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Rosas v. GEICO Casualty Co.

United States District Court, D. Nevada

March 19, 2019

DIANA ROSAS, Plaintiff
GEICO Casualty Company, Defendant



         Plaintiff Diana Rosas sued defendant GEICO Casualty Company (GEICO), alleging four causes of action arising out of GEICO's insurance coverage of her injuries resulting from a car accident. GEICO moves to dismiss claims 2, 3, and 4. ECF No. 6. GEICO alternatively moves to bifurcate and stay claims 2 and 3 pending the outcome of Rosas's breach of contract claim. ECF No. 7.

         I grant GEICO's motion to dismiss claims 2, 3, and 4 because Rosas's complaint lacks sufficient facts to state those claims. However, I grant Rosas leave to amend her complaint if she can plead sufficient facts to properly state her claims. I deny GEICO's motion to bifurcate and stay those claims.

         I. BACKGROUND

         Rosas alleges that she was a passenger in a vehicle driven by Kimberly Fox that was rear-ended at a red light. Fox was insured by GEICO. Rosas sustained physical injuries that require continuing medical attention. When GEICO contacted Fox about the collision, Fox informed GEICO that Rosas was in the car and provided GEICO with Rosas's contact information. More than one year later, [1] GEICO contacted Rosas regarding her coverage under Fox's underinsured motor vehicle policy.[2] One year after that, Rosas submitted her proof of claim to GEICO. After a medical examination, GEICO valuated Rosas's claim at $28, 750. Later, GEICO re-valuated the claim at $50, 000. ECF No. 1-1 at 2-11.

         Rosas alleges that GEICO has not tendered any benefits to Rosas, misrepresented pertinent facts or policy provisions, offered to pay the undisputed portion[3] only if Rosas agreed to diminish her rights to extra-contractual claims, intentionally undervalued the benefits owed to her, and that this conduct has caused and continues to cause additional damages.

         Rosas asserts four causes of action: (1) breach of contract, (2) unfair practices in settling claims in violation of Nevada Revised Statutes § 686A.310, (3) bad faith and breach of the covenant of good faith and fair dealing, and (4) declaratory relief. ECF No. 1-1. GEICO moves to dismiss the extra-contractual claims (2, 3, and 4). ECF Nos. 6, 7.

         II. ANALYSIS

         In considering a motion to dismiss, “all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party.” Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). Legal conclusions, however, are not entitled to the same assumption of truth even if cast in the form of factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). A plaintiff must make sufficient factual allegations to establish a plausible entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).

         A claim is facially plausible when the complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Iqbal, 556 U.S. at 663. Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged-but it has not shown-that the pleader is entitled to relief.” Id. at 679 (internal quotation marks and citation omitted). When the claims have not crossed the line from conceivable to plausible, the complaint must be dismissed. Twombly, 550 U.S. at 570. “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the [district] court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.

         A. Unfair Settlement Practices (Claim 2)

         Under Nevada Revised Statutes § 686A.310, an insurer is liable for damages if it engages in any of various enumerated acts. Rosas asserts that GEICO violated several provisions in § 686A.310 but simply recites the language of those provisions without providing sufficient supporting factual allegations. It is not clear that GEICO has unduly delayed payment of benefits to Rosas, particularly considering the length of time Rosas took to submit her proof of claim; it is not clear that GEICO did not conduct a reasonable investigation; Rosas does not explain how GEICO misrepresented pertinent facts or policy provisions; and she did not provide any detail regarding how GEICO undervalued her claim, other than to include the amount of its offer and simply allege that it was intentionally undervalued. Reciting the elements of a cause of action is insufficient to state a claim. I therefore grant GEICO's motion and dismiss Rosas's claim for violations of § 686A.310, without prejudice.

         B. Bad Faith and Breach of the Covenant of Good Faith and Fair Dealing (Claim 3)

         Under Nevada law, “[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and execution.” A.C. Shaw Constr. v. Washoe Cty., 784 P.2d 9, 9 (Nev. 1989) (quoting Restatement (Second) of Contracts § 205); see also Nelson v. Heer, 163 P.3d 420, 427 (Nev. 2007) (“It is well established that all contracts impose upon the parties an implied covenant of good faith and fair dealing, which prohibits arbitrary or unfair actions by one party that work to the disadvantage of the other.”). “The implied covenants of good faith and fair dealing impose a burden that requires each party to a contract to refrain from ...

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