Fluke Corporation v. The Hartford Accident & Indemnity Co., et al.

The Hartford Accident and Indemnity Company (Hartford)
challenges the decision of the Court of Appeals that, under the terms of
the Commercial General Liability (CGL) policy that Hartford sold to Fluke
Corporation (Fluke), Hartford was obligated to pay both the compensatory
and punitive damages that a California jury awarded against Fluke in a
malicious prosecution action. In this declaratory judgment action, the
trial court and the Court of Appeals concluded that public policy in
Washington did not negate the CGL policy's unambiguous grant of
liability coverage for malicious prosecution. See Fluke Corp. v. Hartford
Accident & Indem. Co., 102 Wn. App. 237, 7 P.3d 825 (2000). However,
contrary to the trial court's conclusion, the Court of Appeals held that
the policy covered awards of punitive damages against Fluke, and it further
determined that coverage for punitive damages did not contravene a clear
public policy in this state regarding such insurance. Because California
law precludes coverage both for intentional acts (including malicious
prosecution) and for punitive damages, Hartford invoked California law,
but the Court of Appeals agreed with the trial court that Washington law,
not California law, governed this declaratory judgment action.

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of the Court's opinion for approximately 60 days from the date shown above.

We affirm the Court of Appeals on all issues.

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Reported by Kent Morlan