Justia Washington Supreme Court Opinion Summaries

At issue before the Supreme Court in this matter was the narrow question of whether an arbitration agreement signed by respondents was unconscionable and therefore unenforceable under California law. Upon review, the Washington Supreme Court concluded that the forum selection and punitive damages clauses at issue were not unconscionable, but that the arbitrator selection, statute of limitations and fee shifting provisions were. Therefore, because the agreement was "permeated with unconscionability," it was unenforceable. View "Brown v. MHN Gov't Servs., Inc." on Justia Law

Petitioner Patrick Kofmehl bought a piece of land from Baseline Lake, LLC. By closing, the parties disputed the amount of land to be covered by their sales contract. Petitioner was willing to close only if the disputed parcel was included; the sale ultimately failed to close. The trial court invalidated the contract for failing to comply with the statute of frauds and denied specific performance to either party. The issue on appeal to the Supreme Court was whether Petitioner was entitled to recover his down payment before the dispute arise. Upon review, the Court concluded that because neither party breached the contract. The Court affirmed the appellate court which reversed the grant of summary judgment that granted restitution. View "Kofmehl v. Baseline Lake, LLC" on Justia Law

Newman Park, LLC was formed for the sole purpose of developing a piece of property. In 2004, it took out a loan to purchase the property at issue in this suit. In 2008, without knowledge of the other owners in Newman Park, one member went to Columbia Community Bank and requested a loan for his 95%-owned company, Trinity. Trinity had nothing to do with Newman Park, but the Bank's loan to Trinity was secured by a second deed of trust on the Newman Park property. The issue before the Supreme Court in this case was whether the Bank, who was tricked into refinancing the property that the borrower lacked authority to pledge as security, could benefit from equitable subrogation when that Bank had no preexisting interest in the property. The property-owner/debtor argued that the Bank's lack of the preexisting interest barred it from equitable subrogation because of the "volunteer rule" which would characterize it as an intermeddler. The Court rejected the volunteer rule as a bar to equitable subrogation. The Court affirmed the appellate court which held that the defrauded Bank was entitled to be equitably subrogated as first priority lienholder. View "Columbia Cmty. Bank v. Newman Park, LLC" on Justia Law

In open court, Appellant Vanessa Condon and Respondent Fely Condon entered into a stipulated settlement and dismissal with prejudice of Vanessa's claims against Fely, stemming from an automobile accident. Before payment, Fely requested that Vanessa sign a release agreement, which the parties had not discussed nor placed on the record. Vanessa refused to sign, and Fely made a motion to enforce the settlement and release. The trial court deemed the release signed, and Vanessa appealed the trial court's order. On appeal, she argued that the trial court lacked jurisdiction to enforce release terms that were not a part of the original agreement. Fely argued that Vanessa waived her right to appeal by accepting the settlement check. Upon review, the Supreme Court held that Vanessa did not waive her right to appeal, and that the trial court improperly added implied terms to the agreement. Accordingly, the Supreme Court reversed and remanded for further proceedings. View "Condon v. Condon" on Justia Law

In Washington, a liability insurer unclear of its obligation to defend an insured may invoke a "reservation of rights" defense while it seeks a declaration regarding coverage. The issue before the Supreme Court in this case centered on whether the insurer may unilaterally condition its reservation on making the insured absorb defense costs if a court ultimately determines there is no coverage. The Supreme Court responded in the negative: "we recognize…that an insurer may avoid or minimize its responsibility for defense costs when an insured belatedly tenders a claim and the insurer demonstrates actual and substantial prejudice as a result." View "Nat'l Sur. Corp. v. Immunex Corp." on Justia Law

Petitioner Bruce Cedell lost his home in a fire. After hearing nothing from his insurer for several months, the company threatened to deny coverage and issued an ultimatum to Petitioner to accept one quarter of what the trial court eventually found Petitioner's claims to be worth. Petitioner brought suit alleging bad faith. The company resisted disclosing its claims file, among other things, and Petitioner moved to compel production. After a hearing and a review of the claims file in camera, the trial court granted Petitioner's motion. On interlocutory review, the Court of Appeals held that the attorney-client privilege applied to a bad faith claim by a first party insured, that the fraud exception to the attorney-client privilege required a showing of actual fraud, and that the trial court erred in reviewing Petitioner's claims file in camera because Petitioner had not made a sufficient prima facie showing of fraud. Upon review, the Supreme Court affirmed in part, reversed in part, and remanded to the trial for further proceedings. "In first party insurance claims by insured's claiming bad faith in the handling and processing of claims, other than UIM claims, there is a presumption of no attorney-client privilege. However, the insurer may assert an attorney-client privilege upon a showing in camera that the attorney was providing counsel to the insurer and not engaged in a quasi-fiduciary function. Upon such a showing, the insured may be entitled to pierce the attorney-client privilege. If the civil fraud exception is asserted, the court must engage in a two-step process. First, upon a showing that a reasonable person would have a reasonable belief that an act of bad faith has occurred, the trial court will perform an in camera review of the claimed privileged materials. Second, after in camera review and upon a finding there is a foundation to permit a claim of bad faith to proceed, the attorney-client privilege shall be deemed to be waived. . . . Cedell is entitled to broad discovery, including, presumptively the entire claims file. The insurer may overcome this presumption by showing in camera its attorney was not engaged in the quasi-fiduciary tasks of investigating and evaluating the claim." View "Cedell v. Farmers Ins. Co. of Wash." on Justia Law

The issue before the Supreme Court in this case involved the enforceability of a binding arbitration clause included within a debt adjustment contract. The trial court denied the defendant's motion to compel arbitration, ruling that the motion was untimely and that the binding arbitration clause was unconscionable. Upon review of the trial court record and the clause at issue, the Supreme Court affirmed the trial court's holding that the clause was unconscionable, which then required the Court to decide whether this conclusion as to the validity of the binding arbitration clause is preempted by the Federal Arbitration Act (FAA). Finding no preemption, the Court affirmed. View "Gandee v. LDL Freedom Enters., Inc." on Justia Law

This action stemmed from a contract for construction of a baseball stadium and home field for the Seattle Mariners baseball team. In its first trip to the Supreme Court, "Washington State Major League Baseball Stadium Public Facilities District v. Huber, Hunt & Nichols-Kiewit Construction Company," (202 P.3d 924 (2009) (PFD I)), the Court held that the statute of limitations did not bar the owner’s suit against the general contractor because the action was brought for the benefit of the State, and therefore the exemption from the statute of limitations set out in RCW 4.16.160 applied. This case raised questions about whether the construction statute of repose barred suit against the general contractor and, if not, whether the general contractor may pursue third party claims against two of its subcontractors. The trial court granted summary judgment of dismissal in favor of the general contractor and the subcontractors on statute of repose grounds. Upon review of the matter, the Supreme Court reversed the trial court: "the statute of repose does not bar suit against the general contractor. In accord with several provisions in the subcontracts, the subcontractors are subject to liability to the same extent that the general contractor may be liable for any defective materials or work under the subcontracts. Thus, the trial court erred in holding that the statute of repose bars Hunt Kiewit’s third party claims against the subcontractors." View "Wash. State Major League Baseball Stadium v. Huber, Hunt & Nichols-Kiewit Constr. Co." on Justia Law

The issue before the Supreme Court in this case centered on an insured's duty to cooperate with an insurer's claim investigation. Petitioner John Staples' claim was denied for failing to cooperate, namely failing to submit to an examination under oath (EUO). Petitioner sued the insurer for bad faith and related causes of action; the trial court dismissed the case on summary judgment. Upon review of the record, the Supreme Court concluded that genuine issues of fact still existed and made summary judgment inappropriate in this case. Accordingly, the Court reversed and remanded the case for further proceedings. View "Staples v. Allstate Ins. Co." on Justia Law

P.E. Systems, LLC (PES) offered to analyze and reduce the credit card processing costs of CPI Corp. (CPI). The parties signed an agreement that appeared to be a contract. CPI later repudiated the contract, disputing its validity. PES sued for breach. CPI attached a copy of the contract to its answer to PES's complaint, and then filed a motion for judgment on the pleadings, arguing the "contract" was a mere agreement to agree and therefore unenforceable. PES responded to the motion and attached an identical copy of the contract and a PowerPoint presentation it had given to CPI. The trial court found the contract was not binding but merely an agreement to agree and granted CPI's motion, thereby dismissing the case. PES appealed. The Court of Appeals reversed holding that both the contract was enforceable and that CPI had breached it. Upon review, the Supreme Court affirmed the Court of Appeals to the extent it held the contract was a valid with an open term, but reversed the balance of the Court of Appeals' opinion. View "P.E. Sys., LLC v. CPI Corp." on Justia Law