Ruiz & Smart represented a long-time Seattle property owner in a significant insurance bad faith case arising from the wrongful denial of coverage for catastrophic damage to a family-owned commercial building. The matter involved a commercial property in West Seattle that had housed a neighborhood auto parts business for decades and represented both a livelihood and a family legacy.
After the building was red-tagged by King County as unsafe, the owner promptly submitted a claim to her commercial property insurer. The County determined that portions of the structure—including critical concrete masonry unit (CMU) walls—had failed, rendering the building dangerous and unfit for occupancy. As a result, the tenants were forced to vacate immediately, and rental income ceased overnight.
From the outset, the insurer focused on finding reasons to deny coverage rather than fairly investigating the claim. Despite substantial evidence that the damage was caused by construction activity and vehicle impacts during a nearby public works project—events that were covered under the policy—the insurer denied the claim, attributing the damage instead to “wear and tear” and alleged lack of maintenance.
Ruiz & Smart undertook an exhaustive investigation and developed a detailed evidentiary record. Independent engineers retained by the insured confirmed that heavy construction vehicles staging near the building likely caused the structural failures, including partial collapse of CMU walls. Even the insurer’s own engineering consultant privately acknowledged that vehicle impact could not be ruled out as a cause of the damage—an admission the insurer failed to disclose to its policyholder and did not meaningfully investigate further.
In addition to demonstrating that vehicle impact was a covered cause of loss, the legal team showed that coverage also existed under the policy’s collapse provisions. County records and engineering reports established that portions of the building had suffered a substantial impairment of structural integrity, meeting the policy’s definition of collapse and triggering additional coverage.
The case also involved procedural misconduct. The insurer misrepresented key policy terms, delayed producing the correct policy for years, and attempted to assert a limitations defense that the court ultimately rejected. These actions compounded the financial harm suffered by the insured, who endured years without rental income while the building remained unusable.
Faced with a well-supported record of bad faith, expert testimony, and significant exposure under Washington’s consumer protection and insurance statutes, the insurer ultimately agreed to resolve the case through a confidential monetary settlement. The result provided meaningful compensation to the property owner and brought long-overdue accountability for the insurer’s handling of the claim.
This matter exemplifies Ruiz & Smart’s commitment to holding insurance companies accountable and securing justice for policyholders when coverage is wrongfully denied.