United States District Court, W.D. Washington, Seattle
RUSHFORTH CONSTRUCTION CO., INC/ d/b/a AP RUSHFORTH, a Washington Corporation, Plaintiff,
WESCO INSURANCE COMPANY, a foreign insurance company, et al., Defendant.
C. COUGHENOUR, UNITED STATES DISTRICT JUDGE
matter comes before the Court on Plaintiff's motion for
partial summary judgment against Defendant Wesco Insurance
Company (“Wesco”) (Dkt. No. 79), Wesco's motion
to continue (Dkt. No. 83), and Wesco's cross-motion for
summary judgment (Dkt. No. 86). Having thoroughly considered
the parties' briefing and the relevant record, the Court
finds oral argument unnecessary and hereby GRANTS
Plaintiff's motion (Dkt. No. 79) and DENIES Wesco's
motions (Dkt. Nos. 83, 86) for the reasons explained herein.
Rushforth Construction Company brings suit against twelve
insurers for inadequate defense and indemnification in an
underlying lawsuit. (Dkt. No. 1 at 4-7.) Plaintiff served as
the general contractor on the Lake Hills Village Project.
(Id. at 7.) Wesco insured Sound Glass Sales, Inc.
(“Sound Glass”), a subcontractor on the project.
(Dkt. No. 86 at 2.) Plaintiff was an “additional
insured” under Sound Glass's Wesco policy.
(Id.) On October 28, 2015, Lake Hills sued Plaintiff
for defective construction and subsequent damage. (Dkt. No. 1
at 8.) Lake Hills filed an amended complaint on June 20,
2015. (Dkt. No. 72 at 20.)
1, 2016, Plaintiff tendered its defense and demand for
indemnity to Wesco. (Dkt. No. 73 at 7.) Wesco's
third-party claim administer opened a claim, set reserves,
and began gathering information. (Dkt. No. 86 at 4.) Wesco
requested, and Plaintiff provided, additional information in
August 2016. (Id.) Wesco prepared a draft
reservation of rights letter (“ROR”) on or around
September 1, 2016. (Dkt. No. 74 at 10.) The ROR was
ready for approval and issuance by September 23, 2018 but was
not issued at that time. (Id.) Over the next ten
months, Plaintiff sent Wesco four letters requesting a
coverage position. (Dkt. Nos. 79 at 5, 86 at 4) (letters
dated November 11, 2016, January 18, 2017, March 7, 2017,
March 24, 2017). Upon receipt of these letters, Wesco's
adjuster internally requested approval of the ROR, but Wesco
neither issued the ROR nor replied to Plaintiff's
inquiries. (See Dkt. Nos. 79 at 6, 74 at 22, 74 at
7, 86 at 4.) On March 8, 2017, Wesco's adjuster revised
and resubmitted the ROR to be finalized. (Dkt. No. 86 at 4.)
Wesco took no further action at the time.
filed suit against Wesco on July 13, 2017. (Dkt. No. 1.) On
July 26, 2017, Wesco finalized and mailed the ROR, agreeing
to defend Plaintiff. (Dkt. No. 73 at 10.) Plaintiff rejected
Wesco's offer of defense on August 18, 2017. (Dkt. No. 74
at 22.) On October 27, 2017, Wesco advised Plaintiff that its
offer to defend stood, and that it would pay its
proportionate share of Plaintiff's expenses incurred to
date. (Dkt. No. 86 at 5.) Wesco subsequently informed
Plaintiff of its position that it had a right to participate
in Plaintiff's defense. (Id.) Plaintiff again
declined the proffered defense. (Id.)
brings claims against Wesco for declaratory relief, breach of
contract, insurer bad faith, insurer negligence, and
violation of Washington's Consumer Protection Act. (Dkt.
No. 1 at 31-38.) Plaintiff seeks partial summary judgment on
the following elements of these claims: (1) whether Wesco
owed and breached its duty to defend; (2) whether Wesco acted
in bad faith; and (3) whether Wesco can cure its breach by
offering a belated defense. (Dkt. No. 79 at 3.) In response,
Wesco moves to continue Plaintiff's motion until
discovery is completed. (Dkt. No. 83.) Wesco also cross-moves
for summary judgment (Dkt. No. 86).
Wesco's Motion to Continue
initial matter, the Court finds it unnecessary to continue
Plaintiff's motion for summary judgment. Wesco requests a
continuance in order to complete discovery and obtain
information related to harm, causation, and damages. (Dkt.
No. 83 at 5.) However, Wesco has not shown how the facts it
seeks are essential to its opposition of Plaintiff's
motion, which explicitly excludes elements of harm,
causation, and damages. (See Dkt. Nos. 94 at 5-6,
102 at 3); Fed.R.Civ.P. 56(d) (party seeking continuance of
summary judgment motion must show “by affidavit or
declaration that, for specified reasons, it cannot present
facts essential to justify its opposition”). The Court
will not rule on elements of Plaintiff's claims not
addressed by its motion. Accordingly, Wesco's motion to
continue is DENIED.
Plaintiff's Motion for Partial Summary Judgment
Court may grant summary judgment on part of a claim or
defense 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). The Court must view the facts and justifiable
inferences to be drawn therefrom in the light most favorable
to the nonmoving party. Anderson v. Liberty Lobby,
477 U.S. 242, 255 (1986). Once a motion for partial summary
judgment is properly made and supported, the opposing party
must present specific facts showing that there is a genuine
issue for trial. Fed.R.Civ.P. 56(e); Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). A dispute about a material fact is genuine if there
is sufficient evidence for a reasonable jury to find for the
non-moving party. Anderson, 477 U.S. at 248-49.
Summary judgment is appropriate against a party who
“fails to make a showing sufficient to establish the
existence of an element essential to that party's case,
and on which that party will bear the burden of proof at
trial.” Celotex Corp. v. Catrett, 477 U.S.
317, 324 (1986).
Breach of Duty to Defend
first moves for a determination that Wesco breached its duty
to defend. Wesco does not contest that it had a contractual
duty to defend Plaintiff. (See Dkt. No. 86 at 4.)
However, Wesco maintains it did not breach this duty because
it never denied Plaintiff's tender and eventually offered
to defend Plaintiff. (Id. at 5, 7.)
insurer's duty to defend is triggered by the filing of a
covered complaint. Griffin v. Allstate Ins. Co., 29
P.3d 777, 781 (Wash.Ct.App. 2001). This duty includes the
obligation to provide a “prompt and proper
defense.” N.H. Indem. Co., Inc. v. Budget
Rent-A-Car Sys., Inc., 64 P.3d 1239, 1243 (Wash. 2003).
An insurer may breach its duty to defend by failing to
respond to an insured's tender in a reasonably timely
manner. Allan Windt, Insurance Claims and Disputes § 2:4
(6th ed. 2018) (collecting cases); see Cedar Grove
Composting, Inc. v. Ironshore Specialty Ins. Co., Case.
No. C14-1443-RAJ, slip op. at *6 (W.D. Wash. June 2, 2015)
(“refusal to pay a demand for coverage reasonably
promptly is [a] . . . denial of benefits”). An offer to
defend after an initial denial does not erase an
insurer's breach of its duty to defend. Jaco ...