The Washington Supreme Court, in Pacific Lutheran Univ., et. al., v. Certain Underwriters at Lloyd’s London, 2024 Wash. LEXIS 55*, Case No. 100752-3 (2024), reviewed the trial court’s rulings for abuse of discretion in (1) denying the Insurers’ motion to dismiss the Colleges’ action, based on forum non conveniens; and (2) granting the Colleges’ motion to enjoin the Insurers from taking further action in a parallel case subsequently initiated by the Insurers in Illinois State Court, based on equitable factors. On January 18, 2024, the Supreme Court affirmed those rulings.
This action arises from an insurance coverage dispute based on losses allegedly caused by the COVID-19 pandemic. The Insurers issued “all risk” insurance policies to the Colleges through the EIIA, a nonprofit organization that provides risk management and insurance services to member institutions. The Colleges brought this action against the Insurers in their selected forum, the Pierce County Superior Court, consistent with the policies’ “suit against the company” clause (the “Washington Action”). Several months later, two of the defendant Insurers to the Washington Action commenced a parallel action against the EIIA in Illinois State Court, and subsequently joined the Colleges as defendants (the “Illinois Action”).
The Colleges moved to enjoin the Insurers from taking further action in the Illinois Action, and the Insurers moved to dismiss the Washington Action on the basis of forum non conveniens. The trial court ruled in favor of the Colleges, and the Insurers sought review by the Washington Supreme Court.
The Supreme Court held that the trial court did not abuse its discretion in electing to enforce the policies’ forum selection clause, by denying the Insurers’ motion to dismiss based on forum non conveniens. The Court explained that the common law doctrine of forum non conveniens refers to “the discretionary power of a court to decline jurisdiction when the convenience of the parties and the ends of justice would be better served if the action were brought and tried in another forum” and “unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.” Here, the Colleges had the contractual right under the policies to select their desired forum, all sixty plaintiff Colleges elected for the dispute to be heard in Pierce County Superior Court, and the Insurers failed to establish that the relevant private- and public-interest factors justified denying the Colleges’ contractual right. Accordingly, the Supreme Court held that the trial court properly enforced the policies’ forum selection clause and affirmed the trial court’s ruling.
The Supreme Court further held that the trial court properly issued the injunction enjoining the Insurers from taking further action in the Illinois Action, by granting the Colleges’ motion based on equitable factors. The Court explained that an injunction is an equitable remedy, and that a Washington Court may enjoin parties before it from pursuing an out-of-state action where equity clearly demands. Here, the important factors relied on by the trial court were the timing in which the actions were filed, the parallelism of the actions, and the presence of a forum selection clause that established the Colleges’ contractual right to select forum. Accordingly, the Supreme Court held that the trial court properly enjoined the Insurers to protect those interests and affirmed the trial court’s ruling.
The trial court’s rulings on the motions were affirmed.
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