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Maxum Casualty Insurance Co. v. Taylor

United States District Court, D. Nevada

December 6, 2019

STEVEN T. TAYLOR, et al., Defendants.


         Presently before the court is the matter of Taylor et al. v. Kilroy et al., case number 2:19-cv-00081-JCM-CWH (“Taylor/Kilroy counterclaim”), which has been consolidated with Maxum Casualty Insurance Company v. Taylor et al., case number 2:18-cv-01866-JCM-CWH (“declaratory action”). (Taylor, ECF No. 27); (Maxum, ECF No. 30).[1]

         Pending before the court is plaintiffs/counterclaimants Steven Taylor (“Mr. Taylor”) and Mary Taylor's (“Mrs. Taylor”) (collectively “Taylors”) motion to remand. (Taylor, ECF No. 9). Counterdefendants Maxum Casualty Insurance Company and Maxum Specialty Insurance Group (collectively “Maxum”) filed a response (Taylor, ECF No. 23), to which the Taylors replied (Taylor, ECF No. 25).

         Also before the court is defendant/counterclaimant Robert Kilroy's motion to remand. (Taylor, ECF No. 11). Maxum filed a response (Taylor, ECF No. 24), to which Kilroy replied (Taylor, ECF No. 26).

         Also before the court is Maxum's motion to dismiss. (Taylor, ECF No. 5). The Taylors filed a response (Taylor, ECF No. 10), to which Kilroy joined (Taylor, ECF No. 14), and to which Maxum replied (Taylor, ECF No. 22).

         I. Background

         The court has extensively discussed the factual and procedural background of this action in prior orders. (Maxum, ECF Nos. 31, 43). Because these events are well known to the parties, the court will discuss only those relevant to the instant motions, as follows:

         On or about June 4, 2008, Mr. Taylor and Kilroy's vehicles collided into each other, causing significant injury to Kilroy. (Maxum, ECF Nos. 10, 13, 15, 16). At the time of the collision, Mr. Taylor had an insurance policy with Maxum. Id. The policy provided a $1, 000, 000 limit for bodily and property damages, per accident. Id.

         On January 23, 2009, the Taylors commenced an action against Kilroy in Nevada state court for personal injuries (“underlying action”). Id. After four years of litigation, Kilroy's counterclaims against Mr. Taylor were the only issues remaining in the case. Id. In May 2013, the matter went to trial and the jury found that Mr. Taylor and Kilroy were equally liable for the collision. Id. The jury awarded $35, 000 to Mr. Taylor and $75, 000 to Kilroy. (Maxum, ECF No. 1).

         Following the jury verdict, the Taylors and Kilroy filed motions for new trial. (Maxum, ECF Nos. 10, 12, 15). The state court granted the motions, holding that the jury's liability determination was supported by adequate evidence, but that the jury failed to follow instructions when calculating damages. Id. The Taylors appealed and the Nevada Court of Appeals affirmed the state court's order. Id.

         After the Nevada Court of Appeals remanded the case, the parties stipulated to a binding arbitration. Id. The arbitration agreement provided that the scope of arbitration was limited to the issue of damages and that Kilroy would subsequently be able to file a motion for interest, costs, and attorney's fees. Id. In June 2017, the arbitrators ultimately found total damages in the amount of $6, 758, 293.76, for which Mr. Taylor was 50% liable. Id. In July 2017, the state court entered judgment consistent with the results of the arbitration. Id.

         On July 12, 2017, Maxum filed a motion to interplead funds in the amount of $1, 000, 000. (Maxum, ECF No. 10-3). The Taylors and Kilroy filed a countermotion requesting that the court adjudicate Maxum's duties under the insurance policy. (Maxum, ECF Nos. 10-4, 10-5). On September 28, 2017, the state court issued an order (1) dismissing Maxum's motion as being procedurally defective, (2) exercising general jurisdiction over Maxum, and (3) holding that the insurance policy requires Maxum to pay the $1, 000, 000 limit, with interest on the entire judgment, costs, and attorney's fees. (Maxum, ECF No. 10-7).

         Maxum moved for reconsideration of the state court's September 28, 2017 order. (Maxum, ECF No. 10-8). The state court denied the motion for reconsideration. (Maxum, ECF No. 10-9).

         On October 2, 2018, Maxum initiated the declaratory action seeking a declaration of its rights and duties in connection with the insurance policy. (Maxum, ECF No. 1). The Taylors and Kilroy both filed motions to dismiss. (Maxum, ECF Nos. 10, 12).

         On December 21, 2018, the Taylors and Kilroy filed the Taylor/Kilroy counterclaim[2]against Maxum in Nevada state court alleging five causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) violation of the Nevada Trade Practices Act, NRS 686A.310, et seq.; (4) punitive damages; and (5) declaratory relief. (Taylor, ECF No. 1). Maxum removed the Taylor/Kilroy counterclaim on January 11, 2019. Id. On March ...

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