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5 6 7 UNITED STATES DISTRICT COURT 8 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 9 10 KINSALE INSURANCE COMPANY, CASE NO. 2:24-cv-02168-LK 11 Plaintiff, ORDER DENYING MOTION 12 v. FOR SUMMARY JUDGMENT 13 VBC MADISON LP et al., 14 Defendants. 15
16 This matter comes before the Court on Plaintiff Kinsale Insurance Company’s motion for 17 summary judgment. Dkt. No. 46. For the reasons explained below, the motion is denied.1 19 A. The June 2022 Fire and VBC’s Efforts to Secure its Building 20 This is an insurance coverage action. Defendant VBC Madison LP, the insured party in 21 this case, owned a building in Seattle formerly located at 823 Madison Street. Dkt. No. 51 at 2. 22 The building caught fire in June 2022, prompting the City of Seattle to order that the building be 23
1 Because this matter can be decided based on the written submissions, the Court denies Kinsale’s request for oral 24 argument. Dkt. No. 46 at 1. 1 vacated. Id. By the end of September 2022, all of the tenants had moved out. Id. 2 VBC then decided to begin abatement and selective demolition of the building. Id. VBC 3 had the building secured as part of that process. Id. It later re-secured the building in response to 4 trespassers gaining access: it covered ground and second floor windows with plywood, screwed
5 doors and access hatches shut with tamper resistant screws (which can only be removed with 6 special equipment), and secured plywood barricades with concrete bolts. Id. All in, the June 2022 7 fire, clean up efforts, selective demolition, and security measures to keep trespassers out cost VBC 8 approximately $4 million. Id. 9 B. The January 1, 2024 Fire and Underlying Claims 10 On January 1, 2024, the building caught fire again. Id. at 3. The Seattle Fire Department 11 (“SFD”) classified the cause of the fire as “undetermined.” Dkt. No. 47-1 at 2. The SFD’s report 12 speculated that the fire was “likely due to homeless/transient activity,” possibly related to “cooking 13 and drug use.” Id. Photographs taken after the fire show that SFD had to cut through bars over the 14 ground floor windows and cut through plywood to access the building while fighting the fire. Dkt.
15 No. 51 at 3–6. 16 Frontier Development Corporation owns an adjacent building, located at 909 9th Avenue 17 in Seattle. Dkt. No. 55 at 4. Frontier contends that the fire, which originated at VBC’s building, 18 spread to its adjacent building and caused approximately $1.05 million in damages. Dkt. No. 24 at 19 4. Frontier’s liability insurer, RSUI Indemnity Company, sent a demand letter to VBC in February 20 2024. Id.; see also Dkt. No. 47-3. Kinsale refers to Frontier’s property damage claims against VBC 21 as the “Underlying Claims.” Dkt. No. 46 at 2. 22 C. The Kinsale Policy 23 Plaintiff Kinsale Insurance Company is VBC’s liability insurer. Kinsale sold VBC a
24 commercial general liability policy that provides coverage for “property damage” caused by an 1 “occurrence” (defined as “an accident”), with a duty to defend and indemnify VBC against suits 2 seeking such damages. Dkt. No. 47-2 at 6, 20. 3 Kinsale is defending VBC with respect to Frontier’s Underlying Claims under a reservation 4 of rights. Dkt. No. 24 at 9. Kinsale does not dispute that the claims fall within the policy’s insuring
5 agreement, but argues that two exclusions bar coverage: (1) the Fire or Fire Related Injury or 6 Damage Exclusion and (2) the Unsecured Property Exclusion. Dkt. No. 46 at 10–13. 7 1. Fire or Fire-Related Injury or Damage Exclusion 8 The Fire Exclusion states: 9 This insurance does not apply to any claim or “suit” for “bodily injury”, “property damage”, or “personal and advertising injury” arising directly or indirectly out of, 10 related to, or in any way involving fire, smoke, or any conceivable by-product of combustion. 11 This exclusion applies to any claim or “suit” regardless of whether fire, smoke, or 12 any conceivable by-product of combustion is the initial precipitating cause or is in any way a cause, and regardless of whether any other actual or alleged cause 13 contributed concurrently, proximately, or in any sequence, including whether any actual or alleged “bodily injury”, “property damage” or “personal and advertising 14 injury” arises out of a chain of events that involves or includes any fire, smoke, or any conceivable by-product of combustion. 15 Dkt. No. 47-2 at 66. 16 2. Unsecured Property Exclusion 17 The Unsecured Property Exclusion states: 18 This insurance does not apply to any claim or “suit” for “bodily injury”, 19 “property damage” or “personal and advertising injury” arising directly or indirectly out of, related to, or, in any way involving a vacant or unoccupied 20 building unless it is “secured” and inaccessible to human entry except by authorized persons. 21 “Secured” means securely covered at all access points below grade level, on grade level, or within fifteen (15) feet above grade level. 22 Id. at 59. 23 24 1 D. Procedural Background 2 Kinsale filed suit seeking a declaration “that Kinsale owes no defense obligation to VBC 3 for any claims asserted against it arising from the subject loss” and that it “owes no indemnity 4 obligation to VBC for any claims asserted against it, including but not limited to the Subrogation
5 Claims, arising from the subject loss.” Dkt. No. 54 at 32. It filed its motion for summary judgment 6 on both claims on May 30, 2025. Dkt. No. 46. 8 A. Legal Standards 9 Because this Court sits in diversity jurisdiction, it will apply Washington state substantive 10 law and federal procedural law. See Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 11 (1996). 12 1. Summary Judgment 13 Summary judgment is appropriate only when “the movant shows that there is no genuine 14 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
15 Civ. P. 56(a). The Court does not make credibility determinations or weigh the evidence at this 16 stage. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). In essence, the inquiry is 17 “whether the evidence presents a sufficient disagreement to require submission to a jury or whether 18 it is so one-sided that one party must prevail as a matter of law.” Id. at 251–52. And to the extent 19 that the Court resolves factual issues in favor of the nonmoving party, this is true “only in the sense 20 that, where the facts specifically averred by that party contradict facts specifically averred by the 21 movant, the motion must be denied.” Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888 (1990). 22 To establish that a fact cannot be genuinely disputed, the movant can either cite the record 23 or show “that the materials cited do not establish the . . . presence of a genuine dispute, or that an
24 adverse party cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1)(B). 1 Once the movant has made that showing, “the nonmoving party must come forward with specific 2 facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith 3 Radio Corp., 475 U.S. 574, 587 (1986) (citation modified). Metaphysical doubt is insufficient, id. 4 at 586, as are conclusory, non-specific allegations, Lujan, 497 U.S. at 888–89. Nor is it the Court’s
5 job to “scour the record in search of a genuine issue of triable fact”; rather, the nonmoving party 6 must “identify with reasonable particularity the evidence that precludes summary judgment.” 7 Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (quoting Richards v. Combined Ins. Co., 55 8 F.3d 247, 251 (7th Cir. 1995)). The Court will enter summary judgment “against a party who fails 9 to make a showing sufficient to establish the existence of an element essential to that party's case, 10 and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 11 317, 322 (1986). 12 2. Insurance Policy Construction 13 Under Washington law, “[i]nterpretation or construction of an insurance contract is a 14 question of law and may properly be determined on motion for summary judgment.” Wampold v.
15 Safeco Ins. Co. of Am., 409 F. Supp. 3d 962, 967 (W.D. Wash. 2019) (quoting Gerken v. Mut. of 16 Enumclaw Ins. Co., 872 P.2d 1108, 1112 (Wash. Ct. App. 1994)). 17 Determining whether coverage exists under a policy is a two-step process. “The burden 18 first falls on the insured to show its loss is within the scope of the policy’s insured losses. If such 19 a showing has been made, the insurer can nevertheless avoid liability by showing the loss is 20 excluded by specific policy language.” Overton v. Consol. Ins. Co., 38 P.3d 322, 329 (Wash. 2002) 21 (internal citation omitted). 22 The “primary goal” in interpreting an insurance policy is to ascertain and give effect to the 23 parties’ intent at the time of the policy’s execution—not “the interpretations the parties are
24 advocating at the time of the litigation.” Int'l Marine Underwriters v. ABCD Marine, LLC, 313 1 P.3d 395, 399–400 (Wash. 2013). In doing so, the Court “construe[s the] insurance polic[y] as a 2 whole and give[s] the language a fair, reasonable, and sensible construction as would be given to 3 the contract by the average person purchasing insurance.” Seattle Tunnel Partners v. Great Lakes 4 Reinsurance (UK) PLC, 516 P.3d 796, 800 (Wash. 2022) (citation modified); Certification from
5 U.S. Dist. Ct. ex rel. W. Dist. of Wash. (Kroeber) v. GEICO Ins. Co., 366 P.3d 1237, 1239 (Wash. 6 2016) (“This court views an insurance contract in its entirety, does not interpret a phrase in 7 isolation, and gives effect to each provision.”). Undefined terms are thus given “their popular and 8 ordinary meaning[.]” Kut Suen Lui v. Essex Ins. Co., 375 P.3d 596, 601 (Wash. 2016). But when 9 the policy expressly defines a term, the Court is bound by that definition. Overton, 38 P.3d at 327. 10 In the insurance context, the duty to defend is broader than the duty to indemnify. Woo v. 11 Fireman’s Fund Ins. Co., 164 P.3d 454, 459 (Wash. 2007). “An insurance company has the duty 12 to indemnify if the insurance policy actually covers the insured, while the duty to defend arises if 13 the insurance policy conceivably covers the insured.” Robbins v. Mason Cnty. Title Ins. Co., 462 14 P.3d 430, 435 (Wash. 2020). Ambiguities in the policy are strictly construed against the insurer.
15 Findlay v. United Pac. Ins. Co., 917 P.2d 116, 119 (Wash. 1996). This rule “applies with added 16 force to exclusionary clauses,” id.; policy exclusions are “most strictly construed against the 17 insurer,” Am. Best Food, Inc. v. Alea London, Ltd., 229 P.3d 693, 697 (Wash. 2010) (citation 18 modified). When determining whether ambiguity exists, the Court—as is the case generally— 19 views the policy language as it would be read by the average insurance purchaser. Allstate Ins. Co. 20 v. Peasley, 932 P.2d 1244, 1246–47 (Wash. 1997). Policy language is ambiguous only “if, on its 21 face, it is fairly susceptible to two different but reasonable interpretations.” Seattle Tunnel 22 Partners, 516 P.3d at 800. Where, however, the policy language “is clear and unambiguous, the 23 court must enforce it as written and may not modify the contract or create ambiguity where none
24 exists.” Transcon. Ins. Co. v. Wash. Pub. Utilities Dists.’ Util. Sys., 760 P.2d 337, 340 (Wash. 1 1988). “[W]here multiple reasonable definitions of an undefined term in an insurance policy exist 2 . . . courts adopt the definition that most favors the insured.” Hill & Stout, PLLC v. Mut. of 3 Enumclaw Ins. Co., 515 P.3d 525, 531 (Wash. 2022) (quoting McLaughlin v. Travelers Com. Ins. 4 Co., 476 P.3d 1032, 1037 (Wash. 2020)).
5 B. Factual Issues Preclude Summary Judgment on the Fire Exclusion 6 Kinsale argues that coverage is precluded by the Fire or Fire-Related Injury or Damage 7 Exclusion. Dkt. No. 46 at 12. VBC responds that the efficient proximate cause rule prevents the 8 Fire Exclusion from applying. Dkt. No. 50 at 7. 9 As an initial matter, the parties agree that the commercial general liability policy Kinsale 10 issued to VBC provides for coverage for “those sums that [VBC] becomes legally obligated to pay 11 as damages because of . . . ‘property damage[.]’” Dkt. No. 47-2 at 6. It is undisputed that the 12 Underlying Claims seek “damages” from “property damage.” Dkt. No. 47-2 at 6; Dkt. No. 54 at 13 6; Dkt. No. 50 at 6. 14 Washington’s efficient proximate cause rule provides for coverage “where a covered peril
15 sets in motion a causal chain the last link of which is an uncovered peril.” Xia v. ProBuilders 16 Specialty Ins. Co., 400 P.3d 1234, 1240 (Wash. 2017) (citation modified). “If the initial event, the 17 efficient proximate cause, is a covered peril, then there is coverage under the policy regardless 18 whether subsequent events within the chain, which may be causes-in-fact of the loss, are excluded 19 by the policy.” Id. (citation modified). The rule “applies only when two or more perils combine in 20 sequence to cause a loss and a covered peril is the predominant or efficient cause of the loss.” Id. 21 at 1241–42 (citation modified). 22 VBC argues that (1) the Fire Exclusion cannot be read in a way that circumvents the 23 efficient proximate cause rule, and (2) the Exclusion—interpreted consistently with the efficient
24 proximate cause rule—does not clearly apply, because there is factual dispute over whether a 1 covered peril (e.g., trespassing, vandalism, or criminal acts of third parties) was the initiating cause 2 of the loss. Dkt, No. 50 at 7–12. The Court addresses each argument in turn. 3 1. The Fire Exclusion Must Be Construed Based on the Efficient Proximate Cause Rule 4 The Court begins with the text of the policy. Again, the Fire Exclusion bars coverage for:
5 any claim or “suit” for . . . “property damage” . . . arising directly or indirectly out of, related to, or in any way involving fire, smoke, or any conceivable by-product 6 of combustion. 7 This exclusion applies to any claim or “suit” regardless of whether fire, smoke, or any conceivable by-product of combustion is the initial precipitating cause or is in 8 any way a cause, and regardless of whether any other actual or alleged cause contributed concurrently, proximately, or in any sequence[.] 9 Dkt. No. 47-2 at 66. As this Court has previously observed, “[t]he Washington Supreme Court has 10 repeatedly warned that insurers ‘cannot contract around the efficient proximate cause rule, i.e., 11 [they] cannot contract to exclude coverage for excluded perils within a causal chain initially started 12 by a covered peril.’” Ridge at Riverview Homeowner’s Ass’n v. Country Cas. Ins. Co., No. 21- 13 CV-00950-LK, 2023 WL 22678, at *6 (W.D. Wash. Jan. 3, 2023) (quoting Hill & Stout, 515 P.3d 14 at 536); see also Xia, 400 P.3d at 1241 (“The exclusion cannot eviscerate a covered occurrence 15 merely because an uncovered peril appeared later in the causal chain.”); Safeco Ins. Co. of Am. v. 16 Hirschmann, 773 P.2d 413, 416–17 (Wash. 1989) (“When an insured risk sets into operation a 17 chain of causation in which the last step may be an excluded risk, the exclusion will not defeat 18 recovery.”). Although the state’s highest court has “left open the possibility that an insurer may 19 draft policy language to deny coverage when an excluded peril initiates an unbroken causal chain,” 20 Vision One v. Phila. Indem. Ins., 276 P.3d at 300, 309 (Wash. 2012) (en banc),2 that is not what 21
22 2 See also Xia, 400 P.3d at 1241 (“It is perfectly acceptable for insurers to write exclusions that deny coverage when an excluded occurrence initiates the causal chain and is itself either the sole proximate cause or the efficient proximate 23 cause of the loss.”); Findlay v. United Pac. Ins. Co., 917 P.2d 116, 120 (Wash. 1996) (while “the use of broad policy language which eliminates the relevance of the efficient proximate cause rule under all possible circumstances” is prohibited, the Washington Supreme Court “did not forbid the use of clear policy language to exclude a specifically 24 named peril from coverage”). 1 Kinsale has done here. Instead, Kinsale purports to exclude coverage even when a covered peril 2 initiates an unbroken causal chain: the Fire Exclusion applies “regardless of whether fire . . . is the 3 initial precipitating cause or is in any way a cause, and regardless of whether any other actual or 4 alleged cause contributed concurrently, proximately, or in any sequence.” Dkt. No. 47-2 at 66. In
5 other words, in a scenario where fire is a cause—but not the initial precipitating cause—of the loss, 6 the Fire Exclusion would bar coverage, whereas the efficient proximate cause rule would mandate 7 it (assuming the initiating cause is a covered peril). 8 Kinsale attempts to avoid this problem by arguing that the efficient proximate cause rule 9 “applie[s] only to first-party property coverage claims,” and here, “the Underlying Claims are 10 third-party claims being made against VBC’s commercial general liability policy.” Dkt. No. 52 at 11 4. In support of its argument, Kinsale cites Lesure v. Farmers Ins. Co. of Washington, 392 P.3d 12 1076 (Wash. Ct. App. 2016), which purports to limit the rule to “determin[ing] first-party 13 insurance policy coverage,” id. at 1079. But Kinsale does not explain why that distinction should 14 make a difference. “[T]he purpose of the efficient proximate cause rule is to provide a workable
15 rule of coverage that provides a fair result within the reasonable expectations of both the insured 16 and the insurer,” Kish v. Ins. Co. of N. Am., 883 P.2d 308, 312 (Wash. 1994), and the Court sees 17 no reason why (absent express language in the policy stating otherwise) the rule should function 18 differently depending on whether a loss to the insured under a commercial general liability policy 19 stems from the insured’s own injury or that of a third party. Furthermore, Lesure predated Xia, 20 which emphasized that “the [efficient proximate cause] rule has broad application,” and applied 21 the rule in analogous circumstances. Xia, 400 P.3d at 1240. In Xia, the issue was whether the policy 22 issued to a contractor (the first party) covered bodily injuries suffered by the contractor’s customer, 23 Zhaoyun “Julia” Xia (a third party). Id. at 1237. After the contractor assigned its rights to Xia, she
24 sued the contractor’s insurance company to recover for her injuries; thus, as in this case, Xia 1 involved a suit to recover damages incurred by a third party. And significantly, the majority ruled 2 in favor of Xia over a dissent protesting that “[u]ntil now, we have applied the efficient proximate 3 cause rule only in first party coverage cases,” whereas Xia presented a “third party ‘liability’ 4 coverage” case. Id. at 1246 n.1 (Madsen, J., dissenting).3 Based on Xia, the Court finds that the
5 efficient proximate cause rule applies in the circumstances of this case.4 This is true regardless of 6 the fact that Kinsale used the phrase “arising out of” to describe the excluded act. See Dolsen Cos. 7 v. Bedivere Ins. Co., 264 F. Supp. 3d 1083, 1093–94 (E.D. Wash. 2017) (“Although the term 8 [‘]arising out of[’] is generally broader than [‘]proximately caused by[’]—and the rule would not 9 apply if freedom of contract governed without restriction—the court in Xia expressly disavowed 10 attempts to circumvent the efficient cause rule with the [] use of broad policy language which 11 eliminates the relevance of the efficient proximate cause rule under all possible circumstances. As 12 a consequence, the difference of language does not appear to be material.” (citation modified)); 13 see also Country Mut. Ins. Co. v. Evergreen Landing LLC, No. C20-5337 RJB-TLF, 2020 WL 14 6044505, at *1, 3 (W.D. Wash. Oct. 13, 2020) (applying the efficient proximate cause rule where
15 a policy’s mold exclusion excluded coverage for “[a]ny loss, cost or expense arising out of ... 16 ‘fungi’ or bacteria,” and noting that “[t]he Fungi or Bacteria exclusion cannot contract around 17 3 Much of Kinsale’s arguments echo Justice Madsen’s concerns in Xia. See, e.g., Dkt. No. 46 at 12–13 (“[T]he plain 18 and unambiguous language of the Kinsale Policy excludes coverage for property damage arising directly or indirectly from fire[.]”). But as much as this Court might agree with dissenting justices that “[t]here is simply nothing ambiguous 19 about the broad, absolute . . . exclusion in this case,” and that applying the efficient proximate cause rule “would contradict the plain language” of the exclusion, Xia, 400 P.3d at 1245–46 (Madsen, J., dissenting); see also Hirschmann, 773 P.2d at 418 (Callow, C.J., dissenting) (“The majority invalidates unambiguous contractual language 20 without explicitly identifying any public policy with which the challenged provisions of the policy conflict[.]”), it must abide by the decisions of the majority, not the dissent, see Arizona Elec. Power Co-op., Inc. v. Berkeley, 59 F.3d 21 988, 991 (9th Cir. 1995). 4 Kinsale argues that other cases in this district have “declined to adopt Xia and apply the EPC rule in third-party 22 liability cases with facts analogous to those presented here.” Dkt. No. 52 at 5. That is not exactly right. Those cases declined to apply the efficient proximate cause rule for reasons that do not apply here; neither court concluded that 23 the rule categorically does not apply to third-party coverage cases. See Charter Oak Fire Ins. Co. v. Chas. H. Beresford Co., 575 F. Supp. 3d 1313 (W.D. Wash. 2021); Safeco Ins. Co. of Am. v. Wolk, 342 F. Supp. 3d 1104 (W.D. Wash. 2018). Indeed, neither of the cases Kinsale cites discusses the distinction between first- and third-party coverage cases 24 at all. 1 efficient proximate cause rule, so a covered peril that results in excluded ‘mold’ damage will result 2 in a duty to defend”). As the Washington Supreme Court observed in Hill & Stout, language 3 excluding loss or damage “regardless of any other cause or event that contributes concurrently or 4 in any sequence to the loss” is “an example of contracting around the efficient proximate cause
5 rule.” 515 P.3d at 536. 6 Because the efficient proximate cause rule applies, the Fire Exclusion is unenforceable to 7 the extent it excludes coverage that would be mandated by the rule. See id. (“a policy cannot 8 contract around the efficient proximate cause rule; i.e., it cannot contract to exclude coverage for 9 excluded perils within a causal chain initially started by a covered peril”); Xia, 400 P.3d at 1241 10 (attempts “to draft language into the exclusion that expressly circumvents the [efficient proximate 11 cause] rule” should be rejected). 12 2. There Are Disputed Issues of Fact as to Whether the Efficient Proximate Cause of the Subject Loss is a Covered Peril 13 The parties do not dispute that the cause of the fire is currently undetermined. If the 14 efficient proximate cause is a covered peril (such as trespassing, vandalism, or criminal acts of 15 third parties)5 as VBC argues, then the Fire Exclusion does not apply. 16 As noted above, an efficient proximate cause is the “cause which sets into motion the chain 17 of events producing the loss”—it is “not necessarily the last act in a chain of events.” Hirschmann, 18 773 P.2d at 415 (quoting Graham v. Pub. Emps. Mut. Ins. Co., 656 P.2d 1077, 1081 (Wash. 1983). 19 Here, the cause that set into motion the chain of events resulting in damage to Frontier’s building 20 is the occurrence that caused the fire in VBC’s building. Contrary to Kinsale’s arguments, the 21 evidence suggests that the fire could have been caused by the covered perils of trespassing, 22
23 5 Kinsale argues that “[t]his case does not involve a covered peril,” Dkt. No. 52 at 11, but does not directly rebut VBC’s specific arguments that “[t]respassing, vandalism, and criminal acts of third parties are not excluded by the 24 Policy” and thus are covered perils, Dkt. No. 50 at 10. The policy does not suggest that these perils are excluded. See generally Dkt. No. 47-2. 1 vandalism, or criminal acts of third parties. 2 Hirschmann is instructive. There, the insured owned a vacation home damaged by a 3 landslide, which was triggered by heavy rainfall. Id. at 413–14. The insurance policy with Safeco 4 excluded losses from landslides. Id. Safeco argued that the landslide exclusion barred coverage,
5 but the Washington Supreme Court concluded that because “a finder of fact could conclude that 6 the efficient proximate cause of the destruction of [the insured’s] home was the covered perils of 7 wind and rain, and that the excluded peril of landslide was merely the final link in the causal chain 8 . . . [t]he summary judgment in favor of Safeco [] cannot stand.” Id. at 417. 9 Xia is also similar in relevant ways. There, the negligent installation of a hot water heater 10 caused the release of toxic levels of carbon monoxide into a home. Xia, 400 P.3d at 1236. The 11 insurance policy contained a broad exclusion for bodily injury caused by a pollutant. Id. at 1241. 12 The Washington Supreme Court found that the negligent installation of the water heater (a covered 13 peril) was the efficient proximate cause because it was the event that set in motion a causal chain 14 that resulted in the excluded peril (injury caused by pollution). Id. at 1243.
15 The same logic applies here. The efficient proximate cause is not the last act in the chain 16 of events (the landslide in Hirschmann, the release of carbon monoxide in Xia, and the fire in this 17 case); rather, it is the initiating cause which set everything else into motion. In Hirschmann, that 18 was heavy wind and rain; in Xia, it was the negligent installation of the water heater; and here, it 19 is the occurrence that caused the fire. See also, e.g., Graff v. Allstate Ins. Co., 54 P.3d 1266, 1269 20 (Wash. Ct. App. 2002) (policy excluding loss from “contamination” covered contamination loss 21 where vandalism was the efficient proximate cause; specifically, tenants of insured committed 22 vandalism by “creat[ing] harmful vapors and residues” from an indoor methamphetamine lab “that 23 damaged [the insured’s] rental house”); Bowers v. Farmers Ins. Exch., 991 P.2d 734, 736–38
24 (Wash. Ct. App. 2000) (policy providing that insurer did “not cover direct or indirect loss from 1 . . . . mold” covered mold damage where vandalism was the efficient proximate cause; specifically, 2 tenants of insured committed vandalism by “creat[ing] a sauna-like environment in the basement” 3 to grow marijuana, causing the mold). VBC has presented sufficient evidence to suggest that the 4 fire may have been caused by a covered peril—e.g., trespassing, vandalism, and criminal acts of
5 third parties. Dkt. No. 50 at 10. For example, the SFD’s report states that the fire’s cause was 6 “undetermined” but “most likely due to homeless/transient activity” involving “cooking and drug 7 use.” Dkt. No. 47-1 at 2–3. If a jury concludes similarly, then the Fire Exclusion would not apply 8 because the efficient proximate cause of the fire would be a covered peril. 9 For these reasons, determining whether the Fire Exclusion applies involves resolving 10 disputed issues of material fact, and is thus not something the Court can resolve at the summary 11 judgment stage. See Hill & Stout, 515 P.3d at 535 (“The determination of the efficient proximate 12 cause of loss is a question of fact for the fact finder.”); AXIS Surplus Ins. Co. v. Intracorp Real 13 Est., LLC, No. C08-1278-JCC, 2009 WL 10676383, at *5 (W.D. Wash. Sept. 14, 2009) (“[T]he 14 Court may not, on a motion for summary judgment, decide issues of proximate cause unless those
15 facts are truly undisputed, such that no reasonable jury could decide otherwise.”); Churchill v. 16 Factory Mut. Ins. Co., 234 F. Supp. 2d 1182, 1186–87 (W.D. Wash. 2002) (“The court cannot 17 resolve the question of coverage on summary judgment because the efficient proximate cause of 18 Plaintiff’s losses has not been determined.”). 19 C. Factual Issues Preclude Summary Judgment on the Unsecured Property Exclusion 20 Next, Kinsale argues that even if trespassing, vandalism, or criminal acts of third parties 21 were the cause of the fire, the Unsecured Property Exclusion bars coverage. Dkt. No. 46 at 12–13; 22 Dkt. No. 52 at 8–9. As noted above, that Exclusion bars 23 any claim or “suit” for “bodily injury”, “property damage” or “personal and advertising injury” arising directly or indirectly out of, related to, or, in any way 24 1 involving a vacant or unoccupied building unless it is “secured” and inaccessible to human entry except by authorized persons. 2 Dkt. No. 47-2 at 59. “‘Secured’ means securely covered at all access points below grade level, on 3 grade level, or within fifteen (15) feet above grade level.” Id. Kinsale argues that it is “uncontested 4 that [VBC’s building] was unoccupied and unsecured at the time of the subject loss.” Dkt. No. 46 5 at 12. In support, Kinsale cites the SFD’s report, which stated that the “south-side 6 stairwell/courtyard [] is unsecured.” Dkt. No. 47-1 at 2 (capitalization removed). Kinsale also relies 7 on RSUI’s allegation that the building was unsecured. Dkt. No. 46 at 12; see also Dkt. No. 47-3. 8 VBC responds that it “spent significant sums—approximately $4 million over a year and a 9 half—on security patrols of the property, contractors erecting and maintaining barriers to access 10 of the property, building cleanup and selective demolition.” Dkt. No. 50 at 12. For example, 11 evidence in the record shows that VBC’s contractor “secured the doors with metal bars and special 12 tamper-resistant screws that require specialized tools to remove,” and that “[p]lywood barricades 13 were secured with concrete anchor bolts.” Id. (citing Dkt. No. 51). Furthermore, photographs show 14 that “the Fire Department had to cut bars form [sic] the first level windows, and cut and remove 15 plywood over second floor windows to gain access.” Id. (citing Dkt. No. 51); see also Dkt. No. 51 16 at 5–6. As to SFD’s report, VBC argues that it “was written by someone who witnessed the 17 conditions during and after the fire”—and thus no one from the department saw the building before 18 the fire “to see whether [it] was unsecured as opposed to trespassers taking extraordinary steps to 19 defeat reasonable security measures.” Dkt. No 50 at 13.6 VBC also argues—and the Court 20 agrees—that it did not admit that the building was unsecured and that RSUI’s allegation that it was 21 unsecured does not make this an undisputed issue of fact. Id. 22
23 6 VBC also argues that the Exclusion does not apply because it is limited to property damage arising out of a “vacant” or “unoccupied” building, and here, evidence shows that the building was occupied. Dkt. No. 50 at 13. The Court is 24 not persuaded. A plain reading of the clause renders it applicable if the building is (1) either vacant or unoccupied, and (2) unsecured. Here, it is undisputed that the building was vacant. See Dkt. No. 51 at 2; Dkt. No. 52 at 3. 1 Ultimately, what SFD reported on the day of the fire is not dispositive of the factual 2 question regarding whether and to what extent VBC’s building was secured. There is evidence in 3 the record that VBC secured the doors and windows on the first and second floors. See Dkt. No. 4 47-2 at 59 (“‘Secured’ means securely covered at all access points below grade level, on grade
5 level, or within fifteen (15) feet above grade level.”). The fact that SFD noted that the building’s 6 south-side stairwell/courtyard “is unsecured,” Dkt. No. 47-1 at 2, could mean, among other things, 7 (1) that VBC did not secure that side of the building, in which case the Exclusion would apply, 8 (2) that the fire destroyed some of the barricades on the south-side of the building, in which case 9 the Exclusion may not apply, (3) that the barricades were breached and removed by trespassers 10 prior to the fire, in which case the Exclusion also may not apply, or (4) that SFD believed it was 11 unsecured based on prior observations of “transient traffic” there, id., which does not necessarily 12 show that the building was unsecured at the time of the fire. 13 Because the extent to which VBC secured its building is a disputed issue of material fact, 14 summary judgment on this basis is precluded.
16 For the reasons explained above, Kinsale’s motion for summary judgment is DENIED. 17 Dkt. No. 46. 18 Dated this 8th day of September, 2025. 19 A 20 Lauren King United States District Judge 21 22 23 24