INTHE COURT OF APPEALS OF THE STATE OFWASHINGTON No. 74622-7-1 SAFECO INSURANCE CO. OF AMERICA, a New Hampshire corporation, Appellant,

v. COBALT BOATS, LLC, a Delaware limited liabilitycompany, Respondent. DIVISION ONE

UNPUBLISHED OPINION

FILED: January 30, 2017 C.

Leach, J. — In September 2012, Albert Duenas's boat sank while itwas moored at a Kirkland marina. After Safeco Insurance Company of America 

### reimbursed Duenas, it brought this insurance subrogation action against the boat's manufacturer, Cobalt Boats LLC. Safeco appeals the trial court's summary dismissal of its breach of express warranty claim against Cobalt. Safecofails to demonstrate anygenuine issue ofmaterialfact aboutthe scopeof 

### the warranty or identify any structural defect required for the warranty to apply. Accordingly, we affirm. FACTS In August 2007, Albert Duenas purchased a 2007 Cobalt 232, a 23-foot recreational boat. Cobalt had outfitted the boat with a sterndrive manufactured by Mercury Marine.NO. 74622-7-1 / 2


### A sterndrive combines features of both inboard and outboard engines. The engine sits forward ofthe stern, inside the hull, while the outboard drive lies outside the hull. The transom forms the back of the hull and separates the 

### inboard and outboard components. The transom housing is the part of the sterndrive attached to the transom and helps to secure the sterndrive to the boat.1 When Deunas bought the boat, Cobalt gave him a certificate of limited warranty, which states as follows, Ten (10) Year Limited Transferrable Warranty on Hull and Deck. Cobalt warrants that the hull and deck including floor, stringers, bulkheads, motor mounts, transom and deck/hulljoints of a new Cobalt boat are free from structural defects in material and workmanship under normal, non-racing and non-commercial use for a period of (10) years from the date of delivery to the original retail purchaser. Two (2) Year Limited Transferable Warranty on Gelcoat Finish, Upholstery, Components Not Separately Warranted by the Manufacturer and All Components Manufactured by Cobalt Other Than the Hull and Deck. Cobalt warrants that the gelcoat finish, upholstery, components not separately warranted by the manufacturers thereofand all components manufactured by Cobalt with respectto a new Cobaltboatarefree from structural defects in material and workmanship under normal, non-racing and non commercial use for a period of two (2) years from the date of deliveryofsuch Cobaltboatto the original retail purchaser.



### 1 The parties also call the transom housing the transom shield, the transom assembly, and the gimbal housing. Forpurposes ofdeciding this case, theseterms are interchangeable. -2-NO. 74622-7-1 / 3
Thewarranty also contains a limitation-of-remedies clause. Itprovides, in part, COBALT'S ONLYRESPONSIBILITY, AND THE OWNER'S ONLY REMEDY, IS REPAIR AS DESCRIBED IN THIS WARRANTY. COBALT SHALL NOT BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECTOR SPECIAL DAMAGES. In September2012, Duenas's boat sank. Experts retained by Safeco and Cobalt agree that the bolts connecting the transom housing to the transom were loose. An expert retained by Cobalt's insurer concluded, "Based on my investigation, it appears the sinking was caused by the transom shield being loose and flexing during usage resulting inthe deterioration ofthetransom shield gasket and water ingress." Safeco's expert similarly concluded that bolts used
on the transom housing were loose, finding also that the bolts had likely been loose since the time of manufacture. Thus, for purposes of the summary 

### judgment motion, the parties agree that water leaked into the boat due to the loosetransom housing and caused it to sink. 

### After Safeco paid Duenas for the loss of the boat, it brought this 

### subrogation action against Cobalt. Safeco claimed that Cobalt breached the express 10-yearwarrantyonthe hulland deck. 

### Cobaltmoved for summaryjudgment. The trial court initially decided that
an issue of fact existed about the application of the warranty to the transom 

### housing. Butthe court stillgranted the motion because it found the warranty's -3-NO. 74622-7-1 / 4
limitation of remedies provision enforceable and Safeco's delay in seeking repairs barred Safeco's claims underthe doctrine oflaches. Both parties moved for reconsideration. The trial court denied Safeco's motion for reconsideration. But itgranted Cobalt's motion and again granted summaryjudgment in Cobalt's favor, this time holding that no material issue offact existed aboutthe application of the warranty to the transom housing. Safeco appeals the order granting summary judgment, the order denying its motion for reconsideration, and the ordergranting Cobalt's motionfor reconsideration. STANDARD OF REVIEW A party moving for summaryjudgment has the initial burden to show no 

### genuine issue of fact exists.2 The burden then shifts to the nonmoving party to "setforth specific facts to rebut the moving party's contentions and show that a 

### genuine issue as to a material fact exists."3 Summaryjudgment is proper if, viewing the facts and reasonable inferences in the light most favorable to the nonmoving party, no genuine issues ofmaterial factexistand the moving party is 

### entitled tojudgmentas a matteroflaw.4 Agenuine issue of material factexists if reasonable minds could differregarding the facts controlling the outcome ofthe
2Young v. Key Pharm., Inc., 112Wn.2d 216, 225, 770 P.2d 182 (1989). 3Allard v. Bd. of Regents of Univ. ofWash., 25 Wn. App. 243, 247, 606 P.2d 280 (1980). 

### 4CR 56(c); Michak v. Transnation Title Ins. Co.. 148 Wn.2d 788, 794-95, 64 P.3d 22 (2003). -4-NO. 74622-7-1 / 5 

### litigation.5 We review summaryjudgmentorders de novo, engaging inthe same inquiryas the trial court.6 We may, however, affirm summaryjudgment on any basis established by the pleadings and supported bytheproof.7 ANALYSIS The 10-year warranty covers "structural defects in material and workmanship" to the "hull and deck." Cobalt claims that this warranty does not coverthe condition thatcaused the boatto sink. Weagree. Washington follows the objective manifestation theory of contract 

### interpretation.8 The court's primary goal ininterpreting a contract is to ascertain 

### the parties' intent from the ordinary meaning of the words in the contract.9 "'An interpretation which gives effect to all of the words in a contract provision is favored over one which renders some of the language meaningless or 

### ineffective.'"10 In addition, a reasonable interpretation of a contract must prevail
overan unreasonable one.11

5Hulbertv. PortofEverett. 159Wn. App. 389, 398, 245 P.3d 779 (2011). 6Michak, 148Wn.2d at794. 7LaMonv. Butler, 112Wn.2d 193, 200-01, 770 P.2d 1027(1989). 8 Hearst Commc'ns, Inc. v. Seattle Times Co., 154 Wn.2d 493, 503, 115 P.3d 262 (2005). 9Hearst, 154Wn.2d at 503. 10 GMAC v. Everett Chevrolet, Inc., 179 Wn. App. 126, 135, 317 P.3d 

### 1074 (2014) (quoting Seattle-First Nat'l Bank v. Westlake ParkAssocs., 42 Wn. App. 269, 274, 711 P.2d 361 (1985)). 11 Bvrnev. Ackerlund, 108Wn.2d 445, 453-54, 739 P.2d 1138 (1987). -5-NO. 74622-7-1 / 6 

### Here, summary judgment is proper because Safeco has not supplied evidence that the condition that caused the boat to sink was a structural defect. Even if ithad, that condition did not involve a partofthe "hulland deck" covered bythewarranty 

### First, we note that according to its plain language, the 10-year warranty
covers only structural defects. A structural defect is a defect that concerns the design or fabrication of a boat component as opposed to its installation. Safeco 

### alleges that the transom housing bolts were not adequately tightened. But Safeco makes no claim thatbolts or any otherparts ofthe boatwere defective in 

### design or manufacture. Safeco only alleges impropertightening of bolts during the installation of the transom housing. Thus, Safeco has not introduced evidence ofa structural defect. 

### Safeco maintains that a "structurally sound" transom does not leak. Safeco relies on the undisputed fact that the water entered the boat through a hole inthetransom. ButCobaltattached the outdriveto the hullthrough a hole in the transom, so a transom with a hole is not necessarily defective. Further, Safeco's expert admitted thatthe transom "was not deformed at all" and "looked pristine." Thus, although the water that caused the sinking entered the boat through the transom, Safeco has raised no question of fact as to whether the
transom itselfwas defective.NO. 74622-7-1 / 7 Second, even ifwe considered the condition ofthe loosetransom housing bolts a structural defect, the 10-yearwarranty would not apply because the bolts and transom housing are not part of the "hull and deck." The warranty states, "Cobalt warrants that the hull and deck including . . . motor mounts [and]
transom ... of a new Cobalt boat are free from structural defects." Safeco fails to showthatthetransom housing iseithera "transom" or a "motormount." Safeco claims that the warranty includes anything permanently bolted to the transom, such as the transom housing. But the text ofthe warranty does not supportSafeco's interpretation. The "hulland deck" warranty lists equipmentthat 

### the warranty covers. Cobalt does not claim that the list is exclusive, but the list indicates what equipment Cobalt intended the warranty to cover. Significantly, Cobalt manufactures each item listed. Mercury Marine, however, manufactures 

### the transom housing. We conclude that under the plain language of the warranty, Cobalt did not intend the 10-yearwarranty to cover equipment that it did not manufacture when the warranty lists only equipment that Cobalt did 

### manufacture. Therefore, we disagree with Safeco's assertion that "transom" includes features that are permanently bolted to the transom, like the transom housing. Safeco's contention thatthetransom housing is a "motormount" fails for a 

### similar reason. According to Safeco, becausethe transom housing helps mount -7-NO. 74622-7-1 / 8


### the engine to the boat, it is a motor mount and is thus covered by the warranty. However, while Cobalt manufactured the motor mounts, those are installed inthe hull forward of the transom and the engine is bolted to them. It does not manufacture the transom housing, and itdoes not secure the engine to the hull. Thus, the transom housing and its attendant bolts cannot be considered "motor mounts" in this case. Further, Safeco's contention that the 10-year warranty covers items that
are attached to the hull or deck would make the 2-year warranty superfluous. "An interpretation of a contract that gives effect to all provisions is favored over 

### an interpretation that renders a provision ineffective."12 The 2-year warranty
covers "components not separately warranted by the manufacturer" and "components manufactured by Cobalt otherthan the hull and deck." (Emphasis omitted.) An interpretation ofthe 10-yearwarrantythatcovers components other than the "hull and deck" which are attached to the hull and deck—such as the transom housing—would mean that much of the boat's equipment falls under boththe 10-yearand 2-yearwarranties. This interpretation is notreasonable. Because Safeco has not identified a structural defect or shown that the 10-year warranty covers the transom housing, we conclude that the warranty does not applyto the conditionthatcaused the boatto sink. Becausewe resolve 12 Snohomish County Pub. Transp. BenefitArea Corp. v. FirstGroup Am., Inc., 173Wn.2d 829, 840, 271 P.3d 850 (2012). -8-NO. 74622-7-1 / 9
this case on this basis, we do not reach the questions involving laches, the limitation-of-remedies clause, or Safeco's motion for reconsideration, which only addressed the laches issue. Because we agree with the trial court's final 

### decision aboutthe scope ofthe warranty, itproperly granted Cobalt's motion for reconsideration. Because Safeco has not raised an issue of material fact, we affirm 

### summaryjudgmentinfavorofCobalt.

WE CONCUR: 

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