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Walker v. Geico Casualty Co.

United States District Court, D. Nevada

December 11, 2019

KARA WALKER, Plaintiff,
GEICO CASUALTY COMPANY, et al., Defendant.



         Before the Court is defendant Geico Casualty Company's Partial Motion to Dismiss (ECF No. 6) to which plaintiff Kara Walker responded (ECF No. 9), and Geico replied (ECF No. 11). Also before the Court is Geico's Alternative Motion to Sever/Bifurcate and Stay Walker's Extracontractual Claims (ECF No. 7). Walker also responded to that motion (ECF No. 10), and Geico replied (ECF No. 11).

         Kara Walker has sued her insurer, Geico, for payment of the uninsured/underinsured motorist coverage in her policy after she was injured in an accident with a third-party. Walker's complaint alleged four causes of action: breach of contract, contractual bad faith, tortious bad faith, and unfair claims practices. The basis of Walker's claims is that Geico exhibited bad faith by knowingly hiring a biased physician to perform her independent medical evaluation. According to Walker, Geico purposefully hired a doctor that would disagree with her treatment decisions, undercut the value of her damages, and justify Geico's delay or denial of her claim. Geico has moved to dismiss all of Walker's extracontractual claims, leaving alone her claim for breach of contract. Geico argues that this case boils down to a dispute over coverage, which is solely a contractual issue. Geico also argues that Walker's claims fail because it has acted reasonably-in good faith-throughout the claims process.

         Having reviewed Walker's allegations in the light most favorable to her, the Court finds that Walker has alleged facts to support her tortious bad faith claim and her claim for violations of Nevada's unfair claims practices act. Although Geico is correct that a reasonable denial of coverage defeats a bad faith claim, an insurer's purposeful use of a biased or dishonest doctor to undermine a claimant's recovery would breach the implied covenant of good faith and fair dealing. At this stage, dismissal of Walker's entire bad faith claim is unwarranted. However, Walker has failed to adequately plead her contractual bad faith claim because she simultaneously argues that Geico has breached its contract. Thus, the Court dismisses only that claim. As for Geico's request to sever and stay Walker's extracontractual claims, the Court declines to do so. Given the overlap between the claims, the Court finds that its resources would be better spent litigating the claims together.

         I. Background

         On December 5, 2017, Kara Walker was the passenger in a vehicle that was struck by a 1995 Ford F-150. Compl. 2, ECF No. 1. Walker was hurt in the accident and promptly filed a third-party claim against the driver of the F-150. Id Walker then began treatment for her injuries. Id As of May of 2019, Walker had allegedly incurred over $60, 000 in medical bills and other damages. Id Walker settled her claim with the adverse driver for his policy limits, $15, 000. Id. $15, 000 did not cover Walker's outstanding medical bills, so she filed a claim against Geico, her own insurer, to access the uninsured/underinsured motorist (“UIM”) coverage in her policy. Id. That policy provided $100, 000 in UIM coverage. Id

         Geico offered Walker $31, 014.64 to settle her claim, which she refused. Id Geico then ordered an independent medical evaluation (“IME”). Id at 3. The insurer hired Dr. Firooz Mashhood to perform the IME. Id Dr. Mashhood's examination found that Walker “sustained ‘soft tissue injury to cervical and thoracic spine secondary to minor impact.'” Id Apparently, Dr. Mashhood's findings conflicted with Walker's claimed injuries and provided Geico a basis to undervalue her claim. Id Walker believes that Geico purposefully assigned her IME to Dr. Mashhood because it knew the doctor would disagree with Walker's stated injuries. Id at 4. Walkers UIM claim is still pending.

         Walker filed her complaint in April of 2019, in the Eighth Judicial District Court of Nevada. Geico timely removed the action to this Court. Pet. for Removal, ECF No. 1. Geico now moves to dismiss each of Walker's causes of action except her breach of contract claim.

         II. Legal Standard

         The Court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pleaded complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands more than “labels and conclusions or a formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). “Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Thus, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter to ‘state a claim for relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (citation omitted).

         In Iqbal, the Supreme Court clarified a two-step approach district courts are to apply when considering motions to dismiss. First, the Court accepts as true all well-pleaded factual allegations in the complaint. Legal conclusions or mere recitals of the elements of a cause of action, on the other hand, do not receive the assumption of truth. Id. at 678. Second, the Court considers whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. 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. Id. at 678. Further, 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 show[n]-that the pleader is entitled to relief.” Id. at 679 (internal quotation marks omitted). Thus, when the claims in a complaint have not crossed the line from conceivable to plausible, the complaint must be dismissed. Twombly, 550 U.S. at 570.

         Moreover, “[a]ll allegations of material fact in the complaint are taken as true and construed in the light most favorable to the non-moving party.” In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1403 (9th Cir. 1996) (citation omitted).

         III. Analysis

         Walker brought four causes of action: (1) breach of contract; (2) breach of the contractual duty of good faith and fair dealing; (2) tortious breach of good faith and fair dealing; and (4) unfair trade practices under NRS § 686A.310, Nevada's unfair claims practices statute. Walker's breach of contract claim survives because Geico has not challenged it here. Mot. to Dismiss 3, ECF No. 6. Geico challenges Walker's remaining claims, or ...

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