PN II, Inc. v. National Fire & Marine Insurance Company

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 PN II, INC. dba PULTE HOMES and/or 4 DEL WEBB, Case No. 2:20-cv-01383-ART-BNW 5 Plaintiff, v. ORDER ON MOTIONS IN LIMINE 6 (ECF Nos. 162, 163, 180) NATIONAL FIRE & MARINE 7 INSURANCE COMPANY; and DOES 1 through 100, inclusive, 8 Defendants. 9 NATIONAL FIRE & MARINE INSURANCE COMPANY, 10 Counter-Claimant, 11 v. 12 PN II, INC. dba PULTE HOMES and/or DEL WEBB, 13 Counter-Defendant. 14 NATIONAL FIRE & MARINE 15 INSURANCE COMPANY, 16 Third-Party Plaintiff, v. 17 PN II, INC. dba PULTE HOMES 18 and/or DEL WEBB; CONTRACTORS INSURANCE COMPANY OF NORTH 19 AMERICA, INC., 20 Third-Party Defendants. 21 Before the Court are the parties’ respective motions in limine: Third-Party 22 Defendant Contractor’s Insurance Company of North America’s (“CICNA’s”) 23 motion to exclude evidence and argument regarding contribution (ECF No. 162), 24 and Plaintiff/Counter-Defendant PN II, Inc. dba Pulte Homes’ (“Pulte’s”) motion 25 to exclude evidence and argument regarding Defendant National Fire’s duty to 26 indemnify (ECF No. 163). Also before the Court is National Fire’s motion for leave 27 to file a sur-reply to CICNA’s motion (ECF No. 180). For the reasons stated, the 28 Court denies CICNA’s motion in limine, grants in part and denies in part Pulte’s 1 motion in limine, and grants National Fire’s motion for leave to file a sur-reply. 2 I. National Fire’s Motion to File a Sur-Reply (ECF No. 180) 3 As a preliminary matter, the Court grants National Fire’s motion for leave 4 to file a sur-reply. National Fire’s motion sought leave to file a sur-reply to (1) 5 “correct the record” regarding several misstatements allegedly made in CICNA’s 6 reply, and (2), to address a new position taken by CICNA in its reply. (ECF No. 7 180.) 8 The Court finds that a sur-reply is warranted here because CICNA, in its 9 reply brief, suggested that the Court consider sua sponte summary judgment. 10 See Paxson v. Live Nation Ent., Inc., No. 2:24-CV-00907-APG-EJY, 2025 WL 11 894634, at *12 (D. Nev. Mar. 21, 2025) (if a reply brief raises new issues, a court 12 may grant opposing party opportunity to respond to them); Morgan Stanley Smith 13 Barney LLC v. Takahashi, No. 2:24-CV-02127-CDS-MDC, 2025 WL 35134, at *4 14 (D. Nev. Jan. 6, 2025) (granting leave to file sur-reply where new issue was raised 15 in reply brief). 16 The Court notes that this is not the first time that National Fire has sought 17 leave to file a sur-reply in this action. The Court recently granted its motion to do 18 so in response to Pulte’s motion for voluntary dismissal. (ECF No. 202.) While the 19 Court grants National Fire’s motion here due to the unusual circumstances of 20 the briefing, it reminds all three parties to this action that sur-replies are highly 21 disfavored, and that arguments made for the first time in reply briefs may be 22 disregarded by the Court. The Court is unlikely to grant further motions for leave 23 to file a sur-reply in this case absent highly unusual circumstances. 24 II. National Fire’s Contribution Claim 25 CICNA’s motion in limine seeks to exclude evidence and argument 26 regarding National Fire’s contribution claim against it. CICNA’s motion argues 27 that Pulte’s remaining claims against National Fire—(1) breach of the duty to 28 defend and (2) breach of the implied covenant of good faith and fair dealing— 1 would give rise only to consequential damages against National Fire. 2 Contribution, CICNA explains, cannot be sought where an insurer is found to 3 have breached its duties because liability for breaches is not shared by other non- 4 breaching insurers who did not take on such a risk. Thus, CICNA argues National 5 Fire’s contribution claim against it fails regardless of the outcome of trial, making 6 evidence regarding the contribution claim irrelevant. 7 National Fire responds that CICNA’s motion in limine improperly seeks 8 summary judgment on National Fire’s contribution claim. The Court agrees that 9 CICNA’s motion seeks an order stating that as a matter of law, National Fire’s 10 claim for contribution—which remains in the operative complaint—fails. The 11 Court issued an order stating that whether these claims fail as a matter of law is 12 an issue that should be resolved before trial, but that National Fire had not had 13 adequate opportunity to defend against sua sponte summary judgment. (ECF No. 14 203.) Thus, the Court ordered National Fire to show cause why summary 15 judgment on its contribution claim should not be entered sua sponte by the Court 16 based on CICNA’s motion in limine. (Id.) National Fire responded. (ECF No. 204.) 17 The Court now considers (1) sua sponte summary judgment on National Fire’s 18 contribution claim, and (2) CICNA’s motion in limine to exclude evidence 19 regarding that claim. 20 A. Sua Sponte Summary Judgment 21 Under Federal Rule of Civil Procedure 26(f)(a), a court may, “[a]fter giving 22 notice and a reasonable time to respond . . . grant summary judgment for a 23 nonmovant.” The Ninth Circuit has “long recognized that, where the party moving 24 for summary judgment has had a full and fair opportunity to prove its case, but 25 has not succeeded in doing so, a court may enter summary judgment sua sponte 26 for the nonmoving party.” Albino v. Baca, 747 F.3d 1162, 1176 (9th Cir. 2014); 27 see also Gospel Missions of Am. V. City of Los Angeles, 328 F.3d 548, 553 (9th 28 Cir. 2003). 1 1. Legal Standard for Summary Judgment 2 “The purpose of summary judgment is to avoid unnecessary trials when 3 there is no dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S. 4 Dep’t of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is 5 appropriate when the pleadings, the discovery and disclosure materials on file, 6 and any affidavits “show there is no genuine issue as to any material fact and 7 that the movant is entitled to judgment as a matter of law.” Celotex Corp. v. 8 Catrett, 477 U.S. 317, 322 (1986). An issue is “genuine” if there is a sufficient 9 evidentiary basis on which a reasonable factfinder could find for the nonmoving 10 party and a dispute is “material” if it could affect the outcome of the suit under 11 the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). 12 The court must view the facts in the light most favorable to the non-moving party 13 and give it the benefit of all reasonable inferences to be drawn from those facts. 14 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). 15 The party seeking summary judgment bears the initial burden of informing 16 the court of the basis for its motion and identifying those portions of the record 17 that demonstrate the absence of a genuine issue of material fact. Celotex, 477 18 U.S. at 323. Here, because the party seeking summary judgment is Plaintiff, who 19 bears the ultimate burden of proof at trial, it must establish “beyond controversy 20 every essential element” of its claim. S. California Gas Co. v. City of Santa Ana, 21 336 F.3d 885, 888 (9th Cir. 2003); see also Nationstar Mortg., LLC v. Maplewood 22 Springs Homeowners Ass’n, 238 F. Supp. 3d 1257, 1266 (D. Nev. 2017) (moving 23 party with the burden of proof at trial “must come forward with evidence which 24 would entitle it to a directed verdict if the evidence went uncontroverted at trial”). 25 Once the moving party satisfies Rule 56’s requirements, the burden shifts 26 to the non-moving party to “set forth specific facts showing that there is a genuine 27 issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may not rely 28 on denials in the pleadings but must produce specific evidence, through affidavits 1 or admissible discovery material, to show that the dispute exists[.]” Bhan v. NME 2 Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). However, where a moving party 3 fails to meet their initial burden, “the nonmoving party has no obligation to 4 produce anything, even if the nonmoving party would have the ultimate burden 5 of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Companies, Inc., 6 210 F.3d 1099, 1102-1103 (9th Cir. 2000). 7 2. Analysis 8 a. Contribution/Reimbursement of $267.685.21 Payment 9 The Court finds that summary judgment is not appropriate on National 10 Fire’s claim for contribution towards its $267.685.21 payment to Pulte. First, the 11 Court agrees with National Fire that there is, at minimum, a genuine dispute as 12 to whether National Fire’s $267.685.21 was an indemnity payment or payment 13 for consequential damages. CICNA argues that the payment was consequential 14 damages resulting from National Fire’s breach of its duty to defend. In support of 15 this argument, CICNA cites to various statements made by National Fire, such as 16 that the payment was a “business decision,” and that it was to be “credited 17 against [its] ultimate obligations” to Pulte. (ECF Nos. 114 at 36, 9 at 60.) CICNA 18 also cites to a briefing in which National Fire stated “National Fire wrote Pulte a 19 check for $267,685.21 in partial satisfaction of the judgment.” (ECF No. 204 at 20 2.) 21 Equitable contribution claims permit a cause of action by an insurer 22 against coinsurers “when it has undertaken the defense or indemnification of the 23 common insured.” N. Am. Specialty Ins. Co. v. Nat’l Fire & Marine Ins. Co., No. 24 2:10-CV-01859-GMN, 2013 WL 1332205, at *2 (D. Nev. Apr. 2, 2013) (quoting 25 Fireman’s Fund Ins. Co. v. Maryland Cas. Co., 77 Cal. Rptr. 2d 296, 303 (Cal. Ct. 26 App. 1998)); see also Riverport Ins. Co. v. State Farm Fire & Cas. Co., No. 2:18- 27 CV-00330-GMN-NJK, 2019 WL 4601511, at *8 (D. Nev. Sept. 20, 2019). CICNA 28 cites to California case law for the proposition that an insurer may not seek 1 contribution for consequential damages resulting from its own breaches of its 2 duties, as these damages are not defense or indemnification of a common 3 insured. See United Servs. Auto. Ass’n v. Alaska Ins. Co., 114 Cal. Rptr. 2d 449, 4 454 (Cal. Ct. App. 2001) (insurer could not seek contribution for payments it 5 made in settlement of breach of contract and bad faith claims). 6 There are two problems with CICNA’s argument. First, while the Court’s 7 order on summary judgment found that the judgment in the Eave Soffits 8 Litigation constitutes damages to Executive Plastering proximately caused by 9 National Fire’s failure to defend, this is not the same as finding that the 10 $267.685.21 payment constitutes payment for consequential damages. (See ECF 11 No. 131 at 16.) As National Fire points out, the payment was made before there 12 had been any determination that National Fire indeed had breached its duty to 13 defend, and National Fire made no such concession in making the payment. 14 Second, National Fire has presented evidence tending to show that the payment 15 was an indemnity payment. Along with the payment, National Fire provided a 16 letter stating that “National Fire is paying an amount which it believes exceeds 17 any potential exposure under its policy with regard to the Judgment,” and 18 maintained its position that it had no duty to defend as its insurance was excess 19 to CICNA’s policy. (ECF No. 9 at 58-60.) 20 If National Fire’s payment was an indemnity payment, National Fire is not 21 barred from seeking contribution under the theory that CICNA was primary and 22 it was excess. The Court’s prior order denied summary judgment due to factual 23 disputes concerning primary/excess coverage. (ECF No. 131 at 23.) Because 24 there is evidence which supports both sides’ theories, there is a genuine dispute 25 of fact as to whether this payment was for indemnification or consequential 26 damages. As such, summary judgment on National Fire’s contribution claim is 27 not appropriate. 28 CICNA also argues that National Fire cannot proceed with its contribution 1 claim because the remedy of contribution is only available to co-insurers and 2 National Fire has offered no evidence that it and CICNA were coinsurers. “Where 3 multiple insurance carriers insure the same insured and cover the same risk, 4 each insurer has independent standing to assert a cause of action against its 5 coinsurers for equitable contribution when it has undertaken the defense or 6 indemnification of the common insured.” N. Am. Specialty Ins. Co., 2013 WL 7 1332205, at *2 (quoting Fireman’s Fund, 77 Cal. Rptr. 2d at 303.) CICNA argues 8 that National Fire’s position that its own insurance was excess and 9 noncontributory defeats its claim because contribution only arises when two 10 insurers share equal obligation to pay the loss. National Fire’s argument is, in 11 effect, that it had no obligation to pay the loss and that CICNA in fact was 12 obligated to pay it entirely. 13 Fairly construed, National Fire’s complaint seeks adjudication of its 14 coverage obligation, if any, and reimbursement for any overpayment. Specifically, 15 National Fire seeks declaratory relief in the form of a “judicial determination of 16 the rights and duties under [National Fire’s] and CICNA’s policies with respect to 17 the Eve Soffits Claims.” (ECF No. 9 at 36.) National Fire then seeks 18 “Contribution/Reimbursement” for the $267,685.21 payment based on its 19 allegation that CICNA’s coverage was primary and its coverage was excess, 20 therefore it didn’t have an obligation to pay. (Id. at 39.) It seems that National 21 Fire’s claim seeks contribution/reimbursement for amounts it paid towards 22 claims alleges it provided no coverage for. This is not the same as seeking 23 equitable contribution, which CICNA correctly identifies as being applicable 24 where two insurers both provide coverage for the same claim. 25 Several courts in California have made it clear that insurers do not need to 26 cover the same risk in order to seek reimbursement, and that this is referred to 27 as “subrogation” rather than “contribution”: 28 1 “[W]here different insurance carriers cover different risks and 2 liabilities with respect to the same insured, they may proceed against each other for reimbursement by subrogation rather than by 3 contribution.... [C]ontribution is only available in cases where there are coinsurers who share the same level of obligation on the same 4 risk. One insurer has no right of contribution from another insurer with respect to its payment on an obligation for which it was 5 primarily responsible, and as to which the liability of the second 6 insurer was only secondary.” 7 Atl. Mut. Ins. Co. v. J. Lamb, Inc., 123 Cal. Rptr. 2d 256, 276 (2002) (citing 8 Fireman’s Fund, 77 Cal. Rptr. 2d at 307); see also Reliance Nat. Indem. Co. v. Gen. 9 Star Indem. 85 Cal. Rptr. 2d 627, 636 (1999). In addition, the Nevada Supreme 10 Court’s decision in Ardmore Leasing Corp. v. State Farm Mut. Auto. Ins. Co. seems 11 to permit a claim for “contribution and/or indemnity” where one insurer paid the 12 insured but argued that another provided primary coverage and its own policy 13 provided no coverage. 796 P.2d 232 (Nev. 1990). 14 The Court is not clear on why both parties have been so focused on case 15 law regarding equitable contribution in their briefing. While equitable 16 contribution may be relevant if it is determined that both National Fire and CICNA 17 did cover the same risk, it is not the correct analysis for National Fire’s claim that 18 it is owed reimbursement because its policy was not primary. It is, however, clear 19 based on the case law cited above that National Fire is not barred from seeking 20 some form of reimbursement under the theory that it paid towards a claim that 21 CICNA was in fact the primary insurer for. And, as stated in the Court’s summary 22 judgment order, there are factual issues as to coverage: “[s]ince the issue of 23 whether any damage occurred after [] CICNA’s policy went into effect could impact 24 the liability of each insurer, summary judgment is inappropriate.” (ECF No. 131 25 at 23.) 26 Because National Fire is not precluded from pursing reimbursement on 27 this theory, and there are factual issues as to (1) whether the payment was 28 indemnity or consequential damages and (2) National Fire’s and CICNA’s 1 respective coverage, the Court denies summary judgment on National Fire’s 2 contribution claim related to the $267,685.21 payment. 3 b. Contribution Related to Collusion 4 The Court finds that summary judgment is appropriate on National Fire’s 5 contribution claim tied to its claim/affirmative defense of collusion. CICNA argues 6 that if National Fire is found liable for breach of the duty to defend and breach of 7 the implied covenant of good faith and fair dealing for failure to settle, the 8 damages it will be liable for will be in the form of consequential damages, for 9 which it cannot seek contribution. See United Servs., 114 Cal. Rptr. at 449. Thus, 10 National Fire is barred from pursuing a claim for contribution for any liability it 11 faces in the instant lawsuit. In response, National Fire argues that it is possible 12 that a jury finds that it is liable for these breaches, but also that the judgment 13 was the result of collusion, as it has asserted in its own claim and affirmative 14 defense. Because collusion is a full defense to the failure to defend, National Fire 15 would then be entitled to seek contribution and/or reimbursement from CICNA 16 and/or Pulte for its liability. 17 First, the Court notes that collusion is a defense, not a claim in and of 18 itself. See Andrew v. Century Sur. Co., 134 F. Supp. 3d 1249, 1267-68 (D. Nev. 19 2015). The Court agrees with National Fire that the jury could find that National 20 Fire is liable for said breaches but also find that all or part of the judgment was 21 caused by collusion. However, the Court also agrees with CICNA that in this 22 event, because collusion is a defense, National Fire’s liability will be reduced by 23 the amount of the judgment the jury finds was attributable to any collusion by 24 CICNA and Pulte. Thus, National Fire will not need to seek contribution or 25 reimbursement should it succeed on this defense. Thus, National Fire would not 26 be entitled to seek contribution if it succeeds on its affirmative defense of 27 collusion. Accordingly, the Court finds that summary judgment is appropriate on 28 this issue: National Fire may not seek contribution based on its collusion defense. 1 B. CICNA’s Motion to Exclude Evidence Regarding Contribution, or 2 Alternatively, to Bifurcate Trial (ECF No. 162) 3 As stated above, the Court finds that summary judgment is not appropriate 4 as to National Fire’s contribution claim for contribution towards its $267.685.21 5 payment to Pulte. Evidence and argument regarding contribution is obviously 6 relevant to this claim. The Court therefore denies CICNA’s motion to exclude 7 evidence regarding contribution. 8 Alternatively, CICNA requests that the Court bifurcate trial, to allow the 9 parties to first try Pulte’s claims against National Fire, and then separately try 10 National Fire’s contribution claim. Under Federal Rule of Civil Procedure 42(b), 11 the Court may, “[f]or convenience, to avoid prejudice, or to expedite and 12 economize” order a separate trial of separate claims. “Rule 42(b) of the Federal 13 Rules of Civil Procedure confers broad discretion upon the district court to 14 bifurcate a trial, thereby deferring costly and possibly unnecessary proceedings.” 15 Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002). “Bifurcation 16 can be especially helpful where the resolution of a particular issue could dispose 17 of the remaining claims or defenses.” Alele v. Geico Gen. Ins. Co., 420 F. Supp. 3d 18 1124, 1130 (D. Nev. 2019) (citing Drennen v. Maryland Cas. Co., 366 F. Supp. 2d 19 1002, 1007 (D. Nev. 2005)). However, “where the claims involve overlapping 20 discovery and intertwined factual issues, a separate trial would merely spur 21 duplicative litigation and eliminate the convenience that bifurcation intends.” 22 Walker v. Geico Cas. Co., No. 2:19-CV-0909-KJD-NJK, 2019 WL 6729315, at *6 23 (D. Nev. Dec. 11, 2019) (citing Alele, 420 F. Supp. 3d at 1130). 24 First, CICNA argues that resolution of Pulte’s claims against National Fire 25 should dispose of National Fire’s contribution claim. However, as discussed 26 above, National Fire’s claim against CICNA for reimbursement of the $267.685.21 27 payment remains, as there are factual issues as to whether the payment 28 constitutes consequential damages. Thus, even if Pulte succeeds on its claims 1 against National Fire, National Fire’s claim for contribution against CICNA 2 remains. See Tracey v. Am. Fam. Mut. Ins. Co., No. 2:09-CV-01257-GMN, 2010 3 WL 3613875, at *6 (D. Nev. Sept. 8, 2010) (the fact that resolution of one claim 4 was not dispositive of other claims cut against bifurcation). CICNA also argues 5 that “removing the contribution claim from the lawsuit would save potentially 6 days of coverage evidence and arguments that have nothing to do with Pulte’s 7 claims.” (ECF No. 162 at 12.) However, as discussed below, issues of coverage are 8 relevant to several of Pulte’s claims, such as National Fire’s collusion defense and 9 the reasonableness of its decision not to settle. This presents the possibility that 10 the same evidence and/or witnesses would need to present the same evidence in 11 both trials, which would be inefficient for the Court and parties. See Alele, 420 F. 12 Supp. 3d at 1129-30. Finally, CICNA argues that trying the claims together will 13 cause it prejudice because it “will risk that contribution or coverage are conflated 14 with National Fire’s own liability to Pulte for damages caused by its failure to 15 defend.” (ECF No. 162 at 12.) The Court does not think that this distinction 16 presents such a risk of confusion that bifurcation is necessary. “Any concerns 17 about prejudice or confusion on the jury’s part can be properly addressed 18 through jury instructions and counsels’ opening statements and closing 19 arguments.” Id. at 1130; (citing Tracey, 2010 WL 3613875, at *7 (potential 20 confusion in hearing contractual and bad faith claims in same trial can be 21 addressed through jury instructions and opening and closing statements)). 22 III. Pulte’s Motion to Exclude Evidence Regarding Indemnification (ECF No. 163) 23 24 Pulte’s motion in limine seeks to exclude evidence and argument regarding 25 National Fire’s contribution claim against it. The Court notes at the outset that 26 both parties, in their briefing, fail to identify with specificity what precise evidence 27 they are discussing. This makes it difficult for the Court to discern the evidence 28 which various parties seek to deem either relevant or irrelevant. As such, the 1 Court addresses at a conceptual level certain aspects of the motion but defers on 2 all other decisions regarding the admissibility of evidence until specific evidence 3 is before it. 4 Pulte argues that now that its claim regarding breach of the duty to 5 indemnify has been voluntarily dismissed (ECF No. 202), National Fire’s duty to 6 indemnify Executive Plastering is no longer relevant to any remaining claims.1 7 Accordingly, Pulte argues, evidence of National Fire’s coverage or indemnification 8 is irrelevant and inadmissible under Federal Rule of Evidence 402. In response, 9 National Fire argues that evidence of coverage/indemnification is still relevant to 10 (1) its collusion defense; (2) its defense that its decision not to settle was 11 reasonable; and (3) its contribution claim. 12 A. Relevance to Duty to Defend 13 The Court agrees with Pulte that evidence of National Fire’s coverage/duty 14 to indemnify Executive Plastering is not relevant to the duty to defend. An 15 insurer’s liability to defend is broader than the duty to indemnify and occurs 16 when there is a possibility of coverage under the insurance contract. (ECF No. 17 131 at 12); United Nat’l Ins. Co. v. Frontier Ins. Co., 99 P.3d 1153, 1158 (Nev. 18 2004). Additionally, the Court already determined in its summary judgment order 19 that National Fire had a duty to defend Executive Plastering. (ECF No. 131 at 10- 20 15.) Thus, whether National fire had a duty to indemnify Executive Plastering is 21 not relevant to Pulte’s claim for breach of the duty to defend. 22 B. Relevance to Collusion Defense 23 National Fire argues that evidence of coverage is relevant to its collusion 24 1 In its briefing on its prior motion for voluntary dismissal, Pulte urged that it 25 only intends to proceed on the theory of breach of the duty to settle under its claim for breach of the duty of good faith and fair dealing. (ECF No. 175 at 3.) 26 National Fire notes that Pulte’s other theories under this claim are for breach of 27 the duty to defend and duty to indemnify. If Pulte does in fact proceed on its theory of breach of the duty to indemnify, evidence of coverage would of course 28 be relevant to that claim. 1 defense because it shows motive. Specifically, National Fire argues, coverage 2 evidence shows that its policy provided limited coverage for the underlying 3 homes, which Pulte argues motivated the collusion between CICNA and Pulte. 4 The Court finds that evidence of indemnification/coverage is relevant to this 5 defense. 6 C. Relevance to Reasonableness of Decision Not to Settle 7 National Fire argues that evidence of coverage is relevant to the jury’s 8 determination as to whether its refusal to settle was reasonable. The Court’s 9 summary judgment order denied Pulte’s motion for summary judgment on this 10 claim, finding that there were genuine issues of material fact as to the 11 reasonableness of National Fire’s decision not to settle. (ECF No. 131 at 20.) Pulte 12 argues that “An insurer may not consider coverage in determining whether to 13 accept a reasonable settlement offer.” (ECF No. 163 at 7.) However, the case law 14 Pulte cites for this proposition is a California Supreme Court decision, Johansen 15 v. California State Auto. Assn. Inter-Ins. Bureau, 538 P.2d 744, 748 (Cal. 1975). 16 The Court’s prior summary judgment order cited to a Nevada Supreme Court 17 decision which cited favorably to several factors from a Louisiana Court of 18 Appeals decision regarding bad faith failure to settle, including “the extent of 19 damages in excess of policy coverage.” Allstate Ins. Co. v. Miller, 212 P.3d 318, 20 327 (2009) (quoting Fertitta v. Allstate Ins. Co., 439 So.2d 531, 533 (La. Ct. App. 21 1983)). This Court’s summary judgment order specifically identified an issue for 22 the jury as to “whether National Fire was reasonable at the time with regards to 23 its belief about the extent of its coverage.” (ECF No. 131 at 20.) The Court finds 24 that evidence regarding coverage may be relevant to the reasonableness of 25 National Fire’s decision not to settle. 26 D. Questions of Law and Probative Value 27 Pulte also argues that coverage is a legal issue for the court, not the jury, 28 citing Arminas Wagner Enters., Inc. v. Ohio Sec. Ins. Co., 658 F. Supp. 3d 883, 1 890 (D. Nev. 2023) (“Ultimately, the interpretation of an insurance policy is a 2 question of law for the court.”). Pulte explains that while some policy documents 3 can be admitted by stipulation, opinion testimony regarding the meaning of said 4 policies is categorically inadmissible. (ECF No. 163 at 10.) Pulte also argues even 5 if admissible as relevant, the probative value of coverage evidence is outweighed 6 by the risk of confusion and error by the jury as well as undue prejudice. Because 7 Pulte has not provided sufficient specificity as to the evidence it seeks to deem 8 inadmissible via these arguments, the Court will defer ruling on this matter until 9 specific evidence or testimony is presented. 10 E. Relevance to Declaratory Judgment and Contribution Claim 11 The crux of National Fire’s claim against CICNA for declaratory judgment 12 and contribution towards its $267.685.21 payment to Pulte is National Fire’s 13 argument that CICNA’s insurance was primary and National Fire’s own insurance 14 was excess and non-contributory. The Court’s summary judgment order held that 15 “since the issue of whether any damage occurred after the CICNA policy went into 16 effect could impact the liability of each insurer, summary judgment is 17 inappropriate.” (ECF No. 131 at 23.) Evidence regarding both CICNA’s and 18 National Fire’s policy coverage is relevant to which policy provided coverage for 19 the damaged homes. 20 Accordingly, the Court grants in part and denies in part Pulte’s motion. The 21 Court finds that evidence of indemnification/coverage is not relevant to Pulte’s 22 claim for breach of the duty to defend. However, evidence of 23 indemnification/coverage is relevant to National Fire’s collusion defense, its 24 defense that its decision not to settle was reasonable, and its declaratory 25 judgment and contribution claim against CICNA. 26 IV. Conclusion 27 It is therefore ordered that CICNA’s motion to exclude evidence and 28 argument regarding contribution and in the alternative to bifurcate claims for 1 || trial (ECF No. 162) is DENIED. 2 It is further ordered that Pulte’s motion to exclude evidence and argument 3 || regarding Defendant National Fire’s duty to indemnify (ECF No. 163) is GRANTED 4 || IN PART and DENIED IN PART in accordance with this order. 5 It is further ordered that National Fire’s motion for leave to file a sur-reply 6 || (ECF No. 180) is GRANTED. 7 Dated this 21st day of July 2025. 8 9 Ana ‘ losed Jer 10 ANNE R. TRAUM 11 UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28