Affiliated FM Insurance v. LTK Consulting Services Inc.

Affiliated FM Insurance Company (“AFM”), subrogated to the rights of its insured, Seattle Monorail Services Joint Venture (“SMS”), sued LTK Consulting Services Inc. (“LTK”), asserting that LTK had provided negligent design advice to the Seattle Monorail System that resulted in fire damage. LTK took the position that the so-called “economic loss rule” precluded this suit and that AFM did not have an adequate interest in the Monorail System on which to base a suit in tort.

Determining that Washington law was not clear on this subject, we certified the following question to the Washington State Supreme Court:

Affiliated FM Ins. Co. v. LTK Consulting Servs. Inc., 556 F.3d 920, 922 (9th Cir.2009). We also told the Washington State Supreme Court:

Id.

The Washington State Supreme Court accepted the certified question and, after thoroughly considering the issues, filed its opinion, which concludes as follows:

Affiliated FM Ins. Co. v. LTK Consulting Servs., Inc., 243 P.3d 521 , No. 82738-9, 2010 WL 4350338 , at *10 (Wash. Nov. 4, 2010).

We reverse the district court and remand for further proceedings consistent with the decision of the Washington State Supreme…