IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION ONE

POPE RESOURCES LP, a Delaware ) No. 80032-9-I

limited partnership, )

)

Respondent, )

)

v. )

)

CERTAIN UNDERWRITERS AT )

LLOYD’S, LONDON; CERTAIN )

LONDON MARKET COMPANIES; )

CONTINENTAL CASUALTY )

COMPANY; and THE CONTINENTAL )

INSURANCE COMPANY (as successor )

in interest to the rights and obligations )

under certain policies issued by )

HARBOR INSURANCE COMPANY); )

AMERICAN REINSURANCE )

COMPANY; ASSOCIATED )

INTERNATIONAL INSURANCE )

COMPANY; CENTRAL NATIONAL )

INSURANCE COMPANY; CENTURY )

INDEMNITY COMPANY; EMPLOYERS )

INSURANCE COMPANY OF WAUSAU;)

EMPLOYERS REINSURANCE )

COMPANY; GRANITE STATE )

INSURANCE COMPANY; HIGHLANDS )

INSURANCE COMPANY; INSURANCE ) PUBLISHED OPINION

COMPANY OF NORTH AMERICA; )

INSURANCE COMPANY OF THE )

STATE OF PENNSLYVANIA; )

INTERNATIONAL INSURANCE )

COMPANY as successor to )

INTERNATIONAL SURPLUS LINES )

INSURANCE COMPANY; NEW )

HAMPSHIRE INSURANCE )

COMPANY; and NORTHBROOK )

INSURANCE COMPANY, )

)

Appellants. )
2

POPE & TALBOT, INC.; )

GENERAL INSURANCE COMPANY )

OF AMERICA; LIBERTY MUTUAL )

INSURANCE COMPANY; and JOHN )

DOES 1-20, )

)

Defendants. )

)

VERELLEN, J. — Washington’s broad and inclusive anti-annulment statute, 

RCW 48.18.320, voids any agreement between an insurer and insured 

attempting to retroactively cancel, rescind, void, buy back, or otherwise annul 

an insurance contract for liability coverage after a potentially covered injury or 

damage to a third party has occurred. When analyzing whether a particular 

settlement agreement and release implicates an “insurance contract,” we must 

consider whether the substance of the agreement and release impacts a riskshifting and risk-distributing device, not necessarily an entire policy.

Applying recognized conflict of law principles, we conclude Washington’s 

paramount interest in environmental cleanup and pollution remediation requires 

we apply RCW 48.18.320 to each of the settlement and remediation 

agreements between ten different Insurers and Pope & Talbot, Inc., the

previous owner and operator of the Port Gamble Bay and mill site located in 

Washington. We further conclude that RCW 48.18.320 renders all ten 

agreements unenforceable. 

Therefore, we affirm.
No. 80032-9-I/3

3

FACTS

The history underlying the current dispute is extensive. In 1853, Pope &

Talbot, Inc. began operating a mill in Port Gamble, Washington. In 1964, Pope 

& Talbot, which had become a publicly traded Delaware corporation, moved its 

headquarters to Oregon.

Between 1959 and 1986, various insurance companies issued 

comprehensive general liability insurance policies to Pope & Talbot. Over the 

years, Pope & Talbot also obtained various excess and umbrella coverages.1 

Here, we are concerned with the policies issued by TIG Insurance 

Company,

2 Evanston Insurance Company,3 Westport Insurance Corporation,4

London Market Insurers,

5 Munich Reinsurance America Inc.,6 Century 

 1 A primary comprehensive general liability policy provides an insured 

with “the first line of defense in the event of accident or injury.” Safeco Ins. Co. 

of Ill. v. Auto. Club Ins. Co., 108 Wn. App. 468, 479, 31 P.3d 52 (2001). Excess 

and umbrella policies provide coverage only after the primary policy has been 

exhausted and “protect the insured in the event of a catastrophic loss in which 

liability damages exceed available primary coverage.” Id. at 479-80 (citing 15 

LEE R. RUSS & THOMAS F. SAGALLA, COUCH ON INSURANCE 3D § 220:32 (3d ed. 

2000)).

2 TIG Insurance Company is the successor insurer to International 

Surplus Lines Insurance Company. Clerk’s Papers (CP) at 10855-58.

3 Evanston Insurance Company is the successor insurer to Associated 

International Insurance Company. CP at 10860-62.

4 Westport Insurance Corporation is the successor insurer to Employers 

Reinsurance Corporation. CP at 4835, 4856. 

5 Certain Underwriters at Lloyd’s London and Certain Market Insurance 

Companies (London Market) issued their policies to Pope & Talbot. CP at 

10737-814. 

6 Munich Reinsurance America Inc. was previously named American 

Reinsurance Company. CP at 6068, 6070, 10730-33. 
No. 80032-9-I/4

4

Indemnity Company,

7 Employers Insurance Company of Wausau,8 Allstate

Insurance Company,

9 Continental Insurance Company,10 and Granite State

Insurance Company 11 (Insurers).

In 1985, Pope & Talbot created Pope Resources, a limited partnership.12 

Pope & Talbot transferred all of its Washington real property, including the Port 

Gamble Bay and mill site, to Pope Resources.

13 In exchange, Pope Resources

assumed upwards of $22 million of Pope & Talbot’s debt. Pope Resources

leased the mill site back to Pope & Talbot, which continued to operate the mill 

until 1995, when it was shut down due to significant environmental 

 7 Century Indemnity Company is the successor insurer to Insurance 

Company of North America. CP at 2765-68, 10709-15. 

8 Employers Insurance Company of Wausau is the successor insurer to 

Employers Mutual Liability Insurance Company of Wisconsin. CP at 10863-

909. 

9 Allstate Insurance Company is the successor insurer to Northbrook 

Insurance Company. CP at 3994-4058, 10694-701. 

10 Continental Insurance Company is the successor insurer to Harbor 

Insurance Company. CP at 3144-48, 3156-62, 10706-708. 

11 Granite State Insurance Company, the Insurance Company of the 

State of Pennsylvania, and the New Hampshire Insurance Company are 

affiliated with American Insurance Group. CP at 6817-22, 10815-54. 

12 “Pope Resources . . . has independent management and is largely a 

timber operator/owner and real estate . . . company. Pope & Talbot maintained 

all of the operating manufacturing assets and did not own any timberland after 

that spinoff. They were separate companies.” CP at 2511.

13 “The Company hereby conveys, assigns, transfers, sets over and 

delivers, as is and without representations or warranties except as expressly set 

forth herein, to the Partnership all of the Company’s right, title, and interest in 

and to the Properties [including] the Timber Properties.” CP at 8820. The “Port 

Gamble Bay and Mill Site consists of the Property together with the former 

sawmill area, and uplands areas to the west and south of the former sawmill 

area.” CP at 626.
No. 80032-9-I/5

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contamination. The Washington State Department of Ecology listed the Port 

Gamble mill as a hazardous waste site. The estimated cost to clean up Port 

Gamble, including the mill site, is $22 million.14

In June of 1995, Pope Resources and Pope & Talbot started 

communicating about their shared responsibility for the environmental 

contamination at Port Gamble. 

In 1997, Pope Resources sent Pope & Talbot a formal demand letter. A 

few years later, Pope Resources and Pope & Talbot entered into a remediation 

agreement. In summary, Pope & Talbot assumed responsibility for the cleanup 

at Port Gamble and, once completed, Pope Resources would clean up the 

other sites contaminated by Pope & Talbot’s operations. 

Around the same time, Pope & Talbot filed suit against Insurers in King 

County Superior Court seeking insurance coverage for its Washington liabilities. 

Between 1998 and 2003, Pope & Talbot and Insurers entered into ten separate

settlement and remediation agreements.

In November 2007, Pope & Talbot filed for Chapter 11 bankruptcy in 

Delaware and stopped all remediation work at Port Gamble. The bankruptcy 

was converted to a Chapter 7 proceeding. 

On February 4, 2013, the bankruptcy court granted Pope Resources

relief from the automatic stay to enable Pope Resources “to liquidate its claims 

 14 CP at 14718.
No. 80032-9-I/6

6

against [Pope & Talbot] for contamination arising from [Pope & Talbot’s]

ownership or operation of the property.”15

In 2015, Pope Resources filed suit in King County to obtain coverage for 

its environmental liabilities against its own insurers, seeking declaratory 

judgment for breach of contract, bad faith, and violations of the Consumer 

Protection Act. In 2016, Pope Resources amended its complaint to seek 

contribution from Pope & Talbot and Insurers for the costs of the environmental 

remediation.

The court entered a case management order phasing the litigation. 

Pope Resources and Insurers filed cross motions for summary judgment 

regarding conflicts of law and the enforceability of the settlement agreements.

On April 30, 2019, the court denied Insurers’ motion for summary 

judgment and granted Pope Resources’ motion for summary judgment. The 

trial court noted that no conflict of law analysis was necessary because Pope 

Resources was “not a signatory or [a] party to [the] settlement agreements.”16 

The court concluded, “Allowing the settlement agreements to be used as a 

shield . . . against a third party, non-signatory, to retroactively cancel insurance 

coverage of a potentially covered event, would be to enforce a contract that is 

illegal as violative of Washington public policy.”17 Accordingly, the court held 

that all ten settlement agreements were unenforceable.

 15 CP at 60.

16 CP at 15794.

17 CP at 15794-95. 
No. 80032-9-I/7

7

Insurers filed motions for discretionary review in this court.

18 

Commissioner Mary Neel granted the motions for discretionary review as to the 

conflict of law issue and interpretation of Washington’s anti-annulment statute.19 

Subsequent phases of this litigation will determine whether Pope 

Resources has compensable damages and is entitled to a judgment against 

Pope & Talbot and Insurers.

ANALYSIS

At the outset, we emphasize the very narrow issues before this court. 

Commissioner Neel granted discretionary review of the conflict of law “threshold 

issue” and the “interpretation and application” of Washington’s anti-annulment 

statute, RCW 48.18.320, as it pertains to the claims involving the Port Gamble

Bay and mill site.

20 

We are not deciding other issues nor are we deciding any conflict of law 

as it may pertain to any other issues.

21 We are focused on how the particular 

language of the ten settlement and remediation agreements between Pope & 

Talbot and Insurers impact the potential claims of Pope Resources, a 

 18 Westport, Allstate, Granite State, Munich, Evanston, and TIG sought 

review of the trial court order entered on April 30, 2019. London Market, 

Century, Wausau, and Continental sought review of both the April 30, 2019, 

order and the summary judgment order entered on March 11, 2019.

19 We decline to reach the capacity to be sued issue that Commissioner 

Neel allowed the parties to brief but was not a ground for discretionary review. 

20 CP at 16094.

21 “[D]ifferent issues in a single case arising out of a common nucleus of 

facts may be decided according to the substantive law of different states,” 

sometimes referred to as depecage. FutureSelect Portfolio Mgmt., Inc. v. 

Tremont Grp. Holdings, Inc., 175 Wn. App. 840, 857 n.15, 309 P.3d 555 (2013). 
No. 80032-9-I/8

8

prospective garnishor of the insurance contracts that was known to the Insurers 

as the current owner of the Port Gamble mill site when all 10 settlement 

agreements were entered into.

I. Conflict of Law

Insurers contend that the trial court failed to engage in the appropriate 

conflict of law analysis before determining whether RCW 48.18.320 applied to 

the ten settlement agreements. 

We disagree with the trial court’s conclusion that no conflict of law 

analysis was required because Pope Resources was not a signatory or a party 

to any of the settlement agreements. Whether the settlement agreements are

valid impacts the prospective claims of Pope Resources. Because Pope 

Resources has a potential interest in the outcome of the dispute, a conflict of 

law analysis is required. To determine whether RCW 48.18.320 applies to the 

settlement agreements, we must first engage in a conflict of law analysis to 

decide which state’s law applies. We review the question of conflict of law de 

novo.

22

Actual conflict. The first step in the conflict of law analysis is to 

determine whether an actual conflict exists.23 An actual conflict exists if the 

 22 Shanghai Com. Bank Ltd. v. Kung Da Chang, 189 Wn.2d 474, 479-80, 

404 P.3d 62 (2017); Erwin v. Cotter Health Ctrs., 161 Wn.2d 676, 691, 167 P.3d 

1112 (2007).

23 Freestone Cap. Partners L.P. v. MKA Real Est. Opportunity Fund I, 

LLC, 155 Wn. App. 643, 664, 230 P.3d 625 (2010); see also Shanghai Com.

Bank, 189 Wn.2d at 480-81; Erwin, 161 Wn.2d at 692.
No. 80032-9-I/9

9

outcome of an issue is different depending on which state’s law applies.

24 

Here, there is an actual conflict. 

Insurers contend an actual conflict exists because the enforceability of 

the settlement agreements depends on whether Washington law applies. Pope 

Resources argues that the result is the same under Washington law and the 

common law of any other state because, similar to RCW 48.18.320, the 

common law generally recognizes an insurer and insured should not be allowed 

to enter into an agreement to annul insurance coverage after an injury has 

occurred, leaving an injured third party with no recourse.25 But Pope 

Resources does not cite any authority supporting its contention that the 

common law of other states provides the same level of protection to an injured 

third party as does RCW 48.18.320. 

Here, some Insurers argue that Oregon law should govern their 

settlement agreements but did not contract for a specific state’s law to apply. 

Others specifically contracted for Oregon, California, or New Jersey law to 

apply. Because Oregon, California, and New Jersey do not have anti-

 24 Freestone Cap. Partners, 155 Wn. App. at 664 (quoting Seizer v. 

Sessions, 132 Wn.2d 642, 648, 940 P.2d 261 (1997)); Erwin, 161 Wn.2d at 

692.

25 See Finkelberg v. Cont’l Cas. Co., 126 Wash. 543, 549, 219 P. 12 

(1923) (insurer and insured’s cancellation of insurance policy after car accident 

occurred does not relieve the insurer from obligations under indemnity policy); 

STEVEN PLITT, DANIEL MALDONADO, JOSHUA D. ROGERS, & JORDAN R. PLITT, 2

COUCH ON INSURANCE § 31:49 (3d. ed. 1995) (“Where the contract of insurance 

provides for liability to third persons, the insurer and the insured cannot 

terminate such a contract by their voluntary action to the prejudice of a 

claimant’s rights which have already vested.”). 
No. 80032-9-I/10

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annulment statutes comparable to Washington’s statute, the validity of each 

settlement agreement turns on which state’s law applies. Therefore, there is an 

actual conflict. 

Agreements with no choice of law provision. Once an actual conflict is 

established, the next step in the conflict of law analysis depends on whether the 

parties have contracted for a specific state’s law to apply. 

Washington applies section 188 of the Restatement (Second) of 

Conflicts of Law when an actual conflict exists and the parties have not 

contracted for a choice of law provision. Under section 188 subsection (2), the 

“most significant relationship test,” a court will apply “[t]he local law of the state 

which, with respect to that issue, has the most significant relationship to the 

transaction and the parties.”26 In determining which state has the most 

significant relationship to the transaction, the factors to be considered are “(a) 

the place of contracting, (b) the place of negotiation of the contract, (c) the 

place of performance, (d) the location of the subject matter of the contract, and 

(e) the domicile, residence, nationality, place of incorporation and place of 

business of the parties.”27 

We begin with Insurers that did not contract for a choice of law provision. 

Pope & Talbot’s settlement agreements with Granite State, TIG, Evanston, and 

Wausau do not contain a choice of law provision, but the insurers contend that 

 26 Canron, Inc. v. Fed. Ins. Co., 82 Wn. App. 480, 493, 918 P.2d 937 

(1996).

27 RESTATEMENT (SECOND) OF CONFLICTS OF LAW § 188(2) (1971).
No. 80032-9-I/11

11

Oregon law applies. For these four Insurers, the tangle of these various factors 

is not conclusive; some factors favor the Insurers, some do not. Although 

inconclusive, we include a summary of the factors as to each Insurer:

(1) Granite State. Granite State, the Insurance Company of the State of 

Pennsylvania, and the New Hampshire Insurance Company are affiliated with 

American Insurance Group. Granite State contracted for its settlement 

agreement with Pope & Talbot in either Oregon or New York.28 Pope & Talbot’s 

president in Oregon and Granite State representatives in New York handled the 

final settlement negotiations.29 Pope & Talbot’s president signed the settlement 

agreement in Oregon, and Granite State’s “authorized agent” signed the 

agreement in New York.30 Granite State delivered the settlement check to 

Pope & Talbot in Oregon.31 Pope & Talbot deposited the check in Oregon.32 

Granite State is domiciled in Pennsylvania and its principle place of business is

in New York.33 Pope & Talbot is incorporated in Delaware and is 

headquartered in Oregon.34 The agreement released Granite State from 

liability resulting from Pope & Talbot’s operations in Oregon and Washington.35

 28 CP at 3679, 3691. 

29 CP at 3692.

30 CP at 2534-36. 

31 CP at 3695. 

32 CP at 3695. 

33 CP at 3698. 

34 CP at 8812. 

35 CP at 2537-38. 
No. 80032-9-I/12

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(2) TIG. TIG is the successor insurer to International Surplus Lines

Insurance Company.36 International is the insurer that entered into the 

settlement agreement with Pope & Talbot.

37 Pope & Talbot and International 

contracted for the settlement agreement in either Oregon or New Hampshire.38 

Pope & Talbot’s representatives negotiated from Oregon, and International’s 

“decision maker” participated in the negotiations from New Hampshire.39 

During negotiations, International was also represented by Washington 

counsel.40 Negotiations occurred “either in Oregon or over the telephone and in 

writing between” Pope & Talbot’s representatives in Oregon and International’s 

representatives and counsel in Oregon, New Hampshire, and Washington.41 

Pope & Talbot accepted and executed the agreement in Oregon and 

International signed the agreement in New Hampshire.42 International delivered 

the settlement check to Pope & Talbot in Oregon and Pope & Talbot deposited 

the check in Oregon.43 Pope & Talbot is incorporated in Delaware and is 

headquartered in Oregon.44 International is an Illinois corporation and is 

 36 CP at 3680 n.2. 

37 CP at 3680-710. 

38 CP at 3691. 

39 CP at 3692-93. 

40 CP at 3692-93. 

41 CP at 3692-93. 

42 CP at 3691. 

43 CP at 3696. 

44 CP at 8812. 
No. 80032-9-I/13

13

headquartered in New Hampshire.45 The agreement released International 

from liability arising from Pope & Talbot’s operations in Oregon and 

Washington.46 

(3) Evanston. Evanston is the successor insurer to Associated 

International Insurance Company.47 Associated International is the insurer that 

entered into the settlement agreement with Pope & Talbot.

48 Pope & Talbot

contracted for the agreement with Associated International in either Oregon or 

California.49 During negotiations, Pope & Talbot’s counsel in Oregon 

negotiated with Associated International’s counsel in Oregon and New York.50 

Pope & Talbot accepted and executed the agreement in Oregon, and 

Associated International signed the agreement in California.51 Associated 

International delivered the settlement check to Pope & Talbot’s counsel in 

Oregon, and Pope & Talbot deposited the check in Oregon.52 Pope & Talbot is 

incorporated in Delaware and is headquartered in Oregon.53 Associated 

International is a California corporation headquartered in California.54 The 

 45 CP at 3698. 

46 CP at 3002, 9049-52. 

47 CP at 3680 n.1.

48 CP at 3680-710. 

49 CP at 3691. 

50 CP at 3693. 

51 CP at 3691. 

52 CP at 3696. 

53 CP at 8812. 

54 CP at 3698. 
No. 80032-9-I/14

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agreement released Associated International from liability arising from Pope & 

Talbot’s operations in Oregon and Washington.

55

(4) Wausau. Wausau and Pope & Talbot contracted for the agreement 

in either Oregon or Illinois.56 Pope & Talbot’s counsel and management in 

Oregon negotiated with Wausau’s counsel in Oregon and Texas.57 During 

negotiations, some in-person meetings were held in Oregon.58 Pope & Talbot 

executed the agreement in Oregon, and Wausau signed the agreement in 

Illinois.59 Wausau wired the settlement amount to Pope & Talbot’s bank in 

Oregon.60 Pope & Talbot is incorporated in Delaware and is headquartered in 

Oregon.61 Wausau is a Wisconsin company headquartered in Wisconsin.62 

The agreement released Wausau from liability arising from Pope & Talbot’s 

operations in Oregon, Canada, and Washington.63 

A variety of states were involved in aspects of negotiating, executing, 

and performing the settlement agreements. On the surface, the mix of section 

188 factors do not favor applying the law of any particular state. But section 

188 factors “‘are to be evaluated according to their relative importance with 

 55 CP at 3059, 3063, 9049-52.

56 CP at 3691. 

57 CP at 3692. 

58 CP at 3692. 

59 CP at 3691. 

60 CP at 12144. 

61 CP at 8812. 

62 CP at 3698. 

63 CP at 12132. 
No. 80032-9-I/15

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respect to the particular issue’ and in conjunction with the principles set forth in 

[section] 6 of the Restatement.”64 These principles include:

(a) the needs of the interstate and international systems, (b) the 

relevant policies of the forum, (c) the relevant policies of other 

interested states and the relative interests of those states in the 

determination of the particular issue, (d) the protection of justified 

expectations, (e) the basic policies underlying the particular field 

of law, (f) certainty, predictability and uniformity of result, and (g) 

ease in the determination and application of the law to be 

applied.[65]

These principles “underlie all rules of choice of law” and are used to evaluate 

the significance of a relationship to the potentially interested states, the thing, 

and the parties with respect to the particular issue.66 Thus, we weigh the 

contacts with potentially interested states under the circumstances and in the 

context of relevant policy considerations to determine which state’s laws 

applies.

Here, Washington has a significant interest in ensuring that a hazardous 

waste site located in Washington is remediated. Specifically, Washington’s 

Model Toxic Control Act provides:

Each person has a fundamental and inalienable right to a 

healthful environment, and . . . has a responsibility to preserve 

and enhance that right. The beneficial stewardship of the land, 

 64 Canron, 82 Wn. App. at 493 (quoting RESTATEMENT (SECOND) OF 

CONFLICTS OF LAW § 188(2) (1971)).

65 RESTATEMENT (SECOND) CONFLICTS OF LAW § 6 (1971). If the purposes 

of the state’s law would be furthered by its application to the facts, this is a good 

reason for such an application to be made. RESTATEMENT (SECOND) OF 

CONFLICTS OF LAW § 6 cmt. e (1971). The state with the dominant interest 

should have its law applied. RESTATEMENT (SECOND) OF CONFLICTS LAW § 6 

cmt. f (1971); see also Seizer, 132 Wn.2d at 652-53.

66 RESTATEMENT (SECOND) OF CONFLICTS OF LAW § 222, cmt. b (1971).
No. 80032-9-I/16

16

air, and waters of the state is a solemn obligation of the present 

generation for the benefit of future generations.”67 

And, as this court articulated in Canron, Inc. v. Federal Insurance Company,

Washington has “a paramount interest” in protecting its residents from 

environmental contamination and promoting the “health and safety of its 

people.”68 Insurance can play a significant role in safeguarding that interest. 

Here, as in Canron, “[t]he existence or absence of insurance proceeds can 

determine whether or not a hazardous waste site is remediated. Washington, 

therefore, has a significant interest in [the] insurance coverage.”69

Additionally, the comparative cost of cleanup at a particular location can 

impact the conflicts analysis.70 Bridgewater Group, Inc. conducted an 

assessment of known and potential environmental liabilities associated with 

 67 RCW 70A.305.010(1).

68 82 Wn. App. 480, 494, 918 P.2d 937 (1996). In Canron, a Canadian 

corporation based in Canada shipped byproducts containing zinc to Western 

Processing, a Kent, Washington facility, for recycling and disposal. Id. at 482-

83. The Environmental Protection Agency closed the Kent facility and 

designated it a “Superfund site under the Comprehensive Environmental 

Response, Compensation, and Liability Act.” Id. at 482. Canron’s insurer 

denied coverage, and Canron sued. Id. at 483-84. Canron’s insurer argued 

that Quebec law should govern the dispute because Quebec was the place 

where the contract was entered. Id. at 492-93. This court upheld the trial 

court’s decision that Washington law applied to the dispute primarily because of 

Washington’s interest in ensuring that the “hazardous waste site was 

remediated.” Id. at 492-94. 

69 Id. at 494.

70 See Ingenco Holdings, LLC v. Ace Am. Ins. Co., 921 F.3d 803, 811 

(9th Cir. 2019) (holding that Washington law applied in an environmental 

cleanup because the coverage amounts for a single site in Washington 

“dwarfed” the coverage amounts for the 12 sites located in Virginia.).
No. 80032-9-I/17

17

Pope & Talbot’s operations”71 and concluded that the environmental 

contamination occurring in Port Gamble was by far the most costly. 

Bridgewater predicted that the contamination resulting from Pope & Talbot’s 

operations of the mill site was approximately $11 million and the total damage 

of its operations in Port Gamble would cost upwards of $22 million.

72 Estimated 

liability at Pope & Talbot’s operations at several other sites in Washington was 

upwards of $21 million.

73 By contrast, its operations in St. Helens, Oregon, was 

approximately $12 million, and its operations at other sites in Oregon was 

estimated at $6 million.74 Because the single most expensive cost of cleanup

site is at Port Gamble, this also favors applying Washington rather than Oregon

law.

Further, in adopting Washington’s anti-annulment statute, the legislature 

intended “to ensure that cancellation of [an insurance contract would not] 

adversely impact any person who was injured or damaged by an occurrence 

before such cancellation.”75 Because the application of the law of other states, 

such as Oregon, could prevent parties injured in Washington from filing 

insurance claims, Washington’s interests in protecting its citizens from pollution 

 71 CP at 14714.

72 CP at 14718. 

73 CP at 14718-19.

74 CP at 14718-19. Pope & Talbot’s operations in South Dakota and 

Canada together amounted to less than $1 million. CP at 14716-19. And its 

operations in Wisconsin caused approximately $5 million in damages. CP at 

14716-19.

75 Am. Cont’l Ins. Co. v. Steen, 151 Wn.2d 512, 522, 91 P.3d 864 (2004).
No. 80032-9-I/18

18

at Port Gamble are the “most deeply affected.”76 Taken together, Washington’s 

interest in protecting the health and safety of its residents, the greater extent of 

the loss suffered in Washington, and the policy of the anti-annulment statute 

itself establishes that Washington has the most significant relationship to the 

settlement agreements.77 

Thus, Washington law applies to Pope & Talbot’s settlement agreements 

with Granite State, TIG, Evanston, and Wausau.

Agreements with choice of law provisions. Next, we turn to the 

agreements in which Pope & Talbot and certain Insurers contracted for a 

specific state’s law to apply. Pope & Talbot’s settlement agreements with 

Century, Westport, Continental, and Allstate all contain an Oregon choice of law 

clause.78 Its agreement with London Market contains a California choice of law 

provision.

79 And its agreement with Munich contains a New Jersey choice of 

law provision.80 For these six Insurers, our analysis also begins with the most 

significant relationship test.

 76 “The forum should seek to reach a result that will achieve the best 

possible accommodation of these policies. The forum should also appraise the 

relative interests of the states involved in the determination of the particular 

issue. In general, it is fitting that the state whose interests are most deeply 

affected should have its local law applied.” RESTATEMENT (SECOND) CONFLICTS 

OF LAW § 6 cmt. f (1971).

77 See Canron, 82 Wn. App. at 493.

78 CP at 2800, 15524, 3168, 11731.

79 CP at 5716.

80 CP at 4818. In the alternative, London Market Companies and Munich 

argue that Oregon law should apply. But consistent with the section 188 

analysis above, we do not find this argument compelling.
No. 80032-9-I/19

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Specifically, Washington applies section 187 of the Restatement 

(Second) of Conflicts of Law when an actual conflict exists and the parties have 

contracted for a specific state’s law to apply.

81 Section 187 subsection (2)

applies to particular issues that the parties could not have determined by 

explicit agreement, such as the validity of the agreement itself.82 Under section 

187 subsection (2)(b), we will disregard the party’s chosen state’s law and 

“apply Washington law if, without the provision, Washington law would apply[,] if 

the chosen state’s law violates a fundamental public policy of Washington[,] and 

if Washington’s interest in the determination of the issue materially outweighs 

the chosen state’s interest.”83 All three questions must be answered in the 

affirmative to disregard the parties’ chosen state’s law.84 

The first question in the 187 analysis, whether Washington law would 

apply if the contract did not contain a choice of law provision, must be answered 

using the same most significant relationship factors listed in section 188 and 

discussed above. For these six Insurers, again, some factors favor them, some 

do not. And, once again, the factors are inconclusive.

(1) Century. Century representatives contracted for their settlement 

agreement from Pennsylvania with Pope & Talbot’s president and 

 81 Shanghai Com. Bank, 189 Wn.2d at 482; Erwin, 161 Wn.2d at 694. 

82 Erwin, 161 Wn.2d at 695.

83 McKee v. AT&T Corp., 164 Wn.2d 372, 384, 191 P.3d 845 (2008)

(citing id. at 694-95); see RESTATEMENT (SECOND) OF CONFLICTS OF LAW

§ 188(2)(b) (1971).

84 Erwin, 161 Wn.2d at 696.
No. 80032-9-I/20

20

representatives located in Oregon.85 During negotiations, Pope & Talbot’s 

president and counsel were in Oregon, Century’s representative was in 

Pennsylvania, and Century’s counsel was in Washington.86 Century signed the 

agreement in Pennsylvania, and Pope & Talbot signed the agreement in 

Oregon.87 Century delivered its settlement check to Pope & Talbot in Oregon.88 

Pope & Talbot deposited the check in Oregon.89 Pope & Talbot is a Delaware 

corporation headquartered in Oregon.90 Century is a Pennsylvania 

corporation.91 The agreement released Century from liability arising from Pope 

& Talbot’s operations in Oregon and Washington.92

(2) Westport. Westport is a successor insurer to Employers Reinsurance 

Corporation.93 Employers Reinsurance entered into the settlement agreement 

with Pope & Talbot.

94 Pope & Talbot’s representatives and counsel in Oregon 

negotiated remotely with Employers Reinsurance’s Kansas representative and 

its counsel in California and Oregon.95 The agreement was signed by Pope & 

 85 CP at 2749-50. 

86 CP at 2746, 2801-03. 

87 CP at 2801-03. 

88 CP at 2747. 

89 CP at 8816.

90 CP at 8812. 

91 CP at 3610. 

92 CP at 2795-96, 9050-52. 

93 CP at 4835. 

94 CP at 4838. 

95 CP at 4838. 
No. 80032-9-I/21

21

Talbot’s president and Employers Reinsurance’s claims specialist.96 Employers 

Reinsurance was a Missouri corporation with its principle place of business in 

Kansas.97 Pope & Talbot is incorporated in Delaware and is headquartered in 

Oregon.98 The settlement agreement released Employers Reinsurance from 

liability arising from Pope & Talbot’s operations in Oregon, Canada, Wisconsin, 

and Washington.99 

(3) Continental. Continental is an Illinois corporation.100 Continental’s 

Oregon counsel contracted for the settlement agreement with Pope & Talbot’s 

Oregon counsel.101 The attorneys, both located in Oregon, negotiated 

telephonically and through the mail.102 Pope & Talbot’s president and 

Continental’s claims counsel executed the agreement.103 Pope & Talbot signed 

the agreement in Oregon.104 Continental delivered the settlement check to 

Pope & Talbot in Oregon.105 And Pope & Talbot deposited the check in 

 96 CP at 4868. The record on appeal does not provide where Pope & 

Talbot and Westport representatives were located when contracting for their 

settlement agreement. And the record also does not provide where the 

representatives were located when the settlement agreement was executed.

97 CP at 4837. 

98 CP at 8812. 

99 CP at 4838. 

100 CP at 3101.

101 CP at 2785, 3208-09. 

102 CP at 3099, 3208-09. 

103 CP at 3236. 

104 CP at 3099. 

105 CP at 14751. 
No. 80032-9-I/22

22

Oregon.106 Pope & Talbot is incorporated in Delaware and is headquartered in 

Oregon.107 The agreement implicated Continental’s liability arising from Pope & 

Talbot’s operations in Canada.108 

(4) Allstate. Allstate representatives contracted with Pope & Talbot for 

the settlement agreement from Illinois, Oregon, and California.

109 Pope & 

Talbot’s representatives and counsel negotiated from Oregon, while Allstate’s 

“claim analyst” and counsel negotiated from Illinois, California, and Oregon.

110 

The “[n]egotiations took place in Portland and remotely by video conference 

and telephone between Portland, Oregon, California, and Illinois.”111 The 

agreement was signed by Allstate’s representative in Illinois and by Pope & 

Talbot’s representative in Oregon.112 Allstate delivered the settlement check to 

Pope & Talbot in Oregon, and Pope & Talbot deposited the check in Oregon.113 

Allstate is headquartered in Illinois.114 Pope & Talbot is incorporated in 

Delaware and is headquartered in Oregon.115 The release discharged Allstate 

 106 CP at 2784. 

107 CP at 8812. 

108 CP at 3170-72. 

109 CP at 3962.

110 CP at 3962-63. 

111 CP at 3963. 

112 CP at 4652-53. 

113 CP at 3963. 

114 CP at 11793-94. 

115 CP at 8812. 
No. 80032-9-I/23

23

from liability arising from Pope & Talbot’s operations in Oregon, Canada, 

Wisconsin, and Washington.116 

(5) London Market. London Market representatives located in California 

contracted for the settlement agreement with Pope & Talbot representatives 

located in Oregon.117 Pope & Talbot’s Oregon counsel and London Market’s 

California counsel negotiated remotely, but some settlement negotiations 

occurred in person in London.118 Pope & Talbot signed the agreement in 

Oregon, and London Market’s counsel signed the agreement in California.119 

London Market delivered the settlement check to Pope & Talbot in Oregon, and 

Pope & Talbot deposited the check in Oregon.120 London Market is an entity 

based in London.

121 Pope & Talbot is incorporated in Delaware and is 

headquartered in Oregon.122 The settlement agreement released London 

Market from liability arising from Pope & Talbot’s operations in Oregon, 

Canada, North Dakota, and Washington.123 

(6) Munich. Munich is a successor insurer to American Reinsurance 

Corporation.124 American Reinsurance Corporation entered into the settlement 

 116 CP at 3962. 

117 CP at 2785, 9154. 

118 CP at 3324. 

119 CP at 5716-17. 

120 CP at 3326. 

121 CP at 14168. 

122 CP at 8812. 

123 CP at 5707-24, 9429-30. 

124 CP at 6046. 
No. 80032-9-I/24

24

agreement with Pope & Talbot.

125 American Reinsurance’s New Jersey 

counsel contracted for the settlement agreement with Pope & Talbot’s Oregon 

counsel.126 Negotiations occurred remotely between American Reinsurance 

representatives in New Jersey, its counsel in Chicago, and Pope & Talbot 

representatives and counsel in Oregon.127 The settlement discussions 

consisted of written communications between Pope & Talbot’s Oregon counsel 

and American Reinsurance’s claims representative in New Jersey and its 

Chicago counsel.128 American Reinsurance representatives signed the 

agreement in New Jersey, and Pope & Talbot’s president signed the agreement 

in Oregon.129 American Reinsurance and Pope & Talbot are incorporated in 

Delaware.130 American Reinsurance’s headquarters are in New Jersey, and 

Pope & Talbot’s headquarters are in Oregon.131 The settlement agreement 

discharged American Reinsurance from liability arising from Pope & Talbot’s 

operations of sites in Oregon and Washington.132 

 125 CP at 6048. 

126 CP at 2785, 4793, 12567-68. 

127 CP at 4793. 

128 CP at 6048. 

129 CP at 4819-20. 

130 CP at 4794. 

131 CP at 4794. 

132 CP at 9050-52. 
No. 80032-9-I/25

25

Again, the negotiations leading up to the settlement agreements were 

held in multiple states, and the only consistent contacts occurred in Oregon and 

Washington.

As discussed above, the section 188 factors must be evaluated in the 

context of section 6 policy considerations. Accordingly, Washington’s interests 

in protecting its residents from environmental contamination, its interests in 

cleaning up the severe contamination that occurred in Washington, and its 

interests in adhering to the policy behind RCW 48.18.320 displaces the much 

less significant relationships that these settlement agreements have with 

Oregon, California, and New Jersey.

The next question in the section 187 analysis is whether the laws of 

Oregon, California, and New Jersey violate a fundamental public policy of 

Washington. In answering this question, we return to the policy of 

RCW 48.18.320. Because the application of Oregon, California, and New 

Jersey law could prevent injured parties from filing insurance claims for 

environmental claims involving Port Gamble, each of the chosen states’ laws 

violates Washington’s fundamental public policy preferences.

The last question in the section 187 analysis is whether Washington’s 

interests materially outweigh the interests of Oregon, California, and New 

Jersey. Consistent with the section 188 and section 6 analyses above, taken 

together, Washington’s “paramount interest” in protecting the health and safety 

of its residents, the sheer volume of contamination and resulting cost of 

remediation in Washington, and the policy behind Washington’s anti-annulment 
No. 80032-9-I/26

26

statute materially outweighs the individual interests of Oregon, California, or 

New Jersey. Because each question prescribed by section 187 favors the 

application of Washington law, Washington law also applies to Pope & Talbot’s 

settlement agreements with Century, Westport, Continental, Allstate, London 

Market, and Munich. 

We conclude that Washington law applies to all ten settlement and 

remediation agreements. 

Pope Resources, citing Freestone Capital Partners L.P. v. MKA Real 

Estate Opportunity Fund I, LLC,

133 argues that section 187 has no application 

because it is not a party to the settlement agreements. But Freestone held that 

the guarantors were not bound by choice of law provisions contained solely in 

the promissory note because promissory notes and guarantees create separate 

obligations for differently situated parties.134 

Here, however, Pope Resource’s interest in the insurance policies is 

based upon its potential role as a judgment creditor of Pope & Talbot, entitled to 

garnish the benefits of Pope & Talbot’s policies. Because Pope Resources

seeks to “stand in the shoes” of Pope & Talbot and benefit from the agreements 

between Pope & Talbot and Insurers, Pope Resources’ argument is unavailing.

II. RCW 48.18.320

Because Washington law applies to each settlement agreement, we next 

consider whether the ten agreements violate Washington’s anti-annulment 

 133 155 Wn. App. 643, 661-62, 230 P.3d 625 (2010). 

134 Id.
No. 80032-9-I/27

27

statute, RCW 48.18.320, which voids any agreement between an insurer and 

insured attempting to retroactively cancel, rescind, void, buy back, or otherwise 

annul an insurance contract for liability coverage after a potentially covered 

injury or damage to a third party has occurred.135

“‘To determine legislative intent, we look first to the language of the 

statute.’”136 “‘If a statute is unambiguous, we may derive its meaning from the 

language of the statute alone.’”137 The statute provides:

No insurance contract insuring against loss or damage through 

legal liability . . . for damage to the property of any person, shall 

be retroactively annulled by any agreement between the insurer 

and insured after the occurrence of any such . . . damage for 

which the insured may be liable, and any such annulment 

attempted shall be void.[138]

The statute “is broad and inclusive.”139

To analyze whether RCW 48.18.320 is ambiguous, we consider in 

turn each requirement of the statute.140 

An “annulment” subject to the statute can take the form of attempts to 

abrogate, abolish, buy back, cancel, nullify, rescind, or void an insurance 

 135 Steen,151 Wn.2d at 521.

136 Bremerton Pub. Safety Ass’n v. City of Bremerton, 104 Wn. App. 226, 

230, 15 P.3d 688 (2001) (citing Lacey Nursing Ctr., Inc. v. Dep’t of Revenue,

128 Wn.2d 40, 53, 905 P.2d 338 (1995)). 

137 Id. (citing Cherry v. Mun. of Metro. Seattle, 116 Wn.2d 794, 799, 808 

P.2d 746 (1991)). 

138 RCW 48.18.320. 

139 Steen, 151 Wn.2d at 519.

140 See id. at 518-25.
No. 80032-9-I/28

28

contract.141 Insurers often desire to “buy-back” liability insurance as part of 

settlement agreements with their insureds.142 But neither a cancellation, 

rescission, “buy back,” nor other form of annulment is enforceable to defeat an 

injured third party’s vested rights.143 

“Retroactively” as is used in the statute means “while looking back or 

affecting things past” and extends to either prospectively cancelling an 

agreement or rescinding it ab initio.

144

An “occurrence” for purposes of the statute extends “both [to] events that 

do give rise to legal liability covered by the [insurance] policy and [to] events 

 141 Id. at 520.

142 RICHARD A. ROSEN, LIZA M. VELAZQUEZ, GITA. F. ROTHSCHILD & STACI 

JANKIELEWICZ, SETTLEMENT AGREEMENTS IN COM. DISPUTES: NEGOTIATING,

DRAFTING AND ENFORCEMENT, § 19.10 (2d ed. 2021) (“The broadest release—

and consequently the one most desired by insurers—is the ‘policy buy-back.’ 

Put simply, policies subject to a complete buy back are void ab initio. An 

insurer’s defense and indemnity obligations for any and all past, present, and 

future claims of any type under the released policies are released.”). 

143 STEVEN PLITT, DANIEL MALDONADO, JOSHUA D. ROGERS, & JORDAN R.

PLITT, 2 COUCH ON INSURANCE 3D § 31:49 (1995) (“A completed surrender and 

cancellation of an insurance policy terminates the contract, and the parties are 

relieved from any liability that might otherwise accrue under the policy, though 

not from liability already accrued.”); 8B JOHN A. APPLEMAN & JEAN APPLEMAN,

INSURANCE LAW & PRACTICE § 5020 (1981) (“[I]t is the general rule that an 

injured person’s rights cannot be defeated by a cancellation or settlement after 

an accident has occurred.”); see SCOTT M. SEAMAN & JASON R. SCHULZE,

ALLOCATION OF LOSSES IN COMPLEX INSURANCE COVERAGE CLAIMS § 15:1 (2020-

21 ed.) (“Additionally, even a policy buy-back or mutual rescission agreement 

with complete releases of all known and unknown claims does not guarantee 

finality. For example, an insurer may not be able to enforce a policy buy-back 

agreement against vested third-party rights such as those of underlying 

claimants whose claims have accrued and are not parties to the agreement.”).

144 Steen, 151 Wn.2d at 521 (quoting RCW 48.18.320). 
No. 80032-9-I/29

29

that could give rise to legal liability covered by the [insurance] policy.”145 But 

“[t]he statute does not void agreements that are made before the occurrence of 

any injury, death or damage for which the insured may be liable [but renders an 

agreement] ineffectual when the agreement is made after the occurrence of the 

potentially covered event.”146

An agreement is “‘a manifestation of mutual assent by two or more 

persons to one another.’”147 Thus, the phrase “any agreement” as used in the 

statute clearly extends to a settlement agreement between an insurer and an 

insured.148

Insurers contend that the various settlement agreements and releases 

do not impact an “insurance contract” as referred to in the statute because only 

an “insurance policy” is an “insurance contract.”149 We disagree. The statute 

does not define “insurance contract.” The basic meanings of “contract” and 

“insurance” are a starting point, but it is also helpful to consider our case law 

regarding what constitutes a “contract of insurance.” 

 145 Id. 

146 Id. at 521.

147 Corbit v. J. I. Case Co., 70 Wn.2d 522, 531, 424 P.2d 290 (1967)

(quoting RESTATEMENT (FIRST) OF CONTRACTS § 3 (1932)).

148 See Courville v. Lamorak Ins. Co., 301 So. 3d 557, 560 (La. Ct. App.

2020) (applying an anti-annulment statute identical to RCW 48.18.320 to void a 

settlement agreement that “essentially rescinded or annulled policy contracts for 

injuries sustained years ago” by a third party tort victim).

149 Appellant’s Opening Br. at 54-58.
No. 80032-9-I/30

30

“A contract is a legally enforceable promise or set of promises.”150 

“Insurance” is broadly defined as “a contract whereby one undertakes to 

indemnify another or pay a specified amount upon determinable 

contingencies.”151 To be a contract of insurance, the agreement must be both a 

risk-shifting and risk-distributing device. “A contract may be a risk-shifting 

device, but to be a contract of insurance, which is a risk-distributing device, it 

must possess both features, and unless it does[,] it is not a contract of 

insurance whatever be its name or its form.”152 Similarly, “[w]hen deciding 

whether a law applies to a contract, we are ‘guided by the substance or effect of 

the transaction rather than the particular form or label adopted.’”153

The Washington State Insurance Commissioner, an amicus, convincingly 

argues that “insurance” may take many forms, and the term “insurance 

contract” applies to a general and broad category of contracts that are both riskshifting and risk-distributing devices.154 Although most insurance comes in the 

 150 6 WASHINGTON PRACTICE: WASHINGTON PATTERN JURY INSTRUCTIONS:

CIVIL 301.01, at 163 (7th ed. 2019). “A contract is a promise or a set of 

promises for the breach of which the law gives a remedy, or the performance of 

which the law in some way recognizes as a duty.” RESTATEMENT (SECOND) OF 

CONTRACTS § 1 (1971).

151 RCW 48.01.040.

152 In re Smiley’s Estate, 35 Wn.2d 863, 867, 216 P.2d 212 (1950)

(emphasis added).

153 Ten Bridges, LLC v. Guandai, 15 Wn. App. 2d 223, 237, 474 P.3d 

1060 (2020) (quoting id. at 866, 216 P.2d 212 (1950)).

154 Wash. Court of Appeals oral argument, Granite State Ins. Co. v. Pope 

Resources, No. 80032-9-I, (Apr. 21, 2021), at 53 min., 18 sec. through 55 min., 

54 sec., video recording by TVW, Washington State’s Public Affairs Network, 

https://www.tvw.org.
No. 80032-9-I/31

31

form of a written “policy,” there are a variety of contracts that may satisfy the 

definition of “insurance” without resembling a traditional “policy.”155 Additionally, 

the more specific term “insurance policy” has a limited and precise meaning. 

For example, insurance policy forms must be filed with and approved by the 

insurance commissioner.156 And the insurance commissioner has authority to 

define various standard form policies.157 Stated another way, an “insurance 

policy” qualifies as one form of “insurance contract,”158 but that does not mean 

only a document labeled “policy” constitutes an “insurance contract.”

Therefore, we read the term “insurance contract” in RCW 48.18.320 

broadly and flexibly, applying it based upon the true substance of each 

settlement agreement and release rather than any particular form or label.159 

Specifically, we consider whether the substance of the settlement agreement 

 155 See STEVEN PLITT, DANIEL MALDONADO, JOSHUA D. ROGERS & JORDAN 

R. PLITT, 1 COUCH ON INSURANCE 3D § 1:12 (2009) (some forms of performance 

bonds, guaranty agreements, surety agreements, and other miscellaneous 

contracts may satisfy the definition of “insurance”).

156 RCW 48.18.100.

157 RCW 48.18.120.

158 See Steen, 151 Wn.2d at 521 (applying RCW 48.18.320 to an 

insurance policy); see also Strojnik v. General Ins. Co. of Am., 201 Ariz. 430, 

435, 36 P.3d 1200 (Ariz. Ct. App. 2001) (“Although the legislature has not 

defined an ‘insurance contract,’ it has defined ‘insurance’ as ‘a contract by 

which one undertakes to indemnify another or to pay a specified amount upon 

determinable contingencies.’ A.R.S. § 20-1123 (A). An insurance policy, 

therefore, is an ‘insurance contract.’”) (construing Arizona’s anti-annulment 

statute, which is identical to RCW 48.18.320).

159 In a related sense, a contract of insurance itself is a promise or set of 

promises, rather than a written memorialization labeled as a “policy.” See

RCW 48.18.140 (distinguishing between written instrument and contract).
No. 80032-9-I/32

32

and release impacts a risk-shifting and risk-distributing device. As the Supreme 

Court explained in American Continental Insurance Company v. Steen:

[T]he legislative intent expressed in RCW 48.18.320 is to ensure 

that cancellation does not adversely impact any person who was 

injured or damaged by an occurrence before such cancellation. . . . 

. . . .

The purpose of RCW 48.18.320 is not the protection of 

either the insured or the insurer. Its purpose is to protect the 

injured and damaged by preventing insureds and insurers from 

coming together and canceling or rescinding insurance contracts 

after a potentially covered injury, death, or damage has 

occurred.[160]

Focusing on the substance instead of the form of the parties’ settlement 

agreements and releases better implements the intent of RCW 48.18.320.

Therefore, our review of the plain meaning of the anti-annulment statute 

confirms its broad application. A cancellation, rescission, buy back, or other 

annulment of an insurance contract by mutual agreement is a contract formed 

like any other contract and requires mutual assent.161 “Washington follows the 

objective manifestation test for contract formation.”162 And, notably, 

RCW 48.18.320 expressly refers to annulments “attempted.” Consistent with 

Steen, we conclude RCW 48.18.320 is not ambiguous and extends to any 

 160 151 Wn.2d 512, 522, 91 P.3d 864 (2004). 

161 STEVEN PLITT, DANIEL MALDONADO, JOSHUA D. ROGERS & JORDAN R.

PLITT, 2 COUCH ON INSURANCE 3D § 31:58 (2009).

162 Wilson Court Ltd. P’ship v. Tony Maroni’s, Inc., 134 Wn.2d 692, 699, 

952 P.2d 590 (1998) (“Washington follows an objective manifestation test for 

contracts, looking to the objective acts or manifestations of the parties rather 

than the unexpressed subjective intent of any party.” (citations omitted)). 
No. 80032-9-I/33

33

attempt to cancel, rescind, void, buy back, or otherwise annul a contractual 

obligation that in substance is a risk-shifting and risk-distributing device 

manifesting a mutual intent to insure against liability resulting from triggering 

events occurring before a settlement agreement and release was entered 

into.163 

Over many decades, the Port Gamble mill released toxic substances, 

including wood debris sedimentation, that triggered environmental insurance 

claims and implicated Pope & Talbot’s “long tail” environmental coverage

provided by Insurers.164 Here, each of the ten settlement agreements contain

broad release provisions and specific language attempting to cancel, rescind, 

void, buy back or otherwise annul liability coverage for injury or damage that 

occurred prior to the agreement. 

Pope & Talbot’s settlement agreements with TIG, Evanston, Westport, 

London Market, Munich, Century, and Wausau all contain language objectively 

manifesting an intent to cancel, rescind, void, buy back, or otherwise annul their 

broadly defined “policy” or “policies” issued to Pope & Talbot. 

TIG. TIG’s settlement agreement provides, “In further consideration of 

the covenants contained in this Agreement, the parties hereto agree that the 

 163 Steen, 151 Wn.2d at 522.

164 CP at 2527, 7100. “The term ‘long-tail harms’ describes a series of 

indivisible harms, whether bodily injury or property damage, that are attributable 

to continuous or repeated exposure to the same or similar substances or 

conditions that take place over multiple years or that have a long latency period. 

The paradigmatic examples of long-tail harms are asbestos-related bodily 

injuries and environmental property damage.” RESTATEMENT (SECOND) OF 

LIABILITY INSURANCE § 33 cmt. f (2019); see Appellant’s Opening Br. at 56.
No. 80032-9-I/34

34

Policies shall be rescinded, treated as null and void ab initio, and considered 

never to have been issued to Pope & Talbot by International.”165 “Policies” is 

defined to broadly include any and all policies TIG issued to Pope & Talbot.

166 

Evanston. Evanston’s agreement states it is “a final settlement . . .with 

the Policy void ab initio.”167 “Policy” is defined to include any liability policy 

issued to Pope & Talbot.168 

Westport. Westport’s agreement refers to a “complete policyholder 

release and a cancellation of the Policy.”169 “The Policy” is defined as one 

specific named policy.170

London Market. London Market’s agreement provides, “This Release is 

intended to operate as though the London Market Insurers which pay their 

allocated several share of the settlement amount had never subscribed to the 

Subject Insurance Policies.”171 “Subject Insurance Policies” is defined as “all 

known and unknown insurance policies incepting prior to January 1, 1993.”172

 165 CP at 3005.

166 CP at 3004.

167 CP at 3063.

168 CP at 3061.

169 CP at 4866.

170 CP at 4865.

171 CP at 5711.

172 CP at 5709.
No. 80032-9-I/35

35

Munich. Munich’s agreement acknowledges “that all Policies have been 

bought back . . . as of the inception date thereof and cancelled.”173 “Policies” is 

defined as all “actual or alleged” policies issued to Pope & Talbot.174

Century. Century’s agreement states the settlement “constitutes a 

complete and unqualified policy release for insurance coverage.”175 The 

policies are defined as “any and all known or unknown policies” issued by 

Century to Pope & Talbot.176

Wausau. The Wausau agreement acknowledges that the parties “have 

agreed to a buy-back of the Policies, retroactively effective as of their inception 

dates.”177 The “Policies” refers to fifteen separate policies issued by Wausau to 

Pope & Talbot.178 

For each of these seven settlement agreements, Pope & Talbot and the 

named insurer objectively manifested their mutual intent to cancel, rescind, 

void, buy back, or otherwise annul the entirety of liability policies issued to Pope 

& Talbot. Such attempts are subject to RCW 48.18.320. Because the 

agreements purport to accomplish exactly what the statute precludes—“insured 

and insurers . . . coming together and canceling or rescinding insurance 

 173 CP at 4816.

174 CP at 4815.

175 CP at 2795.

176 CP at 2794.

177 CP at 3774.

178 CP at 3782.
No. 80032-9-I/36

36

contracts after a potentially covered injury, death, or damage has occurred”—

these attempts violate the anti-annulment statute.179

Pope & Talbot’s settlement agreements with Allstate, Continental, and 

Granite State also violate RCW 48.18.320 because the substance of these

three agreements manifest the mutual intent to cancel, rescind, void, buy back, 

or otherwise annul an insurance contract issued to Pope & Talbot. 

Allstate. Allstate’s settlement agreement provides, “[Pope & Talbot] 

hereby forever fully and irrevocably releases, acquits, and discharges Allstate, 

of and from any liability or obligations, or alleged or potential liability, or 

obligation of whatever kind, nature or description, known or unknown.”180 The 

agreement states the parties “desire to completely extinguish and terminate any 

and all contractual and insurance relationships.”181 

Allstate focuses upon the specific release provision contained in its 

agreement with Pope & Talbot to argue that their release is a “site-specific, not 

a global release of the Policies and applies only to claims against Pope & 

Talbot that it has asserted or in the future could assert obligate Allstate to 

provide Pope & Talbot with coverage under The Policies for the Sites as 

defined herein.”182 “The Policies” include “any and all policies of insurance of 

 179 Steen, 151 Wn.2d at 524.

180 CP at 4640.

181 CP at 4633.

182 CP at 11722. 
No. 80032-9-I/37

37

any kind whatsoever” issued by Allstate to Pope & Talbot.183 “Sites” is defined 

to include property owned or operated by Pope & Talbot in St. Helens, Oregon, 

Port Ludlow, Washington, Port Gamble, Washington, Ladysmith, Wisconsin, 

and Castlegar, British Columbia.184 Notwithstanding the “not a global release”

language, the broad recital of intent to extinguish and terminate any insurance 

relationship cannot be ignored.185 The objective manifestation of intent to 

completely terminate any insurance relationship is an attempt to cancel or 

rescind every policy issued by Allstate.186 The anti-annulment statute applies.

Continental. Continental’s settlement agreement provides, “The settling 

carriers have no further obligations to Pope and Talbot whatsoever under any 

policy of insurance except as expressly reserved herein.”187 The settlement 

agreement broadly provides for the release of all environmental claims “except 

only [those] relating to the [British Columbia] Sites and the St. Helens Site.”188

 183 CP at 11719.

184 CP at 11716.

185 See, e.g., Hawkins v. Empres Healthcare Mgmt., LLC, 193 Wn. App 

84, 96, 371 P.3d 84 (2016) (“In Washington, special recitals accompanying a 

release of “all claims” limit the scope of the release.” (citing Fradkin v. 

Northshore Util. Dist., 96 Wn. App. 118, 128, 977 P.2d 1265 (1999))).

186 Allstate also contends that all of its insurance policies with Pope & 

Talbot had expired prior to entering into the settlement agreement and thus, the 

policies were no longer operational. Appellant Allstate’s Br. at 17-18. But given 

the nature of long tail environmental coverage, the underlying policy remains 

effective as to environmental claims.

187 CP at 3231.

188 CP at 3231.
No. 80032-9-I/38

38

To the extent Continental argues it has ongoing coverage, we are not 

convinced. 

Specifically, the agreement provides, “With respect to the [British 

Columbia] Sites only, this Agreement shall release and forever discharge the 

Settling Carriers from any and all alleged obligations under the Excess Policies 

. . . but not under any primary policy issued by the Settling Carriers.”189 

However, there is no evidence of any primary policies. Continental advised the 

trial court that it “issued two policies to [Pope & Talbot] in Oregon, with policy 

periods between 1967 and 1970 and between 1974 and 1977.”190 The two 

policies were excess or “excess-umbrella” coverage.191 

Neither of those Continental policies were primary policies. Continental 

did not identify any primary policy issued to Pope & Talbot. There is nothing in 

the record before us confirming or even suggesting that Continental ever issued 

Pope & Talbot a primary insurance policy, and Continental makes no assertion 

that it ever issued such a policy.192 On this record, the reservation for British 

 189 CP at 3231 (emphasis omitted).

190 CP at 3098; see also CP at 3144-48, 10706-08. 

191 CP at 3099, 3145 (“Excess Umbrella Liability”), 3150 (“Excess 

Umbrella Policy”). Continental “may have issued a third policy to Pope & Talbot

in Oregon for a policy period between 1973 and 1976.” CP at 3098. The third 

policy, an “Excess Third Party Liability Policy” appears to have been cancelled 

and rewritten as part of an “Umbrella Liability Renewal [on] January 1, 1974.” 

CP at 3098-99, 3156. 

192 The settlement agreement defines “The Excess Policies” as two 

specific policies. CP at 3229. And recitations to the settlement agreement 

merely state “Pope & Talbot alleges that the Settling Carriers sold 

comprehensive liability insurance to Pope & Talbot . . . including, but not limited 

to, the Excess Policies.” CP at 3230. The recitals also include Continental’s 
No. 80032-9-I/39

39

Columbia sites for any “primary policy issued by the Settling Carriers”193 is 

insignificant. For purposes of RCW 48.18.320, the ‘buy back’ of all insurance 

other than primary coverage of the British Columbia sites is, in substance, a 

cancellation of the only documented Continental policies issued by Continental 

or known to Pope & Talbot. The reservation as to primary coverage for British 

Columbia sites does not create a safe harbor for Continental.

As to the St. Helens site, the agreement expressly stated that “Pope & 

Talbot’s claims relating to the St. Helens site were resolved by a separate 

agreement relating to that site, executed prior to this Agreement.”194 The 

resolution of the St. Helens site claims by means of a separate settlement 

agreement does not support the existence of any ongoing Continental liability 

coverage of the St. Helens site claims.195 This reservation is also insignificant. 

For purposes of RCW 48.18.320, in substance, the only Continental 

insurance coverage was completely eliminated by the settlement agreement. 

The anti-annulment statute applies.

Granite State. Granite State’s 2001 settlement agreement provides,

“[T]he Policies shall be considered null and void ab initio, of no further force and 

 

representation that it “has searched its record for excess or umbrella policies” 

and has not found information or records “of such other policies and has no 

knowledge that such other policies may have been issued to Pope & Talbot.” 

CP at 3230. There are no representations about any search for or knowledge 

of any primary policy.

193 CP at 3231. 

194 CP at 3216, 3231.

195 See CP at 3221. 
No. 80032-9-I/40

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effect with respect to any Environmental Claims released hereunder.”196 Such 

a provision is commonly called an environmental buyout.197 The release of 

“environmental claims” was limited to “St. Helens, Oregon, Port Gamble, 

Washington, the latter including, but not limited to, wood debris sedimentation in 

Port Gamble Bay, and the upland portion of Port Ludlow, Washington.”198 

Granite State argues that RCW 48.18.320 is limited to cancellation of an 

entire insurance policy. In its agreement with Pope & Talbot, Granite State 

provided, “[T]his Release does not apply to Port Ludlow Bay . . . or any sites not 

expressly included in this Release.”199 Granite State contends that its policies 

continued to apply after the 2001 settlement agreement both to environmental 

claims at other sites and to nonenvironmental claims at any site.200 But the 

“broad and inclusive” anti-annulment statute is not so limited.

Steen factually involved the cancellation of an entire insurance policy, 

but our Supreme Court did not hold that only entire insurance policies qualify as 

“insurance contracts” for purposes of RCW 48.18.320.201 In addition, Steen

included multiple references to “insurance coverage” and to “insurance 

 196 CP at 2538.

197 See Steven Plitt, Policy Buyback Limitations (July 29, 2021), 

https://www.insuranceexpertplitt.com/blog/2021/07/policy-buyback-limitations/.

198 CP at 2538. 

199 CP at 2539. 

200 See CP at 13057.

201 Steen, 151 Wn.2d at 521-23. 
No. 80032-9-I/41

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contracts” when discussing the application of the statute.202 Nothing in Steen

prohibits a broad and inclusive interpretation of the anti-annulment statute. 

Indeed, the court interpreted the statute as applicable to “all insurance 

contracts” and prohibiting “agreements retroactively annulling insurance 

coverage.”203

And, as discussed, we must consider the nature and substance of the 

Granite State insurance in the context of its settlement agreement. From 1968 

to 1985, Granite State issued eleven insurance policies to Pope & Talbot,

including eight umbrella policies.204 The most recent term of Granite State 

insurance was fifteen years prior to its 2001 settlement agreement.205 The 

original focus of the litigation involving Granite State was environmental claims 

arising from sites operated by Pope & Talbot in Oregon and Washington.206 

The record before us does not suggest that when the 2001 settlement 

agreement was entered into there were any existing occurrences causing 

damage to third parties other than environmental events. At the time of the 

2001 settlement, the substance of Granite State’s coverage was limited to such 

 202 See, e.g., id. at 521-24 (“cancels or rescinds ab initio an insurance 

contract,” “for which the insurance contract provides coverage,” “agreements 

retroactively annulling insurance coverage are prohibited and void,” 

“retroactively annul coverage of that event,” “did not intend to prohibit the 

cancellation of insurance contracts,” “canceling or rescinding of insurance 

contracts”) (emphasis added).

203 Id. at 518-19, 521.

204 CP at 2765-66, 10815-54.

205 CP at 6822, 10851-52. 

206 CP at 2765-66, 10814-54.
No. 80032-9-I/42

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long tail environmental claims. Under these particular circumstances, such risk 

sharing and risk distributing coverage qualifies as an insurance contract.

Further, in this context, the agreement between Pope & Talbot and 

Granite State terminated Granite State’s coverage of environmental claims by 

providing that the agreement rendered the insurance coverage void ab initio, 

frustrating the fundamental purpose of RCW 48.18.320. Allowing the buyout of 

all potential long tail environmental claims as of 2001, even when limited to the 

Port Gamble, St. Helens, and the upland portion of Port Ludlow sites, leaves 

third parties damaged by the pre-2001 environmental occurrences without 

access to that coverage. And the possibility that there may be hypothetical 

environmental claims as to other sites does not bar the application of

RCW 48.18.320. Voiding the coverage of substantial long tail environmental 

claims at major contaminated sites adversely impacts those injured or damaged 

by environmental occurrences before the 2001 settlement agreement. The antiannulment statute applies.

Because in operation all ten settlement agreements were attempts to 

cancel, rescind, void, or buy back liability insurance coverages in violation of 

RCW 48.18.320, we conclude that each of the ten settlement agreements

between Pope & Talbot and its insurers is unenforceable.

Insurers’ remaining arguments regarding RCW 48.18.320 are not 

persuasive. First, Insurers contend that the arms-length settlement of known or 

potential environmental claims against Pope & Talbot, for which Pope & Talbot 

received much more than a partial or complete return of premiums, is not 
No. 80032-9-I/43

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subject to RCW 48.18.320. But the inclusion of express and specific provisions 

that purport to cancel, rescind, void, buy back or otherwise annul liability 

coverage for past occurrences went far beyond a release of known or potential 

claims, thus triggering RCW 48.18.320. The attempted annulment of liability 

coverage arising out of past environmental occurrences is prohibited by the 

statute. 

Contrary to Insurers’ arguments, the public policy favoring settlement 

does not outweigh the strong public policy of RCW 48.18.320 to preclude 

adversely impacting those injured or damaged by environmental occurrences 

before the settlement agreements were entered into.207 

Insurers argue the use of broad releases including voiding or buying

back past insurance coverage is legitimate. Insurers are not precluded from 

agreeing with insureds to cancel liability coverage so long as such cancelation 

is limited to claims for damage or injury resulting from occurrences after the 

agreement.208 Although Insurers may have preferred Pope & Talbot’s broad 

release of known or potential claims together with an agreement cancelling, 

rescinding, voiding, buying back or otherwise annulling liability coverages, 

RCW 48.18.320 bars an attempt to defeat vested third party claims for loss or 

damage occurring before the agreement.

 207 Steen, 151 Wn.2d at 522.

208 Id. (“The statute does not void agreements that are made before the 

occurrence of any injury, death, or damage for which the insured may be 

liable.”). 
No. 80032-9-I/44

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To the extent Insurers contend that the application of RCW 48.18.320 

adversely impacts the practicality of long tail environmental claim settlements, 

they fail to establish that public policy warrants the insureds and Pope & Talbot

stranding injured third parties with vested rights solely because they have long 

tail environmental claims. We are not convinced by Insurers’ prediction of the 

death of long tail environmental claim settlements.

Insurers also contend Pope Resources lacks standing because it is not a 

party to the settlement agreements, but an injured third party may pursue the 

issuer of a liability policy by means of garnishment of the policy once a 

judgment is obtained against the insured. As a potential judgment creditor, 

Pope Resources’ zone of interest extends to the possible garnishment of the 

liability insurance policies.209 The extent of Pope Resources’ actual and bona 

fide injury and damage, as well as questions of agency and alter ego, are more 

properly addressed in the trial court in the remaining phases of this litigation. 

Insurers further argue that as to Pope Resources, any portions of their 

settlement agreements providing for cancellation, rescission or buy back of 

 209 In re Custody of S.R., 183 Wn. App. 803, 809, 334 P.3d 1190 (2014)

(to establish that an injured party is within the zone of interests, “‘[t]he litigant 

must have suffered an “injury in fact,” thus giving him or her a “sufficiently 

concrete interest” in the outcome of the issue in dispute; the litigant must have a 

close relation to the third party; and there must exist some hindrance to the third 

party’s ability to protect his or her own interests’” (quoting Powers v. Ohio, 499 

U.S. 400, 411, 111 S. Ct. 1364, 113 L. Ed.2d 411 (1991))); Burr v. Lane, 10 Wn. 

App. 661, 670, 517 P.2d 988 (1974) (“the injured party, after recovering 

judgment against the insured, may recover under the policy to the extent of the 

insurance afforded by this policy. He may recover by the means of a writ of 

garnishment”) (internal quotation marks omitted).
No. 80032-9-I/45

45

liability insurance are severable either under express severability provisions or 

under common law. We disagree. 

Insurers cite to Zurich v. Airtouch Communications, Inc.,

210 to support 

their contention that the severability provisions in the settlement agreements

with Continental, Evanston, TIG, Wausau, and Allstate are enforceable. But in 

Zurich, our Supreme Court narrowly held that “when parties have agreed to a 

severability clause in an arbitration agreement, courts often strike the offending 

unconscionable provisions to preserve the contract’s essential term of 

arbitration.”211 Zurich is not applicable where, as here, the contracts’ essential 

terms are prohibited by statute and were prohibited when the contracts were 

formed.

The remaining five settlement agreements, London Market, Century, 

Munich, Westport, and Granite State, do not contain severability provisions, but 

those insurers contend that their agreements are “still severable” under section 

208 of Restatement (Second) of Contracts.

212 Section 208 governs an 

unconscionable contract or term and applies where “a contract or term thereof 

is unconscionable at the time the contract is made.”213 Insurers argue that “the 

settlements can be enforced against [Pope Resources] as settlements of [Pope 

& Talbot’s] insurance claim regarding [Pope Resources’] claim against [Pope & 

 210 153 Wn.2d 293, 103 P.3d 753 (2004).

211 Id. at 320. 

212 Appellants’ Opening Br. at 64. 

213 RESTATEMENT (SECOND) OF CONTRACTS § 208 (1979). 
No. 80032-9-I/46

46

Talbot].”214 But Insurers provide no compelling authority in support of their 

proposition that an agreement rendered unenforceable by RCW 48.18.320 can 

still be severable, with the remainder of the settlement enforceable under 

section 208.215

Insurers next argue that the release provisions of the settlement 

agreements are an accord and satisfaction and therefore do not constitute an 

agreement subject to the statute.216 But an accord and satisfaction is an 

agreement.

217 The express language contained in the agreements and 

releases here, cancelling, rescinding, voiding, buying back, or otherwise 

annulling liability coverage, is just as effective as if set out in a separate 

cancellation, rescission, buy back or other annulment agreement.

Further, Insurers argue that it would be unconstitutional under the full 

faith and credit clause of article IV of the United States Constitution and the due 

 214 Appellants’ Opening Br. at 65. 

215 Alternatively, Insurers cite Saletic v. Stamnes, 51 Wn.2d 696, 321 

P.2d 547 (1958), in support of severability. In Saletic, our Supreme Court 

stated, “‘Whether a contract is divisible depends very largely on its terms and 

on the intention of the parties disclosed by its terms. As a general rule[,] a 

contract is entire when by its terms, nature, and purpose, it contemplates and 

intends that each and all of its parts are interdependent and common to one 

another and the consideration.’” (quoting Traiman v. Rappaport, 41 F.2d 336, 

338, 71 A.L.R. 475 (3d Cir. 1930)). But “any agreement” that violates RCW 

48.18.320 is unenforceable. RCW 48.18.320 does not contemplate 

severability.

216 Appellant’s Reply Br. at 56-57. 

217 27 MARJORIE DICK ROMBAUER, WASHINGTON PRACTICE: CREDITORS’

REMEDIES—DEBTORS’ RELIEF § 5.63, at 532 (1998) (“An accord and satisfaction 

is a contract between a creditor and a debtor that compromises a doubtful or 

disputed claim and substitutes a new performance for the original claim with the 

intention of discharging the original claim.”).
No. 80032-9-I/47

47

process clause of the Fourteenth Amendment to invalidate the release 

agreements based upon RCW 48.18.320. Insurers contend that in determining

whether the release agreements are “fair,” the most important consideration is 

the intention of the parties.

218 Alleging they did not anticipate that Washington 

law would apply, Insurers argue that invalidating the settlement agreements 

based upon RCW 48.18.320 would be unconstitutional.

But the due process and full faith and credit clauses prohibit certain 

choice of law decisions only when the choice of law is arbitrary or fundamentally 

unfair, such as when “the selection of forum law rested exclusively on the 

presence of one nonsignificant forum contact.”219 In Phillips Petroleum 

Company v. Shutts, for example, the Court held the Kansas Supreme Court 

violated the Constitution by applying Kansas law to members of a nationwide 

class who had no connections to Kansas other than their coincidental 

membership in a nationwide class action filed in Kansas.220 Because here, it is 

not arbitrary or fundamentally unfair to apply the anti-annulment statute, their 

argument is not compelling.

Finally, some Insurers argue that because Pope Resources “encouraged 

and benefited from” the settlement agreements it seeks to invalidate, Pope 

Resources is not an innocent third party.221 But in Steen, our Supreme Court 

 218 Appellants’ Opening Br. at 64.

219 Allstate Ins. Co. v. Hague, 449 U.S. 302, 308-09, 101 S. Ct. 633, 66 

L. Ed. 2d 521 (1981).

220 472 U.S. 797, 822-23, 105 S. Ct. 2965, 86 L. Ed. 2d 628 (1985).

221 Appellants Evanston and TIG Br. at 1.
No. 80032-9-I/48

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stated that the purpose of RCW 48.18.320 “is to protect the injured and 

damaged by preventing insureds and insurers from coming together and 

canceling or rescinding insurance contracts.”222 RCW 48.18.320 does not 

require that the injured third party be oblivious to the annulment agreement

between the insurers and insured. We note it is possible that Pope Resources’

particular role in the events leading up to the settlement agreements may arise 

in the remaining phases of this litigation.

We affirm the trial court’s conclusion that the ten settlement and 

remediation agreements are void under Washington’s anti-annulment statute.

WE CONCUR:

 222 Steen, 151 Wn.2d at 524.