Justia Washington Supreme Court Opinion Summaries

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

After a landslide damaged their home, homeowners Timothy Jackowski and Eri Takase (the Jackowskis) sued the sellers of the home, seeking rescission or, in the alternative, damages for fraud, fraudulent concealment, negligent misrepresentation, and breach of contract. The homeowners also sued the sellers' broker and agent, alleging fraud, fraudulent concealment, negligent misrepresentation, and breach of common law fiduciary duties. They leveled similar claims against their own broker and agent together with a claim for breach of statutory fiduciary duties. The trial court entered summary judgment dismissing all of the Jackowskis' claims, except the fraudulent concealment claims against the sellers and the sellers’ broker and agent regarding cracks in the concrete basement floor. The Court of Appeals affirmed that decision in part and reversed it in part. The sellers and the homeowners’ broker and agent then sought review by the Supreme Court. Upon review, the Supreme Court affirmed the Court of Appeals’ decision and remanded the case to the trial court for further proceedings. View "Jackowski v. Borchelt" on Justia Law

This case involved the proper interpretation of a "resulting loss" clause in an all-risk insurance policy. It also provided an opportunity to clarify application of the efficient proximate cause rule. The Court of Appeals overturned a jury verdict in favor of the insured, reasoning that the resulting loss clause did not apply in the absence of a secondary covered peril that proximately caused the loss. The court remanded for a jury determination as to the efficient proximate cause of the insured's loss, holding that if the efficient proximate cause was not itself a covered peril, then the policy did not provide coverage. Upon review, the Supreme Court reversed the Court of Appeals. Because the loss at issue was not excluded under the policy, coverage exists under the ensuing loss provision. And, because there is no rule of law excluding coverage under an efficient proximate cause analysis, and the insurer was precluded from changing the ground for its denial of coverage, there is no basis for a jury to determine the efficient proximate cause of the loss. Accordingly, the Court reinstated the judgment of the trial court. View "Vision One, LLC v.. Phila. Indem. Ins. Co." on Justia Law

The supports for the deck system at Respondents Max and Krista Sprague's house rotted out due to improper construction techniques exposing the supports to the elements. Their claim for homeowners' insurance coverage was denied due to exclusions for rot and defective construction. The trial court granted summary judgment to their insurer, Safeco Insurance Company of America. The Court of Appeals reversed, finding that the ensuing loss provision provided coverage for the otherwise excluded losses. Upon review, the Supreme Court concluded that the homeowners policies in this case excluded coverage for both rot and defective construction, the deterioration of Respondents' deck were not covered conditions. The Court reversed the Court of Appeals and reinstated the judgment of the trial court. View "Sprague v. Safeco Ins. Co. of Am." on Justia Law

The United States Court of Appeals for the Ninth Circuit certified a question to the Washington Supreme Court concerning whether an "early termination fee" (ETF) in a broadband internet service contract constituted an "alternative performance provision" or as a liquidated damages clause. Appellants are all customers who either incurred this ETF for canceling early or were threatened with this ETF for attempting to cancel early. All Appellants were dissatisfied with Clearwire’s service, alleging that instead of the fast and reliable service promised, they received inconsistent and painstakingly slow speeds. Plaintiff Chad Minnick sued Clearwire in King County Superior Court in April 2009, claiming that Clearwire was committing false advertising and was imposing ETFs unlawfully. He then filed the first amended complaint in May, which added the other 11 plaintiffs through class certification. In July, Clearwire removed the case to the federal district court where it filed a motion to dismiss all of Appellants' claims. The district court granted Clearwire's motion. Appellants then appealed to the Ninth Circuit, arguing that the ETF was a liquidated damages provision and not an alternative performance provision as the trial court found. Under Washington law, an alternative performance provision is distinguishable from a liquidated damages provision because it provides a "real option" to the promisor and the alternatives are reasonably equal to each other. Here, the ETF provided a "real option" at the time of contracting because Appellants wanted to retain the control and flexibility that the early cancellation allowed them. Further, the ETF was less expensive than the remaining payments for the majority of the contract's life, thereby indicating the options were reasonably related. The ETF also allowed Appellants to benefit from reduced monthly premiums under the fixed-term contract but also enjoy some of the flexibility of the month-to-month subscription. Therefore, the ETF is an alternative performance provision that is not subject to a penalty analysis.View "Minnick v. Clearwire US, LLC" on Justia Law

At issue in this case was a claim for damages relating to a drilling contract Petitioner Elcon Construction and Respondent Eastern Washington University. Elcon alleged tort and contract claims. The contract claims were resolved by arbitration. In dismissing the tort claims, the trial court applied the independent duty rule formerly known as the "economic loss rule," which the Court of Appeals similarly applied in affirming. Upon review, the Supreme Court concluded the trial court and Court of Appeals misapplied the independent duty doctrine to bar Elcon's tort claims in this case. The Court found Elcon's claims failed factually. Viewing the facts and reasonable inferences in the light most favorable to Elcon, no genuine issues of material fact existed with respect to Elcon's fraud in the inducement or tortious interference claims. The Court affirmed on different grounds reached by the trial and appeals courts. View "Elcon Constr., Inc. v. E. Wash. Univ." on Justia Law

In this appeal the Supreme Court was asked to determine whether the parties' indemnity agreement clearly and unequivocally indemnified the Snohomish County Public Transportation Benefit Area Corporation (doing business as Community Transit) for losses resulting from its own negligence. Upon review, the Court concluded that the language of the agreement, and in particular language providing that indemnity would not be triggered if losses resulted from the sole negligence of Community Transit, clearly and unequivocally evidenced the parties' intent that the indemnitor, FirstGroup America, Inc. (doing business as First Transit) indemnify Community Transit for losses that resulted from Community Transit's own negligence. The Court reversed the Court of Appeals' decision to the contrary and remanded the case to the trial court for further proceedings. View "Snohomish County Pub. Transp. Benefit Area Corp. v. FirstGroup Am., Inc." on Justia Law

The Supreme Court consolidated "Matsyuk v. State Farm Fire & Casualty Company" and "Weismann v. Safeco Insurance Company of Illinois" for the purpose of clarifying the pro rata sharing rule announced in several precedential cases, including "Mahler v. Szucs" (957 P.2d 632). The rule is based on the "common fund" exception to the "American rule" on attorney fees. The rule requires personal injury protection (PIP) insurers to share pro rata in the attorney fees incurred by injured persons when the PIP insurer wins at trial. Plaintiffs in these cases recovered PIP funds as insureds under policies held by the tortfeasors. They incurred attorney fees arising from the recovery of the liability insurance. The insurance companies attempted to offset the funds expended under PIP policies by reducing plaintiffs' award under the tortfeasors' liability insurance. The Court of Appeals held that neither plaintiff was entitled to recoup a pro rata share of attorney fees. Upon review, the Supreme Court reversed the appellate court, holding that the pro rata fee sharing rule applied in this context. View "Matsyuk v. State Farm Fire & Cas. Co." on Justia Law

The issue before the Supreme Court concerned a dispute between Petitioners Donia Townsend and several other home purchasers and Defendant Quadrant Corporation and its parent companies over an arbitration clause in the home purchasers' individual purchase contracts. Several years after the home purchases, Townsend and the other purchasers jointly filed suit in superior court against Quadrant alleging outrage, fraud, unfair business practices, negligence, negligent misrepresentation, rescission and breach of warranty. In support of these allegations, they claimed that Quadrant knowingly engaged in shoddy workmanship in building the homes, and that this resulted in serious construction defects that caused personal injuries relating to mold, pests, and poisonous gases. They claimed that the arbitration clause in their purchase agreements was unenforceable. The superior court denied Quadrant's motion to compel arbitration. The Court of Appeals reversed. Upon review, the Supreme Court affirmed the appellate court's holding that the homeowners’ procedural unconscionability claim that pertained to the entire purchase contract, including the arbitration clause, was to be decided by an arbitrator. View "Townsend v. Quadrant Corp." on Justia Law