Filed
Washington State
Court of Appeals
Division Two
June 27, 2017
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
STATE FARM FIRE & CASUALTY CO., an No. 47913-3-II
Illinois corporation, (Linked w/ No. 47196-5-II)
Respondent,
PUBLISHED OPINION
v.
ROBERT CHARLES JUSTUS, a single man,
Appellant,
WILLIAM D. MORGAN and DONNA L.
MORGAN, husband and wife; CORINNE M.
TOBECK as Personal Representative of the
Estate of JOSEPH “JOEY” TOBECK;
VERNON A. TOBECK, natural father of
decedent Joseph “Joey” Tobeck; and APRIL
D. NORMAN, natural mother of decedent
Joseph “Joey” Tobeck,
Defendants.
BJORGEN, C.J. — This appeal, State Farm v. Justus1, has its origins in Robert Justus’
claim for negligent wrongful detention against William and Donna Morgan for an incident in
1
This opinion decides the appeal in No. 47913-3-II. We refer to this appeal as State Farm v.
Justus. We refer to the linked case noted in the appeal, No. 47196-5-II, as Justus v. State Farm.
The linked appeal is decided by a separate opinion.
No. 47913-3-II (Linked
with No. 47196-5-II)
which William2 shot at and held Justus at gunpoint. Justus alleged in his lawsuit against the
Morgans that William wrongfully detained him on two occasions during the incident. He now
argues that William’s umbrella insurance policy with State Farm Fire and Casualty Company
provides coverage for this claim.
In the linked case, Justus v. State Farm, No. 47196-5-II, we upheld the determination that
a covenant judgment settlement between Justus and the Morgans relating to the claimed
wrongful detention was reasonable. In the covenant judgment settlement, the Morgans stipulated
to a judgment in favor of Justus, Justus agreed not to execute the judgment against the Morgans,
and the Morgans assigned to Justus all claims they may have against State Farm. We also held
that the settlement court3 did not abuse its discretion in declining to rule whether William’s
actions in the incident were negligent or intentional.
During the covenant judgment settlement proceedings, State Farm filed a separate
declaratory judgment action to determine whether the Morgans’ umbrella liability insurance
policy provided coverage for William’s actions. Justus filed counterclaims alleging bad faith,
violation of the Consumer Protection Act (CPA), chapter 19.86 RCW, and violation of the
Insurance Fair Conduct Act (IFCA), RCW 48.30.010.015 (extra contractual claims), and an
associated motion to compel production of the Morgans’ claim file in State Farm’s possession.
The present appeal is of the trial court's decisions of this declaratory judgment action,
counterclaims, and motion to compel.
2
Because William and Donna have the same last name, we refer to them individually by their
first names to avoid confusion. No disrespect is intended.
3
We refer to the superior court that approved the covenant judgment settlement as the
“settlement court” and the superior court in the present appeal as the “trial court.”
2
No. 47913-3-II (Linked
with No. 47196-5-II)
After a bench trial, the trial court ruled that State Farm was not required to indemnify the
Morgans because William’s actions could only constitute intentional acts of false arrest and false
imprisonment, each of which would be time barred under the applicable statute of limitations.
The trial court also denied Justus’ motion to compel production of the Morgans’ claim file and
granted summary judgment in favor of State Farm on all of Justus’ extra contractual claims
Justus appeals the trial court’s rulings, arguing that (1) the settlement court’s earlier
ruling regarding the covenant judgment settlement collaterally estopped the trial court from
determining underlying liability, i.e. whether William’s actions were negligent or intentional; (2)
the trial court erred in concluding that William’s actions did not support a negligent wrongful
detention claim and only showed intentional conduct supporting a false arrest or a false
imprisonment claim; and (3) the trial court erred when it denied Justus’ motion to compel
discovery of the pertinent insurance claim file in State Farm’s possession and when it
subsequently granted summary judgment to State Farm dismissing his extra contractual claims.
We first hold that the trial court was not collaterally estopped by the settlement court’s
earlier ruling. We assume, without deciding, that a tort of negligent wrongful detention is
available in Washington, but hold that the trial court did not err by ruling that William’s actions
could only constitute the intentional torts of false arrest or false imprisonment, both of which
would be time barred. Because Justus failed to establish William’s liability in negligence on
these facts, we do not need to reach Justus’ other arguments related to whether William’s
umbrella insurance policy with State Farm would cover his conduct. However, we also hold that
the trial court’s denial of Justus’ motion to compel the claim file was erroneous, requiring
reversal of the summary judgment ruling dismissing Justus’ extra contractual claims.
3
No. 47913-3-II (Linked
with No. 47196-5-II)
Accordingly, we affirm in part, reverse in part, and remand with instructions detailed in
this opinion.
FACTS
Because Justus’ attorney conceded that he is not challenging any of the trial court’s
findings of fact, they are verities.4 Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801,
808, 828 P.2d 549 (1992). As such, they establish the following factual narrative underlying this
case:
12. Defendants William and Donna Morgan live toward the end of a private
road in rural Roy, Washington. . . . Around 10:00 p.m. on Wednesday June 9, 2010,
[Donna] was in bed reading when she heard some loud banging sounds outside. . .
. After being informed of the noises by his wife, [William] grabbed a Sig Sauer
pistol he kept at the home, retrieved a flashlight, and then went outside to
investigate.
....
14. As [William] walked down his driveway toward the source of the noise,
he heard and then saw a pickup truck with no lights on parked on the private
roadway. The Morgans’ home . . . is on the south side of the roadway. The pickup
truck was pointed eastbound, on the north side of the roadway of 358th Street
South. As [William] got closer, he saw that two individuals—Robert Justus and
Joseph Tobeck—had loaded some large metal pipes into their pickup truck. The
pipes belonged to [William] and he was storing them across the road from his house
for future use. . . . [William] called back to his wife, who was still in the house,
and told her to call 9-1-1; she complied.
....
17. [William] confronted Mr. Justus and Mr. Tobeck, saying “Hey, you
have my pipe.” [William] held the pistol and pointed it directly at Mr. Justus. Mr.
Justus tried to talk with [William] and tried to calm him down. [William] got
4
At oral argument before our court, when questioned about which factual findings he was
specifically challenging, Justus’ attorney stated, “To be honest with you, your honor, after
reading the findings of fact . . . I agreed with most of the findings of fact, in fact, all of them,
and the fact that I agree with all of them.” See Wash. Court of Appeals, State Farm v. Justus,
No. 47913-3-II, Oral Argument (December 6, 2016), at 6 min. (on file with our court) (emphasis
added).
4
No. 47913-3-II (Linked
with No. 47196-5-II)
madder and madder. Mr. Justus and Mr. Tobeck did not remove the pipes from
their truck. Mr. Justus and Mr. Tobeck got into the truck, and began driving away,
to the east on 358th Street South. The roadway dead-ended a short distance to the
east. Mr. Tobeck, driving the pickup truck, executed a 180-degree turn to the left.
This turn was begun in front of 8418 - 358th Street South. Thereafter, the pickup
truck was headed westbound.
18. [William] fired nine shots from his pistol. At least seven of the shots
hit the passenger cab of the truck. Four bullets entered the front windshield. One
bullet came from the rear and exited out of the front windshield; one bullet entered
the driver's side door window; and one entered the rear window and was recovered
in the headliner. One of the bullets struck Mr. Tobeck in the head. The truck went
out of control and hit a tree.
....
20. Mr. Justus climbed out of the passenger window after the truck hit the
tree. [William] yelled at Mr. Justus to lie down in the street and spread out his
arms. Mr. Justus complied.
21. Pierce County Sheriff’s Deputy Jeffrey Johnson was the first responder
to arrive on the scene. He arrived at 22:18. This was less than 11 minutes after
[Donna] first called 9-1-1.
22. Deputy Johnson observed Mr. Justus lying in the roadway. He observed
that Mr. Justus’s face was bloody. The neighbors pointed out [William] as being
the shooter. Deputy Johnson took [William]’s handgun from [William]’s back
pocket, handcuffed him, and placed him in the patrol car.
....
24. Mr. Tobeck was transported to Madigan Hospital where he died the next
day.
25. Deputy Johnson inspected [William]’s handgun and found it to be a .40
caliber Sig Sauer semi-automatic handgun, with one round in the chamber and two
rounds in the magazine.
26. [William] does not remember firing the gun. [William] is a gun
enthusiast and owns many guns. Over the years, he has had substantial training in
the use of guns. Prior to the incident, he generally practiced his firearms skills
several times every week by engaging in target practice at local gun clubs. He was
a member of two different gun clubs, and accompanied his friends to other clubs.
5
No. 47913-3-II (Linked
with No. 47196-5-II)
27. Mr. Justus suffers severe post-traumatic stress disorder (PTSD) as a
result of the events of June 9, 2010. Mr. Justus began seeing Gloria Roettger, a
mental health therapist, on April 3, 2013, as a referral from attorney Kevin Johnson.
Since then, there have been 75 visits. Mr. Justus’s PTSD symptoms include
significant startle reflex, recurring memories of the traumatic event, nightmares,
depression, high anxiety, stress, fear, anger, disassociation, and fear of leaving
home.
Clerk’s Papers at 2344-46.
Justus sued William on June 26, 2012, over two years after the incident, alleging, among
other things, a claim against William for “negligent” wrongful detention. CP at 678. State Farm
agreed to provide a defense to the Morgans, but also reserved its rights to challenge insurance
coverage for any judgment ultimately entered against the Morgans.
Both parties moved for summary judgment on Justus’ wrongful detention claim, and the
trial court denied both motions due to outstanding issues of material fact.
Eventually, Justus and the Morgans entered into a covenant judgment settlement of
Justus’ claims against William, which had the following contractual features: a stipulation by
the Morgans to a judgment in favor of Justus, a covenant binding Justus to not execute the
stipulated judgment against the Morgans, and an assignment by the Morgans of all their claims
against State Farm to Justus, including coverage and extra contractual claims. Justus v. State
Farm.
Justus moved for a determination that the settlement was reasonable, and State Farm
intervened to oppose the settlement. State Farm argued that Justus’ alleged claim of negligent
wrongful detention was the equivalent of the intentional torts of false arrest or false
imprisonment, which were time barred under the two year statute of limitations. See Justus v.
State Farm; RCW 4.16.100(1); Heckart v. City of Yakima, 42 Wn. App. 38, 39, 708 P.2d 407
(1985).
6
No. 47913-3-II (Linked
with No. 47196-5-II)
In approving the reasonableness of the covenant judgment settlement, the settlement
court recognized that State Farm had filed a separate declaratory action and stated that it “will
not make findings as to whether or not or the degree to which Defendant [William]’s actions on
June 9th, 2010, were intentional versus negligent.” CP at 960. The court also decided that
Justus would not be “time barred for any negligence-based claim that is later found to have
arisen out of the events of June the 9th, 2010.” CP at 966 (emphasis added). In the linked
appeal of Justus v. State Farm, we upheld the settlement court’s decision approving the
reasonableness of the settlement. We reasoned that the settlement court did not abuse its
discretion in declining to determine which of Justus’ liability theories would succeed and that it
was not required to decide if his actions were based on negligent or intentional conduct.
During these settlement proceedings, as already noted, State Farm filed a separate
declaratory judgment action in the trial court, arguing that William’s umbrella liability insurance
policy did not provide coverage for his acts. Justus counterclaimed that William’s umbrella
policy covered his actions and that State Farm had engaged in bad faith and violated the CPA
and IFCA through the assignment of extra contractual claims. The trial court ordered bifurcation
of the case: the first segment to resolve the issue of coverage and the second to resolve Justus’
extra contractual claims.
The parties proceeded to a bench trial on the coverage issues, in which the evidence
established the narrative set out in the unchallenged findings above. At the end of the bench
trial, the trial court entered the following conclusions of law on the coverage issues:
11. Mr. Justus did not file his lawsuit against the Morgans until more than
two years after the June 9, 2010[] incident. Accordingly, any claims for false arrest
or false imprisonment (or wrongful detention) were time barred by the time Mr.
Justus filed his lawsuit.
7
No. 47913-3-II (Linked
with No. 47196-5-II)
12. No facts support a theory of negligence. At all times, the acts of
[William] were intentional. He intentionally aimed the pistol and let Mr. Justus
retreat. He again intentionally aimed the pistol at the truck and fired 9 rounds, 7
into the cab of the truck. There is nothing to support a negligent act.
CP at 2347. On this basis, the trial court determined that the Morgans’ umbrella liability policy
did not cover “the intentional acts of [William] on June 9, 2010[] because the statute of
limitations had run.” CP at 2348.
After this ruling, the parties returned to litigating Justus’ extra contractual claims. Justus
moved the court to compel State Farm to produce the insurance claim file regarding the incident,
which would assist Justus in prosecuting his extra contractual claims. State Farm responded that
attorney-client privilege still protected the claim file and that without a waiver from the
Morgans, it could not produce the file. The Morgans’ attorney replied by declaration that:
Defendant Justus has never made a formal request or request for production
of the complete attorney file and/or all communications with State Farm. Mr.
Justus' attorney, Kevin Johnson, has through email and oral conversations,
requested that the Morgans waive their attorney-client privilege so that he may
obtain certain files presumably in the custody of plaintiff State Farm.
CP at 2515.
Meanwhile, State Farm moved for summary judgment to dismiss Justus’ extra contractual
claims. At the summary judgment hearing, Justus narrowed his request to compel documents.
Instead of requesting the entire insurance claim file, he asked for the claim file for the time
period of June 2010, when the Morgans asked for attorney fees in their criminal case, to January
2012, when the first civil claim was filed against the Morgans.5
5
Justus’ written motion also sought to compel the Morgans’ attorney to produce his “complete
attorney file and all communications with State Farm.” CP at 2377. At the hearing, Justus did
not repeat this argument and appeared to withdraw it.
8
No. 47913-3-II (Linked
with No. 47196-5-II)
Justus emphasized that State Farm would not produce the insurance claim file without a
waiver from the Morgans, but the Morgans would not grant the waiver, which Justus argued
violated their settlement agreement. The covenant judgment settlement that the Morgans and
Justus entered into reads in pertinent part,
4. Assignment of Claims. [The Morgans] shall assign [Justus] any and
all of their rights against State Farm. . . . [The Morgans] further acknowledge that
[Justus has] the exclusive legal power and right to prosecute, compromise, settle,
assign and otherwise control the Assigned Claims, at their sole expense. . . . With
the exception of whatever effect this assignment itself may have, [the Morgans]
represent that they have done nothing and will in the future do nothing to impair
or otherwise adversely affect the Assigned Claims.
....
6. Cooperation. The Parties to this Agreement agree to provide
reasonable cooperation in all matters for all talks and endeavors necessary to carry
out or realize the terms of this Agreement.
CP at 855-56 (emphasis added).
State Farm argued, among other matters, that without the Morgans’ waiver it could not
produce the requested portion of the claim file, since the requested portion contained privileged
information. The court invited the Morgans’ attorney to comment, and he stated that he had
never received a formal discovery request for the claim file. The Morgans’ attorney declined the
court’s invitation to comment on why the Morgans were not signing the waiver, stating, “[I]t’s
not before the court,” to which the court agreed. Report of Proceedings (RP) (July 24, 2015) at
9-11.
The trial court ultimately denied Justus’ motion to compel the production of State Farm’s
claim file. The court believed that given the case’s procedural posture, it could not compel the
Morgans to sign the waiver for State Farm to produce the file. Specifically, it stated:
9
No. 47913-3-II (Linked
with No. 47196-5-II)
So, Mr. Johnson [Justus’ attorney], the point is that's not before me right
now. . . . There hasn’t been a discovery request. And if you’re trying to enforce
the agreement that you have, that may take some other litigation, I think. I’m not
going to force him to sign a waiver today, given the posture of the case.
RP (July 24, 2015) at 14.
The trial court then turned to State Farm’s summary judgment motion and dismissed
Justus’ extra contractual claims. The trial court entered orders reflecting these judgments.
Justus appeals.
ANALYSIS
I. DECLARATORY JUDGMENT COVERAGE ISSUES
We first examine Justus’ arguments related to the insurance coverage issues in the
declaratory judgment action. Justus contends that (1) the settlement court’s covenant judgment
settlement ruling collaterally estopped the trial court from reevaluating William’s liability, and
that (2) the trial court erred in concluding that William’s conduct did not support negligent
wrongful detention. For the reasons discussed below, we disagree with both arguments.
1. Standard of Review
The ordinary rules of appellate review apply to an appeal from a declaratory judgment.
Buck Mountain Owner’s Ass’n v. Prestwich, 174 Wn. App. 702, 713, 308 P.3d 644 (2013) (citing
RCW 7.24.070). When findings of fact and conclusions of law are entered following a bench
trial, we review whether the findings are supported by substantial evidence and, if so, whether
the findings support the trial court’s conclusions of law and judgment. Id. Unchallenged
findings of facts are verities on appeal. Cowiche, 118 Wn.2d at 808. In addition, we review the
conclusions of law de novo to determine whether they are legally correct. State v. Smith, 196
Wn. App. 224, 230, 382 P.3d 721 (2016), review granted, 187 Wn.2d 1025 (2017).
10
No. 47913-3-II (Linked
with No. 47196-5-II)
2. Collateral Estoppel
Justus argues that the settlement court’s earlier ruling approving the reasonableness of the
covenant judgment settlement collaterally estopped the trial court in this action from examining
whether William’s actions were negligent or intentional because the settlement court had already
found that William was liable. Because the settlement court made clear it was not determining
whether William’s actions were negligent or intentional, we disagree that the trial court was
collaterally estopped.
Collateral estoppel bars relitigation of the same issue in a subsequent action when that
issue has been actually litigated as well as necessarily and finally determined in the earlier
proceeding. Christensen v. Grant County Hosp. Dist. No. 1, 152 Wn.2d 299, 306-07, 96 P.3d
957 (2004). The purpose of this rule in the insurance context is to “avoid inconsistent
judgments, delay, additional expense, and the creation of a perverse incentive for carriers to wait
until liability and damages have been established before deciding whether it is cost-effective to
intervene.” Green v. City of Wenatchee, 148 Wn. App. 351, 362-63, 199 P.3d 1029 (2009).
Whether an insurer is collaterally estopped from litigating liability in a subsequent coverage
action turns on whether it had an actual opportunity to litigate the merits of liability. For
example, in cases involving underinsured motorist insurance coverage, if an insurer is given
notice and an opportunity to intervene in the underlying liability action but fails to do so, the
insurer will be bound by the court’s findings and conclusions. Fisher v. Allstate Ins. Co., 136
Wn.2d 240, 246, 961 P.2d 350 (1998); Finney v. Farmers Ins. Co., 21 Wn. App. 601, 617, 586
P.2d 519 (1978).
Further, if a court in a previous ruling substantially resolves an issue of liability, even if
not to finality, the insurer is bound to those determinations in a subsequent coverage action. For
11
No. 47913-3-II (Linked
with No. 47196-5-II)
example, in Mutual of Enumclaw Insurance Co. v. T&G Construction, Inc., 165 Wn.2d 255, 259,
199 P.3d 376 (2008), the plaintiff homeowners sued a developer, the insured, for improperly
installing siding on their homes. The insurer represented the developer and moved for summary
judgment, arguing that the statute of limitations precluded the homeowners’ claims. Id. at 260.
The trial court denied the insurer’s motion for summary judgment. Id. Subsequently, at the
hearing on the reasonableness of a proposed settlement, the trial court stated that a trier of fact
was “likely” to find that the statute of limitations defense would not apply. Enumclaw, 165
Wn.2d at 261. In a later declaratory judgment action to determine coverage, the insurer argued
again that the homeowners’ liability theory was precluded by the statute of limitations. Id. at
261-62. On appeal, the court held that the insurer could not relitigate the statute of limitations
defense because it had been substantially resolved in the underlying liability case. Id. at 259.
In contrast to Enumclaw, an insurer will not be bound to findings and conclusions
concerning liability if the insurer attempted to challenge the liability findings, and the trial court
failed to adjudicate the merits of the substantive claims. In Green, 148 Wn. App. at 358, the
plaintiff and insured entered into a covenant judgment settlement in which the insured stipulated
to findings and conclusions that established his liability and consented to a money judgment. Id.
at 358-59. The insurer expressly opposed these stipulations to the extent they would bind it. Id.
at 359. The trial court entered the findings, conclusions, and judgment, but allowed the insurer
to intervene and conduct additional discovery in order to contest the reasonableness of the
covenant judgment settlement. Id. at 359-60. At a subsequent reasonableness hearing, the trial
court found that the insurer was bound by the court’s earlier entry of the findings and
conclusions establishing the insured’s liability and that the only question was whether the dollar
amount of the judgment was reasonable. See id. at 360.
12
No. 47913-3-II (Linked
with No. 47196-5-II)
On appeal, the court in Green held that the trial court abused its discretion because the
insurer “clearly preserved its right to challenge the reasonableness of the settlement . . . without
any binding effect” from the earlier stipulations. Id. at 364, 367. Additionally, the Green court
noted that the trial court failed to address the merits of the releasing party’s liability theories and
the released party’s defenses as required under Chaussee6, resulting in the entry of “conclusory
liability findings.” Id. at 364, 368-69.
Here, the settlement court had denied the Morgans’ summary judgment motion to dismiss
Justus’ wrongful detention action based on the statute of limitations. In addition, at the hearing
on the reasonableness of the settlement, State Farm argued that William’s actions were all
intentional and amounted to a false arrest or false imprisonment, both intentional torts, and as
such, would be time barred. RCW 4.16.100; Heckart, 42 Wn. App. at 38-39. The settlement
court recognized that State Farm had brought a declaratory action in a different court and
decided that it “will not make findings as to whether or not . . . the degree to which Defendant
[William]’s actions on June 9th, 2010[] were intentional versus negligent.” CP at 960. The
settlement court also decided that Justus would not be “time barred for any negligence-based
claim that is later found to have arisen out of the events of June the 9th, 2010.” CP at 966
(emphasis added).
Under these circumstances, we hold that the trial court in the declaratory judgment action
was not collaterally estopped by the settlement court’s rulings. The settlement court specifically
6
Chaussee v. Maryland Cas. Co., 60 Wn. App. 504, 512, 803 P.2d 1339 (1991).
13
No. 47913-3-II (Linked
with No. 47196-5-II)
declined to determine if Justus’ actions were intentional or negligent.7 In essence, it was
deferring that ruling for adjudication in the declaratory judgment action. Unlike Enumclaw,
State Farm is not asking the coverage court to determine once again whether William’s conduct
was negligent or intentional; State Farm is merely asking for that determination to be made for
the first time. More akin to Green, State Farm asked the settlement court to determine whether
William’s actions were intentional or negligent, but the settlement court declined to do so.
For these reasons, the trial court was not collaterally estopped from examining William’s
liability by evaluating whether his actions were intentional or negligent.
3. The Intentional Nature of William’s Actions
We next turn to Justus’ claim that the trial court erred in concluding that William’s
conduct did not support negligent wrongful detention. We assume, without deciding, that it is
possible to establish a wrongful detention claim in our state under a theory of negligence.
However, the unchallenged findings show that William only committed intentional acts in
carrying out his tortious conduct. The tort of wrongful detention based on intentional conduct, to
the extent recognized in Washington, would be subject to a two year statute of limitations. See
RCW 4.16.130. The torts of false arrest and false imprisonment are intentional torts also barred
by the two year statute of limitations. RCW 4.16.100(1); Heckart, 42 Wn. App. at 38-39.
7
Justus also claims that the settlement court determined that the wrongful detention action was
not barred by the statute of limitations based on an earlier ruling concerning State Farm’s motion
to dismiss. However, that ruling does not appear to be in the record. Even if it were, the
settlement court’s later representation that it was not determining which actions were negligent
or intentional superseded the earlier ruling.
14
No. 47913-3-II (Linked
with No. 47196-5-II)
Because Justus sued more than two years after this incident, he has no cognizable claim8 that
could be covered under the Morgans’ umbrella insurance policy.
The Restatement (Second) of Torts section 282 (1965) defines “negligence” as “conduct
which falls below the standard established by law for the protection of others against
unreasonable risk of harm. Section 284 of the Restatement defines “negligent conduct” in part as
“an act which the actor as a reasonable man should recognize as involving an unreasonable risk
of causing an invasion of an interest of another.”
In defining “intent,” section 8A of the Restatement states that
“Intent” . . . has reference to the consequences of an act rather than the act itself.
When an actor fires a gun in the midst of the Mojave Desert, he intends to pull the
trigger; but when the bullet hits a person who is present in the desert without the
actor’s knowledge, he does not intend that result. “Intent” is limited, wherever it is
used, to the consequences of the act.
All consequences which the actor desires to bring about are intended. . . . Intent is
not, however, limited to consequences which are desired. If the actor knows that
the consequences are certain, or substantially certain, to result from his act, and
still goes ahead, he is treated by the law as if he had in fact desired to produce the
result. As the probability that the consequences will follow decreases, and becomes
less than substantial certainty, the actor’s conduct loses the character of intent, and
becomes mere recklessness, as defined in § 500. As the probability decreases
further, and amounts only to a risk that the result will follow, it becomes ordinary
negligence, as defined in § 282 . . .
(Emphasis added.)
Under these definitions, then, we examine whether William’s actions were best
characterized as intentional, meaning he desired to bring about the consequences of his volitional
8
In the proceedings to determine the reasonableness of the settlement, Justus asserted claims
against William for negligently preventing Justus from rendering aid to Tobeck and negligently
using his gun against Justus. However, he does not assert these as separate claims in this appeal.
See Reply Br. of Appellant at 3 (“Justus agrees with State Farm that his main claim at trial was
that his damage settlement was covered . . .under the ‘personal injury’ offense for ‘wrongful
detention of a person.’”). Thus, we do not examine the merits of these separate claims.
15
No. 47913-3-II (Linked
with No. 47196-5-II)
acts because he knew or was substantially certain the result would occur, or whether they were
negligent, meaning his volitional actions merely caused an unreasonable risk of harm to Justus.9
The unchallenged findings of fact established that (1) Donna informed William that she
heard some noises outside; (2) William, a skilled marksman, grabbed his pistol and went outside;
(3) William found Justus and Tobeck with his metal pipes in their pickup truck; (4) William
yelled at Donna to call the police; (5) William confronted Justus and Tobeck and pointed his
pistol directly at Justus, informing Justus that they were stealing his pipes; (6) William became
agitated and upset despite Justus trying to calm William down; (7) Justus and Tobeck took off in
their truck, which resulted in William firing nine shots—the majority of which went through the
cab of the truck; (8) one bullet hit Tobeck in the head; (9) the truck crashed into a tree; (10)
Justus escaped from the truck; and (11) William yelled at Justus to lay down in the street and
spread out his arms.
Justus argues that William’s actions were negligent because he unreasonably assessed the
situation by thinking that he could lawfully exercise force against Justus and detain him.
William’s request that Donna call 911 and his statement that he believed Tobeck and Justus were
stealing his pipes perhaps support a negligence theory. However, William’s act of pointing his
gun at Justus began the transformation of any initial negligent assessment of the situation into
intentional conduct in which he unlawfully tried to restrain Justus. William’s pointing of the gun
at Justus was intentional, not merely because he voluntarily pointed a gun at Justus, but also
9
In his complaint, Justus alleged that the wrongful detention was a result of William’s “reckless
acts.” CP at 678. In his reply brief, Justus acknowledges a recklessness liability theory, but does
not provide any supporting argument on the issue, as required by RAP 10.3(a)(6). Accordingly,
we do not examine any issues related to a recklessness theory.
16
No. 47913-3-II (Linked
with No. 47196-5-II)
because he desired the consequences of pointing the gun at Justus, which was to control and
detain him.
William’s immediate shooting at the truck after it took off and the numerous rounds he
fired at the cab of the truck were unequivocally beyond mere negligence. At a minimum,
William knew or was substantially certain that his conduct would restrain Justus by inflicting
injury, which he in fact was able to accomplish. After William mortally wounded Tobeck,
causing the truck to crash into the tree, he pointed his gun at Justus and detained him on the
ground. The result that William desired to achieve, detainment and restraint of Justus and
Tobeck through intimidation or infliction of injury, was successful. Whether characterized as
wrongful detention, false arrest, or false imprisonment, these are intentional acts subject to a two
year statute of limitations. RCW 4.16.100(1), .130; Heckart, 42 Wn. App. at 38-39.
We do not minimize the barbarous nature of William’s actions, and we have some sense
of the trauma that this incident has brought to Justus’ life. Justus had clear claims against
William for false arrest and false imprisonment, among other theories. However, because
William knew or was substantially certain the result would occur, Restatement (Second) of Torts
section 8A, these were intentional acts to harm and detain Justus. They were not merely conduct
which created an “unreasonable risk of harm.” RESTATEMENT (SECOND) OF TORTS § 282.
Therefore, because Justus sued over two years after the incident, those causes of actions are
barred by the statute of limitations. RCW 4.16.100(1), .130; Heckart, 42 Wn. App. at 38-39.
For these reasons, the trial court’s unchallenged findings of fact support its conclusion
that Justus failed to establish liability grounded in negligence for William’s actions.
17
No. 47913-3-II (Linked
with No. 47196-5-II)
II. MOTION TO COMPEL AND JUSTUS’ EXTRA CONTRACTUAL CLAIMS
Justus argues that the trial court erred by denying him access to the Morgans’ insurance
claim file in State Farm’s possession. Because that discovery was denied, Justus further
contends the trial court’s ruling dismissing his extra contractual claims on summary judgment
was erroneous. We agree.
“We review a trial court’s discovery orders for abuse of discretion.” Cedell v. Farmers
Ins. Co. of Wash., 176 Wn.2d 686, 694, 295 P.3d 239 (2013). “We will reverse a trial court’s
discovery rulings ‘only on a clear showing that the court’s exercise of discretion was manifestly
unreasonable, or exercised on untenable grounds, or for untenable reasons.’” Id. (quoting T.S. v.
Boy Scouts of Am., 157 Wn.2d 416, 423, 138 P.3d 1053 (2006)). “A trial court’s authority to
entertain a motion, as opposed to its authority to decide that motion, is a question of law that we
review de novo.” Rudolph v. Empirical Research Sys., Inc., 107 Wn. App. 861, 866, 28 P.3d 813
(2001).
Washington courts have established that even if insurance coverage is denied, bad faith
and CPA claims can still be viable against the insured.10 Coventry Assocs. v. Am. States Ins. Co.,
136 Wn.2d 269, 279, 961 P.2d 933 (1998). This principle extends to not only first party
insureds, but to those third parties who are assigned the first party insured’s claims and sue on
behalf of them. See Safeco Ins. Co. of Am. v. Butler, 118 Wn.2d 383, 399-400, 823 P.2d 499
(1992); see Kagele v. Aetna Life & Cas. Co., 40 Wn. App. 194, 197-98, 698 P.2d 90 (1985)
(collecting cases).
10
We do not address whether an IFCA claim can be pursued even after coverage is denied,
because State Farm does not argue on appeal that it cannot.
18
No. 47913-3-II (Linked
with No. 47196-5-II)
In Cedell, 176 Wn.2d at 696, the Supreme Court determined that the insured needs access
to the insurance claim file in order to discover facts to support a bad faith claim. In balancing the
purposes of discovery with the purpose of the attorney-client privilege, the Cedell court laid out
the following rules governing a discovery request for an insurance claim file in the context of a
first party bad faith claim against an insurer:
We start from the presumption that there is no attorney-client privilege relevant
between the insured and the insurer in the claims adjusting process, and that the
attorney-client and work product privileges are generally not relevant. However,
the insurer may overcome the presumption of discoverability by showing its
attorney was not engaged in the quasi-fiduciary tasks of investigating and
evaluating or processing the claim, but instead in providing the insurer with counsel
as to its own potential liability; for example, whether or not coverage exists under
the law. Upon such a showing, the insurance company is entitled to an in camera
review of the claims file and to the redaction of communications from counsel that
reflected the mental impressions of the attorney to the insurance company, unless
those mental impressions are directly at issue in its quasi-fiduciary responsibilities
to its insured. If the trial judge finds the attorney-client privilege applies, then the
court should next address any claims the insured may have to pierce the attorney-
client privilege.
Id. at 698-99 (citations omitted) (footnotes omitted).11
Justus moved to compel production of the claim file under Cedell. The situation at hand
differs from Cedell in that State Farm is not arguing that its own attorney-client privilege is
preventing Justus from receiving the claim file, but rather is asserting the Morgans’ privilege.
On this basis, the trial court determined that it could not consider Justus’ motion to compel
because the Morgans were not before it.
11
Cedell relied on the prior holdings of Barry v. USAA, 98 Wn. App. 199, 989 P.2d 1172 (1999),
which discussed the propriety of compelling a claim file for not only an insured’s bad faith
claim, but also CPA claims as well. Although no Washington case appears to have examined the
propriety of compelling a claim file for an IFCA cause of action, we do not need to address that
issue given our decision of these issues.
19
No. 47913-3-II (Linked
with No. 47196-5-II)
Given the circumstances presented to the trial court, we hold that it had authority to
compel production of the claim file, subject to the formula outlined in Cedell. The covenant
judgment settlement between Justus and the Morgans was admitted into the trial court’s record.
That settlement states, in pertinent part, that the Morgans “represent that they have done nothing
and will in the future do nothing to impair or otherwise adversely affect the Assigned Claims,”
and “[t]he Parties to this Agreement agree to provide reasonable cooperation in all matters for all
talks and endeavors necessary to carry out or realize the terms of this Agreement.” CP at 855-
56. At oral argument, State Farm conceded that the Morgans were never dismissed from this
action. See State Farm v. Justus, Oral Argument Recording (December 6, 2016) at 32:34. The
Morgans’ attorney participated in State Farm’s response to Justus’ discovery motion in a
declaration and at the hearing before the trial court.
State Farm refused to disclose the claim file because the Morgans refused to waive any
privilege they may have in it. The trial court responded by implying that Justus needed to file a
separate action against the Morgans in order to compel production of the claim file. In these
circumstances, denying Justus, who stands in the shoes of the Morgans, the rights to the claim
file he would have under Cedell is contrary to the central purposes of discovery highlighted in
Cedell. Those purposes include the production of all relevant facts and the promotion of the
efficient and early resolution of claims. Cedell, 176 Wn.2d at 698. Preventing Justus from
obtaining the claim file to determine the merits of his extra contractual claims plainly
contravenes these purposes.
20
No. 47913-3-II (Linked
with No. 47196-5-II)
For these reasons, we extend Cedell to requests for production of a claim file by a third
party who has been assigned a first party insured’s claims. Cf. Safeco, 118 Wn.2d at 399-400
(extending the same principles applicable to first party bad faith claim to a bad faith claim
assigned to a third party). Accordingly, we find the trial court abused its discretion and reverse
the denial of Justus’ motion to compel.
Turning to the consequences of this error, we note that in Demelash v. Ross Stores, Inc.,
105 Wn. App. 508, 514, 20 P.3d 447 (2001), the court reversed the discovery orders and
summary judgment on Demelash’s CPA and title 49.60 RCW claims because the trial court erred
in refusing to allow discovery of evidence about Ross Stores’ conduct in other shoplifting
incidents. Similarly, in the present appeal the claim file may contain information pertinent to
Justus’ extra contractual claims. Accordingly, we reverse the grant of summary judgment on the
extra contractual claims.12 Consistently with Cedell, we remand for the trial court (1) to hold an
in camera hearing to determine whether the claim file contains any material protected under the
Morgans’ attorney-client privilege, (2) to redact any privileged material and disclose the claim
file to Justus, and (3) to determine State Farm’s summary judgment motion on the extra
contractual claims after the disclosure.13
12
We note that Perez-Crisantos v. State Farm Fire & Cas. Co., 187 Wn.2d 669, 684, 389 P.3d
476 (2017) recently held that the IFCA does not create an independent cause of action for
regulatory violations. On remand, the trial court should consider the effect of Perez-Crisantos
on Justus’ IFCA claims. We note, however, that Perez-Crisantos continues to recognize that
insurers may be sued under insurance regulations through a CPA or bad faith action. Id. at 676.
13
State Farm also separately argues that Justus “dropped the ball” by not requesting the
discovery sooner. Br. of Respondent at 44. Specifically, State Farm contends that Justus took
assignment of extra contractual claims in May 2014, did not request the claim file during the
November 11, 2014 discovery conference, and filed his motion to compel on June 1, 2015, in
essence waiting about a year and a half before making his motion to compel. Id.
21
No. 47913-3-II (Linked
with No. 47196-5-II)
III. ATTORNEY FEES
Justus argues that he is entitled to an award of attorney fees and costs, but does not cite to
any law providing for an award. A party is required to cite authority to advise us of the
appropriate grounds for an award of attorney fees. See Just Dirt, Inc. v. Knight Excavating, Inc.,
138 Wn. App. 409, 420, 157 P.3d 431 (2007) (citing RAP 18.1). Without being directed to legal
authority, we decline to award attorney fees.
CONCLUSION
We agree with the trial court’s conclusion that William’s actions did not constitute
negligence, and we affirm its ruling that the Morgans’ umbrella liability policy did not cover
those intentional acts because the statute of limitations had run. We reverse the trial court’s
rulings denying Justus’ motion to compel production of the Morgans’ claim file and granting
summary judgment in favor of State Farm on the extra contractual claims. We remand for the
trial court (1) to hold an in camera hearing to determine whether the claim file contains any
material protected under the Morgans’ attorney-client privilege, (2) to redact any privileged
We disagree with State Farm's characterization of Justus' actions. Before the bifurcation
of the trial into coverage and extra contractual claims, State Farm moved on November 20, 2014
for summary judgment dismissing the extra contractual claims. In his response, Justus
specifically argued that summary judgment was not appropriate because it was “pre[]mature as
discovery has not been completed.” CP at 1310. This response was filed on January 5, 2015.
Not long after, on March 13, 2015, the court ordered bifurcation of the cases and stayed all
discovery and motions related to the extra contractual portion of the case. The stay on these
proceedings was not lifted until May 20, 2015. Justus then filed his motion to compel on June 1,
2015, just over a week later.
Thus, State Farm’s assertion that Justus “dropped the ball” is incorrect. He attempted to
compel production of the claim file before the extra contractual claims portion of the case was
stayed. After the stay was lifted, he promptly moved to compel production again. Accordingly,
this argument is without merit.
22
No. 47913-3-II (Linked
with No. 47196-5-II)
material and disclose the claim file to Justus, and (3) to determine State Farm’s summary
judgment motion on the extra contractual claims after the disclosure.
BJORGEN, C.J.
We concur:
JOHANSON, J.
MELNICK, J.
23