Gull Industries, Inc. v. Granite State Insurance Co.

• Court: District Court, W.D. Washington
• Decided: April 13, 2026
• Docket: 2:25-cv-01923
• Status: Unknown

Opinion

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3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE

9 10 GULL INDUSTRIES, INC., CASE NO. C25-1923JLR 11 Plaintiff, ORDER v. 12 GRANITE STATE INSURANCE 13 CO., 14 Defendant. 15 Before the court is Plaintiff / Counter-Defendant Gull Industries, Inc.’s (“Gull”) 16 motion for reconsideration of the court’s January 26, 2026 Order granting Defendant / 17 Counter-Claimant Granite State Insurance Company’s (“Granite State”) motion to 18 dismiss. (Mot. (Dkt. # 19); Reply (Dkt. # 23); see also 1/26/26 Order (Dkt. # 17).) 19 Granite State opposes the motion. (Resp. (Dkt. # 21).) The court has considered the 20 parties’ submissions, the relevant portions of the record, and the governing law. Being 21 fully advised, the court GRANTS Gull’s motion. 22 1 The court set forth the background of this action in its January 26, 2026 Order and 2 assumes the reader’s familiarity with the factual and procedural history provided therein.

3 (See 1/26/26 Order at 2-6.) In that order, the court dismissed Gull’s complaint after 4 concluding that Gull’s claims in the instant case are barred under the doctrine of claim 5 preclusion. (See generally 1/26/26 Order.) This action arises from Granite State’s 6 refusal to defend and indemnify Gull in litigation that took place in 2023. (See 1/26/26 7 Order at 2-6 (citing Compl. (Dkt. # 1) ¶ 1.) In 2023, a third party sued Gull, alleging that 8 Gull’s prior operation of one gas station located in Port Orchard, Washington, caused

9 ground water contamination during at least one Granite State insurance policy period (the 10 “2023 Port Orchard Lawsuit”). (Id. at 5 (citing Compl. ¶ 14).) The court granted Granite 11 State’s motion to dismiss, in pertinent part, because the court concluded that a 2016 state 12 court judgment declaring that Granite State was subject to no obligation to remediate 13 environmental pollution at Gull’s former gas stations (the “2016 Declaratory Judgment”)

14 precluded the current action. (See id. at 8-11); see also Gull Indus., Inc. v. Granite State 15 Ins. Co., 493 P.3d 1183 (Wash. Ct. App. 2021); rev. denied, 506 P.3d 646 (Wash. 2022). 16 On February 9, 2026, Gull moved for reconsideration, asserting that the court 17 erred in concluding that Gull’s current claims were precluded because Granite State had 18 not shown a concurrence of identity of causes of action or subject matter between the

19 2016 Declaratory Judgment and current action. (Mot. at 3.) The court subsequently set a 20 briefing schedule on the motion. (See generally 2/18/26 Order (Dkt. # 20).) The motion 21 is now fully briefed and ripe for the court’s consideration. 22 1 A motion for reconsideration is an “extraordinary remedy, to be used sparingly[.]” 2 Kona Enters., Inc. v. Est. of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (citation omitted).

3 “Indeed, ‘a motion for reconsideration [of a court’s prior order] should not be granted, 4 absent highly unusual circumstances, unless the district court is presented with newly 5 discovered evidence, committed clear error, or if there is an intervening change in the 6 controlling law.’” Id. (quoting 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 7 (9th Cir. 1999)). Although motions for reconsideration are generally “disfavored[,]” 8 courts in this District grant such motions upon a “showing of manifest error in the prior

9 ruling or a showing of new facts or legal authority which could not have been brought to 10 [the court’s] attention earlier with reasonable diligence.” Local Rules W.D. Wash. LCR 11 7(h)(1). 12 A party seeking to invoke claim preclusion must establish “a concurrence of 13 identity . . . of (1) subject matter; (2) cause of action; (3) persons and parties; and (4) the

14 quality of the persons for or against whom the claim is made” between the prior judgment 15 and a subsequent action. Schroeder v. Excelsior Mgmt. Grp., LLC, 297 P.3d 677, 684 16 (Wash. 2013) (internal quotation marks omitted) (quoting Mellor v. Chamberlin, 673 17 P.2d 610 (Wash. 1983)). As to concurrence of causes of action, Hassan v. GCA 18 Production Services, Inc., explains that

19 With regard to subject matter, ‘[c]ourts generally focus on the asserted theory of recovery rather than simply the facts underlying the dispute.’ And to 20 determine whether causes of action are identical, courts consider where (1) prosecuting the second action would destroy rights or interests 21 established in the first judgment, (2) the evidence presented in the two actions is substantially the same, (3) the two actions involve infringement of 22 1 the same right, and (4) the two actions arise out of the same transactional nucleus of facts. 2 487 P.3d 203, 208 (Wash. 2021) (internal citations omitted) (citing Marshall v. Thurston 3 Cnty., 267 P.3d 491, 495-96 (Wash. 2011)). 4 Here, the court agrees with Gull that it erred when it concluded that Granite State 5 had shown concurrence of identity of causes of action and subject matter between the 6 2016 Declaratory Judgment and the current action. As Gull points out, this action 7 implicates Granite State’s duty to defend Gull in the 2023 Port Orchard Lawsuit rather 8 than its duty to indemnify Gull against environmental liability generally. (See Mot. at 3-5 9 (so contending); Reply at 3 (“Gull’s claim is based on Granite State’s breach by wrongful 10 denial of a tender of defense, a contract claim that did not exist in 2016.”) As a result, the 11 court erred when it held that Gull’s claims in this case were barred by claim preclusion. 12 In response, Granite State contends that claim preclusion is warranted, in part, 13 because allowing this action to proceed would “destroy” the rights the trial court assigned 14 it under the 2016 Declaratory Judgment. (Resp. at 4-6 (citing Hassan, 487 P.3d at 208); 15 id. at 4 (asserting that the state court proceedings “relieved [Granite State] of further 16 coverage obligations vis-à-vis the 76 sites[,]” including the site in Port Orchard, 17 Washington).) The court disagrees. 18 Granite State relies on Hassan to support its proposition that there is concurrence 19 of causes of action and subject matter between the instant case and the 2016 Declaratory 20 Judgment action, but Hassan supports no such conclusion. (Resp. at 5-6.) The case upon 21 which Hassan relies, Marshall v. Thurston County, is illustrative. In Marshall, a couple 22 1 first sued the county for negligence, trespass, and inverse condemnation for flooding of 2 their property that resulted from the county’s installation of a storm water diversion

3 device and failure to provide for adequate runoff. Marshall, 267 P.3d at 493. The parties 4 settled the matter, and plaintiffs released the county from future liability. Id. When their 5 property flooded again, the plaintiffs again sued the county, alleging negligence, trespass, 6 and inverse condemnation. Id. In determining that the first action precluded the second, 7 the appellate court concluded that, under the theory of recovery established in the first 8 lawsuit, “[e]ach flood was not a new cause of action, but rather additional damages

9 resulting from the original installation, which did not provide for adequate runoff.” Id. at 10 496 (“The [plaintiffs] sued based on a single wrongful act by the County, not a series of 11 acts that gave rise to a series of causes of action.”). 12 Here, by contrast, Gull’s current claims rest on Granite State’s alleged wrongful 13 denial of a tender of defense, a contract claim that did not exist when the declaratory

14 judgment was entered in 2016. (Compl. ¶ 1.) Under Washington law, each occurrence 15 under an insurance policy can independently trigger the duty to defend. See Transcon. 16 Ins. Co. v. Wash. Pub. Utils. Dists.’ Util. Sys., 760 P.2d 337, 346 (Wash. 1988) 17 (concluding that separate triggering events constitute separate occurrences). Thus, 18 because the state court did not rule on Granite State’s duty to defend Gull against future

19 occurrences under the insurance policies, prosecuting the current action cannot destroy 20 rights or interests established by the 2016 Declaratory Judgment. For the same reason, it 21 cannot be said that the 2016 Declaratory Judgment and the instant case arise from a 22 1 “single wrongful act[,]” rather than a series of acts that create a series of causes of action. 2 Marshall, 267 P.3d at 496.

3 Because Granite State has not demonstrated a concurrence of identity of causes of 4 action or subject matter between the 2016 Declaratory Judgment and the instant action, 5 the court concludes that the 2016 Declaratory Judgment does not preclude this lawsuit. 6 Therefore, the court GRANTS Gull’s motion for reconsideration (Dkt. # 19), DENIES 7 Granite State’s motion to dismiss (Dkt. # 10), and VACATES the judgment (Dkt. # 18). 8

9 Dated this 1 3th day of April, 2026. A 10 JAMES L. ROBART 11 United States District Judge 12 13 14 15 16 17 18 19 20 21 22