T-Mobile USA Inc. v. Selective Ins. Co. of Am.
| Decision Date | 01 April 2021 |
| Docket Number | CASE NO. C15-1739JLR |
| Citation | 532 F.Supp.3d 1050 |
| Parties | T-MOBILE USA INC., Plaintiff, v. SELECTIVE INSURANCE COMPANY OF AMERICA, Defendant. |
| Court | U.S. District Court — Western District of Washington |
Kelly H. Sheridan, Michael A. Moore, Corr Cronin, LLP, Seattle, WA, for Plaintiff.
Eric G. Siegel, Pro Hac Vice, Michael J. Marone, Pro Hac Vice, McElroy, Deutsch, Mulvaney & Carpenter, LLP, Morristown, NJ, Jeffrey S. Tindal, Betts Patterson & Mines, Seattle, WA, for Defendant.
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
This matter comes before the Court on remand from the Ninth Circuit Court of Appeals. See T-Mobile USA Inc. v. Selective Ins. Co. of Am. , 787 F. App'x 395 (9th Cir. 2019) ; (Mandate of USCA (Dkt. # 98).) Before the court are cross-motions for summary judgment by Plaintiff T-Mobile USA Inc. ("T-Mobile USA") and Defendant Selective Insurance Company of America ("Selective"). (Pl. MSJ (Dkt. ## 50 (sealed), 65 (redacted)); Def. MSJ (Dkt. # 71).) The court has considered the parties’ submissions in favor of and in opposition to the motions, the relevant portions of the record, and the applicable law. Being fully advised,1 the court GRANTS in part and DENIES in part T-Mobile USA's motion for partial summary judgment and DENIES in part and DEFERS ruling in part on Selective's motion for summary judgment.
This is an insurance coverage dispute in which T-Mobile USA asserts that (1) it is an additional insured under a Selective insurance policy issued to Innovative Engineering, Inc. ("Innovative"), and (2) Selective wrongfully failed to defend and indemnify T-Mobile USA in construction litigation in New York State ("the underlying litigation").
On July 8, 2010, T-Mobile Northeast, LLC ("T-Mobile NE")—a wholly owned subsidiary of T-Mobile USA—entered into a "Field Services Agreement" with Innovative.2 Innovative contracted to perform architectural and engineering services for T-Mobile NE and to maintain general liability insurance including a waiver of subrogation in favor of T-Mobile NE and "its affiliates and subsidiaries." (Id. at 6.) The FSA also required Innovative to provide T-Mobile NE with certificates of insurance documenting the coverage that the FSA required Innovative to obtain and naming T-Mobile NE as an additional insured on the certificates. (Id. at 7.)
Selective issued Innovative a commercial general liability policy numbered S164349108 ("the Policy"), which was effective from January 16, 2012, through January 16, 2013. (Sheridan Decl. ¶ 3, Ex. B ("Policy") at 2-3.) The Policy provides that "the words ‘you’ and ‘your’ refer to the Named Insured shown in the Declarations, and any other person or organization qualifying as a Named Insured under this policy."
(Id. at 54.) The Declarations name "Innovative Engineering Inc[.] &/ Or Innovative Client Solutions"—Innovative—as the Named Insured. (Id. at 3.) The Policy states that "SECTION II – WHO IS AN INSURED is amended to include as an additional insured any person or organization with whom you have agreed in a written contract or written agreement to add as an additional insured on your policy." (Id. at 60.) The Policy further states that if an entity is designated in the Declarations as a limited liability company ("LLC"), its "members are also insureds, but only with respect to the conduct of [the LLC's] business." (Id. at 39.) In addition, Selective's "Elite Pac Endorsement" confers automatic additional insured status on an entity when an insured enters a contract that requires the insured to name the other contracting party as an insured. (Wyrsch Decl. (Dkt. # 51) ¶ 5.)
The Van Dyk Group ("VDG") has served as Selective's agent since 1988, and VDG and Selective entered into their most current agency agreement on January 1, 2007. (Id. ¶ 4.) The agreement provides that VDG has authority to act on Selective's behalf, including by issuing insurance certificates. (Id. ¶ 5.) In January 2012, VDG issued a certificate of insurance to T-Mobile USA that references the Policy, indicates that the "[c]ertificate holder is included as an additional insured with respect to General Liability, Auto[,] and Umbrella Liability," and identifies the certificate holder as "T-Mobile USA, Inc., its Subsidiaries and Affiliates." (Id. ¶ 10; see also Sheridan Decl. ¶ 5, Ex. D ("COI") at 2.) VDG's Michelle Ortiz signed the certificate of insurance as Selective's "Authorized Representative." (Wyrsch Decl. ¶ 10.)
The events giving rise to this coverage dispute are as follows. In 2005, Omnipoint—T-Mobile NE's predecessor in name—leased from Virginia Properties, LLC, a portion of a rooftop on which to construct a cell phone tower. (Cyprian Decl. ¶ 5, Ex. C ("Lease").) Innovative performed work for T-Mobile NE to construct the rooftop tower, and on April 23, 2013, Virginia Properties initiated the underlying litigation against T-Mobile USA and Omnipoint, alleging that the cell tower damaged the building. See Va. Props., LLC v. T-Mobile Ne. LLC , No. 13-CV-03493 (S.D.N.Y.); (see generally Lease.)
After T-Mobile USA and Omnipoint filed a third-party complaint against Innovative in the underlying litigation (Cyprian Decl. ¶ 6, Ex. D), Innovative tendered its defense to Selective (Sheridan Decl. ¶ 10, Ex. I).3 On July 23, 2013, Selective accepted the defense under a reservation of rights. (Sheridan Decl. ¶ 11, Ex. J ("ROR Letter").) On February 1, 2013, T-Mobile USA—through Sedgwick, T-Mobile USA's claims agent—also tendered a claim to Innovative for defense and indemnification regarding the underlying litigation and requested that Innovative put its insurer on notice of the claim. (Sheridan Decl. ¶ 8, Ex. G ("Tender").) The tender referenced a "contract with T-Mobile USA Inc. [that] contains an indemnification and hold harmless agreement that favors T-Mobile, USA Inc. in this matter" and also "requires that you obtain insurance covering not only you but T-Mobile, USA Inc. for these claims." (Id. at 2.) On February 7, 2013, Kary Cyprian, Claims Management Specialist for Selective, contacted Sedgwick to acknowledge "receipt of your request for tender on behalf of your insured T-Mobile." (Cyprian Decl. ¶ 5, Ex. E.) Ms. Cyprian asked Sedgwick to "forward copies of all your investigation, copies of contracts between our insured [Innovative] and T-Mobile, copies of your insurance policy[,] and any other information that may assist us with the investigation of this claim." (Id. at 2.) Ms. Cyprian further stated that Selective would contact Sedgwick once Selective completed its investigation. (Id. )
According to Ms. Cyprian, based on her initial investigation into T-Mobile USA's tender, the only information she needed to make a final determination as to whether T-Mobile USA was an additional insured was a copy of T-Mobile USA's own insurance policy. (See Sheridan Decl. ¶ 9, Ex. H ("Cyprian Dep.") at 199-201, 211-12, 219.)4 However, on July 8, 2013, another Selective claims handler, Michael Parlin, took over T-Mobile USA's claim. (Sheridan Decl. ¶ 4, Ex. C ("Parlin Dep.") at 119, 125.)
After Mr. Parlin assumed responsibility for the claim, Selective did not act on T-Mobile USA's tender until February 26, 2015. (Sheridan Decl. ¶ 13, Ex. L at 2.) On February 25, 2015, Sedgwick again demanded that Selective defend T-Mobile USA. (Id. ¶ 12, Ex. K.) The next day, Mr. Parlin denied via email T-Mobile USA's tender. (Id. ¶ 13, Ex. L at 2.) Mr. Parlin's email merely pointed T-Mobile USA to Selective's 2013 reservation of rights letter to Innovative. (Id. (); see also ROR Letter.) In Mr. Parlin's subsequent deposition testimony, he stated that he denied T-Mobile USA's tender based on the Professional Services Exclusion in the Policy. (See, e.g. , Parlin Dep. at 119-20; Policy at 60 ().) Sedgwick again emailed Mr. Parlin on March 13, 2015, stating "[a]s my client T-Mobile [USA] is an additional insured on your policy, we continue to look to you for defense and indemnification on this claim." (Sheridan Decl. ¶ 14, Ex. M at 2.)
In August 2015, Selective's coverage counsel, Dan Kohane, responded to an inquiry from T-Mobile USA's Lisa Bauer about Selective's position regarding coverage of T-Mobile USA under the policy. (Parlin Decl. (Dkt. # 73) ¶ 14, Ex. B at 2.) T-Mobile USA asked Selective to clarify the basis for denying coverage. (See id. ) Mr. Kohane stated that Selective had determined T-Mobile USA was not a named or additional insured under the Policy and therefore was not entitled to coverage. (Id. ¶ 5, Ex. C ("Kohane Email") at 2.)
Before filing this suit, T-Mobile USA notified Selective that it intended to sue Selective under Washington's Insurance Fair Conduct Act ("IFCA"), RCW 48.30.015. (Sheridan Decl. ¶ 15, Ex. N.) On September 29, 2015, Selective responded that "[t]his letter confirms that T-Mobile [USA] is not an additional insured and that Selective has not violated IFCA." (Id. ¶ 16, Ex. O.)
T-Mobile USA then brought this suit in the Superior Court for King County, alleging that the terms of the Policy cover T-Mobile USA (see Compl. ¶ 13), and Selective removed the case to this court on November 4, 2015 . T-Mobile USA asserts claims for: (1) declaratory judgment that Selective is contractually obligated to defend and indemnify T-Mobile USA in the underlying action, (2) breach of the insurance contract, (3) attorneys’ fees, (4) breach of the duty of good faith and fair dealing; (5) violation of the Washington State Consumer Protection Act ("CPA"), RCW 19.86, et seq. ; and (6) estoppel.5 (Compl. ¶¶ 24-44.)
On March 23, 2017, T-Mobile USA moved for partial summary judgment on its...
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