United States District Court, D. Nevada
JAMES NALDER, Guardian Ad Litem for minor Cheyanne Nalder, real party in interest, and GARY LEWIS, Individually, Plaintiffs,
UNITED AUTOMOBILE INSURANCE COMPANY, DOES I through V, and ROE CORPORATIONS I through V, inclusive, Defendants.
ROBERT C. JONES, District Judge.
On October 30, 2013, the Court entered summary judgment in this case, which arises out of an automobile accident. Defendant has moved for attorney fees (ECF No. 104), and Plaintiffs have filed a countermotion, seeking attorney fees, costs, and prejudgment interest, (ECF No. 106). Defendant has also moved to strike an affidavit filed in support of Plaintiffs' motion, (ECF No. 108), and to strike Plaintiffs' subsequently filed errata, (ECF No. 127). For the reasons stated herein, the Court grants in part and denies in part Plaintiffs' motion. Defendant's motion for attorney fees is denied in the entirety, and the motions to strike are denied as moot.
I. Facts and Procedural History
In July 2009, Defendant United Automobile Insurance Company ("Defendant" or "UAIC") filed a petition for removal based on diversity jurisdiction. (Pet. for Removal, ECF No. 1, at 1-2). Defendant attached Plaintiffs James Nalder, guardian ad litem for minor Cheyanne Nalder, real party in interest, and Gary Lewis's (collectively "Plaintiffs") complaint which had been filed in Nevada's Eighth Judicial District. (Compl., ECF No. 1, at 5-16).
The complaint alleged the following: Lewis was the owner of a 1996 Chevy Silverado and had an automobile insurance policy with Defendant on July 8, 2007. ( Id. at 6). On July 8, 2007, Lewis drove over the top of Cheyanne while Cheyanne was a pedestrian in a residential area, causing Cheyanne serious personal injuries. ( Id. at 7). Cheyanne made a claim to Defendant for damages and offered to settle the claim within the policy limits. ( Id. ). Defendant refused to settle and denied the claim, contending that Lewis did not have coverage at the time of the accident. ( Id. ). Defendant was required to provide insurance coverage under the policy. ( Id. at 9). Defendant never informed Lewis that Cheyanne was willing to settle the claim for the sum of $15, 000, the policy limit. ( Id. ). Due to the dilatory tactics and failure of Defendant to protect its insured, Cheyanne filed a complaint on October 9, 2007 against Lewis for her personal injuries and damages. ( Id. ). Cheyanne procured a default judgment in the amount of $3, 500, 000 against Lewis. ( Id. ). Plaintiffs alleged breach of contract, breach of the implied covenant of good faith and fair dealing, bad faith, breach of NRS 686A.310, and fraud against Defendant. ( Id. at 9-14).
In March 2010, Defendant moved for summary judgment on all claims. ( See Mot. Summ. J., ECF No. 17). In December 2010, Judge Reed issued an order granting Defendant's motion in the entirety. (Order, ECF No. 42, at 13). The order provided the following factual history:
Lewis was the owner of a 1996 Chevy Silverado insured, at various times, by Defendant. Lewis had an insurance policy issued by UAIC on his vehicle during the period of May 31, 2007 to June 30, 2007. Lewis received a renewal statement, dated June 11, 2007, instructing him to remit payment by the due date of June 30, 2007 in order to renew his insurance policy. The renewal statement specified that "[t]o avoid lapse in coverage, payment must be received prior to expiration of your policy." The renewal statement listed June 30, 2007 as effective date, and July 31, 2007 as an "expiration date." The renewal statement also states that the "due date" of the payment is June 30, 2007, and repeats that the renewal amount is due no later than June 30, 2007. Lewis made a payment on July 10, 2007.
Defendant then issued a renewal policy declaration and automobile insurance cards indicating that Lewis was covered under an insurance policy between July 10, 2007 to August 10, 2007.
( Id. at 2-3).
The order then summarized the parties' respective positions: Defendant sought summary judgment on all claims on the basis that Lewis had no insurance coverage on the date of the accident. ( Id. ). Plaintiffs argued that Lewis was covered on the date of the accident because the renewal notice was ambiguous as to when payment had to be received in order to avoid a lapse in coverage and that any ambiguities had to be construed in favor of the insured. ( Id. at 5-6). Defendants, in the alternative, requested that the Court dismiss Plaintiffs' extra-contractual claims or bifurcate the claim of breach of contract from the remaining claims. ( Id. at 6).
Regarding Lewis's insurance coverage on July 8, 2007, the order stated the following:
Plaintiffs contend that Lewis was covered under an insurance policy on July 8, 2007, the date of the accident, because Lewis' payment on July 10, 2007 was timely. Plaintiffs rely on the sentence "[t]o avoid lapse in coverage, payment must be received prior to expiration of your policy" contained in the renewal statement. Defendant contends that "expiration of your policy" did not refer to the expiration date of the renewal policy listed on the renewal statement, but to the expiration of Lewis' current policy, which coincided with the listed due date on the renewal statement. Plaintiffs contend that Lewis reasonably believed that while there was a due date on which UAIC preferred to receive payment, there was also a grace period within which Lewis could pay and avoid any lapse in coverage.
The renewal statement cannot be considered without considering the entirety of the contract between Lewis and UAIC. Plaintiff[s] attached exhibits of renewal statements, policy declarations pages, and Nevada automobile insurance cards issued by UAIC for Lewis. The contract, taken as a whole, cannot reasonably be interpreted in favor of Plaintiffs' argument.
Lewis received a "Renewal Policy Declarations" stating that he had coverage from May 31, 2007 to June 30, 2007 at 12:01 A.M. (Pls' Opp., Exhibit A at 29 (#20-1); Pls' Supp., Exhibit A at 11-12 (#26-1); Pls' Supp., Exhibit A at 15 (#26-1).) The declarations page stated that "[t]his declaration page with policy provisions' and all other applicable endorsements complete your policy." (Pls' Opp., Exhibit A at 29 (#20-1).) Lewis also received a Nevada Automobile Insurance Card issued by UAIC stating that the effective date of his policy was May 31, 2007, and the expiration date was June 30, 2007. ( Id. at 30; Pls' Supp., Exhibit A at 11-12 (#26-1).) The renewal statement Lewis received in June must be read in light of the rest of the insurance policy, contained in the declarations page and also summarized in the insurance card.
"In interpreting a contract, the court shall effectuate the intent of the parties, which may be determined in light of the surrounding circumstances if not clear from the contract itself.'" Anvui, LLC v. G.L. Dragon, LLC, 163 P.3d 405, 407 (Nev. 2007). Plaintiffs contend that there was a course of dealing between Lewis and UAIC supporting a reasonable understanding that there was a grace period involved in paying the insurance premium for each month-long policy. In fact, the so-called course of dealing tilts, if at all, in favor of Defendant. Lewis habitually made payments that were late. UAIC never retroactively covered Lewis on such occasions. Lewis' new policy, clearly denoted on the declarations page and insurance cards Lewis was issued, would always become effective on the date of the payment.
Plaintiffs point to the fact that in April 2007, Lewis was issued a revised renewal statement stating that the renewal amount was due on May 6, 2007, a date after the effective date of the policy Lewis would be renewing through the renewal amount. This isolated occasion occurred due to the fact that Lewis added a driver to his insurance policy, resulting in an increase in the renewal amount, after UAIC had previously sent a renewal notice indicating that a lower renewal amount was due on April 29, 2007. UAIC issued a revised renewal statement dated April 26, 2007, and gave Lewis an opportunity to pay by May 6, 2007, instead of April 29, 2007, when the original renewal amount had been due upon expiration of his April policy. In that case, Lewis made a timely payment on April 28, 2007, and therefore there is not a single incident Plaintiffs can point to in which Lewis was retroactively covered for a policy before payment was made, even in the single instance UAIC granted him such an opportunity due to a unique set of circumstances.
( Id. at 7-9).
Plaintiffs appealed. (Notice of Appeal., ECF No. 46). In a two-page memorandum disposition, the Ninth Circuit held, inter alia, the following:
We reverse the district court's grant of United Automobile Insurance Company's motion for summary judgment with respect to whether there was coverage by virtue of the way the renewal statement was worded. Plaintiffs came forward with facts supporting their tenable legal position that a reasonable person could have interpreted the renewal statement to mean that Lewis's premium was due by June 30, 2007, but that the policy would not lapse if his premium were "received prior to expiration of [his] policy, " with the "expiration date" specifically stated to be July 31, 2007. We remand to the district court for trial or other proceedings consistent with this memorandum. The portion of the order granting summary judgment with respect to the statutory arguments is affirmed.
(Ninth Cir. Mem. Dispo., ECF No. 82, at 2-3).
The parties then filed cross-motions for summary judgment. (Pls.' Mot. Summ. J., ECF No. 88; Def.'s Mot. Summ. J., ECF No. 89). In an order dated October 30, 2013, this Court granted in part and denied in part Plaintiffs' motion. (ECF No. 102). Specifically, the Court granted summary judgment as to the existence of coverage, finding that the insurance renewal statement contained an ambiguity that must construed in favor of coverage during the time of the accident. ( Id. at 10.). The Court denied Plaintiffs' motion as to the remaining bad faith claims and granted Defendant's countermotion as to all of the extra-contractual claims. ( Id. ). The Court then directed Defendant to pay Nalder the policy limits and ordered the case closed. ( Id. ).
Shortly thereafter, the parties filed the pending cross-motions for attorney fees and costs. (ECF No. 104; ECF No. 106). Defendant has also moved to strike the affidavit submitted in support of Plaintiffs' motion. (ECF No. 108). The Court heard oral argument on February 13, 2014 and now considers the pending motions.
Although Plaintiffs have filed a notice of appeal from this Court's October 30, 2013 order on the motions for summary judgment, (ECF No. 112), the Court retains jurisdiction to hear the pending motions for attorney fees. In Masalosalo by Masalosalo v. Stonewall Ins. Co., the Court of Appeals for the Ninth Circuit held that an appeal from the merits does not foreclose an award of attorney fees by the district court. 718 F.2d 955, 956 (9th Cir. 1983). Allowing the district court retain jurisdiction to consider a motion for attorney fees "will prevent hasty consideration of postjudgment fee motions" and "will prevent postponement of fee consideration until after the circuit court mandate, when the relevant circumstances will no longer be fresh in the mind of the district judge." Id. The Ninth Circuit also noted that if the district court rules on the fees motion, the losing party may file an appeal from the district court's order on the motion for attorney fees and have that appeal consolidated with the appeal on the merits. Id. Accordingly, the Court has jurisdiction over the pending motions.
III. Plaintiffs' Motion for Attorney Fees and Costs (ECF No. 106)
Plaintiffs have moved for prejudgment interest, costs, and an award of attorney fees. (ECF No. 106). Upon initial review, the Court found the motion substantively and procedurally deficient in numerous respects. However, as explained at the hearing held on February 13, 2014, the Court was, and remains, inclined to grant a reasonable award of conservative fees and costs upon the filing of a properly supported motion. (Hr'g, Feb. 13, 2014, Las Vegas Courtroom 4B, at 10:09:20 a.m.). Specifically, the Court suggested that Plaintiffs could supplement their original filings with the required, additional proofs. ( Id. at 10:04 a.m., 10:07 a.m.). In response, ...