Hansen et al v. State Farm Mutual Automobile Insurance Company et al

Filing 163

ORDER that the parties shall file a supplemental brief by 10/31/2012 and a response brief by 11/7/2012 as to 40 Motion for Summary Judgment. Signed by Judge Miranda M. Du on 10/23/2012. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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STEPHEN TANNER HANSEN, et al.,

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Case No. 2:10-cv-01434-MMD-RJJ

Plaintiffs,
REQUEST FOR SUPPLEMENTAL
BRIEFING

v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, et al.,

(State Farm Auto’s Motion for Summary
Judgment – dkt. no. 40)

Defendants.

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Plaintiffs, assignees of Ernest and Brad Aguilars’ auto insurance policy with

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Defendant State Farm Auto, seek damages for breach of contract and related claims

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against the insurance company. State Farm Auto moves for summary judgment on all

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claims, arguing that the assignment of rights was not valid under the insurance contract.

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(Dkt. no. 40.) Plaintiffs appear to argue that State Farm Auto breached the terms of the

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insurance contract by not properly defending the Aguilars in the state court action, and

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that because of this material breach of the insurance contract, State Farm Auto cannot

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use the terms of the contract as an affirmative defense. That is, even if the Aguilars

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breached the contract by wrongfully settling and assigning its rights against State Farm

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Auto to Plaintiffs, State Farm Auto materially breached the insurance contract prior to

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this wrongful assignment of rights by not providing the Aguilars with an adequate

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defense.

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One argument lodged by Plaintiffs regarding State Farm Auto’s breach concerns

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the requirements of San Diego Navy Fed. Credit Union v. Cumis Ins. Soc’y, Inc., 162

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Cal. App. 3d 358 (1984).

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independent counsel for its insured when a conflict between the two arises. The Court

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now requests supplemental briefing on this matter, as described below.
GOOD CAUSE SHOWING, the parties are hereby ordered to provide

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That case held that an insurer is required to provide

supplemental briefing regarding the following:
(1)

the applicability of San Diego Navy Fed. Credit Union v. Cumis Ins. Soc’y, Inc.,
162 Cal. App. 3d 358 (1984) to the facts of this case, addressing:

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a. whether not providing Cumis counsel, if required, would constitute a breach
of the auto insurance contract;

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b. the impact of Defendant’s reservation of rights on any potential Cumis
claim (for example, did the reservation of rights create a conflict of interest
under Cumis and its progeny?);

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(2)

whether Nevada courts presently apply the Cumis requirement to insurance
cases in light of the holdings in Commercial Standard Ins. Co. v. Tab Constr.,
Inc., 583 P.2d 449, 451 (Nev.1978) and Nev. Yellow Cab Corp. v. Eighth
Judicial Dist. Court ex. rel., 152 P.3d 737, 742-43 (Nev. 2007), as well as other
relevant cases;

(3)

if Nevada courts do impose a Cumis requirement, what impact this has on the
resolution of Defendant’s Motion for Summary Judgment (dkt. no. 40).

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IT IS THEREFORE ORDERED that the parties submit supplemental briefing as

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described above. Defendant shall file its supplemental brief no later than Wednesday,

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October 31, 2012. Plaintiffs shall file its supplemental brief in response no later than

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Wednesday, November 7, 2012. The respective supplemental papers must not exceed

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ten (10) pages.

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DATED THIS 23rd day of October 2012.

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MIRANDA M. DU
UNITED STATES DISTRICT JUDGE

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