On June 6, 2018, the Washington Supreme Court declined to review lower court rulings entered in the matter of National Surety Corporation v. Immunex, a high-profile liability insurance matter handled by McNaul attorneys Robert Sulkin and Timothy Fitzgerald. The Washington Supreme Court’s ruling brings this long-running matter to an end.
The Washington Supreme Court previously considered the Immunex case in 2013. Even though the policies issued by National Surety did not impose a duty to defend, the Court ruled that National Surety could still be obligated to pay Immunex’s $15.4 million legal bill because it issued a reservation of rights. The Court ruled, however, that National Surety’s payment obligation would be reduced or entirely eliminated to the extent Immunex’s late notice and tender resulted in actual and substantial prejudice. The Court remanded the case for trial regarding that issue.
On remand, Immunex asserted counter-claims for breach of contract and bad faith, seeking to recover over $100 million on the basis of those claims. National Surety moved for summary judgment on those claims, arguing that the payment obligations it undertook through the reservation of rights afforded it with insulation from such extracontractual liability. The trial court agreed, dismissing Immunex’s counterclaims with prejudice. At trial, McNaul then successfully demonstrated that Immunex’s late notice and tender resulted in extraordinary prejudice to National Surety, which in turn caused the jury to reduce National Surety’s payment obligation under the reservation of rights by 95% -- from $15.4 million down to $640,000.
Immunex appealed the trial court’s dismissal of its extracontractual claims, but the Court of Appeals affirmed (https://www.courts.wa.gov/opinions/pdf/756745.pdf). Then, with the support of The Association of General Contractors of Washington, The Building Industry Association of Washington, Georgia-Pacific LLC, The National Utility Contractors Association, and Gonzaga University School of Law, all acting as amici, Immunex petitioned the Washington Supreme Court to review the case a second time. In denying that petition, the Washington Supreme Court brought the Immunex matter to an end.
McNaul’s team was led by partners Robert Sulkin and Timothy Fitzgerald, along with support by associate attorney Claire Martirosian. Bob, Tim, and Claire are part of McNaul Ebel’s Litigation and Trial Practice Group.