Johnson v. United States Automobile Association

1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 * * * 7 JEFFREY JOHNSON, Case No.2:22-CV-532 JCM (DJA) 8 Plaintiff(s), ORDER 9 v. 10 USAA CASUALTY INSURANCE COMPANY, 11 Defendant(s). 12 13 Presently before the court is defendant USAA Casualty Insurance Company’s motion for 14 summary judgment. (ECF No. 114). Plaintiff Jeffrey Johnson filed a response (ECF No. 126), to 15 16 which defendant replied. (ECF No. 130). 17 Also before the court is plaintiff’s motion for leave to file a supplemental opposition to 18 defendant’s motion for summary judgment. (ECF No. 154). Defendant filed a response. (ECF 19 No. 156). 20 I. Background 21 22 This case involves an insurance coverage dispute. On December 6, 2017, plaintiff was 23 involved in a car accident with William Boise. (ECF No. 114 at 2). Plaintiff recovered $115,000 24 from Boise’s insurance policies. (Id.). He also filed a worker’s compensation claim and was 25 compensated approximately $8,000 for medical expenses and $74,000 for his permanent partial 26 disability. (Id.). 27 28 At the time of the accident, plaintiff maintained an insurance policy with defendant, which 1 included uninsured/underinsured motorist coverage. (Id. at 3). On December 27, 2017, plaintiff 2 notified defendant of the accident and requested disclosure of his policy benefits. (ECF No. 126 3 at 5). After years of correspondence between the parties, defendant maintained its position that 4 the underinsured motorist coverage was not triggered. (Id. at 15). 5 6 The policy includes a non-duplication provision which states that “no covered person will 7 be entitled to receive duplicate payments under this coverage for the same elements of loss which 8 were […] [p]aid because of the [bodily injury] by or on behalf of persons … who may be legally 9 responsible” or “[p]aid or payable under any [w]orker’s compensation law.” (ECF No. 114 at 3). 10 Moreover, the policy’s offset provision provides that “amounts otherwise payable for 11 12 damages under UM coverage shall be reduced by . . . [t]he amount paid because of the [bodily 13 injury] by or on behalf of persons … who may be legally responsible” and “[a]mounts paid or 14 payable because of the [bodily injury] under […] [w]orkers’ compensation law, disability benefits 15 law, or similar law.” (Id.). 16 The gravamen of plaintiff’s complaint is that defendant “has not fully or fairly evaluated 17 18 this claim or appropriately considered plaintiff’s future damages.” (ECF No. 1-3). His complaint 19 alleges three causes of action: (1) breach of contract, (2) breach of the covenant of good faith and 20 fair dealing, and (3) unfair claims practices. (Id.). Defendant moves for summary judgment as to 21 all three claims. (ECF No. 114). 22 II. Legal Standard 23 24 The Federal Rules of Civil Procedure allow summary judgment when the pleadings, 25 depositions, answers to interrogatories, and admissions on file, together with the affidavits (if any), 26 show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment 27 as a matter of law.” Fed. R. Civ. P. 56(a). Information may be considered at the summary 28 1 judgment stage if it would be admissible at trial. Fraser v. Goodale, 342 F.3d 1032, 1036 (9th Cir. 2 2003) (citing Block v. Los Angeles, 253 F.3d 410, 418–19 (9th Cir. 2001)). A principal purpose 3 of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. 4 v. Catrett, 477 U.S. 317, 323–24 (1986). 5 6 In judging evidence at the summary judgment stage, the court does not make credibility 7 determinations or weigh conflicting evidence. Rather, it draws all inferences in the light most 8 favorable to the nonmoving party. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 9 F.2d 626, 630–31 (9th Cir.1987). 10 When the non-moving party bears the burden of proof at trial, the moving party can meet 11 12 its burden on summary judgment in two ways: (1) by presenting evidence to negate an essential 13 element of the non-moving party’s case; or (2) by demonstrating that the non-moving party failed 14 to make a showing sufficient to establish an element essential to that party’s case on which that 15 party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–24. If the moving 16 party fails to meet its initial burden, summary judgment must be denied, and the court need not 17 18 consider the non-moving party’s evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159– 19 60 (1970). 20 If the moving party satisfies its initial burden, the burden then shifts to the opposing party 21 to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith 22 Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the 23 24 opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient 25 that “the claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing 26 versions of the truth at trial.” T.W. Elec. Serv., Inc., 809 F.2d at 630. 27 However, the nonmoving party cannot avoid summary judgment by relying solely on 28 1 conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 2 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the 3 pleadings and set forth specific facts by producing competent evidence that shows a genuine issue 4 for trial. See Celotex, 477 U.S. at 324. If the nonmoving party’s evidence is merely colorable or 5 6 is not significantly probative, summary judgment may be granted. Anderson v. Liberty Lobby, 7 Inc., 477 U.S. 242, 249–50 (1986). 8 III. Discussion 9 Defendant moves for summary judgment as to all of plaintiff’s causes of action. (ECF No. 10 114). As an initial matter, the court denies plaintiff’s request to file a supplemental opposition to 11 12 defendant’s motion. (ECF No. 154). No reasonable jury could conclude that defendant’s $10,000 13 reserve on file demonstrates that it agrees plaintiff has not been fully compensated. See Phoenix 14 Ins. Co. v. Your Vitamins, Inc., No. 2:12-CV-00564-MMD, 2013 WL 459226, at *3 (D. Nev. Feb. 15 5, 2013). 16 Moreover, the court declines plaintiff’s request to conduct additional discovery. (ECF No. 17 18 126 at 29). Plaintiff has failed to show that the sought-after facts are essential to resist summary 19 judgment. See State of Cal., on Behalf of California Dep't of Toxic Substances Control v. 20 Campbell, 138 F.3d 772, 779 (9th Cir. 1998). 21 1. Breach of contract 22 Nevada treats insurance policies like other contracts, and thus, legal principles applicable 23 24 to contracts are generally applicable to insurance policies. Century Sur. Co. v. Andrew, 134 Nev. 25 819, 432 P.3d 180, 183 (2018) (citations omitted). Nevada law requires a breach of contract 26 claimant show (1) the existence of a valid contract, (2) performance by the plaintiff, (3) a breach 27 by the defendant, and (4) damages resulting from the breach. Walker v. State Farm Mutual 28 1 Automobile Insurance Company, 259 F.Supp.3d 1139, 1145 (D. Nev. 2017). 2 “Whether a party has breached a contract and whether the breach is material are questions 3 of fact.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 536 (9th Cir. 2011) (citing Hoffman v. 4 Eighth Judicial Dist. Court, 90 Nev. 267, 523 P.2d 848, 850 (1974). In Nevada, “[t]he starting 5 6 point for the interpretation of any contract, including insurance policies, is with its plain language.” 7 WP6 Rest. Mgmt. Grp. LLC v. Zurich Am. Ins. Co., No. 2:20-cv-1506-KJD-NJK, 2022 WL 8 980248, at *7 (D. Nev. Mar. 31, 2022). 9 An insurance policy “is enforced according to its terms to effectuate the parties’ intent,” 10 viewing its provisions “in their plain, ordinary[,] and popular sense.” Levy Ad Grp., Inc. v. Chubb 11 12 Corp., 519 F. Supp. 3d 832, 836 (D. Nev. 2021), aff’d sub nom. Levy Ad Grp., Inc. v. Fed. Ins. 13 Co., No. 21-15413, 2022 WL 816927, at *1 (9th Cir. Mar. 17, 2022) (citing Siggelkow v. Phoenix 14 Ins. Co., 846 P.2d 303 (1993)). 15 First, defendant argues that under the non-duplication provision, plaintiff has already been 16 compensated for all elements of his loss. (ECF No. 114 at 5). Plaintiff opposes, arguing that he 17 18 has not been compensated for additional medical treatment, past and future loss of household 19 services, wage loss for future treatment, past and future physical and mental pain, suffering, 20 anguish, and disability. (ECF No. 126 at 22). 21 Defendant has failed to prove that summary judgment is proper. It provides only 22 conclusory statements, without evidence, that all of plaintiff’s past recovery includes the same 23 24 elements of loss he seeks to recover from defendant. Here, plaintiff has presented evidence 25 proving that there remains a genuine issue for trial. A reasonable jury could conclude that 26 defendant breached the policy agreement by not providing plaintiff’s requested coverage. 27 Alternatively, defendant argues that if the court allows additional recovery, plaintiff must 28 1 prove damages in excess of $197,037.86. (ECF No. 114 at 8). However, the court will not make 2 a specific determination as to what plaintiff is owed. The court finds only that a reasonable jury 3 could conclude that defendant has not been compensated for certain elements of loss, in excess of 4 what he has already recovered. 5 6 2. Good faith and fair dealing 7 “It is well established that all contracts impose upon the parties an implied covenant of 8 good faith and fair dealing, which prohibits arbitrary or unfair acts by one party that work to the 9 disadvantage of the other.” Nelson v. Heer, 163 P.3d 420, 426–27 (Nev. 2007). The purpose of 10 the claim is to prevent a contracting party from “deliberately counterven[ing] the intention and 11 12 spirit of the contract.” Morris v. Bank of America Nevada, 886 P.2d 454, 457 (Nev. 1994) (internal 13 quotation marks omitted). 14 “Bad faith is established where the insurer acts unreasonably and with knowledge that there 15 is no reasonable basis for its conduct.” Guar. Nat. Ins. Co. v. Potter, 912 P.2d 267, 272 (Nev. 16 1996). Generally, “a bad-faith claim is subject to summary judgment if the defendant demonstrates 17 18 that there was a genuine dispute as to coverage, because if the insurer had a reasonable basis to 19 deny coverage,” the insurer is unlikely to know it was acting unreasonably. Amini v. CSAA Gen. 20 Ins. Co., No. 2:15-cv-0402-JAD-GWF, 2016 WL 6573949, at *4 (D. Nev. Nov. 4, 2016). 21 Thus, if the undisputed evidence shows that defendant had a reasonable basis for its actions, 22 there cannot be bad faith. Defendant contends that it had a reasonable basis for not paying any 23 24 additional amounts for plaintiff’s past and future medical bills, past and future wage loss, 25 disability, and pain and suffering because those losses were already paid for. (ECF No. 114 at 11). 26 Plaintiff argues that bad faith is established because defendant unreasonably refused to pay 27 the policy limits and evaluate his claim. (ECF No. 126 at 24). Here, there was a genuine dispute 28 1 as to whether coverage was applicable; thus defendant did not act unreasonably in denying 2 coverage. Moreover, the court cannot find that defendant refused to evaluate his claim because 3 plaintiff’s own statement of facts prove that defendant did so. (See id.). Summary judgment is 4 therefore appropriate. 5 6 3. Unfair claims practices 7 The Nevada Unfair Claims Practices Act, NRS 686A.310, addresses “the manner in which 8 an insurer handles an insured’s claim.” Zurich Am. Ins. Co. v. Coeur Rochester, Inc., 720 F. Supp. 9 2d 1223, 1236 (D. Nev. 2010) (internal quotation omitted). The statute lists sixteen activities that 10 constitute unfair practices. NRS § 686A.310(1)(a)-(p). When an insurance company engages in 11 12 one of these prohibited activities, the insured may bring a private right of action against the insurer 13 for violations of the statute. See Hart v. Prudential Prop. & Cas. Ins. Co., 848 F.Supp. 900, 903 14 (D. Nev. 1994). 15 Plaintiff contends that defendant violated multiple provisions of NRS 686A.310. (See ECF 16 No. 126). In response, defendant offers one conclusory statement that plaintiff presents no 17 18 evidence to support his unfair claims practices cause of action. (ECF No. 130 at 10). The court 19 finds that defendant has failed to meet its initial burden on summary judgment. Plaintiff has set 20 forth sufficient evidence showing that a genuine issue for trial remains as to his third cause of 21 action. Therefore, summary judgment is inappropriate. 22 IV. Conclusion 23 24 Accordingly, 25 IT IS HEREBY ORDERED, ADJUDGED, and DECREED that defendant’s motion for 26 summary judgment (ECF No. 114) be, and the same hereby is, GRANTED in part and DENIED 27 in part. Summary judgment is GRANTED on plaintiff’s second cause of action for breach of the 28 1 covenant of good faith and fair dealing. The case proceeds on plaintiff’s remaining claims. 2 IT IS FURTHER ORDERED that plaintiff’s motion for leave to file a supplemental 3 opposition to defendant’s motion for summary judgment (ECF No. 154) be, and the same hereby 4 is, DENIED. 5 6 DATED February 25, 2025. 7 8 ______________________________________ 9 UNITED STATES DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28