VISION ONE LLC. v. PHILADELPHIA Indem. Ins. Co., No. 38411-6-II

CourtCourt of Appeals of Washington
Writing for the CourtARMSTRONG, P.J.
Citation241 P.3d 429
PartiesVISION ONE, LLC; and Vision Tacoma, Inc., Respondents/Cross Appellants, v. PHILADELPHIA INDEMNITY INSURANCE COMPANY, Respondent/Cross Appellant and D & D CONSTRUCTION, INC., Respondent. D & D Construction, Inc., Respondent, v. Berg Equipment & Scaffolding Co., Inc., Respondent. Matthew Thompson, Respondent, v. D & D, Inc., a Washington corporation; Berg Equipment & Scaffolding Co., Inc., a Washington corporation; Vision One, LLC, a Washington limited liability corporation; and Vision Tacoma, Inc., a Washington corporation, Respondents. RSUI, Appellant/Intervenor.
Decision Date19 October 2010
Docket NumberNo. 38411-6-II,41021-4-II.

241 P.3d 429

VISION ONE, LLC; and Vision Tacoma, Inc., Respondents/Cross Appellants,
v.
PHILADELPHIA INDEMNITY INSURANCE COMPANY, Respondent/Cross Appellant
and
D & D CONSTRUCTION, INC., Respondent.

D & D Construction, Inc., Respondent,
v.
Berg Equipment & Scaffolding Co., Inc., Respondent.

Matthew Thompson, Respondent,
v.
D & D, Inc., a Washington corporation; Berg Equipment & Scaffolding Co., Inc., a Washington corporation; Vision One, LLC, a Washington limited liability corporation; and Vision Tacoma, Inc., a Washington corporation, Respondents.

RSUI, Appellant/Intervenor.

Nos. 38411-6-II, 41021-4-II.

Court of Appeals of Washington,Division 2.

Oct. 19, 2010.


241 P.3d 430

COPYRIGHT MATERIAL OMITTED.

241 P.3d 431

Michael David Helgren, Barbara Himes Schuknecht, David Andrew Linehan, McNaul Ebel Nawrot & Helgren PLLC, Thomas Dean Adams, Celeste Mountain Monroe, Jose Dino Vasquez, Karr Tuttle Campbell, Seattle, WA, Charles Kenneth Wiggins, Wiggins & Masters PLLC, Bainbridge Island, WA, for Appellants.

Randy Jarl Aliment, Daniel W. Ferm, Williams Kastner & Gibbs, Jerry Bruce Edmonds, Douglas A. Hofmann, Teena M. Killian, Attorney at Law, Tracy A. Duany, Daniel F. Mullin, Mullin Law Group PLLC, Seattle, WA, Timothy Lee Ashcraft, Williams Kastner & Gibbs, D. Michael Shipley, Peter Thomas Petrich, Attorney at Law, Tacoma, WA, Dennis J. Perkins, Attorney at Law, Bellevue, WA, for Respondents.

ARMSTRONG, P.J.

¶ 1 Shoring equipment supporting a poured concrete slab collapsed during the construction of a condominium complex being developed by Vision One LLC and Vision Tacoma Inc. (collectively Vision). Philadelphia Indemnity Insurance Co., Vision's insurance company, denied Vision's insurance claim and Vision sued Philadelphia for breach of contract, bad faith, and violations of the Consumer Protection Act (CPA). The trial court ruled that the concrete slab collapse was covered under the “resulting loss” exception to the policy's faulty workmanship exclusion. A jury found that Philadelphia acted in bad faith and committed five CPA violations.

¶ 2 Vision also sued D & D Construction Inc., the contractor responsible for the concrete work, and D & D sued Berg Equipment and Scaffolding Co., the contractor responsible for supplying the shoring equipment. Vision settled with D & D and Berg and the settlement released Berg from liability. Philadelphia moved to dismiss Vision's breach of contract claim, contending that Vision breached the insurance contract by impairing Philadelphia's recovery rights against Berg. The trial court denied Philadelphia's motion.

¶ 3 Philadelphia appeals (1) the trial court's denial of its motion to dismiss Vision's breach of contract claim, (2) the trial court's ruling that the concrete slab collapse is covered as a resulting loss, and (3) the measure of damages and attorney fees. Vision cross-appeals, also assigning error to the measure of damages. Because material facts regarding the cause of the collapse remain in dispute, we reverse the judgment against Philadelphia and remand for a jury to determine causation. We also hold as a matter of law that the concrete slab collapse is not a resulting loss under the faulty workmanship resulting loss provision.

FACTS
I. Collapse and Insurance Claim

¶ 4 In 2005, Vision began developing a condominium complex in Tacoma. Vision contracted with D & D for the concrete work and D & D contracted with Berg for shoring equipment to temporarily support the poured concrete slabs. On October 1, 2005, D & D poured a concrete slab and the shoring structure collapsed. After receiving Vision's insurance claim, Philadelphia hired BT & Associates to determine the cause of the collapse.

¶ 5 A structural engineer examined the shoring design drawings and concluded that the design was adequate for supporting the poured concrete but that “at best, this shoring design is marginal and it doesn't allow for any inadequacies in the shoring installation.” Clerk's Papers (CP) at 6110, 6112. BT & Associates also inspected the shoring equipment and identified numerous flaws with the shoring installation, including: missing cross-braces, overextended tubes, tilting shoring towers, and inadequately supported base plates placed on unlevel surfaces. The report concluded:

The marginal shoring design alone may not have caused the ... collapse.... We suggest that this factor in combination with various shoring installation problems identified in this report, on a more likely than not basis, caused the shoring to collapse....

CP at 6118.

¶ 6 Vision's insurance policy covers all “direct physical ‘loss,’ ” unless the loss is

241 P.3d 432

expressly excluded. CP at 5973-74. The policy expressly excludes loss caused by defective design and loss caused by faulty workmanship. But the faulty workmanship exclusion provides coverage for resulting losses: “[If] loss by any of the Covered Causes of Loss results, we will pay for that resulting ‘loss.’ ” CP at 5978.

¶ 7 Based on these exclusions and the report from BT & Associates, Philadelphia denied Vision's claim in a letter dated January 3, 2006:

The damage to the construction project was a sole and direct result of the marginal shoring design and faulty installation of the shoring. The policy excludes loss caused by deficiency in design and loss caused by faulty workmanship. Coverage will exist for any resulting loss caused by another insured event or peril. In this instance, the only peril, which caused the loss, was defective design and faulty workmanship, therefore there is no coverage for Vision One's claims. To the extent any portion of the claim can be considered a resulting loss, other policy exclusions and limitations apply.

CP at 13,136. Vision asked Philadelphia to reconsider, and Philadelphia clarified its evaluation in a letter dated January 27, 2006:

While the faulty workmanship exclusion contains an exception for resulting loss from a Covered Cause of Loss, in [this] case, the only cause of the loss was defective design and faulty workmanship. There is no separate and independent loss that resulted in the claimed damage. Therefore, the faulty workmanship exclusion bars coverage for this loss, and the “resulting loss” provision contained therein does not apply.

CP at 13,139 (emphasis omitted).

II. Litigation Between Vision and Philadelphia

¶ 8 In March 2006, Vision sued Philadelphia in Pierce County Superior Court. In pretrial hearings regarding proposed jury instructions, the parties disagreed over the meaning of several policy provisions. The parties asked the trial court to interpret the disputed provisions as a matter of law and submitted extensive briefing on the issues.

¶ 9 Vision argued that if there were two excluded causes of loss, then the collapse would be covered because neither “directly and solely” caused the collapse. CP at 6,388-91. In response, Philadelphia argued:

The significance of the “directly and solely” language is not to preclude Philadelphia from denying coverage if two or more excluded events occur. It is to preclude Philadelphia from denying coverage if an excluded event and a [ ] non-excluded event result in loss or damage.

CP at 6,492. At a hearing on this issue, Philadelphia clarified that an additional efficient proximate cause analysis is required if the loss was caused by an excluded event and a nonexcluded event. Relying on the language in Philadelphia's brief, the trial court ruled:

Order on Insurance-Related Issues:

If it is found that the loss was caused by one or more non-excluded event(s) in combination with one or more excluded event(s); the loss is covered.

Report of Proceedings (RP) (July 18, 2008) at 18; CP at 6,587. Philadelphia moved for reconsideration, asking the trial court to amend its ruling to state: “If there are two or more causes of loss, the policy provides coverage if the efficient proximate cause of the loss is a covered cause of loss.” CP at 6,603-06. The trial court denied the motion.

¶ 10 The parties also disagreed over whether the concrete collapse qualified as a “resulting loss” under the faulty workmanship resulting loss provision. CP at 6,960-7,009. The trial court ruled that because the shoring equipment and concrete slab were “separate and distinct,” the concrete collapse was covered under the resulting loss provision:

Order on Resulting Loss:

As a matter of law, for purposes of the faulty workmanship resulting loss clause in the contract between Vision One and Philadelphia, the shoring equipment is separate and distinct from the concrete, rebar, and wood forms. Thus, any resulting loss or

241 P.3d 433

damage caused by the concrete collapse is covered by the policy language.

CP at 7,099-7,100.

¶ 11 Philadelphia again moved for reconsideration, arguing that a jury must determine the efficient proximate cause of the collapse before the trial court can rule that the loss is covered under the faulty workmanship resulting loss provision. The trial court denied the motion, stating: “We've been over whether there needs to be one cause or two, or multiple causes. If there is a cause that should be covered, then it's all going to be covered.” RP (Sept. 16, 2008) at 19. The trial court then ruled:

Order on Faulty Workmanship:

Philadelphia is precluded, by its prior position taken, from arguing at trial that faulty workmanship was not a cause of the collapse. Because the Court has already ruled that any resulting loss or damage caused by the concrete collapse is covered by the policy language, the only issues remaining for trial are: (1) causation; (2) bad faith; and (3) damages.

CP at 7,102-03.

¶ 12 A jury found that the concrete collapse caused $251,023 in repair and reconstruction expenses and $724,605 in expenses due to delay. The jury also found that Philadelphia acted in bad faith and committed five CPA violations, causing $178,728 in damages. The trial court awarded Vision a principal judgment of $1,148,428, an additional $50,000 for the five CPA...

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6 practice notes
  • Vision One, LLC v. Phila. Indem. Ins. Co., No. 85350–9.
    • United States
    • United States State Supreme Court of Washington
    • 17 Mayo 2012
    ...analyze coverage through the lens of the efficient proximate cause rule. Vision One LLC v. Phila. Indem. Ins. Co., 158 Wash.App. 91, 105, 241 P.3d 429 (2010). Because the parties disagreed on which of three possible perils was the efficient proximate cause of the loss—faulty equipment (cove......
  • Rsui Indemnity Co. v. Vision One, LLC, 38411-6-II
    • United States
    • Court of Appeals of Washington
    • 28 Diciembre 2011
    ...that verdict. We resolved the trial issues in a separate opinion. Vision One, LLC v. Philadelphia Indemnity Ins. Co., 158 Wn.App. 91, 241 P.3d 429 (2010), review granted, 171 Wn.2d 1001, 249 P.3d 182 (2011). V. CR 60 Proceedings Almost 19 months after the trial court found the settlement be......
  • Rsui Indemnity Co. v. Vision One, LLC, 38411-6-II
    • United States
    • Court of Appeals of Washington
    • 28 Febrero 2012
    ...that verdict. We resolved the trial issues in a separate opinion. Vision One, LLC v. Philadelphia Indemnity Ins. Co., 158 Wn.App. 91, 241 P.3d 429 (2010), review granted, 111 Wn.2d 1001, 249P.3d 182(2011). V. CR 60 Proceedings Almost 19 months after the trial court found the settlement betw......
  • Kaapa Ethanol, LLC v. Affiliated FM Ins. Co., Nos. 10–1929
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 3 Noviembre 2011
    ...supporting this contention, although few courts have addressed the issue. See Vision One, LLC v. Phila. Indem. Ins. Co., 158 Wash.App. 91, 241 P.3d 429, 437 & n. 3 (2010) (when an excluded cause causes collapse, there is no independent covered peril), review granted, 171 Wash.2d 1001, 249 P......
  • Request a trial to view additional results
6 cases
  • Vision One, LLC v. Phila. Indem. Ins. Co., No. 85350–9.
    • United States
    • United States State Supreme Court of Washington
    • 17 Mayo 2012
    ...analyze coverage through the lens of the efficient proximate cause rule. Vision One LLC v. Phila. Indem. Ins. Co., 158 Wash.App. 91, 105, 241 P.3d 429 (2010). Because the parties disagreed on which of three possible perils was the efficient proximate cause of the loss—faulty equipment (cove......
  • Rsui Indemnity Co. v. Vision One, LLC, 38411-6-II
    • United States
    • Court of Appeals of Washington
    • 28 Diciembre 2011
    ...that verdict. We resolved the trial issues in a separate opinion. Vision One, LLC v. Philadelphia Indemnity Ins. Co., 158 Wn.App. 91, 241 P.3d 429 (2010), review granted, 171 Wn.2d 1001, 249 P.3d 182 (2011). V. CR 60 Proceedings Almost 19 months after the trial court found the settlement be......
  • Rsui Indemnity Co. v. Vision One, LLC, 38411-6-II
    • United States
    • Court of Appeals of Washington
    • 28 Febrero 2012
    ...that verdict. We resolved the trial issues in a separate opinion. Vision One, LLC v. Philadelphia Indemnity Ins. Co., 158 Wn.App. 91, 241 P.3d 429 (2010), review granted, 111 Wn.2d 1001, 249P.3d 182(2011). V. CR 60 Proceedings Almost 19 months after the trial court found the settlement betw......
  • Kaapa Ethanol, LLC v. Affiliated FM Ins. Co., Nos. 10–1929
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 3 Noviembre 2011
    ...supporting this contention, although few courts have addressed the issue. See Vision One, LLC v. Phila. Indem. Ins. Co., 158 Wash.App. 91, 241 P.3d 429, 437 & n. 3 (2010) (when an excluded cause causes collapse, there is no independent covered peril), review granted, 171 Wash.2d 1001, 249 P......
  • Request a trial to view additional results

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