Woo v. Fireman’s Fund (Wash. S. Ct. 2007)
Dentist Robert Woo played a practical joke while performing a dental procedure on an employee while she was under general anesthesia. The procedure involved the insertion of temporary bridges called “flippers.” Dr. Woo inserted flippers shaped like boar tusks, took photographs, and then concluding the procedure by inserting normal flippers. Upon viewing the photographs, the employee quit her job and sued alleging various torts.
Dr. Woo tendered the defense to his insurer, Fireman’s Fund, under professional liability, employment practices liability, and general liability coverages. Relying in part on a formal legal opinion of counsel, Fireman’s Fund refused to defend. Dr. Woo financed his own defense and settled with the plaintiff shortly before trial for $250,000. Dr. Woo then sued Fireman’s Fund alleging breach of the duty to defend, bad faith, and violation of the Consumer Protection Act. The trial court ruled that the duty to defend was breached, and the jury awarded $750,000 in damages, including damages for Dr. Woo’s emotional distress.
The court of appeals reversed and held there was no duty to defend. 128 Wn. App. 95, 114 P.3d 681 (2005). The Washington Supreme Court accepted review, reversed the court of appeals, and affirmed the judgment entered by the trial court. Four justices dissented.
The supreme court summarized the scope of the duty to defend, emphasizing its breadth and noting that the insurer must “give the insured the benefit of the doubt.” The court observed, “If the insurer is uncertain of its duty to defend, it may defend under a reservation of rights and seek a declaratory judgment that it had no duty to defend.”
The court held that Fireman’s Fund had a duty to defend under the professional liability coverage because Dr. Woo’s conduct conceivably fell within the broad definitions of “dental services” and “practice of dentistry” in the policy and a statute referenced in the policy. The court relied partly on the fact that the procedure involved an employee, which is related to the “ownership, maintenance, or operation of an office for the practice of dentistry,” and partly on the fact that insertion of the boar tusk flippers was “integrated into and inseparable from the overall procedure.” The court held that the legal opinion relied on by Fireman’s Fund did not justify refusing to defend under the professional liability coverage because the opinion was equivocal and acknowledged that the application of case law cited therein was questionable.
The court held there was also a duty to defend under the general liability coverages for bodily injury and personal injury. The court held that, although intentional conduct was excluded under the policy, and Dr. Woo’s conduct was likely intentional, it was conceivable that he did not intend that conduct to result in the alleged injuries.
In contrast, there was no duty to defend under the employment practices liability coverage because the emotional distress alleged by Dr. Woo’s former employee resulted from the practical joke, not from a wrongful discharge.
In summary, the court held that Fireman’s Fund breached its duty to defend and affirmed the jury’s verdict, even though it included damages for Dr. Woo's emotional distress based solely on his own testimony. This permitted Dr. Woo to recover a judgment that included the $750,000 verdict, the $250,000 Dr. Woo paid to settle his former employee’s claim, and Dr. Woo’s attorney’s fees and costs in the trial court. The supreme court also awarded Dr. Woo his attorney's fees and costs for all stages of the appeal.
If Referendum 67 becomes law, it will be asserted as a basis for recovering triple damages in cases similar to the Woo case. A million dollars or more of Dr. Woo's judgment might have been tripled if Referendum 67 were applicable to his case.