Philadelphia Indemnity Insurance Company v. Olympia Early Learning Center

CourtDistrict Court, W.D. Washington
DecidedNovember 26, 2024
Docket3:12-cv-05759
StatusUnknown

This text of Philadelphia Indemnity Insurance Company v. Olympia Early Learning Center (Philadelphia Indemnity Insurance Company v. Olympia Early Learning Center) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Philadelphia Indemnity Insurance Company v. Olympia Early Learning Center, (W.D. Wash. 2024).

Opinion

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5 6 7 UNITED STATES DISTRICT COURT 8 WESTERN DISTRICT OF WASHINGTON AT TACOMA 9 10 PHILADELPHIA INDEMNITY CASE NO. 3:12-cv-05759-DGE 11 INSURANCE COMPANY, ORDER ON MOTION FOR ORDER 12 Plaintiff, TO APPROVE MINOR v. SETTLEMENT (DKT. NO. 243) 13 OLYMPIA EARLY LEARNING CENTER 14 et al, 15 Defendant. 16

17 I INTRODUCTION 18 This matter comes before the Court on Counterclaim Plaintiffs’ unopposed Motion to 19 Approve Minor Settlements which involves the beneficial interest of Minor Plaintiffs J.T., A.K., 20 S.R.B., and M.M (Minor Plaintiffs) who were sexually abused by Elisha Tabor, an employee of 21 Olympia Early Learning Center (OELC). (Dkt. No. 243.) While there are numerous litigants 22 involved in this case, the Court solely evaluates the settlement terms in relation to the interests of 23 the Minor Plaintiffs. 24 1 For the reasons discussed below, the Court GRANTS Counterclaim Plaintiffs’ motion to 2 approve minor settlements. 3 II FACTUAL AND PROCEDURAL BACKGROUND 4 A. Underlying Proceedings

5 The underlying litigation ensued after Tabor sexually abused Minor Plaintiffs while he 6 was employed at OELC—the daycare they attended. (See Dkt. No. 122-1 at 6–9.) Minor 7 Plaintiffs were two to four years old at the time of the abuse. (Id. at 3–5.) J.T. disclosed that 8 Tabor “played with her ‘bagina’ during naptime.” (Id. at 7.) J.T. described that Tabor would lay 9 down next to her on the mat, pull down her diaper, and press something hard against her 10 “bagina” hurting her. (Dkt No. 242 at 10.) An examination at Mary Bridge Children’s Hospital 11 found abuse could not be ruled out. (Id.) J.T. continues to attend counseling after her experience 12 at OELC. (Id.) 13 A.K. attended OELC from a young age. (Id. at 15.) She exhibited behavior indicative of 14 sexual abuse and regressed developmentally. (Id.) Minor Plaintiffs’ expert opined that “the

15 variety of harms caused to a young child as a result of sexual abuse not only . . . would be 16 exhibited as a child but could be exhibited into adolescence and beyond.” (Id.) Consistent with 17 Minor Plaintiffs’ expert opinion, the abuse negatively impacted A.K.’s sexual development and 18 created issues with boundaries and trust. (Id. at 16.) 19 Tabor also sexually abused S.R.B., who attended OELC between January 2007 and May 20 2009. (Dkt. No. 242 at 19.) After Tabor changed S.R.B.’s diaper in violation of OELC policy, 21 she told her mother “eli, owie mom!” and reported pain in her vaginal area. (Dkt. No. 122-1 at 22 7.) Ms. Barbieri took S.R.B. to St. Peter’s Hospital and the Monarch Sexual Assault Center, they 23

24 1 found sexual assault could not be ruled out. (Dkt. No. 242 at 20.) Minor Plaintiffs’ expert 2 opined S.R.B. “would likely sustain effects of the childhood sexual abuse[.]” (Id.) 3 M.M. attended OELC between August 2007 and April 2011. (Id. at 24.) “When M.M. 4 was 4 years old, Ms. Mendoza contacted the Sexual Assault Center because she observed him

5 touching his older sister in her private area.” (Id. at 25.) Next, she contacted “law enforcement 6 to inquire if Tabor had identified any additional victims of his behavior to include M.M.” (Id.) 7 Minor Plaintiffs’ expert “opined that M.M.’s developmental delay and toilet training regression 8 after being in Tabor’s classroom were known to be highly indicative of a very young child who 9 was ‘significantly traumatized by sexual abuse.’” (Id.) Further, he “related it to M.M.’s 10 exposure to abuse by Tabor at OELC.” (Id.) M.M. required counseling after the abuse, 11 however, it was difficult for his mother to obtain counseling, due to his developmental delays 12 caused by the abuse. (See id.) 13 “All minor Plaintiffs other than Plaintiff M.M.[,who was nonverbal,] disclosed sexual 14 abuse by Tabor or sexual activity in general, such as statements regarding ‘drinking pee’ or

15 requests to kiss their genitals.” (Dkt. No. 122-1 at 8.) Further, Minor Plaintiffs “exhibited 16 behaviors consistent with sexual abuse, including prematurely sexualized behavior, new or 17 significantly worsened behavioral issues, toileting issues, and/or reluctance to attend OELC.” 18 (Id. at 8–9.) 19 In 2011, a number of claimants, including the Minor Plaintiffs, began filing lawsuits 20 against OELC alleging negligence in retaining Tabor, failure to protect their children from being 21 sexually abused, and failure to supervise. (Id. at 9.) Subsequently, Plaintiffs added Defendants 22 Rose Horgdahl and Steve Olson to the lawsuits because they were involved in OELC’s 23 management. (Id. at 6, 9.) Counterclaim Defendant Philadelphia Indemnity Insurance Company

24 1 (Philadelphia) “provided indemnity to OELC and its officers and directors pursuant to various 2 contracts for insurance.” (Dkt. No. 243.) Philadelphia retained counsel on behalf of OELC, 3 Olson, and Horgdahl to defend against the lawsuits. (Dkt. No. 122-1 at 10.) 4 In 2012, after evaluating the risks involved in proceeding to trial, the manner in which

5 retained defense counsel prepared for trial, and the manner in which Philadelphia handled the 6 defense and indemnity of the lawsuits, Counterclaim Plaintiffs (including the Minor Plaintiffs) 7 and OELC negotiated and executed stipulated judgments. (Id. at 14–15.) On October 26, 2022, 8 eleven years after litigation began and following several appeals, the Honorable James J. Dixon 9 of the Superior Court of the State of Washington for Thurston County concluded the covenant 10 judgments1 were reasonable and that the stipulated judgments amounts were also reasonable. 11 (Id. at 30.) 12 B. Federal Court Proceedings 13 On August 24, 2012, Philadelphia brought an interpleader action against Counterclaim 14 Plaintiffs to determine the maximum insurance policy all claimants were entitled to under

15 Philadelphia’s policies. (Dkt. No. 1 at 18.) Philadelphia also asked to be discharged from 16 liability in this litigation, and for the Court to declare that upon payment of the policy limits 17 Philadelphia had no duty to further defend OELC, Olsen, and Horgdahl. (Dkt. No. 1 at 19.) 18 On October 16, 2013, the Honorable Ronald B. Leighton, United States District Judge, 19 granted Philadelphia’s motion for summary judgment and concluded that the applicable policy 20 limits were $1,000,000. (Dkt. No. 94.) Nonetheless, Judge Leighton stayed the action until a 21

1 “[T]he covenant judgment agreed to by parties is both qualitatively and analytically distinct 22 from a monetary settlement.” (Dkt. No. 122-1 at 15–16) (citing CBS Corp. v. Ulbricht, 12 Wn. App. 2d 1013, 2020 WL 622940, at *4 (Wash. Ct. App. Feb. 10, 2020)). “Unlike a cash 23 settlement, there is therefore no certainty that the covenant judgment agreement entered in this case will result in any monetary recovery to Plaintiffs.” (Id.at 16.) 24 1 bad faith claim was asserted or the reasonableness hearing in state court concluded. (See Dkt. 2 No. 105 at 2–3.) 3 On September 1, 2022, after the state court concluded its reasonableness hearing, 4 Philadelphia filed a motion to lift stay. (Dkt. No. 106.) On November 23, 2022, this Court

5 granted Philadelphia’s motion to lift stay and granted Defendants leave to amend their answer to 6 assert their bad faith claims as counterclaims. (Dkt. No. 124.) On December 14, 2022, 7 Defendants filed a counterclaim in this lawsuit for insurance bad faith. (Dkt. No. 125.) 8 On July 18, 2024, retired state court Judge Paris K. Kallas informed the Court the Parties 9 had participated in mediation and that the case was resolved. (Dkt. No. 227.) On August 6, 10 2024, the Court granted Philadelphia’s motion to appoint settlement guardian ad litem Virginia 11 L. DeCosta (SGAL). (Dkt. No. 234.) On October 1, 2024, the SGAL provided the Court a 12 report for each minor child’s claims and Counterclaim Plaintiffs filed their motion to approve 13 minor settlement. (Dkt. Nos.

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Philadelphia Indemnity Insurance Company v. Olympia Early Learning Center, Counsel Stack Legal Research, https://law.counselstack.com/opinion/philadelphia-indemnity-insurance-company-v-olympia-early-learning-center-wawd-2024.