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Case 2:12-cv-00934 Document 1

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UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON AT SEATTLE PREMIER COMMUNITIES, INC., a Washington corporation, Plaintiff,

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No. COMPLAINT FOR DECLARATORY RELIEF AND DAMAGES And Request for Speedy Hearing Pursuant to FRCP 57

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v.
ACE AMERICAN INSURANCE COMPANY, a Pennsylvania corporation, Defendant.

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I.
1.

INTRODUCTION

Plaintiff Premier Communities, Inc. ("Premier") brings this action to obtain a

declaration of its rights and duties with respect to an insurance policy issued by Defendant Ace American Insurance Company ("Ace"). Premier claims insurance rights and benefits as an

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additional insured under the Ace policy.

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II.

PARTIES

2.

Premier Communities, Inc. is a Washington corporation and residential general

contractor with its principal place of business in Washington State.

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3.

Ace American Insurance Company is a Pennsylvania corporation and general

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liability insurance company with its principal place of business in Pennsylvania. Ace transacts business in Washington State and contracts to insure risks in Washington State.

III. 4.

JURISDICTION AND VENUE

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This Court has subject matter jurisdiction pursuant to 28 USC 1332(a) because
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this action is between citizens of different states and the amount in controversy exceeds $75,000 exclusive of interest and costs. 5. This Court has personal jurisdiction over all parties. Venue is proper in this Court pursuant to 28 USC 1391(a)(2). IV. 7.

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6.

FACTS
Premier entered into a Trade

12 Agreement Between Premier and BMHC. 13 14 15 16 17 18 19 20 8. 21 Agreement Between Premier and BMC West. Premier entered into a Trade Contractor Agreement with Building Materials Holding Corporation ("BMHC") on or around September 29,2005. The Agreement covered all Premier projects in Washington State. Among other things, the Agreement required BMHC to maintain liability insurance and to name Premier as a primary additional insured. BMHC provided Premier with a certificate of insurance identifying Premier as an additional insured under Ace general liability policy no. XSLG2373560A, effective November 11, 2007 to November 11,2008 ("the Policy").

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Contractor Agreement with BMC West Corporation ("BMC West") on or around March 1,2007. The Agreement covered all Premier projects in Washington State. Among other things, the Agreement required BMC West to maintain liability insurance and to name Premier as a primary additional insured. BMC West provided Premier with a certificate of insurance identifying Premier as an additional insured under the Policy.

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9.

The Ace Policy.. Ace issued policy no. XSLG 2373560A to BMHC and BMC

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West, effective November 11,2007, to November 11, 2008. A copy ofthe Policy is attached to this pleading as Exhibit A and the terms are incorporated herein. 10. Project. Premier was the general contractor for the construction of a housing

development in Pierce County, Washington. BMHC and BMC West served as subcontractors on

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7 that project under their respective Trade Contractor Agreements with Premier. One of the houses in that housing development was at 6501 Elaine Avenue Southeast; North Tapps Estates, Pierce County, Washington. 11. Suit. On or about December 2, 2010, Francisco Zuniga filed a lawsuit in Pierce

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County Superior Court under cause no. 10-2-15563-1 against Premier, BMHC and BMC West

("Zuniga suit"). A copy of the complaint in the Zuniga suit is attached hereto as Exhibit B. The

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Zuniga suit is going to trial on June 18, 2012, and it is for this reason that Premier requests a
speedy hearing of this Declaratory Judgment Action. In his complaint, Zuniga alleged that, while employed by BMHC or BMC West, he was injured when he fell at the Project on January 30, 2008. Zuniga claimed Premier is liable for damages because it acted with negligence and failed to enforce safety regulations at the Worksite. He also claimed that BMHC and BMC West are liable for damages because they

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for his injuries. Zuniga later agreed to dismiss BMHC and BMC West from the Zuniga suit without prejudice based onBMHC and BMC West's bankruptcy. 12. Tender. On March 3, 2011, Premier tendered defense and indemnity of the

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Zuniga suit to Ace under the Policy. It also requested a copy of the Policy and all other
documents regarding coverage available to Premier.

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13.

Ace's Response to Premier's Tender.

On June 14, 2011, Ace responded to

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Premier's tender, refusing to defend or indemnify Premier in the Zuniga suit and refusing to produce the Policy. After several more letters back and forth between Premier and Ace, Ace produced a copy of the Policy in early October 2011. 14. Ace's Reservation of Rights. On October 31, 2011, Ace accepted Premier's

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tender subject to a full and complete reservation of rights. Since then, Ace has not participated in any way in the defense or attempted settlement of the Zuniga suit, including failing to attend or participate in a mediation held April 2, 2012. 15. Ace's Coverage. The Ace policy is a "fronting policy," which means typically

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the named insured is self-insured for the whole amount of the policy. But Ace named insureds BMHC and BMC West entered into a Chapter 11 bankruptcy reorganization plan approved

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a.

Endorsement no. 8 of the Policy provides that Premier is an additional insured

with respect to liability for bodily injury caused in whole or in part by BMHC or BMC West's acts or omissions, and Zuniga claimed BMCH and BMC West were partially at fault for his injuries, triggering coverage for Premier under this endorsement;

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b.

Endorsement no. 61 of the Policy provides that if the named insured is unable to

pay the Deductible amount ($1,900,000) or any portion thereof, Ace has an obligation to pay 21

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damages to satisfy a judgment or pay a settlement that includes the Deductible amount or any portion of it. Because BMHC and BMC West are unable to pay the claim that became the

Zuniga suit when that claim was discharged in bankruptcy, it is Ace's obligation to pay damages
for its named insureds in the Zuniga suit.

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c.

The Policy includes a provision under section IV, Conditions which states,

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"Bankruptcy or insolvency of the insured ... will not relieve us of our obligations under this policy." Ace remains liable to pay on behalf of BMHC and BMC West notwithstanding their bankruptcy; and

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d.

As required in Premier's Trade Contractor Agreements with BMHC and BMC

West, the Policy is to provide primary coverage to Premier.

v.
A.

CLAIMS FOR RELIEF

Declaratory Judgment - Duty to Defend and/or Indemnify. A present and actual

controversy exists regarding Ace's obligations to Premier under the Policy. In accordance with 28 U.S.C. 2201, Premier is entitled to a declaratory judgment that Ace owes a duty to defend and/or indemnify Premier as an additional insured under the Policy for liability for Zuniga's

12 13 14 15 16 17 18 19 20 a result of any judgment in the Zuniga suit, arising out of BMHC or BMC West's acts or 21 bodily injury arising out ofBMHC and BMC West's acts or omissions. B. Declaratory Judgment - Payment of Defense Fees and Judgment Award. Ace's

withholding of defense and indemnity of Premier in the Zuniga suit, even after accepting tender, has caused Premier to incur defense costs in excess of $75,000. Pursuant to Ace's obligations under the Policy, Premier is entitled to recoup from Ace all amounts it (a) has expended and will expend in defense costs inthe Zuniga suit, and (b) may pay in settlement or be ordered to pay as

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omissions.

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VI.

PRAYER FOR RELIEF

Therefore, Premier requests that the Court:

1.

Determine the rights of the parties under the Policy by way of a declaratory

judgment that Ace has a duty to defend and/or indemnify Premier against the Zuniga suit for liability for bodily injury arising out of BMHC or BMC West's acts or omissions;

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2.

Award damages, including all defense expenses and judgment, settlement or other

indemnity amounts paid by or on behalf of Premier in the Zuniga suit for liability for bodily injury arising out ofBMHC or BMC West's acts or omissions;

3.

Order a speedy hearing of this matter pursuant to FRCP 57 because the Zuniga

suit is going to trial on June 18, 2012; 4. Award Premier its Olympic Steamship fees for having to sue Ace for coverage; Award Premier its taxable costs and disbursements; and Grant such further relief as is just and appropriate.

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5. 6.

DATED this 31st day of May, 2012.

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S .e Andersen, WSBA No. 22250 Gordon & Polscer, L.L.C. 1000 Second Avenue, Suite 1500 Seattle, WA 98101 Telephone: (206) 223-4226 Fax: (206) 223-5459 Email: sandersen@gordon-polscer.com Attorneys for Plaintiff

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