United States District Court, D. Nevada
C. Jones United States district Judge.
insurance company brought this case against another insurance
company alleging that both were liable for claims against the
same insured party. The Defendant claimed that it had no duty
to defend forcing the Plaintiff to defend the insured and pay
for the resulting settlements alone. The Defendant avers that
its policy lapsed; the Court agrees and dismisses the case.
to the operative complaint and its attachments, the facts are
as follows. Both the Plaintiff and the Defendant are
insurance companies that insured Landmark, a Nevada
construction contractor and developer. Landmark became
insolvent and filed for bankruptcy in 2009.
2006 to 2009, the Defendant insured Landmark and its
subcontractors by issuing a general liability exposure
insurance policy specific to particular construction
projects. This policy also provided for an “extended
reporting period, ” which would “begin on the
expiration of this policy and end when the applicable
statute of limitations . . . expires.” (Am. Compl. Ex.
5 at 30, ECF No. 18.) However, “the extended reporting
period will only apply to claims . . . [t]o which no other
subsequent insurance you purchase applies.”
later purchased broad liability insurance policies for its
general business exposures from the Plaintiff. These policies
started in 2007 and ended in 2011. Accordingly, these
policies and the Defendant's policy overlapped and
covered some of the same risks.
in 2014, a number of claims were filed against Landmark
alleging defects in the construction projects that both
parties had insured. The parties were provided notice of the
actions, but only the Plaintiff defended against the actions
and paid for settlements. The Defendant refused to
participate in those cases.
the Plaintiff has filed this case with this Court for two
counts. First, the Plaintiff seeks a declaratory judgment
stating that the Defendant has a duty to defend these actions
under its policy. Second, the Plaintiff asks that this Court
grant equitable contribution such that the Plaintiff receives
a pro rata share of the settlements and expenses associated
with the underlying cases.
FAILURE TO STATE A CLAIM STANDARD
Rule of Civil Procedure 12(b)(6) mandates that a court
dismiss a cause of action that fails to state a claim upon
which relief can be granted. In considering whether the
complaint is sufficient to state a claim, the court will take
all material allegations as true and construe them in the
light most favorable to the plaintiff. NL Indus., Inc. v.
Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). To determine
the facts, a court is constrained to consider only the
pleadings and “material which is properly submitted as
part of the complaint.” Hal Roach Studios, Inc. v.
Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th
Cir. 1990). If the court grants a motion to dismiss, then it
should grant leave to amend unless amendment cannot cure the
deficiencies of the complaint. See DeSoto v. Yellow
Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).
parties agree that the Defendant's coverage lapsed if its
extended reporting period does not apply and that the
“the extended reporting period will only apply to
claims . . . [t]o which no other subsequent insurance
[Landmark] purchase[d] applies.” Thus, there is only
one issue before this Court-whether the Plaintiff's
insurance policies limit the extended reporting period under
issue can be even further isolated applying Nevada law. In
order for an insurance policy to restrict coverage, “it
should employ language that clearly and distinctly
communicates to the insured the nature of the
limitation.” Griffin v. Old Republic Ins. Co.,
133 P.3d 251, 253 (Nev. 2006) (quoting Vitale v.
Jefferson Ins. Co., 5 P.3d 1054, 1057 (Nev. 2000)). An
insurance policy is considered to be ambiguous if there are
multiple reasonable interpretations of the contract.
Century Sur. Co. v. Casino W., Inc., 329 P.3d 614,
616 (Nev. 2014). If an insurance policy is not ambiguous,
then the courts should apply the policy's plain meaning.
Id. On the other hand, Nevada courts interpret
ambiguities in an insurance contract in favor of extending
coverage. Id. If an insurance contract has more than
one reasonable interpretation, then the contract is
ambiguous. Id. Hence, if there is any reasonable
interpretation of the term “subsequent insurance”
that would make the Defendant liable, then the Court should
deny the Defendant's motion.
Court holds that there is no reasonable interpretation of the
contract that would make the Defendant liable. Here, although
the contract does not define the term “subsequent
insurance, ” the Court finds that the term's
meaning is clear. As the complaint and attached documents set
forth, Landmark purchased the Plaintiff's policies
subsequent to the Defendant's policy; the Plaintiff's
policies provided coverage for the same claims subsequent to
the Defendant's coverage; and the Plaintiff's