Opinion ID: 2601906
Heading Depth: 2
Heading Rank: 1

Heading: failure to obtain consent

Text: ¶ 22 MOE argues T & G violated the policy condition requiring it to obtain the consent of the insurer before it settled with a plaintiff. But an insured's noncompliance with a cooperation clause releases the insurer from its responsibilities ` only if the insurer was actually prejudiced by the insured's actions or conduct.' Pub. Util. No. 1 of Klickitat County v. Int'l Ins. Co., 124 Wash.2d 789, 803, 881 P.2d 1020 (1994) (quoting Or. Auto. Ins. Co. v. Salzberg, 85 Wash.2d 372, 377, 535 P.2d 816 (1975)). We find MOE's contention to be completely without merit. MOE owes a fiduciary-type duty to its insured. Safeco Ins. Co. v. Butler, 118 Wash.2d 383, 389, 823 P.2d 499 (1992). MOE refused to participate in settlement negotiations that would have relieved T & G and its principals of significant financial risk. MOE cannot put its financial interest before the interest of its insured; for an insurer to do so is to act in bad faith. Cf. id.; see also Tank v. State Farm Fire & Cas. Co., 105 Wash.2d 381, 385-86, 715 P.2d 1133 (1986) (collecting cases). MOE was on notice of the settlement and had an opportunity to intervene in the reasonableness proceedings. MOE did intervene, was heard, and as a result, the judge presiding over the reasonableness proceedings reduced the reasonable value of the settlement by $300,000. MOE has not shown possible prejudice. [5]