O.P.H. OF LAS VEGAS, INC., Appellant,
OREGON MUTUAL INSURANCE COMPANY; DAVE SANDIN; AND SANDIN & CO., Respondents.
from district court orders granting summary judgment in an
action by an insured against its insurer and its broker
arising out of cancellation of a fire insurance policy.
Eighth Judicial District Court, Clark County; Gloria Sturman,
in part, reversed in part, and remanded.
McLetchie Shell, LLC, and Margaret A. McLetchie and Alina M.
Shell, Las Vegas, for Appellant.
Hutchison & Steffen, LLC and Michael K. Wall, Patricia M.
Lee, and Michael S. Kelley, Las Vegas, for Respondents Dave
Sandin and Sandin & Co.
Brisbois Bisgaard & Smith LLP and Robert W. Freeman, Jr.,
and Priscilla L. O'Briant, Las Vegas, for Respondent
Oregon Mutual Insurance Company.
DOUGLAS, GIBBONS and PICKERING JJ.
insurance policy cancellation dispute, we are asked to
resolve two issues. The first is whether NRS 687B.360
requires a cancellation notice to contain a statement of a
policyholder's right to request additional information to
be effective. We hold that NRS 687B.360 requires strict
compliance; without an express statement of a
policyholder's right to request additional information
about the reasons for a policy's cancellation, the
cancellation notice is ineffective. Because the insurance
company's cancellation notice failed to provide the
statement required by NRS 687B.360, the policy remained in
effect at the time of loss. We therefore reverse the district
court's grant of summary judgment for the insurance
company and remand so the insured may pursue its claims
against the insurer.
second issue is whether, under Nevada law, an insurance
broker who obtains an insurance policy for a client has a
duty to monitor the client's premium payments and to
alert the client when the policy is about to be canceled for
nonpayment of premiums. We hold that the relationship between
the insurance broker and the insured client in this case did
not give rise to such a duty. We therefore affirm summary
judgment in favor of the broker against the insured.
otherwise noted, the following facts are undisputed:
Appellant O.P.H. of Las Vegas, Inc. operated an Original
Pancake House restaurant in Las Vegas. Between 2002 and 2012,
respondent Dave Sandin or Sandin & Co. served as the
insurance broker for OPH (except for a two-year period when
OPH used another broker). In December 2011, Sandin
recommended that OPH purchase a Business Owner Protector
policy for the restaurant from respondent Oregon
Mutual Insurance Co., which OPH did. The policy term ran from
December 26, 2011, until December 26, 2012, and permitted
periodic premium payments.
26, 2012, OPH defaulted on its obligation to pay the premium
for which it had been billed earlier in the month. Five days
later, Oregon Mutual issued OPH a cancellation notice
(Notice). The Notice stated that Oregon Mutual would cancel
the policy on August 16, 2012, if it did not receive payment
by August 15, 2012. The Notice did not inform OPH of its
right under NRS 687B.360 to request and receive within 6 days
additional information if needed to relay "with
reasonable precision" the facts on which OPH based its
OPH denies receiving the Notice, Oregon Mutual attests that
it mailed the Notice to OPH on August 1, 2012. Oregon Mutual
did not mail a copy of the Notice to the broker, Sandin. On
August 13, 2012, OPH realized that it had not made its July
premium payment, wrote a check for the premium due, then
failed to mail the payment to Oregon Mutual. On August 17,
2012, a fire destroyed the Original Pancake House. OPH
reported the loss and submitted a claim under the policy.
Oregon Mutual denied coverage, stating that the policy had
been canceled for failure to pay the premium effective August
16, 2012, the day before the fire.
sued Oregon Mutual, Sandin, and Sandin & Co. on various
theories, including, as against Oregon Mutual, breach of
contract, bad faith and negligence and, as against the Sandin
defendants, breach of fiduciary duty. Early on in the case,
OPH filed a motion for partial summary judgment against
Oregon Mutual on the ground the Notice did not comply with
NRS 687B.360 and thus had no effect. The district court
denied the motion. After conducting discovery, Oregon Mutual
moved for summary judgment asserting that the policy did not
cover the loss because it had been validly canceled for
nonpayment of premiums before the fire occurred. The Sandin
defendants also filed a ...