Opinion
No. 51690-6-I.
Filed: February 9, 2004. UNPUBLISHED OPINION
Appeal from Superior Court of Snohomish County. Docket No: 01-2-07598-3. Judgment or order under review. Date filed: 12/17/2002.
Counsel for Appellant(s), Gabriel Baker, Lane Powell Spears Lubersky LLP 1420 5th Ave Ste 4100, Seattle, WA 98101-2338.
David Martin Schoeggl, Mills Meyers Swartling, 1000 2nd Ave Ste 3000, Seattle, WA 98104-1064.
Counsel for Defendant(s), Donald Wright (Appearing Pro Se), 430 Olds Station Road, 4th Floor, Wenatchee, WA 98801.
Susan Wright (Appearing Pro Se), 430 Olds Station Road, 4th Floor, Wenatchee, WA 98801.
Counsel for Respondent(s), Harold B. Field, Murray Dunham Murray, 2225 4th Ave Ste 200, Seattle, WA 98121-2034.
This somewhat convoluted scenario involves a claim under a commercial general liability policy. We affirm the trial court's findings that Mutual of Enumclaw effectively cancelled the policy before the occurrence giving rise to the claim, and did not act in bad faith in investigating the claim or otherwise. We also affirm the court's refusal to grant a continuance or stay pending the underlying litigation, and its refusal to strike the cancellation defense as a sanction for discovery violations. We therefore affirm judgment of dismissal.
FACTS
Robert Brokaw and his wife Lisa Lundt (Brokaws) were contractors who built single-family homes until mid-1998. One of the last homes they built was located in Everett on Madrona Avenue (the Madrona property). Brokaws sold the house to Donald and Susan Wright (Wright); the purchase and sale agreement was signed on April 2, 1998 and the sale closed on April 28. The house was still unfinished, so the parties entered into an additional agreement concerning the remaining work, and allocated $50,000 from the sale proceeds to a `contingency account' to cover the cost.
In June of 1998, Wright noticed that water was leaking into the home through the foundation and the soil around the foundation was shifting. Wright contacted Brokaws. There was some disagreement about what needed to be fixed and how, but Wright agreed to direct the repairs and pay for them with funds remaining in the contingency account.
In October, Brokaws moved to the Caribbean to start a charter boat business. They maintained a private mailbox in Seattle with mail-forwarding service and a Seattle phone number with voice mail.
Wright was unable to resolve the water and foundation problems for the amount of money in the contingency account. In December 1998, Wright sued Brokaws for damages, alleging breach of contract, negligent misrepresentation, and breach of the warranty of habitability. Wright served Brokaws by personal service on the proprietor of Brokaws' private mailbox facility, and by mail at Brokaws' last known address, which was the private mailbox. Brokaws did not appear or defend the Wright lawsuit. In early 1999, business associates informed Brokaws that Wright was filing or had filed a claim regarding the Madrona property. Mr. Brokaw called his insurance broker, Jim Bulman, who told him to take no action unless or until he received actual notice that a claim had been filed.
On June 15, 1999, Wright obtain a default judgment against Brokaws for approximately $150,000. The next day, Wright sent a copy of the judgment to Mutual of Enumclaw (MOE) and inquired whether their claim was covered by Brokaws' policy. Over the course of the summer, MOE sent four letters to Brokaws informing them of the judgment, and asking Brokaws to contact MOE as soon as possible. In the third letter, MOE referenced a clause in Brokaws' policy that required notice to MOE of any claim or suit, and stated that if failure to give notice prejudiced MOE's ability to investigate the claim, the company could deny coverage. That letter also explicitly reserved MOE's right to deny coverage. All four letters were sent to the same private mailbox to which the summons and complaint were sent.
It is not clear how Wright learned that Brokaws had a policy with MOE.
In February 2000, in the course of a deposition in a separate suit, Mr. Brokaw was notified that Wright might have obtained judgment against him and his wife. Brokaws took no action in response to this information. In June 2000, efforts by an unrelated party to execute a judgment against Brokaws led to seizure of their yacht. Brokaws filed for Chapter 13 bankruptcy protection. Wright eventually became involved as a creditor in the bankruptcy proceeding.
In March 2001, Brokaws formally notified MOE of the Wright's claim for the first time, and tendered the defense. MOE initially responded that the claim was not covered and that no defense would be provided. After an exchange of letters, MOE agreed to defend, and hired counsel to attempt to have the default judgment set aside. This effort was ultimately unsuccessful.
See Wright v. B L Properties, Inc., 113 Wn. App. 450, 53 P.3d 1041 (2002), review denied, 149 Wn.2d 1014 (2003).
While those proceedings were pending, MOE filed a declaratory judgment action seeking a determination of noncoverage on several grounds. Brokaws counterclaimed for breach of contract, declaratory judgment, bad faith, and violation of the Consumer Protection Act. Essentially, Brokaws alleged MOE acted in bad faith by failing to make a reasonable investigation after receiving the letter from Wright, failing to locate them, failing to mount a defense in their absence, and by hiring inadequate counsel for the defense ultimately offered. Brokaws also alleged that bad faith precluded MOE's coverage defenses, and that MOE had not effectively reserved its rights.
The matter was tried over five days in September 2002. The court found that the policy had been effectively cancelled for nonpayment, that the damage to Wright's property occurred after cancellation, that Brokaws' failure to cooperate prejudiced MOE, and that MOE did not act in bad faith or waive its rights. The court entered declaratory judgment for MOE and dismissed all the counterclaims. Brokaws appeal, and ask this court to allow supplementation of the record.
DISCUSSION I. Policy Coverage A. Cancellation for Non-Payment of Premiums
Sometime prior to September 1996, Brokaws purchased a comprehensive general liability policy from MOE. The policy had at least two annual terms: September 1996 to September 1997, and September 1997 to September 1998. Estimated premiums were charged for each annual term, with minimum payments due each month. Premiums were subject to revision based on post-term audits, and any additional premiums were due upon completion of the audit. On March 16, 1998, MOE sent Brokaws a bill for both the payment due on the 1998 policy term, and the amount due for a premium adjustment for the 1997 term. Payment was due April 12. Brokaws made no payment. On April 15, MOE sent a cancellation notice stating that coverage under the policy ceased on April 12, but that if payment was received by April 29, coverage would continue uninterrupted. Brokaws did not respond.
On May 12, MOE sent a closing bill for coverage to the date of cancellation, April 12. The amount due was proportionally reduced from the amount stated on the March bill to reflect the date coverage terminated. The closing bill stated that payment would not reinstate the policy. Payment was due June 10. Brokaws made no payment.
On June 10, MOE sent a notice stating that unless Brokaws paid the outstanding balance by July 9, their account would be submitted to collection. On June 12, Brokaws paid the balance stated on the May closing bill.
The court found that the policy was cancelled effective April 12, 1998 after Brokaws failed to pay the premium when due. Brokaws argue this finding was not supported by substantial evidence. They contend the payments were not delinquent because (1) prior overpayments on their account were sufficient to cover the premium payment due on April 12; (2) the portion of their June payment that was applied toward the premium adjustment for the 1997 policy should have been credited to their account in a way that would avoid cancellation of the 1998 policy; (3) Washington law requiring any unearned premium to be returned before cancellation is effective bars the purported April 12 cancellation; and (4) MOE's acceptance of the June 1998 payment waived its right to cancel the policy. These arguments fail.
`Substantial evidence is evidence in sufficient quantum to persuade a fair-minded person of the truth of the declared premise.' Ridgeview Properties v. Starbuck, 96 Wn.2d 716, 719, 638 P.2d 1231 (1982).
Ms. Lundt testified that her records showed an overpayment on the policy in January 1998. Brokaws contend this amount should have been applied to avoid forfeiture on current accounts before being applied toward the prior year's premium adjustment. The court found that when the overpayments were made, however, they were properly credited toward premiums, and `did not operate to excuse payment of further minimum monthly amounts as set forth on the billings of MOE.' The evidence supports this finding. Further, the overpayment, however credited, was not sufficient to cover the minimum monthly premium.
Brokaws actually had two MOE policies: the commercial general liability policy at issue here, and a commercial auto policy. Both were billed on the same invoice. Apparently MOE's computerized accounting process applies under — and overpayments pro rata to each outstanding bill item unless directed otherwise.
Clerk's Papers at 16.
Second, Brokaws cite the general rule that an insurer must apply overpayments to avoid forfeiture of the policy, and argue that the June 1998 payment should have been applied to the current policy premium, rather than the outstanding bill on the previous year's policy. But the June payment was not an overpayment, and was not made until after MOE declared the policy cancelled and not subject to reinstatement. See Morrissette v. Continental Life and Accident Co., 9 Wn. App. 789, 791, 514 P.2d 1391 (1973) (cancellation upheld where payment was insufficient to pay all past-due premiums).
Third, Brokaws contend RCW 48.18.290 barred cancellation in this case because it requires refund of any unearned premium before a cancellation can be effected. But there was no unearned premium to be refunded. Finally, Brokaws argue that MOE's acceptance of the June payment constitutes waiver of its right to cancel the policy. But because the policy was cancelled long before the June payment was received, Brokaws are actually arguing for retroactive reinstatement of the policy. Acceptance of payment does not retroactively reinstate a lapsed policy. Wisniewski v. State Farm Gen. Ins. Co., 25 Wn. App. 766, 769, 609 P.2d 456 (1980).
RCW 48.18.290 provides, in part:
(1) Cancellation . . . may be effected . . . only upon compliance with the following: . . . . (4) The portion of any premium paid to the insurer on account of the policy, unearned because of the cancellation and in amount as computed on the pro rata basis, must be actually paid to the insured or other person entitled thereto as shown by the policy or by any endorsement thereon, or be mailed to the insured or such person as soon as possible.
B. Discovery Sanctions
Brokaws argue MOE's cancellation defense should have been stricken as a sanction for discovery violations. A trial court's decision whether to impose sanctions for discovery violations is reviewed for abuse of discretion. Washington State Physicians Ins. Exch. Ass'n v. Fisons Corp., 122 Wn.2d 299, 338, 858 P.2d 1054 (1993). The court abuses its discretion if its decision is manifestly unreasonable or based on untenable grounds. Id. at 339.
The discovery at issue here related to the account payment history. Brokaws requested production of all documents pertaining to MOE's assertion that the policy was cancelled in April 1998 for nonpayment of premium. MOE and its attorneys failed to produce account statements from September 1997 through March 1998 and affidavits of mailing for bills mailed from March through June 1998. Brokaws also allege that other critical accounting documents were never produced. As a result, Brokaws contend they were forced to respond to the cancellation defense without proper preparation. On the first day of trial, when MOE called its billing supervisor to testify about cancellation notices mailed to Brokaws in spring 1998, the affidavits of mailing were first produced. At the end of that day, MOE produced what it described as the complete underwriting file for Brokaws' policy. The next morning, Brokaws informed the court that the file was substantially incomplete. Further documents were located immediately and produced.
The last bill sent to Brokaws on the policy and the cancellation notices sent to them in April and May 1998 were produced at a deposition a few weeks before trial.
Brokaws asked the court to sanction MOE for its late production by striking the cancellation defense altogether. The court declined, and MOE contends this was error. While MOE's conduct was improper, the requested sanctions were properly rejected.
Due process requires a court to find a willful or deliberate refusal to obey a discovery order and resulting prejudice before imposing extreme sanctions such as dismissal of a claim or defense. Smith v. Behr Process Corp., 113 Wn. App. 306, 330, 54 P.3d 665 (2002). Brokaws argue the discovery violations were willful and prejudicial, because `the facts surrounding this nondisclosure make it difficult to conclude that it was anything but calculated and intentional.' While we are impatient with MOE's failure to make timely disclosure, we do not see proof the violations were willful and intentional, nor do we see resulting prejudice. The court conducted numerous inquiries in this regard and proceeded with caution and due concern. The only late-produced documents used by MOE at trial were affidavits of mailing for various bills and collection notices dated after the policy was cancelled. The court found Brokaws received the notices from MOE in 1998, and the notices were also produced to them at a deposition a few weeks before trial. Brokaws never argued they did not receive them, however, so the mailing affidavits (used to show the notices were sent in 1998) weren't really relevant to any contested issue. Brokaws do not describe any clear prejudice from this delay in production. As to the accounting documents allegedly never produced, Brokaws do not identify what those might have been or how they might have helped establish that their account was not properly credited.
App. Br. at 33.
Under Rivers v. Washington State Conference of Mason Contractors, 145 Wn.2d 674, 686, 41 P.3d 1175 (2002), extreme sanctions may not be imposed without considering, on the record, whether lesser sanctions will suffice. Thus the first resort is never dismissal; Brokaws do not explain why striking the defense entirely was the only appropriate remedy.
In short, Brokaws did not establish that extreme sanctions were warranted, and the trial court's refusal to impose them was not an abuse of discretion.
C. Coverage on Date Damage Occurred
In the suit against Brokaws, Wright alleged physical damage to the Madrona property caused by water seepage and soil movement. The trial court found this damage occurred after the policy was cancelled on April 12. Interpreting an insurance policy is a matter of law. McDonald v. State Farm Fire Cas. Co., 119 Wn.2d 724, 730, 837 P.2d 1000 (1992). The policy provides that MOE will `pay those sums that the insured becomes legally obligated to pay as damages' for property damage occurring within the policy period. `Property damage' means:
Exhibit 1, Commercial General Liability Coverage Form (Policy) at Section I(A)(1)(a).
(a) Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
(b) Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the `occurrence' that caused it.
Policy at Section V(15).
The policy defines `occurrence' as `an accident, including continuous or repeated exposure to substantially the same general harmful conditions.' Brokaws contend the court erred by relying on the date of discovery of the damage, rather than the date of occurrence. They contend the occurrence was the process that ultimately led to the tangible property damage, because the damage resulted from soil movement or sliding that occurred during `the entire course of construction.' But a latent defect is not an occurrence; actual injury to the property must occur during the policy period. Villella v. Public Employees Mut. Ins. Co., 106 Wn.2d 806, 814, 725 P.2d 957 (1986) (where improperly installed drainage system caused continuous process of soil destabilization, covered property damage did not occur until residence itself sustained tangible damage).
Policy at Section V(12).
App. Br. at 26.
Most of the testimony was offered in terms of when seeping water and soil movement were detected, which was June. The only testimony as to when the damage actually occurred was the following from Susan Wright:
Q: My question is just about time, when do you think the slide that you are talking about occurred, if you know?
. . . .
A: I would imagine it was occurring probably through May April, May June, I don't know, it was continuing to slide, probably the whole time he was building.
. . . .
Q: Do you know whether it was sliding even before you purchased the house?
A: It would have had to have been.
Report of Proceedings (RP) (Sept. 19, 2002) at 295-96.
This is speculation, not evidence. If there was actual soil movement during construction, no one so testified, and the soil engineers, Brokaws, and Wright all failed to observe it. The evidence established only that the damage was not evident at closing on April 28, and was evident in June. The court's finding that tangible damage did not occur until after April 12 is supported by substantial evidence.
Brokaws also rely on section (b) of the `property damage' definition, which defines coverage for loss of use of tangible property not physically damaged. In such cases, loss of use is deemed to occur `at the time of the `occurrence' that caused it.' Brokaws contend the occurrences causing Wright's loss of use of the property were their own negligent misrepresentations and improper design, which occurred before April 12. But section (b) does not apply here. The only loss of use alleged by Wright was that resulting from the water damage, which rendered the house uninhabitable. This is loss of use from physical injury to tangible property, which is covered by section (a) of the definition and is deemed to occur at the time of the physical injury that caused it.
Policy at Section V(15).
The court's findings that the property damage occurred after April 12 are supported by substantial evidence.
Given our disposition of this issue, we do not discuss MOE's alternative defense that MOE was prejudiced when Brokaws breached the cooperation clause.
II. Waiver and Estoppel A. Waiver
Under Underwriters at Lloyds v. Denali Seafoods, Inc., 927 F.2d 459, 462 (9th Cir. 1991), an insurer that defends without reserving its right to deny coverage may waive its coverage defenses. But MOE reserved its rights before it provided a defense, and thus preserved its coverage defenses. MOE first reserved its rights in one of the letters sent to Brokaws in summer 1999, which said, `the rights of Mutual of Enumclaw are fully reserved in our undertaking of the investigation of this claim.' Although Brokaws claimed they did not receive the letters in 1998, a letter from their attorney to MOE in July 2001 indicates that copies of those letters were included in correspondence Brokaws received in May 2001. In its May 2001 letter, MOE explicitly reserved its rights again, saying, `our handling of this is under a full and complete reservation of rights.' Claims examiner Dave Michlitsch told the Brokaws' attorney the defense would be provided under reservation of rights and that the company was still contesting coverage. The court's conclusion that MOE did not waive its defenses is supported by substantial evidence.
Ex. 18.
Ex. 52.
In their reply brief, Brokaws argue that Michlitsch rebutted his own testimony that he told the Brokaws' attorney MOE was defending under reservation of rights. But Michlitsch merely confirmed that the exact words `reservation of rights' did not appear in the transcript of a telephone message he left for the Brokaws' attorney. RP (Sept. 23, 2002) at 668. Brokaws' attorney stipulated that while Michlitsch did not use the words `reservation of rights' during the phone message, he did say that MOE would be filing a declaratory judgment action. RP (Sept. 23, 2002) at 656.
B. Coverage by Estoppel
Insurers have a duty to deal fairly and in good faith with their insureds. Tank v. State Farm Fire Cas. Co., 105 Wn.2d 381, 385-86, 715 P.2d 1133 (1986). The implied covenant of good faith and fair dealing requires the insurer to conduct any necessary investigation in a timely fashion and to conduct a reasonable investigation before denying coverage. Coventry Assoc. v. Am. States Ins. Co., 136 Wn.2d 269, 281, 961 P.2d 933 (1998). If the insurer fails in either regard, it will have breached the covenant and, therefore, the policy, regardless of whether the insurer was ultimately correct in determining coverage did not exist. Id. at 279. When an insurer acts in bad faith, it may be estopped from denying coverage even where policy defenses exist. Safeco Ins. Co. of Am. v. Butler, 118 Wn.2d 383, 392, 823 P.2d 499 (1992).
Brokaws argue MOE should be estopped from denying coverage because MOE acted in bad faith by failing to investigate between June 1999 and March 2001, by refusing to defend between early 1999 and August 2001, and by providing an inadequate defense after August 2001.
Failure to Investigate. Brokaws argue MOE acted in bad faith when it failed to more fully investigate Wright's claim, and that the court's findings to the contrary are not supported by substantial evidence. Brokaws emphasize that when Brokaws failed to respond to MOE's letters, MOE obtained some additional details about Wright's claim, but did nothing further to locate Brokaws or investigate the claim until Brokaws notified MOE and tendered the defense in March 2001. The court found that a reasonable investigation would have disclosed Brokaws' location. But the court also found that even if MOE had located them, Brokaws would have remained unresponsive. Before leaving Washington, Brokaws had experienced financial difficulties and had numerous creditors, including subcontractors who had filed liens and lawsuits.
Further, Brokaws' unresponsiveness was not unusual in MOE's experience with its contractor insureds. MOE concluded that Brokaws were choosing to ignore Wright's claim and the requests for cooperation and assistance from MOE. The court found reasonable MOE's conclusions that Brokaws did not intend to cooperate, that MOE could not retain counsel for Brokaws without their consent, and that MOE had no basis for a motion to vacate the default without affidavits from Brokaws setting forth grounds to support the motion and a valid defense. The court found that, given these reasonable conclusions, MOE's course of action was not unreasonable under the circumstances, and its investigation was not in bad faith. These findings are supported by substantial evidence.
Brokaws argue that the claims adjuster's testimony contradicts these findings. He testified MOE `could' retain an attorney for the Brokaw without their consent and that MOE `could' intervene in the suit and attempt to have the default judgment set aside. But in context, the witness seems to be saying exactly the opposite that MOE really could not do either of these things. RP (Sept. 19, 2002) at 222-24. Whether MOE could do these things in theory is not really the question. The issue is whether the adjuster's conclusions were reasonable, and the court's finding that they were is supported by the evidence.
Failure to Defend in Brokaws' Absence. MOE's duty to defend was not triggered until Brokaws asked MOE to participate. Even when an insurer is aware of a potential claim, `an insurer cannot be expected to anticipate when or if an insured will make a claim for coverage; the insured must affirmatively inform the insurer that its participation is desired.' Unigard Ins. Co. v. Leven, 97 Wn. App. 417, 427, 983 P.2d 1155 (1999). Provision of Inadequate Defense. Both an insurer and retained defense counsel have a duty of good faith in providing a defense under a reservation of rights. Tank, 105 Wn.2d at 387-88. This includes the obligation to retain competent counsel. Id. at 388. But an insurance company is not vicariously liable for the negligence of counsel it has retained to represent its insured. Evans v. Steinberg, 40 Wn. App. 585, 588, 699 P.2d 797 (1985). MOE is therefore not liable for any alleged inadequacies in retained counsel's performance unless MOE itself acted in a way inconsistent with its obligations to its insured. In that regard, Brokaws simply make vague allegations of lax supervision of the attorneys by MOE. This does not establish bad faith.
Brokaws contend the court failed to make findings regarding MOE's failure to defend. The court did enter findings, both as to the failure to defend before Brokaws contacted the company and as to the defense offered afterward.
Even if MOE could be liable for the defense provided by retained counsel, however, the court found the evidence insufficient to sustain Brokaw's claims that MOE retained incompetent and/or inexperienced counsel who provided an inadequate defense, and the evidence supports this finding. Brokaws contend retained counsel failed to contact them until the day before the hearing on the motion to set aside the default, and then told Brokaws that counsel was not prepared for the hearing. Assuming this is true, there is no evidence that counsel was still unprepared when she appeared in court, nor do Brokaws describe any meritorious arguments that were not advanced. Brokaws take the position that counsel should have focused on the propriety of personal service in the Wright case, and should have presented testimony from the manager of the private mailbox business and a letter from Brokaws outlining the services authorized. But the mailbox manager's testimony and the letter were irrelevant, because personal service was irrelevant. The only issue in the motion to vacate the default was whether mailing to a private mailbox was proper substitute service.
See RCW 4.28.080(16); Wright v. B L Properties, Inc., 113 Wn. App. 450, 461, 53 P.3d 1041 (2002), review denied, 149 Wn.2d 1014 (2003).
III. Refusal to Grant Continuance
Brokaws argue the trial court abused its discretion by refusing to continue or stay the declaratory action pending resolution of the challenge to the default judgment in the underlying litigation. Denial of a continuance is reviewed for abuse of discretion. Public Utility Dist. No. 1 of Klickitat County v. Int'l Ins. Co., 124 Wn.2d 789, 813, 881 P.2d 1020 (1994). Relying upon Western National Assurance Co. v. Hecker, 43 Wn. App. 816, 719 P.2d 954 (1986), Brokaws argue that `an insurer should not be allowed to proceed with a declaratory judgment action on coverage where coverage litigation could involve issues or findings that have the potential to prejudice the insured in an underlying action.' But there was no overlap between the issue of substitute service on a private mailbox and the issues in the declaratory judgment action, so there was no likelihood of prejudice to the insured. The trial court did not abuse its discretion when it denied the continuance.
App. Br. at 13.
IV. Motion to Submit Additional Evidence on Review
In a related argument, Brokaws seek leave to submit additional evidence on review under RAP 9.11, consisting of copies of the Supreme Court's denial of review in Wright, and two pleadings submitted to the Supreme Court by Wright urging the court to deny review. Brokaws contend these documents support their argument that a stay was required, because they show that the findings in this coverage action were used to prejudice them in Wright. Wright's intent in submitting the trial court's findings herein, including the finding that Brokaws had actual notice of Wright's lawsuit, was to urge denial of Brokaws' petition for review. This submission was improper, and Brokaws moved to strike the materials. The Supreme Court denied the petition for review without ruling on the motion to strike. But whether Brokaws received actual notice was of no consequence to the issue of whether substitute service on a private mailbox was effective, so there is no reason to believe the materials actually prejudiced Brokaws. The requirements of RAP 9.11(a) are therefore not satisfied, and we decline to take the additional evidence.
RAP 9.11(a) allows this court consider additional evidence on the merits if:
(1) additional proof of facts is needed to fairly resolve the issues on review, (2) the additional evidence would probably change the decision being reviewed, (3) it is equitable to excuse a party's failure to present the evidence to the trial court, (4) the remedy available to a party through postjudgment motions in the trial court is inadequate or unnecessarily expensive, (5) the appellate court remedy of granting a new trial is inadequate or unnecessarily expensive, and (6) it would be inequitable to decide the case solely on the evidence already taken in the trial court.
This court may take judicial notice of the record in the case presently before it or `in proceedings engrafted, ancillary, or supplementary to it.' Swak v. Dep't of Labor Indus., 40 Wn.2d 51, 53, 240 P.2d 560 (1952). However, it cannot, while deciding one case, take judicial notice of records of other independent and separate judicial proceedings even though they are between the same parties. Id. at 54. In State v. Duran-Davila, 77 Wn. App. 701, 705, 892 P.2d 1125 (1995), the court noted the distinction between consulting the record of another case to determine whether it contains something and consulting the record of another case to determine whether disputed facts were or were not found to be true. The former was permissible, but the latter was not. So under Duran-Davila, this court can consult the pleadings filed in Wright to determine whether those pleadings contained references to the coverage action.
See Duran-Davila, 77 Wn. App. at 705.
CONCLUSION
Because the trial court's findings are supported by substantial evidence, and the court did not abuse its discretion in denying the requested continuance or sanctions, we affirm the judgment in all respects.
COX and BAKER, JJ., concur.