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17 I. PARTIES
23 3. The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.
24 § 1332. This matter involves citizens of different states; King County is considered a citizen of
25 Washington State and Ace is a citizen of the State oi' Pennsylvania. King County seeks more
26 than $75,000 from Ace and, as such, this is a case or controversy in which damages exceed
27 $75,000.
LANEPOWKLLPC
COMPLAINT FOR DECLARATORY RELIEF AND M20 FIFTH AVENUE, SUITE 4200
DAMAGES - 1 P.O. BOX 91302
CASE NO. SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
123194.0003/7515836.1
1 4. The Court also has subject matter jurisdiction because this is an action for
6 6. Venue is proper because the events giving rise to this action took place in Seattle,
7 King County, Washington.
8 III. FACTS
9 7. King County is the owner of a new wastewater storage facility that was built in
10 south Magnolia in Seattle, Washington (the "Project").
11 8. This newly constructed facility consists of a diversion structure, a 3,000 lineal
12 foot underground conveyance pipe 30 inches in diameter ("Underground Conveyance Pipe"),
13 and a 1.5 million gallon storage tank at the foot of Magnolia Hill. The Magnolia Wet Weather
14 Storage Facility was designed to reduce overflows of excess stormwater and sewage to Puget
15 Sound during heavy rains. The facility was constructed to handle overflow wastewater due to
16 storm water surges that would otherwise be directed into Elliott Bay. The County is under a
17 Consent Decree withtheU.S. Environmental Protection Agency and the Washington Department
18 of Ecology to reduce overflow. This Project was intended to fulfill that commitment. The
19 Underground Conveyance Pipe was installed 150 feet below ground surface and was designed
20 with a gradual slope to keep the wastewater flowing by gravity.
21 9. Pursuant to RCW 39.26.160(l)(a)(iii) King County awarded the construction
22 contract as the general contractor for the Project to the Walsh Construction Company II, LLC
23 ("Walsh") as the lowest responsive, responsible bidder.
24 10. Ace American Insurance Company issued a Builder's Risk policy, No.
25 121101291001 to Walsh covering the Project (the "Policy"). In accordance with the contractual
26 requirements inthe King County - Walsh construction contract, Ace named King County as an
27 additional insured on the Policy.
£25E^£n',FOR
DAMAGES - 2
DECLARAT0RY RE^F AND ^i^ESSiSn,**
p.o. box 91302
CASE NO SEATTLE. WA 98111-9402
* 206.223.7000 FAX: 206.223.7107
123194.0003/7515836.1
1 11. During construction of the Project on or about December 19, 2014, the
2 Underground Conveyance Pipe was damaged when the head was pulled off during pull back. A
3 claim under the Policy was submitted for the pull-head break and Ace accepted the claim and
4 paid thecosts to remediate the resultant damage. Afterthe damage during the pullback, the pipe's
5 structural integrity was compromised such that portions of the pipe fractured, which gradually
6 led to a total loss of the Underground Conveyance Pipe, including complete blockage and other
7 damage.
8 12. On December 22, 2015, King County issued a letter acknowledging to Walsh
9 that the Project has reached substantial completion.
10 13. The newly constructed wastewater system appeared to work in the months
11 following substantial completion during Seattle's rainy season.
12 14. On September 19, 2016, following a relatively long dry spell, King County
13 engineers noticed asmall temperature dip alarm on the conveyance system's portable flow meter
14 data. This dip was significantly lower than the expected threshold level. As such, King County
15 suspected a valve malfunction and investigated. This investigation revealed that the upper
16 diversion station was completely filled with wastewater, which by design should have been
17 flowing downward (via gravity) into the 1.5 million gallon storage tank. Eventually, the
18 County's investigation revealed that Underground Conveyance Pipe was plugged with soil and
19 that significant chunks of broken pipe had been carried "downstream" within the pipe and the
20 County informed Walsh of the failed system, which was still under the Contractor's one year
21 warranty.
22 15. On November 22,2016, Walsh provided notice to Ace of the above loss.
23 16. On December 16, 2016, Ace acknowledged receipt of the loss and denied
24 coverage, stating:
S?KPAL^T/OR
DAMAGES - 3
DECLARAT0RY REUE? AND ,420P,PTAH^VE°SJrVE4200
P.O. box 91302
CASE NO SEATTLE, WA 98111-9402
' 206.223.7000 FAX: 206.223.7107
123194.0003/7515836.1
1 17. Thereafter, without the benefit of its insurance that was purchased for this
2 Project, King County undertook an extensive investigation as to the cause of the Magnolia
3 Underground Conveyance Pipe failure. King County's analysis, buttressed by its consulting
4 engineers, concluded that the cause of the pipeline failure and damage to the Underground
5 Conveyance Pipeline system occurred during the installation of the pipeline and significantly
6 earlierthan the date Ace alleged to be the Policy's expiration date as described above.
7 18. On March 22, 2018, Walsh presented the results of King County's investigation
8 to Ace and requested, on its behalfand that of the additional insureds, that Ace reconsider its
9 denial of December 15, 2016. Ace did not respond. On or about July 3, 2018, Walsh contacted
10 Ace because of its failure to not respond to the March 22nd letter. Walsh's attorney, Mr. John
11 Ahlers, spoke to Ms. Benzoni of Ace and suggested a face-to-face meeting in Seattle. Mr. Ahlers
12 then followed up with an email confirming this offer. Ace also did not respond to this request.
13 19. Subsequently and by way of follow-up, King County's attorneys wrote to Ace on
14 July 25, 2015, offering to answer any questions Ace had with regard to the finding of when the
15 damage to the Underground Conveyance Pipe occurred and reiterated theofferto meet with Ace
16 either in Seattle or in Delaware to discuss its denial of Walsh's tender. Again, Ace did not
17 respond.
18 20. Concerned with Ace's lack of response to its named andadditional insureds, King
19 County's Construction Unit Manager directly contacted Ms. Benzoni of AceonAugust 17,2018
20 and again on September 7, 2018, inquiring about the status of the claim. These telephone calls
21 were followed by aletter from King County to Ms. Benzoni onOctober 1,2018, again requesting
22 Acerespond to Walsh's and King County's request for coverage under the Policy, as set forth in
23 Walsh's May 22, 2018 correspondence and King County's July 25, 2018 correspondence.
24 These requests went unanswered.
25 21. As a result of Ace's refusal to reconsider its denial of Walsh's tender under the
26 Policy and honor the terms of its Policy and even undertake its duty to investigate, King County
27 has directly incurred in excess of $20,000,000 in repair costs to the wastewater conveyance
^J^Y0*
DAMAGES - 4
DECLARAT0RY ^UEF AND M» P,rSEEL^E«00
p.o. box 91302
CASE NO. SEATTLE. WA 98111-9402
' 206.223.7000 FAX: 206.223.7107
123194.0003/7515836.1
1 system in an effort to promptly bring the system back on line and fulfill its commitment under
2 the Consent Decree
3 22. On December 6, 2018, King County provided Ace with notice under RCW
4 48.30.015(8)(a), Washington's Insurance Fair Conduct Act. The notice informed Ace that King
5 County may file suit for Ace's unreasonable denial of coverage inviolation of the statute and for
6 Ace's failure to satisfy certain Washington insurance claim handling regulations. More than 20
7 days have passed since King County gave the notice, and Ace continues to deny King County's
8 claim.
25 28. Ace, by failing to timely reconsider its denial of coverage notwithstanding being
26 provided the results of King County's investigation into the loss, and by failing to acknowledge
27 or respond to King County, has breached its contract with King County.
S?KMIT«F0R
DAMAGES - 5
DECLARATORY RELiEF AND ,«0F,r™suTtE420O
p.o. box 91302
CASE NO SEATTLE, WA 98111-9402
* 206.223.7000 FAX: 206.223.7107
123194.0003/7515836.1
1 29. King County has been damaged by Ace's breaches, which includes King
2 County's repair costs which are in excess of $20,000,000, and such other damages as may be
3 proven at trial.
VI. THIRD CAUSE OF ACTION - NEGLIGENCE
5 30. The allegations in Plaintiffs Complaint Paragraphs 1-29 are incorporated herein
6 by reference
7 31. Ace owes King County common law duties including the obligation to handle
8 King County's claim with reasonable care, and the obligation to fully and promptly conduct an
9 appropriate investigation
Io 32. Ace negligently breached these duties to King County, which proximately caused
II harm and consequential damages to King County which are in excess of $20,000,000, and such
12 other amounts as may be proven at trial
2 King County is entitled to seek treble damages and attorneys' fees against Ace as a result of
3 Ace's actions and omissions.
4 38. As a further consequence of its conduct, Ace has forfeited its rights to deny
5 coverage and is estopped from so doing, and is liable under theterms of its Builder'sRisk Policy
6 to the full amount of King County's repair costs.
24 RCW 19.86;
26 5. For an award of all costs taxed against King County with respect to the claims
27 asserted in this Complaint;
S9MMIT,FOR
DAMAGES - 7
DECLARATORY REUEF AND M20F,£ha™£tE«00
p.o. box 91302
CASE NO SEATTLE, WA 98111-9402
' 206.223.7000 FAX: 206.223.7107
123194.0003/7515836.1
1 6. For award of pre- and post-judgment interest for the full extent allowed by law;
2 7. For an award ofattorneys' fees and other costs of litigation recoverable under the
3 applicable statutes and common law, including but not limited to RCW 19.86.090,
4 RCW 48.30.015(3); and Olympic Steamship, Inc. v. Centennial Insurance Co., 117 Wn.2d 37
5 (1991); and
6 8. For such other relief as this Honorable Court seems equitable and just.
7
DATED: December 31, 2018
8 LANE POWELL PC
9
By s/Stanton Phillip Beck
«n Stanton Phillip Beck, WSBA No. 16212
1u 1420 Fifth Avenue, Suite 4200
P.O. Box 91302
11
Seattle, WA 98111-9402
,0 Telephone: 206.223.7000
u Facsimile: 206.223.7107
,- Email: becks@lanepowell.com
H LANE POWELL PC
15 By s/Mark G. Beard
Mark G. Beard, WSBA No. 11737
16 1420 Fifth Avenue, Suite 4200
P.O. Box 91302
17 Seattle, WA 98111-9402
Telephone: 206.223.7000
18 Facsimile: 206.223.7107
Email: bearding lanepowell.com
19
LANE POWELL PC
20
01 By s/Jennifer Beverlein
11 Jennifer Beyerlein, WSBA No. 35754
1420 Fifth Avenue, Suite 4200
22
P.O. Box 91302
Seattle, WA 98111-9402
23
Telephone: 206.223.7000
Facsimile: 206.223.7107
24
Email: beyerleinj@Ianepowell.com
25
Attorneys for King County
26
27
S?MMrr.F0R
DAMAGES - 8
DECLARATORY RELIEF AND ^ ^Sgi",
p.o. box 91302
«.
CASE NO SEATTLE, WA 98111-9402
' 206.223.7000 FAX:206.223.7107
123194.0003/7515836.1
JS44 (Rev. 06/17) CIVIL COVER SHEET
TheJS44civil coversheet andtheinformation contained herein neither replace norsupplement thefiling andservice of pleadings or otherpapers as required bylaw, except as
provided by local rulesof court. This form, approved by the JudicialConference of the United States in September 1974,is requiredfor the use of the Clerkof Court for the
purpose ofinitiating the civil docket sheet. (SEE INSTRUCTIONS ONNEXT PAGE OFTHIS FOliM.)
KING COUNTY, a Washington municipal corporation Ace American Insurance Company, a Pennsylvania corporation
(b) County ofResidence ofFirst Listed Plaintiff King Countyof Residence of FirstListed Defendant
(EXCEPT IN U.S. PIAINTIFFCASES) (IN U.S. PIAINTIFF CASESONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.
II. BASIS OF JURISDICTION (Placean "X" inOne BoxOnly) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an"X"in OneBoxforPlaintiff
(ForDiversity Cases Only) andOne Boxfor Defendant)
D I U.S. Government O 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S Government Not a Party) Citizen ofThisState 0 1 0 1 Incorporated orPrincipal Place 39 4 O4
of Business In This State
o 2 U.S. Government o 4 Diversity Citizen of Another State 0 2 O 2 Incorporated and Principal Place as «s
Defendant (IndicateCitizenshipofParlies in ItemIII) of Business In Another State
IV. N ATU RE OF SU IT (Place an "X" inOne Box Only) Click here for: Nature o fSuitCode Descriptions.
1 CXMJTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES 1
H 110 Insurance PERSONAL INJURY PERSONAL INJURY O 62S Drug RelatedSeizure O 422 Appeal 28 USC 158 O 375 False Claims Act
O 310 Airplane O 365 Personal Injury • of Property 21 USC 881 O 423 Withdrawal O 376 Qui Tarn (31 USC
0 120 Marine
O 130 Miller Act O 315 Airplane Product Product Liability O 690 Other 28 USC 157 3729(a))
O 140 Negotiable Instrument Liability O 367 Health Care/ O 400 State Reapportionment
Pharmaceutical PROPERTY RIGHTS O 410 Antitrust
O 150 Recovery ofOverpayment O 320 Assault, Libel &
& Enforcement ofJudgment Slander Personal Injury O 820 Copyrights O 430 Banks and Banking
O 330 Federal Employers' Product Liability O 830 Patent O 450 Commerce
O 151 Medicare Act
O 152 Recovery of Defaulted Liability O 368 Asbestos Personal O 835 Patent • Abbreviated O 460 Deportation
Student Loans O 340 Marine Injury Product New Drug Application O 470 Racketeer Influenced and
Liability O 840 Trademark Corrupt Organizations
(Excludes Veterans) O 345 Marine Product
PERSONAL PROPERTY LABOR SOCIAL SECURITY O 480 Consumer Credit
O 153 Recovery ofOverpayment Liability
of Veteran's Benefits O 350 Motor Vehicle O 370 Other Fraud O 710 Fair Labor Standards O 861HIA(139Sff) O 490 Cable/Sat TV
O 371 Truth in Lending Act O 862 Black Lung (923) O 850 Securities/Commodities/
O 160 Stockholders'Suits O 355 Motor Vehicle
Product Liability O 380 Other Personal O 720 Labor/Management O 863 DIWC/DIWW (405(g)) Exchange
O 190 Other Contract
O 360 Other Personal Property Damage Relations O 864 SS1D Title XVI O 890 Other Statutory Actions
O 195Contract Product Liability
Injury O 385 Property Damage O 740 RailwayLabor Act O 865 RSI (405(g)) O 891 Agricultural Acts
O 196 Franchise
ProductLiability O 751 Family and Medical O 893 Environmental Matters
O 362 PersonalInjury-
Medical Malpractice Leave Act O 895 Freedom of Information
CIVIL RIGHTS PRISONER PETITIONS O 790 Other Labor Litigation FEDERAL TAX SUITS Act
1 REAL PROPERTY
O 210 Land Condemnation O 440 Other Civil Rights Habeas Corpus: O 791 EmployeeRetirement O 870 Taxes (U.S. Plaintiff O 896 Arbitration
O 463 Alien Detainee Income Security Act or Defendant) O 899 Administrative Procedure
O 220 Foreclosure O 441 Voting
O 442 Employment O 510 Motions to Vacate O 871 IRS—Third Party Act/Review or Appeal of
O 230 Rent Lease & Ejectment
O 443 Housing/ Sentence 26 USC 7609 Agency Decision
O 240 Torts to Land
Accommodations O 530 General O 950 Constitutionality of
O 245 Tort Product Liability
O 445 Amer. w/Disabilities - O 535 Death Penalty IMMIGRATION State Statutes
• 290 All Other Real Property
Employment Other: O 462 Naturalization Application
O 446 Amer. w/Disabilities • O 540 Mandamus & Other O 465 Other Immigration
Other O 550 Civil Rights Actions
O 448 Education O 555 Prison Condition
O 560 Civil Detainee -
Conditions of
Confinement .
The JS 44 civil coversheet and the information contained hereinneitherreplaces nor supplements the filings and service of pleadingor other papersas
required bylaw, except as provided by local rules ofcourt. This form, approved bythe Judicial Conference of the United States in September 1974, is
required for the use ofthe Clerk ofCourt for the purpose ofinitiating the civil docket sheet. Consequently, a civil cover sheet issubmitted to the Clerk of
Court foreachcivilcomplaint filed. The attorney filing a caseshould complete the form as follows:
I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If theplaintiff or defendant is a government agency, use
only the full name orstandard abbreviations. Ifthe plaintiff ordefendant isanofficial within a government agency, identify first the agency and
then the official, giving both name and title.
(b) County ofResidence. For each civil case filed, except U.S. plaintiffcases, enter the name ofthe county where the first listed plaintiff resides atthe
time of filing. InU.S. plaintiff cases, enter the name ofthe county inwhich the first listed defendant resides at the time of filing. (NOTE: Inland
condemnation cases, thecounty of residence of the "defendant" is thelocation of thetractof land involved.)
(c) Attorneys. Enter the firm name, address, telephone number, and attorney ofrecord. Ifthere are several attorneys, list them on anattachment, noting
in this section "(see attachment)".
II. Jurisdiction. The basis ofjurisdiction issetforth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions beshown in pleadings. Place an"X"
in one of the boxes. If there is morethan one basisofjurisdiction, precedence is givenin the order shownbelow.
United States plaintiff. (I) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers ofthe United States are included here.
United States defendant. (2) When theplaintiff is suing theUnited States, itsofficers or agencies, place an "X"in thisbox.
Federal question. (3) This refers tosuits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution ofthe United States, an amendment
totheConstitution, an actof Congress ora treaty of the United States. Incases where theU.S. isa party, theU.S. plaintiff or defendant code takes
precedence, and box 1 or 2 should be marked.
Diversity ofcitizenship. (4) This refers tosuits under 28 U.S.C. 1332, where parties are citizens ofdifferent states. When Box 4 ischecked, the
citizenship ofthe different parties must bechecked. (See Section III below; NOTE: federal question actions takeprecedence overdiversity
cases.)
III. Residence (citizenship) ofPrincipal Parties. This section ofthe JS 44 isto be completed ifdiversity ofcitizenship was indicated above. Mark this
section for each principal party.
IV. Nature ofSuit. Place an"X" inthe appropriate box. Ifthere are multiple nature ofsuit codes associated with the case, pick the nature ofsuit code
that is mostapplicable. Clickhere for: Nature of SuitCode Descriptions.
VI. Cause ofAction. Report the civil statute directly related to the cause ofaction and give a brief description ofthe cause. Do notcite jurisdictional
statutesunless diversity. Example: U.S. Civil Statute: 47USC 553 Brief Description: Unauthorized reception of cable service
VII. Requested in Complaint. Class Action. Place an"X" inthis box ifyou are filing a class action under Rule 23,F.R.Cv.P.
Demand. Inthis space enter the actual dollar amount being demanded orindicate other demand, such asa preliminary injunction.
Jury Demand. Check theappropriate box to indicate whether or not ajury is being demanded.
VIII. RelatedCases. Thissection of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insertthedocket
numbersand the correspondingjudge names for such cases.
Plaintiffs)
v. { Civil Action No.
ACE AMERICAN INSURANCE COMPANY, a
Pennsylvania corporation
Defendant(s)
Within 21 days after service of this summons onyou (not counting the day you received it)— or 60 days if you
arethe United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
P. 12 (a)(2) or(3) — you must serve onthe plaintiff an answer to the attached complaint ora motion under Rule 12 of
the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiffs attorney,
whose name and address are: Stanton P. Beck, Mark G. Beard
Jennifer M. Beyerlein
Lane Powell PC
1420 Fifth Ave. No. 4200
PO Box 91302
Seattle, WA 98111
Ifyou fail to respond, judgment by default will be entered against you for therelief demanded inthe complaint.
You also must file your answer or motion with the court.
CLERK OF COURT
Date:
Signature ofClerkor DeputyClerk
AO 440 (Rev. 06/12) Summons in a Civil Action (Page 2)
PROOF OF SERVICE
(Thissection should not befiled with the courtunless required by Fed. R. Civ. P. 4 (I))
D I left the summons at the individual's residence or usual place of abode with (name)
, a person of suitable age and discretion who resides there,
on (date) , and mailed a copy to the individual's last known address; or
• Other (specify):
Date:
Server's signature
Server's address