FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AFFILIATED FM INSURANCE
COMPANY, a Rhode Island
corporation, No. 07-35696
Plaintiff-Appellant,
v. D.C. No.
CV-06-01750-JLR
LTK CONSULTING SERVICES INC., a OPINION
Pennsylvania corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Washington
James L. Robart, District Judge, Presiding
Argued and Submitted
December 12, 2008—Seattle, Washington
Filed December 7, 2010
Before: Robert R. Beezer, Ronald M. Gould and
Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Gould
19629
AFFILIATED FM INS. v. LTK CONSULTING SERVICES 19631
COUNSEL
William E. Pierson, Jr. (argued), Seattle, Washington, for
plaintiff-appellant Affiliated FM Insurance Co.
Steven G.M. Stein, Brandon G. Hummel, and Jeffrey Winnick
(argued), Stein, Ray & Harris LLP, Chicago, Illinois; Beth
Andrus, Skellenger Bender, P.S., Seattle, Washington, for
defendant-appellee LTK Consulting Services, Inc.
OPINION
GOULD, Circuit Judge:
Affiliated FM Insurance Company (“AFM”), subrogated to
the rights of its insured, Seattle Monorail Services Joint Ven-
ture (“SMS”), sued LTK Consulting Services Inc. (“LTK”),
asserting that LTK had provided negligent design advice to
the Seattle Monorail System that resulted in fire damage. LTK
took the position that the so-called “economic loss rule” pre-
cluded this suit and that AFM did not have an adequate inter-
est in the Monorail System on which to base a suit in tort.
Determining that Washington law was not clear on this
subject, we certified the following question to the Washington
State Supreme Court:
May party A (here, SMS, whose rights are asserted
in subrogation by AFM), who has a contractual right
to operate commercially and extensively on property
owned by non-party B (here, the City of Seattle), sue
party C (here, LTK) in tort for damage to that prop-
erty, when A (SMS) and C (LTK) are not in privity
of contract?
Affiliated FM Ins. Co. v. LTK Consulting Servs. Inc., 556 F.3d
920, 922 (9th Cir. 2009). We also told the Washington State
Supreme Court:
19632 AFFILIATED FM INS. v. LTK CONSULTING SERVICES
If the Washington State Supreme Court concludes
that a party with a contractual right to operate com-
mercially and extensively on another’s property may
bring a suit in tort against a third party for damage
to that property, we will reverse the district court’s
order granting summary judgment to LTK. If, how-
ever, the Washington State Supreme Court decides
that the economic loss rule, or some other legal rule,
bars such a suit in tort, we will affirm the district
court’s grant of summary judgment in favor of LTK.
Id.
[1] The Washington State Supreme Court accepted the cer-
tified question and, after thoroughly considering the issues,
filed its opinion, which concludes as follows:
Applying the independent duty doctrine here, we
hold that SMS may sue LTK for negligence. LTK,
by undertaking engineering services, assumed a duty
of reasonable care. This obligation required LTK to
use reasonable care, as we have defined it, with
respect to risks of physical damage to the monorail.
SMS enjoyed legally protected interests in the mono-
rail, and LTK’s duty encompassed these interests.
By subrogation to SMS’s rights, AFM may pursue a
claim for negligence against LTK. Consistent with
this opinion, the answer to the Ninth Circuit’s certi-
fied question is yes.
Affiliated FM Ins. Co. v. LTK Consulting Servs., Inc., ___
P.3d ___, No. 82738-9, 2010 WL 4350338, at *10 (Wash.
Nov. 4, 2010).
[2] We reverse the district court and remand for further
proceedings consistent with the decision of the Washington
State Supreme Court.
AFFILIATED FM INS. v. LTK CONSULTING SERVICES 19633
REVERSED AND REMANDED.