Snowpocalypse

As most of you know, during the last two weeks in Seattle we all experienced an interesting and unusual winter storm. Despite the snowy and icy conditions, Lether & Associates made it through and remained open for business providing our clients with uninterrupted service during Snowpocalypse. In addition, we all had a little fun playing with kids, family, and pets and delighting in the snowy conditions.

We hope everyone had equally as great of fun in the snow. In the meantime, we all look forward to an early spring.

n interesting and unusual winter storm. Despite the snowy and icy conditions, Lether & Associates made it through and remained open for business providing our clients with uninterrupted service during Snowpocalypse. In addition, we all had a little fun playing with kids, family, and pets and delighting in the snowy conditions.

We hope everyone had equally as great of fun in the snow. In the meantime, we all look forward to an early spring.

 

A Tale of Two Cases. The Best of Times and the Worst of Times

Within roughly a two-week period over this past holiday season, the Federal District Courts for the Western District of Washington issued two dramatically different orders in very similar coverage disputes. In Northwest Pipe Company v. Travelers Property Casualty Company of America and The Phoenix Insurance Company (3:17-cv-05098-BHS), the Honorable Benjamin Settle of the Tacoma District granted Travelers’ summary judgment motion dismissing Northwest Pipe’s bad faith and Consumer Protection Act claims. This decision came 14 days after the Honorable John Coughenour of the Seattle District issued a summary judgment in favor of Osborne Construction Company against Zurich American Insurance Company. In the Osborne Construction Company v. Zurich American Insurance Company matter the court found Zurich had acted in bad faith (2:18-cv-00349-JCC).

The two cases presented very similar issues. A review of the facts of the cases, however, clearly establishes the right way to handle construction liability claims in Washington and the wrong way to handle those claims. In Northwest Pipe Company v. Travelers Property Casualty Company of America and The Phoenix Insurance Company, Travelers correctly identified a tender from the named insured, agreed to assign counsel, and issued a timely and thorough reservation of rights letter. Northwest Pipe argued that Travelers was obligated to pay for the insured’s personal counsel who had allegedly assisted in the defense of Northwest Pipe. Northwest Pipe also argued that the reservation of rights letter issued by Travelers was untimely. Taking the position that Travelers had denied the claim and had failed to investigate coverage in a reasonable manner, Northwest Pipe argued that Travelers was precluded from raising coverage defenses based upon the doctrine of coverage by estoppel. Judge Settle rejected this argument and denied Northwest Pipe’s motion and granted Travelers’ motion for summary judgment dismissing all extra-contractual claims.

The Court found that Travelers was not obligated to respond to the alleged claim for the insured’s personal counsel’s fees and that Travelers’ position in regard to that claim was reasonable. The Court also noted that the remedy of coverage by estoppel is a drastic remedy that would not have been applicable even if the court had found a question of fact in regard to the bad faith claim. In regard to the coverage by estoppel issue, the Court’s decision was consistent with the decision in Ledcor Indus. (USA), Inc. v. Mut. of Enumclaw Ins. Co., 150 Wn. App. 1, 10, 206 P.3d 1255, 1261 (2009), wherein the Court found that coverage by estoppel does not apply in all cases and that an insured still must establish actual damage for a bad faith claim.

In Osborne Construction Company v. Zurich American Insurance Company, Zurich denied the defense of an AI tender. Zurich took the position that the tender was unclear and that Osborne had failed to establish that it had entered into a contract with the named insured requiring the named insured to procure insurance. Judge Coughenour found that the tender was sufficient to place Zurich on notice and that Zurich failed to investigate the AI tender appropriately. As a result, Judge Coughenour found that Zurich had not only acted in bad faith but also found that coverage by estoppel applied as a matter of law.

The disparity between these two cases presents an excellent case study of how to properly investigate liability construction cases in Washington, particularly when it comes to a tender and the prompt issuance of a correct reservation of rights letter. In a similar manner, the Zurich decision shows the extreme dangers of an inappropriate coverage position or improper investigation.

The Federal Courts remain an excellent place for insurers to litigate coverage issues. However, as these cases show, the Courts will not tolerate improper claims handling. However, the Courts will reward those insurers who follow the rules.

Lether & Associates proudly represented Travelers in theNorthwest Pipe Company v. Travelers Property Casualty Company of America and The Phoenix Insurance Company matter. If you would like to discuss these cases or any issue involving Washington law, feel free to contact our offices.

Our Annual Holiday Animal Food Drive


 

Our Annual
Holiday Animal
Food Drive

Donate to help the animals of PAWS

Make a difference this holiday season in the precious lives of sick, injured, orphaned and homeless animals. Whether it be big or small, food or toys anything helps these animals. For more information on what is needed visit paws.org.
Donation Drop-off Hours:
Monday-Friday
8am-5:30pm

Drop-off Location:
Lether & Associates, PLLC
1848 Westlake Ave N. Suite 100
Seattle, WA 98109
(206) 467-5444

 Northwest Insurance Law:A Comprehensive ReviewOctober 25-26, 2018

Tom Lether is proud to once again be the co-chairperson for the Seminar Group’s Northwest Comprehensive Insurance Law seminar. This two-day event, which Tom has chaired for the last five years, will focus on Insurance and Bad Faith issues in the Northwest. The speakers include a number of experienced attorneys from both sides of the industry as well as judges from various courts. The two-day seminar on this comprehensive review will allow attendees to gain a better understanding of the wide variety of insurance issues and bad faith exposures. The seminar will be held at the World Trade Center in Portland, OR.

We look forward to having you join Tom and the rest of the speakers for this presentation.

To view the full agenda and register visit:
https://www.theseminargroup.net/seminardetl.aspx?id=5859 

 

Join Eric J. Neal at the National Business Institute’s Insurance Bad Faith “Set-Up” in Washington Seminar

On December 12, 2018 Eric J. Neal will be presenting at NBI’s Insurance Bad Faith “Set-Up” in Washington seminar in Seattle, Washington. Eric will specifically be addressing how to respond to a potential bad faith set-up. This is an all-day seminar with CLE credits available. Eric will be speaking at approximately 12:30pm. See the below link for additional information and to register if you are interested in attending.

https://www.nbi-sems.com/ProductDetails/Insurance-Bad-Faith-Set-Up-in-Washington/Seminar/81167ER?N=63943%2B37

If you have any questions, please feel free to contact Eric directly at eneal@letherlaw.com