United States District Court, D. Nevada
BOBBY E. WORTHAM and SYLVIA E. WORTHAM, Plaintiffs,
WESTERN MUTUAL INSURANCE COMPANY, Defendants.
before the court is defendant Western Mutual Insurance
Company's (“Western Mutual”) motion for
partial summary judgment. (ECF No. 26). Plaintiffs Bobby E.
Wortham and Sylvia E. Wortham, husband and wife,
(“plaintiffs”) filed a response (ECF No. 46), to
which the Western Mutual replied (ECF No. 52).
before the court is plaintiffs' motion for Rule 56(d)
relief regarding Western Mutual's motion for partial
summary judgment. (ECF No. 48).
present case involves a dispute over plaintiffs'
homeowner's policy purchased from Western Mutual. (ECF
No. 26). The policy covered the premises at 229 Heaven Sent
Court, Henderson, NV 89074 (the “property”).
Id. Plaintiffs have paid insurance premiums to
Western Mutual since 1999. (ECF No. 46).
3, 2016, plaintiffs notified Western Mutual of a fire at the
property. (ECF No. 26). Plaintiffs told Western Mutual that
their son, the full time resident of the property, discovered
the fire. Id. As a result of the fire, plaintiffs
made a claim on their homeowner's policy. Id.
homeowner's policy defines “residence
premises” as the one family dwelling where the named
insured resides and which is shown as the residence premises
on the declarations. (ECF No. 26, Ex. C). Plaintiffs had
moved out of the property in 2009 and purchased a single
story home because Bobby Wortham could no longer climb the
stairs. (ECF No. 26). Plaintiffs' adult son resided at
the property full-time. Id. Plaintiffs left
furniture, computers, and TVs at the premises for their son
to use. Id.
11, 2016, Western Mutual notified plaintiffs that because
plaintiffs were not residing at the property full-time at the
time of the fire, but instead their son was, there was no
coverage for the dwelling under plaintiffs'
homeowner's policy. (ECF No. 26, Exhibit A).
Additionally, Western Mutual notified plaintiffs that their
“loss of use” coverage covered only the part of
the property where plaintiffs resided that was made unfit for
habitation by the fire loss. Id. Because plaintiffs,
the insureds, were not residing at the property at the time
of the fire, they did not qualify for this coverage.
same correspondence, Western Mutual notified plaintiffs that
the policy did provide coverage for their personal property
located at the property at the time of the fire. (ECF No. 26,
December of 2015, Western Mutual submitted the form titled
“HO NV SP WM 15” (the “new form”) to
the Nevada Division of Insurance for approval. (ECF No. 46).
The new form added the language “. . . . and which is
occupied by you as your primary residence” to the
definition of “residence premises.” Id.
The declarations page of the policy lists the new form.
Id. However, on May 3, 2016, the date of the fire,
Western mutual acknowledged that plaintiffs had not received
proper notice of the inclusion of the new form and thus, the
new definition would not be applied to plaintiffs' claim.
Id. Instead, the form included in plaintiffs'
policy prior to the update (the “old form”) would
be applied. Id. The old form defined
“residence premises” as the one family dwelling
where the named insured resides and which is shown as the
residence premises on the declarations. Id. Neither
the old form nor the balance of the policy defines the word
“resides.” Id. Further, the declarations
sheet states: “the premises covered by the policy is
located at: 229 Heaven Sent Ct Henderson, NV
89704-8751.” Id. Nonetheless, Western Mutual
has relied on the “primary residence” language
throughout its communications with plaintiffs, including its
denial of plaintiffs' claim.
retained the Greenspan Company in order to assist them with
the inventory of damages to their personal property. (ECF No.
26). Plaintiffs then retained an attorney. Id. On
August 23, 2016, plaintiffs' attorney sent Western Mutual
a demand letter asserting that the declarations page of the
policy and the policy's boiler plate language created a
reasonable expectation of coverage. Id. Further,
plaintiffs' attorney also asserted that plaintiffs'
son's person and property were also insured under the
policy and that the loss of use coverage was not dependent on
plaintiffs' occupancy of the property. Id.
response, Western Mutual requested the examination under oath
(“EUOs”) of plaintiffs in order to reconsider its
previous denial of the claim and to conduct further
investigation. (ECF No. 26, Exhibit D). On November 9, 2017,
the EUOs of plaintiffs were taken. Id. From the
EUOs, Western Mutual learned that plaintiffs moved into the
home in 1999 and plaintiffs' two sons Shane and Devin
each lived at the property from 1999 until 2015 and from 2003
until the fire, respectively. Id. Plaintiffs'
sons helped pay the mortgage. (ECF No. 26, Exhibit E). Sylvia
Wortham only went to the property once a week after 2009 and
did not leave any personal items there, besides some
furniture and wall hangings used by her sons. Id.
report the property to the IRS as a “rental
property” for tax purposes. (ECF No. 26, Exhibit D).
Bobby Wortham regularly visited the house to do chores and
general upkeep, and while he did not keep any toiletries or
medication there, he occasionally slept there. Id.
When plaintiffs moved in 2009, Bobby Wortham updated his
voter registration to reflect plaintiffs' new address.
November 11, 2017, plaintiffs filed the underlying complaint
alleging three causes of action: (1) breach of contract and
implied covenant of good faith and fair dealing; (2) tortious
bad faith claims handling; and (3) negligent marketing. (ECF
instant motion, Western Mutual moves for partial summary
judgment as to plaintiffs' extra-contractual claims, or
in the alternative, to bifurcate, pursuant to ...