259 P.3d 1154
Wash. Ct. App.2011Background
- Harbour Commons is a seven‑unit commercial building; Elkins owned unit F and operated Lease Police, Inc. there until Nov. 2007, when Kalles bought the business and leased unit F from the Elkins.
- CAU, as insurer, secured a fire insurance policy through Harbour Commons, naming Harbour Commons as insured and the Board as trustee for owners and mortgagees.
- In Jan. 2009 a fire damaged unit F; cause not determined but space heater suspected.
- CAU paid Harbour Commons’ insured loss and sued the Kalles (as subrogee) for the amount paid.
- The Kalles moved for summary judgment arguing they were the Elkins’ coinsured under CAU’s policy and that insurers cannot sue insureds; the trial court granted summary judgment and later awarded attorney fees to the Kalles.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAU may subrogate against the Kalles | CAU argues the Kalles are not coinsured and subrogation is permitted | Kalles contend they are the Elkins’ coinsured and CAU cannot sue its insured | CAU may pursue subrogation; Kalles are coinsured |
| Whether the Kalles may recover attorney fees under Olympic Steamship | CAU argues Olympic Steamship does not apply | Kalles rely on Olympic Steamship to recover fees | Olympic Steamship applies; fees affirmed on appeal |
Key Cases Cited
- Cascade Trailer Court v. Beeson, 50 Wash.App. 678 (Wash. App. 1988) (presumes tenant is coinsured absent express contrary agreement)
- Sutton v. Jondahl, 532 P.2d 478 (Okla.Civ.App. 1975) (recognizes Sutton rule of coinsured status absent contrary agreement)
- Olympic Steamship Co. v. Centennial Ins. Co., 117 Wash.2d 37 (Wash. 1991) (insurer- insured equitable fees when coverage disputes compel litigation)
- Leingang v. Pierce County Medical Bureau, Inc., 131 Wash.2d 133 (Wash. 1997) (coverage disputes justify attorney-fee awards under Olympic Steamship)
- McGreevy v. Oregon Mutual Insurance Co., 128 Wash.2d 26 (Wash. 1995) (reinforces Olympic Steamship rationale for insurer–insured fee shifts)
- Mahler v. Szucs, 135 Wash.2d 398 (Wash. 1998) (describes subrogation principles and equitable allocation of loss)