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Gutting v. American Family Financial Services, Inc.

United States District Court, D. Nevada

March 28, 2017



          Gloria M. Navarro, Chief Judge

         Pending before the Court is the Motion for Summary Judgment, (ECF No. 12), filed by Defendants American Family Financial Services, Inc., and American Family Medical Insurance Company (collectively “American Family”). Plaintiff Angelena Gutting (“Plaintiff”) filed a Response, (ECF No. 14), and American Family filed a Reply, (ECF No. 19).

         Also pending before the Court is Plaintiff's cross-Motion for Summary Judgment, (ECF No. 20), to which American Family filed a Response, (ECF No. 24). Plaintiff did not file a reply, and the time to do so has passed. For the reasons discussed below, the Court GRANTS American Family's Motion for Summary Judgment and DENIES Plaintiff's cross-Motion.[1]

         I. BACKGROUND

         This case arises from American Family's initial refusal to pay the policy limit under Plaintiff's Uninsured/Underinsured Motorist (“UIM”) coverage policy. Plaintiff was involved in a motor vehicle accident on October 27, 2007. (Ex. B to Defs.' Mot. for Summary J. (“MSJ”) at 9, ECF No. 12-2). On July 24, 2009, Plaintiff informed American Family that she had reached a settlement with the insurance carrier for the third party involved in the accident for $25, 000. (Ex. H to Defs.' MSJ, ECF No. 12-8). On August 28, 2009, Plaintiff demanded that American Family tender her the UIM policy limit of $100, 000. (Ex. I to Defs.' MSJ, ECF No. 12-9).

         Following Plaintiff's policy limit demand, American Family notified Plaintiff's counsel on September 15, 2009, that they were conducting a medical review of Plaintiff's claim and requested additional information. (Ex. K to Defs.' MSJ, ECF No. 12-11). On September 18, 2009, American Family completed the medical review and, three days later, extended an oral offer to settle Plaintiff's claim for $10, 000. (Ex. J to Defs.' MSJ at 11, ECF No. 12-10). Although Plaintiff's counsel requested this offer in writing, none was ever sent. (Id.). Instead, American Family notified Plaintiff on September 21, 2009, that they would proceed with an independent medical exam (“IME”) and requested Plaintiff's medical records or medical authorization. (Ex. M to Defs.' MSJ, ECF No. 12-13).

         Between late September 2009 and January 25, 2010, American Family via its vendor attempted to schedule the IME with Plaintiff but received no response from her or her attorney. (Ex. J at 8-9); (Ex. N to Defs.' MSJ, ECF No. 12-14). After American Family notified Plaintiff's counsel in writing of their intent to unilaterally schedule the IME, Plaintiff's counsel contacted American Family and scheduled the IME for March 19, 2010. (Ex. J at 9); (Ex. N). On the day of the IME, Plaintiff's counsel asked to reschedule the IME because he did not have all the material required for the visit. (Ex. J at 7). The IME was ultimately rescheduled and conducted on May 7, 2010, by Dr. Clive Segil (“Dr. Segil”). (Id.).

         Dr. Segil issued a report opining that Plaintiff's medical condition was “very good” and that the chronic degenerative disc disease in her neck “definitely predated” the October 27, 2007 accident. (Ex. P to Defs.' MSJ at 12, ECF No. 12-16). Further, Dr. Segil concluded that the medical procedures recommended by Plaintiff's treating physicians were “not medically necessary and . . . not related to the accident.” (Id.). Based on Dr. Segil's report, American Family determined that only $6, 070 of Plaintiff s medical costs were attributable to the accident, an amount covered by the third party settlement, and offered Plaintiff $5, 000 to resolve her UIM claim. (Ex. Q to Defs.' MSJ, ECF No. 12-17); (Ex. R to Defs.' MSJ, ECF No. 12-18).

         Rather than respond to the offer, Plaintiff filed suit in the Eighth Judicial District Court for the District of Nevada on July 21, 2010. (Ex. S to Defs.' MSJ, ECF No. 12-19). The parties agreed to submit the valuation of Plaintiff's injury claim to an arbitrator and participated in binding arbitration on September 30, 2014. (Ex. T to Defs.' MSJ, ECF No. 12-20). The arbitrator reviewed Plaintiff's medical records from her treating physicians as well as the IME conducted by Dr. Segil and a later IME performed on May 2, 2013, by Dr. Hugh S. Selznick, whose conclusions matched Dr. Segil's opinions. (See Id. at 3-8). Based on his review of the evidence and Plaintiff's testimony regarding her condition, the arbitrator found that all of Plaintiffs past medical expenses were related to the accident and valued Plaintiff's injury from the accident at $147, 826.46. (Id. at 16). As a result of this decision, American Family tendered Plaintiff the $100, 000 policy limits. (See Ex. 1 to Pet. for Removal ¶ 9, (“Compl.”), ECF No. 1).

         Plaintiff then filed the instant Complaint in state court, alleging the following causes of action against American Family: (1) common law bad faith; (2) breach of the covenant of good faith and fair dealing; (3) statutory breach of insurer's duty pursuant to NRS § 686A.310; and (4) insurer bad faith and unfair practices. On November 24, 2015, American Family removed the action to this Court. In the instant Motions, the parties seek summary judgment on each of these claims.


         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 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See Id. “Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor.” Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103-04 (9th Cir. 1999)). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

         In determining summary judgment, a court applies a burden-shifting analysis. “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323- 24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

         If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). ...

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