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ISSAQUAH LAW GROUP

Issaquah Law Group: Experienced Counsel; Client Focus

PHILOSOPHY: Formed in 2014, Issaquah Law Group is a law firm with one focus: providing businesses and insurers with high quality legal representation with the responsiveness of a smaller firm. ILG was founded on the principle that strong client relationships are the key to successful legal representation and strong relationships are built upon clear and consistent communication. 

LITIGATION: We work closely with our clients to fully and accurately understand their goals, work collaboratively to formulate specific legal strategies, and execute the agreed plan of action utilizing methods most likely to result in the efficient and effective resolution of the matter. ILG attorneys have a broad base of litigation experience to draw on in all Federal and State courts from on-the-ground investigations to Supreme Court appeals in the areas of personal injury and wrongful death, product liability, commercial general liability, labor & employment, construction litigation, and catastrophic losses due to fire and explosion.

BUSINESS LAW: Rarely is the path from point A to point B a straight line, so our role in a business law practice is to find alternatives, devise workable strategies, and keep your business ideas, goals and objectives moving toward realization. ILG’s business attorneys help clients achieve their goals with respect to business formation, intellectual property, labor and employment, CAN-SPAM, copyright and trademark

COMMUNITY: In addition, the Lawyers at Issaquah Law Group remain active in the legal and civic community. A core commitment of our Issaquah Attorneys is community service. Our attorneys' civic involvement includes the King County Civil Rights Commission; the City of Issaquah Planning Policy Commission; the Northwest Screenwriters Guild, service as a pro tem judge. We live and work in the Pacific Northwest, and we aim to make it a better place.

In addition, through The Amateur Law Professor Blog and LinkedIn postings, we share pertinent opinions and decisions of the Washington State Supreme Court, as well as the pertinent opinions and decisions of the Washington State Courts of Appeal so that our clients can be as update to date on cutting legal issues as we are.

ILG Wins at Division I: Stealing your Parents' Car Does Not Impose Liability on Parents

Morgan v. Hebert

In here it first news, this opinion has not even hit the courts.wa.gov daily email. Why? Because it was emailed directly to Issaquah Law Group, as it is our appeal. Click on the case name to view a PDF of the opinion. Though unpublished (at present), it is our hope Division I will publish and help clarify the law of replevin.

So what happened? In short, Michael was estranged from his parents. He dropped by their house and took a car he had been explicitly told he could not use. He did not have a license. His parents tried to get the car back, calling him and telling him "Get the car home." They went looking for it. After a few days with no action, Michael was taking the car home when he got into an accident.

In the matter at hand, the Plaintiff abandoned the theory of Family Car Doctrine, and rightfully so. Michael did not live with his parents, and there is no question the car was not provided for general family use. 

Plaintiff then argued that the statement to get the car home created an agency relationship. Though not mentioned in the opinion, there is a long history in the law of replevin that actions to obtain recapture of wrongfully taken chattel are absolutely privileged. The court's language, though not mentioning the law of replevin, lays out the law quite nicely:

     Morgan argues here that, like in O'Brien, the alleged principal controlled (1) the time—in both cases, immediately; (2) the destination—in O'Brien the pickup place and here the parents' home; (3) the purpose—in O'Brien to pick the owner up and in this case to bring the parents' car home; and (4) the means—in both cases, driving.

     But, an agency relationship arises only when the principal agrees to the agent's conduct. See O'Brien, 122 Wn. App. at 285. And, unlike Baxter and O'Brien, the parents did not ask Michael to take possession of the car or to work on their behalf. Rather, the parents had made it clear to Michael that he was never to use their vehicle. Yet, he took the car without their knowledge or consent. And, Michael continued to possess the car, even after his parents demanded that he return it immediately. His defiance demonstrates the parents' complete lack of control.

     The law does not hold the vehicle owner liable for the negligent acts of an individual that has taken the vehicle unlawfully. See Kim v. Budget Rent A Car Sys., Inc., 143 Wn.2d 190, 202, 15 P.3d 1283 (2001) ("[W]e have held that the owner of an unsecured vehicle that is stolen and later involved in an accident is not liable for a third party's damages caused by the accident."). Michael had no more permission to possess the vehicle than the thief in the Kim case. None of Morgan's cited authority supports the principle that a person whose property is wrongfully taken can be held liable for the negligence of the person who wrongfully took the property.

     Nevertheless, Morgan portrays the parents' demands that Michael return the vehicle as establishing an agency agreement with Michael. According to Morgan, once the parents requested that Michael return the car, his possession and use became permissive, for his parents' benefit (the vehicle's return), and under their control. If not establishing control, Morgan argues that, at a minimum, a question of fact has been raised which precludes summary judgment.

     We hold that, as a matter of law, the bare demand that wrongfully taken property be returned, even when complied with, is insufficient to create a question of fact regarding the owner's right of control over the possessor, as is necessary to establish agency. The trial court did not err in granting the parents' motion for summary judgment.

This is a major win for the parents', as well as for anyone who asks for their property back. If you require appellate counsel, allow ILG to help. We offer a wide variety of services to insurers and self-insureds, including claims investigation, litigation, and appeals.

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WA Supreme Court Curtails Insurance Fair Conduct Act Claims

Perez-Crisantos v. State Farm 

One of the most oft-litigated IFCA issues is what happens when the offer a plaintiff gets from their own insurance company vastly differs from what the claim is worth. 

The Washington Supreme Court clarified this today in Perez-Crisantos. The parties had a legitimate dispute over whether certain injuries were causally related to the incident. In review of the claims file and incentive programs, there was no evidence found of anything other than a claims valuation difference.

In this case, Perez-Crisantos suggests that something more can be found in the fact PIP benefits were allowed based on the same evidence and his suspicion that the incentive program created bad incentives. But State Farm never disputed that some of Perez-Crisantos's injuries came from the accident; it is not necessarily inconsistent for an insurer to pay the one and balk at the other based on its valuation of the claim. The fact State Farm paid PIP benefits is not sufficient to create a material question of fact that State Farm violated insurance regulations by rejecting some of Perez-Crisantos's UIM claim

More importantly, the Court also took a hard look at the state of the law and the intent of IFCA and found that a violation of a an insurance regulation alone (such as the ten day response rule), does not in and of itself create a private cause of action. This means a causal link is required, and they can be evidence of violations under the CPA, which was lacking in this case.

There was an interesting discussion by Judge Stephens that this question was not justiciable, given that Plaintiff could not survive summary judgment based on whether there was even a WAC violation, let alone whether it created an independent cause of action. The Court limited IFCA actions to the language of the statute:

We respectfully disagree with the Langley opinion that legislative intent supports creating an implicit IFCA cause of action. IFCA explicitly creates a cause of action for first party insureds who were "unreasonably denied a claim for coverage or payment ofbenefits." RCW 48.30.015(1). IFCA does not state it creates a cause of action for first party insureds who were unreasonably denied a claim for coverage or payment of benefits or "whose claims were processed in violation of the insurance regulations listed in (5)," which strongly suggests that IFCA was not meant to create a cause of action for regulatory violations. . . . 

Ainsworth notes that "[s]ubsection (1) describes two separate acts giving rise to an IFCA claim. The insured must show that the insurer unreasonably denied a claim for coverage or that the insurer unreasonably denied payment of benefits. If either or both acts are established, a claim exists under IFCA." Id. (citing RCW 48.30.015).

While I tend to agree with Justice Stephens' justiciability arguments, I will say this opinion goes a long way to resolving a split among the local federal courts. For that reason alone, it was probably worth addressing. However, it could have been stated a little clearer in the majority opinion. 

For those looking to a primer on how Plaintiff Attorneys have litigated Insurance Fair Conduct Act Claims, I highly recommend Isaac Ruiz's book, Insurance Fair Conduct Act: Cases and Analysis, which provided a breakdown of the law and how its commonly litigated (which will likely go through a new revision breaking down this opinion).

If you have a question as to how the Insurance Fair Conduct Act affects your claims, please feel free to contact our Issaquah Attorneys. We are conveniently located on the Eastside, and we handle all business matters from formation through litigation, including coverage for Washington and Alaska. We're here to help.

 

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WA Supreme Court Upholds Director Liability for Unpaid Wages Post-Bankruptcy

Allen v. Dameron

This case involves Advanced Interactive Systems. Why am I excited to blawg about this? Well, your humble attorney used to be a humble IT guy. His first IT job was at Advanced Interactive Systems. The company was known for a variety of products, but specialized in law enforcement and military weapons simulators, which included a "shoot back" option, which could shoot non-lethal munitions at the participant in time with the simulation, especially in cases where the participant was failing to appropriately use cover. It also allowed for the instructor to manage the scenario, including escalation and deescalation of the scenario based on the participant's behavior. I was responsible for installation, troubleshooting, QA, and customer support. It was a fun job. Unfortunately, the travel got to me rather quickly, and I made the move to Unisys, where I spent the remainder of my tech career.

They also, much to my chagrin, made gun range games and bow hunting simulators.

Now, I made the decision to leave AIS primarily based on the travel. But the straw that broke the camel's back, as they say was this phrase: "[The CEO] has decided to step down in order to spend more time with his family." That is a huge red flag in the corporate world, denoting some manner of ill-performance. It is the corporate equivalent of a movie star checking in to a hospital for "exhaustion." 

This case came to the Washington Supreme Court on Certification from the Federal District Court for the Western District of Washington. They asked the following two questions:

Is an officer, vice principal, or agent of an employer liable for a deprivation of wages under RCW 49.52.050 when his or her employment with the employer (and his or her ability to control the payment decision) was terminated before the wages became due and owing?

Does an officer, vice principal, or agent's participation in the decision to file the Chapter 7 bankruptcy petition that effectively terminated his or her employment and ability to control payment decisions alter the analysis? If so, how?

Now what happened here was Allen took a job as interim CEO. Due to the financial difficulties, he deferred some of his pay, as did other key employees. The funds in the piggy bank were insufficient to meet final payroll. The Board made the decision to file for Chapter 7 if its senior secured lender could not back more funds.  Allen had the oh so fun job of announcing the shutdown, and stating they would be receiving their final paychecks with accrued vacation, on the next pay date. The Board kept Allen on for the filing. He didn't get a share of the pie. 

Allen filed suit for willful withholding of wages in violation of the Washington Rebate Act. The case was dismissed by the Western District of Washington on the basis that the Board didn't have authority to pay Allen and that they didn't wrongfully withhold wages. Allen asked for reconsideration and certification to the Court of Appeals. 

First the Court held that the filing of a Chapter 7 Bankruptcy has no bearing on whether the wages were wrongfully withheld by the Officers of the Company. In addition, the Court held the Officer participation in the decision to file a Chapter 7 Bankruptcy is actually further evidence of an intent to wrongfully withhold wages. It did not matter that the officer was terminated as a result of the Chapter 7, and the last pay date came after the filing and the officer's termination. This is because the wages are due and owing under the law at termination, but at the next pay period. What happens in the interim does not quash the obligation.

In its reasoning, the Court held that this was a rather unique situation, in that Boards don't generally engage in payroll decisions: 

In addition, the circumstances where a member of the board of directors will be liable under the WRA appear to be rare. Here, the directors were acting as the de facto officers of AIS. In fact, AIS operated without a CEO for a period of several days until the board filed for chapter 7 bankruptcy. The board made the decisions of who, when, and how much was being paid to AIS employees. Such decision-making is not within the normal duties of a member of the board of directors for a corporation. 

So what does this mean for businesses operating in Washington? First, Boards should be careful to assume payroll obligations. Second, payroll obligations need to be treated as paramount: fold up shop before you run the last cent out. For higher level employees that wish to defer, perhaps issuance of stock instead of accruing liabilities you will be unable to pay. Third, make sure you are adequately insured for D&O liability: If you have to assume an obligation, make sure you're covered in the event a suit is around the corner.

If you have any questions regarding the case or its implications for your business, please feel free to contact our Issaquah Attorneys. We are conveniently located on the Eastside, and we handle all business matters from formation through litigation, including coverage for Washington and Alaska. We're here to help.

 

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Join Us!

Issaquah Law Group is seeking a full time legal receptionist/file clerk to join the firm. The ideal candidate is reliable, self-motivated, organized, professional, and highly detail-oriented. Proficiency with Microsoft Office, the ability to multitask, and strong verbal and written communication skills are required. This position does offer the opportunity to train as a legal assistant in addition to the above responsibilities. Prior office experience is strongly desired, and a college degree is a plus. We offer a competitive salary, excellent benefits, and a collegial, dog-friendly, work environment.

Issaquah Law Group is a law firm with one focus: providing businesses and insurers with the same high quality legal representation seen in larger firms and the responsiveness seen in smaller firms. The firm was founded on the principle that high quality legal representation can be achieved with a work/life balance not normally seen in litigation firms. Our employees sit on local boards and commissions, volunteer in the community, play music, write screenplays, and train dogs. Our firm is primarily focused on litigation on behalf of insureds and self-insureds within the state of Washington and Alaska. However, the firm also features a thriving business practice, including formation, transactions, and trademark and copyright issues on behalf of our clients. 

To apply, please send a cover letter and resume to our firm administrator (admin@issaquahlaw.com). Resumes will be accepted through close of business on Friday, December 2, 2016. However, the application process may close earlier if the ideal candidate is found.

Issaquah Law Group is an Equal Opportunity Employer and does not discriminate on the basis of race, color, creed, national origin, ancestry, religion, age, citizenship, sex, marital status, military or veteran status, disability, sexual identity, political ideology, genetic information, or any other basis prohibited by federal, state, or local law.

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WA Supreme Court: Corporate Attorney-Client Privilege Does Not Extend to Postemployment Communications with Former Employees

Newman v. Highland School District

The plaintiff in Newman suffered a permanent brain injury during a football game. He sued Highland School District for the negligence of Highland coaches who permitted him to play despite exhibiting symptoms of a concussion suffered at practice the day before the game. At the depositions of the coaches, some of who were no longer employed by Highland, counsel for Highland indicated that he had spoken with the former coaches prior to the deposition and was now representing them for purposes of the deposition.

Newman first sought to disqualify Highland counsel for conflict of interest. However, the superior court denied the motion, and the Supreme Court upheld the lower court’s ruling that while an attorney-client relationship existed during representation at the deposition, Highland counsel was not allowed to represent “non-employee witness[es] in the future.”

Newman then sought discovery of the communications between the former coaches and Highland’s counsel. Highland moved for a protective order asserting the communications should be shielded under the attorney-client privilege.

The issue here is “whether post-employment communications between former employees and corporate counsel should be treated the same as communications with current employees for purposes of applying the corporate attorney-client privilege.”

The pinnacle U.S. Supreme Court case regarding corporate attorney-client privilege is Upjohn Co. v. United States, 449 U.S. 383, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981). Upjohn provided a flexible framework for defining who the “client” is in regards to determining corporate attorney-client privilege, which may sometimes include non-managerial employees. However, the Court in Upjohn expressly declined to answer the question of whether the privilege extended to former employees.

Understanding the reason the attorney-client privilege exists is critical. As stated in Upjohn, certain communications between a client and their attorney is privileged “to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration justice.” Important to note, only certain communications may qualify for privilege, those communications made: (1) in confidence and (2) in the context of an attorney-client relationship.

The Court here based its decision on the principal-agent relationship. While employees may be required to disclose pertinent facts regarding their duties to corporate counsel for investigatory and litigation purposes, the court found that “former employees categorically differ from current employees.” Upon termination of an employee, the agency relationship generally ceases to exist. Just as the employee no longer has the ability to bind the corporation, the employee no longer has duties to the corporation (loyalty, obedience, confidentially). As such, the Court reasoned that a former employee is “no different from other third-party fact witnesses to a lawsuit, who may be freely interviewed by either party.”

While one can disagree with the bright-line test created by this ruling, as the dissenting justices clearly do, the Court has provided predictability of when privilege will apply and when it terminates in relation to corporate communications with employees. Corporate clients need to be aware of the fact that even though a former employee may have information regarding a litigation matter that occurred during the period of employment, communications with the former employee after termination will not be privileged. There may be options for maintaining a relationship with the former employee such that communications are still privileged – including attorney work-product or work product developed in anticipation of litigation. However, these are limited and do not protect documents sent to or received from those witnesses.

Should you have an investigative need, Issaquah Law Group is well-versed in handling all aspects of the investigatory process. If you require assistance with an investigation on potential or current litigation, please contact us.

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Now Serving Alaska!

What do the tried and true fisherman of TV's Deadliest Catch and the attorneys in Issaquah Law Group have in common? We are both operating in the 49th State of the U.S. - Alaska. In addition to our thriving Washington Practice, ILG partners A. Troy Hunter and Justin P. Walsh are now admitted to the Alaska Bar. The variety and depth of our experience allows us to handle any and all claims arising in Alaska, whether standard personal injury suits, employment suits, business litigation, or even catastrophic losses. In addition, Issaquah Law Group's new associate, Ryan Sobotka, has extensive experience handling claims in Alaska, having litigated and counseled on matters ranging from municipal employment matters to tribal corporation acquisition strategies. Ryan's admission to Alaska is currently pending. If you have any questions on our Practice Areas, please contact us. 

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Join Us

 

Issaquah Law Group has an opening for an Associate Attorney position. You can find the details here.

Issaquah Law Group is a law firm with one focus: Providing businesses and insurers with the same high quality legal representation seen in larger firms combined with the responsiveness seen in smaller firms. Issaquah Law Group's founding partners had known each other for years, first working on opposite sides of a case, then working together at a prominent mid-size insurance defense litigation firm. They realized the practice of law could quickly lose its sheen in the face of high billable hours requirements. There was only work, no life. They formed Issaquah Law Group with the hope of reclaiming the work life balance that is generally so elusive for litigators. The firm is built on the philosophy that the practice of law can be done differently, while still providing the high quality representation our clients expect and deserve.

Our employees sit on local boards and commissions, volunteer in the community, play music, write screenplays, and run half marathons. Our firm is primarily focused on litigation on behalf of insureds and self-insureds within the state of Washington. However, the firm also features a thriving business practice, including formation, transactions, and trademark and copyright issues on behalf of our clients. 

Issaquah Law Group is an Equal Opportunity Employer and does not discriminate on the basis of race, color, creed, national origin, ancestry, religion, age, citizenship, marital status, military or veteran status, disability, sexual identity, political ideology, genetic information, or any other basis prohibited by federal, state, or local law.

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WA Supreme Court - Breach of Duty on Campus Can Be Proximate Cause of Behavior Off Campus

 

 

 

 

N.L. v. Bethel School District

This case is pretty short, but has huge implications for school districts that have specialized knowledge of a student's bad behavior. In this case, the district new a student, Clark, was a registered sex offender. He also had a history of inappropriate behavior in school, including inappropriate sexual comments, physical assaults, and sexual misconduct going back to seventh grade. The Principal was informed of Clark's status, but no action was taken.

The RCW and the District policy's in place at the time required informing the teachers of Clark's sex offender. The former superintendent of public instruction noted that model policies adopted by most districts includes notification of other school personnel as well.

N.L. skipped class and was led off campus by Clark, where they had intercourse. She was 14, he was 18, a clear case of statutory rape. 

The District claimed a lack of proximate causation due to the behavior occurring off campus. The supreme court first noted the generalized duty Districts have to "protect their students from the foreseeable risk of harm the students may inflict on each other." The Court then noted that, regardless of where the harm occurred, there may still have a proximate cause to the breach of the duty by the District to fail to inform the teachers:

We hold that districts have a duty of reasonable care toward the students in their care to protect them from foreseeable dangers that could result from a breach of the district's duty. While the location of the injury is relevant to many elements of the tort, the mere fact the injury occurs off campus is not by itself determinative. As the Idaho Supreme Court noted in a somewhat similar case, "the relevant inquiry is to the location of the negligence rather than the location of the injury." Whether the district breached its duty to take reasonable care to protect N.L. from Clark is a factual question in this case.

The District had also argued that because N.L. had skipped class, it somehow makes the conduct less foreseeable. The Court rejected this argument:

We are left then with the district's argument that 14-year-old N.L.'s decision to leave campus with Clark changes this calculation as a matter of law. But "'[f]oreseeability is normally an issue for the jury."' We see no reason to depart from that rule here. Students have been skipping class "[s]ince at least the days of Huck Finn and Tom Sawyer." We cannot say as a matter of law that it is unforeseeable that students will leave campus together. 

So what does this mean for districts? In this case, it seems fairly clear issue. The district needs to at the very least follow its own policies and inform the teachers of the student's status. That does not, however, mean it is clear that, had a teacher known, this still wouldn't have happened. But this raises other issues. Does a district need to inform the teacher's of non-criminal past behavior of this nature? What about past drug offenses to prevent students from being harmed by drug use? Does the district now have a duty to inquire into a student's past criminal behavior? This has the potential to go down a fairly slippery slope. For now, however, it is limited to this one scenario. 

If you have questions regarding liability of your district, you may contact Issaquah Law Group. We are well versed in school district liability, and can help your district craft policies to assist in effective administration and avoidance of these types of lawsuits.

 

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WA Supreme Court: Read Post-Arbitration Offers of Compromise Like a Normal Person

Nelson v. Erickson

This case is a must read for anyone engaging in personal injury or contract litigation on a regular basis, especially if you find yourself in mandatory arbitration.

If you go through arbitration, a party can appeal the case (called a de novo) to the superior court for an actual trial. If you improve your position at trial, the case is done. However, if you do not, you are on the hook for fees and costs incurred from the point of de novo through trial.

The case can take one of two forms. If Plaintiff does not like the award, and de novos  the case, it must get at least a penny more in damages; if defendant - a penny less. The kicker, the other side can do what is called an offer of compromise. In the typical context, Plaintiffs do not generally de novo a case, as most plaintiffs cases are taken on contingency. They do not have the money to pay for an attorney up front, let alone front the risk of potentially having fees and costs of a trial assessed against them. 

What you usually see is this: 

  1. Plaintiff receives an award at arbitration that defendant is unhappy with;
  2. Defendant de novos the case, requesting a superior court trial;
  3. Plaintiff puts forth an offer of compromise at some amount lower than the arbitration award.

By offering to settle the case for less than the arbitration award, the Plaintiff essentially resets the bar by which each side must improve their position.

In the present case, Plaintiff received an award at arbitration for $44,923, of which $1,522 was taxable fees and costs. Defendant de novo'd the case. Plaintiff made an offer of compromise of "$26,000 plus taxable costs incurred at arbitration." As we recall from literally the last sentence, those taxable costs were $1,522. This would seem the total offer of compromise was for $27,522. 

At trial, the jury awarded $24,167. The judge, for reasons not described, performed an additur, increased the award by $3,000 (usually some uncontested element of damages the jury did not award contrary to law). So the total award received at the jury trial was $27,167. In case you are bad at math, $27,167 is less than $27,522. Plaintiff did not improve their position.

Plaintiff argued to the trial court that their offer of compromise was really for $26,000, and that the whole "plus taxable costs incurred at arbitration" language didn't count. Under that argument, they did improve their position. The trial court agreed and awarded fees and costs. The court of appeals did not. 

In a prior case, Niccum v. Enquist, 175 Wn.2d 441, 286 P.3d 966 (2012), a slightly different situation reared its head, when the offer of compromise by Plaintiff offered to settle for a lower sum, but then stated "[Such compromise in intended to replace the arbitrator's award of $24,496.00 and replace the previous offer of compromise, with an award of $17,350.00 including costs and statutory attorneys fees." The jury awarded less than that amount. Then Plaintiff moved for fees and costs arguing fees and costs from the arbitration award should be subtracted in determining the bar by which a judgment should be judged (sorry, couldn't help myself, I love alliteration and word play).

In Niccum, the Court rejected the position. They stated the offer of compromise has to be understood by ordinary people: "an offer of compromise is the total sum of money that a party offered to accept in exchange for settling the lawsuit." In Niccum, they were offering to settle the case for $17,350, lump sum, done.

So what about the present case, where they do the opposite. They perform an offer of compromise for an amount plus fees and costs awarded at arbitration. The Court took its prior ruling and applied it. The check Defendant would have to write would not be $26,000, it would have been $27,522, the amount it would take to settle the suit based on the offer of compromise:

     Thus, both parties are correct that Niccum provides some support for their position. On the one hand, Niccum explained that parties should not reference costs in their settlement offer because costs are generally statutory and awarded by courts. On the other hand, Niccum also explained that offers should be interpreted as an ordinary person would interpret them, and that we should view the offer as a whole-as "the total sum of money that a party offered to accept in exchange for settling the lawsuit." Id. at 452. 

     We treat this offer as an ordinary person would interpret it. The plaintiff offered to settle the case for $26,000 plus the costs incurred at arbitration. Unlike Niccum, the costs were known at the time of the offer-$1,522. An ordinary person would understand that the plaintiff was offering to settle the case for $26,000 plus $1,522. The plaintiff is essentially arguing that the defendant should have known that Niccum prevented any inclusion of costs in an offer, and thus the defendant should have known that the offer was only for $26,000. But if the plaintiff wanted to offer $26,000, he could have done so by simply offering "$26,000." He now argues that he had no right to make the offer he did, but he places responsibility for identifying that flaw on the defendant. Simply as a matter of fairness, we cannot accept that argument. If he had no right to include costs in the offer, why did he purport to include them? Either he was intentionally making a confusing offer or he negligently made a confusing offer. Regardless, we cannot reward him for making a confusing offer that he now argues was improper. 

So, what does this mean for the Plaintiff bar? It would seem the Courts have sent a pretty clear message that any language as to fees and costs should be excluded. Keep it simple. As for the Defense bar, it seems the strong language against confusing terms in an offer of compromise contains additional ammunition to challenge awards of fees and costs where the offer of compromise is not clear on its face.

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WA Supreme Court - Safety Concern Transfer Based on Race Violates WLAD

Blackburn v. State

Very interesting case out of the Washington State Supreme Court. Several workers at Western State Hospital (think Washington's version of Arkham Asylum) were pulled off of care in a particular ward due to its housing a violent patient who had threatened a particular employee of color, and stated "he planned to 'f*** up an [n-word] working with him.'"

The workers were removed from the ward, and another employee with lighter skin placed on his care for the weekend. Once the patient presumably became a little more stable, care in the ward resumed as normal (which, knowing Western State, is a very subjective form of normal)The employees sued under the Washington Law Against Discrimination, alleging disparate treatment and a hostile work environment. The supreme court upheld the factual finding that this was not a policy of racial staffing, but rather a one-off. On its face, the staffing decision was based on race, and thus amounted to disparate treatment in violation of RCW 49.60.180(3). There are certain instances in which an employer can take protected instances into account, such as restrooms based on sex, but those did not apply here.

The Court noted that there may have been a bona fide occupational qualification defense. However, the State waived the defense. The defense would require a showing "(1) that the protected characteristic is essential to job purposes or (2) that all or substantially all persons with the disqualifying characteristic would be unable to efficiently perform the job." Here, that would require a pretty strong showing of a credible threat. Almost all agreed that the case manager was overreacting a bit to the threat, especially in an environment where patient assaults can be the norm and the staff, regardless of color, know how to deal with them. 

Regarding the hostile work environment claim, the claim requires pervasiveness in the workplace. The trial court found, and the supreme court agreed, that the single weekend was not severe and pervasive, especially considering the underlying circumstances.

So what does this mean? We do not really live in an age where overt discrimination happens often, but it does happen. I have seen customers my own youth request to be served by white employees (at a movie theater, no less). It can happen in any work environment. Some employers do kowtow to these customers and clients. As a matter of principal,  one would hope these customers would be turned away vocally. However, reassigning a worker based on race could also expose you to costly litigation, as well.

At the end of the day, the supreme court remanded the case on the disparate treatment claim for determination of damages and attorney fees.

If you find yourself faced with  an employment issue, please contact our Attorneys. We represent employers across Washington State and can help you navigate any issues that may arise.

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WA Supreme Court - 1st Amendment Protects Begging and Solicitation AT Intersections

City of Lakewood v. Willis

It's not often that you will find this blog mentioning cases regarding criminal law. After all, we are a civil litigation firm. While we make sure our clients are taken care of if they are ever in need of criminal representation, we do not handle these cases ourselves.

So why this case? Well, it involves issues of First Amendment jurisprudence, which could, if improperly applied, subject municipalities to civil liability. 

Willis was begging on a freeway onramp. Now, it is undisputed that freeway onramps are generally not public forums and speech may be restricted as to time, place, and manner. However, Lakewood's ordinance was worded a little differently. It restricted begging at freeway onramps.

There are two problems with this. First, the "at" part applied to the intersection before the onramp as well, which is a traditional sidewalk area and thus a traditional public forum. While it was undisputed that Willis was "in" the onramp, the Court cannot rewrite the statute, and thus it did not comply with the First Amendment.

The bigger problem is with the content restriction. While ordinances can limit the time, place, and manner of speech, it cannot restrict the content. I may not agree with a word that you say, but I can only restrict the time, place, and manner in which you say it.

Here, the statute prohibited begging, a form of solicitation. The United States Supreme Court has recently weighed in on this, and decided that restricting begging amounts to a content-based restriction, which is a First Amendment no-no, finding that content base restrictions include content regulated "by its function or purpose." Reed v. Town of Gilbert, U.S. , 135 S. Ct. 2218, 2227, 192 L. Ed. 2d 236 (2015). Further, other cases from various federal courts of appeals have found that solicitation of charitable contributions is protected.

Now, if the ordinance had prohibited all First Amendment activity in onramps, it presumably would have complied. The one thing I take issue with here is the Washington Supreme Court seemed to imply that one could restrict content based on a category (solicitation) and still comply with the First Amendment. Solicitation is still a function or purpose, and this would likely fail the Reed test.

So what do municipalities in Washington have to do now? Each city and county needs to take a good hard look at any anti-begging ordinances to ensure compliance with both Reed and Willis. In addition, any freeway based ordinances need to be reviewed to ensure they are not encroaching on the intersection prior to a freeway onramp, but only the onramp itself, which is not a public forum. Failure to do so in the future may not only lead to a waste of resources in the courts, but could create potential exposure to suit.

 

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Construction Worker Tragically Killed in Fall at Atlas Apartments

Construction site safety protocols and fall protection will be an issue

According to Eastside Fire & Rescue, on the morning of May 16, 2016, a 46-year-old masonry worker was reportedly doing work on the brick facade at the Atlas Apartments construction site in Issaquah, Washington, when he fell to his death. It was also reported he was working on scaffolding at the time for a subcontractor to the general contractor for the project, Anderson Construction. Officials with the state Department of Labor & Industries are at the scene investigating.

It is important a full and adequate investigation is performed in the early days of a fatal accident such as this. The construction companies are well-suited to do this since they have access to the site, the employees, and the safety records. Unfortunately, construction companies and their employees don't always do the best job of gathering and preserving necessary evidence and in cases such as this, the adequacy of safety protocols, and their enforcement, from the general contractor down to each and every subcontractor and vendor, is always scrutinized. 

Therefore, it is recommended counsel be retained early on to guide and participate in the investigation, identification, and retention of evidence, conducting and gathering witness statements, and coordination with investigating authorities, in order to improve the chances of success in any litigation inevitably arising out of such a tragic event. 

This is as true for the family of the deceased worker as it is for the contractors and their insurers. The best case will be built upon an early and thorough involvement in the investigation into the facts and circumstances of this worker's accident and death.    

For more information, follow this link: http://www.seattletimes.com/seattle-news/construction-worker-killed-in-fall-at-issaquah-apartments/

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WA Court of Appeals: Division III fights the tide on prejudice under arbitration clauses.

Schuster v. Prestige Senior Management LLC

Very interesting case out of Division III this morning. The actual case itself is not really worth discussing. Suffice it to say there was a lawsuit where the underlying contract contained an arbitration clause. 

In the present case, Plaintiffs were in discussion about the case, and no arbitration clause was discussed or invoked by the Defense. After filing suit, the case went on for over a year without any invocation of the arbitration clause, including discovery and responding to motions to compel. 

Unsurprisingly, the Court found waiver and estoppel of the clause.

The interesting part of this case, however, revolved around the issues of prejudice and a seeming rebuking of 9th Circuit precedent by Division III. Why is this important? In this case, the arbitration clause was governed by Federal arbitration law. While the prejudice analysis likely would have played out the same regardless of the discussion of the 9th Circuit, Division III noted the 9th Circuit's seeming view that there could be no real prejudice to a Plaintiff in having an arbitration clause invoked against it because the Plaintiff chose to file the lawsuit knowing the arbitration clause existed. The discussion is worth the read:

The Ninth Circuit Court of Appeals' decision in Fisher v. A.G. Becker Paribas, Inc., conflicts with the tenor of other circuits' decisions. No other circuit has imposed blame on the plaintiff for filing suit, despite the applicability of an arbitration agreement. No other circuit has characterized the cost of litigation to be self-inflicted by the plaintiff who files suit despite being party to an arbitration clause. Blame is more often imposed on a defendant for untimely seeking arbitration. 

It is not often that you have a state Court of Appeals calling out a federal circuit court in such a manner. Even more surprising is, given the Ninth Circuit's usual liberal tone, that they reached this ruling in the first place.

Regardless, the decision is the arbitration clause was waived, and the lawsuit continues. If you have an arbitration clause and wish to enforce it, keep in mind the courts will be looking to pre-litigation conduct on top of the conduct during litigation. As the Court stated at the beginning of the opinion, it is very much a use it or lose it situation. Our Issaquah attorneys are well-versed in the state and federal arbitration law. Allow our Issaquah lawyers to assist you with your claim-handling.

 

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Division II: Restrooms Open to All Not Integral to Dock or Rental Spaces at Park Under Recreational Use Statute

Hively v. Port of Skamania County

Under standard tort principles, if you are aware of a hazardous condition on land and do not correct it within a reasonable time, you can be liable for injuries occurring because of that hazardous condition.

An exception to this is found in the Recreational Use Statute. If you open your land to the public, without a fee, and someone is injured, you cannot be held liable. 

In this case, the Port operated a park. You could rent out part of the park for a fee, or you could dock at the port for a fee as well. At issue was whether charging a fee for docking or for rental took the property at issue out of the recreational use statute. The area of the property here, where the Plaintiff had tripped and fallen, was open to the public without fee regardless of whether or other areas of the park were rented. 

The case law on this is fairly well-settled:

A landowner may charge a fee to use part of its land and maintain immunity for recreational use of the remainder of the land. Plano v. City of Renton, 103 Wn. App. 910, 914, 14 P.3d 871 (2000). To maintain recreational use immunity and charge a fee, “[a] landowner must only show that it charges no fee for using the land or water area where the injury occurred.” Plano, 103 Wn. App. at 915. A landowner is not entitled to immunity when the place that the injury occurred is a “necessary and integral part” of the fee-generating area. Plano, 103 Wn. App. at 915. It is undisputed that the Port does not charge a fee for public use of either the path where Hively fell or the restroom to which the path led.

So what is integral. Well in Plano, ramps leading to a dock were an integral part of the dock, for which a fee was charged. Here, there is no such thing. The restrooms and the paths to them, where Plaintiff fell, were not integral to the port's docking. The restrooms and surrounding path were an integral part of both the fee generating portion of the park, as well as the non-fee generating portion. However, the bathroom was not designed to serve the fee generating portions, it was provided for the general recreation. As such, it fell within the recreational use statute.

As cities, counties, and developers work towards integration, these kinds of distinctions are going to play more and more into whether immunity can be granted. It may become important in the future to segregate off areas open to the public without fee in order to obtain the full benefit of the statute.

The rest of the opinion dealt with whether the condition, here uneven surfaces, was latent (not discoverable). Prime examples of this include submerged stumps or muddy water which hid the edge of a road. This means the Plaintiff has to provide evidence the uneven surface was not readily apparent, as it is an exemption to the recreational use statute. It was not hidden or submerged, and thus there was no evidence of latency in the record.

As such, Hivey's claims were dismissed as a matter of law.

Issaquah Law Group has extensive experience defending premises liability claims, both under the recreational use statute, as well as under common law tort principles. Please contact our Issaquah Attorneys should you have a question on Washington Law or an issue of liability. 

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Our Hearts Are In Brussels

The events of yesterday are a constant reminder that we live in a global society. This tragedy affects not only those injured or killed in the blast, but their families and friends. It affects each of us as we ponder how to deal with those fleeing these terrorists within their own countries, and how we differentiate the ones fleeing from those seeking to harm us. It affects the communities and people targeted by  misdirected hate. Our firm administrator offered the following in the wake of this tragic event:

Do not stop living, dancing, laughing, and loving out of fear of those who wish only to spread hate and terror. Fight back: live with passion, dance with your toes tapping and arms flailing, laugh with abandon, and love so deeply your soul aches with joy. ‪#‎Brussels‬ ‪#‎loveoverhate‬ ‪#‎fightbackfear‬

Our hearts are in Brussels.

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WA Supreme Court - Meth Chain of Custody Not Enough to Support Felony Payment Bar Through Possession

Dept. of Labor & Indus. v. Rowley

Very interesting case from the Washington Supreme Court. Normally, an injury while committing a felony is a bar to a labor and industries workers' compensation claim. But what happens when the potential felony has a myriad of chain of custody issues with the claimed possession? According to the Washington Supreme Court, this can, as a matter of law, preclude a felony payment bar defense. 

In this case, Rowley was injured after his truck veered off an overpass and landed on the road below. A nurse believed she found a baggie on Rowley, but all items were trashed. After digging through a trash in another room in some clothes, a baggie was found with residue of meth amphetamine. No nurses could remember if Rowley was even wearing clothes at the time of arrival. No field sobriety test was able to be performed on Rowley because he was in a coma. The officer also testified he could not form an opinion as to whether Rowley was intoxicated by amphetamine use. Rowley's blood was mislabelled as "Rawley", but did test positive for methamphetamine. 

Ultimately, the prosecutor did not charge Rowley with any felony. 

The Department initially denied his claim, citing the felony payment bar. Reconsideration was denied, and an appeal to the Board was filed, evidence was presented, whereby the IAJ reversed the department order, finding the Department had not met a preponderance of the evidence standard to prove a felony. 

A three member Board panel held the standard was actually higher, that the standard to prove the commission of a felony must come from clear, cogent, and convincing evidence. The Court of Appeals affirmed on this issue. The Supreme Court reversed, stating that the standard is laid out within the statute, and all evidence must come from a preponderance of the evidence standard (more likely than not). 

The supreme court first looked to who had the burden of proving a felony. The Court of Appeals placed this burden on the Department, analogizing the felony bar to an affirmative defense, and noting the burden of affirmative defenses are the burden of the person asserting the defense. Oddly enough, this question had not yet been decided in Washington.

The supreme court took a different approach, noting that felony bar is essentially asserting that the Plaintiff was not within the course and scope of employment, and thus the burden could potentially remain on the claimant, as has been done with regard to the intentional injury bar. Oddly enough, lack of proximate cause and lack of course and scope of employment are affirmative defenses under tort law as well, and the logic behind differentiating them within worker's compensation was not entirely clear. Even after stating it was not to be analogized to an affirmative defense, the supreme court ultimately held the burden is on the Department to prove the felony payment bar applied. However, they did so on the logic that a claimant should not be required to prove a negative; the department must come forward with some evidence first in order to require a rebuttal from the claimant. To hold otherwise would require the courts to presume a felony bar in all cases unless proven otherwise. 

Next, the court looked to what must be shown to even appeal the department's order. The Department attempted to state that the claimant must show some aspect of the initial department order was incorrect to appeal. However, the court noted that simply arguing the evidence was insufficient to make a finding against the claimant is sufficient, as long as the claimant has shown a prima facia case of injury in the course of employment. The appellant of the original order need not come forward with new evidence to refute the Department's initial determination.

Finally, the court then looked to how that must be proved. The Board held the standard to prove the commission of a felony must come from clear, cogent, and convincing evidence. The Court of Appeals affirmed on this issue. The Supreme Court reversed, stating that the standard is laid out within the statute, and all evidence must come from a preponderance of the evidence standard (more likely than not). There was nothing supporting application of a heightened standard to the felony payment bar. 

After looking to the standards, the court then looked to whether the evidence supported commission of a felony in this case. Here, there was a pretty good case that Rowley had committed a misdemeanor, DUI. DUI can, with other evidence, support prior possession. However, that is all we have here. The nurses in the ER could not remember what the clothes looked like, and the baggie recovered from the trash was in another room. Though the baggie tested positive, there was not, as a matter of law, enough to show he was in possession at the time of his truck leaving the roadway. 

The issue I have with this opinion has to do with the court deciding as a matter of law the evidence was insufficient. This seems like a pretty borderline case, given the chain of events, to be weighing the evidence on appeal. A better method would have been to rely on the IAJ's findings on appeal, giving the deference to the finder of fact. C'est la vie!

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Washington Supreme Court Allows Three Year Statute of Limitations for Idaho Accident Involving Washington Residents

Woodward v. Taylor

So what happens when an accident occurs in Idaho, but strictly involves Washington residents.

The present case involves a car driving through Idaho. The driver was a Washington resident, as were the passengers. When the vehicle rolled (allegedly due to excess speed in icy conditions), one of the passengers sued the driver. 

Here, the suit was brought in King County Superior Court for the State of Washington. The trial court dismissed the claim as having missed Idaho's two year statute of limitations, reasoning that under Ellis v. Barto, 82 Wn. App. 454, 918 P.2d 540 (1996),  Idaho law applied given that it involved Idaho's rules of the road. Division One of the Court of Appeals affirmed, holding that Idaho had the greater interest in applying the law of its state to cases involving interpretation of its rules of the road. A similar, but not identical, argument.

The Supreme Court took a different route in this matter. Under conflict of laws, one must first determine if the laws are in conflict. Only then do you start looking at who has the bigger interest in having their law applied to the case. This is a step both the trial court and the court of appeals missed in their analysis. 

At first glance, it appears this is most definitely the case, as two year versus three year statute of limitation appears to be a conflict. However, statutes of limitations are not considered to be a substantive law for conflict of law analyses. See Rice v. Dow Chem. Co., 124 Wn.2d 205, 210, 875 P.2d 1213 (1994). In essence, once you identify the conflict and choose the law, then that state's statute of limitations apply under the Uniform Conflict of Law Limitations Act, Ch. 4.18 RCW. There of course is a limited exception to this, if the other state's statute is so unfair as to not afford any real opportunity to sue, but the difference between two and three year statutes is not an unconscionable one. The case differed from Ellis, which involved conflict of law issues as to permissive use, comparative fault, and rules governing vehicle turnarounds.

The supreme court then looked as to whether an actual conflict existed under the laws of negligence and found no conflict. As their was no conflict, there was no need to turn to Idaho law, and Washington's statute of limitations applied. Though the states had differing speed limits, this case was about driving too fast for road conditions, regardless of the speed limit.

There is one area where I think the supreme court fudged a bit. Though the case was primarily about negligence laws generally, this does involve the application of speed limits to some extent. Idaho's speed limit was 75, and the question is whether it was reasonable to set the cruise control to 82 given the road conditions AND the speed limit. The Washington Supreme Court ignored the interplay between the two to come to the result it wanted. However, given the decision was unanimous, I don't see a great chance of any easy differentiation of later cases.

Our Issaquah, Washington Attorneys are skilled at application of conflict of law statutes, preemption law, and other methods of construction and justiciability. Allow Issaquah Law Group to assist you with your litigation needs across Washington State.

 

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Washington Supreme Court Adopts "Mere Situs" Test for Injuries While Using Motor Vehicle.

Kroeber v. GEICO Ins. Co.

They say that truth is stranger than fiction, and this is only proved true time and  time again in insurance coverage issues.

The Western District of Washington certified this issue to the Washington Supreme Court, knowing full well that this situation likely skirted potential coverage issues. In a fairly suave move, the Washington Supreme Court punted the issue right back, with a little more direction.

In this case, a man was driving at a bar, presumably in a parking lot, and opened fire. Of course the car was uninsured, leaving coverage to fall to a UIM policy, which covered damages "arising out of" use of the vehicle.

Oddly enough, this situation has sort of been dealt with before, in the case of Detweiler v. J.C. Penney Cas. Ins. Co., 110 Wn.2d 99, 751 P.2d 282 (1988). I'll let Justice Johnson recite the facts:

In Detweiler, we held that injuries arose out of vehicle use when a drinking buddy drove off in the claimant's pickup truck and the claimant . . . jumped onto the bed of the truck, was later thrown off the truck, pulled out his .357 Magnum pistol, fired six shots at the tire of the truck from roughly 10 feet away, and was injured in the neck, face, and eyes by ricocheting bullet fragments. Detweiler, 110 Wn.2d at 101, 109. Finding such a causal connection between vehicle use and a gunshot injury is not unique to Washington. 

A few important pieces of information were relayed back to the Western District:

  • Arising out of is broader than caused by;
  • If the vehicle was only the "mere situs" of the incident, then the incident is not arising from the vehicle's use;
  • that insurance statutes are to be liberally construed for the public benefit.

So what does that mean for the case? Well, not much until the Western District rules based on this guidance. Given the liberal construction of Detweiler, there is a good argument that coverage should apply in a "drive-by" type situation, as the vehicle is essentially used as a mechanism of escape as the shooting is happening. However, the lack of clarity on the "mere situs" test provides some wiggle room. 

You may be asking yourself, "Why no exclusion for an intentional act?" Unfortunately, in this case, the driver admitted shooting, but claimed he was not trying to hit any particular person.

The grey area will come, I believe, when a person goes to their car to get a weapon to fire indiscriminately in a crowd. A strong argument could be made for the "mere situs" test in those situations.

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Division III: Website Warning Consumers Does Not Rise to Level of Defamation

Life Designs Ranch, Inc. v. Sommer

This case comes from an interesting procedural standpoint. Usually, a motion for summary judgment is done to dismiss a case. Essentially the motion says that, given the undisputed facts, the court must reach a certain result. Here, it is unclear from the result whether there was a motion to find defamation, a motion to get the defamation claim dismissed, or whether there were cross-motions. The end result was the same, the defamation claim was dismissed.

Sommer had put up a website warning consumers about what he felt were improprieties with the Ranch. The Ranch felt the statements were defamatory and moved for summary judgment. The issue here was whether Sommer had stated a false fact, or whether he had expressed an opinion. 

In the present case, the Court of Appeals considered the website and determined it was expressing opinions, could not be confused with the Ranch's website, and, as a matter of policy, allowing a business to sue for every unhappy customer's review would stifle speech. 

I am going to take a wild guess and say this is setup for future potential cases based on yelp reviews.

If you have been sued for defamation, allow us to help. The attorneys at Issaquah Law Group have defended claims for defamation and have succeeded in getting these claims dismissed on summary judgment.  

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When Does Contractual Duty to Defend, Indemnify and Hold Harmless Really Kick In?

Introduction

Many attorneys assume they know what duty defend, indemnify and hold harmless means and many are mistaken. Many think they know when they apply and might be surprised. We recently had an opportunity to really dive into the law interpreting and applying these contractual terms and I wanted to share what we learned and argued in the process.

To set the stage, our case was about a lease agreement between our client, ABC, Inc. (lessee), and Business Park (lessor). The Smiths owned ABC. There was a spill of a contaminated liquid in an adjoining office space that leaked into ABC’s space. Mrs. Smith sustained chemical burns to her eyes as a consequence of contact with the spill. The Smiths sued Business Park for personal injuries caused by their negligence. Business Parks got creative and in response sued ABC under their lease for breach of contract in ABC’s failure to defend and indemnify Business Park for the injury caused to Mrs. Smith. We pursued a motion to dismiss Business Park’s claims based upon their allegations of contractual duty to defend and indemnify.

Issue

The Indemnification Clause at issue read as follows:

[ABC] shall indemnify and hold [Business Park] harmless from all damages arising out of any damage to any person or property occurring in, on or about the Premises or [ABC’s] use of the Premises or [ABC’s] breach of any term of this lease.

The questions we litigated on cross motions for summary judgment before Judge Sharon Armstrong in King County Superior Court were:

  1. Is there a duty to defend?
  2. Is there a duty to indemnify?

Definitions

Duty to defend is just that, a duty to accept responsibility for the fees and costs incurred in defending a lawsuit against the indemnitee.

Indemnification is the duty to reimburse losses sustained by the indemnitee as the result of a judgment being entered against the indemnitee.

An indemnitor’s duty to defend a lawsuit against its indemnitee is totally independent from the obligation to indemnify in the event judgment is rendered.Parks v. Western Washington Fair Assoc., 15 Wn.App. 852, 855 (1976).

A lot of attorneys get these mixed up. They will say you have a duty to indemnify us when no such duty has arisen since there is no judgment. And like in ABC’s case, they will demand a duty to defend where none exists. It is all based on the contract language.

What about that “hold harmless” language? Extraneous and duplicative. Hold harmless is synonymous for indemnification. At least according to Black’s. The only other interpretation of hold harmless that we could find was that it could be interpreted to mean “release from liability.” Scott v. Pacific West Mountain Resort, 119 Wn.2d 484 (1992). (“I hereby hold harmless the ski instructor from all claims arising out of the instruction of skiing.”).

When Do Duties Arise

Parks v. Western Washington Fair Assoc., 15 Wn.App. 852, 855 (1976).

The Parks court initially reviewed the “Strict Rule”: The law is clear…duty to defend arises when a complaint is filed…alleging facts which if proved, would render the insurer liable under its policy. However, the Parks court was dissatisfied with the Strict Rule in light of notice pleadings, and favored a more expansive test that the duty to defend arises and is determined by the facts known by the insurer/indemnitor at the time of tender. (“Broad Test”)

As a result, indemnification is only triggered once judgment has been rendered against an indemnitee. But the issue of sole and concurrent negligence is crucial and discussed more fully in the next section.

Contractual Language

Governing all of this is the specific contractual language between parties imposing the duties to defend, indemnify and hold harmless and has been the subject of a line of case authority culminating in the recent case of Snohomish County Public Trans. V. FirstGroup America, Inc., 173 Wn.2d 829 (Feb. 23, 2012)

Law on contract interpretation applies to indemnification provisions. Therefore, “[I]ndemnification agreements, such as the one involved in this case, are to be interpreted in the same way as other contracts.” Snohomish County Pub. Transp. v. FirstGroup America, Inc., 173 Wn.2d 829, 836, 271 P.3d 850 (2012) (citingJones v. Strom Contr. Co., 84 Wn.2d 518, 520, 527 P.2d 1115 (1974)).

Furthermore, “if the language of a contract is subject to interpretation because [it is] vague or ambiguous, it will be construed most strongly against the party who drafted it… .” Parks v. Western Washington Fair Assoc., 15 Wn.App. 852, 857 (1976).

Duty To Defend

Parks v. Western Washington Fair Assn., 15 Wn. App. 852 (1976). The indemnification agreement there required the concessionaire (the indemnitor) to "protect and indemnify and hold harmless the Association from any and all claims for damages ... resulting from the activities and business of the concessionaire in connection with this contract." A common definition of the word "protect" includes the word "defend." The indemnitor voluntarily accepted a tender of defense, with reservation of rights. While the court found no duty to defend under the facts of the case, it is important to note that the indemnification language in Parks included a duty to defend, by another name.

In Tri-M Erectors, Inc. v. Donald M Drake Company, 27 Wn. App. 529 (1980), the general contractor sued the sub-contractor for damages the general incurred as a result of being required to defend a personal injury action by the subcontractor's employee. The employee did not claim that the subcontractor was negligent, but the injury occurred while the employee was connected with the performance of the subcontract. The court held the sub-contractor responsible for the general's costs of defense. Significantly, the indemnity language specifically required the subcontractor to Indemnify and save contractor harmless from all claims, suits and actions (including costs, expenses and reasonable attorneys’ fees incurred by Contractor or others in defending the same) . . . brought on account of any injury . . . in any way connected with the performance of this Subcontract.

In Northwest Airlines v. Hughes Air Corp., 104 Wn.2d 1 52 (1985), the court enforced an indemnification clause that explicitly provided that lessee would indemnify lessor for injuries whether or not caused by lessor's negligence. The issue before the court was whether the lessee was required to indemnify if it was not negligent. The court found the parties expressed this intention in clear and unequivocal terms and the provision did not violate public policy. More importantly, for our purposes, the indemnity contract required payment of costs and fees:

INDEMNITY. Lessee shall indemnify the Lessor from and against any and all claims, demands, causes of action, suits or judgments (including costs and expenses incurred in connection therewith) for . . . injuries to persons . . . arising out of or in connection with the use and occupancy of the premises by Lessee . . . whether or not caused by Lessor's negligence.

In George Solitt Corp. v. Howard Chapman Plumbing, 67 Wn. App. 468 (1992), a declaratory judgment action, the court held that a subcontractor had a contractual obligation to defend the general contractor in a suit by the subcontractor's employee. The relevant language specifically required the subcontractor to defend:

Article 5. That the Sub-contractor shall indemnify, save harmless and defend, the Owner, General Contractor, Architect . . . against all claims, money damages . . . and/or expense arising under Article 2, 3, and 4 of this agreement.

In Nunez v. American Building Maintenance Company West, 144Wn. App. 345 (2008), the indemnification clause required the contractor, a building maintenance company, to "indemnify, defend, and hold harmless" the landlord for personal injury actions. It imposed the same duty on the landlord to the contractor. But the court held there was no duty on the landlord to indemnify the contractor against claims by a tenant's employee because the landlord did not control the premises, or the circumstances giving rise to the employee's injury.

In Snohomish County Public Transportation v. Firstgroup America, Inc., 173 Wn. 2d 829 (2012), plaintiff Community Transit had tendered injury claims to defendant, which refused to defend or indemnify. Community Transit settled the claims and sued for indemnification. The issue before the court was whether there was clear and unequivocal language evidencing the intent that the indemnitee (Community Transit) be indemnified against losses resulting from its concurrent negligence. The indemnity provision expressly required the contractor to "defend, indemnify and save harmless" Community Transit. Community Transit prevailed.

Given clear history of interpretation, Judge Armstrong agreed that the language of the indemnification clause in the ABC case was utterly silent as to any duty to defend and therefore there was no duty to defend imposed by the language of the lease agreement.

Indemnification

Focused on when and if a duty to indemnify arises in the face of sole or concurrent negligence on the part of the Indemnitee, Business Park asserted that indemnification is required regardless of whether the indemnitee is negligent.

However, an indemnitor is only required to indemnify the indemnitee for the indemnitee’s negligence—whether sole or partial— if the indemnification clause “speak[s] to the negligence of the indemnitee.” The indemnification clause’s language need not be “formulaic,” but it must at least evince a mutual intent to provide indemnification for the indemnitee’s sole or partial negligence. If an indemnification clause is silent on the indemnitee’s negligence, then indemnification is triggered only by a negligent act of the indemnitor.

Sole Negligence

Agreements that indemnify an indemnitee “from liability for losses flowing solely from his own acts or omissions are not favored and are to be clearly drawn and strictly construed." FirstGroup Amer., 173 Wn.2d at 836.

In Snohomish County Public Transportation v. FirstGroup America, Inc., our Supreme Court held that indemnification is not required for an indemnitee’s sole negligence “unless this intention is expressed in clear and unequivocal terms.” 173 Wn.2d 829, 836, 271 P.3d 850 (2012) (quoting Nw. Airlines v. Hughes Air Corp., 104 Wn.2d 152, 158, 702 P.2d 1192 (1985), recons. denied(1985)).

 “‘[A] contract of indemnity will not be construed to indemnify the indemnitee against losses resulting from [the indemnitee’s] own negligence unless this intention is expressed in clear and unequivocal terms.’” FirstGroup Amer., 173 Wn.2d at 836 (quoting Nw. Airlines, 104 Wn.2d at 158).

Courts “will not find clear and unequivocal intent in broad and all-encompassing contract language that does not include specific language showing clear and unequivocal intent to indemnify the indemnitee’s own negligence.” FirstGroup America, 173 Wn.2d at 836 (citing Nw. Airlines, 104 Wn.2d at 155):

[Indemnitor] shall indemnify the [indemnitee] from and against any and all claims, demands, causes of action, suits or judgments (including costs and expenses incurred in connection therewith) for deaths or injuries to persons or for loss of or damage to property arising out of or in connection with the use and occupancy of the premises by [indemnitor], its agents, servants, employees or invitees whether or not caused by [indemnitee’s] negligence.

 The Court concluded that the indemnity clause “clearly includes coverage for the indemnitee’s negligence” and, therefore, required the indemnitor to indemnify the indemnitee for the indemnitee’s negligent acts.

 Partial Negligence

What is less clear in the cases is when an indemnitor has a duty to indemnify an indemnitee for the indemnitee’s concurrent negligence.

The Washington Supreme Court has held that indemnification for an indemnitor’s negligence—sole or partial—is required only if the indemnity clause “speak[s] to the negligence of the indemnitee.” Id. at 839. The Indemnity Clause in the Osborne case lacked language similar to that in the Northwest Airlinesindemnity clause, and did not contain any other language “clearly spell[ing] out” that indemnification was required for PS Business Parks’ negligence, whether sole or partial.

In FirstGroup America, the Supreme Court reaffirmed the rule that “the important question is whether the agreement clearly provides for indemnification when losses result from the indemnitee’s negligence. The agreement must speak to the negligence of the indemnitee.” FirstGroup America, 173 Wn.2d at 839. The Court was referring not just to the indemnitee’s sole negligence, but to any degree of negligence by the indemnitee.

The FirstGroup America Court then scrutinized the following indemnity clause:

 The [indemnitor] shall defend, indemnify and save harmless [the indemnitee] . . . from any and every claim and risk, including, but not limited to, suits or proceedings for bodily injuries . . . and all losses, damages, demands, suits, judgments and attorney fees, and other expenses of any kind, on account of all personal bodily injuries . . . property damages of any kind . . . in connection with the work performed under this contract, or caused or occasioned in whole or in part by reason of the presence of the [indemnitor] or its subcontractors, or their property, employees or agents, upon or in proximity to the property of [the indemnitee] . . . except only for those losses resulting solely from the negligence of [the indemnitee], its officers, employees and agents.

The Court concluded that this clause “expressly and specifically refer[red] to losses resulting from the sole negligence of the indemnitee.” “The language shows, that the parties consciously and deliberately considered the question of indemnity in connection with the indemnitee’s negligence” and only excludedsole negligence thus leaving concurrent negligence in the clause by omission from the exclusion.

Whereas the FirstGroup America indemnity clause “show[ed] clear and unequivocal intent to indemnify for loss resulting from negligence of the indemnitee,” the Indemnity Clause in this case does not evince any such intent. The Indemnity Clause does not even address acts by PS Business Parks. Thus, it cannot be said that RCAW is required to indemnify PS Business Parks for losses flowing from PS Business Parks’ sole or partial negligence.

Indeed, the Indemnity Clause in this case more closely resembles the clause fromJones v. Strom Construction Company, 84 Wn.2d 518, 527 P.2d 1115 (1974), which was discussed in FirstGroup America. The Jones indemnity clause read: 

[The indemnitor agrees] [t]o indemnify and save harmless the [indemnitee] from and against any and all suits, claims, actions, losses, costs, penalties, and damages, of whatsoever kind or nature, including attorney’s fees, arising out of, in connection with, or incident to the [indemnitor’s] performance of this Subcontract.

 Jones, 84 Wn.2d at 521.

Examining Jones, the FirstGroup America court explained that “[t]here was no language in the indemnity agreement in Jones that clearly spelled out any intent to indemnify in the event of the [indemnitee’s] negligence. The [indemnitee’s] conduct was never even addressed in the indemnity provision.FirstGroup America, 173 Wn.2d at 838.

 Conclusion

Like the clause in Jones, the Indemnity Clause in the ABC case did not “even address” the conduct of Business Park. As such, there was no indication that the parties intended for ABC to indemnify Business Park for its negligence, whether sole or partial. Because the Indemnity Clause was silent as to Business Park’s negligence, indemnification was triggered as a matter of law but only to the extent that ABC was partially negligent.

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