Bar Bulletin

Bar Bulletin

Washington Supreme Court Clarifies the Standards for Covenant Judgments and Holds Insurers Have No Per Se Right to Discovery into Such Settlements

September 2021 Bar Bulletin

By McKean J. Evans

On August 5, 2021, the Washington Supreme Court decided Wood v. Milionis Constr., Inc., et al.,1 clarifying the standards governing courts’ approval of covenant judgments and declining to grant insurers a presumptive right to discovery into such settlements. The decision provides helpful guidance to counsel contemplating covenant judgment settlements.

(1) Background of covenant judgment settlements. Covenant judgments provide a mechanism to resolve litigation in which the defendant’s liability insurance carrier’s refusal to fund a settlement would otherwise obstruct resolution. A covenant judgment allows an insured defendant facing claims by...

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