by Sarah Davenport | Nov 5, 2018 | Blog News, Publications
On November 1, 2018, the Washington Supreme Court held in Hendrickson v. Moses Lake School District, No. 94898-4, that school districts are subject to an ordinary duty of care, not a heightened duty of care, in an unanimous opinion.
In this case, a student injured herself in a woodshop class when she did not properly follow procedures with a table saw while the teacher was supervising other students. The student sued the school district, alleging that it was vicariously liable for the teacher’s negligence. At trial, the student proposed a jury instruction that imposed a heightened duty of care, which the trial court declined to use. After the jury found that the school district’s negligence was not the proximate cause of the student’s injuries, the student appealed. The intermediate court of appeals reversed in part, holding that the trial court should have provided a jury instruction imposing a heightened duty of care. The school district then appealed to the Washington Supreme Court.
The Washington Supreme Court noted that, although a party is not typically required to take affirmative action to protect another party from harm, there is a special relationship between school districts and students. School districts have “a duty to protect their students from foreseeable harm, even when that harm is caused by third parties.” However, this special relationship only requires school districts “to exercise such care as an ordinarily responsible and prudent person would exercise under the same or similar circumstances.” Accordingly, the trial court did not err by providing a jury instruction that imposed an ordinary duty of care, instead of the proposed heightened duty of care.
Disclaimer: The opinions expressed in in this blog are those of the author and do not necessarily reflect those of Soha & Lang, P.S. or its clients.
by Jennifer Dinning | Oct 26, 2018 | Blog News, Publications
In Safeco Ins. Co. of America v. Wolk, Cause No. C18-5368 RBL, 2018 WL 5295250, at *1 (W.D. Wash. Oct. 25, 2018) the federal district court analyzed the duty to defend a suit against Safeco’s insureds, Ben and Michelle Wolk. The underlying suit alleged sexual abuse by Ben and negligent supervision by Michelle. Safeco denied coverage for Ben, but defended Michelle under a reservation of rights, and brought a declaratory judgment action to determine its obligations, if any, to Michelle.
Safeco brought a motion for summary judgment, asserting that the suit did not allege an occurrence under the policy and that several exclusions bar coverage. The court performed a proximate cause analysis pursuant to Xia v. ProBuilders Specialty Ins. Co. RRG, 188 Wn.2d 171 (2017), and found in Safeco’s favor in all respects, holding that three separate grounds barred coverage.
First, the court held that negligent supervision cannot be efficient proximate cause of sexual abuse, noting that no case discussing efficient proximate cause supports the assertion that negligence or negligent supervision can be the efficient proximate cause of an intentional act. Further, on a factual basis “[i]t is not possible that the efficient proximate cause of the sexual abuse was Michelle’s knowledge that it was happening and her failure to stop it.” Accordingly, the suit against the insureds does not allege an occurrence under the policy, and no duty to defend exists.
Second, the intentional act exclusion contained in the policy, which excludes injury “which is expected or intended by any insured or which is the foreseeable result of an act or omission intended by any insured” (emphasis added) applied to exclude coverage for Michelle where Ben committed sexual abuse.
Third, the sexual abuse exclusion, which excludes coverage for bodily injury “arising out of physical or mental abuse, sexual molestation, or sexual harassment” applied to the claim of negligent supervision against insured Michelle Wolk. The court held that the negligent supervision claim necessarily arises out of the sexual abuse.
by Geoff Bedell | Oct 22, 2018 | Blog News, Publications
On October 17, 2018, the Oregon Court of Appeals held that a risk pool had the authority for its assessment of a former member. In Capital Credit & Collection Serv., Inc. v. Kerr Contractors, Inc., 294 Or App 486 (2018), a workers’ compensation risk pool assessed current and former members in response to the state raising capitalization requirements. A former member (the “Member”) refused to pay the assessment, contending that the risk pool did not have the authority on two grounds. First, the Member contended that, under the terms of the pooling agreement, the risk pool’s authority to assess former members was limited to two situations, neither of which was involved: payments to injured workers; and payments to the Workers’ Compensation Division. The Oregon Court of Appeal rejected the contention, finding that the assessment authority was broader. Second, the pooling agreement permitted assessments for former members as follows: “You are assessable while this agreement is in effect and for three years following its termination.” (Emphasis added). Focusing on the word “termination,” the Member contended that it was not subject to the assessment because its participation had been “cancelled” rather than “terminated.” The court rejected the argument, finding that the pooling agreement used the two words interchangeably.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Cristin Cavanaugh | Oct 22, 2018 | Blog News, Publications
In Baker v. Fireman’s Fund Insurance Company, et al., Case No. 76218-4-I (October 15, 2018), the Court of Appeals of the State of Washington held that the trial court acted well within its discretion in determining the insureds’ reasonable attorney fees in the amount of $1,209,757.25, through the use of the lodestar method and a 1.3 multiplier.
The Court of Appeals addressed both an appeal by the insureds and a cross-appeal by the insurance company. There was no dispute that the insureds were the prevailing party and thus entitled to reasonable attorney fees under Washington law. Consequently, the court’s analysis focused on whether the trial court abused its discretion in determining the insureds’ reasonable attorney fees.
As to the insureds’ appeal, the Court of Appeals held the trial court did not abuse its discretion in determining the reasonable attorney fees. The court held that the “primary consideration” in determining an appropriate award of attorney fees is reasonableness. The court held that the lodestar method is an established method of determining a reasonable attorney fee award. The Court of Appeals agreed with the trial court’s determination in excluding or reducing hours billed for fees related to the following: (1) tax foreclosure, as Fireman’s Fund promptly paid the bill after being notified, and the property tax bill was at best tangential to the Bakers’ claims against Fireman’s Fund; (2) fees related to PRP claims, as the Bakers failed to carry their burden to demonstrate the fees were non-duplicative or necessary for the Bakers’ claims against Fireman’s Fund; (3) fees incurred litigating against OneBeacon, as the common-fund doctrine did not apply and Fireman’s Fund likely secured its right to contribution from OneBeacon at the time the Bakers tendered their claim to OneBeacon, as the right was created by the continuous-trigger doctrine; and (4) fees for acting as Bakers’ personal counsel, as the tax consequences of the settlement were irrelevant to establishing Fireman’s Fund’s liability to the Bakers and the record showed that the parties agreed to settlement in principle.
The Court of Appeals also held that there was not an abuse of discretion by applying a 1.3 multiplier instead, of the insureds’ requested 2.5 multiplier. It reasoned that the trial court considered the risk (albeit not large) that no recovery might be obtained, the length of time it took to resolve, that the insureds’ private counsel recovered no fees or costs for up to nine years and the contingent nature of Bakers’ fee agreement, as proper reasons supporting a multiplier. The court’s decision was supported by its findings and substantial evidence and did not abuse its discretion in awarding a 1.3 multiplier to the lodestar fee.
As to the cross-appeal, the Court of Appeals found that the record before them demonstrated that the trial court had considered the entire record, and that the insurance company had failed to show that the trial court’s decision was manifestly unreasonable. The Court of Appeals also rejected the insurance company’s argument that it was error to calculate the lodestar without evidence of actual hourly rates. The Court of Appeals held that the trial court’s determination of reasonable hourly rates was supported by substantial evidence and was not an abuse of discretion.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Geoff Bedell | Oct 18, 2018 | Blog News, Publications
In two related cases, Unigard Ins. Co. v. Metro Metals Nw., Inc., 17-CV-05743-RBL (W.D. Wash. Oct. 11, 2018) and Alaska Nat’l Ins. Co. v. Metro Metals Nw., Inc., 1:17-CV-05765-RBL (W.D. Wash. Oct. 11, 2018), the federal district court held that the insurance companies’ policies did not provide coverage for the underlying claims against their mutual insureds.
The insureds had entered into an agreement with a port to use a dock for loading scrap metal onto ships. The dock was damaged, and the port demanded reimbursement for repairs, consistent with their agreement. The port subsequently sued the insureds. In separate opinions, the federal district court held that there was no coverage for the port’s underlying claims against the insureds. It reasoned that Exclusion j.(5), the Ongoing Operations Exclusion, applied to the claims. This exclusion bars coverage for property damage to “[t]hat particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations[.]” Soha & Lang, P.S., represented one of the insurance companies.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.
by Jennifer Dinning | Sep 24, 2018 | Blog News, Publications
In Reverse Now VII, LLC v. Oregon Mutual Insurance Company, Case No. C16-209-MJP, 2018 WL 4510071 (W.D Wash. Sep. 18, 2018), the federal district court found that the insurance policy at issue was void as a matter of law due to material misrepresentation and concealment by the insured and its purported public adjuster.
The insurance claim underlying this litigation arose from a fire in an apartment unit in the building owned by the insured. The fire damaged the unit’s interior and approximately 2% of the building’s exterior cladding. The parties engaged in appraisal pursuant to the policy terms to determine the extent of the loss to the building’s exterior. The insured filed suit against Oregon Mutual before the appraisal was complete.
Through the course of litigation, Oregon Mutual learned that the insured’s purported public adjuster had applied for a public adjuster’s license, but failed to complete his application. Nonetheless, he held himself out as a public adjuster and performed the responsibilities of a public adjuster on behalf of the insured for more than two and a half years in violation of RCW 48.17.060.
Oregon Mutual also learned that the appraiser named by the insured was not impartial, but instead that the appraiser had been best friends with the purported public adjuster for decades and that the two were former business partners who had often worked on claims together.
On Oregon Mutual’s motion for summary judgment, the Court found that these misrepresentations were material as a matter of law. The Court rejected the insured’s argument that public adjuster licensing was an administrative issue that was irrelevant to the investigation of the insurance claim. The Court also found that the failure to disclose the long-term relationship between the purported public adjuster and the appraiser was material as a matter of law. The Court rejected the insureds’ argument that misrepresentations made by its agents could not be imputed to it.
On the basis of the insured’s material misrepresentations, the Court found the policy was void, and dismissed all claims, both contractual and extra contractual, against Oregon Mutual. Soha & Lang, P.S., represented Oregon Mutual in this matter.
