Robbins v. Mason County Title Ins. Co., 462 P.3d 430

Background

In 1978 Leslie and Harlene Robbins bought tidelands with manila clam beds and obtained a standard title insurance policy from Mason County Title Insurance Company (MCTI).
The policy promised to defend the insured against “demands and legal proceedings” based on title defects or encumbrances, but excepted “public or private easements not disclosed by the public records.”
In 2015 the Squaxin Island Tribe sent Robbins a letter announcing its plan to harvest shellfish from Robbins’ tidelands under the 1854 Treaty of Medicine Creek and the Tribe’s Shellfish Implementation Plan.
Robbins tendered the claim and demanded a defense; MCTI refused, treating the Tribe’s asserted treaty right as an easement not shown in the public record and therefore excluded.
Robbins sued for breach of the duty to defend; the superior court granted MCTI summary judgment, but the Court of Appeals reversed and found MCTI acted in bad faith by refusing to defend.
The Washington Supreme Court affirmed the Court of Appeals: the Tribe’s letter was a “demand,” the policy conceivably covered the claim, the easement exception did not clearly apply given uncertainty whether treaty harvesting rights are easements or profits, and MCTI acted in bad faith; the case is remanded to consider MCTI’s affirmative defenses.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Duty to defend: whether the Tribe’s letter triggered MCTI’s duty to defend	Robbins: the Tribe’s letter was a “demand” under the policy and thus triggered the insurer’s duty to defend	MCTI: no suit was filed; the duty arises only when legal proceedings commence, so no defense duty was triggered	Held: the policy covered “demands”; the Tribe’s letter was a demand and triggered the duty to defend because the policy expressly covers demands as well as legal proceedings
Applicability of easement exclusion: whether the Tribe’s treaty right is an easement excluded from coverage	Robbins: the treaty right is a profit à prendre (right to remove shellfish), not necessarily an easement, creating ambiguity favoring coverage	MCTI: the treaty right is (or at least operates as) an easement; the policy excludes easements not disclosed in public records	Held: Washington law is uncertain whether profits are easements; that uncertainty must be resolved for the insured, so the easement exception does not clearly apply and does not defeat the duty to defend
Bad-faith refusal to defend	Robbins: MCTI unreasonably refused to defend and thus acted in bad faith	MCTI: its denial was legally defensible	Held: as a matter of law MCTI’s refusal was unreasonable (it did not defend under reservation of rights despite legal uncertainty) and thus constituted bad faith; estoppel presumes harm
Summary-judgment procedure for affirmative defenses and attorney fees	Robbins: court should decide defenses and award fees for unreasonable denial	MCTI: affirmative defenses remain and require factual development; plaintiff didn’t move on them	Held: because Robbins did not specifically seek summary judgment on MCTI’s affirmative defenses, the superior court must consider them on remand; attorney fees are premature until defenses are resolved

Key Cases Cited

Am. Best Food, Inc. v. Alea London, Ltd., 168 Wn.2d 398 (Wash. 2010) (ambiguity in law favors insured; insurer acted in bad faith when it refused to defend without reservation)
Woo v. Fireman’s Fund Ins. Co., 161 Wn.2d 43 (Wash. 2007) (duty-to-defend standard: triggered when policy conceivably covers allegations)
Truck Ins. Exch. v. VanPort Homes, Inc., 147 Wn.2d 751 (Wash. 2002) (insurer must defend unless claim is clearly not covered; exceptions permitting consideration of extrinsic facts)
United States v. Washington, 135 F.3d 618 (9th Cir. 1998) (federal case holding tribal fishing rights include shellfish harvesting within usual and accustomed places)
Affil. FM Ins. Co. v. LTK Consulting Servs., Inc., 170 Wn.2d 442 (Wash. 2010) (discusses distinction between easements and profits)
Kirk v. Mt. Airy Ins. Co., 134 Wn.2d 558 (Wash. 1998) (insurer estopped from denying coverage after bad-faith refusal to defend)
New York ex rel. Kennedy v. Becker, 241 U.S. 556 (U.S. 1916) (historical authority treating hunting and fishing rights as an easement or profit)