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Shaw v. State Farm Mutual Automobile Insurance Co.

United States District Court, D. Nevada

September 18, 2017

LINDA SHAW, as next friend of J.S., a minor, Plaintiff,



         This case arises out of an insurer's alleged breach of an uninsured motorist policy contract following an automobile accident. Pending before the Court is Defendant State Farm's Motion for Partial Summary Judgment. (Mot. Summ. J., ECF No. 45.) For the reasons given herein, the Courts grants the Motion.


         The following facts are largely taken from State Farm's motion and are not disputed by Plaintiff.

         On July 23, 2014, Jillian Shaw, a minor, was involved in an automobile accident, which caused her bodily injuries and required her to incur medical expenses. (Compl. ¶¶ 7-8, ECF No. 1 at 15; Mot. Summ. J. 3, ECF No. 45.) At the time of the accident, Plaintiff Linda Shaw ("Plaintiff")-Jillian's grandmother and legal guardian-had a State Farm automobile insurance policy that included uninsured motorist ("UIM") coverage of up to $250, 000 per person and medical payments coverage ("MPC") of up to $5, 000 for eligible insureds. (Compl. ¶¶ 9-10; Mot. Summ. J. 4.)

         Following the accident, Jillian received treatment for her physical injuries through March 3, 2015. (Mot. Summ. J. 4; PL's Demand Letter 2-5, ECF No. 45-4 at 11-14.) She then treated with Dr. JoAnn Lippert for post-traumatic stress disorder ("PTSD") on July 9, July 30, and August 6, 2015. (Mot. Summ. J. 4; PL's Demand Letter 5-6.) Jillian had a fourth appointment scheduled with Dr. Lippert for August 19, but she failed to show. (Mot. Summ. J. 4; Dr. Lippert's Session Notes 5, ECF No. 45-5 at 6; Linda Shaw Dep. 55:15-24; ECF No. 45-8.) As a result of her treatment for physical injuries and PTSD, Jillian incurred a total of $16, 710.98 in medical expenses. (Mot. Summ. J. 4; PL's Demand Letter 6-7.)

         In or around January 2016, the insurer of the individual who caused the accident settled Jillian's bodily injury claim for $100, 000. ((Mot. Summ. J. 4; Settlement Letter, ECF No. 45-6.) Jillian also recovered $5, 000 from State Farm, the MPC limit on Plaintiffs policy. (Mot. Summ. J. 4; Def.'s Letter of May 31, 2016, ECF No. 45-4 at 6.)

         On May 17, 2016, Plaintiffs counsel sent a letter to State Farm, detailing Jillian's damages and demanding the $250, 000 policy limit on Plaintiffs UIM coverage. (Demand Letter, ECF No. 45-4 at 10-19.) State Farm then evaluated the demand, applied an offset of $105, 000, and offered a UIM payment of $4, 000 to settle Plaintiffs claim. (Mot. Summ. J. 4-5; Def.'s Case Notes 10-11, ECF No. 45-7 at 7-8; Def.'s Letter of May 31, 2016, ECF No. 45-4 at 6.) Plaintiffs response to State Farm's initial settlement offer reveals the crux of the present dispute: "Could you please provide, consistent with damages allowed by Nevada law, how you evaluated the case in terms of Miss Shaw's continuing issues with PTSD." (Def.'s Letter of June 16, 2016, ECF No. 45-4 at 9 (emphasis added).) State Farm answered Plaintiffs letter on June 21, 2016, explaining that it based its offer on all the documentation Plaintiff had provided, and that it had applied the $105, 000 offset consistent with insurance payments already received. State Farm also indicated that it had concerns about attributing Jillian's chipped teeth and PTSD to the automobile accident because she had not sought treatment for these particular issues until approximately six months and one year after the accident, respectively. (Def.'s Letter of June 21, 2016, ECF No. 45-4 at 4-5.) Plaintiff responded on July 27, 2016, offering explanations for the delays in treatment and asking several more pointed questions: "In your evaluation of this case are you discounting any of the incurred medical bills? What value are you placing on past pain and suffering? What value are you placing on future pain and suffering? What value are you placing on her diagnosis of PTSD and its future consequences?" (Pl.'s Letter of July 27, 2016, ECF No. 45-4 at 7-8.)

         State Farm's next communication with Plaintiffs counsel was a telephone call on August 17, 2016. During that call, State Farm's representative informed Plaintiffs counsel that State Farm would include the future expenses for Jillian's two chipped teeth at the estimated rate provided by her dentist, which was in the range of $289 to $399 per tooth. State Farm also stated that all the medical expenses for which Plaintiff provided documentation-including the treatment for PTSD-were fully included in its evaluation of Jillian's damages. However, State Farm took the position that the documentation did not support the need for future expenses, predominantly because Jillian had not received any treatment for PTSD for approximately one year. (Def.'s Case Notes 7-8, ECF No. 45-7 at 4-5.) Plaintiffs counsel responded that State Farm was being unreasonable, that he would not decrease his demand for the UIM policy limit of $250, 000, and that he would proceed with suing State Farm for bad faith. (Id.)

         The following day, on August 18, State Farm sent a final letter to Plaintiffs counsel, confirming their discussion from the day before, and extending an amended settlement offer of $6, 000. (Def.'s Letter of August 18, 2016, ECF No. 45-4 at 2-3.) In this letter, State Farm reiterated that their most recent evaluation included future medical expenses for Jillian's chipped teeth in the range of $289 to $399 per tooth. State Farm also stated that it had "included the actual medical expenses for the PTSD being claimed. The last visit was 8/6/15. Per our discussion today [sic], there are no additional visits beyond this last visit. As discussed, the medical documentation provided does not support the need for additional future treatment." (Id.)

         Plaintiff then filed this case in the Second Judicial District Court of the State of Nevada, Washoe County, on August 24, 2016. (Compl., ECF No. 1 at 13.) Plaintiff asserted three claims under Nevada law: (1) breach of contract; (2) bad faith; and (3) violation of NRS 686A.310');">686A.310 et seq. State Farm removed on October 4, 2016.

         State Farm now moves for summary judgment on Plaintiffs second and third claims for bad faith and violation of NRS 686A.310');">686A.310 et seq.


         A court must grant summary judgment when "the movant shows 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 which 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. 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 uses a burden-shifting scheme. 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." C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citation and internal quotation marks 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 (1970). If the moving party meets its initial burden, the burden then shifts to the opposing party to establish a genuine issue of material fact. 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 unsupported by facts. 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 Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S. at 324.

         At the summary judgment stage, 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, 477 U.S. at 249. 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. at 249-50. Notably, facts are only viewed in the light most favorable to the non-moving party where there is a genuine dispute about those facts. Scott v. Harris,550 U.S. 372, 380 (2007). That is, even where the underlying claim contains a reasonableness test, where a party's evidence is so clearly contradicted ...

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