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Geico Casualty Co. v. Schneider

United States District Court, D. Nevada

May 8, 2018

GEICO CASUALTY COMPANY, Plaintiff,
v.
PAUL SCHNEIDER; KIMBERLY SCHNEIDER; and CASANDRA SCHNEIDER, Defendants.

          ORDER (1) GRANTING IN PART PLAINTIFF'S MOTION FOR SUMMARYJUDGMENT;AND(2) SETTINGAHEARING

          ANDREW P. GORDON, UNITED STATES DISTRICT JUDGE

         This is a dispute over the amount of insurance coverage available to defendants Kimberly Schneider and Casandra Schneider[1] under their insurance policy with plaintiff GEICO Casualty Company (GEICO). After a motor vehicle accident in 2015, the defendants obtained the liability insurance limits from the tortfeasor, and made claims to GEICO under their underinsured motorist (UIM) coverage and medical payments coverage.

         The policy covers six members of the Schneider family and six different vehicles. It has UIM limits of $15, 000 per person/$30, 000 per occurrence and medical payments limits of $5, 000 per person per occurrence. The policy also includes an anti-stacking provision for each form of coverage. GEICO paid the defendants $30, 000 under the UIM coverage (the per occurrence limit) and $15, 000 under the medical payments coverage (the $5, 000 limit for each person in the vehicle during the accident). The defendants demanded payment for the stacked limits of the policy, or $90, 000 per person/$180, 000 per occurrence for UIM and $30, 000 for medical payments.

         GEICO filed this action, seeking a declaration that its financial obligations to the defendants under the UIM and medical payments coverage have been extinguished by the payments already made. The defendants move for partial summary judgment, arguing that the UIM anti-stacking provision is invalid under Nevada Revised Statutes § 687B.145. GEICO also moves for summary judgment, contending that the anti-stacking provisions are valid and therefore it has met its contractual obligations.

         The parties are familiar with the facts of the case and I will not repeat them here except where necessary. The medical payments anti-stacking provision is valid. However, GEICO has not proven the UIM anti-stacking provision is valid. I therefore grant GEICO's motion for summary judgment in part as to the medical payments coverage. I will set a hearing on the question of the validity of the UIM anti-stacking provision.

         I. ANALYSIS

         Summary judgment is appropriate if the pleadings, discovery responses, and affidavits demonstrate “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), (c). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000). I view the evidence and draw reasonable inferences in the light most favorable to the non-moving party. James River Ins. Co. v. Hebert Schenck, P.C., 523 F.3d 915, 920 (9th Cir. 2008).

         Under Nevada Revised Statutes § 687B.145(1), a valid anti-stacking provision must satisfy three prerequisites. “First, the limiting provision must be expressed in clear language. Second, the provision must be prominently displayed in the policy, binder, or endorsement. Finally, the insured must not have purchased separate coverage on the same risk nor paid a premium calculated for full reimbursement under that coverage.” Nationwide Mut. Ins. Co. v. Coatney, 42 P.3d 265, 267 (Nev. 2002) (quotation omitted). The “burdens of persuasion and production on the issue of the validity of an anti-stacking clause . . . rest on the insurer.” Torres v. Farmers Ins. Exch., 793 P.2d 839, 842 (Nev. 1990).

         At issue in this case are two nearly identical anti-stacking provisions. The first limits UIM coverage. Under the heading “LIMITS OF LIABILITY, ” the provision appears as follows:

4. ANTI-STACKING
IF YOU OR ANY OTHER INSURED IS IN AN ACCIDENT:
(A) IN AN INSURED AUTO WE WILL NOT PAY MORE THAN THE LIMIT OF COVERAGE FOR THAT PARTICULAR INSURED AUTO.
(B) IN A MOTOR VEHICLE OTHER THAN YOUR INSURED AUTO OR WHILE AS A PEDESTRIAN, WE WILL NOT PAY MORE THAN THE LIMIT OF COVERAGE WHICH YOU HAVE ON ANY ONE ...

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