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Kalberer v. American Family Mutual Insurance Co.

United States District Court, D. Nevada

August 19, 2014

JESSE KALBERER, Plaintiff(s),
v.
AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant(s).

ORDER

JAMES C. MAHAN, District Judge.

Presently before the court is a motion for summary judgment filed by defendant American Family Mutual Insurance Company ("American Family"). (Doc. #26). Plaintiff Jesse Kalberer filed a response in opposition (doc. #46), and American Family filed a reply (doc. #62).

Also before the court is a motion for relief pursuant to Federal Rule of Civil Procedure 56(d) filed by plaintiff. (Doc. #47). American Family filed a response in opposition (doc. #63), and plaintiff filed a reply (doc. #67).

I. Background

Plaintiff was insured by American Family under a family automobile policy. (Doc. #26 at p. 4). The policy provided a limit of $100, 000 for bodily injury per individual. (Doc. #26 at p. 4).

On May 28, 2008, plaintiff was involved in a car accident with Eileen Mendiola ("Mendiola") and Mendiola's passenger, Rosa Siguenza. (Doc. #26 at p. 4). The next month, American Family received letters of representation from Adam S. Kutner and Associates as representatives of Mendiola. (Doc. #26 at p. 5). On June 25, 2009, American Family received a demand from Mendiola which requested the full $100, 000 policy limit in order to settle the claim. (Doc. #46 at p. 2). After this demand was rejected, Mendiola filed a lawsuit against plaintiff and American Family in Nevada State Court on August 24, 2009. (Doc. #26 at p. 6).

American Family disputed liability for Mendiola's injuries based on its belief that some of the alleged injuries predated the accident. (Doc. #26 at p. 8). Additionally, American Family believed that Mendiola had overstated her medical expenses. (Doc. #26 at p. 8).

American Family sent several updates to plaintiff, including a warning which stated "[s]hould the damages awarded to [Mendiola] exceed the coverage limit provided under [plaintiff's] policy of insurance with American Family [], [plaintiff] may be held personally liable for the amount in excess of those limits." (Doc. #46-9). As a result, plaintiff emailed American Family and requested that the case be settled for the policy limit so that he would not personally be held liable. (Doc. #46 at p. 6).

Throughout the litigation, American Family's counsel sent several status updates to American Family advising that an adverse damage award as high as $350, 000.00 could result from Mendiola's claims. (Doc. #46 at p. 5). In January 2013, counsel for American Family advised that exposure was potentially as high as $600, 000.00. (Doc. #46 at p. 15).

On March 25, 2010, Mendiola sent American Family an offer of judgment for $99, 999.00 in order to settle the lawsuit. (Doc. #26 at p. 7). American Family allowed this offer to expire. On September 24, 2010, American Family sent an offer of judgment for $76, 000.00, which Mendiola subsequently allowed to expire. (Doc. #26 at p. 10). At the conclusion of the state court litigation, a jury issued a verdict against plaintiff for $338, 477.03. (Doc. #26 at p. 11).

American Family settled claims with Mendiola and others involved in the state court litigation for $500, 000.00 before a judgment was entered. (Doc. #26 at p. 11). A stipulation and order to vacate the state court judgment was approved by the state court on February 14, 2014. (Doc. #26 at p. 11).

Plaintiff initially filed the instant suit against American Family in Clark County, Nevada on October 18, 2013. (Doc. #1-1). American Family subsequently removed to this court. In the instant suit, plaintiff alleges claims for (1) breach of contract, (2) bad faith, and (3) violations of Nevada's Unfair Claims Practices Act, all arising out of American Family's refusal to settle the state litigation within the policy limits. Plaintiff's complaint also includes a request for punitive damages.

II. Legal Standard

The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(a). A principal purpose of summary judgment is "to isolate ...


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