United States District Court, W.D. Washington
ORDER GRANTING DEFENDANTS LEXINGTON AND NATIONAL
UNION'S MOTION FOR SUMMARY JUDGMENT
BARBARA JACOBS ROTHSTEIN U.S. DISTRICT COURT JUDGE
instant case involves claims by Plaintiff King County against
multiple insurers, seeking defense and indemnity related to
the County's liability for contamination in and around
the Lower Duwamish Waterway located in the City of Seattle.
Two such insurers, Defendants Lexington Insurance Company and
National Union Insurance Company of Pittsburgh, PA,
(collectively, the “AIG Defendants”), have filed
this Motion for Summary Judgment, seeking dismissal from this
action. They argue that the County's claims against them
are barred by a settlement agreement and release King County
signed in 1997. Having reviewed the pleadings filed in
support of and opposition to this motion, the Court finds and
rules as follows.
early and mid 1990s, environmental contamination at multiple
sites in the City of Seattle, including around the Lower
Duwamish Waterway area at issue in this litigation, was the
subject of several lawsuits brought against, among others,
the Municipality of Metropolitan Seattle
(“Metro”). In response to these lawsuits, Metro
tendered claims against its insurers, including the AIG
Defendants Lexington and National Union, and several other
AIG affiliates. See Declaration of Linda Clapham,
Dkt. No. 629 (“Clapham Decl.”), Ex. 3. Disputes
arose over whether, and to what extent, Metro was entitled to
coverage. In 1997, in resolution of those disputes, Metro and
the “AIG-Related Companies” executed a Settlement
Agreement and Release (the “Agreement”),
expressing a “wish to (i) avoid litigation, and (ii)
fully, finally, completely and in good-faith resolve all
disputes and disagreements between them arising from, or
connected in any way with, environmental contamination or
pollution connected in any way” to the Lower Duwamish
Waterway, among other sites. Clapham Decl., Ex. 1, ¶ M.
Notably, in 1994 King County and Metro had merged, and it was
King County that executed the 1997 Agreement, “as
successor to the Municipality of Metropolitan Seattle.”
Id. at p. 1.
instant action, which involves some of the same environmental
contamination in the Lower Duwamish Waterway, King County is
claiming coverage under four AIG excess policies: one issued
by National Union to King County (policy number 1225707), and
three issued by Lexington to Metro (policy numbers GC 403544,
GC 5502773, and 5510602). See Clapham Decl., Ex. 2.
By this motion, the AIG Defendants claim that the 1997
Agreement was intended to, and did, resolve all of the
parties' disputes and disagreements related to
contamination at the Lower Duwamish Waterway, known and
unknown, current and future, including the instant dispute
over these four policies. King County disagrees, arguing that
(1) the Agreement does not apply to the National Union policy
issued to King County, because the County signed the
Agreement “as successor” to Metro, not on its own
behalf; that (2) the Agreement does not apply to the three
Lexington policies issued to Metro, because the parties did
not intend for the Agreement to apply to Lexington; and (3)
the Agreement does not apply to any of the four policies,
because it released only certain “enumerated”
policies listed in the Agreement, none of the four among
reasons set forth below, the Court finds that the intent of
the parties to the 1997 Agreement, as expressed in the
language of the Agreement, was that it be broad enough to
include both policies issued to King County and policies
issued by Lexington; and, more specifically, the four
policies at issue in this action, and therefore grants the
AIG Defendants' Motion for Summary Judgment.
Summary Judgment Standard and Washington Principles of
Judgment is appropriate when “the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law.” Fed.R.Civ.P. 56(c), Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). Where there is no
dispute of material fact, the construction of a contract is
appropriate on summary judgment. Mut. of Enumclaw Ins.
Co. v. USF Ins. Co., 191 P.3d 866 (W.2d 2008);
Brinkerhoff v. Campbell, 994 P.2d 911, 915 (Wn. App.
2000). Courts interpret settlement agreements using the same
principles used in interpretation of other contracts.
McGuire v. Bates, 234 P.3d 205 (Wn.2d 2010). The
parties agree that interpretation of the Agreement at issue
in this diversity action is governed by Washington law, and
that “[t]he party moving to enforce a settlement
agreement carries the burden of proving that there is no
genuine dispute over the existence and material terms of the
agreement.” AIG Defs.' Mot. at 6; King County Opp.
at 7, citing Brinkerhoff.
Berg v. Hudesman, the seminal Washington case
governing the construction of contracts, the Washington
Supreme Court directed “every court [to] heed the
strong words of Corbin: . . . that language at its best is
always a defective and uncertain instrument, that words do
not define themselves, that terms and sentences in a
contract, a deed, or a will do not apply themselves to
external objects and performances.” 115 801 P.2d 222,
227 (Wn.2d 1990). Thus, Berg v. Hudesman instructs
courts to determine the intent of the contracting parties in
light of not just the language used, but also “the
subject matter and objective of the contract, all the
circumstances surrounding the making of the contract, the
subsequent acts and conduct of the parties to the contract,
and the reasonableness of respective interpretations
advocated by the parties.” Id. With this
directive in mind, the Court turns to the Agreement at issue
in this motion.
The 1997 Agreement Releases Policies Issued to King
1997 Agreement was executed “by and between (I) King
County, as successor to The Municipality of Metropolitan
Seattle (together with all related and affiliated entities,
‘Metro')” and multiple AIG insurers. Clapham
Decl., Ex. 1 at p. 1. King County argues that the qualifier
“as successor to” Metro, found several other
times in the Agreement, necessarily limits the scope of the
Agreement to only those policies issued to Metro, and does
not include policies issued to King County itself.
See Clapham Decl., Ex. 1, § 16(a) (notices to
be provided to “King County, as successor to the
Municipality of Metropolitan Seattle); p. 12 (Agreement
signed by “KING COUNTY, as successor to the
Municipality of Metropolitan Seattle”). The County
therefore claims that the release in the Agreement does not
include the National Union policy under which it claims
coverage in this case, which was issued to King County in the
1980s, long before its merger with Metro.
AIG Defendants point out, however, King County also executed
the Agreement on behalf of “all” of Metro's
“related and affiliated entities, ” a category to
which King County undeniably belonged by the time the
Agreement was executed. Clapham Decl., Ex. 1 at p. 1.
Furthermore, the definition of “policies”
released by the Agreement does not articulate the
County's proposed limitation. That definition provides
“‘Policies' is defined as all
policies issued by National Union . . . with respect to
. . . the excess policies including, but not limitedto, those set forth below.” Id.
¶ A. (2) (emphases added). Elsewhere in the Agreement,
the parties expressed the intent that the “Scope of
Releases” not be limited to Metro, but include
“all . . . entities that are or purport to be insureds
under the AIG-Related Companies Policies.” Id.
§ 7(a). In this action, King County is in fact claiming
to be an ...