In the case of National Surety Corp. v. Immunex Corp., 176 Wash. 2d 872, 297 P.3d 688 (2013), the Supreme Court of Washington rejected a carrier's claim to reimbursement of defense expenses for noncovered claims.
More recently, a federal District Judge has distinguished Immunex in a case involving Washington State substantive law. The federal court held that Washington State public policy did not invalidate a policy's defense cost reimbursement endorsement even though the endorsement compelled a result contrary to Immunex. Massachusetts Bay Insurance Co. v. Walflor Industries, Inc., 383 F. Supp. 3d 1148, 1168-69 (W.D. Wash. 2019).
The issue of a liability carrier's right to reimbursement of defense expenses for defending noncovered claims, as well as the carrier's right to reimbursement of indemnity for noncovered claims, is discussed at length in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:6, Informing the Insured: Insurer Assertion of Rights to Reimbursement From the Insured of Clearly Noncovered Indemnity and Defense Expense (Thomson Reuters West 3d ed, 2020 Supplements in process). The Immunex case and the Massachusetts Bay Insurance Co. cases are among the cases discussed there, both in print and online.
Please read the disclaimer. ©2020 Dennis J. Wall. All rights reserved.
Comments