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IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
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NO.
COMPLAINT FOR DECLARTORY
RELIEF
Plaintiff,
vs.
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COMES NOW Plaintiff Big-D Construction Northwest, LLC by and through its
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attorneys of record, Groff Murphy, PLLC, and hereby asserts the following Complaint for
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1.
liability company conducting business in the State of Washington, Western District. Big-D is
a duly registered contractor in the State of Washington, in good standing, and has complied
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with all prerequisites to maintain this action.
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2.
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COMPLAINT FOR DECLARATORY RELIEF
AND DAMAGES -1
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ACE issued a policy of excess liability insurance under which Big-D is an insured, which
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3.
Upon information and belief, subject matter jurisdiction exists under 28 U.S.C.
1332 in that this lawsuit involves citizens of different States and the amount in controversy
exceeds the sum of $75,000, exclusive of interest and costs.
4.
This Court has personal jurisdiction over Defendant ACE under the
Washington Long Arm Statute, RCW 4.28.185, in that ACE transacts business in the State of
Washington.
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5.
Venue is proper in this judicial district under 28 U.S.C. 1391(c) because ACE
is subject to personal jurisdiction in this judicial district at the time of commencement of this
action, and is therefore a resident of this judicial district.
III.
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FACTUAL BACKGROUND
Big-D was the general contractor for construction of the Washington Square
Towers One & Two Condominium project in Bellevue, Washington (the Project). The
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Project is generally comprised of two towers with 377 residential units, including 26 townhouse
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units and 17 residential flats. Big-D constructed the Project under contract to the project
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owner/developer, Washington Square One Towers, Inc. and Washington Square One Parking,
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issued by Zurich American Insurance Company under policy number GLO 4277400-00 (the
Zurich Policy). The Zurich Policy contains $2,000,000/$4,000,000 limits, per occurrence
and aggregate. Big-D is an insured under the Zurich Policy.
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The OCIP also included an excess insurance policy issued by Ace American
Insurance Company, under policy number XSL G22910176 (the ACE Policy). The ACE
COMPLAINT FOR DECLARATORY RELIEF
AND DAMAGES -2
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Policy contains a $25,000,000 limit per occurrence and aggregate. The ACE Policy is excess to
the Zurich Policy and follows form to the Zurich Policy. Big-D is an insured under the ACE
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Policy.
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In or about April 2010, the Developer placed Big-D on notice of alleged leaks
and other property damage resulting from alleged construction defects at the Project. Big-D
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tendered the Developers claims to Zurich and ACE. ACE failed to respond to Big-Ds tender
within a reasonable time as required by WAC 284-30-330.
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In July of 2013, the Washington Square Towers One & Two Condominium
Association (the HOA) filed suit in King County Superior Court (Cause No. Case No. 13-2-
27554-6 SEA) against the Developer, alleging a variety of construction defects and other
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deficiencies causing property damage at the Project (the Defect Claims). The amounts
alleged as damages by the HOA pursuant to its Defect Claims exceeds the policy limits of the
Zurich Policy. On information and belief, the Developer tendered defense of the claims to both
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As a result of the HOAs Defect Claims against the Developer, the Developer
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filed third-party claims against Big-D seeking indemnity and damages from Big-D for the
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Zurich defend and indemnify Big-D against the same. Zurich agreed to defend Big-D pursuant
to a reservation of rights.
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Big-D again tendered the Developers Defect Claims to Zurich demanding that
By letter dated March 6, 2015, Zurich again tendered the Defect Claims to ACE
on behalf of Big-D. By letter dated April 27, 2015, ACE took the position that it was inclined
to deny coverage to Big-D because the ACE contended that the OCIP enrollees waived
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claims against the other enrollees to the extent that the OCIP covers the claim. Stated
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differently, ACE contends that the ACE Policy does not provide Big-D with coverage for any
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The ACE Policy follows form to the Zurich Policy, which is Underlying
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While Zurich has accepted the tender of the Developers Defect Claims against Big-D under a
reservation of rights (which reserved rights are different from the basis on which ACE has
asserted Big-D is not afforded coverage), ACE has denied coverage to Big-D for the same
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Defect Claims.
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Big-D has provided ACE with all pertinent documents, investigations and
reports related to the Defect Claims to allow ACE to evaluate the Defect Claims and provide a
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defense and indemnity. Big-D has also provided regular updates to ACE regarding the
litigation and Big-Ds estimate of potential exposure regarding the litigation.
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In addition, Big-D has requested that ACE assess the facts and expert reports
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produced by the parties regarding the Defect Claims, and to provide a detailed coverage
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Rather, ACE has refused to modify its coverage position (denying coverage
based upon a waiver of claims between insureds) and acknowledge its obligation to provide
coverage to Big-D for WSOTs claims.
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There is no language or provision in the ACE Policy that excludes coverage for
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the Developers claims against Big-D. ACE has failed to provide a reasonable basis and
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COMPLAINT FOR DECLARATORY RELIEF
AND DAMAGES -4
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19.
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ACE has failed to attempt in good faith to effectuate a prompt, fair and equitable
faith. At each mediation, ACE has failed to have an adjuster present with knowledge of the
facts and issues underlying the Defect Claims.
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property damage claims and provision of detailed expert reports and summaries of those
reports, ACE has never engaged in any fashion in any dialogue regarding any reason why any
of the Defect Claims are not covered property damage under the ACE Policy.
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ACE has failed and refused to engage counsel on behalf of Big-D to participate
in the defense of the Defect Claims. While Zurich, as the primary carrier, has been funding the
defense, given the Defect Claims significantly exceed the Zurich Policy limits, ACE has
effectively refused to engage in litigation defense strategies and discussions.
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IV.
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Big-D incorporates and re-alleges the above paragraphs as if fully set forth
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Big-D has complied with all applicable requirements and conditions precedent
herein.
An actual controversy exists between Big-D and ACE with respect to the rights
and obligations of the parties under the ACE Policy, and specifically with respect to ACEs
obligation to defend and indemnify Big-D against the Developers Defect Claims.
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Big-D against the Developers Defect Claims and (b) that the Defect Claims allege property
damage that is covered under the ACE Policy.
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Big-D seeks a declaration that (a) ACE is obligated to defend and indemnify
V.
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3. Such other and further relief as this Court deems just and proper.
DATED this 20th day of November, 2015.
Respectfully submitted,
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/s/ Michael P. Grace
Michael P. Grace, WSBA #26091
Meredith L. Thielbahr, WSBA #41746
300 East Pine Street
Seattle, WA 98122
Ph. 206-628-9500
Fx. 206-628-9506
E. mgrace@groffmurphy.com
E. mthielbahr@groffmurphy.com
Attorneys for Plaintiff Big-D Construction
Northwest, LLC
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