United States District Court for the Western District Washington Imputes Material Misrepresentations of “Public Adjuster” to Insured, Declares Policy Void

by Jennifer Dinning | Sep 24, 2018 | Blog News, Publications

In Reverse Now VII, LLC v. Oregon Mutual Insurance Company, Case No. C16-209-MJP, 2018 WL 4510071 (W.D Wash. Sep. 18, 2018), the federal district court found that the insurance policy at issue was void as a matter of law due to material misrepresentation and concealment by the insured and its purported public adjuster.

The insurance claim underlying this litigation arose from a fire in an apartment unit in the building owned by the insured. The fire damaged the unit’s interior and approximately 2% of the building’s exterior cladding. The parties engaged in appraisal pursuant to the policy terms to determine the extent of the loss to the building’s exterior. The insured filed suit against Oregon Mutual before the appraisal was complete.

Through the course of litigation, Oregon Mutual learned that the insured’s purported public adjuster had applied for a public adjuster’s license, but failed to complete his application. Nonetheless, he held himself out as a public adjuster and performed the responsibilities of a public adjuster on behalf of the insured for more than two and a half years in violation of RCW 48.17.060.

Oregon Mutual also learned that the appraiser named by the insured was not impartial, but instead that the appraiser had been best friends with the purported public adjuster for decades and that the two were former business partners who had often worked on claims together.

On Oregon Mutual’s motion for summary judgment, the Court found that these misrepresentations were material as a matter of law. The Court rejected the insured’s argument that public adjuster licensing was an administrative issue that was irrelevant to the investigation of the insurance claim. The Court also found that the failure to disclose the long-term relationship between the purported public adjuster and the appraiser was material as a matter of law. The Court rejected the insureds’ argument that misrepresentations made by its agents could not be imputed to it.

On the basis of the insured’s material misrepresentations, the Court found the policy was void, and dismissed all claims, both contractual and extra contractual, against Oregon Mutual. Soha & Lang, P.S., represented Oregon Mutual in this matter.

Sufficient Evidence Existed of Requisite Antecedent Agreement for Purpose of Insured’s Reformation Claim

by Jillian Henderson | Sep 19, 2018 | Blog News, Publications

In Emrys v. Farmers Ins. Co., 294 Or App 107, __ P3d ___ (Sept. 12, 2018), the insured owned two adjacent properties, with addresses at 106 Cofey Crossing Lane (“106 Property”) and 108 Cofey Crossing Lane (“108 Property”), insured under two separate policies.  The insured let the policy for the 106 Property lapse.  After the insured’s death, the estate’s personal representative learned of the properties and informed the insurer she wanted to continue the existing policy.  After a fire loss at the 106 Property, the insurer denied the claim because it had only issued coverage for the 108 Property.  The personal representative filed a lawsuit seeking to reform the policy to include the 106 Property.  On remand from a prior appeal,[1] the trial court concluded that the reformation claim failed because there was no showing of the requisite antecedent agreement.  The Court of Appeals reversed.  The appellate court exercised its power to review the case de novo because, among other things, the matter was on appeal for the second time on virtually the same issue. The Court of Appeals found that, on the undisputed facts, the parties had reached an antecedent agreement to insure the 106 Property and, therefore, reform was warranted.

Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.