Faithlife Corporation v. Philadelphia Indemnity Insurance Company

• Court: District Court, W.D. Washington
• Decided: December 16, 2020
• Docket: 2:18-cv-01679
• Status: Unknown

Opinion

5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE 7 8 FAITHLIFE CORPORATION, Case No. C18-1679RSL

9 Plaintiff, ORDER REGARDING 10 v. CROSS-MOTIONS FOR PARTIAL SUMMARY 11 PHILADELPHIA INDEMNITY JUDGMENT AND RELATED 12 INSURANCE COMPANY, MOTIONS

13 Defendant. 14

15 I. INTRODUCTION 16 This matter comes before the Court on (1) the parties’ cross-motions for partial summary 17 judgment (Dkts. # 11, # 18), (2) plaintiff’s “Motion to Continue [Defendant’s] Motion for 18 Partial Summary Judgment” (Dkt. # 16), and (3) defendant’s “Motion to Bifurcate and Stay” 19 (Dkt. # 14). The Court, having reviewed the memoranda, declarations, and exhibits submitted by 20 the parties,1 finds as follows: 21 II. BACKGROUND 22 Plaintiff Faithlife Corporation is a bible software company based in Bellingham, 23 Washington. Plaintiff was insured by defendant Philadelphia Indemnity Insurance Company 24 under several commercial liability insurance policies during a period spanning from 25 approximately 2015 to 2018. Ex. C, Dkt. # 12 at 75. Defendant issued plaintiff the first of two 26 relevant policies, Policy No. PHSD1106639, for the period of December 17, 2015 to December 27

28 1 The Court finds this matter suitable for disposition without oral argument. 1 17, 2016 (the “2016 Policy”). Ex. B, Dkt. # 12 at 12–73. Defendant issued plaintiff the second 2 policy, Policy No. PHSD1205448, for the period from December 17, 2016 to December 17, 3 2017 (the “2017 Policy”). Ex. C, Dkt. # 12 at 75–136. The 2016 Policy and 2017 Policy (the 4 “Policies”) provided coverage for claims made against plaintiff and reported during their 5 respective policy periods. Ex. B, Dkt. # 12 at 41; Ex. C, Dkt. # 12 at 104. 6 On November 25, 2015, Charlene Wickstrom and Michael Davis, two of plaintiff’s 7 former employees, filed administrative charges against plaintiff with the Washington State 8 Human Rights Commission and the Equal Employment Opportunity Commission. See Ex. D, 9 Dkt. # 12 at 138–39; Ex. E, Dkt. # 12 at 141–42. Notice of each of the administrative charges 10 was mailed to plaintiff’s human resources department on April 28, 2016. Id. The administrative 11 charges alleged that plaintiff discriminated against the former employees based on age and 12 disability. Id. It is undisputed that plaintiff did not report the notices of administrative charges to 13 defendant at that time. See Compl. at ¶¶ 9–10; Dkt. # 18-1 (Skipton Decl.) at ¶ 7. Plaintiff 14 alleges that Ms. Wickstrom and Mr. Davis subsequently voluntarily withdrew their 15 administrative charges. Skipton Decl. at ¶ 6. 16 On March 22, 2017, Ms. Wickstrom, Mr. Davis, and Mr. Davis’ wife filed an 17 employment discrimination case in Whatcom County Superior Court, captioned Davis v. 18 Faithlife Corp., Case No. 172004967 (the “underlying lawsuit”). Ex. F, Dkt. # 12 at 144–58. The 19 complaint in the underlying lawsuit asserted claims for age- and disability-based discrimination. 20 Id. On March 28, 2017, plaintiff reported to defendant the claim, described as “LAWSUIT – 21 Allegations of age and disability discrimination.” Ex. A, Dkt. # 13 at 4, 6. 22 On April 11, 2018, defendant denied plaintiff coverage. Dkt. # 19 at 3. Thereafter, 23 plaintiff filed a lawsuit against defendant in Whatcom County Superior Court. Compl., Dkt. # 1- 24 3. On November 20, 2018, defendant removed the action to federal court based on diversity. 25 Dkt. # 1; 28 U.S.C. § 1332. Plaintiff asserts claims for declaratory relief (Compl. at ¶¶ 25–28), 26 breach of contract (id. at ¶¶ 29–31), bad faith (id. at ¶¶ 32–41), violations of the Washington 27 Insurance Fair Conduct Act, RCW 48.30.015 (id. at ¶¶ 42–52), and violation of the Washington 28 Consumer Protection Act (id. at ¶¶ 53–58), attorney’s fees and costs (id. at ¶¶ 59–62), and 1 estoppel (id. at ¶¶ 63–64). Defendant asserts a counterclaim for declaratory relief that it owes no 2 duty to defend, indemnify, or pay with respect to any of the underlying liabilities alleged in 3 plaintiff’s complaint. See Dkt. # 19 at 9–10. 4 III. CROSS-MOTIONS FOR PARTIAL SUMMARY JUDGMENT (Dkts. # 11, # 18) 5 6 The parties have filed cross-motions for summary judgment on the issue of coverage for 7 the claim under the Policies. See Dkts. # 11, #18. 8 A. Legal Standard for Summary Judgment 9 Summary judgment is appropriate when, viewing the evidence in the light most favorable 10 to the nonmoving party, “there is no genuine dispute as to any material fact and the movant is 11 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Fresno Motors, LLC v. Mercedes 12 Benz USA, LLC, 771 F.3d 1119, 1125 (9th Cir. 2014). The moving party “bears the initial 13 responsibility of informing the district court of the basis for its motion.” Celotex Corp. v. 14 Catrett, 477 U.S. 317, 323 (1986). Where the nonmoving party will bear the burden of proof at 15 trial, the moving party need not “produce evidence showing the absence of a genuine issue of 16 material fact,” but instead may discharge its burden under Rule 56 by “pointing out . . . that 17 there is an absence of evidence to support the nonmoving party’s case.” Id. at 325. 18 Once the moving party has satisfied its burden, it is entitled to summary judgment if the 19 non-moving party fails to designate “specific facts showing that there is a genuine issue for 20 trial.” Id. at 324. “The mere existence of a scintilla of evidence in support of the non-moving 21 party’s position is not sufficient.” Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 22 919 (9th Cir. 2001) (internal citation omitted). “An issue is ‘genuine’ only if there is a sufficient 23 evidentiary basis on which a reasonable fact finder could find for the nonmoving party.” In re 24 Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (internal citation omitted). On cross-motions for 25 summary judgment, the Court evaluates the motions separately, “giving the nonmoving party in 26 each instance the benefit of all reasonable inferences.” Lenz v. Universal Music Corp., 801 F.3d 27 1126, 1130–31 (9th Cir. 2015) (citation omitted). 28 1 B. Interpretation of Insurance Policies 2 The Court’s “[i]nterpretation of insurance policies is a question of law, in which the 3 policy is construed as a whole and each clause is given force and effect.” Overton v. Consol. Ins. 4 Co., 145 Wn.2d 417, 424 (2002); Moody v. American Guar. & Liab. Ins. Co., 804 F. Supp. 2d 5 1123 (2011). 6 In Washington, insurance policies are construed as contracts. An insurance policy is construed as a whole, with the policy being given 7 a fair, reasonable, and sensible construction as would be given to the 8 contract by the average person purchasing insurance. If the language is clear and unambiguous, the court must enforce it as written and 9 may not modify or create an ambiguity where none exists. If the 10 clause is ambiguous, however, extrinsic evidence of intent of the parties may be relied upon to resolve the ambiguity. Any ambiguities 11 remaining after examining applicable extrinsic evidence are resolved 12 against the drafter-insurer in favor of the insured. A clause is ambiguous when, on its face, it is fairly susceptible to two different 13 interpretations, both of which are reasonable. 14 Panorama Village Condo. v. Allstate Ins. Co., 144 Wn.2d 130, 137 (2001) (internal citation and 15 quotation marks omitted); see also Kut Suen Lui v. Essex Ins. Co., 185 Wn.2d 703, 710, 712 16 (2016). In order to determine whether coverage exists, the Court applies a two-step process. 17 First, the insured bears the burden of showing that the loss falls within the scope of the policy’s 18 insuring agreement. Probuilders Specialty Ins. Co. v. Coaker, 145 F. Supp. 3d 1058, 1063 (W.D. 19 Wash. 2015) (citing McDonald v. State Farm Fire & Cas. Co., 119 Wn.2d 724, 731 (1992)). If it 20 does, the insurer bears the burden of showing that specific policy language excludes the loss in 21 order to avoid coverage. Id. 22 C. Discussion 23 Defendant contends that summary judgment should be granted in its favor because 24 plaintiff failed to give timely notice of the claim during the relevant policy period, as required by 25 the Policies. The Court agrees for the reasons set forth below. 26 The 2016 and 2017 Policies contain virtually identical language. See generally Ex. B, 27 Dkt. # 12 at 12–73; Ex. C, Dkt. # 12 at 75–136. The relevant provisions provide: 28 1 PART 2

2 EMPLOYMENT PRACTICES LIABILITY INSURANCE 3 (To be read in conjunction with the Common Policy Definitions, 4 Exclusions and Conditions Sections, Part 4, 5, 6 below) 5 I. INSURING AGREEMENT 6 7 The Underwriter shall pay on behalf of the Insured, Loss from Claims made against the Insured during the Policy Period (or, if 8 applicable, the Extended Reporting Period), and reported to the 9 Underwriter pursuant to the terms of this Policy, for an Employment Practice Act. 10 11 . . . . 12 PART 4

13 COMMON POLICY DEFINITIONS 14 . . . . 15

16 B. Claim means: 17 2. a judicial or civil proceeding commenced by the service of a complaint or similar pleading; 18 . . . . 19 4. a formal administrative or regulatory proceeding 20 commenced by the filing of a notice of charges, formal investigation order or similar document, including, but not 21 limited to, proceedings before the Equal Employment 22 Opportunity Commission or any similar governmental agency. 23 . . . . 24 25 A claim shall be considered made when an Insured first receives notice of the Claim. 26 . . . . 27 28 1 I. Interrelated Wrongful Act means: any causally connected Wrongful Act or any series of the same, similar or related 2 Wrongful Acts. 3 . . . . 4 PART 6 5 6 . . . . 7 IV. NOTICE/CLAIM REPORTING PROVISIONS 8 . . . . 9 A. In the event that a Claim is made against the Insured, the 10 Insured shall, as a condition precedent to the obligations of the 11 Underwriter under this Policy, give written notice to the Underwriter as soon as practicable after any of the directors, 12 officers, governors, trustees, management committee members, 13 or members of the Board of Members first become aware of such Claim, but, not later than 60 days after the expiration date of this 14 Policy, Extension Period, or Run-Off Policy, if applicable. 15 B. If during this Policy Period an Insured first becomes aware of 16 any circumstances which may subsequently give rise to a Claim 17 being made against any Insured for a specific alleged Wrongful Act, and as soon as practicable thereafter, but before the 18 expiration or cancellation of this Policy, gives written notice to 19 the Underwriter of the circumstances and the reasons for anticipating such a Claim, with full particulars as to the 20 Wrongful Act, dates and persons involved, then any Claim 21 which is subsequently made against the Insured arising out of such Wrongful Act will be considered made during this Policy 22 Period. 23 24 C. All Loss arising out of the same Wrongful Act and all Interrelated Wrongful Acts shall be deemed one Loss on 25 account of a one Claim. Such Claim shall be deemed to be first 26 made when the earliest of such Claims was first made or first deemed made pursuant to Clause B hereinabove. 27 Ex. B, Dkt. # 12 at 43–53; Ex. C, Dkt. # 12 at 106–16. 28 1 Part 5 of the Policies contains an amended “Prior and Pending” clause that reads, in 2 relevant part: 3 PART 5

4 COMMON POLICY EXCLUSIONS 5 The Underwriter shall not be liable to make any payment for Loss 6 in connection with any Claim made against the insured: 7 . . . . 8

9 F. arising out of, based upon or attributable to:

10 1. any litigation or demand against an Insured pending on or 11 before the respective pending Prior and Pending Date set forth in Item 5 of the Declarations Page, or the same or 12 essentially the same facts as alleged in such prior 13 litigation; or

14 2. any Wrongful Act, fact, circumstance or situation which 15 has been the subject of any written notice given under any other similar policy in which this Policy is a renewal or 16 replacement. 17 Ex. B, Dkt. # 12 at 63; Ex. C, Dkt. # 12 at 126. 18 It is undisputed that the Policies defendant issued to plaintiff are “claims made and 19 reported policies” (“claims-made policies”). Dkts. # 11 at 1, # 18 at 9. In Safeco Title Ins. Co. v. 20 Gannon, 54 Wn. App. 330 (1989), review den., 113 Wn. 1026 (1989), the Washington Court of 21 Appeals described the difference between claims-made policies and occurrence policies as 22 follows: 23 24 Notice within an occurrence policy is not the critical and 25 distinguishing feature of that policy type. Occurrence policies are built around an insurer who is liable for the insured’s malpractice, no 26 matter when discovered, so long as the malpractice occurred within 27 the time confines of the policy period. Coverage depends on when the negligent act or omission occurred and not when the claim was 28 1 asserted. The occurrence insurer, then, is faced with a “tail” that extends beyond the policy period itself. This “tail” is the lapse of 2 time between the date of the error (within the policy period) and the 3 time at which the claim is made against the insured. The giving of notice is only a condition of the policy, and in no manner is it an 4 extension of coverage itself. It does not matter when the insurer is 5 notified of the claim by the insured, so long as the notification is within a reasonable time and so long as the negligent act or omission 6 occurred within the policy period itself. 7 Claims-made policies, likewise require that notification to the 8 insurer be within a reasonable time. Critically, however, claims- 9 made policies require that that notice be given during the policy period itself. When an insured becomes aware of any event that 10 could result in liability, then it must give notice to the insurer, and 11 that notice must be given “within a reasonable time” or “as soon as practicable”—at all times, however, during the policy period. 12 With claims-made policies, the very act of giving an extension of 13 reporting time after the expiration of the policy period, . . . [would 14 negate] the inherent difference between the two contract types. Coverage depends on the claim being made and reported to the 15 insurer during the policy period. Claims-made or discovery policies 16 are essentially reporting policies. If the claim is reported to the insurer during the policy period, then the carrier is legally obligated 17 to pay; if the claim is not reported during the policy, no liability 18 attaches. If a court were to allow an extension of reporting time after the end of the policy, such is tantamount to an extension of coverage 19 to the insurer gratis, something for which the insurer has not 20 bargained. This extension of coverage, by the court, so very different from a mere condition of the policy, in effect rewrites the contract 21 between the two parties. This we cannot and will not do. 22 Id. at 337–38 (citations omitted). “Washington law requires that the notice requirement of 23 ‘claims made and reported’ policies be strictly construed.” Moody, 804 F. Supp. at 1125 (citing 24 Gannon, 54 Wn. App. at 338). “‘Claims made’ or ‘discovery’ policies beneficially permit 25 insurers to more accurately predict the limits of their exposure and the premium needed to 26 accommodate the risk undertaken, with countervailing benefits to insured in premiums lower 27 28 1 than would be necessary for ‘occurrence’ policies.” Gannon, 54 Wn. App. at 337 (citation 2 omitted). 3 The administrative charges brought by Wickstrom and Davis against plaintiff are “formal 4 administrative or regulatory proceeding[s]” under Part 4.B.4 of the Policies and thus, constitute 5 a “claim” pursuant to the definition set forth in the Policies. See Ex. B, Dkt. # 12 at 45; Ex. C, 6 Dkt. # 12 at 108. It is undisputed that plaintiff received notice of the administrative charges on 7 April 28, 2016. See Ex. D, Dkt. # 12 at 138; Ex. E, Dkt. # 12 at 141; Dkt. # 18-1 (Skipton Decl.) 8 at ¶ 5. Plaintiff did not report the claim to defendant until it provided notice of the subsequent 9 filing of the underlying lawsuit on March 28, 2017, see Compl. at ¶¶ 9–10; Skipton Decl. at 10 ¶¶ 7–8 16, after the 2016 Policy period had terminated. The underlying lawsuit arises from the 11 same allegations of unlawful employment practices as the 2016 administrative charges. See Exs. 12 D–F, Dkt. # 12 at 138–58. Part 6.IV.C of the Policies makes clear that, “All Loss arising out of 13 the same Wrongful Act and all Interrelated Wrongful Acts shall be deemed one Loss on 14 account of a one Claim. Such Claim shall be deemed to be first made when the earliest of such 15 Claims was first made . . .” Ex. B, Dkt. # 12 at 53; Ex. C, Dkt. # 12 at 116 (emphasis in 16 original). Part 4.B of the Policies makes clear that a “claim shall be considered made when an 17 Insured first receives notice of the Claim.” Ex. B, Dkt. # 12 at 45; Ex. C, Dkt. # 12 at 108 18 (emphasis in original). Pursuant to these clauses, the Wickstrom and Davis administrative 19 charges and the complaint in the underlying lawsuit, all of which allege the same wrongful acts, 20 constitute a single claim made initially on April 28, 2016 during the 2016 Policy period. 21 Plaintiff did not report the claim until March 28, 2017, after the coverage period for the 2016 22 Policy had ended. Ex. A, Dkt. # 13 at 4; Ex. B, Dkt. # 12 at 12; Dkt. # 13 (Eggert Decl.) at ¶ 2. 23 The Court finds defendant has discharged its burden to show that the claim is excluded from 24 coverage under the Policies based on plaintiff’s failure to timely report the claim under the 2016 25 Policy. 26 In its cross-motion, plaintiff urges the Court to determine that the claim is covered under 27 the 2017 Policy because: (1) the Policies contain a “Prior and Pending” clause that does not 28 exclude the claim; (2) and the Policies contain a “Loss Aggregation Clause” that is not properly 1 read to exclude the claim. Should these arguments fail, plaintiff argues that the notice/prejudice 2 rule should be applied. None of plaintiff’s arguments are persuasive. 3 First, plaintiff focuses on an amended “Prior and Pending” clause found in Part 5.F of the 4 Policies. Dkt. # 18 at 9. Plaintiff argues that interpreting the Policies to exclude coverage for the 5 claim at issue renders its “Pro-Pak Elite coverage,” which amended the “Prior and Pending” 6 language, “effectively worthless.” Dkt. # 18 at 11. The Court disagrees. The first provision of 7 the “Prior and Pending” language—which remained unchanged by the Pro-Pak Elite coverage 8 amendment—excludes coverage for any claim arising out of any litigation or demand against an 9 insured pending on or before September 4, 2014, or “the same or essentially the same facts as 10 alleged in such prior litigation.”2 Ex. B, Dkt. # 12 at 49, 63; Ex. C, Dkt. # 12 at 112, 126. The 11 language does not ensure that every claim arising after September 4, 2014 will be covered. 12 Recognizing that plaintiff’s failure to report the claim under the 2016 Policy results in exclusion 13 of coverage under the Policies does not overwrite the “Prior and Pending” language. 14 Second, plaintiff argues that Part 6.IV.C of the Policies is a “Loss Aggregation Clause” 15 that should not be interpreted to require an insured to submit a claim to preserve potential 16 coverage under a future policy.3 Dkt. # 18 at 10. Plaintiff relies upon Wellpoint, Inc. v. Nat’l 17 Union Fire Ins. Co., 952 N.E.2d 254 (Ind. Ct. App. 2011), which does not mention the term 18 “Loss Aggregation” and is distinguishable on the facts. The case concerns a reinsurer, Twin City, 19 who sought to deny coverage by relating back claims to a claim that preceded Twin City’s policy 20 21 2 The Pro-Pak Elite coverage amended the default language of the Policies at Part 5.F. Ex. B, 22 Dkt. # 12 at 49, 63; Ex. C, Dkt. # 12 at 112, 126. The default language contained three provisions under Part 5.F. The Pro-Pak Elite coverage amendment retained the first provision (discussed above), 23 narrowed the second provision, and deleted the third provision. The narrowed second provision concerns 24 claims subject to written notice. The deleted third provision concerns claims arising out of a “Wrongful Act” of which, as of September 4, 2014, the insured had knowledge and from which the insured could 25 reasonably expect a claim to arise. Interpreting the Policies to exclude coverage in the instant case in no 26 way reanimates the default language in the second and third provisions. 3 Plaintiff refers to Part 6.IV.C of the Policies as the “Loss Aggregation Clause,” Dkt. # 27 at 4, 27 but because that descriptor does not appear in the Policies, the Court will continue to refer to this 28 provision as Part 6.IV.C. 1 period. Wellpoint, 952 N.E.2d at 255. Before Twin City’s policy period, another company had 2 been the primary reinsurer, and the insured had provided notice of the claim to that prior 3 reinsurer. Id. at 263. In examining the particular language at issue in that case, the Indiana Court 4 of Appeals held that Twin City could not deny coverage based on this relation back of claims. Id. 5 Unlike the insured in Wellpoint, plaintiff failed to provide notice to any insurer during the policy 6 period when the claim was made. Moreover, the insured in Wellpoint could not have provided 7 notice to Twin City when the claim first arose because no policy existed between Twin City and 8 the insured at the time. Id. Plaintiff does not have this excuse. The Court finds plaintiff’s “Loss 9 Aggregation Clause” argument unpersuasive. 10 Third, plaintiff urges the Court to apply the notice/prejudice rule to its Policies. “The 11 notice/prejudice rule requires insurers to show actual prejudice when denying coverage for lack 12 of timely notice.” See Moody, 804 F. Supp. 2d at 1125 (citing Gannon, 54 Wn. App. at 336). 13 However, the Gannon court made clear that the notice/prejudice rule does not apply to claims- 14 made policies, because “[i]f a court were to allow an extension of reporting time after the end of 15 the policy period, such is tantamount to an extension of coverage to the insured gratis, 16 something for which the insured has not bargained.” Gannon, 54 Wn. App. at 336 (citation 17 omitted).4 Plaintiff contends that Gannon is inapplicable to instances where an insured has 18 continued coverage under separate, annual claims-made policies, but fails to comply with notice 19 requirements during the relevant policy period. The cases plaintiff cites fail to support such an 20 exception to the clear holding of Gannon.5 The Court declines to apply the notice/prejudice rule 21 to the claims-made polices at issue. 22

23 4 Because the Washington State Supreme Court has not addressed this issue, the Court may look to the Washington Court of Appeals decision as persuasive authority. West v. Am. Tel. & Tel. Co., 311 24 U.S. 233, 237–38 (1940). 25 5 Although plaintiff characterizes Westport Ins. Corp. v. Markham Grp., Inc. PS, 403 F. App’x 264 (9th Cir. 2010) as an “illustrative” case, Westport does not support plaintiff’s argument to apply the 26 notice/prejudice rule to its Policies. In the underlying ruling, Westport Ins. Corp. v. Markham Grp., Inc. 27 PS, No. CV-08-221-RHW, 2009 WL 2777845 (E.D. Wash. 2009), the district court distinguished Gannon based on reasoning similar to that offered by plaintiff. This reasoning led the district court to 28 1 Finally, in its response to defendant’s motion for partial summary judgment, plaintiff 2 asserts that issues of fact preclude summary judgment on the coverage determination because 3 extrinsic evidence is required to (1) ascertain the parties’ intent under the insurance contract, and 4 (2) assess whether it is entitled to coverage by estoppel. Dkt. # 18-3. The Court disagrees. First, 5 the Court has found that the Policies’ language unambiguously precludes coverage. There is no 6 genuine dispute as to the interpretation of the Policies’ provisions in all material respects, and 7 the Court need not consider additional extrinsic evidence as to the parties’ intent. See Panorama 8 Village Condo., 144 Wn.2d at 137. Second, plaintiff’s coverage by estoppel and bad faith claims 9 are not at issue in defendant’s motion for partial summary judgment.6 The motion for partial 10 summary judgment pertains only to the issue of coverage under the plain language of the 11 Policies, a determination the Court can make without yet reaching plaintiff’s bad faith claims. 12 In sum, the Court finds the terms of the Policies clear and unambiguous, and plaintiff 13 failed to comply with an essential requirement for coverage. Accordingly, defendant’s motion 14 for partial summary judgment regarding the issue of coverage (Dkt. # 11) is GRANTED. 15 Plaintiff’s cross-motion for partial summary judgment (Dkt. # 18) is DENIED. 16 17 18 19 to year via successive policies. Westport, 2009 WL 2777845, at *8. The Ninth Circuit reversed the district court and held, consistent with Gannon, that the notice/prejudice rule did not apply to a claims- 20 made policy. Westport, 403 Fed. Appx. at 265–66. 21 Plaintiff also cites various nonbinding out-of-state cases for its assertion that the Washington State Supreme Court would apply the notice/prejudice rule to the case at hand. Dkt. # 18 at 18–20; see, 22 e.g., Cast Steel Prods. v. Admiral Ins. Co., 348 F.3d 1298 (11th Cir. 2003); Helberg v. Nat’l Union Fire Ins. Co., 657 N.E.2d 832 (Ohio App. 1995). Notably, the Ninth Circuit observed that most courts that 23 have confronted the issue have concluded that a renewal of a claims-made policy does not extend the 24 reporting period for claims made during the earlier policy period. Alaska Interstate Constr., LLC v. Crum & Forster Specialty Ins. Co., 696 Fed. Appx. 304 (9th Cir. 2017) (referring to Cast Steel and 25 Helberg as representing a “minority view”). 26 6 Plaintiff has not raised its coverage by estoppel claim in its cross-motion for summary judgment. See Dkt. # 18. It discusses the issue only in its response to defendant’s motion. See Dkt. # 18- 27 3. The coverage by estoppel issue is beyond the scope of the issues raised in defendant’s motion for 28 partial summary judgment. The Court declines to deny defendant’s motion on this basis. 1 IV. PLAINTIFF’S MOTION TO CONTINUE MOTION FOR PARTIAL SUMMARY JUDGMENT (Dkt. # 16) 2 3 To the extent plaintiff seeks to continue its partial summary judgment motion under Rule 4 56(d), it fails to demonstrate the existence of specific information that would defeat summary 5 judgment on the coverage issue. See Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. 6 Corp., 525 F.3d 822, 827 (9th Cir. 2008) (explaining that relief under Rule 56(d) requires a party 7 to show that “(1) it has set forth in affidavit form the specific facts it hopes to elicit from further 8 discovery; (2) the facts sought exist; and (3) the sought-after facts are essential to oppose 9 summary judgment.”). Plaintiff asserts it needs additional facts (1) regarding the applicability of 10 certain clauses in the Policies, and (2) related to defendant’s alleged bad-faith handling of 11 plaintiff’s claim, which it believes will support a finding of coverage by estoppel. Dkt. # 16 at 2. 12 The Court finds plaintiff’s requested discovery unnecessary to its straightforward determination 13 of defendant’s obligations to plaintiff under the Policies. The Court’s determination of coverage 14 requires application of undisputed facts to the unambiguous language of the Policies. 15 Furthermore, plaintiff’s bad faith claims are not at issue in the parties’ cross-motions for partial 16 summary judgment.7 The Court finds plaintiff has not met its burden under Rule 56(d). Its 17 “Motion to Continue [Defendant’s] Motion for Partial Summary Judgment” (Dkt. # 16) is 18 accordingly DENIED. 19 V. DEFENDANT’S MOTION TO BIFURCATE AND STAY (Dkt. # 14) 20 Finally, defendant asks the Court to bifurcate this matter for trial, separating the 21 contractual coverage claims, to be tried first, from plaintiff’s extra-contractual claims. See Dkt. 22 # 14. Because the Court has now ruled on the contractual coverage issue, it need not consider 23 the request to bifurcate and stay. Defendant’s “Motion to Bifurcate and Stay” (Dkt. # 14) is 24 DENIED as moot. 25

26 7 Plaintiff’s citation to Grange Ins. Ass’n v. Lund, No. 13-5362RBL, 2013 WL 3819933 (W.D. Wash. July 23, 2013) in support of its request for a continuance is misplaced. Grange involved a request 27 to continue a motion for summary judgment on the insured’s bad faith claims after the court had reached 28 a determination regarding the insurer’s coverage obligation. Id. at *1–3. 1 VI. CONCLUSION 2 For all the foregoing reasons, IT IS HEREBY ORDERED THAT, 3 (1) Defendant’s “Motion for Partial Summary Judgment” (Dkt. # 11) is GRANTED. 4 Plaintiff’s “Motion for Partial Summary Judgment” (Dkt. # 18) is DENIED. 5 (2) Plaintiff’s “Motion to Continue [Defendant’s] Motion for Partial Summary 6 Judgment” (Dkt. # 16) is DENIED. 7 (3) Defendant’s “Motion to Bifurcate and Stay” (Dkt. # 14) is DENIED as moot. 8 DATED this 16th day of December, 2020. 9 10 A

11 Robert S. Lasnik 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28