5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE
7 UNITED STATES FIRE INSURANCE IN ADMIRALTY 8 COMPANY, et al.,
9 Plaintiffs/Counterclaim NO. C20-00401-RSM Defendants, 10 v. ORDER RE: MOTIONS FOR 11 SUMMARY JUDGMENT ICICLE SEAFOODS, INC., et al., 12 Defendants/Counterclaim 13 Plaintiffs.
14 15 I. INTRODUCTION 16 This matter comes before the Court on parties’ cross-motions for summary judgment. 17 Defendants-Counterclaim Plaintiffs Icicle Seafoods, Inc., and ISVesselCo, Inc. (collectively, 18 “Icicle”) have moved for partial summary judgment regarding the applicability of Washington 19 law, Icicle’s right to a jury trial, and interpretation of the deductible language. Dkt. #74. 20 21 Plaintiff-Counterclaim Defendants United States Fire Insurance Company, National Union Fire 22 Insurance Company of Pittsburgh, PA, Great American Insurance Company of New York, 23 Argonaut Insurance Company, Endurance American Insurance Company, Houston Casualty 24 Company, and Certain Underwriters at Lloyd’s, London (collectively, “Insurers”) have filed a 25 response and cross-motion on those issues, Dkt. #86, as well as a motion for summary judgment 26 on Icicle’s counterclaims. Dkt. #111. Parties have not requested oral argument, and the Court 1 finds it unnecessary to resolve the relevant issues. Parties’ motions are resolved as set forth 2 below. 3 II. BACKGROUND 4 A full background of this case is not necessary given the Court’s previous orders in this 5 matter. See Dkts. #127, #128. This action arises out of an insurance claim for Loss of Hire 6 (“LOH”) damages claimed by Icicle as a result of engine damage on the vessel R.M. 7 THORSTENSON (“the RMT”) in December 2016 that interrupted Icicle’s fish processing 8 9 operations in 2017 and 2018. From 2018 until 2020, parties unsuccessfully attempted to settle 10 the LOH claim. Insurers adjusted Icicle’s LOH claim in the amount of $966,638.48, which 11 Icicle refused to accept on the basis that their damages approximated $4 million. Dkt. #1 at ¶ 12 11, Dkt. #18 at ¶ 86. 13 On March 13, 2020, Insurers filed a declaratory judgment action in this Court seeking 14 a declaration of Icicle’s actual loss of net earnings sustained as a result of the RMT’s December 15 2016 engine damage and as limited by the policy terms and conditions between the parties. Dkt. 16 17 #1 at ¶ 30. On June 5, 2020, Icicle counterclaimed for violations under breach of contract, 18 breach of duty of good faith and fair dealing, the Washington Consumer Protection Act, RCW 19 18.86, and the Insurance Fair Conduct Act (“IFCA”), RCW 48.30.015. Dkt. #18 at ¶¶ 88-98. 20 Icicle filed the instant Motion for Partial Summary Judgment on January 21, 2021, 21 seeking a determination that (1) Washington law applies to this dispute; (2) Icicle is entitled to 22 a jury trial; (3) the 14-day deductible contained in the LOH endorsement was triggered by the 23 RMT’s engine failure; (4) the 14-day deductible does not require proof of economic loss; and 24 25 (5) the 14-day deductible was exhausted during the 2017 cod season. Dkt. #74. On February 26 8, 2021, Insurers moved for summary judgment on the same issues. Dkt. #86. On May 20, 1 2021, Insurers filed a subsequent motion for summary judgment seeking dismissal of Icicle’s 2 counterclaims. Dkt. #111. 3 I. DISCUSSION 4 A. Legal Standard 5 Summary judgment is appropriate where “the movant shows that there is no genuine 6 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. 7 R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Material facts are 8 9 those which might affect the outcome of the suit under governing law. Id. at 248. In ruling on 10 summary judgment, a court does not weigh evidence to determine the truth of the matter, but 11 “only determine[s] whether there is a genuine issue for trial.” Crane v. Conoco, Inc., 41 F.3d 12 547, 549 (9th Cir. 1994) (citing Federal Deposit Ins. Corp. v. O’Melveny & Meyers, 969 F.2d 13 744, 747 (9th Cir. 1992)). When parties have filed simultaneous cross-motions on the same 14 claim, “the court must consider the appropriate evidentiary material identified and submitted in 15 support of both motions, and in opposition to both motions, before ruling on each of them.” 16 17 Tulalip Tribes of Washington v. Washington, 783 F.3d 1151, 1156 (9th Cir. 2015) (quoting Fair 18 Hous. Council of Riverside Cnty., Inc. v. Riverside Two, 249 F.3d 1132, 1134 (9th Cir. 2001)) 19 (internal quotations omitted). 20 On a motion for summary judgment, the court views the evidence and draws inferences 21 in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255; Sullivan v. U.S. 22 Dep’t of the Navy, 365 F.3d 827, 832 (9th Cir. 2004). The Court must draw all reasonable 23 inferences in favor of the non-moving party. See O’Melveny & Meyers, 969 F.2d at 747, rev’d 24 25 on other grounds, 512 U.S. 79 (1994). However, the non-moving party must make a “sufficient 26 showing on an essential element of her case with respect to which she has the burden of proof” to survive summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 1 B. Applicability of Washington or Federal Law 2 The Court will first address what law governs this marine insurance policy dispute. 3 Icicle contends that Washington law applies while Insurers argue that federal common law and 4 federal maritime law apply. Dkt. #74; Dkt. #86. Icicle relies on the Ninth Circuit’s holding in 5 Bohemia, Inc. v. Home Ins. Co., which read U.S. Supreme Court precedent as holding “that 6 state law will control the interpretation of a marine insurance policy only in the absence of a 7 federal statute, a judicially fashioned admiralty rule, or a need for uniformity in admiralty 8 9 practice.” 725 F.2d 506, 510 (9th Cir. 1984). Insurers argue that Bohemia does not apply here, 10 since the policy sets forth a choice of law provision that expressly selects federal admiralty law 11 and federal common law as the governing law. 12 The two contracts at issue in this dispute are USA Marine Insurance Policy No. PK-16- 13 060 (“USA Marine Policy”) and Lloyds London’s Unique Market Reference No. 14 B0507/M16PH06590 (“Lloyds Slip Policy”). Both contain the following provision under the 15 Loss of Charter Hire Insurance heading: “This insurance is subject to English law and practice 16 17 U.S. LAW AND PRACTICE.” Dkt. #18 at 56, 92 (strikeout in original). A separate section of 18 the Lloyds Slip policy reads: “In any case arising out of this insurance, the same shall be 19 governed by and construed in accordance with Washington law and practice, jurisdiction . . . .” 20 Id. at 72. Insurers argue that “U.S. LAW AND PRACTICE” must be construed as a choice of 21 law provision expressly selecting federal admiralty and common law. Dkt. #86. The Court 22 disagrees. While the policy does not explain what was intended by the phrase “U.S. law and 23 practice,” the strikeout indicates parties’ intention to be bound by American law as opposed to 24 25 English law—a choice that merely distinguishes between the laws of two countries, not between 26 federal law and the law of any U.S. state. 1 Insurers’ arguments to the contrary are unavailing. Relying on two cases from the Ninth 2 and Fifth Circuits, Insurers argue that in maritime contracts, “United States law” means federal 3 common and statutory law. In Flores v. Am. Seafoods Co., the contract expressly stated, “[t]his 4 Agreement shall be governed exclusively by the general maritime laws of the United States and 5 applicable United States Statutes” and that the “obligations, rights and remedies with respect to 6 the employment relationship established by this Agreement . . . shall not be enlarged, 7 supplemented or modified by the laws of any State or local jurisdiction.” 335 F.3d 904, 910 8 9 (9th Cir. 2003) (emphases added). Consistent with the plain language of the contract, the Ninth 10 Circuit determined that “general maritime laws of the United States and applicable United States 11 Statutes” referred to federal common and statutory law governing admiralty cases. Id. at 918, 12 n.8. Flores does not extend to the instant case, where the plain language of the contract makes 13 no reference to U.S. general maritime laws and statutes, nor does it expressly disclaim 14 application of the laws of any state or local jurisdiction. 15 Fifth Circuit case Foster Wheeler Energy Corp. v. An Ning Jiang MV, 383 F.3d 349 (5th 16 17 Cir. 2004), likewise does not support Insurers’ position. In that case, the court addressed two 18 choice-of-law clauses in bills of lading for carriage between Spain and China, and construed 19 “U.S. law” as meaning the federal Carriage of Goods by Sea Act (“COGSA”). Not only did the 20 Foster court construe “U.S. law” to mean one specific federal statute, COGSA, but it considered 21 the meaning of the term in a wholly distinct context: a bill of lading for carriage of goods across 22 international borders. The language and purpose of that contract is readily distinguishable from 23 parties’ marine insurance policy. 24 25 Having concluded that “U.S. LAW AND PRACTICE” merely indicates parties’ choice 26 of American law over English law, the Court finds no conflict between that provision and the provision of the Lloyd’s Slip Policy that identifies Washington law as the governing law. See 1 Dkt. #18 at 72. Indeed, Washington law, as the law of a U.S. state, falls within the ambit of 2 “U.S. law” as the Court has construed the meaning of that term. Consistent with the well- 3 established principle of contract law that specific provisions control over more general terms, 4 the choice of law provision that specifies Washington law as the governing law controls over 5 the more general identification of American law. Chan, 123 F.3d 1287, 1296 (9th Cir. 1997) 6 (citing Brinderson–Newberg Joint Venture v. Pacific Erectors, Inc., 971 F.2d 272, 279 (9th Cir. 7 1992)). On this basis alone, parties’ choice of law provision for Washington law supports 8 9 application of Washington law to this dispute. See id. at 1296–97 (“[W]here the parties specify 10 in their contractual agreement which law will apply, admiralty courts will generally give effect 11 to that choice.”). 12 Furthermore, the Court finds that application of Washington law to this dispute is 13 consistent with admiralty courts’ interpretation of marine insurance policies. In interpreting a 14 marine insurance policy, state law will control “only in the absence of a federal statute, a 15 judicially fashioned admiralty rule, or a need for uniformity in admiralty practice.” Bohemia, 16 17 Inc., 725 F.2d at 510. Here, “[s]ince Congress has not taken over regulation of marine insurance 18 contracts . . . there is no possible question here of conflict between a state law and any federal 19 statute.” Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310, 314 (1955). Next, the 20 Court is not aware of any federal, judicially-created rule for marine insurance policies that 21 would apply here. See, e.g., Commercial Union Ins. Co. v. Flagship Marine Servs., Inc., 190 22 F.3d 26, 30 (2d Cir. 1999) (finding “no specific federal rule governing construction of maritime 23 insurance contracts”); Littlefield v. Acadia Ins. Co., 392 F.3d 1, 6 (1st Cir. 2004) (same). 24 25 Insurers fail to indicate any federal statute or admiralty rule governing interpretation of the 26 policy’s loss of hire provisions. On the contrary, their briefing cites to federal common law on contract interpretation, see Dkt. #86 at 15, thus conceding that there is no relevant federal 1 admiralty rule. See also Dkt. #96-1 at 1 (Insurers’ expert stating “[T]here is little documented 2 U.S. law or practice germane to the AB Stewart form or, indeed, to loss of hire insurance in 3 general.”). Finally, this Court finds it improper to fashion a rule in the absence of any statute 4 or judicially-created rule for maritime insurance policies. See Wilburn Boat Co., 348 U.S. at 5 316 (“The whole judicial and legislative history of insurance regulation in the United States 6 warns us against the judicial creation of admiralty rules to govern marine policy terms and 7 warranties. The control of all types of insurance companies and contracts has been primarily a 8 9 state function . . . .”). For these reasons, having identified no federal statute or judicially-created 10 rule governing interpretation of maritime insurance policies, and concluding that it would be 11 improper to fashion one, the Court looks to state law to govern interpretation of the policies. 12 Having failed in their argument for applying federal common law and federal admiralty 13 law, Insurers do not identify any other state’s law that should apply instead of Washington’s. 14 Although the record in this case does not allow for a comprehensive analysis of contacts of the 15 parties or the insurance policy with the state of Washington, the Court finds that sufficient 16 17 contacts exist under federal maritime choice-of-law rules to apply Washington law, consistent 18 with parties’ choice of law provision. Insurers pleaded that Washington is the principal place 19 of business for both Icicle Seafoods, Inc. and ISVessel Co, Inc., the engine damage giving rise 20 to this dispute was discovered during a survey and inspection in Seattle, and that the policy’s 21 solicitation, negotiation, contracting, issuance and delivery occurred in Washington. Dkt. #3 at 22 ¶¶ 11, 16-17. These factors establish sufficient contacts in Washington to apply Washington 23 law. Aqua–Marine Constructors, Inc. v. Banks, 110 F.3d 663, 674 (9th Cir. 1997). 24 25 For these reasons, having considered parties’ choice of law provision specifying 26 Washington law and the Wilburn factors supporting application of state law over federal admiralty law, the Court shall apply Washington law to this dispute. 1 C. Icicle’s Entitlement to Jury Trial 2 Insurers argue that because this case was brought in admiralty, Icicle has no right to a 3 jury trial. Dkt. #86. Icicle counters that even though Insurers elected to proceed in admiralty, 4 its compulsory counterclaims entitle it to a jury trial. Dkt. #74. These counterclaims allege 5 breach of contract, breach of duty of good faith and fair dealing, the Washington Consumer 6 Protection Act (“CPA”), RCW 18.86, and the Insurance Fair Conduct Act (“IFCA”), RCW 7 48.30.015, and seek a declaratory judgment. Dkt. #18. For the reasons set forth below, the 8 9 Court finds that Icicle’s jury trial request must be stricken. 10 District courts have original jurisdiction over “[a]ny civil case of admiralty or maritime 11 jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled. 12 28 U.S.C. § 1333. The “saving to suitors” clause leaves state courts “competent” to adjudicate 13 maritime causes of action for in personam proceedings and allows plaintiffs to bring an action 14 at law in federal district court, provided that the requirements for diversity jurisdiction under 28 15 U.S.C. § 1332 are met. Ghotra by Ghotra v. Bandila Shipping, Inc., 113 F.3d 1050, 1054 (9th 16 17 Cir. 1997). A plaintiff seeking to bring in personam maritime claims thus has three options: 18 file a suit in federal court under federal admiralty jurisdiction, in federal court under diversity 19 jurisdiction if the parties are diverse and the amount in controversy is satisfied, or in state court. 20 Id. Although the difference between these options “is mostly procedural,” the “greatest 21 significance is that there is no right to jury trial if general admiralty jurisdiction is invoked, 22 while it is preserved for claims based in diversity or brought in state court.” Id. (citing Fed. R. 23 Civ. P. 38). Where both admiralty and non-admiralty federal jurisdiction exist, a pleader may 24 25 designate a claim as an admiralty claim under Fed. R. Civ. P. 9(h) to inform the court that the 26 pleader elects to proceed within the court’s admiralty jurisdiction. 1 There is a “lack of consensus” among federal courts as to whether a defendant bringing 2 compulsory legal counterclaims in response to a plaintiff’s admiralty claim is entitled to a jury 3 trial. Great Lakes Ins. SE v. Andersson, 525 F. Supp. 3d 205, 207 (D. Mass. 2021). Under 4 Ninth Circuit precedent, “where a federal court has an independent basis of jurisdiction over 5 cases involving admiralty claims, such as diversity of citizenship, both the defendant and 6 plaintiff have a right to demand a jury trial under the Seventh Amendment so long as the suit is 7 one that could traditionally have been brought ‘at common law’ . . . .”). Craig v. Atlantic 8 9 Richfield Co., 19 F.3d 472, 476 (9th Cir. 1994) (emphases added). 10 Here, Insurers asserted jurisdiction only under this Court’s admiralty jurisdiction, 28 11 U.S.C. § 1333(1), and subject matter jurisdiction for a declaratory judgment under 28 U.S.C. § 12 2201. Dkt. #3 at ¶ 1. Insurers did not assert any other basis for federal subject matter 13 jurisdiction, nor did they make a Rule 9(h) election indicating their intent to proceed under 14 admiralty despite independent bases of jurisdiction over their claims. Although courts have 15 found that independent jurisdiction exists where a party has asserted diversity jurisdiction, Icicle 16 17 has not done so here. Cf. Ghotra by Ghotra, 113 F.3d at 1058 (“Ghotras clearly asserted 18 diversity as the jurisdictional basis for the in personam claims in each of their Complaints.”). 19 For that reason, Icicle’s reliance on Wilmington Trust v. U.S. Dist. Court for Dist. of Hawaii, 20 where the defendant asserted “[i]ndependent jurisdictional grounds” for each counterclaim, is 21 misplaced. 934 F.2d 1026, 1027–28 (9th Cir. 1991). Given that Icicle has alleged no 22 independent jurisdictional grounds for its counterclaims, its demand for jury trial “does not 23 defeat plaintiff’s election to proceed in admiralty with a bench trial.” Albany Insurance Co. v. 24 25 Gerald Jones, 1996 AMC 2456, 2456 (D. Alaska 1996). 26 Icicle argues that supplemental jurisdiction under 28 U.S.C. § 1367 provides an “independent” jurisdictional basis for its counterclaims. However, it is well-established that 1 supplemental jurisdiction is not an independent basis for federal jurisdiction. On the contrary, 2 “where there is no underlying original federal subject matter jurisdiction, the court has no 3 authority to adjudicate supplemental claims under § 1367.” Herman Fam. Revocable Tr. v. 4 Teddy Bear, 254 F.3d 802, 804 (9th Cir. 2001) (collecting cases). Icicle argues that the U.S. 5 Supreme Court in Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635 (2009), determined that 6 supplemental jurisdiction is an independent basis of subject matter jurisdiction, yet its argument 7 misconstrues that case’s holding. In Carlsbad, the trial court had original jurisdiction over 8 9 federal claims pursuant to federal question jurisdiction, 28 U.S.C. § 1331, and supplemental 10 jurisdiction over related state law claims under 28 U.S.C. §1367(a). Although the federal claims 11 were dismissed, the Supreme Court found that it nevertheless retained subject matter 12 jurisdiction over the “properly removed state claim[s].” Carlsbad Tech., 556 U.S. at 641. Here, 13 Icicle’s counterclaims are not properly removed state law claims. 14 Next, Icicle argues that Insurers’ request for declaratory relief, brought under 28 U.S.C. 15 § 2201, preserves its right to a jury trial. Relying on Beacon Theatres v. Westover, Icicle 16 17 contends that it could have brought common law claims, but Insurers won “the race to the 18 courthouse.” Dkt. #74 (citing 359 U.S. 500, 501 (1959)). In Beacon Theatres, the U.S. Supreme 19 Court found that counterclaims brought under federal antitrust statutes preserved the 20 defendant’s undisputed right to a jury trial, which was not lost “merely because [plaintiff] took 21 advantage of the availability of declaratory relief to sue [defendant] first.” Id. at 504. However, 22 Icicle’s reliance on Beacon Theatres is misplaced—the Declaratory Judgment Act, on its own, 23 did not confer concurrent jurisdiction in admiralty and law. Rather, the Supreme Court had 24 25 independent jurisdiction over the antitrust counterclaims under federal question jurisdiction, 18 26 U.S.C. § 1331. Here, in contrast, Icicle has offered no independent basis for this Court’s jurisdiction such that its counterclaims may be tried at law. For that reason, its “race to the 1 courthouse” argument is unavailing. Cf. In re Lockheed Martin Corp., 503 F.3d 351, 355 (4th 2 Cir. 2007) (party asserting in personam counterclaim where parties were diverse and amount- 3 in-controversy satisfied had right under saving-to-suitors clause to demand jury trial on 4 counterclaim in federal court). 5 For these reasons, having concluded that Icicle’s counterclaims have no independent 6 basis for federal subject matter jurisdiction, the Court strikes Icicle’s demand for a jury trial. 7 See Albany Ins. Co., 1996 WL 938331, at *1 (“Since there is no indication that defendant’s 8 9 claims are cognizable in anything but admiralty, under Wilmington, defendant’s demand for a 10 jury trial does not defeat plaintiff’s election to proceed in admiralty with a bench trial.”). 11 D. Policy Language 12 Finally, parties’ cross-motions for summary judgment seek a ruling on whether the loss 13 of hire provisions in the USA Marine and Lloyds policies require Icicle to show proof of actual 14 economic loss before the 14-day deductible is triggered. Two provisions address the loss of 15 hire coverage: (1) Paragraph 1 of the Loss of Charter Hire Insurance – Including War (LPO 16 17 455) (ABS 1/10/83 Wording) (hereafter “LOH provision”); and (2) Loss of Hire Special 18 Conditions (hereafter “Special Conditions provision”). The LOH provision reads as follows: 19 1. If in consequence of any of the following events: Loss, damage or occurrence covered by the Hull & Machinery/War Risks section of this policy, herein[] 20 occurring during the period of this insurance the Vessel is prevented from earning 21 hire for a period in excess of Per policy days in respect of any accident, then this insurance shall pay Per schedule of the sum hereby insured for each 24 hours or 22 part thereof after the expiration of said days during which the vessel is so prevented from earning hire for not exceeding a further Per schedule days in 23 respect of any one accident or occurrence [and not exceeding Per schedule days in all during the currency of this Insurance (irrespective of the expiry date of this 24 insurance)], provided that the repairs in respect of which a claim is made 25 hereunder are completed within 12 months of the expiry of the period covered by this Policy. 26 Dkt. #18 at 56, 92 (emphases in original). The Special Conditions provision reads as follows: 1 1. This insurance is to pay actual loss sustained, excess of the 14 day each accident deductible/10 day each accident deductible in respect of Herring Operations, up 2 to $250,000 limit of liability for any one day and subject to a primary policy aggregate limit of $15,000,000 for each accident or series of accidents or 3 occurrences arising during the policy period.
4 Dkt. #18 at 58, 94. Icicle interprets these provisions as meaning that physical damage to insured 5 property triggers the policy and starts the clock on the 14-day deductible period, without any 6 need to show economic injury. Dkt. #74. Insurers, in contrast, argue that the plain language of 7 the policy’s deductible requires evidence of actual loss sustained before payment is required. 8 9 Dkt. #86. 10 As determined supra, § III(B), the Court shall look to Washington law when analyzing 11 the policy provisions. Under Washington law, insurance policies are construed as contracts. 12 Findlay v. United Pac. Ins. Co., 129 Wash.2d 368, 378, 917 P.2d 116 (1996). The interpretation 13 of an insurance contract is a question of law decided on summary judgment unless “contract 14 terms are ambiguous and contradictory evidence is introduced to clarify the ambiguity.” Estate 15 of Sturgill v. United Servs. Auto. Ass’n, 84 Wash. App. 877, 880, 930 P.2d 945 (1997). “Every 16 17 insurance contract shall be construed according to the entirety of its terms and conditions as set 18 forth in the policy, and as amplified, extended, or modified by any rider, endorsement, or 19 application attached to and made a part of the policy.” RCW 48.18.520. An insurance policy is 20 construed as a whole, with the policy being given a “‘fair, reasonable, and sensible construction 21 as would be given to the contract by the average person purchasing insurance.’” Key Tronic 22 Corp. v. Aetna (CIGNA) Fire Underwriters Ins. Co., 124 Wash.2d 618, 627, 881 P.2d 201 23 (1994) (quoting Grange Ins. Co. v. Brosseau, 113 Wash.2d 91, 95, 776 P.2d 123 (1989)). 24 25 Ambiguities are construed in favor of coverage, and the insurer bears the burden of showing 26 that an exclusion applies. Id.; McDonald v. State Farm Fire & Cas. Co., 119 Wash.2d 724, 731, 837 P.2d 1000 (1992). 1 Parties agree that one trigger for payment under the policy is damage or loss to a covered 2 property. See Dkt. #74 at 17; Dkt. #86 at 14. Under Icicle’s interpretation, the analysis ends 3 there: physical damage to insured property triggers the LOH endorsement and starts the clock 4 on the 14-day “per policy” period. Yet this reading ignores the plain language of the LOH 5 provision, which imposes additional requirements to trigger the policy. Not only must there be 6 loss or damage, but “in consequence of” that damage, “the Vessel is prevented from earning 7 hire for a period in excess of Per policy days . . . then this insurance shall pay Per schedule of 8 9 the sum hereby insured for each 24 hours or part thereof after the expiration of said days during 10 which the vessel is so prevented from earning hire . . . .” Dkt. #18 at 58, 92 (emphases added). 11 This clause makes clear that after the vessel is prevented from earning hire in excess of 14 days, 12 then the insurance shall pay “per schedule of the sum” insured for each day after the 14 days 13 has expired. “Per schedule of the sum” clearly references the Special Conditions provision, 14 which provides that the policy pays “up to $250,000 limit of liability for any one day” subject 15 to an aggregate limit of $15,000,000 per accident or series of accidents arising during the policy 16 17 period. Id. That same provision clarifies that the insurance “is to pay actual loss sustained” in 18 excess of the 14-day deductible. Id. (emphasis added). The Court finds no ambiguity in this 19 policy language.1 20 Icicle argues that the LOH and Special Conditions provisions should be construed as a 21 “waiting period” deductible, wherein “in excess of Per policy days” merely denotes the period 22 of time that must elapse after the physical loss or damage—here, 14 days—before any payment 23 obligation arises under the policy. Dkt. #74 at 18. This interpretation ignores the plain language 24 25 of the LOH provision, which specifically provides that insurance pay not merely in the event of 26
1 Parties have both filed motions to strike expert declarations. See Dkts. #86 at 20; #94 at 22. Because this Court finds the plain language of the policy unambiguous, it need not consider parties’ extrinsic expert opinions. 1 loss or damage, but “[i]f in consequence of . . . loss, damage or occurrence” the vessel cannot 2 earn hire for a period “in excess of” the 14-day period. Dkt. #18 at 58, 92 (emphasis added). 3 The Court declines to adopt Icicle’s strained interpretation. 4 Having found that the language of the loss of hire provision is unambiguous, the Court 5 need not resort to extrinsic evidence to determine its meaning. However, even if it found the 6 language ambiguous, the Court finds it persuasive that Icicle’s former general counsel and risk 7 manager, Pat Hardina, interpreted identical LOH provisions in a policy covering the vessel 8 9 GORDON JENSEN (“GJ”) as requiring an actual loss sustained during the 14-day deductible 10 period. See Dkt. #89-2 at 4, 6 (GJ LOH provisions); see also Dkt. #89-1 at 1 (Hardina stating, 11 “We do have a Loss of Hire policy in effect on the GJ but the deductible period is 14 days from 12 the first day of lost revenue.”) (emphasis added). Icicle urges this Court to disregard Hardina’s 13 statement as irrelevant. Dkt. #94 at 19. The Court disagrees. Hardina’s reading of identical 14 language in a separate insurance policy provides evidence of how the average person purchasing 15 insurance might read the LOH provision—a factor that Washington courts consider when 16 17 interpreting a policy. See Key Tronic Corp., 124 Wash. 2d at 627. 18 Icicle also relies on a statement made by Insurers’ average adjuster, Jonathan Spencer, 19 in a December 18, 2018, email stating, “[T]he Marsh presentation relies entirely on the MDD 20 [“Matson, Driscoll & Damico, Ltd.”] findings, which might not correctly reflect the effect of 21 the [] 14-day-deductible – they appear to discuss its impact on sales rather than applying it in 22 full to the beginning of the cod season.” Dkt. #76-1 at 4. Yet this statement, in contrast to 23 Hardina’s, provides no insight into Spencer’s interpretation of the language of the LOH 24 25 provision. Rather, the statement indicates Spencer’s belief that the conditions triggering the 26 deductible were met. As his second declaration clarifies, Spencer assumed at the time he drafted his December 2018 email that Icicle had sustained an actual loss in the 2017 cod season. Dkt. 1 #100 at ¶ 3. After reviewing the November 7, 2019, report nearly a year later, he saw that 2 Insurers’ accountants, Alvarez & Marsal Valuation Services (“Alvarez & Marsal”), reported 3 that the GJ handled all processing during the RMT’s delayed start such that “RMT and Icicle 4 did not sustain a loss during the cod season in 2017.” Id. For that reason, Icicle’s reliance on 5 Spencer’s December 2018 statement is unavailing. 6 For these reasons, having considered the plain language of the insurance policy and 7 parties’ interpretations of that language, the Court concludes that the LOH provisions require 8 9 an actual loss resulting from loss or damage of covered property that prevented the vessel from 10 earning hire in excess of the 14-day period to trigger insurance payment. 11 E. Insurers’ Motion for Summary Judgment on Icicle’s Counterclaims 12 Finally, the Court considers Insurers’ Motion for Summary Judgment on Icicle’s 13 counterclaims for breach of contract, breach of duty of good faith and fair dealing, the CPA, 14 RCW 18.86, and the IFCA, RCW 48.30.015. Dkt. #18 at ¶¶ 88-98. Insurers argue that there is 15 no material dispute of fact to prevent this Court from concluding as a matter of law that Icicle 16 17 breached its duty to cooperate with Insurers, thus discharging any obligation Insurers had to 18 Icicle under the policy and warranting dismissal of all counterclaims. Dkt. #111. Icicle counters 19 that no duty to cooperate exists and, even if it did, material disputes of fact preclude summary 20 judgment. Dkt. #116. As determined supra, § III(B), Washington law applies here. 21 i. Icicle’s Duty to Cooperate with Insureds 22 Insurance policies typically contain a contractual provision that requires the insured to 23 cooperate with the insurer throughout investigation, defense, settlement, or claims handling. 24 25 Staples v. Allstate Ins. Co., 176 Wash. 2d 404, 295 P.3d 201 (2013). The scope of an insured’s 26 duty to cooperate “depends primarily upon the language of the particular cooperation clause.” 1 16 Williston on Contracts § 49:109 (4th ed.). The relevant clause in the USA Marine Policy 2 reads as follows: 3 5. In the event of an occurrence giving rise to a claim under this policy, the Assured agrees to work in conjunction with the underwriters in determining 4 timing, preparation and man power capabilities of using other available insured 5 vessels to help mitigate the overall loss.
6 Dkt. #18 at 58. Icicle argues that the clause cited above is not a cooperation clause but rather 7 a mutual loss mitigation clause wherein parties agreed to “work in conjunction” in order to 8 “help mitigate the overall loss.” Dkt. #116 at 8. Yet “work in conjunction” is precisely the 9 definition of cooperation. This term is unambiguous and clearly sets forth Icicle’s duty to 10 cooperate with Insurers. Construing this provision with the loss of hire condition requiring 11 Insurers “to pay actual loss sustained, excess of the 14 day each accident deductible,” Dkt. #18 12 13 at 58, the policy expressly required Icicle to cooperate with Insurers in determining the capacity 14 of other vessels to mitigate the overall loss. Cooperation between an insurer and insured, as 15 recognized in Staples, requires “a continuous exchange of information between insurer and 16 insured interspersed with activities that affect the rights of both.” See 176 Wash. 2d at 411, 295 17 P.3d 201 (“Cooperation is essential to the insurance relationship because that relationship . . . . 18 can function only if both sides cooperate.”). For that reason, Icicle’s argument that the provision 19 requires parties to “work constructively” without imposing any duty to communicate 20 21 contravenes the plain language of the policy. Insurers’ reading, in contrast, is consistent with 22 the plain language and intent of the provision that parties work collaboratively to determine 23 Icicle’s ability to mitigate the loss. 24 In light of this express cooperation clause, Icicle’s alleged non-compliance with its duty 25 to cooperate is a proper affirmative defense brought by Insurers under Washington law. In re 26 Feature Realty Litig., 634 F. Supp. 2d 1163, 1175 (E.D. Wash. 2007); Pilgrim v. State Farm 1 Fire & Cas., 89 Wash. App. 712, 725, 950 P.2d 479 (1997). Because the Court has determined 2 that the policy contains an express cooperation clause, it need not address Insurers’ alternative 3 arguments that an implied duty exists under the contract. 4 ii. Icicle’s Breach of Duty 5 Having determined that the policy contains an express cooperation clause requiring 6 Icicle to cooperate with Insurers, the Court now addresses the issue of whether Icicle breached 7 its duty to cooperate. Under Staples, an insurer claiming a noncooperation defense bears the 8 9 burden of showing (1) its requests for information were material; (2) the insured failed to 10 substantially comply with the cooperation clause; and (3) it suffered actual prejudice as a result 11 of the insured’s noncompliance. 176 Wn.2d at 413, 295 P.3d 201. For the reasons set forth 12 below, the Court finds that Icicle breached its duty to cooperate as a matter of law. 13 1. Material Requests for Information 14 Under a general cooperation clause, an insurer’s requests for information “must be 15 ‘material to the circumstances giving rise to liability on [the insurer’s] part.’” Id. (quoting Dien 16 17 Tran v. State Farm Fire & Cas. Co., 136 Wash.2d 214, 224, 961 P.2d 358 (1998)). “Information 18 is material when it concerns a subject relevant and germane to the insurer’s investigation as it 19 was then proceeding at the time the inquiry was made.” Tran, 136 Wash.2d at 224, 961 P.2d 20 358 (internal citation and quotation omitted). 21 Insurers argue that several requests for information were material to its investigation of 22 Icicle’s loss of hire claim: (a) Icicle’s financial records for 2013-2017; (b) fish purchase records 23 for the GJ and the RMT for cod, herring, sockeye and pink salmon; (c) product sales and 24 25 inventory records for cod, herring, sockeye and pink salmon, and detailed inventory schedules 26 for those products; and (d) vessel planning and operations schedules for the GJ and RMT for the cod, herring, sockeye and pink salmon fisheries, and communications that Icicle was advised 1 that there was excess supply of pink salmon in Area M. Dkt. #112-11 at 1 (June 19, 2019 e- 2 mail from Alvarez & Marsal to MDD). Insurers also sought answers to general questions about 3 Icicle’s sales expenses, saved expenses, and unused purchasing and processing capacity of the 4 GJ, as well as specific questions regarding mitigation of the RMT’s cod losses, the RMT’s plans 5 not to process herring, and Icicle’s historical purchase and processing of pink salmon from Area 6 M in 2015-2017. Id. at 2-4. 7 Icicle argues that the materiality of these requests is in dispute for five reasons: (1) the 8 9 requested material is now in Insurers’ possession and has not changed their loss measurement; 10 (2) none of the information was lost or destroyed, and Insurers now have it; (3) documentation 11 concerning prior fishery seasons is not material to the quantum of its claim; (4) Insurers did not 12 request or rely on these documents when they adjusted the related loss of hire claim for the GJ; 13 and (5) Insurers’ requests regarding the RMT’s plans not to process herring in 2017 were not 14 material to its loss of hire claim. Dkt. #116 at 16-19. Icicle’s first two arguments are easily 15 discarded as they have no bearing on whether the requested information was relevant or 16 17 germane to Insurers’ investigation at the time the inquiry was made. 18 Turning to Icicle’s remaining arguments, no reasonable juror could conclude that a 19 company’s profitability in the years prior to the claimed loss is irrelevant to estimating its lost 20 profits. Icicle relies on expert declarations distinguishing the restaurant business from the 21 fishing industry, wherein profits from a 2015 fishing season are “not necessarily predictive of 22 profit in a 2017 season.” Dkt. #119 at ¶ 9. This is because fishery supply depends on the size 23 of the run, which varies from year-to-year. Indeed, in 2017, the pink salmon run in Area M was 24 25 not only large but “far exceeded” the same pink salmon run of the prior four years as well as 26 the size of the 2018 run estimated by fisheries scientists. Dkt. #117 at ¶ 13. Notwithstanding the variability of a company’s profit from year to year, historic performance is relevant to 1 estimating lost profits from an interrupting event. See, e.g., Georgia-Pacific Corp. v. Allianz 2 Ins. Co., 977 F.2d 459, 463 (8th Cir. 1992) (holding that unprofitable business “cannot prove it 3 failed or will fail to earn net profits”); Puget Sound Lumber Co. v. Mechanics’ & Traders’ Ins. 4 Co., 168 Wash. 46, 51, 10 P.2d 568, 569 (1932) (determining whether recovery available to 5 lumber company under business interruption insurance requires “due consideration” of 6 company’s experience before interrupting event as well as probable experience thereafter). 7 Even if past profits are less relevant to loss calculation in the fishing industry compared to other 8 9 industries, no reasonable juror could conclude that Icicle’s historic profits are so unrelated to 10 the loss calculation such that they are wholly irrelevant. Insurers’ request for past financial 11 records to determine past profitability was therefore material as a matter of law. 12 Next, Icicle argues that “many of the documents Insurers claim are material . . . were 13 not requested or relied upon by Insurers” when they adjusted the loss of hire claim for the GJ. 14 Dkt. #116 at 18. Icicle fails to identify the data requests or general questions encompassed by 15 this argument. Moreover, the e-mail Icicle relies upon only indicates that this issue applies to 16 17 General Questions 1, 2, 3 and 4(a). This argument does not refute the materiality of the four 18 data requests sought by Insurers or the remaining questions that Icicle refused to answer. 19 Finally, Icicle challenges the materiality of question 7 regarding the RMT’s plans to not 20 process herring. Dkt. #116 at 18-19. This question addressed an exchange between parties’ 21 accountants on May 31, 2017, wherein Icicle’s accountant stated that the RMT’s production 22 schedule was only 5 weeks in 2017 because “it had a time sensitive engine repair pending in 23 Seattle and it was not slotted to process herring in Togiak after the cod season (the Jensen 24 25 was).” Dkt. #114-1 at 1 (emphasis added). Insurers repeatedly sought clarification of this 26 statement to determine whether the RMT was originally scheduled to process herring in 2017. If Icicle claimed it was, Insurers sought planned vessel operations and schedules for the RMT 1 in 2017 to corroborate this claim. Dkt. #114-2 at 8. Icicle’s response does not refute the 2 materiality of Insurers’ request. Instead, it merely repeats its position that the RMT would have 3 participated in the 2017 herring fishery but for the hull claim. See Dkt. #116 at 18-19. This 4 argument does not raise a material dispute of fact that Insurers’ request for clarification, which 5 included a request for corroborative evidence of planned vessel operations and schedules, was 6 material to their investigation. 7 2. Icicle’s Failure to Substantially Comply 8 9 Having concluded that Insurers’ questions were material to their investigation of Icicle’s 10 LOH claim, the Court must consider whether Icicle failed to substantially comply with these 11 requests. Icicle argues that genuine factual disputes remain as to whether Icicle substantially 12 complied with Insurers’ requests, given Icicle’s forensic accounting expert’s conclusion that the 13 information provided to Insurers “was sufficient to opine on Icicle’s loss of hire measurement.” 14 Dkt. #118 at ¶ 5. Yet whether the documents Icicle provided were “sufficient to opine” is not 15 the inquiry. The question is whether Icicle responded to Insurers’ requests, which the Court has 16 17 already determined were material to the loss of hire investigation and claim settlement. See 18 Georgian House of Interiors v. Glens Falls Ins. Co., 21 Wn.2d 470, 492–93, 151 P.2d 598 19 (1944) (“It is not for appellant to say that . . . such inspection and examination was a substantial 20 compliance with the provisions of the policies . . . after a proper demand made upon it.”). 21 Icicle’s argument is therefore irrelevant to the issue of whether it substantially complied. 22 Icicle also contends that it produced “troves of documents” and “access to the same 23 financial data that Icicle’s own forensic accountant relied on” prior to this litigation. Dkt. #116 24 25 at 19. In support of this proposition, Icicle cites to its motion to compel, which in turn states 26 that “[a]ll MDD reports and source materials relied on to create those reports were uploaded to a shared drive and shared with Insurers’ representatives well before this litigation was initiated 1 in the summer of 2018.” Dkt. #78 at 11. Icicle does not cite to any evidence in support of this 2 assertion, nor does this statement indicate which documents were produced and how they 3 substantially complied with Insurers’ requests. This unsupported assertion does not raise a 4 material dispute of fact that Icicle substantially complied with Insurers’ requests. Furthermore, 5 any notion that Icicle substantially complied with Insurers’ requests is dispelled by Insurers’ 6 document requests and motion to compel filed in this litigation, which sought the very records 7 initially requested in their investigation. See, e.g., Dkt. #71 at 6 (RFP 1 seeking operating 8 9 schedules and records for RMT and GJ for 2014 through 2020, noting that Icicle failed to 10 produce any vessel plans or schedules for 2016 or 2017); at 7 (noting gaps in fish processing 11 and production records); at 8 (missing records for Area M pink salmon catch and processing 12 records); at 10 (identifying missing expense and inventory records). 13 Finally, Icicle argues that it was relieved of any duty to cooperate with Insurers’ requests 14 after June 2019 based on Insurers’ treatment of an expert report drafted by independent fishing 15 expert Tom Manos. Manos was retained by Insurers to investigate and draft a report on the 16 17 pink salmon Icicle would have been able to process in Area M in 2017 (“the Manos Report”). 18 See Dkt. #97 at 3. Icicle contends that Insurers accidentally disclosed the Manos Report to 19 Icicle during a meeting on June 11, 2019. However, on October 13, 2020, Icicle discovered an 20 email from Insurers’ counsel dated June 20, 2019, stating that Insurers “intend[ed] to retain [the 21 Manos] report as a consulting expert report and not disclose it to the assured.” Dkt. #46-1 at 22 37. Icicle argues that Insurers’ unsuccessful attempt to bury the Manos Report breached the 23 insurance policy and therefore discharged Icicle’s duty to cooperate. Dkt. #116 at 20 (citing 24 25 Kienle v. Flack, 416 F.2d 693 (9th Cir. 1969); Rushforth Constr. Co., Inc. v. Wesco Ins. Co., 26 2018 WL 1610222 (W.D. Wash. Apr. 3, 2018)). 1 As an initial matter, the breaches at issue in Kienle and Rushforth, which involved 2 improper denial of coverage and breach of duty to defend, are distinguishable from the alleged 3 breach at issue here. See Kienle, 416 F.2d at 695 (insurer estopped from relying on breach of 4 cooperation clause “occurring after the insurer has improperly denied coverage under the 5 policy.”) (emphasis added); Rushforth Constr. Co., 2018 WL 1610222, at *3 (insured 6 discharged from duty to cooperate “when its insurer has materially breached its duty to 7 defend.”) (emphasis added). Here, Icicle argues that Insurers’ treatment of the Manos Report 8 9 “violated Insurers’ duties to Icicle and breached the Policies.” Dkt. #116 at 20 (citing motion 10 to disqualify and Answer). Icicle provides no support for its proposition that Kienle and 11 Rushforth extend to the alleged breach at issue here. Moreover, since Icicle received the Manos 12 Report in June 2019, no reasonable juror could conclude that an email indicating Insurers’ 13 intention to not disclose the report had any prejudicial effect. Given that damages are a required 14 element of breach of contract, Icicle’s conclusory assertion is insufficient to raise a material 15 dispute of fact that Insurers committed a breach that discharged Icicle’s duty to cooperate. See 16 17 Nw. Indep. Forest Mfrs. v. Dep’t of Labor & Indus., 78 Wn. App. 707, 712, 899 P.2d 6 (1995) 18 (breach of contract only actionable if breach proximately causes damage). 19 Finally, even if the Court found a material dispute of fact as to whether Insurers’ 20 treatment of the Manos Report constituted breach, it is undisputed that the June 2019 email 21 followed Icicle’s refusal to provide responses to Insurers’ repeated requests for information. 22 See Dkt. #112 at ¶ 5 (correspondence between parties’ counsel dated June 27, 2018 through 23 May 24, 2019). For that reason, any alleged breach by Insurers came after Icicle’s failure to 24 25 substantially comply through refusals to provide the requested information. As set forth in Kiele 26 and Rushforth, an insured’s duty to cooperate is only discharged after its insurer has materially 1 breached the contract. Here, Icicle’s failure to substantially comply with the request preceded 2 the alleged June 2019 breach by Insurers. 3 For the reasons set forth above, given that there is no issue of fact that Icicle was required 4 to cooperate with Insurers’ requests and that these requests were materially relevant, no 5 reasonable juror could conclude that Icicle substantially cooperated in the investigation or 6 settlement of its claim. See Tran, 136 Wash. 2d at 228, 961 P.2d 358 (finding breach of 7 cooperation clause as a matter of law where insured failed to turn over requested information 8 9 and information was material to investigation). 10 3. Actual Prejudice to Insurers 11 Lastly, the Court must consider whether Insurers were prejudiced by Icicle’s failure to 12 cooperate. See id. (“An insured’s breach of a cooperation clause releases the insurer from its 13 responsibilities if the insurer was actually prejudiced by the insured's breach.”) (citing Public 14 Util. Dist. No. 1 v. International Ins. Co., 124 Wash.2d 789, 803, 881 P.2d 1020 (1994)). An 15 insured’s interference with the insurer’s ability to evaluate and investigate a claim may cause 16 17 actual prejudice. Canron, Inc. v. Federal Ins. Co., 82 Wash.App. 480, 491, 918 P.2d 937 18 (1996), review denied, 131 Wash.2d 1002, 932 P.2d 643 (1997). However, “prejudice is an 19 issue of fact and will seldom be established as a matter of law.” Tran, 136 Wash. 2d at 228, 20 961 P.2d 358. Claims of actual prejudice require “affirmative proof of an advantage lost or 21 disadvantage suffered as a result of the [breach], which has an identifiable detrimental effect on 22 the insurer’s ability to evaluate or present its defenses to coverage or liability.” Id. (citing 23 Canron, 82 Wash. App. at 491–92, 918 P.2d 937). 24 25 Icicle argues that Insurers were not prejudiced by its failure to respond given that it 26 eventually complied with many of these requests. Dkt. #116 at 22. However, courts have rejected delayed compliance as a basis for finding no actual prejudice. See id. (“Tran’s assertion 1 that State Farm was not prejudiced by his failure to provide financial records and tax returns, 2 due to his eventual compliance . . . is simply a restatement of his argument that he substantially 3 complied with State Farm’s requests and, thus, did not breach the cooperation clause.”). As in 4 Tran, the Court rejects Icicle’s argument that delayed compliance mitigates prejudice and finds 5 that Insurers need only establish that Icicle’s failure to produce these items prejudiced its ability 6 to determine coverage. Id. 7 Here, no reasonable juror could find that Insurers were unhampered by Icicle’s failure 8 9 to provide this material information. Where an insurer is unable to complete an investigation of 10 facts due to an insured’s failure to provide relevant records, courts have found prejudice as a 11 matter of law. See, e.g., Pilgrim, 89 Wash. App. 712, 950 P.2d at 486 (“Without access to 12 financial documents, State Farm could not evaluate the validity of the Pilgrims’ claim. It could 13 not decide whether the claim was covered, much less prepare a defense to the inevitable suit by 14 the Pilgrims if it denied coverage.”); Tran, 136 Wash. 2d 214, 231–32, 961 P.2d 358 (“[I]t is 15 uncontroverted that Tran’s intransigence prevented State Farm from completing a legitimate 16 17 investigation in order to determine whether or not coverage should be provided.”). Icicle relies 18 on Mut. of Enumclaw Ins. Co. v. USF Ins. Co. for the proposition that an insured’s delay does 19 not automatically inflict prejudice on the insurer. See 164 Wash. 2d 411, 431, 191 P.3d 866, 20 878 (2008). Yet Enumclaw addressed an insured’s delay in providing the insurer with notice 21 of its claim, which is distinguishable from an insured’s refusal to comply with an insurer’s 22 requests for material information. For these reasons, consistent with Pilgrim and Tran, this 23 Court concludes as a matter of law that Icicle’s failure to provide material records or respond 24 25 to Insurers’ questions hampered Insurers’ investigation and therefore caused actual prejudice. 26 Accordingly, the Court finds no material dispute of fact that Icicle breached its duty to cooperate with Insurers. 1 iii. Discharge of Insurers’ Obligations under Policy 2 Having concluded that Icicle breached its duty to cooperate as a matter of law, its 3 counterclaims are properly dismissed. Under Washington law, where an insured breaches its 4 duty to cooperate, the insurer is relieved from its obligations under the policy. See Pilgrim, 89 5 Wn. App. at 724, 950 P.2d 479 (granting summary judgment dismissal of coverage declaration, 6 attorney fees and damages under CPA where insured breached cooperation clause); McLanahan 7 v. Farmers Ins. Co., 66 Wn. App. 36, 40, 831 P.2d 160 (1992) (affirming dismissal of insured’s 8 9 claims for unreasonable delay and CPA violation), review denied, 120 Wn.2d 1006 (1992). 10 Given the Court’s determination that Insurers have been discharged of their obligations arising 11 from the policy, Icicle’s counterclaims for breach of contract and breach of duty of good faith 12 automatically fail. See id. Icicle’s counterclaim for declaratory judgment, which seeks a 13 construction of the policy and extent of coverage available, fails for the same reasons. See Dkt. 14 #18 at ¶¶ 84-87. 15 Turning to Icicle’s remaining counterclaims under the Consumer Protection Act, RCW 16 17 19.86 and the Insurance Fair Conduct Act, RCW 48.30.01, both claims fail as a matter of law 18 given Icicle’s breach. Starting with Icicle’s IFCA counterclaim, Icicle alleges that Insurers 19 acted unreasonably in adjusting its LOH claim by unreasonably denying coverage and 20 unreasonably depriving Icicle of policy benefits. Id. at ¶¶ 97-98. Again, because Insurers’ 21 obligations arising from the policy were discharged by Icicle’s failure to cooperate, Pilgrim, 89 22 Wn. App. at 724, 950 P.2d 479, Insurers did not owe any duty to Icicle with respect to providing 23 coverage or policy benefits. This counterclaim likewise fails as a matter of law. 24 25 Similarly, Icicle’s CPA counterclaim alleges that Insurers engaged in bad faith handling 26 of Icicle’s claims and breached their duty of good faith to Icicle. Dkt. #18 at ¶¶ 94-96. Icicle specifically cites to Washington insurance regulations that Insurers allegedly violated. See id. 1 Because Insurers did not owe Icicle any duty under the policy to provide coverage, Icicle’s CPA 2 counterclaim fails as a matter of law. Tran, 136 Wash. 2d at 228, 961 P.2d 358 (granting 3 summary judgment dismissal of insured’s CPA claim where insured breached cooperation 4 clause); Pilgrim, 89 Wn. App. at 724, 950 P.2d 479 (same). 5 IV. CONCLUSION 6 Having reviewed Defendants-Counterclaim Plaintiffs Icicle’s and Plaintiffs- 7 Counterclaim Defendants Insurers’ cross-motions for partial summary judgment, Insurers’ 8 9 motion for summary judgment on Icicle’s counterclaims, parties’ responses and replies thereto, 10 the declarations and exhibits in support thereof, and the remainder of the record, the Court 11 hereby finds and ORDERS: 12 (1) Icicle’s Motion for Partial Summary Judgment, Dkt. #74, and Insurers’ Cross- 13 Motion for Partial Summary Judgment, Dkt. #86, are resolved as follows: 14 a. Washington law applies to this dispute; 15 b. Icicle’s request for jury trial is STRICKEN; 16 17 c. Icicle is required to demonstrate an actual loss sustained of net earnings lost 18 during the 14-day deductible period for the 2017 cod or sockeye salmon seasons. 19 (2) Insurers’ Motion for Summary Judgment, Dkt. #111, is GRANTED. Icicle’s 20 counterclaims are DISMISSED. 21
22 DATED this 19th day of November, 2021. 23 24 A 25 RICARDO S. MARTINEZ 26 CHIEF UNITED STATES DISTRICT JUDGE