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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1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 10 11 12 13 14 15 16 17 18 19 20 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 21 Company (“Great American”) and Greenwich Insurance Company (“Greenwich”)’s Motion for 22 Reconsideration. Dkt. #65. 23 Association”) opposes the Motion. Dkt #73. 24 25 Plaintiff Westridge Townhomes Owners Association (“the Defendants request that the Court reconsider a certain portion of its “Order Granting in 26 Part and Denying in Part Plaintiff’s Motion for Partial Summary Judgment and Denying 27 Defendants’ Motion to Continue,” Dkt. #63. Specifically, “part C.1. of the ruling found on 28 pages 5 and 6 of Dkt. 63 dealing with the applicability of exclusions in the defendants’ policies ORDER DENYING MOTION FOR RECONSIDERATION - 1 1 to ‘faulty construction,’ ‘faulty maintenance’ and ‘wet or dry rot.’” Dkt. #65 at 1. Defendants 2 first argue that of the Court’s ruling in that portion “has no clear application” because the Court 3 did not define “faulty workmanship” or “faulty construction,” or “explain how the two terms 4 relate to one another.” Id. at 1–2. Defendants argue that “it is unclear what the parties should 5 6 do with [the Order]” and ask “[h]ow do we know whether something is faulty construction or 7 faulty workmanship?” Id. at 2. Defendants next argue that the Court misunderstood cited 8 portions of City of Oak Harbor v. St. Paul Mercury Ins. Co., 139 Wn. App. 68, 74–75, 159 P.3d 9 422, 425 (2007), specifically arguing that faulty construction must be a subset of faulty 10 11 workmanship. Id. at 2–3. 1 Defendants go on to argue that “The Court’s ruling essentially 12 denies that different words could describe the same thing or be used interchangeably to 13 describe the same thing... [and] ignores the difference between general, abstract words and 14 concrete, specific words.” Id. at 4. Defendants argue that “Washington courts have long 15 recognized that different words within the same insurance policy can have similar meanings 16 17 and that the availability of a more concrete and specific wording to describe particular claims 18 facts does not prevent the application of general, abstract exclusions.” Id. at 5 (citing Queen 19 City Farms, Inc. v. Cent. Nat. Ins. Co. of Omaha, 126 Wn.2d 50, 82, 882 P.2d 703, 721 (1994) 20 and State Farm Fire & Cas. Co. v. English Cove Ass’n, Inc., 121 Wn. App. 358, 367, 88 P.3d 21 986, 991 (2004)). Finally, Defendants argue that the Court should not have considered Great 22 23 American and Greenwich policies issued to other insureds that contain exclusions of “faulty 24 construction,” “faulty maintenance,” and “wet or dry rot,” the exclusions missing in the Policy 25 in this case. Id. Defendants argue that the Court failed to consider evidence in the light most 26 favorable to Defendants as the non-moving parties. 27 28 1 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. ORDER DENYING MOTION FOR RECONSIDERATION - 2 1 In Response, the Association first argues that the Court’s ruling has a clear application 2 because “what the insurance policy covers is a question to be resolved before the jury decides 3 causation.” Dkt. #73 at 2 (citing Vision One, LLC v. Philadelphia Indem. Ins. Co., 241 P.3d 4 429, 435 (Wash. Ct. App. 2010), rev’d on other grounds, 276 P.3d 300 (Wash. 2012); 5 6 Sunbreaker Condominium Ass’n v. Travelers Ins. Co., 901 P.2d 1079, 1082 (Wash. Ct. App. 7 1995)). The Association next argues that the Court’s citation to City of Oak Harbor was 8 accurate and applied to this case correctly, and that Defendants’ arguments are simply 9 reiterations of what was argued previously with a “banana” and “fruit” analogy. Id. at 3–4. 10 11 The Association states that it requested a ruling on “what the Policy covers” and therefore “did 12 not require the Court to apply any facts to the exclusions, and accordingly, there was nothing to 13 ‘misapply.’” Id. at 3. The Association argues its interpretation of the relationship between 14 faulty construction and faulty workmanship is reasonable, and that “[w]hen a policy term— 15 especially an exclusion—is subject to more than one reasonable interpretation, it is ambiguous 16 17 and will be given the interpretation most favorable to the policyholder.” Id. at 4 (citing Kaplan 18 v. N.W. Mut. Life Ins. Co., 65 P.3d 16, 23 (Wash. Ct. App. 2003); Queen City Farms, 126 19 Wn.2d at 83). The Association argues that abstract words are not appropriate for exclusions in 20 insurance contracts under Washington law. Id. at 5. The Association argues that the Court’s 21 reliance on evidence of other policies issued by Defendants was proper. Id. at 6–7. 22 23 “Motions for reconsideration are disfavored.” LCR 7(h)(1). “The court will ordinarily 24 deny such motions in the absence of a showing of manifest error in the prior ruling or a 25 showing of new facts or legal authority which could not have been brought to its attention 26 earlier with reasonable diligence.” Id. 27 28 ORDER DENYING MOTION FOR RECONSIDERATION - 3 1 The Court’s Order stressed what it was and was not ruling on. Dkt. #63 at 6 (“The 2 Court agrees with the Association that because the Policy does not explicitly exclude ‘faulty 3 construction,’ ‘faulty maintenance,’ or ‘wet or dry rot,’ these perils are covered, pursuant to the 4 other terms of the Policy. . . . the Court wishes to be clear that it is not able to rule at this stage 5 6 whether the damage to the condominium falls under a covered or excluded peril.”). 7 Interpreting the insurance contract is a question of law appropriate for consideration on a 8 motion for partial summary judgment. See Overton v. Consol. Ins. Co., 145 Wn.2d 417, 424, 9 38 P.3d 322 (2002). Given the nature of the Association’s Motion, it is to be expected that the 10 11 parties would be left with remaining questions. It will be up to the parties to decide how best to 12 proceed with those remaining questions in this case. 13 rule on insurance coverage in such a piecemeal fashion. However, the issue of “how do we 14 know whether something is faulty construction or faulty workmanship” was not before the 15 Court, and it was not manifest error for the Court to leave the parties with a ruling in the 16 17 It is not the Court’s typical practice to abstract. 18 The Court next finds that Defendants have failed to show manifest error in the Court’s 19 application of City of Oak Harbor or its ruling that faulty construction is not excluded by the 20 Policy’s exclusion of faulty workmanship. Defendants fail to cite any new authority which 21 could not have been brought to the Court’s attention earlier, and generally reiterate prior 22 23 arguments on this point. Defendants fail to convince the Court that its reliance on evidence that 24 these Defendants use the term faulty construction in other policies was somehow inapplicable, 25 or that the Court could have negated this evidence by interpreting this evidence in a different 26 light. The Court agrees with the Association that exclusionary clauses are to be construed 27 28 strictly against the insurer. Eurick v. Pemco Ins. Co., 108 Wn.2d 338, 340, 738 P.2d 251, 252 ORDER DENYING MOTION FOR RECONSIDERATION - 4 1 (1987) (citing Farmers Ins. Co. v. Clure, 41 Wn. App. 212, 215, 702 P.2d 1247 (1985)). Given 2 all of the above, the Court will deny the instant Motion. 3 4 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. 5 6 7 DATED this 28 day of November, 2017. 8 9 10 11 A RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER DENYING MOTION FOR RECONSIDERATION - 5

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