 |
 |
to fill out a simple form to connect to Employee Leasing Services in your area.
|
|
|
|
|
First State Insurance Co. v. Kemper National Insurance Co.2/16/1999
Lance Powell was electrocuted on property owned by Great Western Lumber Company (Great Western). Lumbermens Mutual Casualty Company (Lumbermens) was Great Western's primary insurer, and First State Insurance Company (First State) provided Great Western's excess liability coverage. After a jury awarded Powell's family $2 million, Lumbermens tendered its policy limits to First State for payment. Believing that Lumbermens had badly mishandled the claim, First State sued alleging bad faith, negligence, misrepresentation, and a violation of the Consumer Protection Act (CPA). The trial court dismissed all of the claims except bad faith, ruling that the negligence and bad faith claims were the same cause of action and First State lacked standing to raise a CPA claim. The jury found Lumbermens' conduct did not rise to the level of bad faith and returned a defense verdict. The trial court denied First State's motion for Judgement notwithstanding the verdict or in the alternative a new trial.
On appeal we hold that negligence and bad faith are different causes of action and that an equitable subrogee standing in the shoes of the insured may bring a CPA claim against the primary insurer. We also conclude that the trial court erred in admitting evidence against First State related to affirmative defenses and counterclaims Lumbermens had not pleaded. We therefore reverse and remand for a new trial.
FACTS
Lance Powell was electrocuted while operating conveyors transferring sawdust from a storage bunker on Great Western's premises to a delivery truck owned by his employer, Barleans, Inc. Both Barleans and Great Western inspected and made repairs to the electrical system. Because Barleans was Powell's employer, his survivors' remedy was limited to the exclusive remedies permitted by the workers compensation law, even though Barleans' negligence for improper installation and maintenance of the switches on the conveyor system was uncontested.
In August 1989, Powell's survivors (the Powells) filed a wrongful death lawsuit against Great Western and Barleans. Great Western tendered defense of the claim to its primary insurer, Lumbermens, who hired defense counsel to represent Great Western. The Lumbermens policy had a limit of $1 million per occurrence. Great Western had also purchased $5 million excess coverage from First State, and it notified First State of the lawsuit the following day.
Approximately six months later, First State's assistant manager for excess casualty claims wrote to Lumbermens inquiring about the litigation, including defense counsel's opinion of settlement potential. When Lumbermens replied a month later, it told First State that, contrary to the facts, the incident did not occur on Great Western's property, Great Western was not involved, and this was an excellent case for summary Judgement. Lumbermens promised to advise First State once summary Judgement was granted. A few days later, counsel for Great Western told the Lumbermens adjuster who had replied to First State's inquiry that Great Western's potential liability was significant. Lumbermens did not pass this information along to First State.
Six months later, First State again wrote Lumbermens asking why it had heard nothing further and requesting information on the status of the case and the summary Judgement motion. A different Lumbermens adjuster wrote First State that the motion would be heard within two weeks and that Lumbermens would immediately advise First State of the outcome.
Before the court heard Great Western's first motion for summary Judgement, its attorney told Lumbermens that there had been no Discussion of settlement and, if it lost the
Page 1 2 3 4 5 6 Washington Employee Leasing Services
Employee Leasing Services
|
| |
to fill out a simple form to connect to Employee Leasing Services in your area.
|
|