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Developers Surety and Indemnity Co v. Alis Homes, LLC

United States District Court, W.D. Washington, Seattle

April 16, 2018

DEVELOPERS SURETY AND INDEMNITY COMPANY, Plaintiff,
v.
ALIS HOMES, LLC, et al., Defendants.

          ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

          JAMES L. ROBART United States District Judge.

         I. INTRODUCTION

         Before the court is Plaintiff Developers Surety and Indemnity Company's (“Developers”) motion for summary judgment. (Mot. (Dkt. # 29).) Defendant Alis Homes, LLC (“Alis”) opposes the motion (Resp. (Dkt. # 31)), and Defendant Holeshot Properties, LLC (“Holeshot”) has not responded (see Dkt.). The court has considered the motion, Developers' and Alis's submissions in support of and in opposition to the motion, the relevant portions of the record, and the applicable law. Being fully advised, [1]the court GRANTS the motion for the reasons set forth below.

         II. BACKGROUND

         This cases arises from a lawsuit between Holeshot and Alis in King County Superior Court (“the Underlying Suit”). (See Compl. (Dkt. # 1) ¶ 9); Holeshot Props., LLC v. Alis Homes, LLC, No. 17-2-06293-1 (King. Co. Sup. Ct.). Holeshot, the assignee and successor in interest to PacWest Investment Group, Inc. (“PacWest”), instituted the Underlying Suit on January 11, 2017. Holeshot engaged Alis to perform construction services as the general contractor at 4625 53rd Ave S., Auburn, Washington (“the Property”). (Compl. ¶ 9, Ex. 2 (“Underlying Compl.”) ¶ 2.1.) Alis's scope of work included installing new windows and doors, painting, remodeling the kitchen and laundry rooms, and “various other repairs” for an estimate of $43, 436.53. (Id.) In the Underlying Suit, Holeshot alleges that Alis breached the parties' agreement by (1) failing to: (a) perform its work in a workmanlike manner or to perform its work at all; (b) purchase required materials; (c) use licensed, registered, and bonded subcontractors; and (2) abandoning its work. (Id. ¶ 2.5.) Holeshot also alleges that Alis “utilized inexperienced, unlicensed subcontractors to perform the [w]ork, ” and that the subcontractors' work “fell far below the industry standards.” (Id. ¶¶ 2.6-2.7.) Holeshot further asserts that it had to hire additional contractors to fix and complete Alis's work. (Id. ¶¶ 2.9, 2.16.) Based on those alleged events, Holeshot asserted claims for breach of contract, quantum meruit, and violation of the Washington Consumer Protection Act (“CPA”), RCW ch. 19.86. (Id. ¶¶ 3.1-9.2.) Holeshot seeks treble damages, a constructive trust, promissory estoppel, and a remedy for unjust enrichment. (Id. ¶¶ 11.1-11.9.)

         After Holeshot brought the Underlying Suit, Alis tendered the lawsuit to Developers for defense and indemnity. (Compl. ¶ 11.) On Developers' behalf, Claims Resource Management, Inc., acknowledged that it received the tender, investigated the tender under a reservation of rights, and retained counsel to defend Alis in the Underlying Suit. (Id.) Developers then brought this suit, seeking a declaration that it does not have a duty to defend or indemnify Alis. (Id. ¶ 15.)

         On March 3, 2016, Developers issued a commercial general liability (“CGL”) policy, Policy Number BIS00024679-01 (“the Policy”), to Alis. (Compl. ¶ 8, Ex. 1 (Dkt. # 1-1) (“Policy”).) The Policy was effective from March 3, 2016, to March 3, 2017 (id.), and provides CGL coverage for “those sums that [Alis] becomes legally obligated to pay as damages because of ‘bodily injury' or ‘property damage' to which this insurance applies” (id. at 24). The Policy further states that Developers “will have the right and duty to defend the insured against any ‘suit' seeking those damages.” (Id.)

         The Policy also contains an “Additional Conditions Endorsement.” (Id. at 70.)

         That endorsement provides that

[t]he following conditions precedent to coverage are added to and form part of the policy:
1. You must be named an additional insured on the commercial general liability policy of each contractor and subcontractor that performs work on your behalf . . . .
2. You must obtain a certificate of insurance from each contractor and subcontractor that performs work on your behalf . . . indicating that each such contractor and subcontractor has a commercial general liability policy in effect.
3. Both the policy within which you are named as an additional insured and the certificate of insurance you obtain must each have occurrence, general aggregate, and products-completed operations aggregate limits . . . ...

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