{"id":892624,"date":"2017-07-26T14:23:30","date_gmt":"2017-07-26T20:23:30","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=892624"},"modified":"2017-07-26T14:23:30","modified_gmt":"2017-07-26T20:23:30","slug":"washington-federal-court-rejects-policyholders-separate-claim-argument","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/washington-federal-court-rejects-policyholders-separate-claim-argument\/","title":{"rendered":"Washington Federal Court Rejects Policyholder\u2019s \u201cSeparate Claim\u201d Argument"},"content":{"rendered":"<p>Jason Morris | <a href=\"http:\/\/propertycasualtyfocus.com\/washington-federal-court-rejects-policyholders-separate-claim-argument\/?ct=t(PCF_WEEKLY_UPDATE_RSS)\" target=\"_blank\">PropertyCasualtyFocus<\/a> | July 14, 2017<\/p>\n<p>In April, a federal district court in the Western District of Washington issued a decision in\u00a0<em>National Union Fire Insurance Co. v. Zillow, Inc<\/em><a title=\"National Union Fire Insurance Co. v. Zillow, Inc.\" href=\"http:\/\/propertycasualtyfocus.com\/wp-content\/uploads\/2017\/07\/National-Union-Fire-Ins-Co-v-Zillow-Opinion.pdf\" target=\"_blank\" rel=\"noopener\"><em>.<\/em><\/a>While at first blush, it may seem only of interest to those who work with media policies, this decision has potential broader application. In short, the decision rejects the argument that a demand letter and subsequent litigation based on the facts asserted in the demand letter are separate claims and thus should be treated as such for claim evaluation purposes. While policyholders have successfully convinced courts in other jurisdictions to accept the opposite position, the decision in\u00a0<em>Zillow<\/em>\u00a0provides a helpful counterweight.<\/p>\n<p><strong>How much is my suit worth? Zestimate: $8 Million<\/strong><\/p>\n<p>In July 2014, VHT, Inc., a property photography company that may or may not have been founded by avid viewers of the cable classic TV-series\u00a0<em>Behind the Music<\/em>, sent Zillow a demand letter, asserting that \u201cZillow was misusing VHT\u2019s images and demanding that Zillow,\u201d in the words of the opinion, \u201cimmediately take those images down.\u201d<\/p>\n<p>According to National Union, Zillow did not remove the images, and about a year later, VHT filed suit against Zillow for infringement. Using, among other things, the demand letter itself, VHT obtained an $8 million jury verdict against Zillow.<\/p>\n<p><strong>After 13-Month Delay in Providing Copy of Demand Letter, National Union Files Suit<\/strong><\/p>\n<p>Zillow notified National Union of the suit shortly after its filing in July 2015. A month later, Zillow provided National Union a copy of VHT\u2019s demand letter, the one VHT sent to Zillow 13 months earlier. In September, National Union informed Zillow that National Union believed there was no coverage, as the claim was first made when the demand letter was sent in July 2014, prior to the policy period, and Zillow had failed to timely report the claim. National Union filed suit a year later in September 2016.<\/p>\n<p><strong>Court Finds \u201cSeparate Claim\u201d Argument Ignores \u201cBasic Grammatical Considerations\u201d<\/strong><\/p>\n<p>In defense, Zillow contended \u201cthat the 2014 demand letter was a separate \u2018Claim\u2019 from the VHT litigation and therefore Zillow\u2019s failure to report the 2014 letter should not affect National Union\u2019s obligation to cover the timely-reported VHT litigation,\u201d arguing: (1) the policy\u2019s use of the word \u201cor\u201d in the definition of \u201cClaim\u201d makes the claims different, (2) there are differences in the demand letter and litigation, and (3) National Union could have used other language.<\/p>\n<p>The court rejected the \u201cor\u201d argument, finding:<\/p>\n<blockquote><p>Zillow gives too much weight to the term \u201cor,\u201d the use of which is required by basic grammatical considerations. If National Union had used the term \u201cand\u201d in place of \u201cor,\u201d the clause would require National Union to cover only those claims where there had been a demand letter\u00a0<em>and<\/em>\u00a0a lawsuit. Further, the definition of \u201cClaim\u201d is necessarily broken into two clauses. . . .The first clause is modified by the term \u201cwritten demands,\u201d followed by the categories of demands that qualify as a Claim under the Policy. . . . The second clause includes only the term \u201cSuit,\u201d which is not modified by \u201cwritten demands,\u201d and therefore must be separated from the first clause.<\/p><\/blockquote>\n<p>In doing so, the court dismissed a contrary result in the Northern District of Georgia decision\u00a0<em>Cox Communications, Inc. v. National Union Fire Insurance Co.<\/em>, reasoning that \u201cthe court\u2019s analysis in\u00a0<em>Cox<\/em>\u00a0did not address this argument\u201d and that \u201c[c]ourts that have addressed Zillow\u2019s argument regarding the disjunctive use of the term \u2018or\u2019 have rejected it.\u201d<\/p>\n<p>Next, the court disagreed with Zillow\u2019s argument \u201cthat the demand letter is not related\u00a0<em>enough<\/em>\u201d to the litigation, finding that the \u201cVHT complaint alleges identical facts,\u201d which was more than sufficient to satisfy the \u201crelevant question [of] whether the two Claims involve the same relevant acts.\u201d<\/p>\n<p>The court essentially sidestepped Zillow\u2019s argument that the policy lacked \u201ccommonly used language that would have defined the 2014 letter as part of the same Claim as the litigation\u201d by finding that Zillow \u201cignore[d] Policy language that highlights the importance of the Policy\u2019s \u2018Claims first made\u2019 provision.\u2019\u201d But the court found that, among other things, Zillow ignored the policy\u2019s language providing National Union the \u201crights to direct the court of any Claim,\u201d \u201cdirect the potential litigation in this case,\u201d \u201cthe opportunity to settle a claim, with the insured\u2019s consent, and the right to investigate any Claim.\u201d<\/p>\n<p><strong>Is the Ninth Circuit on Board?<\/strong><\/p>\n<p>Attention now turns to the Ninth Circuit Court of Appeals, as Zillow appealed the decision. Should the Ninth Circuit affirm, insurers will have at their disposal an opinion providing a strong affirmation of the insurer\u2019s contractual rights in the face of an insured\u2019s multimillion dollar jury verdict.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jason Morris | PropertyCasualtyFocus | July 14, 2017 In April, a federal district court in the Western District of Washington issued a decision in\u00a0National Union Fire Insurance Co. v. Zillow, Inc.While at first blush, it may seem only of interest to those who work with media policies, this decision has potential broader application. In short,&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/washington-federal-court-rejects-policyholders-separate-claim-argument\/\">Continue reading <span class=\"screen-reader-text\">Washington Federal Court Rejects Policyholder\u2019s \u201cSeparate Claim\u201d Argument<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9914],"tags":[9895,23,10223,306],"class_list":["post-892624","post","type-post","status-publish","format-standard","hentry","category-insurance-coverage","tag-advise-consult","tag-insurance-coverage","tag-separate-claim","tag-washington","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Washington Federal Court Rejects Policyholder\u2019s \u201cSeparate Claim\u201d Argument - Advise &amp; 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