pleases the court it is black letter law that when considering it will be one motion as it relates to the rather relaxed standards for article three standing that  the court is bound at the trial level to look at the well pled material allegations to the complaint and with respect this case went off the tracks when that did not occur the complaint alleges  with great specificity a dispute that beyond any doubt is something that would be subject to declaratory relief and therefore if you're a motion to compel arbitration to require to clear to relieve it alleges a pretty garden variety insurance dispute where a claim was submitted a claim was denied on the grounds that the insurance policy but in pain through fraud and deceit and and then subsequently the policy was rescinded and it was requested relatively straightforward and not particularly remarkable relief which is it wanted in this case because there was an arbitration agreement declaratory relief in this case compelled through arbitration why is there a claim being made on the policy at that point in time  later the they also requested arbitration and they refused arbitration in writing so there was also a subsequent letter where he indicated they were going to enter into an assignment of rights unless letter where which is similar to the rhodes case where a letter threatening litigation by itself confirms standing now what happened here was and that letter came prior to your filing the case demanding arbitration yes it would be the letter denying arbitron i mean the dyna claim came three days after the claim was filed and then the subsequent letter threatening litigation didn't come for almost a year later from march thirteenth april april thirteenth to march of fourteen and they gave the action compelling arbitration came subsequent to that and these are all very well played in paragraphs forty two forty three and forty five of the of the complaint where they go into some detail as to the fact that they that a pick wants arbitration and addictive closure relief on three issues one is a sign ability of the contract the second was whether or not the rescission was proper in the third had to do with coverage now much as a pack of dogs get struck by a squirrel in this case the squirrel was this that large settlement between the good terrorists is and the angle sees which could not have settled allies dispute allied wanted instilled the desires this court require in order considering the arbitration petition because not only do you think you jumped the gun in this case because eventually that lawsuit was dismissed why not wait until the settlement is finalized and the case finally settled before rushing to court to file this particular case well i don't believe that i did for one thing insurance companies proactively pursuing declaratory relief has been favored the courts not disfavor in this case whatever just determination that they made did not resolve what allied wanted which is a determination about recision is rescission is broader it would deal with questions broader than just this claim any if the policy proffer rescinded then any other claim that could come in would not come in and everybody would know the rights of the part of your lawsuit also sought to compel arbitration before any claim had really been filed so there's a lot of uncertainty over what claims you're pursuing arbitration on whether those are even covered by the arbitration agreement so that's the part that seems premature to me well it would be the thing is that the question of settlement was not within the four corners of the pleadings that was not something for the trial court to properly consider the only thing the trial court should have been considering is what was the within the the four corners of the complaint there was nothing about the settlement they're going to point  interested me which is not directly on point with the standing but the question of the scope of arbitration you were seeking i gather in some parts of your brief it seemed to me that you were arguing that you had a right of arbitra against the underlying plaintiffs and even asked for the amount of the sudden want you seem to be saying something different today so could you clarify your position for me certainly think the question what the brief was meant to convey is they did they stand in the shoes of the two tier system in the english issues and therefore they're subject to the arbitration agreement so that your understanding argument i guess my question is i was unclear to me whether or not you were seeking as part of the arbitration the amount of coverage being arbitrated as one i don't think we took a position on and at this point i don't think the question of coverage bears on the amount of the underlying award the things either covered or or it isn't right so your position today is a straight up the arbitration provision is very broad and it says that any disputes relating to the policy and clearly whether or not a policy was recent was rescinded or not would fall within those within the four corners but that's a question i think for the trial court the trial  that's when i think that if you have a if you stay within the four corners of the complaint the complaint indicates that they were requesting rescission the only other areas where a court would typically go outside the four corners of the complaint has to do with at the end there's nothing about this settlement either way that doesn't there are some things about though that did really cry out for judicial stoppel which is what the washington and we brief the superior court was told versus what judge marshall was told three months later because the washington with poor was told that it was a final deal it was quote signed dr anglesey executed and his lawyer executed it and then three months later when they're in the u s district court counsel says that quote there's no signed copy they also said the assignment already taken place and was a fait accompli and the validity of the contract was not for the washing supreme court spirit courts when you look at that the idea that we jumped the gun somehow and then when they got before judge marshall she specifically asked was there any assignment of the doctor's rights now this is a fact finding mission that wasn't appropriate that will be one but still the response was no no not relief i think they're kind of stuck with that that they themselves said that declaratory relief is appropriate in this case and if you if the standard that the trial court uses becomes the standard that this horde adopts it will constitute a radical departure from eighty years to settle jurisprudence from the aetna decision which just simply said it can't be hypothetical you see other cases and can't reach americal it can't be pure speculation but the that the idea that if they're not actively seeking payment if they're not actively seeking payment that that somehow causes article three standing to go away will create many more cases like this one where right before the hearing an arbitration hearing occurred to relief a party can say well gee i'm no longer actively seeking standing payment and then they do something to cause that to look to be so they settle something th disputes because they can say well today i'm not doing it and they're very carefully so we might do in the future and they dismissed that case without prejudice but that didn't change the four corners of the complaint and the four corners of the complaint were clear that there was a dispute good morning please the court your honors you are absolutely correct in this case i see you did jump the gun they initially filed a complaint before there was anything filed in the washington's do superior court class of the make any difference if there's anything filed why does it make any difference if there's anything found or not if there's a coverage dispute does the insurance company have the right to seek a declaratory judgment action even if there's no underlying claim filed you know it's interesting in some cases yes  in two thousand and thirteen so a p c i had ensured of this chiropractor for approximately eight years right he gets a notice that he's going to be investigated by the washington state department of health he wasn't told who was investigating or why  just thought it was a complaint when he notified his carrier where you'd be representing me in this investigation they immediately wrote back and told him no in actuality we believe that there are there was notice to a p i see shortly action at that point then you may be subject to waiver so i don't understand your theory that there's an article three standing because there are thousands of these suits filed all the time perhaps your honor the they had rescinded the policy i don't know to what extent there was actually a claim tendered doc the doctor simply asked for representation and investigation they told him no rescinded his policies and sent him back a refund one year later amount practice action starts occurring the injured patient is pursuing a claim against the doctor and the doctor is considering the doctor's considering assigning his rights as a policy and the policy suggests there is no assignment and as the doctor and the why is that point aren't they entitled to bring the action they were not named party there there's no well resumed in dismissing this case the district court found that there was no allegation as to a specific threat of an pending litigation counsel argued and he cited to this letter in the record as well that there was an impending threat of litigation are you saying that they are that the record is insufficient to support that or that the case law requires more than that i think that the case that requires more than that i think that there was a letter that suggested that look if you're not going to in washington long i think that we have an issue here with the laws in washington on insurers required to defend their reservation of right correct he did so at that point they the insurer had two options one the co to defend well three options they could refuse to defend which they did they could have defended under reservation of rights or they could to file the declar understand i don't mean to interrupt but i understand your answer that the doctor had intended to do anything with his claim he was he was being sued he was contemplating consent judgment and decided to pursue that and at the time that we entered into a settlement agreement it wasn't contemplated what the rights were the insured and the doctor or the doctor in the patient as to how they would resolve that so they entered into a settlement agreement that didn't ultimately work out and when we went down to argue before george marshall there was no settlement agreement there was no assignment my question is i again apologize for interrupting i don't understand what the existence of a sudden agreement has to do with the insurers right to seek a declaratory judgment action or to pursue a declaratory judgment action against its insured if there was a coverage dispute they would have that right whether or not there was a litigation whether there was a settlement or not right perhaps perhaps it is that means that got article three standing to pursue at least those claims there was nothing imminent at the time that we argued those motions that suggested that the parties would get together and standing i just don't i just don't think that there was anything imminent or you know they waited they waited an entire year before they decided to file based on the threat of litigation and then after the threat of litigation went away they had nothing  let me ask a different question i said i just want to be educated on washington law i assume that washington is not a direct action state meaning the third party third parties can file against insurance companies correct so the typical saying if you want to pursue a bad faith case in washington you have to take an assignment of the first party claim from the insured correct i believe so i mean that would seem to you to have a direct action state in there with we have some in our jurisdiction where the third parties plants can file directly against the insurance company for failure to settle in a reasonable  manner or investigate a claim and you have other states where they do not allow direct actions but in fact the way that you would pursue a bad faith claim or failure to settle claims by taking an assignment of the first party you know was the insurance claim and i gather washington is falls in that category well we also have an added component with there being a difference in washington state that washington insurers are not supposed to we have state law that suggests that they can't be called to other jurisdictions and so i think that that was in part some of the problems here we have a california company initially an arizona company filing actions and suggesting that their their form selected dictions and so that was a secondary issue that we never got to because because the court granted the motion to dismiss as to whether or not we could be called down there you may have a perfectly good defense wrong then you partner you may have a venue argument  yeah i just don't think that the court had quite gotten to that ultimately because there was no pending state court action because it had been dismissed at the time that we brought the twelve b six motion there wasn't anything that the plaintiff had to do to arbitrate the court a p i she could not answer the question as to what exactly it sought to arbitrate whether or not there was coverage or not that a b c had made a decision that they had rescinded the policies and that there was no no coverage it attempted to soon as it learns that we were attempting to work out an agreement to become the first child and bring that jurisdiction down to california and subject but even beyond your theory isn't that wasn't there of standing wasn't there are very substantial risks that the litigation would be reinstituted i don't think that there was a substantial risk i was honest with the court and i said we're going to attempt to continue working on whether or not we can achieve a settlement but there wasn't there hadn't been any approval of the settlement  and therefore no effectual assignment so basically it was dr angus who was it who just wasn't participating and that's why we suggested that there was no imminent dispute especially at the time that the court looked at the issue is there improper question but i just as if this is a sexual problem or we would like to be able to litigate in washington coming down all the way to california in a foreign venue no i think you misunderstand and we're talking about the state court action in washington not about suit filed and then there was a subtle much in the settlement failed and then you have a second suit filed and then a subtle mount which was approved but if it hadn't been approved if it all fall apart are you representing that you were going to abandon your client's claims against a chiropractor yes why economically ok it wouldn't be any recovery the claim would get this charge so it is too we would need to pursue whether or not there's parties that don't have the financial resources to go litigation for an venues and whatnot so so yes it was imperative that that settlement agreement be approved and all that the settlement agreement be effective and that we get the the court to approve it so that we could go forward so we would we would have preferred that a washington court look at it to determine whether or not we have this insurance company acting above its status as an insurance compan suggesting that it's subject to federal laws or risk retention group and have a washington court render a decision as to whether they can do that whether rescission or what choice of law would apply we would like that to be looked at in washington but we never got to diction and then we filed suit and once the settlement agreement didn't get approved and we dismissed it put us in a very awkward situation so we attempted to kind of regroup i didn't know if we would ever be coming back to do it but like i said we never got to to washington law to address whether or not they could rescind what choice of law we would have so at the point i think that judge marshall made her ruling as to whether or not a case or controversy existed i did not know  and i represented to the court i don't know that this goes forward this would be potentially i would attempt to try to see if we could work out a settlement agreement or rework it but i wasn't i wasn't certain and so at the time the court had asked the insurance company what what do you see what do you seek to arbitrate what do you seek to recover what your injury is attempt as a result of this attempted assignment could the doctor even assign his rights and so i think that because if you i see doctor had been sued a p i see it made a claim or two years prior that it was that he wanted some assistance in the investigation and that was it so i think i think judge marshall was correct in looking at that that there wasn't anything imminent or potential other than speculative that something would come out and then after we dismissed after the court dismissed i think if there was a new filing that then if yes you could bring it so let me let me if you let me ask one more question let's assume  that we hold that you can't they can't pursue their claims in california the only way you're going to prevail is by filing into clarity just one action in washington so right i said i'm sorry say that again how are you going to how are you going to pursue your claims let me identify three discrete events that created article three standing the first one was the march twenty fifth twenty fourteen letter this is the rhodes case basically says we're going to proceed to execute a consent judgment roaches about can about threat of litigation the second one was when they refused to arbitrate the able for for twenty fourteen letter that's the international brotherhood case which in fact goes on to say that the refusal to agree to arbitrate itself takes you some substantial risk of harm to the harm having occurred at the point at which you refuse arbitration and the third one was the april eleventh fourteen letter that said the amount to be claimed would be not less than two million dollars that takes us back to roads and actually passed roads my learned colleague indicated at some point that the litigation was not certainly impending that's probably a reference to the clapper case because they did rely on that in their in their briefing the problem with that is that the clapper was not a pleadings case it was a motion for summary judgment case it's specifically stated this is you can't rely on your your allegations your pleadings anymore because it was at the end of the case in response to a motion for summary judgment clappers also an opposite for two other reasons it i would that affect what the standing for article three is the status of the case i mean why would that affect with the testis will clap or what one of these hyper talked about was article three standing and it and it talked about well there is a test a m impending that that is that is correct but what clapper said in footnote five is that if to the extent that anyone thinks there's a difference between certainly impending and substantial risk that the parties and clapper didn't meet either standard they also made a point of saying that they are that they are more rigorous about analyzing standing in cases of and i believe i'm quoting them word for word foreign policy or intelligence gathering he said do with  intelligence gathering out of the country but at that point they said you don't you haven't produced the proof that shows either substantial risk of harm or that it's certainly impending in this case this is a pleading case and i believe that under the pleading standard we certainly have played that as the other point is my colleague indicated well this is a coverage dispute but those letters that demanded coverage were never withdrawn they never in any way withdrew their statement that they felt that these claims were covered as in this situation would write a letter saying oh never mind we withdraw it and that settlement didn't withdraw it and then dismissing it without prejudice didn't withdraw there was a live request to an insurance company saying i think i'm covered i think i can assign i don't agree with your rescission all three of those are letters that are in the record that we briefed and they never needed a proven of the settlement agreement to sue that was something they chose to do but it didn't somehow  ability to get a settlement and the final point i want to make is they indicated that for some reason we were trying to engage in of venue shopping which is clearly what i believe they're trying to do with washington by being first filed that's not what was going on at all as we indicated in our briefing the only court they can implement the settlement agreement is u s district court in los angeles because the federal arbor trace an act provides that a district court cannot order arbitration outside of its judicial district and they're all thank you for their attrition klang but it certainly is not true for the rescission or the declaratory judgment plans which in any event would have to be decided under the laws of the state of washington regardless of where the venue is right it would have to be decided in arbitration by the arbitrator but my point is the only place we could have filed for arbitration because remember that the court's relief is going to be decided in the arbitration was in the us didn't happen perhaps well that that was our contention and we certainly are going to the arbitration petition which is part of the record is attached specifically asked that those questions be resolved by the arbitrator and that's when the questions were good the cases for you be submitted for a decision