As a matter of public policy, many states have adopted various measures to enforce outstanding child-support obligations among their citizens.  Out of this strong public policy, we are now seeing a number of states adopt legislation and rules requiring insurers to take certain steps to prevent a non-compliant parent from concealing recovery of certain insurance proceeds. Consistent with this trend, the State of Washington has recently adopted a law requiring insurers to not only notify the State of certain pending claims and payments, but also to directly satisfy child support liens. 

RCW 26.23.037 requires all insurers to exchange information with the State Division of Child Support within ten (10) days of the opening of a “tort liability claim” in a manner required by the Department.  This statute has a number of provisions concerning how an insurer might comply with this obligation.  For best reference, we recommend reviewing the Washington Child Support Lien Network.

Upon reporting a tort liability claim to the State, the Department will then notify the insurer as to whether there are any outstanding child support liens pending against the claimant.  Once the insurer is on notice of an outstanding child-support lien, it is required under Washington law to withhold the lien amount from any claim payment and to remit the lien amount directly to the department within twenty (20) days.

The direct payment requirement in Washington is a departure from the requirements of many of the other jurisdictions that have adopted these types of reporting requirements.  Based on the language in the statutes, it would appear that the State of Washington is attempting to create the type of “super lien” that are generally recognized in the Medicare environment. 

It is also important to note that the statute applies only to claims for general (non-economic) damages and lost wages claims.  The statute does not apply to property damage claims or for medical special damages.  The statute also specifically carves out Underinsured Motorist claims.

Moreover, the statute specifically states that noncompliance by an insurer does not amount to a violation of Washington’s general child support noncompliance statute, which could subject a non-complying entity to loss of licensure, fines, and suspensions. 

Importantly, it should also be noted that the statute contains an immunity provision stating that an insured cannot be held liable for any efforts to comply with the statute. 

The statute, which contains twenty-seven (27) paragraphs and sub-paragraphs, has not yet been subject to judicial review in any Washington Appellate Court.  It is a complex statute with many different requirements for both insurers and the State.  It may take some time to work out how this statute will operate in real world applications.

Nonetheless, in the absence of caselaw further clarifying an insurer’s obligations, we recommend that insurers in Washington take any and all reasonable steps to comply with the statute as drafted and enacted.

Lether Law Group routinely monitors and reports on changes in Washington law and we are, as always, happy to assist any insurer in navigating through this new development and any others that may be coming in the future.

On April 6, 2026, the U.S. Court of Appeals for the Ninth Circuit filed an opinion in Bramblett v. Allied World Specialty Ins. Co. that highlights the perils of wrongfully denying a defense in Washington. 2026 U.S. App. LEXIS 10077.  

This case arose from an underlying complaint against a Washington company covered by an Allied Insurance policy.  This policy provided coverage for losses arising from claims of sexual harassment. However, that policy expressly excluded “any Loss in connection with … or in any way relating to any actual or alleged sexual molestation or sexual abuse.”  

Allied denied a defense to its insured on the theory that the exclusion for sexual abuse applied.  Allied was sued for breach of contract, bad faith, and violation of the Insurance Fair Conduct Act and the Consumer Protection Act. The District Court granted summary judgment in favor of Allied. The Ninth Circuit reviewed the matter on appeal.

Allied asked the Ninth Circuit to find that the covered sexual harassment allegations were “too intertwined” with the excluded sexual abuse allegations to be separated into “covered” and “excluded” portions of the underlying complaint. The Ninth Circuit declined this request. The Ninth Circuit instead agreed with the Plaintiffs.  The Court held that even where an underlying complaint may contain some excluded allegations, the Policy can be interpreted as providing partial coverage for losses arising from the covered allegations.  In this situation, a full defense must be offered to the insured.

The insurer’s denial of a defense was not looked favorably upon by the Ninth Circuit. The Ninth Circuit held that Allied breached the insurance contract in bad faith by wrongfully denying its defense obligation.  Moreover, the Ninth Circuit held that the insured was entitled to the remedy of coverage by estoppel for the full amount of a settlement in the underlying lawsuit.  The Ninth Circuit also ordered the District Court to enter summary judgment in favor of the Plaintiff’s with respect to the bad faith and statutory claims.

The Bramblett opinion serves as a reminder that wrongfully denying a defense obligation in Washington can lead to severe consequences.

Lether Law Group currently represents multiple insurers in coverage litigation in state and federal courts throughout Washington. If you have questions about the implications of this Ninth Circuit holding or general questions in regard to compliance with Washington insurance law, please feel free to contact our office.

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Spring showed up right on schedule this year, along with a familiar sight on the back deck of Lether Law Group. Our resident Mother Goose returned to the planter box, and all eight goslings have now hatched.

We were fortunate to catch them making their first plunge into Lake Union, staying close as they followed their parents into the water.

Their annual arrival offers a welcome pause in the day and a clear sign that spring has fully settled in.

Fun fact: Within a day of hatching, goslings are already on the move, able to walk, swim, and follow their parents as they begin exploring their surroundings.

A small moment, but one we’re always glad to see.

As some of you might know, the team at Lether Law Group has a number of traditions that we like to enjoy over the course of the year. The Lether Law team finds that mixing a little bit of play in with work keeps us all fresh and energized.

Immediately following the new year, we had our annual holiday party. We revisited an old tradition and brought back the wine tasting tour. We all loaded up in a private bus and toured wineries in Woodinville, Washington. We ended the night with a catered dinner. Everyone enjoyed a little food after a day of wine tasting

This Winter we were also fortunate to revive an experience that we shared as a firm and community back in 2014, when we previously won the Super Bowl

.At Lether Law Group, we are loyal Seahawk fans. Not only did we celebrate Blue Fridays throughout the course of the regular season. We all enjoyed the playoffs in January and, of course, the Super Bowl in February. Just like we did back in 2014, we all shared a victory breakfast. This time, breakfast was hosted by some of the attorneys at the office who made breakfast for the entire firm. We then all loaded up and went to the parade as a group. Following the parade, we enjoyed a group lunch at one of our favorite local Mexican restaurants, with lots of celebratory margaritas around the room. It was a great way to take a day off and enjoy a community event.

 Finally, in March, we once again celebrated one of our favorite holiday traditions, St. Patrick’s Day. This is a holiday luncheon that we’ve celebrated since we started Lether Law Group. Once again, Kerri Lether made a fantastic luncheon of corned beef, cabbage, and potatoes. It was all finished off with a wonderful cake (again, made by Kerri). We had a few Guinness beers along the way. A great way to celebrate St. Patrick’s Day.

 We hope that everyone’s winter has gone well and that you’ve had a chance to enjoy time with friends, family, and coworkers. Never forget the importance of enjoying what you do. We find that it makes us the best lawyers we can be.

Congratulations to the Seattle Seahawks — 2025–26 Super Bowl Champions!

Please note: Our phone line and switchboard will be closed on Wednesday, 2/11, as the firm will be attending the Championship Ceremony and Parade. If you need to speak with one of our attorneys, please contact them directly on their cell phone or call Tom Lether at (206) 498-0693.