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Universal North America Insurance Co. v. Hilts

United States District Court, D. Nevada

August 6, 2014

STEVE F. HILTS and DIANA HILTS; DOES 1 through 10; and ROES 1 through 10, Defendants.


LLOYD D. GEORGE, District Judge.

On September 12, 2011, the defendant, Steve Hilts, took his dog to work. As he was leaving work, the dog broke away from its leash and bit the hand of Michelle Kim. Kim, who is not a party in the instant action, subsequently sued Hilts in state court.[1] Hilts, who was insured by the plaintiff, Universal North America Insurance Company ("UNAIC"), filed a claim seeking its intervention in the suit. While Hilts's insurance agreement included general provisions for UNAIC to hire counsel to defend Hilts against legal suits, and to pay the medical bills of individuals involved in those suits, it also included various exclusions limiting UNAIC's obligation to engage in such actions. On August 6, 2013, UNAIC declined to defend Hilts in the action or compensate Kim for any medical expenses. UNAIC subsequently filed the instant complaint, seeking a declaratory judgment affirming its decision to deny coverage. UNAIC now moves for summary judgment on its complaint (#20). For the reasons stated below, the Court will grant the plaintiff's motion.

Standard of Review

In considering a motion for summary judgment, the court performs "the threshold inquiry of determining whether there is the need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); United States v. Arango, 670 F.3d 988, 992 (9th Cir. 2012). To succeed on a motion for summary judgment, the moving party must show (1) the lack of a genuine issue of any material fact, and (2) that the court may grant judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Arango, 670 F.3d at 992.

A material fact is one required to prove a basic element of a claim. Anderson, 477 U.S. at 248. The failure to show a fact essential to one element, however, "necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323. Additionally, "[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient." United States v. $133, 420.00 in U.S. Currency, 672 F.3d 629, 638 (9th Cir. 2012) (quoting Anderson, 477 U.S. at 252).

"[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. "Of course, a party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. As such, when the non-moving party bears the initial burden of proving, at trial, the claim or defense that the motion for summary judgment places in issue, the moving party can meet its initial burden on summary judgment "by showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case." Id. at 325. Conversely, when the burden of proof at trial rests on the party moving for summary judgment, then in moving for summary judgment the party must establish each element of its case.

Once the moving party meets its initial burden on summary judgment, the nonmoving party must submit facts showing a genuine issue of material fact. Fed.R.Civ.P. 56(e); Nissan Fire & Marine Ins. Co. v. Fritz Companies, Inc., 210 F.3d 1099, 1103 (9th Cir. 2000). As summary judgment allows a court "to isolate and dispose of factually unsupported claims or defenses, " Celotex, 477 U.S. at 323-24, the court construes the evidence before it "in the light most favorable to the opposing party." Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970). The allegations or denials of a pleading, however, will not defeat a well-founded motion. Fed.R.Civ.P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). That is, the opposing party cannot "rest upon the mere allegations or denials of [its] pleading' but must instead produce evidence that sets forth specific facts showing that there is a genuine issue for trial.'" Estate of Tucker v. Interscope Records, 515 F.3d 1019, 1030 (9th Cir. 2008) (quoting Fed.R.Civ.P. 56(e)).


When analyzing the language of an insurance policy, the contract "should be interpreted broadly, affording the greatest possible coverage to the insured." Farmers Ins. Group v. Stonik, 110 Nev. 64, 67 (1994) (citing Harvey's Wagon Wheel v. MacSween, 96 Nev. 215, 219-20 (1980). The terms of the policy "should be viewed in their plain, ordinary and popular connotations." Am. Excess Ins. Co. V. MGM Grand Hotels, Inc., 102 Nev. 601, 604 (1986) (citing National Union Fire Ins. v. Reno's Exec. Air, 100 Nev. 360 (1984). However, where the terms of the policy "[were] intentionally and unambiguously limited by the parties, " courts "will not increase [the insurer's] obligation to the insured." Farmers Ins. Group v. Stonik, 110 Nev. 64, 67 (1994) (citing Senteney v. Fire Ins. Exchange, 101 Nev. 654, 707 (1985). "[I]f an insurer wishes to exclude coverage by virtue of an exclusion in its policy, it must (1) write the exclusion in obvious and unambiguous language in the policy, (2) establish that the interpretation excluding covering under the exclusion is the only interpretation of the exclusion that could fairly be made, and (3) establish that the exclusion clearly applies to this particular case." Powell v. Liberty Mut. Fire Ins. Co., 127 Nev. 14, 252 P.3d 668, 674 (2011).

In the instant case, Hilts obtained an insurance policy from UNAIC for the purpose of insuring a rental property he owned. The form contract also included a series of addendums that alter the meaning of various provisions within the policy. The standard contract includes, among others, a section entitled PERSONAL LIABILITY (#21, Exhibit C, 21). Within this section, there are a series of six sub-sections: Agreement, Definitions, Liability Coverages, Exclusions, Additional Coverages and Conditions (#21, Exhibit C, 21, 23, 26, and 27). The following provisions, contained in the Liability Coverages subsection, are at issue in the instant complaint:


A. Coverage L - Personal Liability
If a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies, we will:
1. Pay up to our limit of liability for the damages for which an "insured" is legally liable. Damages include prejudgment interest ...

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