United States District Court, D. Nevada
JENNIFER M. WALKER, et al., Plaintiffs,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendants.
before the court is defendant State Farm Mutual Automobile
Insurance Company's (“State Farm”) motion for
summary judgment. (ECF No. 17). Plaintiff Jennifer M.
Walker filed a response (ECF No. 22), to which
State Farm replied (ECF No. 25).
an insurance dispute arising from an accident that occurred
at the Sand Mountain Recreation Area (“SMRA” or
the “sand dunes”) and resulted in the death of
plaintiff's husband Travis Walker
October 30, 2015, decedent was riding his ATV with his friend
Joshua Munn (“Munn”) on the sand dunes when his
ATV stalled, causing decedent to dismount and inspect his
ATV. (ECF No. 1-1). During decedent's inspection,
Christian Schauman (“Schauman”) struck decedent
with his sandrail. (ECF No. 1-1). Decedent died as a result
of the impact. (ECF No. 1-1).
time of the accident, decedent had an automobile insurance
policy with State Farm, policy number 059135028 (the
“policy”), which included $100, 000.00/$300,
000.00 of underinsured/uninsured motorist
(“UM/UIM”) coverage. (ECF No. 1-1). Schauman was
uninsured. (ECF No. 1-1).
November 10, 2015, plaintiff made a claim (no. 28-761N-685)
under decedent's UM/UIM policy for the $100, 000.00
limit. (ECF Nos. 1-1; 17). On that same date, State Farm sent
a reservation of rights letter regarding the definitions of
“uninsured motor vehicles” and
“underinsured motor vehicles.” (ECF No. 19-3).
November 23, 2015, State Farm issued a check for $3, 000.00
to plaintiff for medical payment coverage in connection with
funeral expenses (claim no. 28-7M58-801; policy no.
0925-537-28A). (ECF No. 22-1 at 1).
December 17, 2015, State Farm sent a denial letter to
plaintiff's counsel stating that it was unable to provide
coverage under the UM/UIM policy because decedent was struck
by a sandrail off of public roads and the policy specifically
excludes vehicles designated for use off public roads. (ECF
No. 19-5). Plaintiff alleges that State Farm denied the claim
in bad faith without conducting a reasonable investigation.
(ECF No. 1-1).
filed the original complaint in state court on February 1,
2016. (ECF No. 1-1). The complaint alleges six causes of
action: (1) breach of contract; (2) violation of the Unfair
Claims Practices Act, NRS 686A.310 et seq.; (3)
breach of the covenant of good faith and fair dealing; (4)
breach of fiduciary duty; (5) misrepresentation; and (6)
punitive damages. (ECF No. 1-1). State Farm removed the
action to federal court on May 2, 2016. (ECF No.
instant motion, State Farm moves for summary judgment in its
favor on all claims. (ECF No. 17).
Federal Rules of Civil Procedure allow summary judgment 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 a judgment as a
matter of law.” Fed.R.Civ.P. 56(a). 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).
purposes of summary judgment, disputed factual issues should
be construed in favor of the non-moving party. Lujan v.
Nat'l Wildlife Fed., 497 U.S. 871, 888 (1990).
However, to be entitled to a denial of summary judgment, the
nonmoving party must “set forth specific facts showing
that there is a genuine issue for trial.” Id.
determining summary judgment, a court applies a
burden-shifting analysis. The moving party must first satisfy
its initial burden. “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).
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 non-moving 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).
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.
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). Instead, the opposition must
go beyond the assertions and allegations of the pleadings and
set forth specific facts by producing competent evidence that
shows a genuine issue for trial. See Celotex, 477
U.S. at 324.
summary judgment, a court's function is not to weigh the
evidence and determine the truth, but to determine whether
there is a genuine issue for trial. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
The evidence of the nonmovant is “to be believed, and
all justifiable inferences are to be drawn in his
favor.” Id. at 255. But if the evidence of the
nonmoving party is merely colorable or is not significantly
probative, summary judgment may be granted. See Id.
Breach of Contract
alleges that decedent had a policy with State Farm, that
plaintiff submitted a claim for the accident, and that State
Farm's failure to pay the benefits due under the UM/UIM
policy constitutes a material breach of the insurance
contract. (ECF No. 1-1 at 6).
diversity actions, as here, federal courts apply substantive
state law. Erie R.R. Co. v. Tompkins, 304 U.S. 64,
78 (1938); Nitco Holding Corp. v. Boujikian, 491
F.3d 1086, 1089 (9th Cir. 2007). Under Nevada law,
contractual construction is a question of law and
“suitable for determination by summary judgment.”
Ellison v. Cal. State Auto. Ass'n, 797 P.2d 975,
977 (Nev. 1990).
Nevada, “to succeed on a breach of contract claim, a
plaintiff must show four elements: (1) formation of a valid
contract; (2) performance or excuse of performance by the
plaintiff; (3) material breach by the defendant; and (4)
damages.” Laguerre v. Nev. Sys. of Higher
Educ., 837 F.Supp.2d 1176, 1180 (D. Nev. 2011) (citing
Bernard v. Rockhill Dev. Co., 734 P.2d 1238, 1240
(Nev. 1987) (“A breach of contract may be said to be a
material failure of performance of a duty arising under or
imposed by agreement.”)).
instant motion, State Farm argues that the breach of contract
claim fails because a “sandrail” is not an
“uninsured motor vehicle” and is therefore not
covered under the policy. (ECF No. 17 at 11). In particular,
State Farm asserts that the policy explicitly excludes
vehicles designed for use primarily off public roads except
while on public roads and that decedent was struck off of
public roads with a sandrail, which is primarily an off-road
vehicle. (ECF No. 17 at 9).
response, plaintiff contends that State Farm waived its right
to question coverage by acting inconsistently in denying the
UM/UIM claim, but approving the medical payment
(“MedPay”) claim, and that such inconsistent
conduct renders the policy ambiguous. (ECF No. 22 at 10-11).
Nevada law, “[a]n insurance policy is a contract that
must be enforced according to its terms to accomplish the
intent of the parties.” Farmers Ins. Exch. v.
Neal, 64 P.3d 472, 473 (Nev. 2003). “Insurance
policy clauses should be understood in their plain, ordinary
and popular sense.” Keener v. Cal. Auto. Ass'n
Inter-Ins. Bureau, 814 P.2d 87, 88 (Nev. 1991).
“In the insurance context, we broadly interpret clauses
providing coverage, to afford the insured the greatest
possible coverage; correspondingly, clauses excluding
coverage are interpreted narrowly against the insurer.”
Fed. Ins. Co. v. Am. Hardware Mut. Ins. Co., 184
P.3d 390, 392 (Nev. 2008) (internal quotation marks omitted).
“An insurance policy may restrict coverage only if the
policy's language clearly and distinctly communicates to
the insured the nature of the limitation.” United
Nat'l Ins. Co. v. Frontier Ins. Co., 99 P.3d 1153,
1156-57 (Nev. 2004) (quotation omitted).
the “uninsured motor vehicle coverage” section,
the policy states that “We
[(State Farm)] will pay compensatory damages for bodily
injury an insured is legally entitled to
recover from the owner or driver of an uninsured motor
vehicle.” (ECF No. 18-2 at 17). The section sets
forth, in relevant part, the following definitions and
exclusions: . . . .
Uninsured Motor Vehicle means a land motor vehicle:
1. the ownership, maintenance, and use of which is:
a. not insured or bonded for bodily injury liability at the
time of ...