On July 21, 2025, after almost 15 years of litigation, the 9th Circuit Court of Appeals affirmed the Western District Of Washington’s summary judgment decision in favor of Northland Insurance Company dismissing all contractual and extra-contractual claims. The 9th Circuit found that injunctive relief and discretionary costs arising therefrom do not constitute covered monetary damages. Furthermore, the 9th Circuit held that money damages resulting from an insured’s deliberate actions cannot constitute a covered “occurrence.” Lether Law Group represented Northland in both the Western District Washington and 9th Circuit Court of Appeals.

In 2012, an injunction was entered against Kitsap Rifle and Revolver Club (KRRC) whereby the club was prohibited from using its property as a shooting range until in complied with Kitsap County’s permitting requirements. Per KRRC, such permitting costs were approximately $400,000. It was undisputed that these costs were “the result of KRRC’s deliberate actions.”

KRRC then sought commercial general liability insurance coverage for the costs to comply with the injunction and obtain permits. KRRC also argued that the costs to comply with permitting was a covered defense cost. KRRC further asserted that Northland’s refusal to pay such fees and costs constituted bad faith, violation of Washington’s Consumer Protection Act, and violation of the Insurance Fair Conduct Act.

The District Court dismissed the KRRC’s claims, finding that the KRRC caused damage to its own property in developing the land in violation of Kitsap County ordinances. The District Court reasoned that, as the Northland policies strictly provided coverage for damage to third-party property, damage to KRRC’s own property did not qualify for coverage. Further, the District Court agreed with Northland that the KKRC’s claims did not constitute monetary damages as required by the policies because no such monetary damages had been incurred. Finally, the District Court found that the Club’s claims did not constitute an “occurrence” because permitting costs were not only foreseeable but also known and ignored by the Club.

The 9th Circuit affirmed in whole. “[T]he monetary damages for which KRRC seeks coverage—are the result of KRRC’s deliberate actions…Consequently, whatever money damages KRRC faces are not attributable to an “occurrence” and are therefore not covered by Northland’s CGL policies.” The 9th Circuit further held that the permitting costs were “a discretionary cost KRRC must pay only because it elected to develop its property” and therefore were not a defense cost or otherwise within the scope of the Northland policies.

Lether Law Group has extensive experience in the Washington State Courts, the Washington State Court of Appeals, Washington Federal Courts, and the 9th Circuit Court of Appeals litigating insurance coverage disputes in a wide variety of claims. If you have questions about commercial general liability coverage, Washington extra-contractual claims, or 9th Circuit’s decision, we invite you to contact us directly.

On July 29, 2025, the United States District Court for the Western District of Washington issued a summary judgment ruling in a matter entitled Ngethpharat v. State Farm Mut. Auto. Ins. Co., regarding State Farm’s methods for determining actual cash value (ACV) for total losses in Auto Physical Damage (APD) claims. Ngethpharat is an ongoing class action against State Farm accusing the carrier of violating Washington law by applying a “typical negotiation” deduction in calculating ACV.

A “typical negotiation” deduction is a reduction in the ACV calculation based upon a presumption that an advertised price for a comparable auto could be negotiated at the point of sale. The Washington Office of the Insurance Commissioner has promulgated WAC 284-30-391, which sets forth the methods and standards of practice for settlement of total loss vehicle claims. In its July 29, 2025 ruling, the Court held that “typical negotiation” deductions are not permitted under this regulation and that State Farm’s violation of the WAC constituted a per se violation of the Washington Consumer Protection Act (CPA), RCW 19.86 et seq.

As a demonstration of the potential implications of this type of ruling, the Court held that the Class Plaintiffs had produced uncontroverted evidence of CPA damages in the amount of $54,650,595.28.

The Ngethpharat matter is ongoing and is certain to include additional motions practice and likely appeals to the Ninth Circuit Court of Appeals. The question of whether these types of discounts rise to the level of an actual CPA violation has not been decided by any Washington appellate court, and the District Judge’s decision in Ngethpharat is ultimately not binding on any other court. This issue may ultimately need to be brought before the Washington State Supreme Court before there is any ultimate resolution.

Lether Law Group has, for over 35 years, represented insurers, businesses, and individuals in significant claims. Lether Law Group is currently involved in some of the most high-value claims in the State of Washington. We pride ourselves on our track record of fair and equitable resolutions in tough cases.

If you have questions about total loss valuation practices, class exposure, or compliance risks arising from this decision, we invite you to contact us directly.