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ORDER – 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

MACLEAN TOWNHOMES, LLC, a

Washington limited liability company, as

assignee of American Heritage Builders, a

Washington corporation,

Plaintiff,

v.

CHARTER OAK FIRE INSURANCE

CO., a foreign insurance company,

Defendant and Third-Party

Plaintiff,

 v.

FIRST SPECIALTY INSURANCE

COMPANY, a foreign insurance

company,

 Third-Party Defendant.

CASE NO. C06-1093BHS

ORDER GRANTING

DEFENDANT CHARTER

OAK FIRE INSURANCE

CO.’S MOTION FOR

RECONSIDERATION

This matter comes before the Court on Defendant Charter Oak Fire Insurance

Co.’s Motion for Reconsideration (Dkt. 108). The Court has considered the pleadings

filed in support of and in opposition to the motion and the remainder of the file and

hereby grants Charter Oak’s motion for the reasons stated herein.

I. PROCEDURAL BACKGROUND

On August 3, 2006, Plaintiff MacLean Townhomes Inc. filed a complaint for

declaratory relief and monetary damages against Defendant Charter Oak Fire Insurance

Co. Dkt. 1. Plaintiff’s claims are based on the assignment of an insurance contract

between assignor American Heritage Builders and Defendant Charter Oak. Dkt. 56 at 1

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ORDER – 2

(see Dkt. 56 at 1-8 and Dkt. 65 at 1-9 for a more thorough explanation of the facts). 

On December 17, 2007, Plaintiff filed a Motion for Partial Summary Judgment Re:

Insurance Coverage. Dkt. 56. Plaintiff requested that the Court declare that Plaintiff’s

judgment against assignor American Heritage Builder was covered as a matter of law

under the insurance contract. Id. at 2. On March 10, 2008, Defendant responded. Dkt.

79. On March 21, 2008, Plaintiff replied. Dkt. 93.

On January 10, 2008, Defendant filed a Motion for Summary Judgment asking the

Court to dismiss Plaintiff’s complaint because Plaintiff violated the cooperation clause

and the voluntary payments clause of the insurance contract. Dkt. 65 at 2. On March 10,

2008, Plaintiff responded. Dkt. 84. On March 21, 2008, Defendant replied. Dkt. 90.

On May 7, 2008, the Court issued an Order Granting Plaintiff’s Motion for Partial 

Summary Judgment Re: Insurance Coverage and Denying Defendant’s Motion for

Summary Judgment. Dkt. 105. On May 21, 2008, Defendant filed a Motion for

Reconsideration asking the Court to reconsider its decision on each of the motions for

summary judgment. Dkt. 108. On June 5, 2008, the Court issued an Order Setting

Briefing Schedule on Reconsideration. Dkt. 113. In that order, the Court denied

Defendant’s Motion for Reconsideration on its decision denying Defendant’s Motion for

Summary Judgment and allowed additional briefing on Defendant’s Motion for

Reconsideration of the decision granting Plaintiff’s Motion for Summary Judgment Re:

Insurance Coverage. Id. On June 13, 2008, Plaintiff responded. Dkt. 128. On June 19,

2008, Defendant replied. Dkt. 131.

The remainder of Defendant’s Motion for Reconsideration is now ripe for

decision.

II. DISCUSSION

Local Rule 7(h) states that:

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ORDER – 3

Motions for reconsideration are disfavored. The court will ordinarily deny

such motions in the absence of a showing of manifest error in the prior

ruling or a showing of new facts or legal authority which could not have

been brought to its attention earlier with reasonable diligence.

Local Rule 7(h). Defendant argues that the Court committed manifest error when it

granted Plaintiff’s Motion for Summary Judgment Re: Insurance Coverage because there

existed material issues of fact that precluded summary judgment. Dkt. 108 at 4-8; Dkt.

131 at 2.

A. SUMMARY JUDGMENT RULING

Plaintiff moved for summary judgment as to Defendant’s coverage under the

insurance contract. See Dkt. 56. Defendant responded that “[t]he motion must be denied

because [Plaintiff] has failed to establish by uncontroverted evidence a breach of contract

by [Defendant] . . . .” Dkt. 79 at 2. Defendant argued that “[Plaintiff’s] position rests

entirely on the testimony of Mark Lawless that [the assignor’s] work was defective and

caused property damage.” Id. at 6. Moreover, Defendant stated that “every point of

Lawless’s testimony is controverted by the testimony of [the assignor’s] principal Chad

Hansen and [the assignor’s] defense consultant Jim Phillips.” Id. at 3. Plaintiff replied

that “[t]he Phillips and Hansen declarations do not even contest the first six deficiencies

that Mr. Lawless identified.” Dkt. 93 at 4-5. Based on this information, the Court found

that “at least some of this ‘property damage’ does” subject Defendant to liability under

the insurance contract. Dkt. 105 at 3. 

On reconsideration, Defendant maintains that Phillips’ testimony “controverts the

first six alleged deficiencies as well.” Dkt. 108 at 4. Defendant cites two of Phillips’

statements that support its argument: 

1) “the siding and building paper and associated flashings are performing

their function in that they are not allowing excessive moisture to enter

the building envelope system” and 

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ORDER – 4

2) “While I agree with [] Lawless that there has been some water

intrusion as a result of construction deficiencies at Summerhill, I

disagree with their conclusion that the water intrusion is related to

work performed by American Heritage Builders, Inc.”

Id. at 4-5. 

“On a motion for summary judgment, all reasonable inferences are drawn in favor

of the non-moving party.” In Re Slatkin, 525 F.3d 805, 810 (9th Cir. 2008). Phillips is a

specialist in construction defect litigation. Dkt. 108 at 18. Moreover, Phillips stated that

he conducted an on-site investigation of the condominium in question and had performed

a thorough review of the construction documents, plans and specifications, and photos of

the complex. Id. Phillips then expressed his opinion as to the extent and source of the

water intrusion at the condominium complex. Id. at 18-23. Defendant is entitled to the

reasonable inferences that can be drawn from Phillips opinion. Accordingly, the Court

committed manifest error by granting summary judgment when material issues of fact

existed. 

III. ORDER

Therefore, it is hereby

ORDERED that Defendant Charter Oak Fire Insurance Co.’s Motion for

Reconsideration (Dkt. 108) is GRANTED and the Order Granting Plaintiff’s Motion for

Partial Summary Judgment Re: Insurance Coverage (Dkt. 105) is VACATED. Plaintiff’s

Motion for Partial Summary Judgment Re: Insurance Coverage (Dkt. 56) is DENIED.

DATED this 25th day of June, 2008.

A 

BENJAMIN H. SETTLE

United States District Judge

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