December 13th, 2023

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Early Sullivan Obtains Defense Verdict On $10 Million Bad Faith Claim

An Early Sullivan Wright Gizer & McRae trial team, comprised of Scott Gizer and Rebecca Claudat obtained a defense verdict on behalf of their client First American Title Insurance Company following a two-week jury trial in Everett, Washington. Early Sullivan was brought in to serve as lead trial counsel by First American just two months prior to trial The insured Saratoga 18, LLC, owned and controlled by private equity firm, the Resmark Companies, had asserted claims against First American for breach of their title insurance policy, violation of the Washington Consumer Protection Act, and Washington’s Insurance Fair Conduct Act. The insured had submitted two claims to First American regarding a piece of vacant property it had acquired in Mulkiteo, Washington for condo development. The Insured came to learn that the property was not properly subdivided and there was an issue as to whether the selling entity had the right to sell. First American accepted the subdivision claim and elected to cure that issue, and denied the second claim as premature as no third party had challenged the conveyance. The insured ultimately sued First American alleging that First American had failed to diligently proceed with curative efforts for the subdivision and improperly denied the other claim. The insured claimed it was entitled to $3 million for the value of the property plus $6 million in treble damages, and over a $1 million in attorney’s fees and costs. First American contended that the insured had failed to cooperative with the curative efforts and that the denial of the other claim was not a true denial, but was First American’s invocation of an industry practice referred to as “watchful waiting”, whereby First American agrees to reconsider the claim if it ever becomes an actual adverse issue. The jury agreed with First American that the claim was handled properly in all respects and denied all relief requested by the insured.