T-Mobile USA Inc v. Selective Insurance Company of America

MOTION for Partial Summary Judgment

W.D. Wash.March 23, 2017

T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 THE HONORABLE JAMES L. ROBART UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE T-MOBILE USA, INC., a Washington corporation, Plaintiff, v. SELECTIVE INSURANCE COMPANY OF AMERICA, Defendant. No. 2:15-cv-01739-JLR T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT NOTE ON MOTION CALENDAR: April 14, 2017 Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 1 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 1 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 I. INTRODUCTION AND RELIEF REQUESTED Plaintiff T-Mobile US, Inc. (“T-Mobile” or “T-Mobile US”) respectfully moves the Court for a partial summary judgment ruling on three of its claims1 confirming that: (1) Defendant Selective Insurance Company of America (“Selective”) breached the Selective insurance policy at issue (the “Policy”), entitling T-Mobile to a declaratory judgment that the defense costs sought by T-Mobile are covered; and (2) Selective acted in bad faith as a matter of law in the handling of T- Mobile’s claim. The facts set out below are undisputed and based almost exclusively on the sworn testimony of Selective’s own employees, including the claims handler responsible for Selective’s decision to deny coverage in February of 2015, Michael Parlin. His testimony makes it clear that Selective denied coverage to T-Mobile for a single reason: the application of the Policy’s “professional negligence” exclusion (“Professional Negligence Exclusion”), an exclusion that Mr. Parlin had contradictorily concluded years earlier did not impact Selective’s obligation to defend insureds like T-Mobile. Indeed, Mr. Parlin reached the conclusion that Selective owed a duty to defend despite the presence of the Professional Negligence Exclusion after reviewing a coverage opinion from counsel addressing that issue, documented his determination that a defense was owed to Selective’s insureds in writing, and agreed to provide that defense to Selective’s primary insured, Innovative Engineering, LLC (“Innovative”) as a result. After failing to timely respond to T-Mobile’s claim for more than two years – an unreasonable delay that Parlin now concedes constituted improper claims handling on its face – Parlin contradictorily denied coverage to T-Mobile based on that very same exclusion, an inconsistent coverage determination that Mr. Parlin now concedes was likely incorrect. In short, the undisputed facts make it clear that Selective breached the policy at issue and repeatedly committed bad faith in doing so. T- Mobile respectfully submits that partial summary judgment is warranted here as a result. 1 T-Mobile’s motion does not seek a ruling from the Court with regard to: (a) its CPA claim; (b) the extent of its damages; or (c) its claim for punitive damages under New Jersey law. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 2 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 2 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 II. STATEMENT OF FACTS A. The Long-Standing Relationship Between Innovative and T-Mobile Under Which Innovative Was Obligated to Secure Insurance Coverage Naming T-Mobile as an Additional Insured. As the Court is likely aware, T-Mobile provides cellular services to customers across the United States. In order to ensure adequate cellular coverage for its customers, T-Mobile (or its subsidiaries or affiliates within a given region) leases space on buildings and employs third parties to install cellular antennas at those locations. Beginning in 2000, T-Mobile and its predecessors generally employed Innovative to provide antenna installation services in the New York metropolitan area. T-Mobile did so pursuant to a series of “Field Services Agreements” (“FSA”) between Innovative and T-Mobile Northeast, LLC (“T-Mobile NE”), the relevant T- Mobile subsidiary in the region. See Declaration of Kelly H. Sheridan in Support of T-Mobile’s Motion for Partial Summary Judgment (“Sheridan Decl.”), Ex. A. T-Mobile NE was (and continues to be) a wholly-owned subsidiary of T-Mobile US, with T-Mobile US acting as the only “member” of the LLC. Declaration of Lisa Bauer in Support of T-Mobile’s Motion for Partial Summary Judgment (“Bauer Decl.”) at ¶ 3. The FSAs imposed various defense and indemnity obligations on Innovative by way of what is commonly referred to within the insurance industry as a “Defense and Indemnification Agreement” or “D&I Agreement” – an agreement by Innovative to: (a) defend and indemnify T- Mobile and its subsidiaries and affiliates from all exposure arising from Innovative’s services, including the obligation to pay legal fees in defense of any such claim; (b) secure insurance coverage sufficient to cover any such potential liability like the policy provided by Selective now at issue in this case; (c) ensure that T-Mobile (and its subsidiaries and affiliates) was expressly named as an additional insured under such policies so that Innovative’s insurers had a direct obligation to defend any such claims; and (d) secure and provide certificates of insurance (“COIs”) to T-Mobile from the insurer documenting that fact. See Sheridan Decl., Ex. A at ¶ Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 3 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 3 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 12.1, 7.1(a), 7.2. For example, Paragraphs 7.1 and 7.2 of the 2010 FSA in place during the period at issue in this case expressly obligated Innovative to secure general liability insurance covering its operations that included a “waiver of subrogation in favor” of T-Mobile and “its affiliates and subsidiaries” and “Certificates of Insurance” naming T-Mobile “as an additional insured” under that insurance. Id. B. The Selective Policy at Issue. Selective issued the Policy at issue in this litigation to Innovative, policy number S1643491, with a policy period of January 16, 2012 to January 16, 2013. See Sheridan Decl., Ex. B. The Policy is relevant to this Motion in several key respects.  First, the Policy contains an “Additional Insured Endorsement” that automatically extended coverage to any entities like T-Mobile with whom Innovative had D&I Agreements (“AI Endorsement”). Id. at 59. Specifically, the AI Endorsement amended the Policy’s definition of “Who is an Insured” to include “as an additional insured any person or organization whom you have agreed in a written contract or written agreement to add as an additional insured on your policy.” Id. The D&I Agreement in the FSA falls squarely within this language.  Second, the AI Endorsement contains language purporting to exclude coverage for damages arising out of Innovative’s failure to properly render professional architectural or engineering services (“Professional Negligence Exclusion”). Id. Importantly for reasons that will become clear below, the same Professional Negligence Exclusion appeared multiple times in the main body of the policy, meaning that the scope of the coverage provided by the Policy was the same for its primary insured (Innovative) and additional insureds seeking coverage under the AI Endorsement like T-Mobile. See, e.g., id. at 50 (“Exclusion – Engineers, Architects or Surveyors Professional Liability,” excluding coverage for claims “arising out of the rendering of or the failure to render any professional services by you or any engineer, architect or surveyor . . . .”); id. at 67 (exclusion for “Professional Services,” indicating that coverage is excluded for claims “due to rendering or failure to render any professional service”); id. at 81 (“Engineers, Architects or Surveyors Professional Liability Exclusion,” excluding coverage for claims “arising out of the rendering of or the failure to render any professional services . . . including . . . [s]upervisory, inspection or engineering services”).  Third, the Policy’s definition of “Who Is an Insured” contains additional language expanding the scope of coverage for Limited Liability Companies like T-Mobile NE. That language provides that “members” of LLCs were “also insureds.” Id. at 38.2 2 The Policy indicates: “If you are designated in the Declarations as . . . [a] limited liability company, you are an insured. Your members are also insureds, but only with respect to the conduct of your business.” Id. (emphasis Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 4 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 4 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 C. Selective’s Agent the Van Dyk Group Provides COIs Directly to T-Mobile in 2006, 2007, 2010, 2011, and the Policy Year at Issue in This Case – 2012. Innovative secured the general liability coverage required by the FSAs from Selective through Selective’s designated New Jersey agent, the Van Dyk Group (“VDG”). Selective’s written “Agency Agreement” with VDG expressly vested VDG with the authority to issue insurance policies and COIs on Selective’s behalf, including the COIs indicating that T-Mobile was an Additional Insured. See Declaration of Daniel W. Wyrsch (“Wyrsch Decl.”), Ex. A. That Agency Agreement indicated that VDG had “authority to act on [Selective’s] behalf” with regard to eight broad areas, including the issuance of “policies” and “certificates” of insurance like the COIs at issue in this case. Id. at 2 (confirming, under the “Your Authority” section, that VDG had the authority to act on Selective’s behalf with regard to “[e]xecuting and issuing binders, policies and certificates for such insurance”). Indeed, Selective’s own claims examiner confirmed that this type of agency agreement was standard in the insurance industry and vested VDG to act on Selective’s behalf, including to issue COIs. See Deposition of Michael Parlin, Sheridan Decl., Ex. C (“Parlin Dep.) at 138-43. Pursuant to that authority, VDG issued COIs to T-Mobile dating back to at least the early 2000s. For example, VDG issued COIs to T-Mobile for 2006, 2007, 2010, 2011, and the same policy year at issue in this case – 2012 (“2012 COI”). See Sheridan Decl., Ex. D; see also Wyrsch Decl. Ex. B, C. Each of the COIs listed Selective as the “Insurer[] Affording Coverage,” Innovative as the “Insured,” expressly indicated that the relevant certificate “holder is included as an additional insured with respect to General Liability,” and listed the “Certificate Holder” as “T- Mobile USA Inc. and its Subsidiaries and Affiliates.” Id. In addition to the fact that the Agency Agreement expressly vested VDG with authority to issue the COIs, the primary Selective claims handler with responsibility for T-Mobile’s claim added). Additionally, a separate portion of the Policy defines a “Member” as “an owner of a limited liability company represented by its membership, who may also serve as a “manager” of the LLC.” See id. at 121. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 5 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 5 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 (Mr. Parlin) admitted during his deposition that Selective was fully aware of VDG’s practice of issuing COIs to potential additional insureds like T-Mobile. Specifically, while Selective has previously taken the position before the Court that it was somehow unaware of the COIs issued by its own agent on Selective’s behalf, Mr. Parlin admitted that he was in direct contact with VDG during his evaluation and investigation of T-Mobile’s claim, that he reviewed portions of the underwriting file during that investigation, that the underwriting file contained various other COIs issued by VDG, and that Selective was aware of VDG’s practice in this regard as a result. Parlin Dep. at 125-26; 129; 134-37. Critically, Mr. Parlin also admitted that VDG had the authority to issue the COIs to T-Mobile on Selective’s behalf – including the 2012 COI at issue in this case,3 that the 2012 COI contained representations indicating that “T-Mobile USA Inc. and its subsidiaries and affiliates” were certificate holders and listed as additional insureds under the 2012 Policy, and that it was reasonable for T-Mobile US to believe that it was an additional insured under the 2012 Policy in light of representations that T-Mobile received from Selective’s authorized agent. Id. at 144-46.4 Finally, while Mr. Parlin also admitted that the COIs issued by VDG to T-Mobile would have been relevant to his determination of whether T-Mobile qualified as an additional insured given that they contained representations to that effect by Selective’s own agent, he nevertheless failed to request the COIs from VDG or otherwise perform any investigation of the COI issue before summarily denying coverage to T-Mobile for the reason discussed more fully below. Id. at 152-57. 3 Q: So, it appears that the Van Dyk Group, who had authority to act on Selective's behalf, was issuing these certificates of insurance to T-Mobile U.S.A., correct? A: Correct. Q: And making the representation by doing so that T-Mobile U.S.A., Inc. was a certificate holder and listed as an additional insured under the Selective policies issued to Innovative, correct? A: Correct. 4 Q: So, it would have been reasonable upon T-Mobile U.S.A.'s receipt of this certificate of insurance to understand that it was an additional insured under the very Selective policy at issue in this case, wouldn't it? A: Yes. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 6 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 6 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 While all of these agency-related issues have already been admitted by Mr. Parlin, they are also independently confirmed by the declaration of VDG Agency Principal Daniel Wyrsch. Per Mr. Wyrsch’s declaration: (1) VDG has served as Selective’s appointed agent since at least 1988; (2) the Agency Agreement has been in place between VDG and Selective since January 1, 2007 and remained in place as of last fall; (3) that Agency Agreement appoints VDG as Selective’s “agent” and indicates that VDG has “authority to act on [Selective’s] behalf,” including by issuing insurance “policies” and “certificates”; (4) the standard terms of Selective’s Elite Pac Endorsement – the Additional Insured Endorsement – confers automatic additional insured status where a contract requires the insured like Innovative to name a contracting party as an additional insured; (5) VDG regularly issued additional insured certificates on Selective’s behalf, including those issued to T-Mobile; (6) he is not aware of any instance in which Selective objected VDG doing so or took the position that the additional insured certificates issued by VDG were not binding upon Selective; (7) the T-Mobile additional insured COIs indicated that the “Certificate holder is included as an additional insured with respect to General Liability, Auto and Umbrella Liability” and identified “T-Mobile USA Inc., its Subsidiaries and Affiliates” – not just T-Mobile NE – as the “Certificate Holder”; (8) the COIs issued to T-Mobile were signed by Michelle Ortiz of VDG as Selective’s “Authorized Representative”; and (9) VDG only began issuing COIs to T- Mobile because Innovative itself informed VDG that its agreements with T-Mobile required that T-Mobile be named as an additional insured under Innovative’s insurance policies and that T- Mobile qualified as an additional insured per the standard terms of Selective’s policies for that reason. Wyrsch Decl. ¶¶ 4-11. Similarly, Selective’s own responses to T-Mobile’s first set of Requests for Admission also confirm that the Agency Agreement was drafted by Selective, agreed to and executed by Selective in 2007, remains in place today, and designates VDG as Selective’s “agent.” See Sheridan Decl., Ex. E at 6-9. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 7 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 7 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 D. Virginia Properties’ Lawsuit, T-Mobile’s February 2013 Request for a Defense, and Selective’s Bad Faith, Including Selective’s Contradictory Coverage Positions. This case flows out of underlying claims brought against T-Mobile relating to an antenna installation in New York by Innovative. See Sheridan Decl. Ex. F. Specifically, one of T- Mobile’s former subsidiaries and T-Mobile NE’s predecessor, Omnipoint, leased space for the installation of a rooftop antenna from Virginia Properties, LLC (“Virginia Properties”). Id. at ¶ 4. Virginia Properties subsequently asserted claims against various parties alleging that the installation had damaged its property. See generally id. While Virginia Properties initially named T-Mobile US as a defendant, it subsequently substituted T-Mobile NE as the named defendant. See id. at ¶ 2. T-Mobile tendered the claims to Selective in February of 2013. See Sheridan Decl. Ex. G. Both of the Selective claims handlers assigned to the claim – initially Kary Cyprian and later Michael Parlin – described the reasonable claims handling practices that should have applied to their handling of T-Mobile’s claim during their recent depositions, confirming that: (1) Selective adopted written claims handling procedures in a manual that set forth the reasonable claims handling practices that they were expected to follow when addressing T-Mobile’s claim (“Claims Handling Manual”);5 (2) Selective’s Claims Handling Manual required them to timely respond to a claimant’s request for coverage by accepting or denying the claim in writing – a period that Mr. Parlin defined as ranging from two weeks to a maximum of 30 days;6 (3) a delay of more than 700 days – the time that it actually took Selective to respond to T-Mobile’s claim here – was not reasonable;7 (4) if a claim was denied, Selective’s Claims Handling Manual required Mr. Parlin to send the claimant a detailed, written explanation of the relevant policy language and the reasons for the denial so that the claimant would have an opportunity to 5 Parlin Dep. at 58-59. 6 Parlin Dep. at 49-50. 7 Id. at 58-59; see also 81 (“Q: Is responding to a claim in two years timely? A: No, that’s not timely.”). Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 8 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 8 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 respond;8 (5) the Claims Handling Manual also addressed an additional insured (like T-Mobile’s) right to coverage, indicating that such a party’s right to coverage turned on the existence of a D&I Agreement in an underlying contract between the primary insured and the third party;9 (6) if the claims handler reached the conclusion that a primary insured was entitled to coverage, an additional insured like T-Mobile would generally be entitled to coverage as well;10 and (7) the issuance of COIs would be further evidence of an intent to convey additional insured status on a party like T-Mobile.11 Ms. Cyprian began working on T-Mobile’s claim in February of 2013. She never contacted T-Mobile directly as part of her investigation of the claim and never asked either T- Mobile or the third-party claims agent that tendered the claim on T-Mobile’s behalf about the COIs issued by VDG. Deposition of Kary Cyprian, Sheridan Dec. Ex. H (“Cyprian Dep.”) at 144-46; 170-72; 227-29; 231. She instead: (1) reviewed the 2012 Policy and concluded that it created a potential for additional insured status if the underlying FSA contained a D&I Agreement; (2) requested and reviewed copies of the underlying FSA, confirming that it contained the type of D&I Agreement that triggered coverage; and (3) reached the conclusion by April 22, 2013 that T-Mobile was a “potential additional insured” under the Policy as a result. Id. 8 Id. at 51-55; 81-84; 100-102. 9 Id. at 64-68. 10 Id. at 67-68; 91-92: Q: And I think you said you review the Selective policy to determine if it contains an additional insured endorsement, correct? A: Correct. Q: And then you review the language in the Selective policy, that additional insured endorsement, to see how it applies, correct? A: Correct. Q: And then you try to determine if there is a "D and I" agreement, a defense and indemnification agreement, between the underlying primary insured and the party seeking additional insured coverage, correct? A: Correct. Q: And if there is, that additional insured is most likely an additional insured, correct? . . . A: Correct. 11 Id. at 151-52. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 9 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 9 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 at 198-99; 206-08. The only item that Ms. Cyprian claimed she needed to finalize her determination of T-Mobile’s status as an additional insured at the time she subsequently transferred to the file to Mr. Parlin in July of 2013 was a copy of T-Mobile’s own insurance policy. Id. at 199-201; 211-12; 219. Perhaps most importantly, Ms. Cpyrian conceded that she could not think of a single reason why T-Mobile would not qualify as an additional insured in a situation like that present here, where there was both a D&I Agreement requiring Innovative to name T-Mobile as an additional insured and Selective’s own agent issued COIs identifying T- Mobile as an additional insured. Id. at 149-50. Unfortunately, Mr. Parlin assumed responsibility for the handling of T-Mobile’s claim on July 8, 2013. Parlin Dep. at 119; 125. What followed during Mr. Parlin’s handling of T-Mobile’s claim was delay, non-responsiveness, and (eventually) an incorrect coverage determination, all of which are documented by statements made by Mr. Parlin himself during his recent deposition:  Mr. Parlin understood that T-Mobile was seeking a defense as an additional insured under Selective’s Policy and understood that he had a legal obligation to review the existing contents of the file and timely respond to that claim within a reasonable period by accepting or denying coverage. Id. at 87-89. Mr. Parlin also understood that the Claims Handling Manual required that he (1) undertake a reasonable and thorough investigation of T-Mobile’s claim; (2) timely respond to T-Mobile after completing that investigation – a period that he defined as “30 days”; and (3) to the extent that he was denying coverage for claim like T-Mobile’s, indicate that fact in writing along with a detailed explanation of the relevant policy language and reasons why that language allegedly excluded coverage sufficient to allow the claimant to understand and potentially challenge that decision. Id. at 49-55; 81-84; 100-06.  Despite his obligation to review Ms. Cyprian’s notes and the claim file more generally, Mr. Parlin was apparently unaware of the fact that Ms. Cyprian had reached the conclusion that T-Mobile qualified as a potential additional insured in April of 2013 and did not recall ever discussing that conclusion with her. Id. at 113- 14. He was also unaware of the 2012 COI and never asked T-Mobile or VDG for a copy even though he was in direct contact with VDG at that time. Id. at 149-53.  Mr. Parlin instead came up with an entirely new reason for refusing to provide a defense under the Policy: That the claims alleged in the underlying lawsuit were not covered because of the Professional Negligence Exclusion. Id. at 119-20.  Mr. Parlin communicated that position to Innovative’s professional liability insurer (CNA) on July 8 – Mr. Parlin’s very first day handling T-Mobile’s file – apparently Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 10 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 10 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 indicating to CNA that he intended to deny coverage on that basis. See Sheridan Decl., Ex. I (referencing a discussion between Mr. Parlin and CNA on July 8, 2013 during which he “advised [CNA] yesterday that Selective would now be issuing a declination of insurance coverage to Innovative”). CNA responded by sending Mr. Parlin a letter the following day (July 9, 2013), specifically reminding him that Selective had an obligation to defend Innovative even if it was unclear that Selective was ultimately obligated to indemnify Innovative. Parlin Dep. at 163-65.  As a result of the issues raised by CNA’s letter, Mr. Parlin requested that an in-house Selective attorney, Kenneth Malamud, analyze the question of whether Selective was obligated to provide a defense under the 2012 Policy despite the presence of the Professional Negligence Exclusion. Id. at 165; 161-62.  Mr. Parlin received the requested coverage opinion from Mr. Malamud on July 22, 2013 (“Coverage Opinion”). Id. at 166. It is undisputed that, after reviewing the Coverage Opinion, Mr. Parlin concluded that a defense was owed to Selective’s insureds under the 2012 Policy in spite of the Professional Negligence Exclusion but never informed T-Mobile of that conclusion, a fact that he repeatedly acknowledged during his recent deposition. Id. at 121; 170-71.12  Mr. Parlin instead drafted a letter to Innovative (and only Innovative) on July 23, 2013 indicating that Selective would provide a defense pursuant to a reservation of rights. See Sheridan Decl., Ex. J (“2013 ROR Letter”). The 2013 ROR Letter expressly acknowledged the fact that Selective owed a duty to defend Innovative and confirmed in the section of the letter entitled “DEFENSE BEING PROVIDED” that “Selective is providing a defense for all the allegations in the Lawsuit to Innovative . . . .” Id. at 2, 14. In short, it is undisputed that Mr. Parlin concluded that Selective owed a duty to defend its insureds despite the Professional Negligence Exclusion by July of 2013, agreed to provide that defense to Innovative, and funded that defense during the pendency of the underlying litigation.  After failing to inform T-Mobile of his July 2013 conclusion that a defense was owed to Innovative under the Policy, however, Mr. Parlin did nothing further to investigate or address T-Mobile’s claim between July of 2013 and February of 2015. He simply ignored the claim, conduct that he was eventually forced to admit during his deposition constituted improper claims handling. Parlin Dep. at 176-78.13 12 Q: . . . You received the coverage opinion on July 22nd. The coverage opinion confirms that you have an obligation, Selective has an obligation to defend its insureds under this policy, correct? A: Correct. Q: On July 23rd, you advised Innovative of your conclusion in that regard and confirmed that you'll provide a defense to Innovative, correct? A: Correct. Q: You do not send similar correspondence to T-Mobile advising T-Mobile that you've reached the conclusion that a defense is owed under the policy, correct? A: Correct. 13 Q: Was that proper claims handling? A: I am not sure. Q: Do you think it’s okay not to respond to an insured's tender to Selective for a year-and-a-half . . . Is there some policy or procedure you can point me to that says that's okay? Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 11 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 11 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900  Having not received any substantive response to T-Mobile’s claim for more than two years at that point, T-Mobile’s claims agent sent yet another demand for Selective to assume its defense on February 25, 2015. See Sheridan Decl., Ex. K. Mr. Parlin received that demand the following morning, February 26, 2015. Parlin Dep. at 194.  Notwithstanding Mr. Parlin’s conclusion a year and a half earlier that Selective owed a duty to defend its insureds under the 2012 Policy, Mr. Parlin took the opposite position with regard to T-Mobile’s claim, denying coverage and the defense requested by T-Mobile a few short hours later via in a brief email attaching the 2013 ROR Letter, indicating that, “[b]ased on this letter, Selective must respectfully decline your request for defense and indemnification . . . .” Sheridan Decl., Ex. L. Mr. Parlin admitted during his deposition that: (1) his entire “investigation” of T- Mobile’s claim was limited to the brief analysis that he completed on the morning of February 26, 2015; (2) he had done nothing to evaluate T-Mobile’s claim for the entire prior year and a half; (3) his email denying coverage failed to provide any explanation as to the basis for denial or his inconsistent coverage positions, as it did not even address the only basis for T-Mobile’s claim – T-Mobile’s position that it was an additional insured under the 2012 Policy; (4) he made no attempt to properly investigate the claim by contacting Sedgwick or T-Mobile before denying coverage and that he never inquired about the COIs as a result; and (5) his conduct failed to comply with the basic practices defined by Selective’s own Claims Handling Manual. Parlin Dep. at 102-106;14 194-201.15 A: No. Q: So, I'll ask you again, sir. Is that proper claims handling? A: Looking back on it? No. 14 Q: You denied coverage for T-Mobile's claim, correct? A: Yes. Q: Okay. Did you send T-Mobile . . . a detailed letter explaining the additional insured endorsement and why it did not allegedly apply? A: I sent them a copy of the letter to [Innovative]. Q: Okay. Did that letter contain any reference whatsoever to the applicable policy language relating to additional insureds, that coverage that T-Mobile was seeking coverage under in this case? A: No. Q: Okay. Did that letter contain any explanation of any exclusions to the additional insured endorsement that allegedly applied or that you relied on as the basis for denying coverage? A: No. Q: Did that letter in any way, shape or form address T-Mobile's claim that it was an additional insured under Selective's policy? A: No. . . . Q: The letter is also supposed to contain an explanation of how the policy language at issue applies to the claim, correct? A: Correct. Q: And you're supposed to explain any exclusions that you contend apply, correct? A: Correct. Q: And your letter contained none of those things relative to the additional insured endorsement, the endorsement T- Mobile was seeking coverage under, correct? A: Correct. Q: So, it didn't comply with Selective's own policies and procedures, did it? Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 12 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 12 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900  Mr. Parlin subsequently admitted that he denied T-Mobile’s claim on February 26, 2015 for one reason (and one reason only): his conclusion that the Professional Negligence Exclusion barred coverage for T-Mobile’ claim even though he had reached the exact opposite conclusion a year and a half earlier after reviewing the Coverage Opinion, an inconsistent position that he admitted during his deposition was likely incorrect. Id. at 72; 252-53;16 267-68; 269-71;17 278-79.  While that incorrect conclusion was the only basis for his denial and Mr. Parlin expressly confirmed that he did not deny coverage in whole or in part because of any alleged confusion relating to the relationship between the various T-Mobile entities at issue, including the issues later raised by Selective in this litigation (e.g., assertions that Selective was unclear on whose behalf T-Mobile tendered the claim, that T-Mobile US was allegedly not an additional insured under the Policy, or the A: No. 15 Q: Is there any discussion or analysis of the additional insured issue contained in this letter that you forwarded on to T-Mobile in February of 2015? A: No. Q: So, you didn't provide T-Mobile with any explanation of why it did not allegedly qualify as an additional insured under Selective's policy, did you? A: No. Q: You instead sent T-Mobile, who was seeking a defense under the Selective policy, a letter that indicated that you had concluded a defense was owed to someone else under the policy, right? A: Right. Q: Right. Was that an adequate explanation of your coverage determination? A: No. Looking back on it. 16 Q: And as I think you indicated to me earlier, your conclusion that T-Mobile didn't qualify as an additional insured was based on your position that it wasn't an additional insured because of the professional negligence exclusion in the additional insured endorsement? A: Correct. Q: And you had reached the contrary decision with regard to the duty to defend the primary insured, Innovative, in that there was the same type of exclusion in the main body of the policy. But despite the presence of that exclusion, you reached the conclusion the defense was owed to Innovative, correct? A: Correct. Q: And you reached the inconsistent decision with regard to the same exclusion when it came to T-Mobile's defense, correct? A: Correct. Q: And I think you testified earlier that in retrospect, you're not very comfortable that [this] inconsistent decision was correct? A: Correct. 17 Q: But you agreed to provide a defense [to Innovative] anyway, right? A: Right. Q: And T-Mobile was asking you to provide a defense, right? A: Yes. Q: And you didn't do so, right? A: Right. Q: And your justification for not doing so was that same professional negligence exclusion, correct? A: Correct. Q: And that's not consistent, correct? A: Correct. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 13 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 13 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 supposed lack of information about T-Mobile US’s ownership of T-Mobile NE), Mr. Parlin freely admitted that he could and would have performed an additional investigation of those factual issues had they had actually played any role in his decision to deny coverage. Parlin Dep. at 281-83.  Given the inconsistent nature of Mr. Parlin’s denial, T-Mobile’s agent again reiterated its demand for coverage via an email in March of 2015. Sheridan Decl., Ex. M (“As my client T-Mobile is an additional insured on your policy, we continue to look to you for defense and indemnification on this claim”). Once again, however, Mr. Parlin did not respond in any way, later admitting that he did nothing to personally evaluate T-Mobile’s claim for coverage after his February 26, 2015 email denying coverage and that his failure to do so again constituted improper claims handling as a result. Id. at 228-29,18 255-56.  Frustrated by Selective’s failure to acknowledge coverage for more than two years, T-Mobile served notice of its intent to sue Selective under the Insurance Fair Conduct Act on August 15, 2015. See Sheridan Decl., Ex. N (“IFCA Notice”).  Selective responded to the IFCA Notice on September 29, 2015. Sheridan Decl., Ex. O (“IFCA Response”). Selective’s IFCA Response took the inaccurate position that Mr. Parlin had denied coverage because of the alleged absence of “a written contract between Innovative and T-Mobile,” claiming that T-Mobile did “not qualify as an additional insured” as a result. Id.  In addition to confirming the inaccurate nature of other representations made by Selective during this litigation,19 Mr. Parlin admitted during his deposition that: (1) 18 Q: So, it's fair to say between the period of your letter denying coverage – I should say your e-mail denying coverage in February of 2015 and my firm sending you a letter in August of 2015, you did absolutely nothing further to evaluate T-Mobile's claim for coverage as an additional insured under Selective's policy, even though Mr. Burton had reiterated that claim in March of 2015, correct? A: Correct. Q: And why not? A: I don't know. Q: Was that proper claims handling? A: In retrospect, probably not. 19 Mr. Parlin also admitted that various representations made by Selective last fall regarding his claimed unavailability for deposition in 2016 were not true. Specifically, as the Court may recall from the recent hearing held in relation to T-Mobile’s request to extend the case schedule – a motion necessitated by Selective’s delays in scheduling Mr. Parlin’s depositions in 2016 – the primary reason that Selective initially claimed that it could not timely present Mr. Parlin for deposition was the assertion that he had allegedly “retired,” was no longer an employee of Selective, and was difficult to reach because he was allegedly “traveling.” See Sheridan Decl., Ex. P at 1; 3 (“Michael Parlin is retired now so I will need to see if my client has contact information for him”; “Mr. Parlin's may be somewhat difficult to arrange as he is now retired and I am informed he currently is or will be traveling this Fall . . . [w]e are attempting to get his availability despite the fact he is no longer employed by SICA”; “I’m still working on dates . . . I’m being told that neither Parlin nor Cyprian work for Selective any longer so this is what is causing the delay”) (emphasis added). T-Mobile took Selective at its word that it needed additional time to schedule the depositions based on these representations and did not press for the depositions as a result. Mr. Parlin confirmed under oath, however, that these claims were not true, as he never retired from Selective, remains the claims handler assigned to T-Mobile’s claim to this very day, and was not traveling last fall at the time Selective claimed he was Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 14 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 14 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 he had no contact whatsoever with the Selective employees or the outside attorneys responsible for generating the IFCA Response to verify the accuracy of the statements contained therein, including ensuring that it reflected the actual basis for his decision to deny coverage; (2) he had not reviewed any of the pleadings filed by Selective in this case to ensure that those documents accurately reflected the actual basis for his denial; and (3) indeed, no one representing Selective had ever even bothered to ask Mr. Parlin why he had denied coverage for T-Mobile’s claim. Id. at 259-62.  As a result, when shown the IFCA Response during his deposition, Mr. Parlin confirmed that the IFCA Response: (1) did not refer to the Professional Negligence Exclusion or otherwise reflect the actual basis for his decision to deny coverage; and (2) incorrectly asserted that he had denied T-Mobile’s claim because there was no written agreement between T-Mobile and Innovative – a claim that misstated the actual basis for his denial and was simply wrong, as Mr. Parlin was in possession of the 2010 FSA between Innovative and T-Mobile NE at the time he denied coverage in February of 2015. Id. at 268, 271-73, 278-79. III. AUTHORITY AND ARGUMENT A. Selective Breached Its Duty to Defend T-Mobile as a Matter of Law. Selective breached the Policy by failing to provide a defense to T-Mobile for several reasons. First, Selective determined that it was obligated to provide a defense under the Policy and has now admitted that the only basis upon which it denied coverage to T-Mobile was incorrect. Second, the “mend the hold” doctrine estops Selective from relying upon additional defenses not raised at the time of the denial. Third, even if the Court considers those defenses, each fails as a matter of law because both T-Mobile US and T-Mobile NE qualify as insureds under the Policy. unreachable. Counsel for T-Mobile noted this fact on the record during Mr. Parlin’s deposition and in a follow-up email sent during the deposition. Parlin Dep. at 31-32; 108-09; see also Sheridan Decl. Ex. P at 1 (“Again, I was not pleased to learn today that Selective’s prior claim that Mr. Parlin had allegedly retired and was unreachable last fall when we were trying to schedule the deposition – the reason put forth by Selective below for initially delaying the depositions – was not true”). To date, T-Mobile has not received a substantive response to that email. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 15 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 15 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 i. Selective Has Already Admitted That It Was Contractually Obligated to Provide a Defense to T-Mobile and That the Only Basis upon Which It Actually Denied Coverage was Incorrect. Under Washington law,20 courts must “liberally construe the policy in favor of finding coverage,” and “ambiguities in the contract must be construed against the drafter.” RSUI Indem. Co. v. Vision One, LLC, No. 08-cv-1386-RSL, 2009 WL 5125411, at *3-4 (W.D. Wash. Dec. 18, 2009). Where a policyholder establishes that a claimed loss “falls within the scope of the policy’s insured losses,” the burden shifts to the insurer to “show that the loss is excluded by specific language in the policy.” Williams v. Life Ins. Co. of North Am., 117 F.Supp.3d 1206, 1210-11 (W.D. Wash. 2015). The admissions of Mr. Parlin, as well as the relevant language of the Policy and the FSAs, establish T-Mobile’s right to coverage as an additional insured for several reasons. First, it is undisputed that Selective itself determined that the underlying lawsuit triggered its duty to defend under the 2012 Policy. As set forth above, Mr. Parlin has admitted under oath that he: (a) was the Selective employee responsible for making coverage determinations relative to the claims at issue in this case; (b) requested the Coverage Opinion to verify a defense was owed to Selective’s insureds under the Policy in spite of the Professional Negligence Exclusion; (c) subsequently received and reviewed that Coverage Opinion; (d) reached the conclusion after doing so on July 23, 2013 that a defense was owed under the Policy to Selective’s insureds; (e) documented that conclusion in writing by way of the 2013 ROR Letter; and (f) subsequently provided that defense to Innovative. Second, Mr. Parlin has also admitted that T-Mobile qualified as an additional insured under the Policy.21 Specifically, Mr. Parlin admitted that: (a) T-Mobile’s right to coverage as an 20 The Court has previously ruled that Washington law applies to T-Mobile’s breach of contract and declaratory judgment claims. Dkt. No. 30 at 20-21. 21 Even if Mr. Parlin had not already conceded these issues, summary judgment would still be proper under the Additional Insured Endorsement and the FSA. The Additional Insured Endorsement conveys additional insured status to any entity that Innovative “agreed in a written contract or written agreement to add as an additional insured on your policy.” Paragraph 7.2 of the 2010 FSA did exactly that, obligating Innovative to name T-Mobile NE “as an additional insured under the insurance policies that [Innovative] is required to maintain under . . . this Agreement.” Sheridan Decl., Ex. A at ¶ 7.2 (emphasis added). Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 16 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 16 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 additional insured turned on the language of the Additional Insured Endorsement referring to the issue of whether there was a D&I Agreement obligating Innovative to name T-Mobile as an additional insured; and (b) the 2010 FSA contained a D&I Agreement that satisfied the Additional Insured Endorsement and triggered T-Mobile’s status as an additional insured. Id. at 64-68; 91- 92; 294-295. Indeed, the only qualification that Mr. Parlin made was noting that he thought T- Mobile would qualify as an additional insured unless the Professional Negligence applied to T- Mobile’s claim for a defense. Id. at 294-95. Third, it is also undisputed that Mr. Parlin himself determined two years earlier that it did not. Again, that same exclusion is present in the Policy and the Additional Insured Endorsement, it applied equally, if at all, to both Innovative’s and T-Mobile’s respective claims as a result, and Mr. Parlin concluded that Selective was obligated to provide a defense under the Policy despite the presence of the Additional Insured Endorsement after securing a coverage opinion from counsel confirming that fact. As a result, Mr. Parlin’s decision to subsequently deny the defense requested by T-Mobile based on the very same exclusion that he had previously determined did not apply to claims for a defense was inconsistent, incorrect, and one that he could not even explain during his deposition. Id. at 72; 252-53; 267-71; 278-79; 297-98. In summary, Selective’s own admissions and conduct in this case – conduct proving that Selective itself determined that the Professional Negligence Exclusion did not apply to a claim for a defense like that raised by T-Mobile – conclusively demonstrates that Selective owed T-Mobile a duty to defend the underlying claims and that Selective breached that obligation as a matter of law. Summary judgment is proper as a result. ii. Selective Should Be Estopped from Belatedly Asserting Defenses to Coverage That It Has Admitted Played No Role in Its Decision to Deny T-Mobile’s Claim for Coverage. The “mend the hold” doctrine precludes an insurer from introducing new or changed bases for denying coverage after the fact. Karpenski v. Am. Gen. Life Cas., 999 F.Supp.2d 1235, 1245 Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 17 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 17 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 (W.D. Wash. 2014). “When an insurer denies coverage for one reason, with knowledge of other reasons for denying coverage, the insurer may be precluded from raising new grounds for denying coverage under traditional principles of estoppel.” Ledcor Indus. Inc. v. Virginia Sur. Co., Inc., 09-cv-01807-RSM, 2012 WL 223904, at *2 (W.D. Wash. Jan. 25, 2012). Thus, “[a]n insurer is charged with knowledge which it would have obtained had it pursued a reasonably diligent inquiry” once an insured shows bad faith or prejudice from the insurer’s failure to timely raise those additional defenses to coverage. Karpenski, 999 F.Supp.2d at 1245. Again, Mr. Parlin denied T-Mobile’s claim on February 26, 2015 for one reason and one reason only: his misguided and inconsistent conclusion that the Professional Negligence Exclusion impacted Selective’s obligation to defend its insureds. Parlin Dep. at 72; 252-53; 267- 73; 278-79. Despite the fact that Mr. Parlin confirmed under oath these issues played no role whatsoever in his decision to deny coverage, Selective has taken the position in this case that Mr. Parlin’s decision to deny coverage was actually based on different factors, such as the claim that he allegedly did not know on whose behalf T-Mobile had tendered the claim, did not possess a copy of the 2010 FSA at the time he denied coverage, and that T-Mobile US lacks standing to tender its claim to Selective. Yet Mr. Parlin testified at his deposition that he could have (and would have) timely investigated the factual issues on which these purported defenses are predicated had they actually played any role in his decision to deny coverage. Id. at 281-83. These facts present a perfect illustration of why an insurer like Selective should be estopped from belatedly asserting additional coverage defenses that did not actually play a role in its denial of a claim. As Mr. Parlin freely admitted during his deposition, he had an obligation to timely investigate and raise any concerns about T-Mobile US’s ability to tender the claim on behalf of T-Mobile NE or seek recovery of the monies paid to defense counsel by T-Mobile US on T-Mobile NE’s before denying coverage had those issues actually played a role in his decision to deny coverage. Id. at 281-83. T-Mobile was clearly prejudiced by Selective’s failure to timely Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 18 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 18 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 raise those issues as a result, as that failure denied T-Mobile the opportunity to address and cure those issue before Selective denied coverage. Even the most rudimentary of investigations of Selective’s newly-asserted coverage defenses – a simple phone call or email from Mr. Parlin – would have confirmed that they were baseless and provided T-Mobile with the opportunity to cure them in advance of Selective’s denial. That is the precise reason Washington courts apply the “mend the hold” doctrine in coverage cases – to stop insurers from creating their own state of ignorance about the facts underlying a claim through the very type of slipshod “investigation” employed by Mr. Parlin here and then asserting that self-generated ignorance as an alternative justification for denying coverage years after the fact. In short, Selective should not be allowed to benefit by belatedly asserting defenses that its own claims examiner admitted played no role in his decision to deny coverage and that only now exist because that same claims examiner failed to perform an adequate investigation before denying coverage. iii. Even if It Were Proper for Selective to Belatedly Assert Additional Coverage Defenses, None of Those Defenses Have Merit. a. The 2012 COI confers direct coverage to T-Mobile US because it was issued by VDG as Selective’s authorized agent. VDG issued the 2012 COI to T-Mobile US directly identifying T-Mobile US (not merely T-Mobile NE) as an additional insured under the Policy. The plain language in the COI confers additional insured status on T-Mobile US because it was issued by VDG as Selective’s authorized agent acting within the scope of its actual or apparent authority. While Washington courts have not directly addressed the question of whether a certificate of insurance issued to a third-party confers additional insured status,22 courts around the country 22 The one Washington case that has touched on this issue indicated in dicta that a certificate of insurance, standing alone, does not confer coverage. See Postlewait Constr. Inc. v. Great Am. Ins. Co., 106 Wn.2d 96, 100-01, 720 P.2d 805 (1986) (noting simply that a certificate of insurance “is not the equivalent of an insurance policy”). Postlewait did not, however, address the issue of whether the issuing broker had an agency agreement with the insurer such that it was an agent of the insurer or whether the broker was merely an independent broker whose representations would not operate to bind the insurer. See id. at 100 (quoting from Court of Appeals decision noting simply that the plaintiff “was issued certificates of insurance by lessee’s insurance broker”). Postlewait is thus not binding authority on the question of whether an authorized broker can bind an insurer by issuing certificates of insurance, and as noted above, Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 19 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 19 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 have regularly held that it does. See, e.g., J.M. Corbett Co. v. Ins. Co. of N. Am., 357 N.E.2d 125, 126-28, 43 Ill.App.3d 624 (Ill. App. 1976) (certificate of insurance issued directly from insurer to third party incorporated policy by reference and conferred coverage upon third party); Bucon, Inc. v. Penn. Mfg. Ass’n Ins. Co., 151 A.D.2d 207, 210-11, 547 N.Y.S.2d 925 (N.Y. App. 1989) (insurer estopped from denying coverage after issuing certificate of insurance naming plaintiff as additional insured). Moreover, where an insurer has a valid agency agreement with an insurance broker that authorizes the broker to issue certificates of insurance on the insurer’s behalf, courts treat those certificates of insurance as conferring coverage as if they had been issued by the insurer itself. See, e.g., Sumitomo Marine & Fire Ins. Co. of Am. v. Southern Guar. Ins. Co. of Ga., 337 F.Supp.2d 1339, 1349-56 (N.D. Ga. 2004) (certificates of insurance conferred additional insured status when issued by insurer’s authorized broker); West Am. Ins. Co. v. J.R. Const. Co., 777 N.E.2d 610, 615, 334 Ill.App.3d 75 (Ill. App. 2002) (same); Mtn. Fuel Supply v. Reliance Ins. Co., 933 F.2d 882, 889 (10th Cir. 1991) (same). Indeed, a certificate of insurance issued by an authorized broker can even broaden the coverage afforded by the underlying policy where the issuing broker is acting as the insurer’s agent. See Blackburn, Nickels & Smith, Inc. v. Nat’l Farmers Union Prop. and Cas. Co., 482 N.W.2d 600, 602-04 (N.D. 1992) (certificate of insurance issued by insurer’s authorized broker conferred coverage on additional insured for full policy term even though insurer was unaware of certificate, insurer had only issued temporary coverage, and such temporary coverage had lapsed). In Sumitomo, a housing developer named SMG required a contractor to name it as an additional insured under its CGL policies and the contractor obtained certificates of insurance from its insurance broker, an authorized agent of the insurers. Sumitomo, 337 F.Supp.2d at 1342- 43. Both certificates of insurance identified SMG as the “certificate holder,” stated that the the majority of courts that appear to have addressed this question have found that such representations do in fact bind the insurer. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 20 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 20 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 certificate holder was an additional insured, and were signed by the broker as the insurers’ “authorized representative.” Id. at 1343-44. The broker also testified that he understood SMG to be an additional insured under the contractor’s policies, that he believed he had authority to issue the certificates to SMG, that he did so without the insurers’ prior approval, and that he did not recall any instance in which the insurers had taken the position that a certificate he issued was not binding. Id. at 1344-45; 1345 n.5. Despite the certificate’s purported disclaimer23 and despite the fact that the agency agreements between the brokers and the insurers did not specifically authorize the broker to issue certificates of insurance or to confer additional insured status, the Court held that the broker acted with actual authority when it issued the certificates of insurance and SMG was accordingly entitled to coverage under the contractor’s policies. Id. at 1351-53. The circumstances behind VDG’s issuance of the COI to T-Mobile are virtually identical to those at issue in Sumitomo. Innovative was required to name T-Mobile as an additional insured under its CGL policy with Selective and obtained a certificate of insurance stating that T-Mobile had been so named. See FSA ¶¶ 7.1, 7.2; see also Wyrsch Decl. Ex. B. The COI issued to T- Mobile identifies “T-Mobile USA Inc., its Subsidiaries and Affiliates” as the “Certificate Holder,” states that the certificate holder “is included as an additional insured” under that policy, and was signed by Michelle Ortiz of VDG as Selective’s “authorized representative.” Wyrsch Decl., Ex. B. Selective’s own claims examiner has already admitted that he was aware VDG regularly issued COIs on Selective’s behalf, that VDG had the authority to issue such COIs, that the COI was relevant to his investigation of T-Mobile’s claim for coverage, and that it was reasonable for T-Mobile to rely on the COI for its belief that it was entitled to coverage as a result. Parlin Dep. 23 See Sumitomo, 337 F.Supp.2d at 1355 n.9 (emphasis added, quotation omitted): In deciding to what extent coverage is available, we believe it makes sense to have to look to the policy when the certificate of insurance contains disclaimer language. However, when a certificate of insurance issued by the insurer's representative clearly states that an entity is an additional insured, it makes little sense for that entity to have to scour the policy to ensure that is in fact an additional insured, regardless of the disclaimer language. After all, what is a certificate of insurance for if not to verify that a named party is in fact insured? Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 21 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 21 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 at 125-26; 129; 134-37; 144-46; 152-57. VDG has confirmed these same facts, with Mr. Wyrsch confirming that he understood T-Mobile to be an additional insured under Innovative’s policies, that VDG “regularly issue[s] additional insured certificates on Selective’s behalf,” and that he is “not aware of an instance in which Selective has objected to us doing so or taken the position that the additional insured certificates issued by us are not binding upon Selective.” Wyrsch Decl. ¶¶ 5-6. Finally, the terms of VDG’s Agency Agreement confer even greater authority on VDG than the agency agreement at issue in Sumitomo because they explicitly state that VDG has “authority to act on [Selective’s] behalf” in “[e]xecuting and issuing binders, policies and certificates for such insurance or bonds . . . .” Wyrsch Decl. Ex. A at ¶ A.1 (emphasis added); see also Pacific Title, Inc. v. Pioneer Nat. Title Ins. Co., Inc., 33 Wn. App. 874, 878, 658 P.2d 684 (1983) (looking to language of agency agreement to determine that broker was insurer’s agent). At the absolute minimum, VDG clearly acted with apparent authority at the time it issued the 2012 COI, and Selective should be bound by its agent’s representations as a result. b. The policy’s blanket additional insured endorsement confers coverage on T-Mobile US as T-Mobile NE’s sole member or, at a minimum, T- Mobile is entitled to assert a right to reimbursement as T-Mobile NE’s parent company. To the extent that Selective argues that named plaintiff T-Mobile US cannot pursue this action “on behalf of” T-Mobile NE, that argument fails for three reasons: (1) again, T-Mobile US has a direct right to coverage under the 2012 COI expressly naming it as an additional insured for the reasons already addressed above; (2) T-Mobile US also qualifies as an insured as T-Mobile NE’s member or parent under the Policy’s “Who is an Insured” clause; and (3) even if that were not the case, T-Mobile US possesses standing to pursue the defense costs that it incurred on T- Mobile NE’s behalf. The Policy’s “Who is an Insured” clause expressly extends coverage to the members and managers of any insured that is a limited liability company (LLC) for all claims that relate to “the Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 22 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 22 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 conduct of [the LLC’s] business” or “their duties as [the LLC’s] managers . . .” Sheridan Decl. Ex. B at 38. T-Mobile NE is a wholly-owned subsidiary of T-Mobile US and T-Mobile US is the sole “member” of T-Mobile NE. See Bauer Decl. ¶ 3; see also Bauer Decl. Ex. A-B (T-Mobile NE certificate of formation and certificate of sole membership interest). Because it is beyond dispute that the allegations in the underlying complaint relate to “the conduct of [T-Mobile NE’s] business,” the Policy’s “Who is an Insured” provision extends coverage to T-Mobile US as a member of T-Mobile NE. In the alternative, if the Court finds for some reason that T-Mobile US does not have a direct right to coverage under the Policy, T-Mobile US has standing to seek reimbursement of the full extent of defense costs it paid on behalf of T-Mobile NE as a result of Selective’s wrongful denial of T-Mobile NE’s claim for coverage. Parent corporations like T-Mobile US have standing to assert claims related to injuries to their subsidiaries where the parent company has suffered a “direct and independent” injury as a result of the conduct that also harmed the subsidiary. Virginia Sur. Co. v. Northrop Grumman Corp., 144 F.3d 1243, 1246 (9th Cir. 1998). Here, T- Mobile US was directly injured as a result of Selective’s wrongful denial of T-Mobile NE’s claim for coverage because T-Mobile US was forced to pay all attorney’s fees and defense costs that should have been paid by Selective as a result, costs and fees that now exceed more than half a million dollars. See Bauer Decl. ¶ 5. That impact was directly and independently felt by T- Mobile US, and constitutes a concrete injury attributable to Selective’s actions that will be remedied by a declaration that Selective owed T-Mobile NE a duty to defend under the Policy. Accordingly, T-Mobile US has standing to assert a right to reimbursement of defense costs that it paid on T-Mobile NE’s behalf after Selective wrongfully denied T-Mobile’s claim for coverage.24 24 If the Court determines that T-Mobile US did not suffer a “direct and independent injury” as a result of Selective’s wrongful denial of coverage to T-Mobile NE, T-Mobile respectfully submits that the reasonable course to cure any such defect in the pleadings would be to allow T-Mobile to amend its complaint to name T-Mobile NE as a party plaintiff, and T-Mobile will promptly seek such relief from the Court. Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 23 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 23 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 B. Selective’s Conduct Toward T-Mobile NE Constitutes Bad Faith. In addition to a ruling that it is entitled to summary judgment on the issue of coverage, T- Mobile respectfully requests that the Court enter a ruling that it is entitled to summary judgment on its common-law bad faith claim against Selective. The Court has previously ruled that New Jersey law applies to T-Mobile’s bad faith claim. Dkt. No. 30 at 22-27. Under New Jersey law, a policyholder alleging insurance bad faith “must show ‘that no debatable reasons existed for denial of the benefits.’” Badiali v. New Jersey Mfgs. Ins. Grp., 220 N.J. 544, 554-55, 107 A.3d 1281 (N.J. 2015) (quoting Pickett v. Lloyd’s, 131 N.J. 457, 481, 621 A.2d 445 (N.J. 1993)). In cases where the insurer is alleged to have unreasonably delayed the processing of an insured’s claim, “bad faith is established by showing that no valid reasons existed to delay processing the claim and the insurance company knew or recklessly disregarded the fact that no valid reasons supported the delay.” Pickett, 131 N.J. at 481, 621 A.2d 445. A lack of knowledge of a reasonable basis for delaying or denying a claim “may be inferred and imputed to an insurance company where there is a reckless indifference to facts or to proofs submitted by the insured.” Id. at 473. The undisputed testimony of Selective’s own witnesses makes it clear that Selective delayed investigating T-Mobile’s claim “without valid reasons,” acted in “reckless indifference” to factual proof in hand at the time of its denial, and made that denial without a “fairly debatable basis.” Those violations include, but are not limited to:  Selective’s failure to follow its own claims handling requirements. See, e.g., Princeton Gamma-Tech, Inc. v. Hartford Ins. Grp., No. SOM-L-1289-91, 1997 WL 35384066, at *147 (N.J. Super. June 5, 1997) (finding “clearest illustration of [insurer’s] failure to observe its good faith duties to [insured] is its refusal to comply with the very procedures that are set forth in the [insurer’s] Environmental Claims Processing Manual” and insurer’s acting “[i]n stark contrast to its own procedure manual”); see also Bello v. Merrimack Mut. Fire Ins. Co., No. A-4750-10T4, 2012 WL 2848642, at *7 (N.J. Super. App. July 12, 2012) (affirming finding that insurer acted unreasonably in denying claim based on internal memo acknowledging that insurer denied coverage without engineer’s opinion and claims examiner “did not like doing business that way”). Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 24 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 24 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900  Selective’s failure to substantively investigate or otherwise respond to T-Mobile’s claim for more than 2 years. See, e.g., Badiali, 220 N.J. at 553, 107 A.3d 1281 (unfair and deceptive claims handling practices include “refusing to pay claims without conducting a reasonable investigation based upon all available information” and “failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed” (citing N.J.S.A. 17:29B9-4(9)(d), (e))); see also Princeton Gamma-Tech, Inc., No. SOM-L-1289-91, 1997 WL 35384066, at *149-51 (insurer acted in bad faith by failing to respond to notice of claim for six months and failing to submit coverage determination within timeline in its own internal procedures).  Selective’s belated denial of coverage on an inconsistent basis, a basis that Seletive has now admitted was incorrect. See Hudson Universal, Ltd. v. Aetna Ins. Co., 987 F. Supp. 337, 342 n.4 (D.N.J. 1997). Under the undisputed facts set forth above, no jury could reasonably find that Selective had “valid reasons” for its course of conduct in ‘investigating’ T-Mobile’s claim or that Selective had a “debatable basis” for denying T-Mobile’s claim under the Policy. Accordingly, T-Mobile is entitled to a summary judgment ruling that it has established that Selective acted in bad faith as a matter of law.25 IV. CONCLUSION For the reasons set forth above, T-Mobile respectfully requests that the Court enter an Order granting T-Mobile summary judgment on its breach of contract, declaratory judgment, and bad faith claims. A proposed order granting the relief requested is submitted herewith. /// /// 25 Again, T-Mobile does not request a summary judgment ruling on (a) its CPA claim, (b) the extent of its damages, or (c) the question of whether Selective’s conduct rose to such a level that T-Mobile is entitled to punitive damages. For one, whether an insurer’s conduct rises to the level of “wantonly reckless or malicious” behavior sufficient to justify punitive damages is generally a question of fact for the jury under New Jersey bad faith law. See Miglico v. HCM Claim Mgmt. Corp., 672 A.2d 266, 272, 288 N.J. Super. 331 (N.J. Sup. Ct. 1995). Second, analogous precedent from this Court appears to reach the same conclusion, confirming that the availability of extracontractual damages is a jury question under the Seventh Amendment. See MKB Constructors v. Am. Zurich Ins. Co., No. 13-cv- 0611-JLR, 2015 WL 1188533, at *29 (W.D. Wash. Mar. 16, 2015) (ruling that “the issue of enhanced damages must be resolved by the jury to pass muster under the Seventh Amendment” when an insured seeks extracontractual damages); see also Nw. Mut. Life Ins. Co. v. Koch, 771 F.Supp.2d 1253, 1256 (W.D. Wash. 2009) (“[T]he Seventh Amendment provides that a party in federal court is entitled to a jury on the issue of punitive damages.”); Fed. R. Civ. P. 38(a) (“The right of trial by jury as declared by the Seventh Amendment to the Constitution . . . is preserved to the parties inviolate.”). Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 25 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 25 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 DATED this 23rd day of March, 2017. s/ Michael A. Moore Michael A. Moore, WSBA No. 27047 Kelly H. Sheridan, WSBA No. 44746 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Telephone: (206) 625-8600 Fax: (206) 625-0900 E-mail: mmoore@corrcronin.com ksheridan@corrcronin.com Attorneys for Plaintiff Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 26 of 27 T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 26 No. 2:15-cv-01739-JLR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 CERTIFICATE OF SERVICE I hereby certify that on March 23, 2017, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: Jeffrey S. Tindal Betts, Patterson & Mines, P.S. 701 Pike Street, Suite 1400 Seattle, WA 98101-3927 Email: jtindal@bpmlaw.com Eric G. Siegel (pro hac vice) Michael J. Marone (pro hac vice) McElroy, Deutsch, Mulvaney & Carpenter, LLP 1300 Mount Kemble Avenue Morristown, NJ 07962 Email: esiegel@mdmc-law.com mmarone@mdmc-law.com s/ Michael A. Moore Michael A. Moore, WSBA No. 27047 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Telephone: (206) 625-8600 Fax: (206) 625-0900 e-mail: mmoore@corrcronin.com Case 2:15-cv-01739-JLR Document 50 Filed 03/23/17 Page 27 of 27 (PROPOSED) ORDER GRANTING T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 1 Cause No. 2:15-cv-01739-JLR CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE HONORABLE JAMES L. ROBART UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE T-MOBILE USA, INC., a Washington corporation, Plaintiff, v. SELECTIVE INSURANCE COMPANY OF AMERICA, Defendant. No. 2:15-cv-01739-JLR ORDER GRANTING T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT (PROPOSED) THIS MATTER having come on regularly for hearing before the Court on Plaintiff T- Mobile USA, Inc.’s (“T-Mobile”) Motion for Partial Summary Judgment (the “Motion”), and the Court having reviewed the files and records herein, and deeming itself fully advised; now, therefore, it is hereby ORDERED that T-Mobile’s Motion is GRANTED. The Court finds that T-Mobile is entitled to judgment as a matter of law on its breach of contract and declaratory judgment claims. Specifically, Defendant Selective Insurance Company of America owes T-Mobile a duty of defense under Selective insurance policy no. 164349108 in connection with the claims asserted against T-Mobile in Virginia Properties LLC v. T-Mobile Northeast, LLC, United States District Court for the Southern District of New York Case No. 13- CV-3493(ABH)(JCF) and breached that policy by wrongfully refusing to provide that defense within a reasonable period after T-Mobile tendered its claim to Selective in February of 2013. Case 2:15-cv-01739-JLR Document 50-1 Filed 03/23/17 Page 1 of 2 (PROPOSED) ORDER GRANTING T-MOBILE’S MOTION FOR PARTIAL SUMMARY JUDGMENT – 2 Cause No. 2:15-cv-01739-JLR CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Tel (206) 625-8600 Fax (206) 625-0900 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Additionally, the Court finds that T-Mobile is entitled to judgment as a matter of law on its common law insurance bad faith claim under New Jersey law. Nothing in this Order shall be construed as expressing an opinion with regard to T- Mobile’s Consumer Protection Act claim, the extent of T-Mobile’s damages, or T-Mobile’s right to punitive damages under New Jersey law. SO ORDERED this _______ day of ____________________, 2017. The Honorable James L. Robart United States District Judge Presented by: s/ Michael A. Moore Michael A. Moore, WSBA No. 27047 Kelly H. Sherican, WSBA No. 44746 CORR CRONIN MICHELSON BAUMGARDNER FOGG & MOORE LLP 1001 Fourth Avenue, Suite 3900 Seattle, Washington 98154-1051 Telephone: (206) 625-8600 Fax: (206) 625-0900 E-mail: mmoore@corrcronin.com ksheridan@corrcronin.com Attorneys for Plaintiff Case 2:15-cv-01739-JLR Document 50-1 Filed 03/23/17 Page 2 of 2