THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 RENE DASHIELL BLAIR, as assignee of CASE NO. C26-0211-JCC ROBIN ELAINE ADAMS, 10 ORDER 11 Plaintiff, v. 12 TRUMBULL INSURANCE COMPANY, 13 Defendant. 14 15 This matter comes before the Court on Plaintiff’s motion for partial summary judgment. 16 (Dkt. No. 19.) Having thoroughly considered the briefing and the relevant record, and finding 17 oral argument unnecessary,1 the Court DENIES the motion as explained herein. 18 Plaintiff brings suit against Trumbull Insurance Company, following the assignment of an 19 insured’s policy rights. (See generally Dkt. No. 1.) Plaintiff’s resulting claims (against Trumball) 20 are for breach of contract, bad faith, violation of Washington’s Insurance Fair Conduct Act, and 21 violation of Washington’s Consumer Protection Act. (See generally Dkt. No. 1-2.) All arise from 22 Trumball’s adjustment of an insurance claim, following a tortious event between Plaintiff and 23 Trumbull’s insured, which resulted in a Trumball policy limit payout. (See Dkt. No. 19-1 at 34– 24 25 1 Each party has had a full opportunity to brief the issues presented. See Partridge v. Reich, 141 26 F.3d 920, 926 (9th Cir. 1998). 1 38.) In satisfaction of claims between Plaintiff and the insured, and pursuant to a King County 2 Superior Court covenant judgment between the two, the insured assigned to Plaintiff her interest 3 in any extra-contract claims against Trumbull. (Id.) At issue here is a finding from the Superior 4 Court, which it made while assessing the reasonableness of that settlement (in accordance with 5 RCW 4.22.060), that it was “negotiated in good faith and without improper motive.” (Id. at 37.) 6 As to the instant suit, Plaintiff now seeks partial summary judgement on Trumbull’s 7 affirmative defenses numbers 4 and 5. (See generally Dkt. No. 19.) Collectively, those defenses 8 assert that the settlement discussed above was a product “of bad faith, fraud, or collusion” 9 between Plaintiff and the insured or that they “failed to act in good faith” in negotiating the 10 settlement, to Trumbull’s detriment. (Dkt. No. 8 at 5.) In so moving, Plaintiff contends that 11 Trumbull is collaterally estopped from asserting these defenses, in light of the Superior Court’s 12 reasonableness finding. (See Dkt. No. 19 at 4–17.) 13 In opposing summary judgment, Trumbull points out that, by operation of law, an RCW 14 4.22.060 reasonableness determination establishes merely a rebuttable presumption that the 15 agreement was entered into in good faith. (See Dkt. No. 21 at 12–20) (citing Wood v. Milionis 16 Constr., Inc., 492 P.3d 813, 822 (Wash. 2021); Bird v. Best Plumbing Group, LLC, 287 P.3d 17 551, 555 (Wash. 2012)). Meaning, any findings as to the negotiating parties’ good faith (for 18 purposes other than the reasonableness of the settlement) are superfluous. (Id.) Thus, says 19 Trumbull, it would be inappropriate to enter judgment as a matter of law (based on the preclusive 20 effects of the Superior Court’s findings) on Plaintiff’s behalf as to Trumbull’s defenses here, 21 which are untethered to issues finally adjudicated by the Superior Court. (Id.) 22 The Court may grant summary judgment on a claim or defense where the “movant shows 23 that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a 24 matter of law.” Fed. R. Civ. P. 56(a). Once a motion for partial summary judgment is properly 25 made and supported, the opposing party must present specific facts showing that there is a 26 genuine issue for trial. Fed. R. Civ. P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 1 475 U.S. 574, 587 (1986). Summary judgment is appropriate against a party who “fails to make a 2 showing sufficient to establish the existence of an element essential to that party’s case, and on 3 which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 4 324 (1986). 5 As to the motion presently before the Court—summary judgment on certain affirmative 6 defenses based on the preclusive effect of a prior state court proceeding—this Court must apply 7 the state’s law of collateral estoppel. In re Bugna, 33 F.3d 1054, 1057 (9th Cir. 1994). And under 8 Washington law, collateral estoppel applies where: “(1) the issue in the earlier proceeding is 9 identical to the issue in the later proceeding, (2) the earlier proceeding ended with a final 10 judgment on the merits, (3) the party against whom collateral estoppel is asserted was a party, or 11 in privity with a party, to the earlier proceeding, and (4) applying collateral estoppel would not 12 be an injustice.” Schibel v. Eyemann, 399 P.3d 1129, 1132 (Wash. 2017). The purpose of 13 collateral estoppel is not “to deny a litigant his day in court” but to “prevent retrial of one or 14 more of the crucial issues or determinative facts determined in previous litigation.” Luisi Truck 15 Lines, Inc. v. Washington Utilities and Transp. Commission, 435 P.2d 654, 659 (Wash. 1967). 16 Because, as described below, there was no final judgement on the merits by the King 17 County Superior Court as to whether the settlement was negotiated in good faith, Plaintiff cannot 18 prove the second element needed establish collateral estoppel. The Court, thus, declines to 19 address the other elements. 20 In moving for summary judgment, Plaintiff suggests that Trumbull had an opportunity at 21 the Superior Court to fully litigate the issue of bad faith and collusion—the defenses Trumbull is 22 seeking to assert here. (See Dkt. No. 19 at 17.) This misconstrues the Superior Court’s 23 reasonableness determination. Under Washington law, a reasonableness determination shifts the 24 burden of establishing bad faith (in entering into the agreement) to the insurer. See Wood, 198 25 P.3d at 822. It does not dispose of it. Id. And any findings otherwise, such as those made in this 26 instance, (see Dkt. No. 19-1 at 37), have no preclusive effect in this litigation. See Nielson v. 1 Spanaway Gen. Med. Clinic, Inc., 956 P.2d 312, 315 (Wash. 1998) (finding that, for a 2 determination of an issue to be conclusive and thus have preclusive effect, it must be “essential 3 to the judgment”) (citing to RESTATEMENT (SECOND) OF JUDGMENTS § 27 (1982)). Washington 4 law is clear that the insurer “must still be found liable in the bad faith action and may rebut the 5 presumptive measure by showing the settlement was the product of fraud or collusion.” Bird, 287 6 P.3d 560 (emphasis added). This is separate from the calculus pursuant to RCW 4.22.060.
Free access — add to your briefcase to read the full text and ask questions with AI
THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 RENE DASHIELL BLAIR, as assignee of CASE NO. C26-0211-JCC ROBIN ELAINE ADAMS, 10 ORDER 11 Plaintiff, v. 12 TRUMBULL INSURANCE COMPANY, 13 Defendant. 14 15 This matter comes before the Court on Plaintiff’s motion for partial summary judgment. 16 (Dkt. No. 19.) Having thoroughly considered the briefing and the relevant record, and finding 17 oral argument unnecessary,1 the Court DENIES the motion as explained herein. 18 Plaintiff brings suit against Trumbull Insurance Company, following the assignment of an 19 insured’s policy rights. (See generally Dkt. No. 1.) Plaintiff’s resulting claims (against Trumball) 20 are for breach of contract, bad faith, violation of Washington’s Insurance Fair Conduct Act, and 21 violation of Washington’s Consumer Protection Act. (See generally Dkt. No. 1-2.) All arise from 22 Trumball’s adjustment of an insurance claim, following a tortious event between Plaintiff and 23 Trumbull’s insured, which resulted in a Trumball policy limit payout. (See Dkt. No. 19-1 at 34– 24 25 1 Each party has had a full opportunity to brief the issues presented. See Partridge v. Reich, 141 26 F.3d 920, 926 (9th Cir. 1998). 1 38.) In satisfaction of claims between Plaintiff and the insured, and pursuant to a King County 2 Superior Court covenant judgment between the two, the insured assigned to Plaintiff her interest 3 in any extra-contract claims against Trumbull. (Id.) At issue here is a finding from the Superior 4 Court, which it made while assessing the reasonableness of that settlement (in accordance with 5 RCW 4.22.060), that it was “negotiated in good faith and without improper motive.” (Id. at 37.) 6 As to the instant suit, Plaintiff now seeks partial summary judgement on Trumbull’s 7 affirmative defenses numbers 4 and 5. (See generally Dkt. No. 19.) Collectively, those defenses 8 assert that the settlement discussed above was a product “of bad faith, fraud, or collusion” 9 between Plaintiff and the insured or that they “failed to act in good faith” in negotiating the 10 settlement, to Trumbull’s detriment. (Dkt. No. 8 at 5.) In so moving, Plaintiff contends that 11 Trumbull is collaterally estopped from asserting these defenses, in light of the Superior Court’s 12 reasonableness finding. (See Dkt. No. 19 at 4–17.) 13 In opposing summary judgment, Trumbull points out that, by operation of law, an RCW 14 4.22.060 reasonableness determination establishes merely a rebuttable presumption that the 15 agreement was entered into in good faith. (See Dkt. No. 21 at 12–20) (citing Wood v. Milionis 16 Constr., Inc., 492 P.3d 813, 822 (Wash. 2021); Bird v. Best Plumbing Group, LLC, 287 P.3d 17 551, 555 (Wash. 2012)). Meaning, any findings as to the negotiating parties’ good faith (for 18 purposes other than the reasonableness of the settlement) are superfluous. (Id.) Thus, says 19 Trumbull, it would be inappropriate to enter judgment as a matter of law (based on the preclusive 20 effects of the Superior Court’s findings) on Plaintiff’s behalf as to Trumbull’s defenses here, 21 which are untethered to issues finally adjudicated by the Superior Court. (Id.) 22 The Court may grant summary judgment on a claim or defense where the “movant shows 23 that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a 24 matter of law.” Fed. R. Civ. P. 56(a). Once a motion for partial summary judgment is properly 25 made and supported, the opposing party must present specific facts showing that there is a 26 genuine issue for trial. Fed. R. Civ. P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 1 475 U.S. 574, 587 (1986). Summary judgment is appropriate against a party who “fails to make a 2 showing sufficient to establish the existence of an element essential to that party’s case, and on 3 which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 4 324 (1986). 5 As to the motion presently before the Court—summary judgment on certain affirmative 6 defenses based on the preclusive effect of a prior state court proceeding—this Court must apply 7 the state’s law of collateral estoppel. In re Bugna, 33 F.3d 1054, 1057 (9th Cir. 1994). And under 8 Washington law, collateral estoppel applies where: “(1) the issue in the earlier proceeding is 9 identical to the issue in the later proceeding, (2) the earlier proceeding ended with a final 10 judgment on the merits, (3) the party against whom collateral estoppel is asserted was a party, or 11 in privity with a party, to the earlier proceeding, and (4) applying collateral estoppel would not 12 be an injustice.” Schibel v. Eyemann, 399 P.3d 1129, 1132 (Wash. 2017). The purpose of 13 collateral estoppel is not “to deny a litigant his day in court” but to “prevent retrial of one or 14 more of the crucial issues or determinative facts determined in previous litigation.” Luisi Truck 15 Lines, Inc. v. Washington Utilities and Transp. Commission, 435 P.2d 654, 659 (Wash. 1967). 16 Because, as described below, there was no final judgement on the merits by the King 17 County Superior Court as to whether the settlement was negotiated in good faith, Plaintiff cannot 18 prove the second element needed establish collateral estoppel. The Court, thus, declines to 19 address the other elements. 20 In moving for summary judgment, Plaintiff suggests that Trumbull had an opportunity at 21 the Superior Court to fully litigate the issue of bad faith and collusion—the defenses Trumbull is 22 seeking to assert here. (See Dkt. No. 19 at 17.) This misconstrues the Superior Court’s 23 reasonableness determination. Under Washington law, a reasonableness determination shifts the 24 burden of establishing bad faith (in entering into the agreement) to the insurer. See Wood, 198 25 P.3d at 822. It does not dispose of it. Id. And any findings otherwise, such as those made in this 26 instance, (see Dkt. No. 19-1 at 37), have no preclusive effect in this litigation. See Nielson v. 1 Spanaway Gen. Med. Clinic, Inc., 956 P.2d 312, 315 (Wash. 1998) (finding that, for a 2 determination of an issue to be conclusive and thus have preclusive effect, it must be “essential 3 to the judgment”) (citing to RESTATEMENT (SECOND) OF JUDGMENTS § 27 (1982)). Washington 4 law is clear that the insurer “must still be found liable in the bad faith action and may rebut the 5 presumptive measure by showing the settlement was the product of fraud or collusion.” Bird, 287 6 P.3d 560 (emphasis added). This is separate from the calculus pursuant to RCW 4.22.060. 7 Put simply, the Superior Court’s covenant judgement is no more than the presumptive 8 measure of damages on a yet to be proven bad faith claim—not a final judgement on the merits 9 as to the existence of the claim. As a result, Trumbull retains the right to “rebut the presumptive 10 measure by showing the settlement was the product of fraud or collusion.” Traulsen v. Cont’l 11 Divide Ins. Co., 2024 WL 3327023, slip op. at 17 (Wash. Ct. App. 2024) (citing Gosney v. 12 Fireman’s Fund Ins. Co., 419 P.3d 447, 464 (Wash. Ct. App. 2018)). Thus, there has been no 13 final judgement on the issue of bad faith, fraud, or collusion as to the parties who negotiated the 14 settlement of the matter before the Superior Court. 15 For the foregoing reasons, Plaintiff’s motion for partial summary judgment (Dkt. No. 19) 16 is DENIED. 17 18 DATED this 1st day of July 2026.
19 A 20 21 22 John C. Coughenour UNITED STATES DISTRICT JUDGE 23
25 26