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Century Surety Co. v. Prince

United States District Court, D. Nevada

March 28, 2018

CENTURY SURETY COMPANY, Plaintiff(s),
v.
DENNIS PRINCE, et al., Defendant(s).

          ORDER

         Presently before the court is defendant George Ranalli's motion for attorney's fees. (ECF No. 77). Plaintiff Century Surety Company filed a response (ECF No. 82), to which Ranalli replied (ECF No. 88).

         Also before the court is defendant Dennis Prince's motion for attorney's fees. (ECF No. 79). Plaintiff filed a response (ECF No. 83), to which Prince replied (ECF No. 87).

         Also before the court is defendant Silvia Esparza's motion for attorney's fees. (ECF No. 81). Plaintiff filed a response (ECF No. 84), to which Esparza replied (ECF No. 90).

         I. Introduction

         The present case concerns an alleged scheme to fraudulently procure a multi-million dollar judgment against Century as a result of a catastrophic vehicle accident. (ECF No. 1). Century brought two claims against defendants: violations of Nevada Racketeer Influenced and Corrupt Organizations Act (“RICO”) per NRS 207.470, id. at 12-18; and civil conspiracy, alleging that defendants Prince, Ranalli, and Esparza engaged in a “bad faith insurance ‘setup, '” id. at 2, 18- 19.

         Michael Vasquez (“Vasquez”) is the sole owner and manager of Blue Streak Auto Detailing, LLC (“Blue Streak”). (ECF No. 1 at 3). On January 12, 2009, Vasquez was driving his Ford F-150 truck on St. Rose Parkway when he struck Ryan Pretner (“Pretner”), who was riding his bicycle on the shoulder of the road. (ECF Nos. 1 at 3, 37 at 3). Pretner was “violently thrown from his bicycle resulting in a catastrophic brain injury and over $2, 000, 000 in medical expenses.” (ECF No. 37 at 3). Vasquez was allegedly “‘off work' and running ‘personal errands' at the time of the [a]ccident.” (ECF No. 1 at 6).

         At that time, Vasquez had a personal automobile liability insurance policy (“personal policy”) from Progressive. Id. at 3. Blue Streak, a mobile detailing business owned and operated by Vasquez, was covered by a commercial liability garage coverage policy (“garage policy”) from Century. (ECF Nos. 1 at 3, 37 at 3). The personal policy had a $100, 000 policy limit whereas the garage policy had a $1, 000, 000 policy limit. (ECF No. 37 at 3).

         Pretner was initially represented by Esparza. (ECF No. 1 at 7). Progressive offered Esparza the personal policy limit-$100, 000-immediately following the accident. (ECF No. 37 at 4). Due to the severity of Pretner's injuries, “Esparza could not provide a release until all possible insurance coverage was exhausted.” Id. at 4. Esparza made a demand on Century for its policy limit. Id. Century denied the demand, taking the position that coverage did not exist under its policy because Vasquez was not acting in the scope or course of business at the time of the accident. Id. Next, Esparza requested a copy of Century's garage policy. Id. However, Century refused to provide Esparza with a copy of the garage policy. Id.

         Prince was retained by Pretner roughly three weeks prior to the applicable statute of limitations deadline. Id. at 17. At that time, Esparza's involvement in the case ceased. (ECF No. 18 at 3). Prince filed a complaint against Vasquez and Blue Streak “[o]n January 7, 2011, five days before the statute of limitations expired.” (ECF No. 37 at 5).

         Century alleges “Prince informed Progressive that he planned to represent [p]laintiffs before filing suit against Vasquez and Blue Streak, but assured Progressive that he planned to set up [p]laintiff Century Surety for a subsequent bad faith claim and that he would not pursue Vasquez personally.” (ECF No. 1 at 4). Century further alleges “[t]here was no evidence to support [that Vasquez was in the course and scope of his business at the time of the accident] and all of the evidence available and known to [Prince, Esparza, and Ranalli], expressly contradicted material allegations in the complaint.” Id.

         Prince, on the other hand, argues that “[t]he claims against Blue Streak were based upon allegations that Vasquez was in the course and scope of his employment at the time of the collision.” (ECF No. 37 at 5). Moreover, Prince argues that the allegations in the state complaint were supported by case law, the nature of the business, and a potential witness. Id.

         Century was informed that Prince represented Pretner, that there were allegations that there may be coverage under Century's garage policy, and was provided a copy of the complaint. (ECF Nos. 1 at 8, 37 at 5). Century's response was merely to provide Prince with a copy of the garage policy. (ECF No. 37 at 6). Century elected to neither indemnify nor defend Vasquez or Blue Streak, believing that coverage did not exist under its policy and “that Progressive was defending the action.” (ECF No. 1 at 8); see also (ECF No. 37 at 6).

         Defaults were entered against Vasquez and Blue Streak on June 27, 2011. (ECF Nos. 1 at 8, 37 at 6). Prince sent copies of the defaults to Century. (ECF No. 37 at 6). Century replied that it had “no coverage for this matter” and that Progressive was handling the case. Id.

         Thereafter, Progressive and Prince negotiated a settlement agreement, and Progressive retained Ranalli to “represent Vasquez and Blue Streak in connection with the covenant and settlement negotiations.” Id. at 7. “Progressive informed [d]efendant Ranalli that Prince ‘has agreed to give us a [c]ovenant [n]ot to [e]xecute in exchange for the payment of our policy limit' and instructed [d]efendant Ranalli to work with Prince to draft a settlement agreement.” (ECF No. 1 at 9).

Progressive and Defendant Prince agreed to a settlement under which Progressive would pay its $100, 000 policy limit, Pretner and his co-legal guardians would obtain an assignment by Blue Streak and Vasquez of their rights to proceed against Plaintiff Century Surety under the Garage Policy, and Defendant Prince would proceed to obtain a default judgment against Vasquez and Blue Streak. The agreement also provided that Pretner and his co-legal guardians would provide a covenant not to execute on the resulting [state court] judgment.

Id. Vasquez was allegedly “reluctant to sign” the settlement agreement “because he did not believe Century Surety had any responsibility for the accident, ” and executed the agreement only due to “pressure from Defendant Ranalli.” Id. at 9-10.

         “On February 15, 2012, Prince filed an [a]pplication for [e]ntry of [d]efault [j]udgment requesting judicial determination of damages” and, after a hearing, a default judgment in the amount of $18, 050, 185.45 was entered in plaintiffs' favor. (ECF No. 37 at 7); see also (ECF No. 38-16). Subsequently, Prince, as a result of the assignment of rights and the covenant not to execute, filed Andrew v. Century Sur. Co. in state court, and Century removed the case to federal court. See No. 2:12-CV-00978-APG-PAL, 2014 WL 1764740 (D. Nev. Apr. 29, 2014); (ECF No. 26 at 3). Prince, on behalf of his client, sought to collect “damages related to the default judgment and Century's bad faith.” (ECF No. 37 at 7-8); see also (ECF No. 1 at 11).

         Century filed an answer in the Andrew case on June 15, 2012, arguing “[p]laintiffs' alleged right to seek damages against Century was obtained through fraud, misrepresentation, and/or collusion.”[1] (ECF No. 37 at 7). Century first tried, in October 2012, to intervene in the state court action, but its motion to intervene was denied in its entirety. Id. at 7-8. Century never filed any counterclaims in the Andrew case and has been denied the opportunity to reopen discovery to investigate its fraud and collusion defense “because Century had ‘raised that issue from the outset.'” Id. at 8.

         On December 2, 2016, defendant Prince filed a motion for leave to file excess pages related to his special motion to dismiss. (ECF No. 16). On December 5, 2016, Prince filed his special motion to dismiss. (ECF No. 17). Also on December 5, 2016, defendant Esparza filed a motion to dismiss. (ECF No. 18). On December 12, 2016, defendant Ranalli filed a motion to dismiss. (ECF No. 26).

         On December 13, 2016, Magistrate Judge Leen denied Prince's motion for leave to file excess pages. (ECF No. 32). On December 16, 2016, Prince filed a renewed special motion to dismiss which comported with the requirements of LR 7-4. (ECF No. 37). On July 13, 2017, this court granted defendant's special motion to dismiss, thereby dismissing plaintiff's claims against defendants.[2] (ECF No. 75). In its order, this court held that Nevada's anti-SLAPP statute precluded plaintiff from bringing its RICO and civil conspiracy claims against defendants. Id.

         II. Legal Standard

         Federal Rule of Civil Procedure 54(d)(2) allows a party to file a motion for attorney's fees if it: (1) is filed within 14 days after judgment is entered; (2) identifies the legal basis for the award; and (3) indicates the amount requested or an estimate thereof. Moreover, “[a] federal court sitting in diversity applies the law of the forum state regarding an award of attorneys' fees.” Kona Enterprises, Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000). A Nevada trial court “may not award attorney fees absent authority under a statute, rule, or contract.” Albios v. Horizon Communities, Inc., 132 P.3d 1022, 1028 (Nev. 2006).

         In Brunzell, the Nevada Supreme Court articulated four factors for a court to apply when assessing requests for attorney's fees:

(1) the qualities of the advocate: his ability, his training, education, experience, professional standing and skill; (2) the character of the work to be done: its difficulty, its intricacy, its importance, time and skill required, the responsibility imposed and the prominence and character of the parties where they affect the importance of the litigation; (3) the work actually performed by the lawyer: the skill, time and attention given to the work; (4) the result: whether the attorney was successful and what benefits were derived.

455 P.2d at 33. The trial court may exercise its discretion when determining the value of legal services in a case. Id. at 33-34.

         Additionally, a trial court applying Nevada law must utilize Brunzell to assess the merits of a request for attorney's fees, yet that court is not required to make findings on each factor. Logan v. Abe, 350 P.3d 1139, 1143 (Nev. 2015). “Instead, the district court need only demonstrate that it considered the required factors, and the award must be supported by substantial evidence.” Id. (citing Uniroyal Goodrich Tire Co. v. Mercer, 890 P.2d 785, 789 (Nev. 1995), superseded by statute on other grounds as discussed in RTTC Commc'ns, LLC v. Saratoga Flier, Inc., 110 P.3d 24, 29 n.20 (Nev. 2005)). . . .

         III. Discussion

         Nevada's anti-SLAPP statute provides that courts shall award reasonable attorney's fees and costs to parties against whom a SLAPP complaint was filed and dismissed. Nev. Rev. Stat. § 41.670(1)(a). Courts may also award up to $10, 000 in statutory damages to the party against whom a SLAPP complaint was filed and dismissed. Nev. Rev. Stat. § 41.670(b).

         a. Defendant Ranalli's motion for ...


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