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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This case arises from a dispute over insurance coverage for an injury that occurred aboard the F/V Aleutian Spirit. Plaintiff D. H. Evers, on behalf of the Underwriting Members of Syndicate 535 at Lloyd's ("Syndicate 535") seeks a declaratory judgment that it has no further obligation to either defendant in connection with a policy of marine insurance in effect from October 1, 2001 to October 1, 2002. Amended Complaint, Dkt. # 1. In answering the amended complaint, defendants asserted counterclaims against plaintiff for breach of contract, bad faith, and violation of the Washington Consumer Protection Act. Dkt. # 8. The matter is now before the Court for consideration of plaintiff's motion for summary judgment on all claims. Dkt. # 40. Defendants have opposed the motion. After careful consideration of the parties' memoranda and exhibits, together with controlling law, the Court concludes that the motion should be granted in part and denied in part. v. PURSE SEINE VESSEL OWNERS ASSOCIATION, a Washington corporation, and F/V ALEUTIAN SPIRIT, INC., an Alaska corporation, Defendants. D.H. EVERS on behalf of the UNDERWRITING MEMBERS OF SYNDICATE 535 AT LLOYDS, Plaintiff, CASE NO. C09-791RSM ORDER ON MOTION FOR SUMMARY JUDGMENT UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

ORDER ON MOTION - 1

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BACKGROUND The relevant facts are not in dispute. Defendant Purse Seine Vessel Owners Association ("PSVOA") is a non-profit Washington organization with its principal place of business at Seattle, Washington. The purpose of the organization is to further the interests of the commercial fishing fleet. Through its affiliate, Seine Vessels' Reserve ("SVR"), PSVOA operates an insurance pool to provide insurance to member vessels, including the F/V Aleutian Spirit. Defendant Aleutian Spirit, Inc.

("ASI"), owner of the F/V Aleution Spirit, is an Alaskan corporation with principal place of business at Petersburg, Alaska. In 2001, PSVOA sought "stop loss" insurance to cover its pool liabilities in excess of an annual aggregate of $2.2 million. Through a broker, Accordia Northwest, SVR purchased policy No. PMH2045/01, which provided coverage for all types of marine liability, up to $1 million per occurrence per insured vessel. This $1 million limit "erodes" as expenses are incurred on a given claim. National Casualty Company, not a party here, and Syndicate 535 each subscribed to 50% of the policy issued. PSVOA, SVR, and "Individual Certificate Holders as Declared" are named as insureds on the policy. The F/V Aleutian Spirit is named as a Certificate Holder on a 2002 endorsement to the policy. The period of the policy was from October 1, 2001 to October 1, 2002. In April 2002, Jason Miller, a crew member on the F/V Aleutian Spirit, was injured when he slipped on an icy ramp while boarding the ship. Jason Miller is the son of James Miller, the ship's master and a primary shareholder in ASI. Jason Miller sued the owner of the vessel, ASI, in Alaska to recover damages for his injury. The matter was tried to the court in 2007, resulting in an award of damages to Jason Miller of $768,417, as set forth in Amended Findings of Fact and Conclusions of Law dated August 22, 2007. Declaration of Nicolas Vikstrom, Dkt. # 41, Exhibit F. This amount did not include interest, costs, and attorneys fees, all of which remained to be calculated, but which appeared likely to push the final judgment well over $1 million. Before judgment was entered, Jason Miller's attorney offered to settle the matter for $1 million. On December 7, 2007, coverage counsel for National Casualty Company sent written acceptance of the offer to plaintiff. Declaration of Robert Zuanich, Dkt. # 62, Exhibit 4. The final total of all PSVOA's expenses related to Jason Miller's claim reached $1,253,642.14.

ORDER ON MOTION - 2

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National has paid a 50% share of this amount, but Syndicate 535 has not. Syndicate 535 asserts that it was bound to pay only a 50% share up to the policy limit of $1 million, and that it is not bound by National's ex gratis payment over that amount. Defendants, in their counterclaim, allege that Syndicate 535 still owes PSVOA $131,460. Answer and Counterclaim, Dkt. # 8,

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