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Igartua v. Mid-Century Insurance Co.

United States District Court, D. Nevada

June 28, 2017

Richard Igartua, Plaintiff
v.
Mid-Century Insurance Company, et al., Defendant

          ORDER ON SUMMARY JUDGMENT [ECF NOS. 24, 38]

          Jennifer A. Dorsey United States District Judge.

         Richard Igartua alleges that in 2011 he was working as a tow-truck driver and injured his back when someone rear-ended his truck. He sues his employer's insurer, defendant Mid-Century Insurance Company, contending that its policy covers his injuries and that it acted in bad faith by refusing to pay him sooner. Igartua asserts claims for breach of contract, bad faith, and unfair claims practices.

         Mid-Century now moves for summary judgment on Igartua's bad faith and unfair practices claims, and I grant its motion. An insurer is liable for bad faith in Nevada only if the plaintiff can show that it both acted unreasonably and that it knew it was doing so. Similarly, an insurer must unreasonably handle a claim to be liable under Nevada's unfair practice statutes. But the undisputed evidence shows that Mid-Century reasonably handled Igartua's claims from the start. The insurer delayed paying Igartua, but only because there was a reasonable dispute about the extent of his injuries and whether they were even caused by the accident that Mid-Century's policy covered. Mid-Century regularly communicated with Igartua; it repeatedly requested documents so that it could evaluate his claim; and it paid for at least four experts to investigate his accident and whether he was entitled to coverage. Igartua thus has not created a triable issue as to his claims for bad faith or unfair practices.

         Background

         In August 2011, Igartua alleges that he injured his back and neck in a car accident while on the job as a tow-truck driver. The insurer for the driver that hit Igartua paid him its policy limits of $25, 000. Igartua then turned to his employer's insurer, Mid-Century, to cover the rest of the bills related to the accident.

         Mid-Century responded to Igartua's claim within a day.[1] Over the next several months, Mid-Century communicated with Igartua and attempted to gather information related to his injuries and the accident.[2] In July of 2012, Igartua offered to settle with Mid-Century for about $50, 000; Mid-Century countered for around $26, 000, which Igartua rejected.[3]

         Over the next several months, Mid-Century paid for multiple experts to review Igartua's medical records-including a radiologist, a nurse consultant, and multiple medical doctors.[4] These experts all concluded that many of the injuries that Igartua was seeking to recover for had nothing to do with the car accident; instead, they stemmed from his age, genetics, obesity, and other preexisting health problems.[5] For example, one medical doctor reviewed Igartua's x-rays and found that the injuries to his spine were consistent with “degenerative disc disease, ” not any traumatic injury relating to his accident.[6]

         Mid-Century also hired an engineer expert to opine on whether the accident could have caused the injuries that Igartua was seeking compensation for. This engineer used various metrics, such as the physical dimensions of Igartua's truck and the velocity of the impact during the accident, and determinated that the crash should not have caused any serious injury.[7] Mid-Century thus continued to doubt whether it was liable for Igartua's injuries.

         In late 2013, Igartua demanded $500, 000 to settle his case, and Mid-Century again rejected the offer. But Mid-Century continued to work on Igartua's claim, asking him for medical records and other documentation, including records for Igartua's past medical history so that Mid-Century could better determine which injuries were related to the crash.[8]

         In early 2014, Mid-Century offered to pay Igartua $35, 000 to settle his claim, but Iguarta refused. Later in 2014, Iguarta told Mid-Century that he was planning to have spinal surgery, which would up the damages that he allegedly suffered from the accident. Igartua made another demand to settle the case, and Mid-Century again asked for specific medical records so that it could consider his request.[9] Throughout 2015, Mid-Century received new medical records that had been missing.[10]

         Igartua underwent his spinal surgery in late 2015. Shortly after, Igartua demanded the full limits of Mid-Century's policy-$1, 000, 000. Mid-Century again requested medical documentation from Igartua that he had not yet provided. Throughout the end of 2015 and up until Igartua filed this case in March of 2016, Mid-Century continued to ask Igartua for additional records and information about Igartua's medical history prior to his accident.[11]

         These records eventually revealed that, despite Igartua claiming that he had no prior problems with his back-he had been treated for back pain several years before his accident.[12] Igartua's medical records from his treating physicians do not reveal that he ever disclosed his prior back problems.[13]

         Discussion

         A. Summary-judgment standards

         The legal standard governing Mid-Century's motion is well settled: a party is entitled to summary judgment when “the movant shows that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.”[14] An issue is “genuine” if the evidence would permit a reasonable jury to return a verdict for the nonmoving party.[15] A fact is “material” if it could affect the outcome of the case.[16]

         When considering a motion for summary judgment, I view all facts and draw all inferences in the light most favorable to the nonmoving party.[17] The purpose of summary judgment is “to isolate and dispose of factually unsupported claims”[18] and to determine whether a case “is so one-sided that one party must prevail as a matter of law.”[19] It is not my role to weigh evidence or make credibility determinations.[20] If reasonable minds could differ on material facts, summary judgment is inappropriate.[21]

         If the moving party shows that there is no genuine issue as to any material fact, the burden shifts to the nonmoving party, who must “set forth specific facts showing that there is a genuine issue for trial.”[22] The nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts”; it “must produce specific evidence, through affidavits or admissible discovery material, to show that” there is a sufficient evidentiary basis on which a reasonable fact finder could find in its favor.[23]

         B. Mid-Century is entitled to summary judgment on Igartua's bad-faith claims.

         “Bad faith is established where the insurer acts unreasonably and with knowledge that there is no reasonable basis for its conduct.”[24] It is not enough to show that, in hindsight, an insurer acted unreasonably; the plaintiff must show that the insurer knew or recklessly disregarded that it was acting unreasonably.[25] An insurer does not act in bad faith merely because it disagrees with the claimant's estimation of his injuries or delays paying out benefits until it receives relevant documents or expert opinions.[26] Generally, “a bad-faith claim is subject to summary judgment if the defendant demonstrates that there was a genuine dispute as to coverage, because if the insurer had a reasonable basis to deny coverage, ” the insurer is unlikely to know it was acting unreasonably.[27]

         Where the undisputed evidence shows that the insurer had some reasonable basis for acting as it did, there is no bad faith. For example, courts have found that an insurer's significant delay in paying out benefits was not bad faith because the insurer had been waiting to collect documents to evaluate the claim.[28] Similarly, an insurer's rejection of a claimant's demand was not bad faith where an independent medical review contradicted the claimant's estimation of his injuries.[29] And finally, an insurer did not act in bad faith when it denied benefits based on evidence that the claimant's injuries stemmed from uncovered injuries that happened prior to a covered accident.[30]

         Igartua alleges that Mid-Century acted in bad faith by refusing to pay him benefits sooner, by refusing to offer him more money, by relying on biased experts, and by generally being biased against him. But Mid-Century has identified a reasonable basis for acting as it did, and Igartua has not offered any evidence from ...


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