, 100 Wn.App. at 843. In order to reform a
contract on this basis, a court must find not only that a
mistake has occurred, but also that the ...