United States District Court, W.D. Washington, Tacoma
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION TO AMEND COMPLAINT, REALIGN THE
PARTIES AND DISMISS FOR LACK OF SUBJECT MATTER
BENJAMIN H. SETTLE UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendants Sun Theresa Choe
(“Choe”) and Goodwill of the Olympics and Rainier
Region's (“Goodwill”) motion to amend
complaint, realign the parties and dismiss for lack of
subject matter jurisdiction. Dkt. 27. The Court has
considered the pleadings filed in support of and in
opposition to the motion and the remainder of the file and
hereby grants in part and denies in part the motion for the
reasons stated herein.
November 22, 2017, Plaintiff American Alternative Insurance
Corporation (“American”) filed a declaratory
judgment action against Defendants Goodwill, Choe, Enrique
Hernandez Franco (“Franco”), Jane Doe Hernandez
Franco, and Non Profit Insurance Program (“Risk
Pool”) seeking a declaration that there is no duty to
defend, indemnify, or reimburse Goodwill or the Risk Pool
based on allegations in an underlying complaint. Dkt. 1.
underlying matter, Choe alleged that Franco backed over her
at a Goodwill location in Tacoma, Washington and that
Goodwill failed to maintain its premise in a lawful manner.
Id., ¶¶ 3.5-3.12. Choe and Goodwill
entered into a settlement shortly after American filed this
declaratory judgment action.
April 13, 2018, the Risk Pool answered, Dkt. 14, and Goodwill
and Choe answered and asserted counterclaims against
American, Dkt. 17. On May 11, 2018, American answered the
counterclaims. Dkt. 20.
February 7, 2019, Goodwill and Choe filed the instant motion
to amend, realign the parties, and dismiss for lack of
jurisdiction. Dkt. 27. On February 25, 2019, the Risk Pool
responded and moved to strike the Declaration of Micah
LeBank, Dkt. 29, and American responded and moved to strike
the Declaration of Micah LeBank, Dkt. 31. On March 1, 2019,
Goodwill and Choe replied. Dkt. 33.
Motions to Strike
the Risk Pool and American moved to strike the Declaration of
Micah LeBank. Goodwill and Choe respond that both motions are
based on broad generalizations about the content of the
declaration and fail to provide the Court with specific
citations to inadmissible evidence contained with the
declaration. Dkt. 33 at 1 n.1. The Court agrees with Goodwill
and Choe and denies the motions to strike because the
inclusion of some inadmissible evidence does not warrant
striking otherwise admissible evidence within the same
Motion to Amend
and Choe move to amend their counter-complaint to add claims
against the Risk Pool. Dkt. 27 at 6-8. American argues that
Goodwill and Choe's proposed claims are
“unavailing.” Dkt. 31 at 8. The Rick Pool argues
that the Court should deny the motion for procedural and
substantive reasons. Dkt. 29 at 10-13. Regarding the former,
the Risk Pool contends that the Court should deny the motion
because Goodwill and Choe failed to file a red-lined version
of the proposed amended crossclaims. Id. at 10.
While the Court agrees that Goodwill and Choe failed to
technically comply with the Local Rules, the Risk Pool has
failed to show any prejudice from the error.
the substantive reasons, the Risk Pool argues that the Court
should deny the motion because Goodwill and Choe's
proposed claims are futile for numerous reasons. Nunes v.
Ashcroft, 348 F.3d 815, 818 (9th Cir. 2003)
(“Futility alone can justify the denial of a motion to
amend.”). First, the Risk Pool argues that Choe's
claims are futile because the settlement agreement limits her
recovery only to claims against American. Dkt. 29 at 11. The
Risk Pool's argument is without merit because the
agreement provides that Choe reserves the right to proceed
against American and its associated entities “including
but not limited to [the Risk Pool] who is entitled to
coverage under the [American] Policy.” Dkt. 30 at 50,
¶ 1. Even if this does not explicitly allow Choe's
claims, there is at least a question of interpretation
overcoming any argument that the claims are futile as
the Risk Pool argues that the claims are futile because,
under Jones v. St. Paul Fire & Marine Ins. Co.,
15-531-MJP, 2015 WL 4508884 (W.D. Wash. July 24, 2015), it is
not an insurer. Dkt. 29 at 11. This is a mistaken application
of the holding in Jones. In Jones, the
Court held that the plaintiff's claims failed against the
Washington Rural Counties Insurance Program
(“WRCIP”) and its claims administrator because
“Washington statutorily excludes governmental
risk-pooling organizations like WRCIP from being considered
insurers.” Id. at *4 (citing RCW 48.01.050).
The Risk Pool fails to show that it is a government
risk-pooling organization or that Jones extended the
Washington statute to cover nonprofit corporations operating
as a joint insurance purchasing program. Dkt. 1, ¶ 1.2.
Similarly, the Risk Pool's argument that it is immune
because it is a “self-insurance risk pool” is
flawed because “Washington courts also hold that
generally ‘self-insurance' provisions are not
insurance.'” Id. at *4 (quoting
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