Westridge Townhomes Owners Association v. Great American Assurance Company et al

Filing 79

ORDER denying Defendants' 65 Motion for Reconsideration signed by Judge Ricardo S Martinez. (TH)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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WESTRIDGE TOWNHOMES OWNERS
ASSOCIATION,

Case No. C16-1011RSM
ORDER DENYING MOTION FOR
RECONSIDERATION

Plaintiff,
v.
GREAT AMERICAN ASSURANCE
COMPANY, a foreign insurance company, as
successor to AGRICULTURAL
INSURANCE COMPANY; GREENWICH
INSURANCE COMPANY, a foreign
insurance company,
Defendants.

This matter comes before the Court on Defendants Great American Assurance

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Company (“Great American”) and Greenwich Insurance Company (“Greenwich”)’s Motion for

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Reconsideration. Dkt. #65.

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Association”) opposes the Motion. Dkt #73.

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Plaintiff Westridge Townhomes Owners Association (“the

Defendants request that the Court reconsider a certain portion of its “Order Granting in

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Part and Denying in Part Plaintiff’s Motion for Partial Summary Judgment and Denying

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Defendants’ Motion to Continue,” Dkt. #63. Specifically, “part C.1. of the ruling found on

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pages 5 and 6 of Dkt. 63 dealing with the applicability of exclusions in the defendants’ policies

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to ‘faulty construction,’ ‘faulty maintenance’ and ‘wet or dry rot.’” Dkt. #65 at 1. Defendants

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first argue that of the Court’s ruling in that portion “has no clear application” because the Court

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did not define “faulty workmanship” or “faulty construction,” or “explain how the two terms

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relate to one another.” Id. at 1–2. Defendants argue that “it is unclear what the parties should

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do with [the Order]” and ask “[h]ow do we know whether something is faulty construction or

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faulty workmanship?” Id. at 2. Defendants next argue that the Court misunderstood cited

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portions of City of Oak Harbor v. St. Paul Mercury Ins. Co., 139 Wn. App. 68, 74–75, 159 P.3d

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422, 425 (2007), specifically arguing that faulty construction must be a subset of faulty

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workmanship. Id. at 2–3. 1 Defendants go on to argue that “The Court’s ruling essentially

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denies that different words could describe the same thing or be used interchangeably to

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describe the same thing... [and] ignores the difference between general, abstract words and

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concrete, specific words.” Id. at 4. Defendants argue that “Washington courts have long

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recognized that different words within the same insurance policy can have similar meanings

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and that the availability of a more concrete and specific wording to describe particular claims

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facts does not prevent the application of general, abstract exclusions.” Id. at 5 (citing Queen

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City Farms, Inc. v. Cent. Nat. Ins. Co. of Omaha, 126 Wn.2d 50, 82, 882 P.2d 703, 721 (1994)

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and State Farm Fire & Cas. Co. v. English Cove Ass’n, Inc., 121 Wn. App. 358, 367, 88 P.3d

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986, 991 (2004)). Finally, Defendants argue that the Court should not have considered Great

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American and Greenwich policies issued to other insureds that contain exclusions of “faulty

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construction,” “faulty maintenance,” and “wet or dry rot,” the exclusions missing in the Policy

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in this case. Id. Defendants argue that the Court failed to consider evidence in the light most

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favorable to Defendants as the non-moving parties.

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To illustrate this concept, Defendants include a Venn diagram with a circle for “Faulty Construction” contained
entirely within a circle for “Faulty Workmahsip” [sic]. Dkt. #65 at 3.

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In Response, the Association first argues that the Court’s ruling has a clear application

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because “what the insurance policy covers is a question to be resolved before the jury decides

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causation.” Dkt. #73 at 2 (citing Vision One, LLC v. Philadelphia Indem. Ins. Co., 241 P.3d

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429, 435 (Wash. Ct. App. 2010), rev’d on other grounds, 276 P.3d 300 (Wash. 2012);

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Sunbreaker Condominium Ass’n v. Travelers Ins. Co., 901 P.2d 1079, 1082 (Wash. Ct. App.

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1995)). The Association next argues that the Court’s citation to City of Oak Harbor was

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accurate and applied to this case correctly, and that Defendants’ arguments are simply

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reiterations of what was argued previously with a “banana” and “fruit” analogy. Id. at 3–4.

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The Association states that it requested a ruling on “what the Policy covers” and therefore “did

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not require the Court to apply any facts to the exclusions, and accordingly, there was nothing to

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‘misapply.’” Id. at 3. The Association argues its interpretation of the relationship between

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faulty construction and faulty workmanship is reasonable, and that “[w]hen a policy term—

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especially an exclusion—is subject to more than one reasonable interpretation, it is ambiguous

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and will be given the interpretation most favorable to the policyholder.” Id. at 4 (citing Kaplan

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v. N.W. Mut. Life Ins. Co., 65 P.3d 16, 23 (Wash. Ct. App. 2003); Queen City Farms, 126

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Wn.2d at 83). The Association argues that abstract words are not appropriate for exclusions in

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insurance contracts under Washington law. Id. at 5. The Association argues that the Court’s

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reliance on evidence of other policies issued by Defendants was proper. Id. at 6–7.

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“Motions for reconsideration are disfavored.” LCR 7(h)(1). “The court will ordinarily

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deny such motions in the absence of a showing of manifest error in the prior ruling or a

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showing of new facts or legal authority which could not have been brought to its attention

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earlier with reasonable diligence.” Id.

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ORDER DENYING MOTION FOR RECONSIDERATION - 3

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The Court’s Order stressed what it was and was not ruling on. Dkt. #63 at 6 (“The

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Court agrees with the Association that because the Policy does not explicitly exclude ‘faulty

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construction,’ ‘faulty maintenance,’ or ‘wet or dry rot,’ these perils are covered, pursuant to the

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other terms of the Policy. . . . the Court wishes to be clear that it is not able to rule at this stage

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whether the damage to the condominium falls under a covered or excluded peril.”).

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Interpreting the insurance contract is a question of law appropriate for consideration on a

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motion for partial summary judgment. See Overton v. Consol. Ins. Co., 145 Wn.2d 417, 424,

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38 P.3d 322 (2002). Given the nature of the Association’s Motion, it is to be expected that the

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parties would be left with remaining questions. It will be up to the parties to decide how best to

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proceed with those remaining questions in this case.

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rule on insurance coverage in such a piecemeal fashion. However, the issue of “how do we

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know whether something is faulty construction or faulty workmanship” was not before the

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Court, and it was not manifest error for the Court to leave the parties with a ruling in the

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It is not the Court’s typical practice to

abstract.

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The Court next finds that Defendants have failed to show manifest error in the Court’s

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application of City of Oak Harbor or its ruling that faulty construction is not excluded by the

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Policy’s exclusion of faulty workmanship. Defendants fail to cite any new authority which

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could not have been brought to the Court’s attention earlier, and generally reiterate prior

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arguments on this point. Defendants fail to convince the Court that its reliance on evidence that

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these Defendants use the term faulty construction in other policies was somehow inapplicable,

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or that the Court could have negated this evidence by interpreting this evidence in a different

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light. The Court agrees with the Association that exclusionary clauses are to be construed

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strictly against the insurer. Eurick v. Pemco Ins. Co., 108 Wn.2d 338, 340, 738 P.2d 251, 252

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(1987) (citing Farmers Ins. Co. v. Clure, 41 Wn. App. 212, 215, 702 P.2d 1247 (1985)). Given

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all of the above, the Court will deny the instant Motion.

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Having reviewed the relevant briefing and the remainder of the record, the Court hereby
finds and ORDERS that Defendants’ Motion for Reconsideration, Dkt. #65, is DENIED.

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DATED this 28 day of November, 2017.

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A
RICARDO S. MARTINEZ
CHIEF UNITED STATES DISTRICT JUDGE

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