Hawthorne v. Mid-Continent Casualty Company, Oklahoma Surety Company
Filing
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ORDER denying defendant Oklahoma Surety Company's 57 Motion to Certify for Interlocutory Appeal and to Stay Litigation, signed by Judge Robert S. Lasnik. (SWT)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
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PATRICIA S. HAWTHORNE, individually
and as assignee of Oklahoma Court Services,
Inc.,
Case No. C16-1948RSL
Plaintiff,
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v.
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MID-CONTINENT CASUALTY
COMPANY, OKLAHOMA SURETY
COMPANY, an Oklahoma Insurance
Company,
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ORDER DENYING DEFENDANT’S
MOTION TO CERTIFY FOR
INTERLOCUTORY APPEAL AND
TO STAY LITIGATION
Defendant.
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This matter comes before the Court on defendant Oklahoma Surety Company’s “Motion
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to Certify Interlocutory Appeal and to Stay Litigation.” Dkt. # 57. Having considered the
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parties’ briefing and the remainder of the record, the Court denies the motion for the reasons that
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follow.
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In November 2016, acting in her individual capacity and as assignee of various insurance
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claims by Oklahoma Court Services, Inc. (“OCS”), plaintiff filed this action in King County
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Superior Court against OCS’s insurer, Oklahoma Surety Company (“Oklahoma Surety”), for bad
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faith, violation of Washington’s Unfair Trade Practices Act, and breach of the contractual duties
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to defend, settle, and indemnify. Dkt. # 1-1. On December 21, 2016, Oklahoma Surety removed
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this case to federal court, Dkt. # 1, and shortly thereafter moved to dismiss the case for lack of
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ORDER DENYING DEFENDANT’S MOTION
TO CERTIFY FOR INTERLOCUTORY APPEAL
AND TO STAY LITIGATION - 1
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personal jurisdiction, Dkt. # 9. The Court denied that motion on April 4, 2017. Dkt. # 39.
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On April 20, 2017, plaintiff moved for leave to file a second amended complaint,
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specifically to add a claim under Washington’s Insurance Fair Conduct Act (IFCA) because the
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required 20 days had elapsed since plaintiff submitted notices to the Washington Insurance
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Commissioner and to Oklahoma Surety and Mid-Continent Casualty Company, as required by
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RCW 48.030.015(8)(a). Dkt. # 44. Oklahoma Surety opposed plaintiff’s motion, arguing that
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Oklahoma law applies in this case rather than Washington law, but that an IFCA claim would be
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futile in any event. Dkt. # 52.
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On May 4, 2017, just three days after filing its response to plaintiff’s motion for leave to
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amend, Oklahoma Surety moved for partial summary judgment on the question of choice of law
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and on all claims brought in plaintiff’s individual capacity. Dkt. # 54. As in its opposition to
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plaintiff’s motion for leave to amend, Oklahoma Surety argues that Oklahoma law applies to all
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of plaintiff’s claims. Oklahoma Surety also asks the Court to dismiss the claims that plaintiff has
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brought “individually,” as opposed to as assignee of OCS.
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The very next day, Oklahoma Surety moved to certify for interlocutory appeal this
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Court’s order holding that it could exercise specific personal jurisdiction over Oklahoma Surety
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in this case, and to stay this litigation pending resolution of that appeal. Dkt. # 57. Plaintiff
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opposes certification. Dkt. # 63.
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Because certification and a stay would preclude resolution of the other pending motions,
the Court addresses that issue before resolving the older outstanding motions.
Under 28 U.S.C. § 1292(b), in a civil case, a district judge may certify for interlocutory
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appeal an order that “involves a controlling question of law as to which there is substantial
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ground for difference of opinion,” where “an immediate appeal from the order may materially
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advance the ultimate termination of the litigation.” The court of appeals may then, “in its
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discretion, permit an appeal to be taken from such order, if application is made to it within ten
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ORDER DENYING DEFENDANT’S MOTION
TO CERTIFY FOR INTERLOCUTORY APPEAL
AND TO STAY LITIGATION - 2
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days after entry of the order.” Application for an appeal under this provision does not
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automatically stay proceedings in the district court, though either the district court or the court of
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appeals may order a stay.
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As explained above, Oklahoma Surety asks the Court to certify an interlocutory appeal of
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its order holding that it could exercise personal jurisdiction over Oklahoma Surety in this case.
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See Dkt. # 39. Specifically, Oklahoma Surety argues that the Court incorrectly concluded that
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the Ninth Circuit’s decision in Farmers Insurance Exchange v. Portage La Prairie Mutual
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Insurance Co., 907 F.2d 911(9th Cir. 1990), supports personal jurisdiction here. In Farmers, the
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Ninth Circuit held that an insurance company that conducted no business in Montana
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nonetheless “purposefully availed” itself of the Montana forum where (1) the insurer’s policy
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applied nationwide and (2) “an insured event resulted in litigation” in Montana. Id. at 913–14.
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Oklahoma Surety asserts that the Court’s erroneous application of Farmers is grounded on its
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mistaken conclusion that the “insured event” in this case was the assault of plaintiff in
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Washington, rather than the negligent failure to supervise plaintiff’s assailant, which Oklahoma
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Surety asserts occurred in Oklahoma.
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Oklahoma Surety misconstrues Farmers. Whether the “insured event” in this case was
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OCS’s failure to supervise a probationer or the probationer’s assault of plaintiff, what matters
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under the Farmers analysis is that both events “resulted in litigation” in Washington. 907 F.2d at
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913. Like the automobile liability insurer in Farmers, Oklahoma Surety “contract[ed] to
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indemnify and defend [OCS] for claims that [would] foreseeably result in litigation in foreign
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states.” Id. at 914. And like the insurer in Farmers, Oklahoma Surety “controlled its own
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amenability to suit.” Id. “Had [Oklahoma Surety] wished to avoid suit in [Washington], it could
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have excluded that state from the ‘policy territory’ defined in the policy.” Id. (quoting Rossman
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v. State Farm Mut. Auto. Ins. Co., 832 F.2d 282, 287 (4th Cir. 1987)). Instead, Oklahoma
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Surety issued a nationwide policy, and an insured event under that policy resulted in litigation in
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ORDER DENYING DEFENDANT’S MOTION
TO CERTIFY FOR INTERLOCUTORY APPEAL
AND TO STAY LITIGATION - 3
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Washington. Accordingly, under Farmers, Oklahoma Surety purposefully availed itself of this
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Washington forum. The Court is not persuaded that a reasonable jurist might conclude
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otherwise.
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Indeed, Oklahoma Surety’s argument for certification boils down to a quarrel with the
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Farmers rule itself, not with the Court’s application of that rule. See Dkt. # 57 at 3 (“[O]ther
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federal circuits . . . eschew Farmers’ mechanical extension of personal jurisdiction to liability
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insurance cases.”); Dkt. # 68 at 3 & n.1 (arguing that “the Ninth Circuit’s legal standards
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themselves do not square with the constitutional principles governing personal jurisdiction,” and
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that “if the Ninth Circuit takes review, it can (and should) properly consider whether to amend
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its approach in light of other Circuits’ approaches”). The Court declines to certify interlocutory
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appeal on the off chance that the Ninth Circuit will take this opportunity to overrule its own
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clearly established law.
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For all the foregoing reasons, Oklahoma Surety’s motion to certify for interlocutory
appeal and to stay litigation (Dkt. # 57) is DENIED.
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DATED this 30th day of June, 2017.
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A
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Robert S. Lasnik
United States District Judge
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ORDER DENYING DEFENDANT’S MOTION
TO CERTIFY FOR INTERLOCUTORY APPEAL
AND TO STAY LITIGATION - 4
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