United States District Court, D. Nevada
JAMES C. MAHAN, District Judge.
Presently before the court is plaintiff Clark County School District's (hereinafter "plaintiff") motion to certify questions to the Nevada Supreme Court, or in the alternative, motion to reconsider. (Doc. # 60). Defendant Travelers Casualty and Surety Company of America (hereinafter "defendant") filed a response, (doc. # 63), and plaintiff filed a reply, (doc. # 64).
In 2007, plaintiff determined that many of its elementary schools required modernizations, including changes to heating, ventilating, and air conditioning ("HVAC") systems. (Doc. # 9). In early 2010, plaintiff began advertising and accepting bids to complete the projects. (Doc. # 9). Pursuant to Nevada Revised Statute 339.025, the contracts for the projects required performance bonds to protect against contractor default. See Nev. Rev. Stat. 339.025.
Big Town Mechanical ("BTM") submitted the lowest bids for all fifteen school projects. (Doc. # 9). Plaintiff awarded the contracts to BTM. (Doc. # 9). BTM then secured performance bonds for each project with defendant. (Doc. # 9). The bonds incorporate the terms of the contracts, including liquidated damage and warranty provisions. (Doc. # 9). Such performance bonds obligate defendant to arrange for completion or correction of any projects upon default by BTM. (Doc. # 9).
In fall 2010, plaintiff declared BTM in default on certain project obligations. (Doc. # 9). In or around May 2013, BTM filed for chapter 7 bankruptcy protection. (Doc. # 9). BTM eventually defaulted on all projects. (Doc. # 9). Defendant then refused to fulfill its duties under the bonds, and the project work remained unfinished. (Doc. # 9).
On June 21, 2013, plaintiff filed the instant action. (Doc. # 1). On August 19, 2013, plaintiff filed an amended complaint alleging five causes of action: (1) mandatory injunction to compel specific performance; (2) breach of contract; (3) contractual breach of the covenant of good faith and fair dealing; (4) tortious breach of the covenant of good faith and fair dealing; and (5) declaratory relief. (Doc. # 9). On September 6, 2013, defendant filed an answer to plaintiff's amended complaint. (Doc. # 10).
On October 10, 2014, defendant filed a motion for partial judgment on the pleadings as to plaintiff's fourth claim for tortious breach of the covenant of good faith and fair dealing. Defendant argued that a surety cannot be held liable for tortious bad faith under Nevada law. (Doc. # 36). On January 12, 2015, the court granted defendant's motion, dismissing plaintiff's fourth cause of action. (Doc. # 59). Plaintiff then filed the instant motion.
II. Legal Standard
a. Motion to certify
The Nevada Rules of Appellate Procedure provide that the Supreme Court of Nevada has the power to answer "questions of [state] law... which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the Supreme Court of [Nevada]." Nev. R. App. P. 5(a).
The Nevada Supreme Court "may answer questions of law certified  by a federal court when (1) [the] answers to the certified questions may be determinative of part of the federal case, (2) there is no clearly controlling Nevada precedent, and (3) the answers to the certified questions will help settle important questions of law. Hartford Fire Ins. Co. v. Tr. of Const. Industry, 208 P.3d 884, 888 (Nev. 2009).
Where the question does not impact the merits of a claim pending before the certifying court, the question should not be certified to the Supreme Court. See Nev. R. App. P. 5(a) (requiring that certified question be "determinative"); see also Volvo Cars of N. Am., Inc. v. Ricci, 137 P.2d 1161, 1164 (Nev. 2006) (declining to answer certified questions where "answers to the questions posed  would not be determinative' of any part of the case"). "The certification procedure is reserved for state law questions that present significant issues, including those with important public policy ramifications, and that have not yet been resolved by the state courts." Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003).
Federal courts have discretion to certify questions of state law. Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974). "Resort to certification is not mandatory where state law is unclear on a particular issue." Carolina Cas. Ins. Co. v. McGhan, 572 F.Supp.2d 1222, 1225 (D. Nev. 2008) ( citing Lehman Bros., 416 U.S. at 390-91). Generally, "[w]hen a decision turns on applicable state law and the state's highest court has not adjudicated the issue, a federal court must make a reasonable determination of the result the highest state court would reach if it were deciding the case." Aetna Cas. & Sur. Co. v. Sheft, 989 F.2d 1105, 1108 (9th Cir. 1993).
Further, a federal court may decline to certify a question where controlling precedent is available for guidance. Slayman v. FedEx Ground Package Sys., Inc., 765 F.3d 1033, 1041 (9th Cir. 2014); see also Kehoe v. Aurora Loan Servs., LLC, No. 3:10-cv-256-RCJ-RAM; 2010 WL 4286331, at *11 (D. Nev. Oct. 20, 2010) (declining to certify question to Nevada Supreme Court where statutory language was sufficiently clear for the court to apply).
Finally, a party must show "particularly compelling reasons" for certification when that party first requests it after losing on an issue. Complaint of McLinn, 744 F.2d 677, 681 (9th Cir. 1984) ("Ordinarily such a movant should not be allowed a second chance at victory when, as ...