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3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE
9 10 MATCONUSA LP, CASE NO. C19-1952JLR 11 Plaintiff, ORDER ON MOTION FOR v. RECONSIDERATION 12 HOUSTON CASUALTY 13 COMPANY, et al., 14 Defendants. 15 I. INTRODUCTION 16 Before the court is Plaintiff MatconUSA LP’s (“Matcon”) motion for partial 17 reconsideration of the court’s July 14, 2022 order regarding the parties’ motions for 18 summary judgment. (Mot. (Dkt. # 137); Reply (Dkt. # 152); see 7/14/22 Order (Dkt. 19 # 129).) Defendant Marsh USA Inc. (“Marsh”) opposes Matcon’s motion. (Resp. (Dkt. 20 # 151); see also 7/25/22 Order (Dkt. # 140) (directing Marsh to file a response pursuant 21 to Local Rules W.D. Wash. LCR 7(h)); 7/26/22 Min. Order (Dkt. # 142) (extending the 22 1 deadline for Marsh to respond).) The court has reviewed the motion, the parties’ 2 briefing, the remainder of the record, and the applicable law. Being fully advised,1 the
3 court GRANTS IN PART Matcon’s motion for reconsideration. 4 II. ANALYSIS2 5 “Motions for reconsideration are disfavored,” and the “court will ordinarily deny 6 such motions in the absence of a showing of manifest error in the prior ruling or a 7 showing of new facts or legal authority which could not have been brought to its attention 8 earlier with reasonable diligence.” Local Rules W.D. Wash. LCR 7(h)(1).
9 Matcon contends that the court erred “by limiting the duty that Marsh owed 10 Matcon to the exercise of ‘reasonable skill, ordinary care, diligence, and good faith in 11 carrying out the instructions of [Westbank Holdings US Ltd. (“Westbank”)] and [Project 12 Stewart LLC (“Project Stewart”)].’” (Mot. at 1 (quoting 7/14/22 Order at 26).) It argues 13 that the court erred in two ways. First, Matcon contends the court erred by “imput[ing]
14 the requirement that Marsh be ‘instructed’ by Project Stewart to report a claim, even 15 though the Engagement Letter” between Marsh and Westbank “only requires that Marsh 16 be ‘informed’ by Project Stewart of a claim.” (Id. at 3 (emphasis in original); see 17 10/19/20 Williams Decl. (Dkt. # 48) ¶ 9, Ex. G (“Engagement Letter”), at 2).) Second, 18
19 1 No party requests oral argument on the motion (see Mot. at 1; Resp. at 1), and the court finds that oral argument would not be helpful to its disposition of the instant motions, see Local 20 Rules W.D. Wash. LCR 7(b)(4).
2 Because the court set forth the factual and procedural background of this case in detail 21 in its July 14, 2022 order on the parties’ motions for summary judgment, it does not repeat that background here. (See 7/14/22 Order at 2-13, 17-20.) 22 1 Matcon argues that the court improperly combined the common law duties of an 2 insurance broker to exercise “reasonable skill and ordinary care and diligence” and “carry
3 out instructions” with Marsh’s “contractual duty to notify insurers of an insurance claim 4 whenever Westbank informs Marsh of a claim.” (Mot. at 1, 3.) Matcon asserts that the 5 court should conclude, instead, that Marsh owes Matcon the same three duties that Marsh 6 owed its clients Project Stewart and Westbank as the insurance broker for the Project: 7 (1) a “duty to exercise reasonable skill and ordinary care and diligence”; (2) a “duty to 8 exercise good faith and carry out instructions”; and (3) a “duty to notify insurers of
9 claims, provided that Marsh is informed in writing by Project Stewart or Westbank of the 10 claim.” (Id. at 5.) Marsh, for its part, defends the court’s original statement of the duty 11 Marsh owes to Matcon. (Resp. at 3-4.) 12 After carefully reviewing the July 14, 2022 order and the authority cited therein, 13 the court concludes that a revision to its statement of Marsh’s duty to Matcon is
14 warranted. The court finds Merriman v. American Guarantee & Liability Insurance 15 Company, 396 P.3d 351 (Wash. Ct. App. 2017) particularly instructive. In Merriman, the 16 Washington Court of Appeals found that the defendant insurance adjuster3 owed a tort 17 duty to the plaintiff insureds based on specific duties that the adjuster had voluntarily 18 assumed in a third party administrator agreement with the insurer. Id. at 367. The Court
19 of Appeals first reviewed caselaw regarding the duties owed by adjusters to insureds and 20 by agents to intended beneficiaries and concluded that no precedent precluded finding 21
3 Independent insurance adjusters, like the defendant in Merriman, ordinarily represent 22 the interests of the insurer, not the insured. See id. at 362 (quoting RCW 48.17.101(1)(a)). 1 that the adjuster had a duty to inform the insureds about the coverage at issue. Id. at 2 365-66. Next, the Court of Appeals determined that the third party administrator
3 agreement supported the position that the insureds “were expected to benefit from [the 4 adjuster’s] performance of its duties” under that agreement—which included promises to 5 “promptly and thoroughly review, process, [a]djust, settle and pay [c]laims under the 6 [p]olicy in full compliance with . . . all applicable legal and regulatory requirements.” Id. 7 at 362, 366. It further concluded that finding the adjuster owed a duty to the insureds 8 would advance Washington’s policy of protecting insureds. Id. at 366. The Court of
9 Appeals, however, rejected the insureds’ argument that the adjuster owed them a 10 generalized duty of care. Id. Instead, it held that, 11 given the duties undertaken by [the adjuster] in the third party administrator agreement; the intent of that agreement to benefit, in part, [the] insureds; and 12 the foreseeable harm to the insureds if [the adjuster’s] relevant promises were not performed, [the adjuster] owed the insureds a duty of reasonable care to 13 perform those promises.
14 Id. at 367. 15 Following the steps set out in Merriman, the court first concludes that Washington 16 precedent does not foreclose a finding that Marsh owed Matcon a duty of care. Marsh 17 has not identified any Washington precedent that would preclude a finding that Marsh, as 18 the administrator and insurance broker for Project Stewart’s owner-controlled insurance 19 program (“OCIP”), owed a tort duty to Matcon as an enrollee in the OCIP. (See 20 generally Resp.; Marsh MSJ (Dkt. # 92); Marsh Resp. to Matcon MSJ (Dkt. # 109).) 21 Indeed, Marsh argued on summary judgment that its duty to report OCIP claims to the 22 insurer did not arise unless and until Project Stewart instructed it to do so; it did not argue 1 that Washington precedent precluded finding a tort duty in the first instance. (Marsh 2 MSJ at 17-22; see also Marsh Resp. to Matcon MSJ at 15-21.)
3 Second, the court reiterates its conclusion that the agreement between Marsh and 4 Westbank regarding Project Stewart was intended, at least in part, to benefit enrollees in 5 the OCIP. (7/14/22 Order at 23-24.) Marsh’s Engagement Letter with Westbank 6 regarding Project Stewart included Marsh’s promise to 7 prepare loss notices to insurers and notify insurers of claims; provided that your Marsh claims advocate is informed in writing by you of the claim, and 8 Marsh has placed the applicable policies or the Marsh claims advocate has been provided written notice by you of the applicable carrier and policies. 9 (Engagement Letter at 2; see also id. at 1 (defining “you” to mean Westbank).) Because 10 Marsh’s promises to Westbank in the Engagement Letter were intended to benefit 11 enrollees, precedent supports finding that Marsh owed Matcon a tort duty.
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3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE
9 10 MATCONUSA LP, CASE NO. C19-1952JLR 11 Plaintiff, ORDER ON MOTION FOR v. RECONSIDERATION 12 HOUSTON CASUALTY 13 COMPANY, et al., 14 Defendants. 15 I. INTRODUCTION 16 Before the court is Plaintiff MatconUSA LP’s (“Matcon”) motion for partial 17 reconsideration of the court’s July 14, 2022 order regarding the parties’ motions for 18 summary judgment. (Mot. (Dkt. # 137); Reply (Dkt. # 152); see 7/14/22 Order (Dkt. 19 # 129).) Defendant Marsh USA Inc. (“Marsh”) opposes Matcon’s motion. (Resp. (Dkt. 20 # 151); see also 7/25/22 Order (Dkt. # 140) (directing Marsh to file a response pursuant 21 to Local Rules W.D. Wash. LCR 7(h)); 7/26/22 Min. Order (Dkt. # 142) (extending the 22 1 deadline for Marsh to respond).) The court has reviewed the motion, the parties’ 2 briefing, the remainder of the record, and the applicable law. Being fully advised,1 the
3 court GRANTS IN PART Matcon’s motion for reconsideration. 4 II. ANALYSIS2 5 “Motions for reconsideration are disfavored,” and the “court will ordinarily deny 6 such motions in the absence of a showing of manifest error in the prior ruling or a 7 showing of new facts or legal authority which could not have been brought to its attention 8 earlier with reasonable diligence.” Local Rules W.D. Wash. LCR 7(h)(1).
9 Matcon contends that the court erred “by limiting the duty that Marsh owed 10 Matcon to the exercise of ‘reasonable skill, ordinary care, diligence, and good faith in 11 carrying out the instructions of [Westbank Holdings US Ltd. (“Westbank”)] and [Project 12 Stewart LLC (“Project Stewart”)].’” (Mot. at 1 (quoting 7/14/22 Order at 26).) It argues 13 that the court erred in two ways. First, Matcon contends the court erred by “imput[ing]
14 the requirement that Marsh be ‘instructed’ by Project Stewart to report a claim, even 15 though the Engagement Letter” between Marsh and Westbank “only requires that Marsh 16 be ‘informed’ by Project Stewart of a claim.” (Id. at 3 (emphasis in original); see 17 10/19/20 Williams Decl. (Dkt. # 48) ¶ 9, Ex. G (“Engagement Letter”), at 2).) Second, 18
19 1 No party requests oral argument on the motion (see Mot. at 1; Resp. at 1), and the court finds that oral argument would not be helpful to its disposition of the instant motions, see Local 20 Rules W.D. Wash. LCR 7(b)(4).
2 Because the court set forth the factual and procedural background of this case in detail 21 in its July 14, 2022 order on the parties’ motions for summary judgment, it does not repeat that background here. (See 7/14/22 Order at 2-13, 17-20.) 22 1 Matcon argues that the court improperly combined the common law duties of an 2 insurance broker to exercise “reasonable skill and ordinary care and diligence” and “carry
3 out instructions” with Marsh’s “contractual duty to notify insurers of an insurance claim 4 whenever Westbank informs Marsh of a claim.” (Mot. at 1, 3.) Matcon asserts that the 5 court should conclude, instead, that Marsh owes Matcon the same three duties that Marsh 6 owed its clients Project Stewart and Westbank as the insurance broker for the Project: 7 (1) a “duty to exercise reasonable skill and ordinary care and diligence”; (2) a “duty to 8 exercise good faith and carry out instructions”; and (3) a “duty to notify insurers of
9 claims, provided that Marsh is informed in writing by Project Stewart or Westbank of the 10 claim.” (Id. at 5.) Marsh, for its part, defends the court’s original statement of the duty 11 Marsh owes to Matcon. (Resp. at 3-4.) 12 After carefully reviewing the July 14, 2022 order and the authority cited therein, 13 the court concludes that a revision to its statement of Marsh’s duty to Matcon is
14 warranted. The court finds Merriman v. American Guarantee & Liability Insurance 15 Company, 396 P.3d 351 (Wash. Ct. App. 2017) particularly instructive. In Merriman, the 16 Washington Court of Appeals found that the defendant insurance adjuster3 owed a tort 17 duty to the plaintiff insureds based on specific duties that the adjuster had voluntarily 18 assumed in a third party administrator agreement with the insurer. Id. at 367. The Court
19 of Appeals first reviewed caselaw regarding the duties owed by adjusters to insureds and 20 by agents to intended beneficiaries and concluded that no precedent precluded finding 21
3 Independent insurance adjusters, like the defendant in Merriman, ordinarily represent 22 the interests of the insurer, not the insured. See id. at 362 (quoting RCW 48.17.101(1)(a)). 1 that the adjuster had a duty to inform the insureds about the coverage at issue. Id. at 2 365-66. Next, the Court of Appeals determined that the third party administrator
3 agreement supported the position that the insureds “were expected to benefit from [the 4 adjuster’s] performance of its duties” under that agreement—which included promises to 5 “promptly and thoroughly review, process, [a]djust, settle and pay [c]laims under the 6 [p]olicy in full compliance with . . . all applicable legal and regulatory requirements.” Id. 7 at 362, 366. It further concluded that finding the adjuster owed a duty to the insureds 8 would advance Washington’s policy of protecting insureds. Id. at 366. The Court of
9 Appeals, however, rejected the insureds’ argument that the adjuster owed them a 10 generalized duty of care. Id. Instead, it held that, 11 given the duties undertaken by [the adjuster] in the third party administrator agreement; the intent of that agreement to benefit, in part, [the] insureds; and 12 the foreseeable harm to the insureds if [the adjuster’s] relevant promises were not performed, [the adjuster] owed the insureds a duty of reasonable care to 13 perform those promises.
14 Id. at 367. 15 Following the steps set out in Merriman, the court first concludes that Washington 16 precedent does not foreclose a finding that Marsh owed Matcon a duty of care. Marsh 17 has not identified any Washington precedent that would preclude a finding that Marsh, as 18 the administrator and insurance broker for Project Stewart’s owner-controlled insurance 19 program (“OCIP”), owed a tort duty to Matcon as an enrollee in the OCIP. (See 20 generally Resp.; Marsh MSJ (Dkt. # 92); Marsh Resp. to Matcon MSJ (Dkt. # 109).) 21 Indeed, Marsh argued on summary judgment that its duty to report OCIP claims to the 22 insurer did not arise unless and until Project Stewart instructed it to do so; it did not argue 1 that Washington precedent precluded finding a tort duty in the first instance. (Marsh 2 MSJ at 17-22; see also Marsh Resp. to Matcon MSJ at 15-21.)
3 Second, the court reiterates its conclusion that the agreement between Marsh and 4 Westbank regarding Project Stewart was intended, at least in part, to benefit enrollees in 5 the OCIP. (7/14/22 Order at 23-24.) Marsh’s Engagement Letter with Westbank 6 regarding Project Stewart included Marsh’s promise to 7 prepare loss notices to insurers and notify insurers of claims; provided that your Marsh claims advocate is informed in writing by you of the claim, and 8 Marsh has placed the applicable policies or the Marsh claims advocate has been provided written notice by you of the applicable carrier and policies. 9 (Engagement Letter at 2; see also id. at 1 (defining “you” to mean Westbank).) Because 10 Marsh’s promises to Westbank in the Engagement Letter were intended to benefit 11 enrollees, precedent supports finding that Marsh owed Matcon a tort duty. See 12 Merriman, 396 P.3d at 365-66 (analyzing authority finding tort duties where nonclient 13 plaintiffs were intended to benefit from a promise between a principal and an agent 14 (citing Trask v. Butler, 872 P.2d 1080, 1083 (Wash. 1994))); cf. Centurion Props. III, 15 LLC v. Chicago Title Ins. Co., 375 P.3d 651, 658 (Wash. 2016) (concluding that a title 16 insurance company did not owe a duty of care to third parties in the recording of legal 17 instruments where the title insurance company’s recording was intended to benefit only 18 its client). 19 Third, the court reiterates its conclusions that (1) it is foreseeable that OCIP 20 enrollees would be harmed if Marsh failed to perform its promise to notify insurers of 21 claims and (2) recognizing a duty owed by Marsh to OCIP enrollees to perform the 22 1 promises it made in the Engagement Letter would not unduly burden Marsh’s profession. 2 (7/14/22 Order at 24-25.) Thus, consistent with Merriman, the court concludes that
3 Marsh owed Matcon a duty to exercise reasonable care in performing the relevant 4 promises it made in the Engagement Letter, including the promise to prepare loss notices 5 and notify insurers of claims provided Marsh was informed in writing by Westbank or 6 Project Stewart of the claim. Absent evidence that Marsh and Westbank agreed that 7 Marsh would take on further duties with respect to OCIP enrollees, the court declines 8 Matcon’s invitation to impose on Marsh either a general duty of care to OCIP enrollees
9 or a duty to exercise good faith in carrying out the instructions of enrollees in addition to 10 the instructions of its clients. See Merriman, 396 P.3d at 366 (declining to find a general 11 duty of care and limiting the duty to exercising reasonable care to fulfill the promises in 12 the third party administrator agreement). 13 III. CONCLUSION
14 For the foregoing reasons, the court GRANTS IN PART Matcon’s motion for 15 reconsideration (Dkt. # 137). The court holds that Marsh owed Matcon a duty to exercise 16 reasonable care in performing the relevant promises it made in the Engagement Letter, 17 including the promise to prepare loss notices and notify insurers of claims provided 18 Marsh was informed in writing by Westbank or Project Stewart of the claim.
19 Dated this 12th day of August, 2022. A 20 21 JAMES L. ROBART 22 United States District Judge