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WESTCHESTER SURPLUS LINES INSURANCE COMPANY v. YAKIMA AIR TERMINAL MCALLISTER FIELD complaint

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 1
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
Thomas M. Jones, WSBA #13141
E-mail: tjones@cozen.com
Shauna Martin Ehlert, WSBA #21859
E-mail: sehlert@cozen.com
COZEN O'CONNOR
999 Third Avenue, Suite 1900
Seattle, WA 98104
Phone: 206.340.1000 / 800.423.1950
Facsimile: 206.621.8783
Attorneys for Plaintiff Westchester Surplus
Lines Insurance Company
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON
AT YAKIMA
WESTCHESTER SURPLUS LINES
INSURANCE COMPANY, a Georgia
company,
Plaintiff,
v.
YAKIMA AIR TERMINAL
MCALLISTER FIELD, an agency
and/or department of the City of Yakima
and County of Yakima, Washington,
CITY OF YAKIMA, a Washington
municipal corporation; and, COUNTY
OF YAKIMA, a municipal corporation;
Defendants.
Case No.
COMPLAINT FOR
DECLARATORY JUDGMENT
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 2
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
Plaintiff Westchester Surplus Lines Insurance Company (“Westchester”),
by and through its undersigned attorneys, for its Complaint for Declaratory
Judgment against the above-captioned Defendants, alleges as follows:
NATURE OF ACTION
1. This is an insurance coverage action seeking declaratory relief
pursuant to 28 U.S.C. §§ 2201 and 2202. Westchester seeks a determination of
the parties’ rights and obligations under a municipal liability policy it issued to
Yakima Air Terminal – McAllister Field, as more particularly described below,
with respect to claims asserted by M.A. West Rockies Corporation/Langdon
Family Revocable Trust and the Byron and Alice Lockwood Foundation in the
actions captioned and numbered, Yakima Air Terminal – McAllister Field v.
M.A. West Rockies Corporation, 10-2-00989-1, and Byron and Alice Lockwood
Foundation v. M.A. West Rockies Corporation, et al., 14-2-00976-3, both of
which are pending in the Superior Court for the State of Washington, County of
Yakima.
PARTIES
2. Westchester Surplus Lines Insurance Company is an insurance
company incorporated in Georgia and having its principal place of business in
Georgia. Westchester is, therefore, a citizen of the State of Georgia.
Westchester is a wholly owned subsidiary of ACE US Holdings, Inc., a
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 3
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
Delaware corporation, which is a wholly owned subsidiary of ACE Group
Holdings, Inc., a Delaware corporation, which is a wholly owned subsidiary of
ACE Limited, a foreign corporation (Switzerland).
3. Yakima Air Terminal – McAllister Field, is an agency of the City
and County of Yakima, Washington. YAT is therefore a citizen of the State of
Washington. The Yakima Air Terminal, the City of Yakima, and the County of
Yakima are collectively referred to as “YAT.”
4. The City of Yakima is a Washington municipal corporation and is
therefore a citizen of the State of Washington.
5. The County of Yakima is a Washington municipal corporation and
is therefore a citizen of the State of Washington.
JURISDICTION
6. This Court has jurisdiction by virtue of 28 U.S.C. § 1332, as there
is complete diversity of citizenship and the amount in controversy exceeds
$75,000.
7. Venue is proper in this judicial district pursuant to 28 U.S.C.
§ 1391, as Defendants are residents of this judicial district and a substantial part
of the events giving rise to this action occurred in this district.
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 4
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
8. Pursuant to the Federal Declaratory Judgment Act, 28 U.S.C.
§2201(a), this Court has the power to declare all rights, duties, and obligations
under the relevant insurance policy, whether or not further relief is or could be
sought.
FACTS
The Unlawful Detainer Action.
9. On or about March 30, 2010, YAT commenced an unlawful
detainer action against its tenant M.A. West Rockies in the Superior Court for
Yakima County. (A true and correct copy of the Summons and Complaint dated
March 30, 2010, Yakima Air Terminal v. M.A. West Rockies, Yakima County
Superior Court Case No. 10-2-00989-1, is attached hereto as Exhibit A.)
10. YAT contended that M.A. West had breached its lease and failed to
timely pay its monthly rent under its lease for a ramp which provided access
from M.A. West’s property to the Yakima Airport runway.
11. M.A. West opposed the unlawful detainer proceeding and
contended in its Answer and other pleadings that it had timely paid its rent.
M.A. West also alleged in its Answer that YAT:
a. Had breached the lease agreement
b. Had wrongfully withdrawn excessive sums from the lease
payment trust account
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 5
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
c. Had failed to provide proper notice of insufficient lease
payments
d. Had commenced the unlawful detainer action in bad faith to
eject M.A. West from the lease premises
e. Had forced M.A. West into default
(A true and correct copy of the M.A. West’s Answer dated April 16, 2010 is
attached hereto as Exhibit B.)
12. On or about May 20, 2010, the Yakima Superior Court ruled in
favor of YAT, and on June 10, 2010, the court issued a Writ of Restitution,
which restored possession of the ramp to YAT and directed the Sheriff to
remove M.A. West Rockies and its property from the ramp.
13. On August 16, 2010, M.A.West Rockies appealed the eviction to
the Washington Court of Appeals, Division III.
14. On December 10, 2013, the Court of Appeals reversed the lower
court’s ruling and held that M.A.West Rockies had been unlawfully evicted.
(A true and correct copy of the Court of Appeals’ decision is attached hereto as
Exhibit C.) Among other holdings, the Court of Appeals held that M.A. West’s
attempts to cure alleged defaults had been improperly rejected, that YAT had
failed to properly apply a security deposit to unpaid rent, and that YAT had
failed to provide notice of other alleged defaults prior to commencing the
unlawful detainer proceeding.
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 6
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
15. The Court of Appeals directed the remand of the case to the trial
court for entry of judgment that M.A.West was “not guilty of unlawful detainer
of the premises, that it was unlawfully evicted therefrom, that its lease was not
forfeited, that the airport was not entitled to a writ of restitution and immediate
possession.” The Court of Appeals remanded for further proceedings, including
an award of attorneys’ fees, appropriate orders to restore the leased premises,
and restitution if appropriate.
The Lockwood Claims.
16. On January 10, 2014, the Byron and Alice Lockwood Foundation
gave notice of its intent to pursue a tort claim to YAT as an agency of the City
of Yakima.
17. The tort claim alleged that from March 30, 2010 and continuing,
the Lockwood Foundation was a mortgage holder for the M.A. West property
and lease, that YAT was aware of Lockwood’s security interest, and that YAT
failed to properly notify Lockwood that the lease was in default.
18. On March 14, 2014, the Lockwood Foundation commenced a
lawsuit against YAT, the County of Yakima, M.A. West Rockies Corporation,
the Langdon Family Revocable Trust, and several other entities. (A true and
correct copy of the Lockwood Summons and Complaint is attached hereto as
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 7
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
Exhibit D.) The Lockwood Complaint alleges that the Lockwood Foundation
made several loans to M.A. West Rockies that were secured by the airport
property and lease. The Lockwood Foundation alleges that YAT was notified of
its interest and failed to provide notice to the Lockwood Foundation when the
alleged lease defaults occurred. The Lockwood Complaint alleges that the total
amount of the loans and interest that were secured by the M.A. West property
and lease are $4,222,337.
19. The Lockwood Complaint asserts claims against YAT for
negligence, damages to collateral, negligent misrepresentation and omission,
breach of contract, trespass, statutory trespass, condemnation, tortious
interference with contract, and tortious interference with business expectancy.
The Lockwood Complaint seeks monetary amounts from YAT for the value of
the land and/or collateral taken, lost rental income, costs and amounts to repair
the damages caused by the wrongful taking/intrusion to the property,
prejudgment interest, costs, attorneys’ fees, expert expenses, and treble damages
allowed by statute.
The M.A. West/Langdon Counterclaims.
20. On March 13, 2014, the Langdon Family Revocable Trust filed
statutory tort claims with both the County of Yakima and the City of Yakima.
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 8
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
The Langdon Trust alleges that M.A. West assigned its claims to the Trust. The
tort claim alleges that YAT unlawfully evicted M.A. West and committed
statutory trespass, intentional and negligent interference with economic
expectancies and contractual relationships and malicious prosecution. The
Langdon Trust estimates its compensatory damages at $7,000,000 plus
prejudgment interest, reasonable attorneys’ fees, expert witness fees, and treble
damages for statutory trespass.
21. On June 25, 2014, the Langdon Trust filed its Second Amended
Answer and Counterclaims in the Unlawful Detainer Proceeding. (A true and
correct copy of the Second Amended Answer and Counterclaims is attached
hereto as Exhibit E.) The Langdon Trust asserts claims against YAT for
wrongful eviction, breach of contract, tortious interference with business
expectancy and economic relations, trespass and inverse condemnation.
The Policy and Extended Reporting Period Endorsement.
22. Westchester issued three successive policies to Yakima Air
Terminal followed by an Extended Reporting Period Endorsement:
Policy No. G24150707 (July 27, 2010 to July 27, 2011);
Policy No. G24150707 (July 27, 2011 to July 27, 2012);
Policy No. EONG24304127001 (July 27, 2012 to July 27, 2013);
Extended Reporting Period Endorsement (July 27, 2013 to July 27,
2014).
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 9
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
The Policies provide public officials liability and public entity liability coverage
and contain identical provisions unless otherwise indicated. The Policies
provide limits of liability of $1,000,000 each claim/aggregate. Claims expenses
are subject to a separate $1,000,000 limit and thereafter erode the $1,000,000
per claim/aggregate limit of liability. The Policies generally provide coverage
for damages and claims expenses for which the public entity becomes legally
obligated to pay by reason of a claim first made against the public entity and
reported during the policy period, or, if elected, during the extended reporting
period.
23. YAT notified Westchester of the adverse Court of Appeals’
decision on or about December 11, 2013, during the Extended Reporting Period
Endorsement (the “ERP.”)
24. On December 27, 2013, Westchester acknowledged receipt of
YAT’s notice and issued a general reservation of rights. On January 15, 2014,
YAT notified Westchester of the Lockwood tort claim, and on January 30, 2014,
Westchester acknowledged receipt of the tort claim and issued a reservation of
rights.
25. On March 21, 2014, YAT notified Westchester of the Lockwood
Complaint dated March 14, 2014. On March 27, 2014, Westchester
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 10
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
acknowledged receipt of the Complaint subject to a continuing reservation of
rights.
26. Based upon the date of the reporting of the adverse Court of
Appeals’ decision and the date of the tort claims, the applicable policy is the
Extended Reporting Period (ERP), which is subject to the terms and conditions
of the 2012-13 Policy. (A true and correct copy of the 2012-13 Policy and ERP
Endorsement is attached hereto as Exhibit F.)
Westchester’s Investigation and Coverage Determination.
27. After receiving notice of the Lockwood and Langdon claims,
Westchester issued a reservation of rights letter advising YAT that it was
investigating coverage for these claims.
28. After completing its investigation, Westchester agreed to defend the
claims against YAT, the City, and the County, based upon a reservation of its
right to deny or limit coverage on several grounds and to seek declaratory relief
establishing its rights and duties.
CLAIM FOR DECLARATORY RELIEF
29. An actual and justiciable controversy exists between Westchester
and YAT, the City, and the County regarding the scope of coverage under the
Policy’s terms and applicable law.
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 11
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
30. The 2012-13 Policy contains the following relevant provisions in
the Insuring Agreement:
I. INSURING AGREEMENTS
* * * *
B. Public Entity Liability
The Insurer will pay on behalf of the Public
Entity all Damages and Claims Expenses for
which the Public Entity becomes legally
obligated to pay by reason of a Claim first
made against the Public Entity and reported
to the Insurer during the Policy Period or, if
elected, the Extended Reporting Period, for
any Wrongful Act taking place prior to the
end of the Policy Period.
31. The 2012-13 Policy contains the following relevant Definitions:
III. DEFINITIONS
* * * *
D. Claim means:
1. a written demand against any Insured
for monetary Damages or non-
monetary or injunctive relief;
2. a civil proceeding against any Insured
seeking monetary Damages or non-
monetary or injunctive relief,
commenced by the service of a
complaint or similar pleading;
* * * *
K. Damages means compensatory damages,
judgments, any award of prejudgment and
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 12
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
post-judgment interest, and settlements which
the Insured becomes legally obligated to pay
on account of any Claim first made against
any Insured during the Policy Period or, if
elected, the Extended Reporting Period, for
Wrongful Acts to which this Policy applies.
Such damages include punitive and exemplary
damages and the multiple portion of any
multiplied damage award, if and to the extent
such damages are insurable under the law of
the applicable jurisdiction most favorable to
the insurability of such damages.
* * * *
R. Interrelated Wrongful Acts means all
Wrongful Acts that have as a common nexus
any fact, circumstance, situation, event,
transaction, cause or series of related facts,
circumstances, situations, events, transactions
or causes.
S. Personal Injury means injury arising out of
one or more of the following offenses:
* * *
2. malicious prosecution;
* * * *
5. wrongful entry or eviction, or other
invasion of the right to private
occupancy.
* * * *
BB. Wrongful Act means:
* * *
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 13
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
2. with regard to Insuring Agreements
I.B., any actual or alleged act, error,
omission, misstatement, misleading
statement, neglect or breach of duty by
the Public Entity; or
* * * *
32. The 2012-13 Policy contains the following relevant Exclusions:
IV. EXCLUSIONS
* * * *
D. alleging, based upon, arising out of or attributable to
any:
3. Personal Injury . . .
E. alleging, based upon, arising out of or attributable to
the operation of the laws, and principles of eminent
domain, condemnation, inverse condemnation,
temporary or permanent taking, adverse possession
or dedication by adverse use.
* * * *
K. alleging, based upon, arising out of or attributable
to:
1. breach of any express, implied, actual or
constructive contract, warranty, guarantee or
promise…
* * * *
Q. alleging, based upon, arising out of or attributable
to:
1. any prior or pending litigation or
administrative or regulatory proceeding…
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 14
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
filed on or before the effective date of the first
policy issued and continuously renewed by
the Insurer, or the same or substantially the
same Wrongful Act, fact, circumstance or
situation underlying or alleged therein; or
2. any other Wrongful Act whenever occurring
which, together with a Wrongful Act
underlying or alleged in such prior or pending
proceeding, would constitute Interrelated
Wrongful Acts.
* * * *
33. The 2012-13 Policy contains the following relevant provisions
concerning the Optional Extended Reporting Period:
VII. EXTENDED REPORTING PERIODS
* * * *
B. Optional Extended Reporting Period
The Public Entity shall have the right, upon
payment of the additional premium set forth in
Item 7A of the Declarations, to any Optional
Extended Reporting Period, for the period set
forth in Item 7B of the Declarations following the
effective date of such cancellation or nonrenewal,
but only for Claims first made during such Optional
Extended Reporting Period and arising from
Wrongful Acts taking place prior to the effective
date of such termination or nonrenewal.
34. As set forth more particularly below, Westchester is entitled to
declaratory relief establishing that it owes no duty to defend or indemnify the
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 15
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
defendants from the Lockwood and Langdon claims for the reasons set forth
below:
Claim Langdon Lockwood Basis for Non-Coverage
Wrongful Eviction X Barred by Exclusion D, Q
Breach of Contract X X Barred by Exclusion K, Q
Condemnation/Inverse
Condemnation
X X Barred by Exclusion E, Q
Tortious Interference
With Business
Expectancy
X X Barred by Exclusion Q
Trespass X X Barred by Exclusion D, Q
Negligence X Barred by Exclusion Q
Negligent
Misrepresentation
X Barred by Exclusion Q
Damage to Collateral X Barred by Exclusion Q
Tortious Interference
With Contract
X Barred by Exclusion Q
COUNT ONE – EXCLUSION D – PERSONAL INJURY/WRONGFUL
EVICTION/TRESPASS
35. Westchester re-alleges the preceding paragraphs.
36. Exclusion D bars coverage for claims “alleging, based upon, arising
out of or attributable to any . . . Personal Injury. . . .”
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 16
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
37. The Policy defines “Personal Injury” as “injury arising out of one
or more of the following offenses: wrongful entry or eviction, or other invasion
of the right to private occupancy.”
38. The Langdon claim for unlawful eviction (First Cause of Action,
Langdon’s Second Amended Counterclaims) constitutes a claim for “Personal
Injury” within the meaning of Exclusion D of the Policy, and is therefore
excluded from coverage under the Policy.
39. The Langdon and Lockwood claims for Trespass (Fourth and Fifth
Causes of Action of Langdon’s Second Amended Counterclaims, and the Fifth
Cause of Action of the Lockwood Complaint) constitute claims for “Personal
Injury” within the meaning of the Policy, and therefore fall within Exclusion D
and are excluded from coverage under the Policy.
COUNT TWO – EXCLUSION E – CONDEMNATION/INVERSE
CONDEMNATION
40. Westchester realleges the preceding paragraphs.
41. Exclusion E bars coverage for claims “alleging, based upon, arising
out of or attributable to the operation of the laws, and principles of eminent
domain, condemnation, inverse condemnation, temporary or permanent taking,
adverse possession or dedication by adverse use.”
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 17
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
42. The Langdon claim for inverse condemnation (Sixth Cause of
Action, Second Amended Counterclaims) and the Lockwood claim for
condemnation (Seventh Cause of Action, Complaint) fall within Exclusion E
and are therefore excluded from coverage under the Policy.
COUNT THREE – EXCLUSION K – BREACH OF CONTRACT
43. Exclusion K bars coverage for claims “alleging, based upon, arising
out of or attributable to . . . breach of any express, implied, actual or constructive
contract.”
44. The Langdon claim for breach of contract (Second Cause of Action,
Second Amended Counterclaims) and the Lockwood claim for breach of
contract (the Fourth Cause of Action, Complaint) fall within Exclusion K and
are therefore excluded from coverage under the Policy.
COUNT FOUR – EXCLUSION Q – PRIOR AND PENDING
LITIGATION
45. Exclusion Q.1 bars coverage for claims “alleging, based upon,
arising out of or attributable to…any prior or pending litigation…filed on or
before the effective date of the first policy issued and continuously renewed by
Insurer, or the same or substantially the same Wrongful Act, fact, circumstance
or situation underlying or alleged therein. . . .”
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 18
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
46. YAT’s unlawful detainer proceeding was filed on or about
March 30, 2010.
47. The first Westchester Policy incepted approximately four months
later on July 27, 2010.
48. YAT’s unlawful detainer proceeding was filed before the effective
date of the first policy issued and continuously renewed by Westchester and
constitutes a “prior or pending” proceeding within the meaning of the Policy.
49. Exclusion Q.2 bars coverage for claims “alleging, based upon,
arising out of, or attributable to … any other Wrongful Act whenever occurring
which, together with a Wrongful Act underlying or alleged in such prior or
pending proceeding, would constitute “Interrelated Wrongful Acts.”
50. The Policy defines “Wrongful Acts” as “any actual or alleged act,
error, omission, misstatement, misleading statement, neglect or breach of duty
by the Public Entity.”
51. The Policy defines “Interrelated Wrongful Acts” as “all Wrongful
Acts that have as a common nexus any fact, circumstance, situation, event,
transaction, cause or series of related facts, circumstances, situations, events,
transactions or causes.”
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 19
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
52. All of the Langdon Counterclaims (Wrongful Eviction, Breach of
Contract, Tortious Interference, Trespass – RCW 4.24.630, Trespass, and
Inverse Condemnation) allege “Wrongful Acts” that are “based upon, arise out
of, or are attributable to” . . . the unlawful detainer proceeding, or “the same or
substantially the same Wrongful Act, fact, circumstance, or situation underlying
or alleged” in the unlawful detainer proceeding, or “any other Wrongful Act
whenever occurring which together with the Wrongful Act underlying or alleged
in such prior or pending proceeding, would constitute Interrelated Wrongful
Acts.” Therefore, Exclusion Q bars coverage for all of the Langdon
Counterclaims and Westchester has no obligation to provide a defense or
indemnity for any portion of these claims.
53. All of the Lockwood claims against YAT (Negligence and Damage
to Collateral, Negligent Misrepresentation, Breach of Contract, Trespass,
Statutory Trespass, Condemnation, Tortious Interference with Contract, and
Tortious Interference with Business Expectancy) allege “Wrongful Acts” that
are “based upon, arising out of or attributable to” the unlawful detainer
proceeding, or “substantially the same Wrongful Act, fact or circumstance or
situation underlying“ the unlawful detainer proceeding, or “any other Wrongful
Act whenever occurring which together with the Wrongful Act underlying or
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 20
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
alleged in such prior or pending proceeding, would constitute Interrelated
Wrongful Acts.” Therefore, Exclusion Q bars coverage for all of the Lockwood
Claims and Westchester has no obligation to provide a defense or indemnity for
any portion of these claims.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff Westchester Surplus Lines Insurance Company
respectfully requests that this Court adjudicate and declare the rights of the
parties, and that the Court declare as follows:
1. That the Extended Reporting Period Endorsement applies to
Langdon’s Second Amended Counterclaims and Lockwood’s Complaint;
2. That Coverage I.B. Public Entity Liability applies to Langdon’s
Second Amended Counterclaims and Lockwood’s Complaint;
3. That Langdon’s claim for unlawful eviction (First Cause of Action
of the Second Amended Counterclaims) constitutes a claim for “Personal
Injury” within the meaning of Exclusion D of the Policy, and is therefore
excluded from coverage under the Policy.
4. That the Langdon and Lockwood claims for Trespass (Fourth and
Fifth Causes of Action of the Second Amended Answer, and the Fifth Cause of
Action of the Lockwood Complaint) constitute claims for “Personal Injury”
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 21
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
within the meaning of Exclusion D of the Policy, and are therefore excluded
from coverage under the Policy;
5. That the Langdon claim for inverse condemnation (Sixth Cause of
Action, Second Amended Counterclaims) and the Lockwood claim for
condemnation (Seventh Cause of Action, Complaint) fall within Exclusion E
and are therefore excluded from coverage under the Policy.
6. That the Langdon claim for breach of contract (Second Cause of
Action, Second Amended Counterclaims) and the Lockwood claim for breach of
contract (the Fourth Cause of Action, Complaint) fall within Exclusion K and
are therefore excluded from coverage under the Policy.
7. That all of the Langdon Counterclaims (Wrongful Eviction, Breach
of Contract, Tortious Interference, Trespass – RCW 4.24.630, Trespass, and
Inverse Condemnation) allege “Wrongful Acts” that are “based upon, arise out
of, or are attributable to” … the unlawful detainer proceeding, or “the same or
substantially the same Wrongful Act, fact, circumstance, or situation underlying
or alleged” in the unlawful detainer proceeding. Therefore, Exclusion Q bars
coverage for all of the Langdon Counterclaims and Westchester has no
obligation to provide a defense or indemnity for any portion of these claims.
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15
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WESTCHESTER SURPLUS LINES INSURANCE COMPANY’S
COMPLAINT FOR DECLARATORY JUDGMENT - 22
#22131396v1
L AW OF F I CES OF
COZEN O’ CONNOR
A PROF ES SI ONAL C ORPOR AT I ON
9 9 9 T HI RD AVE NUE
SUI T E 1 9 0 0
SEAT T L E , WASHI NGT ON 9 8 1 04
PHONE : ( 2 0 6 ) 3 4 0 - 1 0 0 0
FA X : ( 2 0 6 ) 6 2 1 - 8 7 8 3
8. That all of the Lockwood claims against YAT (Negligence and
Damage to Collateral, Negligent Misrepresentation, Breach of Contract,
Trespass, Statutory Trespass, Condemnation, Tortious Interference with
Contract, and Tortious Interference with Business Expectancy) allege
“Wrongful Acts” that are “based upon, arising out of or attributable to” the
unlawful detainer proceeding, or “substantially the same Wrongful Act, fact or
circumstance or situation underlying“ the unlawful detainer proceeding, or “any
other Wrongful Act whenever occurring which together with the Wrongful Act
underlying or alleged in such prior or pending proceeding, would constitute
Interrelated Wrongful Acts.” Therefore, Exclusion Q bars coverage for all of
the Lockwood Claims and Westchester has no obligation to provide a defense or
indemnity for any portion of these claims.
9. That Westchester is entitled to withdraw the defense being provided
to YAT, the City of Yakima and the County of Yakima under the Policy.
10. Grant such other relief as the Court may deem just and proper.
DATED this 5
th
day of February, 2015.
COZEN O’CONNOR
By / s / Shauna Martin Ehlert
Thomas M. Jones, WSBA #13141
Shauna Martin Ehlert, WSBA #21859
Of Counsel for Plaintiff Westchester Surplus
Lines Insurance Company
Case 1:15-cv-03021-TOR Document 1 Filed 02/05/15

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Thu, 2015-02-05
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