by Soha Lang | Sep 8, 2017 | Blog News, Publications
Soha & Lang, P.S. Shareholder Paul Rosner is one of more than 50 speakers who will be participating in the 2017 CPCU Annual Meeting in Orlando this month.
On Sunday September 17th, Paul, Ulises Castellon of Fire Cause Analysis, and Denise Brown of InterWest Insource Services will be presenting “Bad Faith Nightmares: Recent Trends and Themes.” This interactive course discusses real-life case scenarios and explores errors and issues that have led to some of the industry’s most troubling bad faith losses, as well as several of the themes and increasingly common attacks being utilized by plaintiffs.
On Monday September 18th, Paul will join a panel of experts including Professor Harold Weston of Georgia State University, Phillip Bryant of Snodgrass, P.C. and Michael Gay of Volvo Financial Services to present: “Vacation Calamity 2: Adventures on the Trip to Orlando” a tale of a fictional group traveling to Orlando for the CPCU Society Annual Meeting. The group encounters misfortunes and accidents along the way, including at an amusement park, on an aerial gondola ride, and from an Airbnb stay gone bad. The panel will discuss the legal issues and apply policy provisions.
by Jennifer Dinning | Jul 27, 2017 | Blog News, Publications, Uncategorized
In Swank, et al. v. Valley Christian School et al., ___ Wn.2d ___, ___ P.3d ___ (July 6, 2017), the Washington Supreme Court held that the Lystedt law (RCW 28A.600.190) creates an implied cause of action. The 2009 Lystedt law requires that 1) schools develop a concussion and head injury information sheet; 2) youth athletes be removed from play on suspicion of sustaining a concussion or head injury; and 3) youth athletes removed from play may not return without written clearance from a health care provider.
Andrew Swank (Drew) was a student at Valley Christian School, a non-profit religious school in Spokane, WA. In 2007, a parent, Jim Puryear, approached Valley Christian and offered to start a football team. Valley Christian accepted and Puryear began coaching as an unpaid volunteer. Valley Christian developed a concussion information sheet (CIS) and Coach Puryear distributed the CIS to parents at the beginning of the 2009 season. Coach Puryear discussed the CIS with parents and Drew and his mother both signed the CIS.
On September 18, 2009, Drew was hit hard on the head during a football game. The Swanks live in Idaho and took Drew to his primary care physician in Idaho – Dr. Burns. Dr. Burns examined Drew in Idaho. Two days later, Dr. Burns wrote a note for Drew at his mother’s request.
Drew played football the next day. Though he initially played well, his performance declined sharply during the game. Drew appeared sluggish and confused and was slow to respond. Drew was hit by an opposing player during the game, staggered to the sidelines, and collapsed. He died two days later.
The Swanks sued Valley Christian, Coach Puryear, and Dr. Burns. The trial court granted summary judgment against the Swanks. The Court of Appeals affirmed the trial court on all but the Swanks’ negligence claim against Valley Christian. The Washington Supreme Court reversed the trial court decision, except as regards Dr. Burns.
The Court applied the Bennett test to determine whether the Lystedt law provides an implied cause of action. The Court found that all three elements of the Bennett test were met: 1) Drew is a member of the class protected by the statute; 2) the legislative history showed support for a remedy; and 3) an implied cause of action is consistent with the purpose of the statute. Having found that the Lystedt law includes an implied cause of action, the Court further held that the requirements in RCW 28A.600.190(2), (3), and (4) include duties which can support a claim.
The Court found that the Swanks’ claims against Valley Christian and Coach Puryear may proceed, but that the Washington Courts lacked personal jurisdiction against the Idaho physician, Dr. Burns.
The Washington Supreme Court remanded the matter with instructions to reinstate the Swanks’ claims against Valley Christian and Coach Puryear.
by Jennifer Dinning | Jul 26, 2017 | Blog News, Publications, Uncategorized
In Smelser v. Paul, et al, ___ Wn.2d ___, ___ P.3d ___ (July 6, 2017), the Washington Supreme Court found that, under the parental immunity doctrine, parents owe no duty of care to their children, and on that basis, fault for negligence cannot be apportioned to a parent of the plaintiff under RCW 4.22.070.
Derrick Smelser, then two years old, was run over by a car driven by defendant, Jeanne Paul while playing in his yard. At the trial court level, Ms. Paul was allowed to assert an affirmative defense that the child’s father was partially at fault on a theory of negligent supervision. The trial court instructed the jury under RCW 4.22.070, and the jury determined that the father was 50% at fault. The trial court did not enter judgment against the father because of the parental immunity doctrine.
The Washington Supreme Court found that the common law doctrine of parental immunity in Washington State establishes that there is no tort liability or tort duty applicable to a parent for negligent supervision or negligence in other parenting activities. The Washington Supreme Court went on to state that, under RCW 4.22.051, in order to be an at-fault entity, the party must have engaged in negligent or reckless conduct that breaches a recognized duty. Because the Court found that parents do not have a recognized duty of supervision of their children, the parents’ conduct is not tortious, and they cannot be an at-fault entity.
Pursuant to this holding, the Washington Supreme Court remanded the matter to the trial court, with instructions to enter judgement for 100% of the damages against Ms. Paul.
by Jennifer Dinning | Jul 10, 2017 | Blog News, Publications
In King County v. Vinci Constr. Grands Projects, et al., __Wn.2d __, __ P.3d __ (July 6, 2017), the Washington Supreme Court was asked to review an award of nearly $15 million in attorney fees against five surety companies following a jury trial for breach of contract in a public works project. In a six to three decision, the Washington Supreme Court ruled attorney fees under Olympic S.S. Co. v. Centennial Ins. Co., 117 Wn.2d 37, 811 P.2d 673 (1991) (“Olympic Steamship Fees”), which arguably had been restricted to disputes where an insured is a prevailing party in a lawsuit that is forced by an insurer’s refusal to defend or pay the claim, may be applied in the context of a dispute with sureties on a performance.
In 2006, King County contracted with three construction firms to expand its wastewater treatment system. One of the contractors, VPFK, did not perform its portion of the work by the performance deadline contained in the contract. VPFK had a performance bond that obligated the sureties to step in and “promptly remedy the default in a manner acceptable to [King County],” if VPFK did not perform under the contract.
After King County declared VPFK to be in default, the County requested that the sureties either cure VPFK’s default themselves or agree to fund a new contractor to complete VPFK’s work. The sureties, however, responded that performance was not required under the bond because no breach had occurred.
King County filed suit against VPKF and one of its sureties. VPKF’s other sureties intervened. Together, the five sureties denied coverage and adopted all of VPFK’s defenses against breach of contract. The matter proceeded to trial, and the jury found in favor of King County. As part of the relief awarded after the trial, the court awarded $15 million in Olympic Steamship Fees. Moreover, the trial court held, as a basis for awarding the County all of its legal fees, that it didn’t matter if the fees were incurred in pursuing claims against VPKF or the sureties. Because King County’s claim against the sureties was intertwined and indistinguishable from its claim against VPFK, the county could recover all of its fees under Olympic Steamship.
by Geoff Bedell | May 11, 2017 | Blog News, Publications
In Hunters Ridge Condo. Ass’n v. Sherwood Crossing, LLC, 285 Or App 416 (2017), the insured was a subcontractor on a condominium project. The insured was sued in a construction defect lawsuit. The insured failed to appear, and a default judgment was entered against it. Based on the default judgment, the condominium association (“Association”) filed a garnishment proceeding against the subcontractor’s insurance company. The Court of Appeals first held that the policy’s “Multi-Unit New Residential Construction” exclusion did not apply because the project was mixed use and included both residential and commercial units. Next, the Court of Appeals found issues of fact on whether certain other exclusions could apply, such as the “your work” exclusion. The court then addressed attorney fees that were included in the default judgment. The court held that, to the extent the attorney fees were properly considered consequential damages, they could constitute “damages” within the meaning of the policy. The Court also determined that the award of attorney fees could be “costs taxed against the insured” within the policy’s Supplementary Payments provision. Finally, the court concluded that the insurer was entitled to a jury trial on disputed questions of fact pertaining to its liability under the policy and that the garnishment statute was unconstitutional to the extent it mandated a bench trial.
Disclaimer: The opinions expressed in in this blog are those of the authors and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Misty Edmundson | Apr 27, 2017 | Blog News, Publications, Uncategorized
In another example of bad facts make bad law, the Washington Supreme Court, in a six to three decision, ruled that the “efficient proximate cause rule” applies to the interpretation of general liability policies. See Xia v. ProBuilders Specialty Insurance Company RRG, __Wn.2d __, __ P.3d __ (April 27, 2017).
Turning insurance contract construction on its head, the court first analyzed whether an absolute pollution exclusion applied to a bodily injury claim caused by the inhalation of carbon monoxide fumes from an improperly installed water heater. The Court found that the pollution exclusion would preliminarily apply to a bodily injury claim caused by carbon monoxide poisoning, because the pollution exclusion applies when a “pollutant is acting as a pollutant.” The Court reasoned that, “the choice of analysis under Kent Farms versus Quadrant and the antecedent “fumes” cases, Cook and Harbor Insurance, necessarily turns on a determination of whether an occurrence, as defined under the policy, stems from either a traditional environmental harm or a pollutant acting as a pollutant. If the answer to this inquiry is yes, barring any ambiguities in the policy language, courts must apply the plain language of the pollution exclusion to determine whether the exclusion applies to the facts at hand.”
However, the Court then added an additional step to the analysis, and found that the insurer must next determine whether the excluded occurrence is the “efficient proximate cause of the claimed loss.” Thus, it appears that the Court has instituted an additional step in the contract interpretation requirement under general liability policies, at least with respect to “[w]hen a nonpolluting event that is a covered occurrence causes toxic pollution to be released, causing damages.” In this scenario, it appears that the Insurer must first determine whether the insuring clause is satisfied, then determine whether the exclusion applies to prohibit coverage, and then finally determine whether the “efficient proximate cause” of the loss was the direct cause of the excluded damage.
Prior to this decision, the efficient proximate cause rule had only been applied to first party coverage which is generally based on “covered perils.” Nevertheless, the Washington Supreme Court rejected its own precedent and explicitly held that an efficient proximate cause analysis must be undertaken under the terms of general liability policies as well, at least in the context of a pollution claim when the pollution is proximately caused by “a nonpolluting event.”
The Court stressed, “[h]owever, the efficient proximate cause rule applies only ‘when two or more perils combine in sequence to cause a loss and a covered peril is the predominate or efficient cause of the loss.” The Court went to great lengths to distinguish the facts at issue before it with traditional environmental harm cases. The Court reasoned:
ProBuilders contends that application of the efficient proximate cause rule would defeat the exclusion entirely, arguing that all acts of unintentional pollution begin with negligence. This is not so, and application of the rule may be harmonized with Washington’s prior pollution exclusion jurisprudence. In Cook, the initial peril that set in motion the causal chain was the polluting event: the application of a chemical sealant. 83 Wn. App. at 151. Up until the point of using the sealant and creating the toxic fumes, no negligent act had occurred. Rather, the negligence in permitting the fumes to migrate occurred after the fumes had been created intentionally. Id. (“The contractors did not seal off a six-[ ]by eight-foot fresh air intake, which drew air into the building’s HVAC system. [Sealant] fumes entered the building, requiring evacuation.”). Similarly, in Quadrant, the initial peril that set in motion the causal chain was also the application of a chemical sealant, which was toxic even when used as intended. 154 Wn.2d at 168. There were no covered perils prior to the release of a pollutant acting as a pollutant. As such, application of the efficient proximate cause rule in both cases would have led to the same outcome.
The Court found that because the “efficient proximate cause” of the carbon monoxide poisoning was the negligent installation of the hot water heater (which it characterized as a covered event), and not the escape of the carbon monoxide from the heater, that the absolute pollution exclusion would not apply to bar coverage.
Moreover, the Court found that the insurer committed bad faith in not defending its insured because “under the ‘eight corners rule’ of reviewing the complaint and the insurance policy, ProBuilders should have noted that a potential issue of efficient proximate cause existed,” because the complaint alleged negligent installation of the hot water heater. The Court further found that ProBuilders acted in bad faith by failing to conduct an investigation into Washington law (before it denied the claim) “that might have alerted them to the rule of efficient proximate cause and this court’s unwillingness to permit insurers to write around it.”
The ruling in this case has the potential to have a significant impact on the duty to defend and indemnify analysis under general liability policies.
Please feel free to contact Soha & Lang, P.S. to learn more.
