⚖ Oral Arguments, with Context

The United States Court of Appeals for the Ninth Circuit hears oral argument in Quilbillies, LLC v. First American Title Insurance Company. The central legal issue is whether a title insurance company's decision to pay policy limits in full, rather than provide a legal defense, can give rise to extra-contractual bad faith claims under Washington state law, or whether that election ends all liability as a matter of contract. The insured landowners—residential property owners near the Hood Canal—filed a claim when neighbors asserted an easement right across their land. First American paid the policy limits but declined to defend the claim. When a lawsuit later materialized, the company was paying for the neighbors who brought the easement suit, creating an unusual situation in which the same insurer had paid out policy limits to one set of insureds and was actively financing litigation against them by another set of insureds. The district court dismissed all claims, relying on a Washington state case called Batdorf. The appellants contend that Batdorf resolved only the breach of contract question and that Washington's duty of good faith in insurance claims handling survives independently, requiring factual findings on bad faith that the district court never made.

Quilbillies, LLC v. First American Title Insurance Company (No. 25-501) — U.S. Court of Appeals for the Ninth Circuit, argued August 4, 2026.