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ORDER 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

CHARLES MARYATT and KATHLEEN

MARYATT, husband and wife,

Plaintiffs,

v.

AMERICAN CASUALTY COMPANY OF

READING PA; FEDERAL INSURANCE

COMPANY, a corporation; GRANITE

STATE INSURANCE COMPANY, a

corporation; PROTECTIVE NATIONAL

INSURANCE COMPANY OF OMAHA, a

corporation; WESTCHESTER FIRE

INSURANCE COMPANY, a corporation;

TRAVELERS INDEMNITY COMPANY, a

corporation,

Defendants.

No. C06-5011RBL

ORDER ON DEFENDANT

AMERICAN CASUALTY

COMPANY OF READING

PA’S MOTION TO

DISMISS, MOTION TO

STRIKE, AND MOTION

FOR CHANGE OF

VENUE

This matter is before the Court on Defendant American Casualty Company of Reading PA’s

(“American Casualty”) Motion to Dismiss, Motion to Strike, and Motion for Change of Venue [Dkt. #7]. 

American Casualty seeks to dismiss portions of Plaintiffs’ complaint under the doctrine of res judicata, and

to transfer the remaining portion of the complaint for adjudication in the Northern District of California. 

American Casualty also seeks to strike Charles Maryatt and Kathleen Maryatt’s (“Plaintiffs”) allegations of

bad faith. For the reasons discussed below, these motions are GRANTED in part and DENIED in part.

Case 3:06-cv-05011-RBL Document 51 Filed 03/10/06 Page 1 of 6
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The parties do not explain when American Linen obtained this policy.

2

This references the Washington site.

ORDER 2

FACTUAL BACKGROUND

This case concerns insurance coverage for a dry cleaning company called American Linen. 

American Linen was established in the 1920s, when Plaintiff Charles Maryatt’s father opened shop at 771

Valley Street in Seattle, Washington (“Washington site”). In the 1940s, the company expanded its

operations to open other stores, including a site in California (“California site”). When Plaintiff Charles

Maryatt’s father died in 1980, stock in the company transferred to Charles and his brother. In 1992,

Charles’ brother, David, became the sole shareholder of American Linen. 

In 1992, American Linen submitted a report in compliance with Washington law to the Washington

State Department of Ecology (“DOE”) informing the DOE that it had discovered contamination due to

past practices at its Washington site. The DOE informed the company that an owner or operator of a

contaminated facility is a potentially liable person under the Washington State Model Toxics Control Act

(“MTCA”) and advised the company to clean up the site in accordance with applicable regulations. 

In 1993, American Linen filed a lawsuit seeking a declaration that its American Casualty insurance

policy1

 covered environmental liabilities arising from the Washington site. Prior to trial, the parties entered

a “Confidential Settlement Agreement and Release” (“settlement agreement”). On June 28, 1994, this

Court recognized the settlement agreement and dismissed the complaint with prejudice.

In the settlement agreement, the parties, American Casualty and American Linen, expressed their

“desire to resolve and settle all issues of insurance coverage, defense, and indemnity among them arising

from and concerning the . . . Declaratory Action, the Seattle Facility2

 . . . and any claims for insurance

coverage for Site Contamination at or arising from the Seattle Facility . . . .” The agreement applies to all

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Although Plaintiffs discuss their tender for liability with respect to the California site, neither party

explains how or when Plaintiffs tendered liability to American Casualty with respect to the Washington site.

ORDER 3

future environmental and cleanup claims with regard to the Washington site:

[American Casualty] and American Linen . . . do hereby release, forever discharge and 

covenant not to sue each other, their trustees, agents, officers, directors, attorneys, affiliated 

companies, predecessors, successors, and assigns, from and for all injuries, losses, 

liabilities or claims of any kind . . . including, but not limited to, all claims of . . . 

environmental damage . . . and claims of . . . clean up costs . . . [or] Site Contamination at, 

or in any way arising from [] the Seattle Facility . . . .

Declaration of Robert Salmon, attached as Exhibit A, at pp. 9-10.

Sometime between 1993 and 2005, Plaintiffs faced additional problems with contamination at the

Washington site and tendered liability to American Casualty.3

 On November 23, 2005, in the Superior

Court of California in San Mateo County, American Casualty filed a complaint for declaratory relief,

seeking an answer to the question of whether Charles and Kathleen Maryatt are entitled to insurance

coverage for contamination at the California site. Discovery is underway in that case.

Plaintiffs commenced this case on December 7, 2005, in the Superior Court of Washington in

Pierce County, seeking insurance coverage for contamination at the California and Washington sites. 

American Casualty removed the case to this Court on January 9, 2006. Presently, Plaintiffs are officers,

directors, and shareholders of American Linen.

Defendant American Casualty moves to dismiss the portion of Plaintiffs’ claim regarding the

Washington site and to transfer the remaining claim regarding the California site to the Northern District of

California. They also seek to strike Plaintiffs’ bad faith claim.

DISCUSSION

A. Motion to Dismiss

Defendant American Casualty moves to dismiss that portion of Plaintiffs’ complaint seeking

damages and insurance coverage with respect to the Washington site. It argues that under the doctrine of

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ORDER 4

res judicata, that portion of Plaintiffs’ claim is barred by the parties’ settlement agreement, because the

settlement agreement served as a final judicial adjudication of its contractual liability for environmental

contamination at the Washington site.

The doctrine of res judicata (or claim preclusion) prevents the relitigation of issues that have been

settled by judicial decision. Three elements are necessary to establish a res judicata defense. There must

be (1) an identity of claims, (2) a final judgment on the merits, and (3) privity between parties. Tahoe

Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 322 F.3d 1064, 1077 (9th Cir.

2003). The parties do not dispute that the first element is met. The second element is also met. Judgment

based on a settlement between parties has full res judicata effect with respect to claims that were, or should

have been, decided in a prior proceeding. Hadley v. Cowan, 60 Wn. App. 433, 439, 804 P.2d 1271 (1991).

See also LeBire v. Dep’t of Labor & Indus., 14 Wn.2d 407, 418, 128 P.2d 308 (1942) (“[A] final order of

judgment, settled and entered by agreement or consent of the parties, is no less effective as a bar or

estoppel than is one which is rendered upon contest and trial.”)

The third element, privity between parties, is disputed by the parties. Privity is defined as 

“the connection or relationship between two parties, each having a legally recognized interest in the same

subject matter.” Black’s Law Dictionary (8th ed. 2004). See also Stratosphere Litigation L.L.C. v. Grand

Casinos, Inc., 298 F.3d 1137, 1142 n. 3 (9th Cir. 2002) (quoting In re Schimmels, 127 F.3d at 881)

(“Privity between parties exists when a party is so identified in interest with a party to former litigation that

he represents precisely the same right in respect to the subject matter involved.”). Plaintiffs argue that

there is no privity between Plaintiffs and American Linen because although Plaintiffs were listed as insured

on the policy, they were not a party to the settlement agreement and were not shareholders at the time the

agreement was finalized. American Casualty emphasizes that the settlement language encompassing the

parties’ “trustees, agents, officers, directors, attorneys, affiliated companies, predecessors, successors, and

assigns” was designed to preclude parties asserting the same claims as those resolved in the agreement. 

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ORDER 5

The Court agrees that the settlement agreement precluded Plaintiffs from bringing a second insurance claim

for contamination at the Washington site. The Court therefore concludes that res judicata bars Plaintiffs’

claim regarding the Washington site and GRANTS American Casualty’s motion to dismiss.

B. Motion for Change of Venue

Defendant American Casualty moves under 28 U.S.C. § 1404(a) to transfer this action to the

Federal District Court for the Northern District of California. It argues that because the California site is

the only site at issue, the action should be transferred there in order to more easily and efficiently access

documents and witnesses associated with the site.

Under 28 U.S.C. § 1404(a), the District Court has broad discretion to adjudicate motions for

transfer according to case-by-case consideration of convenience and fairness. 28 U.S.C. § 1404(a);

Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S. Ct. 2239, 101 L. Ed. 2d 22 (1988).

There are eight factors a court may consider when deciding whether to transfer venue:

(1) location where the relevant agreements were negotiated and executed;

(2) the state that is most familiar with the governing law;

(3) the plaintiff’s choice of forum;

(4) the respective parties’ contacts with the forum;

(5) the contacts relating to the plaintiff’s cause of action in the chosen forum;

(6) the differences in the costs of litigation in the two forums;

(7) the availability of compulsory process to compel attendance of unwilling non-party witnesses; 

and

(8) the ease of access to sources of proof.

Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000).

In light of the fact that the Plaintiffs’ remaining claim concerns damages and insurance coverage at

the California site, the balance of these factors supports transfer of this action to the Northern District of

California. Even though the disputed insurance policy was apparently executed in Washington with

Washington residents, nearly all other witnesses and documents are likely to reside in California, the

presumably applicable law of California will be more adequately adjudicated there, and the respective

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Although Plaintiffs are in their 80s, there is no evidence that they are unable to travel. If it is true that

Plaintiffs have a vacation home in Southern California, that would suggest that Plaintiffs are capable of

traveling to California for other purposes, including trial.

ORDER 6

parties appear to have sufficient contacts to dispute their claims there.4 This Court therefore concludes

that transfer is appropriate and GRANTS American Casualty’s motion to transfer the action.

C. Motion to Strike

Plaintiffs claim that American Casualty acted in bad faith when it sought a declaratory judgment in

the San Mateo County Superior Court. American Casualty moves to strike this allegation, contending that

an insurer acts within its rights when it seeks a judicial declaration as to its obligations to the insured. 

Because this question is more appropriate for the Federal Court in California, this Court DENIES the

motion.

* * *

The Court GRANTS Defendant American Casualty’s Motion to Dismiss Plaintiffs’ claims 

regarding the Washington site, GRANTS American Casualty’s Motion to Transfer the remaining action

regarding the California site to the Federal District Court for the Northern District of California, and

DENIES American Casualty’s Motion to Strike Plaintiffs’ bad faith claim [Dkt. #7].

IT IS SO ORDERED.

DATED this 10th day of March, 2006.

A

RONALD B. LEIGHTON

UNITED STATES DISTRICT JUDGE

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