Federal Court Finds RSUI Indemnity Violated Its Duties in $1.89 Billion Insurance Bad Faith Action

Today, a federal judge in the Western District of Washington granted summary judgment on behalf of Brian and Kerri Adolph, who are represented by Albert Law PLLC and its esteemed co-counsel. Rather than send their $1.89 billion case to a jury, the court ruled there were no facts left for the jury to decide and found RSUI violated its duties regardless of what a jury might find.

In the coverage dispute, the court ruled that the insurer’s denial of a defense was unreasonable as a matter of law, not fact, and therefore violated Washington’s Insurance Fair Conduct Act (IFCA) and Consumer Protection Act (CPA). The case now proceeds to trial on damages only.

The ruling is the latest in the saga of claims against Reed Hein and Associates. In 2021, Albert Law filed a class action lawsuit against Reed Hein, alleging $630 million in damages due to unfair and deceptive practices. Unfortunately, Reed Hein had already spent the money to pay their lawyers, much less the claims. When insurance company RSUI refused to defend Reed Hein in violation of Washington law, Reed Hein traded their claims to Albert Law clients Brian and Kerri Adolph in exchange for terminating the suit with a $630 million judgment.

Afterward, Mr. and Mrs. Adolph filed a lawsuit against RSUI, alleging that it violated the Insurance Fair Conduct Act, which would triple the damages to $630 million. Today, the Federal District Court for the Western District of Washington agreed with the Adolphs on liability, with damages to be determined at trial.

Albert Law handles insurance coverage disputes where insurers delay or deny defense or indemnification obligations. This order reinforces that insurers face exposure beyond breach of contract when they take aggressive coverage positions. Claims under IFCA and the CPA can significantly expand liability.

The court also used reconsideration to correct its earlier ruling. After reviewing controlling case law, it reversed a previous ruling and entered judgment on liability for bad faith-related claims. That procedural posture highlights how targeted motion practice can change outcomes in coverage litigation.

For businesses dealing with denied insurance claims, this decision underscores a practical reality: denying a defense is a high-risk move for insurers. Albert Law continues to pursue these claims to hold insurers accountable when they fail to meet their obligations.