Snohomish County v. Allied World National Assurance Company et al

Filing 236

ORDER denying Defendant The Insurance Company of the State of Pennsylvania's 202 MOTION for Summary Judgment re: Starr Indemnity & Liability Company, by Judge Barbara J. Rothstein. (SWT)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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SNOHOMISH COUNTY,
Plaintiff,

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CASE NO. C16-63 BJR

v.
ALLIED WORLD NATIONAL
ASSURANCE COMPANY, et al.,

ORDER DENYING ICSOP’S
MOTION FOR SUMMARY
JUDGMENT RE: STARR
INDEMNITY & LIABILITY
COMPANY

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Defendants.
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I.

Introduction

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This matter is before the Court on cross-motions for summary judgment between Plaintiff

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Snohomish County (“the County”) and Defendant The Insurance Company of the State of

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Pennsylvania (“ICSOP”). Additionally, ICSOP sought summary judgment against Defendant and

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Cross-claimant Starr Indemnity and Liability Company (“Starr”) and Starr filed a response to that

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request. The dispute centers around whether ICSOP owed a duty to defend the County against a

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series of lawsuits in the wake of a catastrophic landslide in 2014.

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ORDER DENYING ICSOP’S MOTION FOR SUMMARY JUDGMENT RE: STARR INDEMNITY &
LIABILITY COMPANY - 1

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This order is solely concerned with that portion of ICSOP’s motion which seeks summary

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judgment against Starr. Having reviewed the parties’ briefing, the relevant case law, and the entire

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record, the Court will deny ICSOP’s motion for summary judgment against Starr. The Court’s

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reasoning follows:

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II. Background

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On March 22, 2014, in Snohomish County, the town of Oso was the scene of a

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catastrophic mudslide that wreaked havoc on lives and property. The number of deaths, personal

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injuries, and destruction to homes and other property resulted in four lawsuits (hereinafter the

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"underlying lawsuits"). The underlying lawsuits are Pszonka v. Snohomish County (King Co. Sup.

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Ct. No. 14-2-18401-8-SEA; “Pszonka”); Ward v. Snohomish County, King Co. Sup. Ct. No. 14-2-

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2955-4-SEA; “Ward”); Regelbrugge v. State of Washington, King Co. Sup. Ct. No. 15-2-01672-

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5-SEA (“Regelbrugge”); Lester v. Snohomish County, King Co. Sup. Ct. No. 15-2-02908-6-SEA

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(“Lester”).

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ICSOP is a “first-layer” excess insurer (whose duty to cover and defend the insured begins

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when the County exhausts its self-insured retention, or “retained limit”). Starr has filed a cross-

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claim against ICSOP asserting rights of contribution and equitable contribution based on the fact

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that Starr accepted the County’s tender of defense while ICSOP thus far has not. (See Dkt. No.

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38, Starr’s Answer and Defenses to the Complaint and Cross-Claim at ¶ 3.)

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On September 14, 2016, the underlying lawsuits against the County were dismissed. (Dkt.

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No. 204, Declaration of Meyers, Exs. 1, 2.) The dismissal of the underlying litigation is currently

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on appeal. (Dkt. No. 200, Declaration of Genster at ¶ 3.) The County seeks reimbursement from

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ICSOP of defense costs incurred in the now-dismissed lawsuits, along with defense costs that will

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ORDER DENYING ICSOP’S MOTION FOR SUMMARY JUDGMENT RE: STARR INDEMNITY &
LIABILITY COMPANY - 2

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be incurred during the appeal and (should the appeal be successful) in defending against future

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proceedings.

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III. Discussion
A. Legal standards

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Summary judgment is proper “if the movant shows that there is no genuine issue as to any

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material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

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The moving party bears the initial burden of demonstrating the absence of a genuine issue of

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material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In deciding a summary

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judgment motion, the court must view the evidence in the light most favorable to the non-moving

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party and draw all justifiable inferences in its favor. Anderson v. Liberty Lobby, Inc. 477 U.S. 242,

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55 (1986).

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The moving party is only required to assert that the party with the burden of proof cannot

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carry that burden, and “that there is an absence of evidence to support the nonmoving party’s case.”

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Celotex, 477 U.S. at 325. On those issues where it bears the burden of proof, the non-moving party

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must present actual evidence to successfully oppose the motion and may not rest on allegations,

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speculations or opinion. Anderson, 477 U.S. at 248.

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B. ICSOP Summary Judgment Motion Against Starr
The Court has already entered an order on the cross-motions between the County and

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ICSOP, granting summary judgment to the County and denying it to ICSOP. (See Dkt. No. 235,

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Order Granting Motion for Summary Judgment by Snohomish County and Denying Motion for

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Summary Judgment by The Insurance Company of the State of Pennsylvania.) To the extent

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relevant, the Court incorporates that ruling herein by reference.

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ORDER DENYING ICSOP’S MOTION FOR SUMMARY JUDGMENT RE: STARR INDEMNITY &
LIABILITY COMPANY - 3

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Defendant Starr Indemnity & Liability Company (‘Starr”) has asserted a cross-claim for

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contribution and equitable contribution against Defendant ICSOP in this litigation. (Dkt. No. 38.)

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On the final page of its motion for summary judgment, ICSOP appended a single paragraph which

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it entitled “The Court Should Grant Summary Judgment Dismissing Starr’s Cross-claim.” (Dkt.

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No. 202, ICSOP Motion at 30.)

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ICSOP listed a single ground for dismissal of the cross-claim: “An insurance company has

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no right to seek contribution from another insurance company that owes no obligation to the

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insured.” (Id.; citation omitted.) Of necessity, the Court’s grant of summary judgment in favor

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of the County refutes the argument that ICSOP owed no obligation to the County and requires that

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ICSOP’s request for summary judgment against Starr be denied.

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IV.

Conclusion

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Having already found that ICSOP has a duty to defend the County and is currently in breach

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of that duty, the Court rejects ICSOP’s argument that Starr has no right to seek contribution from

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it because it owes no obligation to the County. On that basis, ICSOP’s motion for summary

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judgment against Starr is denied.

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The clerk is ordered to provide copies of this order to all counsel.

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Dated: August 18, 2017.

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A
Barbara Jacobs Rothstein
U.S. District Court Judge

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ORDER DENYING ICSOP’S MOTION FOR SUMMARY JUDGMENT RE: STARR INDEMNITY &
LIABILITY COMPANY - 4