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Washington Supreme Court Denies Review of Arson
Insurance Coverage Victory
May 3, 2005. GMT client Lennar Properties, Inc. last year prevailed
in an insurance coverage lawsuit against American States Insurance
Company (a Safeco company) in Division III of the Washington Court
of Appeals. GMT client Wells Fargo was the mortgage holder on a substantial
commercial property in the Yakima area that was destroyed by an arson
fire in 2002. (The loan was ultimately sold to Lennar.) Safeco denied
coverage based on the standard-form "Vacancy Condition,"
arguing that the exclusion for '"vandalism" in the Condition
also excluded acts of arson. The trial court ruled in favor of Wells
Fargo and the Court of Appeals unanimously affirmed the decision.
The Court also awarded the policyholder its attorneys fees for the
appeal.
Today, the Washington Supreme Court denied Safeco's Petition for Review
of the decision.
Decisions nationwide are split on the issue. In Washington, an unpublished
decision of Division II of the Washington Court of Appeals had affirmed
an identical result, but GMT was not able to cite it because it was
unpublished. This Division III opinion containing extensive discussion
of the issue is published and will be very helpful to policyholders
facing this issue in Washington.
GMT partners Jim Murray and Christie Snyder were involved in the representation.
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