United States District Court, W.D. Washington, Tacoma
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT RE
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 for partial
summary judgment re covenant judgment, Dkt. 65. The Court has
considered the pleadings filed in support of and in
opposition to the motion and the remainder of the file and
grants the motion in part and denies the motion in part 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.
23, 2019, Goodwill and Choe answered and asserted
counterclaims against American for breach of the duty to
defend, breach of the duty to settle, breach of the duty to
indemnify, common law bad faith, violations of
Washington's Consumer Protection Act, and violations of
Washington's Insurance Fair Conduct Act. Dkt. 43.
18, 2019 American filed a motion for summary judgment seeking
a declaration that its policy does not obligate American to
defend or indemnify. Dkt. 49. On January 15, 2020, the Court
granted American's motion as to the duty to defend and
denied the motion as to the duty to indemnify. Dkt. 83.
October 31, 2019, Goodwill and Choe filed a motion for
partial summary judgment re: covenant judgment. Dkt. 65. On
November 18, 2019, the Risk Pool responded, Dkt. 69, and
American responded, Dkt. 71. On November 22, 2019, Goodwill
and Choe replied. Dkt. 72.
September 20, 2014, Choe and Franco were customers at
Goodwill. Franco had purchased furniture at the store, and
Goodwill employees instructed him to back his truck up a
loading ramp so that the furniture could be loaded into the
vehicle. While backing up the ramp, Franco ran over Choe
causing severe injuries. On January 6, 2016, Choe filed suit
against Goodwill in state court
26, 2017, Choe moved for entry of default judgment because
Goodwill had failed to appear or defend. Goodwill immediately
moved to set aside the default arguing that it had not been
served with the complaint. Ultimately, the court granted the
motion with conditions. Goodwill also notified the Risk Pool
of the suit, which notified American. The Risk Pool does not
issue insurance itself. Instead, the Risk Pool negotiates and
obtains insurance of behalf of its non-profit members such as
Goodwill. Relevant to the instant matter, Goodwill obtained
insurance with American through the Risk Pool.
September 2017, Choe moved to reinstate the default based on
evidence that Goodwill had been timely served in early 2016.
The court denied the request to reinstate the default and
instead imposed sanctions of 1% liability for Goodwill's
failure to timely submit the evidence in question.
December 2017, Choe and Goodwill entered into a settlement
agreement. Goodwill agreed to pay $300, 000 of a stipulated
judgment of $1, 750, 000 and assigned its claims against the
Rick Pool and American over to Choe. In March 2018, the state
court concluded that the settlement was reasonable.
moves for partial judgment that the settlement “amount
establishes the floor or the minimum amount that the insurer
is liable to [Choe] should [she] prevail at trial” and
that American “is estopped from relitigating the issue
of bad faith, collusion, or fraud in this case.” Dkt.
65 at 15. Choe concedes that nothing in this motion applies
to her claims ...