Skip to main content

Federal Court Rules Directors and Officers Liability Insurer Unreasonably Breached Duty to Defend

By August 1, 2020April 23rd, 2024Charles Davis, Greg Harper

Former board members and staff representatives of a membership-based, not-for-profit Cooperative were sued over a board resolution that many of the Cooperative’s members opposed.  The Cooperative’s Directors and Officers insurer refused to defend the former board members and representatives based on information that was not in the complaint—the insurer had independently researched and discovered the information used to deny the defense, which is not allowed under Washington law.  The former board members and representatives sued the insurer and obtained a summary judgment ruling that the insurer owed and breached a duty to defend and that the insurer’s breach was unreasonable.  Harper Hayes attorneys then secured a settlement from the insurer for nearly $1 million, covering the defense expenses from more than eight years of litigation.