[00:00:05] Speaker 02:
And as I understand it, the appellees are equally dividing your time?

[00:00:09] Speaker 02:
Correct.

[00:00:09] Speaker 02:
Correct.

[00:00:10] Speaker 02:
OK.

[00:00:10] Speaker 02:
Just keep an eye on the clock, and you'll be responsible for sharing alike on your own clock.

[00:00:19] Speaker 02:
Mr. Lawrence?

[00:00:20] Speaker 03:
Yes, good morning, Your Honors.

[00:00:21] Speaker 03:
And may it please the Court again, my name is Daniel Lawrence.

[00:00:23] Speaker 03:
I represent the appellants, the Wilcoxes.

[00:00:25] Speaker 03:
I'd like to reserve five minutes for rebuttal, please.

[00:00:29] Speaker 03:
Our position, of course, is that the court should reverse the district court in all respects and remand this matter for trial.

[00:00:36] Speaker 03:
There are jurisdictional issues, which the court notified us of last Friday.

[00:00:43] Speaker 03:
Well, the Friday before last Friday before Memorial Day weekend.

[00:00:47] Speaker 03:
Second, I think the court had some questions about what the district court did and did not do in its orders.

[00:00:53] Speaker 03:
And third, there are obviously the substantive issues to address.

[00:00:56] Speaker 03:
I'm not sure.

[00:00:56] Speaker 02:
Why don't you start, perhaps, with a 54

[00:00:59] Speaker 02:
rule 54 issues, just do you have any clarity in terms of what claims remain and how they relate to these claims on appeal?

[00:01:07] Speaker 03:
Okay.

[00:01:09] Speaker 03:
Well, I feel that we do.

[00:01:11] Speaker 03:
The claims that remain fundamentally are only the claims against Attorney Warren.

[00:01:16] Speaker 03:
As far as I can tell, but we can, I think you may be asking two questions at once, but why don't I address the

[00:01:26] Speaker 03:
the jurisdictional issue, and then maybe we get to what claims remain.

[00:01:29] Speaker 03:
So supplemental jurisdiction under 28 USC 1367B is not an issue.

[00:01:35] Speaker 03:
By its own terms, 1367B applies only to claims asserted by plaintiffs.

[00:01:41] Speaker 03:
and does not apply to any claims asserted by any party other than the plaintiff.

[00:01:46] Speaker 03:
It really plays no role in these claims, such as counterclaims or cross claims asserted by defendants or any third party defendants.

[00:01:56] Speaker 03:
And basically, I'm quoting Wright and Miller here.

[00:01:57] Speaker 03:
I mean, it's clear that a defendant or a third party defendant does not become a plaintiff for purposes of 1367B by asserting a claim.

[00:02:06] Speaker 03:
The only diversity that matters here is the original plaintiff versus the defendants.

[00:02:11] Speaker 03:
I do want to point out, and if you need a citation, I think this is all discussed in 13-D federal practice and procedure at 35, 67.2, third edition.

[00:02:21] Speaker 05:
So if I can just summarize where I think we are with respect to the Rule 14 question.

[00:02:27] Speaker 05:
Given 1367, it appears that we do not have a problem of subject matter jurisdiction because the Rule 14 claim is made by the defendant.

[00:02:39] Speaker 05:
Correct.

[00:02:39] Speaker 05:
Rule 14, by its own terms,

[00:02:42] Speaker 05:
may or may not have been satisfied.

[00:02:44] Speaker 05:
But that's not a subject matter jurisdiction question.

[00:02:47] Speaker 05:
And because Rule 14 wasn't raised, I don't see that we have any ability to raise it so espante.

[00:02:54] Speaker 05:
If it were subject matter jurisdiction, we would.

[00:02:57] Speaker 05:
But as you said, I don't see that there's a subject matter jurisdiction problem because the Rule 14 claim is made by the defendant.

[00:03:04] Speaker 03:
Well, I agree with you.

[00:03:05] Speaker 03:
And I would also point out that in the amended complaint, which is the operative complaint, Inagon does make claims against Mr. Warren.

[00:03:20] Speaker 03:
And so although our clients brought Mr. Warren into the lawsuit, claims are asserted.

[00:03:26] Speaker 03:
There are two claims asserted against him by Inagon.

[00:03:28] Speaker 03:
That is the operative complaint.

[00:03:30] Speaker 03:
And so, in a sense, it sort of wipes the slate, I think, on the 14 issue.

[00:03:35] Speaker 03:
We did serve process under Rule 14.

[00:03:37] Speaker 03:
The third party joined it was timely.

[00:03:39] Speaker 03:
I don't think there's any technical issue with Rule 14.

[00:03:42] Speaker 03:
And certainly, with respect to whether or not that would be an issue, I think an additional point, in addition to the ones you made, Your Honor, is that essentially now he is a defendant.

[00:03:52] Speaker 03:
So our third party claims are really in the nature of a cross claim.

[00:03:59] Speaker 03:
And a pleader is not an issue, and I think we've just been through that.

[00:04:02] Speaker 03:
As to the 54B findings and whether they're adequate or not, I think all the parties agree that an interlocutory appeal now is appropriate.

[00:04:09] Speaker 03:
The judge, obviously district court judge, Judge Rothstein, agrees with that.

[00:04:13] Speaker 03:
That judge is entitled to substantial discretion under the law applicable to the rule.

[00:04:17] Speaker 03:
And the judge entered 54 B findings that were fairly extensive and we reviewed them in our brief I don't know that I need to go over them here unless the court has a question about or feels that they were inadequate and so I guess just helping helping me at least Find where in the record the court has?

[00:04:38] Speaker 02:
disposed of or whether there's something that's it's missing and

[00:04:41] Speaker 02:
I think the four claims or so that were contemplated in the focus order the Wilcox's ever breach of contract counterclaim and then intagon has three other declaratory judgment claims relating to the policy Where did the district court?

[00:05:00] Speaker 02:
Dispose of those claims.

[00:05:03] Speaker 03:
Yeah, let me address that now, please so

[00:05:06] Speaker 03:
First of all, I think the first question was, Inegan's first cause of action, seeking a declaratory judgment regarding liability limits, did the court dispose of that?

[00:05:14] Speaker 03:
And we would submit no, not as such.

[00:05:18] Speaker 03:
But it wasn't really within the relief requested by Inegan's motion for partial summary judgment to impose a declaratory judgment declaring the liability limits.

[00:05:29] Speaker 03:
By implication, I guess you could say, well,

[00:05:31] Speaker 03:
You know, it dismissed Inagon, and so, you know, it had a $25,000 policy, and if Inagon is dismissed on our claims that it should be liable by, you know, Estoppel for the full $1.6 million judgment,

[00:05:47] Speaker 03:
that claim apparently, according to the district court, is gone.

[00:05:50] Speaker 02:
So I guess to summarize, why shouldn't we be worried about piecemeal appeals?

[00:05:57] Speaker 02:
Are any of these other claims that are lingering around likely to find their way up to us separately?

[00:06:04] Speaker 03:
Well, yeah, I was going to get into the other questions you asked, but I'll address that one, which is that the issue with regard to is it better to have two appeals or two trials, the only trial remaining will be against Warren, and it's only illegal in my practice scheme.

[00:06:20] Speaker 03:
It'll be a very short trial, and there's nothing that's going to be decided in that trial that is likely to influence

[00:06:27] Speaker 03:
the trial of the claims against Inagon and SFE if they are reversed eventually and go forward, depending on what your honors do here.

[00:06:38] Speaker 03:
So definitely, if your honors don't decide the appeal now, and we wait until after the Warren case, there will definitely be an appeal, just like this one, and perhaps with other issues arising out of whatever the Warren trial provides.

[00:06:53] Speaker 02:
So do you have a breach of contract counterclaim against Inagon still?

[00:06:57] Speaker 03:
Yes.

[00:06:58] Speaker 02:
OK.

[00:06:59] Speaker 02:
And what happens?

[00:07:00] Speaker 02:
And that's not before us here.

[00:07:01] Speaker 02:
That wasn't under the 54B.

[00:07:02] Speaker 02:
Right.

[00:07:03] Speaker 02:
OK.

[00:07:04] Speaker 02:
So what happens with that going forward?

[00:07:08] Speaker 03:
Well, what happens with it?

[00:07:09] Speaker 02:
Because that seems awfully close to the claims that are appealed, is it not?

[00:07:15] Speaker 03:
Well, it is.

[00:07:16] Speaker 03:
It's implicit in what's appealed, yes.

[00:07:19] Speaker 03:
I mean, Inagon was functionally dismissed, right?

[00:07:25] Speaker 03:
So if we have a claim against Inagon and we go forward in trial, then that case will be.

[00:07:29] Speaker 02:
Well, I guess, I mean, just trying to figure out the posture in which this appeal comes to us.

[00:07:35] Speaker 02:
So is your view that the district court implicitly

[00:07:38] Speaker 02:
certified those related claims as well on appeal or that they didn't and those are there and that those could come up in a separate appeal even though they seem to deal with the same subject matter?

[00:07:53] Speaker 03:
Well, so the court ruled on whether Inagon had an obligation to

[00:08:01] Speaker 03:
essentially based on whether the Wilcoxes tendered their defense to Intagon.

[00:08:07] Speaker 03:
And that issue is before the court.

[00:08:09] Speaker 03:
And our argument is that there is no such requirement.

[00:08:13] Speaker 03:
It's not in the policy.

[00:08:15] Speaker 03:
And so therefore, Intagon breached its policy by failure to provide a defense to the claim, which the policy says

[00:08:22] Speaker 02:
the intercom has to defend them against any claim or loss well i guess that's just the concern right is we do you don't want to it heads you in details they lose situation where uh... for example if we would affirm the district court on this then you come back and say well but now you've breached the contract seems to be the same to the extent involves the tender rule seems to involve basically the same claim i guess i i guess you know

[00:08:52] Speaker 03:
I haven't thought maybe too cleverly about that and maybe not as cleverly as your honor, but it seems to me that if if if this court says there is no right to the contract benefit to the performance by any gun of the contract to defend the claim because the Wilcox has violated the tender requirement.

[00:09:11] Speaker 03:
then there is no breach of contract claim that can be made.

[00:09:14] Speaker 03:
However, we do submit that under Washington law, there is no duty to tender when there is a defense of a claim.

[00:09:20] Speaker 02:
Well, and that's before us.

[00:09:22] Speaker 02:
So if your position is that our resolution of this one way or the other by law of the case ends up resolving these remaining claims, maybe that settles the issue.

[00:09:34] Speaker 02:
But that's the question.

[00:09:36] Speaker 03:
Yeah, maybe.

[00:09:37] Speaker 03:
It's hard for me to commit to that now because I don't know how you're going to rule and what you're going to say, but.

[00:09:44] Speaker 03:
Then you did have a question also on whether Inegan's fourth cause of action seeking a declaratory judgment on its duty to indemnify was ruled upon.

[00:09:52] Speaker 03:
Again, I don't think she, Judge Rostein, specifically ruled on that, but at some point there was a tender.

[00:09:58] Speaker 03:
upon the Wilcoxes being advised by Inegan of the default judgment.

[00:10:03] Speaker 03:
So that is a place we could go.

[00:10:07] Speaker 03:
I mean, at some point, the Wilcoxes did, in fact, request Inegan to step in.

[00:10:13] Speaker 03:
They hired Smith Fried Eberhard.

[00:10:15] Speaker 03:
And I think we know the story there.

[00:10:18] Speaker 03:
The Wilcoxes' first counterclaim for breach of contract, you asked about that one.

[00:10:22] Speaker 03:
And again, I'm just kind of going through the litany of the questions you asked, Your Honor.

[00:10:26] Speaker 02:
I think we discussed that just in the interest of time.

[00:10:28] Speaker 03:
OK.

[00:10:28] Speaker 03:
Yeah, we can move on.

[00:10:31] Speaker 03:
So I think unless there are further questions about the procedural issues, supplemental jurisdiction, Rule 54B or 1367, I think we can go past that.

[00:10:49] Speaker 03:
So let me try to get back on track here.

[00:10:51] Speaker 03:
So I think really now the question is,

[00:10:55] Speaker 03:
really about whether the court properly dismissed in a gun and whether properly dismissed a smith three ever heart and you know we submit that there are various problems with that that uh... in a gun was dismissed for

[00:11:12] Speaker 03:
Improper reasons which included the you know, essentially the tender issue Failure to tender is a defense to coverage.

[00:11:20] Speaker 05:
It's not a defense to a duty to defend Right, and that's the Expedia case that we cited Let me see if I can fast-forward this a little bit Your argument that is in part that the duty to defend is triggered when the claim is tendered before the lawsuit is filed and

[00:11:39] Speaker 03:
That is absolutely correct.

[00:11:40] Speaker 05:
And if that's so, the only problem that Pentagon can point to is that they were not notified of the filing of the actual lawsuit, but the duty to defend has already been triggered.

[00:11:52] Speaker 03:
That is absolutely our argument.

[00:11:53] Speaker 03:
So that's part of your argument.

[00:11:54] Speaker 03:
Yeah, it is our argument, yes.

[00:11:55] Speaker 05:
Now, if I disagree with that argument, and that there's an independent duty to tender the lawsuit, not just the claim, I think there's an argument that the phone call

[00:12:08] Speaker 05:
made by Elizabeth, and the phone call that might or might not have been made by Daniel was enough.

[00:12:16] Speaker 03:
Yes, and there's a dispute of fact which the judge unfortunately resolved, we argue, improperly.

[00:12:23] Speaker 03:
by saying that because there was no written record of the phone call, that somehow that should be construed against our clients, and that no reasonable jury could believe they made those phone calls despite the fact that they both testified under oath that the phone calls were made.

[00:12:38] Speaker 05:
Well, no, not phone calls.

[00:12:39] Speaker 03:
Phone calls.

[00:12:40] Speaker 05:
One phone call is undisputed.

[00:12:41] Speaker 05:
That's the phone call by Elizabeth.

[00:12:42] Speaker 03:
Yes.

[00:12:42] Speaker 05:
The disputed phone call, singular, is by Daniel.

[00:12:45] Speaker 03:
By Daniel, yes.

[00:12:47] Speaker 03:
Pardon me, I misspoke.

[00:12:48] Speaker 05:
Yeah, yeah, yeah, but here's my problem with respect to Daniel's phone call.

[00:12:52] Speaker 05:
We do have Clear testimony by both Elizabeth and Daniel that he made the phone call They tell say where he was standing in the shop We do know that as to his past behavior right after the accident.

[00:13:07] Speaker 05:
He did make a phone call So I mean his behavior is consistent with having made the phone call yet

[00:13:13] Speaker 05:
The phone records, AT&T, Elizabeth looks at them, finds nothing, throws them away.

[00:13:20] Speaker 05:
The Comcast records are put in front of Daniel, and there's no record of such a phone call, even though there is a record of such a phone call by Elizabeth.

[00:13:30] Speaker 05:
So, is the District Court wrong to say that there is no material dispute of fact, given that the records are right there in front of us, and there's no record of the phone call?

[00:13:40] Speaker 03:
The phones were made from the shop and there were other phones in the shop and he may have used another phone.

[00:13:44] Speaker 05:
So what evidence do we have in front of us that there were other phones with other sort of plans in the shop?

[00:13:52] Speaker 03:
Other plans?

[00:13:54] Speaker 05:
Well, other than AT&T and other than Comcast.

[00:13:57] Speaker 05:
I mean, so there are other phones in the shop, but you're saying they must have been with other carriers or maybe with a different account.

[00:14:03] Speaker 05:
What evidence do we have about other phones that didn't carry either the AT&T account or the Comcast account that they looked at?

[00:14:10] Speaker 03:
I don't think there's any specific evidence.

[00:14:12] Speaker 03:
It is their testimony.

[00:14:14] Speaker 03:
It's his testimony that he made a phone call.

[00:14:16] Speaker 03:
He certainly made a phone call.

[00:14:18] Speaker 03:
And if it's not in those records, then either those records are an error or he used a different phone.

[00:14:25] Speaker 05:
Is there evidence, I'm asking you that question, is there evidence in the record where they say there were other phones in the shop that were neither on the AT&T account or on the Comcast account for which the records were shown?

[00:14:40] Speaker 03:
You know, unfortunately, I mean, we could get back to you on that, but unfortunately, I did not take those depositions, and that is a question I cannot answer at this time.

[00:14:48] Speaker 05:
Okay, but for the moment, let me just focus on Elizabeth.

[00:14:53] Speaker 05:
Elizabeth makes a phone call, and in that phone call, she says, we had not, we hadn't known about this lawsuit.

[00:15:02] Speaker 05:
That sounds as though there is a lawsuit,

[00:15:05] Speaker 05:
that they hadn't previously been notified, and she's making this phone call two days after they've been served.

[00:15:12] Speaker 05:
That sounds to me, and this is kind of alert to the other side, that sounds to me as though that may be sufficient notice.

[00:15:18] Speaker 05:
She says hadn't been served, hadn't known about it, about quote, this lawsuit.

[00:15:24] Speaker 05:
She's not saying about some lawsuit, she's saying this lawsuit.

[00:15:29] Speaker 04:
That's correct.

[00:15:30] Speaker 04:
I see you nodding affirmatively, but

[00:15:33] Speaker 04:
Isn't it clear that she's not referring to this lawsuit?

[00:15:37] Speaker 04:
She's referring to the demand letter because she talks about two years and we haven't heard anything, we hadn't heard anything for two years.

[00:15:47] Speaker 04:
The lawsuit was filed two weeks before.

[00:15:53] Speaker 03:
I think that testimony comes out sometime later, where I think she's a little bit confused.

[00:16:00] Speaker 03:
I mean, she's a lay person.

[00:16:01] Speaker 04:
She doesn't... Well, in her deposition, she also, I think, makes clear that she's referring to the demand letter, not to the lawsuit that we're concerned with.

[00:16:11] Speaker 04:
The point is, she uses the word lawsuit, and in again, the insurance... Well, I understand, and she may, as you say, she's not a lawyer, she may be confused, but what she says is,

[00:16:24] Speaker 04:
Well, the reason I'm calling is two years has gone by and we hadn't heard anything about this lawsuit.

[00:16:31] Speaker 04:
Now, the lawsuit that we've been talking about was filed two weeks before that, but the insurance demand letter was two years before.

[00:16:51] Speaker 04:
Isn't it clear that although she uses the word lawsuit, because she's not a learned in the law person, that she's not referring to the lawsuit that we're referring to?

[00:17:04] Speaker 04:
And isn't it also clear that she makes that clear that that's what she's referring to in her deposition?

[00:17:14] Speaker 03:
That's a lot of questions, but I would say those two are not... I agree, I agree, but feel free to take your time.

[00:17:20] Speaker 03:
Those are not mutually exclusive.

[00:17:22] Speaker 03:
If you're sitting there, you're a lay person, there's been a lawsuit filed, there was obviously a demand made

[00:17:30] Speaker 03:
you know, two years prior to that, of which Inagon knew.

[00:17:33] Speaker 03:
What's telling about it is that if she's conflating lawsuit and demand, Inagon should have been doing that long ago.

[00:17:40] Speaker 03:
I mean, that here, Inagon is sitting there saying, you know, oh, well, we had no notice.

[00:17:47] Speaker 03:
She's using the word lawsuit, and it's clear this thing is progressing.

[00:17:51] Speaker 03:
Inagon is an insurance company.

[00:17:52] Speaker 03:
They handle motor vehicle collision claims all the time.

[00:17:55] Speaker 03:
They know when they get these large demands, and they have a $25,000 minimum limits policy.

[00:18:00] Speaker 03:
that there is likely to be a lawsuit or at least a concerted effort to find some way to get

[00:18:06] Speaker 03:
compensation for the client on the plaintiff's behalf, on Mr. Hoff's behalf, that will exceed the $25,000.

[00:18:13] Speaker 02:
And usually that has to be done by filing a lawsuit.

[00:18:15] Speaker 02:
I guess through the lens of Washington law here and the tender rule, what does the tender rule look to?

[00:18:24] Speaker 02:
Is it tendered if Inagon should reasonably have understood that as notice, or did

[00:18:33] Speaker 02:
The Wilcoxes have to actually have intended to provide that notice.

[00:18:38] Speaker 02:
Does that help us resolve this at all?

[00:18:40] Speaker 02:
Is there anything in Washington law that speaks to this situation?

[00:18:44] Speaker 03:
I think Washington law is a little bit unclear on this, and frankly I would say if there's any doubt in the court's mind about Washington law and what it provides, perhaps we would want to refer that issue to the Washington State Supreme Court.

[00:18:53] Speaker 03:
But the way I read the cases, those cases involve different policy language.

[00:19:01] Speaker 03:
They talk about tendering when

[00:19:04] Speaker 03:
there's a duty to defend a lawsuit, and that's the language in the policy, to defend a lawsuit, not a claim or a lawsuit, pardon me.

[00:19:11] Speaker 04:
When she's asked about this phone call, interdeposition, question, when you said lawsuit, what did you mean by that answer?

[00:19:24] Speaker 04:
Well, I was referring to the demand letter.

[00:19:29] Speaker 04:
Isn't that the end of the issue on that?

[00:19:31] Speaker 03:
No, Your Honor, it's not, because I think answering both your questions, Washington law doesn't say that the insurance company's duty is not triggered until the insured has some subjective understanding and belief and makes some subjectively intended request for a defense.

[00:19:50] Speaker 05:
Well, I think part of the answer is, if you read on,

[00:19:53] Speaker 05:
Was referring to the demand letter for 16 million were you referring to anything else?

[00:19:58] Speaker 05:
No, she says because there wasn't a lawsuit at that time Well, of course there was a lawsuit at that time that was she'd been here husband had been served with that lawsuit two days before You've articulated the facts and so she does not understand the question that goes back to my earlier comment that she was confused and indeed the word hadn't

[00:20:17] Speaker 05:
that was in her phone call, when she's asked the question and the deposition, that word is not used.

[00:20:25] Speaker 05:
The word haven't is used, which changes the meaning of what she said.

[00:20:31] Speaker 05:
I don't know whether you picked that up, but the transcript of the phone call is we hadn't known, and the question that's reporting to read the transcript does not say hadn't, it says haven't.

[00:20:45] Speaker 05:
which then misleads her into thinking, well, wait a minute, we're talking about something else.

[00:20:50] Speaker 05:
But it's clear when she says there wasn't a lawsuit, it's clear that's wrong.

[00:20:54] Speaker 05:
It is also very clear that she is calling in response to the lawsuit that had been served on her husband two days before.

[00:21:01] Speaker 03:
Correct, Your Honor.

[00:21:05] Speaker 03:
I have a few seconds left, I think, in my first 15 minutes.

[00:21:08] Speaker 02:
I don't know if there are other... You're actually over by 40 seconds.

[00:21:11] Speaker 02:
We'll give you a couple of minutes on rebuttal.

[00:21:14] Speaker 03:
Okay, sorry.

[00:21:16] Speaker 02:
Okay.

[00:21:16] Speaker 02:
Thank you, Mr. Lawrence.

[00:21:17] Speaker 02:
Yeah.

[00:21:18] Speaker 03:
I was misreading the clock.

[00:21:20] Speaker 03:
Thanks.

[00:21:25] Speaker 02:
Okay.

[00:21:26] Speaker 02:
Who's up first?

[00:21:28] Speaker 01:
Good morning, Your Honors.

[00:21:29] Speaker 01:
May it please the court, Elliot Harris, on behalf of Inagon in this case.

[00:21:33] Speaker 01:
I'm going to be trying to keep my time to 10 minutes.

[00:21:35] Speaker 01:
Given the conversation with the Pellants Council, I don't want to eat into

[00:21:39] Speaker 01:
My co-counsel's time, so just be free.

[00:21:41] Speaker 02:
If we have questions, we'll give you more time.

[00:21:42] Speaker 01:
OK, great.

[00:21:45] Speaker 01:
Again, Your Honors, Elliot Harris on behalf of Vanagon, we ask the court to affirm the district court's orders granting the two summary judgments as to my client first as the duty to defend.

[00:21:55] Speaker 01:
and then second as to the extra contractual claims, the bad faith, IFCA and CPA claims.

[00:22:01] Speaker 01:
I think I'd like to start with the jurisdictional issues.

[00:22:04] Speaker 01:
I don't think there's much dispute between me and Mr. Lawrence.

[00:22:07] Speaker 01:
I'm gonna go through those pretty quickly.

[00:22:09] Speaker 02:
Well, I guess let me just focus maybe the one remaining question.

[00:22:13] Speaker 02:
Do you agree under the Rule 54 certification with your friend's view that if we decide this,

[00:22:23] Speaker 02:
In your favor that the Wilcoxes still have a breach of contract claim they can proceed with?

[00:22:28] Speaker 01:
I would disagree with that, Your Honors, and here's why.

[00:22:30] Speaker 01:
If you go look at the counterclaim that they've asserted, the breach of contract counterclaim, it's premised on the duty to defend, which is one of the issues before the court.

[00:22:39] Speaker 01:
One of the other issue before the court are the extra contractual claims.

[00:22:44] Speaker 01:
And so in their counterclaim for breach of contract, those are the two bases.

[00:22:48] Speaker 01:
Violation of the Consumer Protection Act, which are the WAC regulations, the Unfair Claims Practices Act.

[00:22:54] Speaker 01:
Those are the two bases for their breach of contract claim.

[00:22:56] Speaker 01:
So I would submit that if this court decides this case in favor of Inagon and affirms the district court rulings, the breach of contract claim, there's nothing left of it as it was pled in the counterclaim.

[00:23:11] Speaker 02:
And as to your claims, if we decide that there is no duty to tender, that the remaining claims about indemnification liability limits,

[00:23:21] Speaker 01:
I agree with that.

[00:23:22] Speaker 01:
If the court affirms the district court's rulings as they are, those claims would go away.

[00:23:27] Speaker 01:
If this case is reversed and the case comes back down, the second cause of action regarding the breach of the policy conditions, that's a coverage issue.

[00:23:37] Speaker 01:
And we can talk about, there was some discussion during the appellant's argument about difference between coverage

[00:23:43] Speaker 01:
and the tender and how that implicates coverage versus the duty to defend.

[00:23:47] Speaker 01:
That's a coverage defense.

[00:23:48] Speaker 01:
That's a defense that the Wilcoxes did not follow the policy terms and conditions by providing notice and providing a copy of the lawsuit to Inagon.

[00:23:59] Speaker 01:
That would void coverage if the court agreed on that point.

[00:24:03] Speaker 01:
That's not being asserted, and that issue is not before the court.

[00:24:05] Speaker 02:
Well, I guess since I ask of you, since your client was the one who brought, I believe, two separate summary judgment motions and succession, why shouldn't we be worried about your piecemeal appeals or the Wilcox's going forward, given that we've got one policy here, one course of conduct, and we're being asked two questions about it now.

[00:24:30] Speaker 02:
And it sounds like we might be asked another three questions about it later if you don't like the result.

[00:24:34] Speaker 01:
No, I would disagree with that, Your Honor.

[00:24:36] Speaker 01:
The question of the duty to defend is a threshold question.

[00:24:41] Speaker 01:
All of the claims rise or fall on that duty to defend issue in the sense of the counterclaims for breach of contract, the extra contractual claims for bad faith, Insurance Fair Conduct Act.

[00:24:53] Speaker 01:
They make a variety of other arguments, but they really come down to the same central issue which is before the court today.

[00:24:59] Speaker 02:
OK, I'll let you go ahead and proceed on the merits.

[00:25:02] Speaker 01:
Sure.

[00:25:04] Speaker 01:
I will talk, I think, about some of the court's questions, first of all, with regard to tender.

[00:25:10] Speaker 01:
And the court indicated there were some issues about what tender really means here.

[00:25:15] Speaker 01:
Well, the Washington courts have talked about that.

[00:25:18] Speaker 01:
The Levin decision, the Griffin decision, the courts have talked about you don't need to use the magic language tender.

[00:25:26] Speaker 01:
However, there must be an affirmative act, something that makes it clear that you are tendering the lawsuit.

[00:25:34] Speaker 02:
Why shouldn't the Intagon employee on the other side of this call, why shouldn't they have reasonably understood this to have been a tender where the lawsuit was mentioned?

[00:25:44] Speaker 02:
There was easy to, at least on constructive notice, if not actual notice, that there was a lawsuit pending.

[00:25:54] Speaker 01:
Mr. Lawrence in his argument said these are sophisticated insurance companies.

[00:25:58] Speaker 01:
They deal with this all the time They'll teach they deal with individuals all the time individuals call and they will say hey I'm calling about this lawsuit or what loss are you talking about and they'll say well You know I got in this car accident did they but that question wasn't asked They didn't your Pentagon didn't say what lawsuit are you talking about?

[00:26:15] Speaker ?:
I

[00:26:16] Speaker 01:
No, I agree with you.

[00:26:18] Speaker 01:
And that's part of their argument, is that we somehow had a duty to then inquire about that.

[00:26:23] Speaker 05:
He says we hadn't known about this lawsuit, and the Pentagon person doesn't respond.

[00:26:29] Speaker 01:
There's a whole series of questions about it.

[00:26:32] Speaker 01:
Tell me more.

[00:26:33] Speaker 01:
Tell me more.

[00:26:33] Speaker 01:
You look at the context of where this happened.

[00:26:36] Speaker 01:
This wasn't the assigned claim adjuster.

[00:26:38] Speaker 01:
She just called the 800 number and was talking to some person.

[00:26:42] Speaker 01:
What comes after that I think also bears on the court's decision, which is Mr. Warren gets involved.

[00:26:47] Speaker 01:
And there's a conversation with Mr. Warren and the assigned claims adjuster.

[00:26:51] Speaker 01:
No mention of a lawsuit.

[00:26:53] Speaker 01:
No mention of service.

[00:26:54] Speaker 01:
There's nothing for inquiry notice at that point.

[00:26:56] Speaker 05:
It may well be a successful or at least plausible lawsuit against Mr. Warren.

[00:26:59] Speaker 05:
We understand that.

[00:27:00] Speaker 01:
But I think it factors into Intagon's mindset.

[00:27:03] Speaker 01:
Even if someone had gone back, assigned a jester, and said, okay, somebody mentioned a lawsuit in your prior phone call.

[00:27:11] Speaker 01:
Do we need to follow up with them?

[00:27:12] Speaker 01:
Well, let's talk to their lawyer, because now we got a letter of representation the next day indicating that a lawyer was involved on behalf of the Wilcoxes.

[00:27:20] Speaker 01:
Same thing during that conversation.

[00:27:21] Speaker 01:
No mention of anything.

[00:27:23] Speaker 05:
But either side.

[00:27:24] Speaker 05:
I mean, Intagon didn't say, hey, why are you a lawyer now?

[00:27:28] Speaker 05:
What's going on?

[00:27:29] Speaker 01:
Well, there is a discussion about that.

[00:27:30] Speaker 01:
And Mr. Warren says, well, hey, I wanted to pose him if this case goes into suit.

[00:27:37] Speaker 01:
There was mention in our briefing about that, where he's inferring that there actually isn't a lawsuit.

[00:27:42] Speaker 05:
And that was part of our- Well, he's not implying that.

[00:27:46] Speaker 05:
I mean, he just doesn't mention it.

[00:27:49] Speaker 05:
He doesn't mention- If it goes to trial, I would love to interrogate, I would love to question this guy, because he's right out of jail when he gets hit, and he goes right back to jail.

[00:28:00] Speaker 05:
I'd love to question him.

[00:28:02] Speaker 05:
He says, if it goes to trial.

[00:28:03] Speaker 05:
He doesn't say, if there is a lawsuit.

[00:28:06] Speaker 05:
No, he says, if it goes to trial.

[00:28:08] Speaker 01:
Respectfully, Your Honor, I think he says, if they file suit.

[00:28:11] Speaker 01:
I would love to depose him.

[00:28:13] Speaker 05:
Give me the page site for that one.

[00:28:14] Speaker 01:
Sure.

[00:28:15] Speaker 01:
It is in the transcript of the phone call.

[00:28:19] Speaker 01:
I don't have the site right off hand.

[00:28:21] Speaker 01:
I know it's in our briefing, Your Honor.

[00:28:23] Speaker 05:
I can find it.

[00:28:25] Speaker 01:
And so that was part of the basis for... I'm afraid that puts the lawyer in trouble.

[00:28:32] Speaker 05:
Okay.

[00:28:33] Speaker 05:
I can find it.

[00:28:34] Speaker 05:
Don't worry about it.

[00:28:35] Speaker 01:
Okay.

[00:28:36] Speaker 01:
That was part of the basis for the, I guess it would be the amended complaint that we brought claims against.

[00:28:42] Speaker 01:
saying that we were misled by his representation to us during that phone call.

[00:28:47] Speaker 01:
Those claims were dismissed.

[00:28:48] Speaker 01:
They're not before the court today.

[00:28:50] Speaker 01:
But I think it's important in context to understand the court's question about the tender and from whose perspective are we looking at?

[00:29:01] Speaker 01:
Who are we deciding whether a tender has been made?

[00:29:04] Speaker 01:
And the courts have been clear that they have to affirmatively provide that notice to us.

[00:29:11] Speaker 02:
Policy behind that is as the Washington courts have explained to ensure that the insured has Isn't unintentionally triggering Coverage or claims under policies or this issue.

[00:29:26] Speaker 02:
There's no there's no fact here suggesting that the Wilcoxes were trying to decide which Policy they wanted to proceed with they'd just been sued they'd called and they said lawsuit.

[00:29:38] Speaker 02:
Why isn't that enough?

[00:29:39] Speaker ?:
I

[00:29:39] Speaker 01:
Given the discussion that takes place, you have to look at it in the context of the insurance company talking to this person who's just calling him and saying, hey, I'm just calling about this.

[00:29:48] Speaker 01:
It's been two years.

[00:29:49] Speaker 01:
We haven't heard anything about this lawsuit.

[00:29:50] Speaker 01:
And the person- Not haven't, hadn't.

[00:29:53] Speaker 01:
Haven't.

[00:29:53] Speaker 05:
Did you take the deposition?

[00:29:55] Speaker 05:
Was it you who used the word haven't, which was not actually the word?

[00:29:59] Speaker 01:
I did take the deposition, Your Honor.

[00:30:01] Speaker 01:
I see you're taking issue with the deposition in the changing of the words and the phrasing of it.

[00:30:09] Speaker 05:
And I'm also, when she says, because there was no lawsuit at that time, I doubt that you were ignorant that there was a lawsuit at that time.

[00:30:19] Speaker 05:
Because the lawsuit had been filed Feb 1.

[00:30:22] Speaker 05:
She's making the phone call on Feb 3.

[00:30:24] Speaker 05:
You had to know that she didn't know what she was talking about.

[00:30:27] Speaker 01:
I had to know that she didn't know what she was talking about, Your Honor?

[00:30:29] Speaker 05:
Well, of course, because there was a lawsuit at that time.

[00:30:31] Speaker 05:
And if you'd looked at your dates, you knew darn well there was a lawsuit at that time.

[00:30:35] Speaker 01:
Oh, I understand.

[00:30:36] Speaker 01:
So the issue, though, is, again, you have someone just calling up saying, and just using the word lawsuit.

[00:30:41] Speaker 05:
No, no, no.

[00:30:41] Speaker 05:
I'm now talking about the deposition when she says, because there wasn't a lawsuit at that time.

[00:30:47] Speaker 03:
Correct.

[00:30:48] Speaker 05:
Well, there was a lawsuit at that time.

[00:30:50] Speaker 05:
The lawsuit was served on them, Feb.

[00:30:52] Speaker 05:
1.

[00:30:53] Speaker 05:
That phone call is Feb.

[00:30:55] Speaker 05:
3, so when she responds to you because there was no lawsuit at that time, did you know that she was wrong?

[00:31:04] Speaker 01:
Did I know that she was wrong?

[00:31:05] Speaker 05:
You know the date when it was served and the date of the phone call?

[00:31:10] Speaker 01:
What's why I asked her the question during her deposition, which is, when you said the word lawsuit during this phone call, what were you talking about?

[00:31:15] Speaker 05:
I'm asking you a different question.

[00:31:16] Speaker 01:
OK.

[00:31:17] Speaker 05:
She says, because there wasn't a lawsuit at that time, she's wrong.

[00:31:21] Speaker 05:
There was a lawsuit at that time.

[00:31:23] Speaker 05:
Because she's talking on Feb 3, and the lawsuit had been served on them two days before.

[00:31:29] Speaker 05:
When she gives that answer, did you know that she was wrong and did not know what she was talking about with respect there being no lawsuit?

[00:31:35] Speaker 01:
At the time I took that deposition, I didn't know whether she knew that her husband had been served.

[00:31:39] Speaker 05:
I'm not asking you that question.

[00:31:41] Speaker 05:
I'm asking what you know.

[00:31:43] Speaker 05:
Did I know that a lawsuit... Did you know the date when the lawsuit had been served on them and the date of the phone call that we're talking about?

[00:31:50] Speaker 01:
I knew that a lawsuit had been filed when I asked that question.

[00:31:53] Speaker 01:
I didn't know whether she knew that at the time she made the phone call.

[00:31:56] Speaker 02:
Why does that matter when the policy of the tender rule is for Intagon to have notice, not the Wilcox's to have intent?

[00:32:07] Speaker 01:
I don't think that it clarifies an issue in terms of what the phone call was, what she said during the phone call.

[00:32:14] Speaker 04:
As I understand your position it is, she calls up your general number and although she begins by saying

[00:32:31] Speaker 04:
Well, the reason I'm calling is two years have gone by and we haven't heard anything about this lawsuit.

[00:32:38] Speaker 04:
Hadn't heard anything.

[00:32:42] Speaker 04:
We can sort out later whether it matters whether it's have it or hadn't.

[00:32:48] Speaker 04:
And then she continues.

[00:32:49] Speaker 04:
In the very same, before there's any interruption by your person, as far as I understand, you guys haven't even made a payment out of this either.

[00:33:00] Speaker 04:
We never received anything saying you made payment, the 50,000 payment.

[00:33:06] Speaker 04:
to Eric Hoff, the claimant.

[00:33:07] Speaker 04:
So I think it's reasonably clear to me, at least, that she's not referring to the recently filed lawsuit.

[00:33:18] Speaker 04:
And then your representative responds to what she referred to in the last part of her few sentences there.

[00:33:28] Speaker 04:
And they go on for several exchanges having nothing to do with the lawsuit.

[00:33:36] Speaker 04:
And then in the deposition, you want to clarify this, and you ask her, in effect, what did you mean by lawsuit?

[00:33:56] Speaker 04:
And she says, I meant the tender.

[00:33:59] Speaker 04:
And so unless there was some duty,

[00:34:04] Speaker 04:
to independently, because she used the word lawsuit in the earlier call, make some inquiry about the lawsuit.

[00:34:11] Speaker 04:
Otherwise, it's reasonably clear that what she was referring to was the tender.

[00:34:18] Speaker 04:
Yes?

[00:34:18] Speaker 01:
I would agree, Your Honor.

[00:34:21] Speaker 05:
Let me ask you a question about tender.

[00:34:23] Speaker 05:
We heard from the other side, and I think there's some Washington law that we at least arguably support it.

[00:34:31] Speaker 05:
Why is it not sufficient in terms of tender?

[00:34:34] Speaker 05:
that Wilcox tenders the claim, and that then discharges responsibility to tender.

[00:34:41] Speaker 05:
That is, why does he have to tender the claim separately as to the suit?

[00:34:45] Speaker 05:
I'm not just talking what's Washington law on the point.

[00:34:47] Speaker 01:
Yeah.

[00:34:48] Speaker 01:
I think there was a question earlier.

[00:34:49] Speaker 01:
I see I'm over my time.

[00:34:50] Speaker 01:
Go ahead.

[00:34:51] Speaker 01:
Take your time.

[00:34:51] Speaker 01:
I don't mean to eat into my co-counsel's time, though.

[00:34:53] Speaker 01:
This idea of an independent duty to defend a claim versus a lawsuit.

[00:35:02] Speaker 01:
I'm not aware of any authority in Washington that says there's a duty to defend a claim given the circumstances in this case where there's a demand for the policy limits.

[00:35:13] Speaker 01:
The policy limits are offered, $25,000.

[00:35:15] Speaker 01:
Those are our policy limits.

[00:35:17] Speaker 01:
We make them available to you.

[00:35:19] Speaker 05:
But of course, you have a duty to defend, in addition to pay off the policy limit.

[00:35:24] Speaker 01:
I would agree with that.

[00:35:25] Speaker 01:
There is both a duty to defend.

[00:35:26] Speaker 05:
But the claim is tendered to you.

[00:35:29] Speaker 05:
Why is that not enough to trigger the duty to defend?

[00:35:33] Speaker 01:
The duty to defend in the cases that we've talked about, we reference here, talk about a breach.

[00:35:39] Speaker 01:
You can't have a breach of the duty to defend until there is a tender of the lawsuit.

[00:35:44] Speaker 05:
Well, that's my question, because I'm not sure I see Washington law as being perfectly clear on that point.

[00:35:48] Speaker 01:
I respectfully your honor I did the cases that have been that have addressed this issue talk about this in the context of a lawsuit.

[00:35:57] Speaker 01:
There is no case that I'm aware of that talks about a pre suit notice of a claim.

[00:36:02] Speaker 01:
It somehow.

[00:36:05] Speaker 01:
creating a duty to hire an attorney to then defend an insured.

[00:36:10] Speaker 01:
In the real world, these circumstances happen quite often where you have a defendant in a car accident where the plaintiffs will say, I want the policy limits.

[00:36:19] Speaker 01:
They don't just go out and hire a defense attorney for all those different claims.

[00:36:23] Speaker 01:
That would be extremely expensive for the insurance company to do so.

[00:36:26] Speaker 01:
They only do it when a lawsuit is filed.

[00:36:28] Speaker 01:
That's when they need a lawyer to represent their interests.

[00:36:31] Speaker 01:
There has to be a tender in order for that to happen.

[00:36:35] Speaker 01:
I will pass the baton over to my co-counsel.

[00:36:37] Speaker 02:
Thank you.

[00:36:47] Speaker 00:
Good morning.

[00:36:48] Speaker 00:
May it please the court?

[00:36:49] Speaker 00:
My name is Keith LaGaurie and I'm here representing Smith-Friede Eberhardt.

[00:36:53] Speaker 00:
I certainly welcome the court's guidance as to how to spend the time.

[00:36:56] Speaker 00:
I don't know that there's anything left jurisdictionally for me to address.

[00:37:01] Speaker 00:
Was there ever, considering the position of my client, but I'm happy to do so and I had some fun looking into Impleader this weekend.

[00:37:08] Speaker 00:
But I will start with the substance of the claims against Smith Fried Eberhardt.

[00:37:12] Speaker 05:
Let me ask one question.

[00:37:13] Speaker 05:
Absolutely.

[00:37:13] Speaker 05:
The day sheet I've got says that you're representing Smith Fried Eberhardt and Warren.

[00:37:19] Speaker 05:
I don't think that's right.

[00:37:20] Speaker 00:
That's incorrect.

[00:37:21] Speaker 00:
I apologize for overlooking that.

[00:37:22] Speaker 00:
You're only Smith Fried Eberhardt.

[00:37:24] Speaker 00:
Yeah, just Smith Fried Eberhardt.

[00:37:26] Speaker 00:
The issue before this court with regard to Smith Fried Eberhart is a narrow issue, and that is the gravamen of our argument in the lower court and on appeal with regard to causation.

[00:37:40] Speaker 00:
It's a legal malpractice claim, and the issue that the district court found that merited dismissal was an absence of causation.

[00:37:50] Speaker 00:
This is a very long saga that started with this accident, and as you know, has a lot of twists and turns and interesting facts in it.

[00:37:59] Speaker 00:
But Smith Fried Eberhardt's participation in this story is very limited, and this court's analysis of the underlying story is very limited in temporal scope.

[00:38:10] Speaker 00:
It doesn't begin until Smith Friede Eberhardt is involved, which doesn't happen until February of... I believe it's... Go ahead.

[00:38:17] Speaker 05:
So the district court ruled in your favor because the Superior Court had said, well, it was already too late by the time you were involved.

[00:38:27] Speaker 05:
That's your defense.

[00:38:30] Speaker 05:
On the other hand, you waited six months to try to set aside that default.

[00:38:34] Speaker 05:
How come?

[00:38:36] Speaker 05:
Or rather your client, I should say.

[00:38:38] Speaker 00:
And so I will admit to the panel that that issue is not before the court and actually was decided against Smith-Friede-Aberhart and the lower court as to the breach itself.

[00:38:48] Speaker 00:
But the answer to your question is that my client spent time looking for arguments that would have done better than the white argument that had little chance of success for the exact reasons that it

[00:39:00] Speaker 00:
failed.

[00:39:01] Speaker 00:
There are other avenues to pursue vacation of a judgment that don't have the same restrictive temporal aspects.

[00:39:12] Speaker 00:
They don't have the reasonable diligence prong in white.

[00:39:15] Speaker 00:
They don't have the one-year limitation that 60B1 is

[00:39:20] Speaker 05:
normal lawyer behavior as belt and suspenders you might have pursued an avenue that didn't require it but if you didn't file right away you're forfeiting the argument that hey you gotta act promptly

[00:39:32] Speaker 00:
I believe we we argued in the lower court again unsuccessfully and we would we would we still believe that the time spent by Smith Friede Eberhardt in certain pursuits in in that time were worthwhile and were not didn't lack diligence specifically they sought to get information from Mr. Warren himself as to what exactly happened where that disconnect

[00:39:55] Speaker 00:
occurred, whether it was a filing error where a notice of appearance was filed in a wrong case versus whether there was none ever prepared, what was told to the Wilcoxes versus what wasn't, and I think reasonably believed that more clarity on that issue could have helped a court understand and potentially find in favor of the Wilcoxes on the motion to vacate because of the analysis of whether, one, it was excusable what happened,

[00:40:23] Speaker 00:
or whether there was an alternative grounds under 60B, such as a fraud grounds or something, or an extraordinary circumstances grounds that don't carry the same temporal limitations or the other prongs that the court might have turned to.

[00:40:36] Speaker 05:
I understand that perfectly, but there was nothing that prevented your client from immediately moving to the set aside and then saying to the court, we need to explore a few things.

[00:40:46] Speaker 00:
I am not aware of anything that would have been prohibitive of that.

[00:40:51] Speaker 05:
On the other hand, it was three months before you were notified, and the Superior Court says that's enough to defeat the claim.

[00:40:59] Speaker 00:
Correct, and the Superior Court did, and the District Court did, and the Washington courts have said that's a reasonable finding.

[00:41:06] Speaker 00:
Um, and so I, you know, our position is that we need to look at just that narrow, that narrow issue here because the fact that my client did get that motion filed within the one year timeframe means that the court was

[00:41:22] Speaker 00:
allowed to review the substance of all the prongs of white.

[00:41:26] Speaker 00:
It's not a case like Shepherd Ambulance where the delay in filing the motion prohibited the court from looking at the substance at all.

[00:41:34] Speaker 00:
It wasn't a we can't entertain this because it's over a year.

[00:41:37] Speaker 00:
It was a let's go through the white test, let's analyze each prong and let's make a decision.

[00:41:42] Speaker 00:
The decisions made, the findings made by the Superior Court were specifically set out in the order

[00:41:47] Speaker 00:
the district court in the malpractice action rightly decided that we can't disturb those findings when they're unrelated to the allegation of malpractice and so whether the district court agreed or disagreed with what the Superior Court might have done with regard to prima facie case

[00:42:05] Speaker 00:
or inexcusable neglect or prejudice to Mr. Hoff, it was not for them to review those findings.

[00:42:13] Speaker 00:
They were independent and unaffected by the sole allegation of negligence, which specifically was the timing of the motion filing.

[00:42:21] Speaker 00:
And so what the district court did, and we think aptly and admirably in light of all of the strands of this case, was focus on causation, focus on proximate cause.

[00:42:33] Speaker 00:
What could have changed with different actions by Smith, Reed, Eberhard, specifically with an earlier filed motion, looked at only those findings, and determined, as you noted, that

[00:42:48] Speaker 00:
the court was going to find a lack of diligence, or the court should have found even a lack of diligence, regardless, because of the three-month time period between notice of the default judgment and any action whatsoever, which is something that has been decided by the Washington courts as not sufficient.

[00:43:12] Speaker 00:
And for the additional reason we believe that the causation issue is resolved properly by the district court, because even if the district court were to step back and say, let's eliminate the diligence findings altogether, because there is some interplay between the Wilcox's lack of diligence and Smith-Read Eberhardt's lack of diligence,

[00:43:34] Speaker 00:
The remaining findings that are undisturbed by the Superior Court do not allow for the court to say that the default judgment would have been vacated because the court did expressly find both the lack of defense and that it was not excusable neglect that led to the failure to appear.

[00:43:55] Speaker 00:
And although there are many, many cases in Washington about default judgments and the white test,

[00:44:01] Speaker 00:
And we have seen cases in the briefings, some where they talk about, well, you can wiggle a little bit on the prima facie defense, and some that talk about, well, we can wiggle a little bit here on what exactly their reason was.

[00:44:14] Speaker 00:
What we don't have is that case that says, well, if you're really diligent,

[00:44:18] Speaker 00:
then we don't look at either of the primary factors.

[00:44:22] Speaker 00:
These are the primary factors.

[00:44:23] Speaker 00:
They're the ones that tell us that this case deserves to be heard on the merits and that you deserve it to be heard on the merits because you were simply the subject of a mistake or a misunderstanding and you have a real case to present.

[00:44:36] Speaker 00:
The district court was given those findings and could not disturb them on the basis of the timing of the motion.

[00:44:42] Speaker 00:
Even if a finding of utmost diligence was entered by the district court below here, it would not lead to a reasonable conclusion that the motion to vacate the default judgment would have been granted.

[00:44:58] Speaker 00:
And then we note in our motion and I don't believe it's addressed in the reply but but it was brought in the summary judgment motion and we mentioned it in our Response brief that we moved on the additional basis that there's no evidence in the record of damages that this court can consider so as Even if causation was here.

[00:45:19] Speaker 00:
There would be a reason to remand this case back down to the district court There's no medical evidence.

[00:45:25] Speaker 00:
There's no

[00:45:27] Speaker 00:
Verdict evidence.

[00:45:28] Speaker 00:
There's nothing out there in the record for this court to look at and say, here's where the Wilcoxes would have fared better if given an opportunity to take this case to trial.

[00:45:40] Speaker 00:
That's absent from the record here.

[00:45:42] Speaker 00:
It's still absent from the record.

[00:45:44] Speaker 00:
The only semblance of evidence that arises on that issue comes late

[00:45:51] Speaker 00:
after our motion for summary judgment has been filed in the form of the late disclosed expert declaration of William Fold, which by the date of the signed declaration itself is obvious to this court that it was not even an opinion that existed until after fact discovery was closed, until after expert report disclosure was due, and after the motions for summary judgment were filed.

[00:46:13] Speaker 00:
On that basis, as we discuss in our motion to exclude that, and again in our response brief, there is an automatic sanction for that kind of late disclosed expert testimony on an issue that is a burden of proof for the plaintiff in the case.

[00:46:32] Speaker 00:
It's not properly categorized as a rebuttal to anything that we put forth in our motion.

[00:46:36] Speaker 00:
It is a response to the fact that we identified there was no evidence.

[00:46:41] Speaker 00:
That's not a proper rebuttal.

[00:46:43] Speaker 02:
Thank you, Mr. LaGaurie.

[00:46:45] Speaker 02:
I think we have your arguments.

[00:46:46] Speaker 00:
Thank you.

[00:46:52] Speaker 02:
Mr. Lawrence.

[00:46:53] Speaker 03:
Thank you, Your Honor.

[00:46:56] Speaker 03:
First of all, that last issue is not before the court.

[00:46:58] Speaker 03:
The district court did not decide the motion to exclude William Fold.

[00:47:04] Speaker 03:
And I'm not sure why there was so much discussion about it.

[00:47:08] Speaker 03:
With respect to sanctions, obviously, the most onerous sanction would be to exclude him, but the court didn't do that below.

[00:47:15] Speaker 02:
Maybe you could focus on the tender issues in your remaining time.

[00:47:20] Speaker 03:
Thank you.

[00:47:21] Speaker 03:
Thank you.

[00:47:22] Speaker 03:
So you don't want to hear about Smith Fried Eberhardt's argument.

[00:47:26] Speaker 03:
OK.

[00:47:27] Speaker 03:
All right.

[00:47:28] Speaker 03:
I would just say there that I think the district court looked at what the Superior Court did and the reasons it did it and did not really look to what it should have done.

[00:47:40] Speaker 03:
That was a case of the spec, if you'll permit me this, where

[00:47:45] Speaker 03:
Washington, I don't believe, has a case in which, like the Wilcoxes, both their insurer and their lawyers lied to them multiple times in order to lead to the Wilcoxes having a reasonable impression that they were being defended.

[00:48:00] Speaker 03:
And I think that is very important to consider.

[00:48:03] Speaker 02:
Well, I guess on a tender rule, the point of a tender rule is it's kind of an on or off switch in terms of notice.

[00:48:09] Speaker 02:
And so does it matter whether Elizabeth thought that she was tendering the claim?

[00:48:15] Speaker 02:
How much of this context comes into whether saying lawsuit is enough?

[00:48:20] Speaker 03:
that's really what we need to decide or what the district court needed to decide right and it goes to two things it goes to the Smith Fried issue because The question really is does Washington law endorse a layperson not doing anything for three months and

[00:48:40] Speaker 03:
when they think they're being defended by insurers and lawyers who are lying to them.

[00:48:43] Speaker 03:
But to get to the tender issue, I'm not sure what hasn't been discussed yet that you want to hear about it, but I'd be happy to address it.

[00:48:51] Speaker 03:
So if there's a focal question you have, I'd be happy to address it.

[00:48:57] Speaker 05:
Well, I do have a question.

[00:48:59] Speaker 05:
You've mentioned it already, and that is,

[00:49:05] Speaker 05:
You suggested that we certify a question to the Western Supreme Court as to whether it is sufficient to tender the claim before the lawsuit is filed, and that if the claim is tendered, that's a tender both as to the claim and any subsequent lawsuit.

[00:49:24] Speaker 05:
Could you say more about why you think that's an open question in Washington law?

[00:49:28] Speaker 03:
I think it hasn't been addressed in the way that you've articulated it.

[00:49:32] Speaker 03:
I think it has been addressed by the law that we've cited in our brief that says that the duty to defend the claim arises before a lawsuit is filed.

[00:49:44] Speaker 03:
And the contract clearly requires Indagon to defend the claim.

[00:49:49] Speaker 03:
That is its own language that it put in its policy.

[00:49:51] Speaker 03:
and it says claim or lawsuit.

[00:49:54] Speaker 03:
So I was a little shocked by Mr. Harris's statement that while they get lots of these claims and so they don't have to defend them because it's too expensive, that's not what their policy says.

[00:50:09] Speaker 03:
It does there's no exception for the insurance company's profit Margin to say well because of that we don't get to yeah, but the question is Much more precise and yes, Washington law and as you read the cases.

[00:50:23] Speaker 05:
There's some ambiguity I guess we can read the cases ourselves and figure out whether we agree

[00:50:27] Speaker 03:
Yeah, I think you might be able to avoid the question by simply ruling that Washington and all is clear that insurance company has to comply with its contract, and the contract says you have to defend a claim.

[00:50:38] Speaker 03:
And with respect to Tender, they clearly had notice of the claim.

[00:50:43] Speaker 03:
The claim demand was sent to them directly to Intagon.

[00:50:47] Speaker 02:
Well, we only need to determine whether there's a genuine issue of whether they had notice.

[00:50:51] Speaker 02:
That's right.

[00:50:52] Speaker 02:
That's right.

[00:50:53] Speaker 03:
Anything else?

[00:50:56] Speaker 02:
Thank you, Mr. Lawrence.

[00:50:56] Speaker 03:
Thank you.

[00:50:57] Speaker 03:
And I want to thank the panel for their obvious preparation and engagement with these very complex issues.

[00:51:03] Speaker 02:
We thank counsel today for your helpful arguments.

[00:51:06] Speaker 02:
That case is submitted, and we will recess for the day.