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National Fire & Marine Insurance Co. v. Holper

United States District Court, D. Nevada

October 8, 2019

NATIONAL FIRE & MARINE INSURANCE COMPANY, Plaintiffs,
v.
STEVEN A. HOLPER, M.D., Defendants.

          ORDER

         Presently before the court is plaintiff National Fire & Marine Insurance Company's (“National Fire”) first motion to dismiss (ECF No. 28) defendant Steven Holper's counterclaims (ECF No. 23). Holper filed a response. (ECF No. 38). National Fire did not file a reply, and the time for doing so has passed.

         Also before the court is National Fire's first motion for summary judgment (ECF No. 29) on Holper's counterclaims (ECF No. 23). Holper filed a response. (ECF No. 38). National Fire did not file a reply, and the time for doing so has passed.

         Also before the court is National Fire's second motion to dismiss (ECF No. 42) Holper's counterclaims (ECF No. 41). Holper filed a response (ECF No. 47), to which National Fire replied (ECF No. 65).

         Also before the court is National Fire's second motion for summary judgment (ECF No. 43) on Holper's counterclaims (ECF No. 41). Holper filed a response (ECF No. 47), to which National Fire replied (ECF No. 65).

         Also before the court is National Fire's motion for summary judgment on all of its claims. (ECF No. 44). Defendant/intervenor Scott Hampton and Holper both filed responses (ECF Nos. 48, 55), to which National Fire replied (ECF No. 65).

         I. Background

         This case involves a dispute over the rights and obligations owed by National Fire to Holper under a professional liability insurance policy. (ECF No. 41). The following facts have been alleged by the parties:

         1. Holper's insurance policy

         Holper purchased a professional liability insurance policy underwritten by National Fire, effective from July 25, 2017, to July 25, 2018 (the “policy”). Id. The policy provided that National Fire would pay, on Holper's behalf, for all loss arising from a covered healthcare event, and would defend Holper if claims for potentially covered losses were filed against him. (ECF No. 45). This dispute arises from National Fire's contention that it has no duty to defend or indemnify Holper with regard to claims filed against him in a separate wrongful death lawsuit brought by the estate of Diana Hampton. (ECF Nos. 35, 41).

         2. Related criminal prosecution and wrongful death suit

         On February 7, 2018, Holper was indicted on several felony charges including unlawful distribution of a controlled substance. (ECF No. 41); United States v. Holper, No. 2:18-cr-00037-JAD-NJK, ECF No. 1 (“related criminal action”). Count two of the indictment, to which Holper pleaded guilty, was for unlawful distribution of a controlled substance to “Patient A, ” who was a former Henderson municipal judge named Diana Hampton. (ECF No. 41); Holper, No. 2:18-cr-00037-JAD-NJK, ECF No. 1. On March 13, 2016, Hampton was found dead in her home following an overdose of the opioid fentanyl. (ECF No. 45 ex. 2).

         On December 12, 2018, Holper pleaded guilty to count two of the indictment by way of a plea agreement, which states in relevant part that Holper intentionally distributed fentanyl “outside the usual course of his professional practice and without a legitimate medical purpose.” Holper, No. 2:18-cr-00037-JAD-NJK, ECF No. 50.

         Following Hampton's death, the estate of Hampton (“estate”) brought a wrongful death suit against Holper on February 27, 2018. (See ECF Nos. 44, 55) (“wrongful death action”).[1]

         3. National Fire's defense and indemnity obligations

         On or about March 6, 2018, Holper provided notice of the wrongful death action to National Fire, who is presently providing a defense to Holper under a reservation of rights dated April 26, 2018. (ECF Nos. 44, 45 ex. 4, 55). National Fire has been paying for Holper's attorney's fees and other costs of his defense in the wrongful death action. (ECF No. 44, 55).

         National Fire and Holper scheduled an examination under oath (“EUO”) for June 14, 2018, which was ultimately rescheduled to July 6, 2018. (ECF Nos. 44, 55). On June 11, 2018, Holper requested that the EUO be continued until after resolution of the related criminal action, which National Fire denied. (ECF No. 44). Holper ultimately failed to attend the EUO meeting. (ECF No. 55).

         4. Procedural history

         On July 20, 2018, National Fire filed its original complaint in this action. (ECF No. 1). On January 16, 2019, National Fire filed its first amended complaint (ECF No. 21), and on March 14, 2019, it filed its second amended complaint, alleging breach of contract and seeking declaratory relief (ECF No. 35).

         On March 28, 2019, Holper filed three counterclaims against National Fire. (ECF No. 41). The counterclaims allege the following causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; and (3) four separate violations of NRS 686A.310. Id.

         Now, National Fire moves for summary judgment on both its claims and Holper's counterclaims. (ECF Nos. 43, 44) . . . . . . . . .

         II. Legal Standard

         1. Summary judgment standard

         The Federal Rules of Civil Procedure allow summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

         For purposes of summary judgment, disputed factual issues should be construed in favor of the nonmoving party. Lujan v. Nat'l Wildlife Fed., 497 U.S. 871, 888 (1990). However, to withstand summary judgment, the nonmoving party must “set forth specific facts showing that there is a genuine issue for trial.” Id.

         In determining summary judgment, a court applies a burden-shifting analysis. Where the party moving for summary judgment would bear the burden of proof at trial, “it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted).

         By contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323-24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159- 60 (1970).

         If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The opposing party need not establish a dispute of material fact conclusively in its favor. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” Id.

         In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Celotex, 477 U.S. at 324.

         At summary judgment, a court's function is not to weigh the evidence and determine the truth, but to determine whether a genuine dispute exists for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. See Id. at 249-50.

         2. Declaratory relief

         A party may seek declaratory relief as to the rights and obligations arising under a contract pursuant to NRS 30.040(1), which provides that:

Any person interested under a deed, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract or franchise ...

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