ORDER DENYING THIRD PARTY WALKER DEFENDANTS AND K.R. CONSULTANTS' MOTION FOR SUMMARY JUDGMENT

BENJAMIN H. SETTLE, District Judge.

This matter comes before the Court on Third Party Walker Defendants and K.R. Consultants, LLC's ("K.R. Consultants") Motion for Summary Judgment (Dkt. 39). The Court has considered the pleadings filed in support of, and in opposition to, the motion and the remainder of the file. For the reasons stated herein, the Court hereby denies the motion.

I. PROCEDURAL AND FACTUAL BACKGROUND

In this lawsuit, ProBuilders Specialty Insurance Company, RRG ("ProBuilders") seeks a declaration concerning its insurance coverage for a claim brought against one of its insureds, Talbitzer Construction, LLC ("Talbitzer"), by an injured worker, Daniel Saranto ("Saranto"). See Dkt. 1. The instant motion relates to a third-party claim that Talbitzer filed against certain third-party defendants. See Dkt. 39. Although the issue before the Court is a narrow one, the factual background is somewhat complex. The Court recounts below the relevant facts.

On or about March 21, 2007, Saranto sustained injuries during a construction accident, when an employee of Columbia River Homes, Inc. ("Columbia") allegedly dropped shingles from a roof, which struck Saranto. Dkt. 1 at 3-4; Dkt. 39 at 2. Saranto, who was an employee of a subcontractor on the project, sued Columbia and Talbitzer, among others, in Clark County Superior Court under cause no. 07-2-02429-1 ("Saranto suit"). Dkt. 1 at 3-4. Saranto alleges that Talbitzer, the general contractor on the project, had supervisory authority over the construction worksite. Id.

On March 12, 2010, Talbitzer tendered its defense in the Saranto suit to ProBuilders under a commercial general liability insurance policy ("ProBuilders policy"); and, on March 15, 2010, it further tendered its defense to Burlington Insurance Company ("Burlington") under a policy that Burlington had issued to Columbia ("Burlington policy"). Id. at 4. ProBuilders agreed to defend Talbitzer under full reservation of rights, contending that the ProBuilders policy did not apply to the claims asserted against Talbitzer in the Saranto suit. Id. Likewise, Burlington notified Talbitzer that it had no duty to defend or indemnify Talbitzer in the Saranto suit under the Burlington policy.1

On March 10, 2011, ProBuilders filed the instant lawsuit against Talbitzer, Burlington, Saranto and Jane Doe Saranto. See Dkt. 1. In the complaint, ProBuilders seeks declaratory judgment against all Defendants that the ProBuilders policy does not require ProBuilders to defend any lawsuit or pay any judgment that may be entered against Talbitzer in the Saranto suit. Dkt. 1 at 5. ProBuilders also claims that it is entitled to equitable contribution from Burlington for the amounts ProBuilders has incurred or may incur in the future in defending the Saranto suit. Id. at 5-6.2

On May 16, 2011, Talbitzer filed a crossclaim against Burlington and counterclaim against ProBuilders asserting that it has coverage under both policies implicated in the Saranto suit. Dkt. 12. In addition, on May 31, 2011, Talbitzer filed a third-party complaint against K.R. Consultants, Randy Walker and Jane Doe Walker (collectively, the "Third-Party Defendants"). Dkt. 20. Talbitzer contends that the Third-Party Defendants were the insurance agents who recommended the purchase of the ProBuilders policy and that, if the ProBuilders policy does not cover Saranto's claim against Talbitzer, then the Third-Party Defendants are liable to Talbitzer for negligence or breach of contract. Id.

On August 17, 2011, Talbitzer filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Washington at Tacoma under Case No. 11-46593PBS. Dkt. 39 at 3; Dkt. 29 at 2. Subsequently, Saranto filed a motion for relief from the automatic stay in the bankruptcy proceeding. Dkt. 39 at 3, 13. On October 18, 2011, United States Bankruptcy Judge Snyder issued an order lifting the automatic stay. Id. at 4, 26. In so doing, Judge Snyder ruled that the instant lawsuit could proceed to determine whether ProBuilders has a duty to defend and indemnify Talbitzer in connection with the Saranto suit. Id. at 27. Judge Snyder further explained that all further action against Talbitzer should cease in the event that this Court rules that ProBuilders has no duty to defend or indemnify. Id. In other words, Judge Snyder allowed the Saranto suit to proceed "as long as any claim against the debtor [Talbitzer] is limited to available insurance proceeds, if any." Id. at 27-28.

In the instant motion, filed on February 8, 2012, the Third-Party Defendants argue that Judge Snyder's October 18, 2011 ruling effectively eliminates any potential third-party claim by Talbitzer in that Talbitzer will suffer no damage regardless of how this Court rules with respect to ProBuilders' coverage policy. Id. at 2.3 On March 12, 2012, Talbitzer and Saranto responded by separate briefing. Dkts. 44-45. On March 13, 2012, the Third-Party Defendants replied. Dkt. 47.

II. DISCUSSION

A. Third-Party Complaint, Motion, and Bankruptcy Orders

In its third-party complaint, Talbitzer claims as follows: If and to the extent that the ProBuilders policy does not provide insurance coverage to Talbitzer with regard to the Saranto lawsuit, then such failure and lack of coverage is due to the negligence of, and/or breach of contract by, Randy Walker and K.R. Consultants in regard to the recommendation, selection, brokerage, and purchase of the ProBuilders policy. Dkt. 20 at 4-5. Talbitzer seeks damages in an amount "includ[ing] the fees and costs incurred by Talbitzer in the litigation with ProBuilders . . . ." Id. at 5.

According to its own terms, the third-party complaint will not stand if the Court ultimately rules against ProBuilders in this lawsuit and finds that ProBuilders has a duty to defend Talbitzer in the Saranto suit. Alternately stated, the only scenario in which Talbitzer has a viable third-party claim against Third-Party Defendants is where the Court finds that ProBuilders does not have a duty to defend Talbitzer in the Saranto suit.

Having framed the conditions under which the third-party complaint operates, the Court turns to the instant motion. In the motion, Third-Party Defendants contend that, in light of Judge Snyder's October 18, 2011 ruling, "Talbitzer will never suffer any damages regardless of how the Court rules with respect to ProBuilders' coverage position." Dkt. 39 at 5. This is so because all claims against Talbitzer "are limited to available insurance proceeds," which means that Talbitzer has no uncovered exposure to the personal injury claim asserted in the Saranto suit. Id.; Dkt. 47 at 2. Because Talbitzer will suffer no actual damages, Third-Party Defendants contend that the third-party claim against them should be dismissed. Dkt. 39 at 5; Dkt. 47 at 2.

In response, Talbitzer concedes that the bankruptcy filing "appear[s] to insulate Talbitzer from monetary losses" related to the Saranto suit, "but only to the extent that the Talbitzer bankruptcy plan is confirmed." Dkt. 44 at 4. Without discussing the merits of the underlying motion, Talbitzer contends that it would be premature at this point for the Court to grant the claims against Third-Party Defendants as moot. Id. at 3.

Saranto makes a similar argument in separate briefing. Dkt. 45 at 3. In addition, Saranto explains that Third-Party Defendants' reliance on Judge Snyder's October 18, 2011 order is misplaced insofar as that order was later superseded. Dkt. 45 at 13-15. Specifically, after Third-Party Defendants filed the instant motion, on February 21, 2012, Saranto filed with the bankruptcy court a motion to clarify the October 18, 2011 order. Id. at 17-20. In that motion, Saranto argued that "if KR [Consulting] was negligent or otherwise at fault as [Talbitzer] asserts [in the third-party complaint], then [Talbitzer's] bankruptcy estate would have additional `insurance proceeds' available to satisfy Saranto's claims — those of KR's `available' insurance proceeds or other available KR's assets." Id. at 19-20. For this reason, Saranto asked Judge Snyder to clarify his earlier ruling that limited Saranto's claim against Talbitzer to "available insurance proceeds." Id. at 19.

Judge Snyder agreed. In a February 28, 2012 order, he ruled:

Id. at 14.

B. Effect of Bankruptcy Order

Although the Court questions whether Saranto has standing to respond to Third-Party Defendants' motion, especially where he has failed to properly intervene, the Court takes notice of Judge Snyder's February 28, 2012 order and finds that this latest order does not bar the third-party complaint from proceeding at this time. The order specifically holds that "[c]laims against third parties or other named defendants . . . are not so limited or protected by this Order or the . . . bankruptcy proceedings." Id. at 14. The Court reads Judge Snyder's latest order literally to mean that "available insurance proceeds," as contemplated by the original order, include those damages that Talbitzer could hypothetically recover against Third-Party Defendants, even if Talbitzer ultimately has no reason to recover. Although the Court acknowledges that there is some doubt about whether Talbitzer has any uncovered exposure with respect to the Saranto suit, the Court cannot find for Third-Party Defendants as a matter of law on this record. Indeed, the parties have not cited any law that aids the Court on this issue.4

Moreover, even absent the latest bankruptcy order, the Court shares Talbitzer's concern that any judgment would be premature where the bankruptcy plan has yet to be confirmed. Third-Party Defendants may re-submit this motion once the plan is confirmed or after the Court conclusively determines the parties' roles and exposure in the ongoing litigation.

III. ORDER

Therefore, it is hereby ORDERED that Third Party Walker Defendants and K.R. Consultants' Motion for Summary Judgment (Dkts. 39, 40) is DENIED.