Workland and Witherspoon, PLLC et al v. Evanston Insurance Company, No. 2:2014cv00403 - Document 42 (E.D. Wash. 2015)
Court Description: ORDER DENYING PLAINTIFFS' MOTIONS TO RECONSIDER ORDER ON AWARD OF ATTORNEY FEES - denying 37 Motion for Reconsideration; and denying 38 Motion to Amend/Correct. Signed by Chief Judge Rosanna Malouf Peterson. (CC, Case Administrator)
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Workland and Witherspoon, PLLC et al v. Evanston Insurance Company Doc. 42 1 2 3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6 7 8 WORKLAND & WITHERSPOON, PLLC, a limited liability company; and ERIC SACHTJEN, an individual, Plaintiffs, 9 10 ORDER DENYING PLAINTIFFS’ MOTIONS TO RECONSIDER ORDER ON AWARD OF ATTORNEY FEES v. 11 NO: 2:14-CV-403-RMP EVANSTON INSURANCE COMPANY, 12 Defendant. 13 14 Before the Court are Plaintiff Workland & Witherspoon, PLLC’s Motion to 15 Amend Order on Award of Attorney Fees, ECF No. 37, and Plaintiff Eric 16 Sachtjen’s Motion to Amend Order on Award of Attorney Fees, ECF No. 38. The 17 Court has reviewed the record, the memorandum in response (ECF No. 41), and is 18 fully informed. 19 BACKGROUND 20 This case is one of four related lawsuits. Plaintiffs in this case, Workland & 21 Witherspoon, PLLC (hereinafter “Workland”), and individual Eric Sachtjen, were ORDER DENYING PLAINTIFFS’ MOTIONS TO RECONSIDER ORDER ON AWARD OF ATTORNEY FEES ~ 1 Dockets.Justia.com 1 defendants in two lawsuits before the Spokane County Superior Court. ECF No. 1- 2 1 at 2. Both lawsuits alleged professional liability causes of action regarding the 3 purchase and sale of real property. Id. At all relevant times, Mr. Sachtjen was an 4 attorney-employee of Workland. Id. Defendant in this case, Evanston Insurance 5 Company (hereinafter “Evanston”), is an Illinois insurance company that issued 6 both Plaintiffs professional malpractice insurance policies. ECF No. 20 at 2. When 7 the underlying litigation against Plaintiffs arose, Plaintiffs tendered the defense and 8 indemnity to Evanston. Id. Evanston assumed the defense of both Workland and 9 Mr. Sachtjen under a reservation of rights. Id. 10 In a separate case, Evanston filed a complaint for a declaratory judgment in 11 this Court on June 16, 2014, seeking a judicial determination that Evanston had no 12 duty to defend or indemnify Plaintiffs in the underlying state court actions. ECF 13 No. 1, 2:14-CV-00193-RMP. Plaintiffs requested a stay of Evanston’s declaratory 14 judgment action. ECF No. 7, 2:14-CV-00193-RMP. The Court ultimately granted a 15 stay on five of Evanston’s six asserted coverage defenses. ECF No. 18, 2:14-CV- 16 00193-RMP. However, the Court found “no reason at this time to abstain from, or 17 stay consideration of, Evanston’s coverage defense regarding the Specific 18 Incidents Exclusion provision of the policy.” Id. at 21. 19 Subsequently, Evanston moved for summary judgment, arguing that the 20 policies’ Specific Incidents Exclusion excluded coverage for Plaintiffs’ claims. 21 ECF No. 29, 2:14-CV-00193-RMP. During oral argument, Mr. Sachtjen’s counsel ORDER DENYING PLAINTIFFS’ MOTIONS TO RECONSIDER ORDER ON AWARD OF ATTORNEY FEES ~ 2 1 informed the Court that the parties had settled the underlying state court lawsuits 2 and that the motion for summary judgment was moot. ECF No. 44, 2:14-CV- 3 00193-RMP. Evanston’s counsel disagreed. Id. The Court determined that it would 4 proceed with argument on Evanston’s motion at that time. Id. After striking as 5 inadmissible Evanston’s supporting evidence, the Court denied Evanston’s motion 6 for summary judgment. ECF No. 46, 2:14-CV-00193-RMP. 7 On August 3, 2015, the parties stipulated to the dismissal with prejudice of 8 Evanston’s declaratory judgment action, 2:14-CV-00193-RMP. ECF No. 52, 2:14- 9 CV-00193-RMP. The parties specifically noted that “all claims which have been 10 asserted in this action by the plaintiff against defendants are moot.” Id. at 1. The 11 motion stated that “[t]he parties further agree that any claims defendants may have 12 regarding the recovery of attorney’s fees are preserved and can be asserted in the 13 matter styled Workland & Witherspoon, PLLC, et al. v. Evanston Insurance Co., 14 No. 2:14-CV-403-RMP.” Id. at 2. The Court granted the Stipulated Motion for 15 Dismissal on August 10, 2015. ECF No. 53, 2:14-CV-00193-RMP. 16 In the instant lawsuit, Plaintiffs have alleged a number of causes of action 17 against Evanston arising from the aforementioned state court lawsuits. ECF No. 1- 18 1. As envisioned by the Stipulation of Dismissal, ECF No. 52, 2:14-CV-00193- 19 RMP, Plaintiffs moved for Attorney Fees arising from 2:14-CV-00193-RMP under 20 Olympic S.S. Co., Inc. v. Centennial Ins. Co., 117 Wn.2d 37 (1991) (hereinafter 21 “Olympic Steamship”). ECF Nos. 22 and 23. This Court denied Plaintiffs’ motions ORDER DENYING PLAINTIFFS’ MOTIONS TO RECONSIDER ORDER ON AWARD OF ATTORNEY FEES ~ 3 1 for attorney’s fees on October 30, 2015. ECF No. 35. Plaintiffs now move for 2 reconsideration of the Court’s prior Order. ECF Nos. 37 and 38. 3 DISCUSSION 4 Under the doctrine of the “law of the case,” courts are “generally precluded 5 from reconsidering an issue that has already been decided by the same court, or a 6 higher court in the identical case.” United States v. Alexander, 106 F.3d 874, 876 7 (9th Cir. 1997). A court may depart from the law of the case and grant 8 reconsideration only where 1) the first decision was clearly erroneous, 2) an 9 intervening change in the law has occurred, 3) the evidence on remand is 10 substantially different, 4) other changed circumstances exist, or 5) a manifest 11 injustice would otherwise result. Failure to apply the doctrine of the law of the case 12 absent one of the requisite conditions constitutes an abuse of discretion. Id. 13 Plaintiffs argue that, under Washington State law, the Court’s prior decision was 14 “clearly erroneous.” ECF No. 37 at 2; ECF No. 38 at 2. 15 Plaintiffs’ primary argument is that, under the Olympic Steamship doctrine, 16 an award of attorney’s fees is mandated whenever an insurer compels an insured to 17 assume the burden of legal action. ECF No. 37 at 2. Further, Plaintiffs contend that 18 the Court incorrectly found that an award of fees would be inappropriate based on 19 the coverage issue having never been adjudicated on the merits. Id. at 6. 20 21 The Court does not find that its prior decision was “clearly erroneous.” Contrary to Plaintiffs’ assertion that a “final judgment on the merits is not ORDER DENYING PLAINTIFFS’ MOTIONS TO RECONSIDER ORDER ON AWARD OF ATTORNEY FEES ~ 4 1 required,” id., Washington courts have held that “fees under Olympic are awarded 2 only if the insured prevails.” Alaska Nat’l. Ins. Co. v. Bryan, 125 Wn. App. 24, 36 3 (2004). Further, the Supreme Court of Washington has noted, when applying 4 Olympic Steamship to surety performance bonds, that “pursuant to Olympic 5 Steamship, an award of attorney fees [is appropriate] when the surety wrongfully 6 denies coverage.” Colo. Structures, Inc. v. Ins. Co. of the West, 161 Wn.2d 577, 7 601 (2007) (emphasis added). As cited by Plaintiffs, Olympic Steamship fees are 8 required to avoid imposing “a back-breaking burden upon the small, but justified, 9 litigants.” ECF No. 37 at 4 (quoting Louisiana-Pacific Corp. v. Asarco Inc., 131 10 11 Wn.2d 587, 695 (1997) (Sanders, J., concurring) (emphasis added)). Due to the truncated nature of Evanston’s declaratory judgment action, see 12 2:14-CV-00193-RMP, the Court does not know whether Evanston wrongfully 13 denied coverage to Plaintiffs or whether Plaintiffs were justified in their defense. 14 As such, the Court reaffirms its prior decision that, as “the Court cannot know 15 whether Plaintiffs had a ‘justifiable expectation of insurance protection,’” an award 16 of Olympic Steamship attorney’s fees would be “premature.” ECF No. 35 at 6 17 (internal citation omitted). 18 Plaintiffs’ reliance on Washington State decisions awarding attorney’s fees 19 where there has been no final adjudication on the merits is misplaced. ECF No. 6. 20 These cases concern other fee-shifting mechanisms, not the Olympic Steamship 21 rule. See Andersen v. Gold Seal Vineyards, Inc., 81 Wn.2d 863, 864 (1973) (costs ORDER DENYING PLAINTIFFS’ MOTIONS TO RECONSIDER ORDER ON AWARD OF ATTORNEY FEES ~ 5 1 under the long-arm statute); Soper v. Clibborn, 31 Wn. App. 767, 767 (1982) 2 (unlawful detainer action); W. Stud Welding, Inc. v. Omark Indus., Inc., 43 Wn. 3 App. 293, 295 (1986) (terms of a buy-out contract); Walji v. Candyco, Inc., 57 Wn. 4 App. 284, 287 (1990) (lease clause and Mandatory Arbitration Rule 7.3); Beckman 5 v. Wilcox, 96 Wn. App. 355, 357 (1999) (condemnation action). As none of these 6 cases concerned fee-shifting under Olympic Steamship, the Court is not convinced 7 that a different result is mandated. 8 Accordingly, IT IS HEREBY ORDERED: 9 1. Plaintiff Workland & Witherspoon, PLLC’s Motion to Amend Order on 10 11 Award of Attorney Fees, ECF No. 37, is DENIED. 2. Plaintiff Eric Sachtjen’s Motion to Amend Order on Award of Attorney 12 13 14 15 Fees, ECF No. 38, is DENIED. The District Court Clerk is directed to enter this Order and provide copies to counsel. DATED this 14h day of December 2015. 16 17 18 s/ Rosanna Malouf Peterson ROSANNA MALOUF PETERSON Chief United States District Judge 19 20 21 ORDER DENYING PLAINTIFFS’ MOTIONS TO RECONSIDER ORDER ON AWARD OF ATTORNEY FEES ~ 6
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