Lebie v. Encompass Insurance Company of America

Filing 12

ORDER that 4 Motion to Dismiss is GRANTED in part and DENIED in part. Signed by Judge Kent J. Dawson on 3/10/15. (Copies have been distributed pursuant to the NEF - TR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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JORDAN DON LEBIE,

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Case No. 2:15-CV-75-KJD-GWF
Plaintiff,

v.
ORDER

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ENCOMPASS INSURANCE COMPANY OF
AMERICA; ROE CORPORATIONS 1 through
10 inclusive; and DOES 11 through 20,
inclusive,

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Defendants.
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Before the Court is Defendant Encompass Insurance Company of America’s

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(“Encompass”) Motion to Dismiss or in the Alternative Motion for Summary Judgment (#4).

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Plaintiff Jordan Lebie (“Lebie”) opposed the motion (#7) and Encompass replied (#10). Because

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matters outside the pleadings are asserted and considered, the Court will treat the motion as one

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requesting summary judgment. Fed. R. Civ. Pro 12(d).

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I. Background

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In 2004, Lebie was the driver in a single-vehicle accident which left his passenger in

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critical condition. Lebie’s passenger retained an attorney who demanded that Encompass,

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Lebie’s insurer, tender its “per accident” limit of $300,000. It is unclear when, if ever, this offer

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was communicated to Lebie. Encompass offered its “per person” limit of $100,000.

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Eventually, Lebie’s passenger prevailed at trial against Lebie, with an initial verdict of
$475,000, and an amended verdict including medical expenses, fees, costs, and interest of

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$2,983,890.35. During this period, Encompass filed a declaratory action seeking a judgment that

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coverage was limited to its $100,000 “per person” limit. Lebie stipulated to a judgment in favor

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of Encompass on this issue.

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The present action was apparently filed on August 28, 2014 in the state courts, and

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subsequently removed to this Court. Lebie claims that Encompass is liable for breach of contract,

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violation of NRS 686A.310, and bad faith failure to settle.

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II. Legal Standards

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A. Summary Judgment

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The purpose of summary judgment is to “pierce the pleadings and to assess the proof in

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order to see whether there is a genuine need for trial.” Matsushita Elec. Indus. Co. v. Zenith

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Radio Corp., 475 U.S. 574, 587 (1986). Summary judgment may be granted if the pleadings,

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depositions, affidavits, and other materials in the record show that there is no genuine issue of

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material fact and that the moving party is entitled to judgment as a matter of law. See FED. R.

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CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

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A fact is material if it might affect the outcome of the suit under the governing law.

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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Uncorroborated and self-serving

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testimony, without more, will not create a genuine issue of material fact. See Villiarimo v. Aloha

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Island Air Inc., 281 F.3d 1054, 1061 (9th Cir. 2002). Conclusory or speculative testimony is also

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insufficient to raise a genuine issue of fact. Anheuser Busch, Inc. v. Natural Beverage Distribs.,

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69 F.3d 337, 345 (9th Cir. 1995).

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The moving party bears the initial burden of showing the absence of a genuine issue of

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material fact. See Celotex, 477 U.S. at 323. Once that burden is met, the nonmoving party then

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has the burden of setting forth specific facts demonstrating that a genuine issue exists. See

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Matsushita, 475 U.S. at 587; FED. R. CIV. P. 56(e). If the nonmoving party then fails to make a

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sufficient showing of an essential element for which it bears the burden of proof, the moving

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party is entitled to summary judgment. See Celotex, 477 U.S. at 322-23.

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III. Discussion

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A. Breach of Contract

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Despite Lebie’s failure to oppose Encompass’s motion on this claim, Local Rule 7-2 does

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not authorize the Court to automatically enter summary judgment in favor of Encompass. Henry

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v. Gill Indus., Inc., 983 F.2d 943, 950 (9th Cir. 1993). Rather, the Court must satisfy itself that

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the standards required under Federal Rule of Civil Procedure 56 have been met. Id. at 950-51.

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Here, although it appears unlikely that any breach of contract occurred, Encompass has failed to

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meet its burden. 1 Accordingly, summary judgment is DENIED without prejudice as to this

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claim. However, the Court reminds the parties of their continuing duties under Federal Rule of

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Civil Procedure 11(b), and encourages the parties to resolve any improper claims or defenses

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without further attention from the Court.

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B. NRS 686A.310

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The statute designated as NRS 686A.310 is governed by NRS 11.190(3)(a) which

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provides a three-year statute of limitations for “[a]n action upon a liability created by statute,

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other than a penalty or forfeiture.” See Schumacher v. State Farm Fire & Cas. Co., 467 F. Supp.

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2d 1090, 1095 (D. Nev. 2006). Plaintiff asserts that final judgment was entered on September 2,

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2010, and that notice of entry was not received until September 9, 2010. Calculating the statute

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of limitations from the latest date advanced by Lebie, this case should have been filed before

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September 9, 2013. It was filed in in August of 2014. Accordingly, as there is no genuine issue

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of material fact and as Encompass is entitled to judgment as a matter of law, summary judgment

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is GRANTED as to this claim.

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To begin, the Court has not been provided a copy of the contract, making a
determination of whether the contract was breached impossible.
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C. Bad Faith

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i. Statute of Limitations

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The tort of bad faith is controlled by a four-year statute of limitations. Davis v. State

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Farm Fire & Cas. Co., 545 F. Supp. 370, 372 (D. Nev. 1982); NRS § 11.190(2)(c). “The general

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rule concerning statutes of limitation is that a cause of action accrues when the wrong occurs and

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a party sustains injuries for which relief could be sought.” Petersen v. Bruen, 792 P.2d 18, 20

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(Nev. 1990). Relief may be sought under a theory of bad faith when there is “an actual or implied

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awareness of the absence of a reasonable basis for denying benefits of the policy.” Am. Excess

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Ins. Co. v. MGM Grand Hotels, Inc., 729 P.2d 1352, 1354-55 (Nev. 1986).
Encompass has failed to carry its burden. For example, Lebie alleges that Encompass

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engaged in bad faith failure to settle when it failed to inform him of an offer to settle for

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$300,000. Such a failure could certainly constitute an injury for which relief could be sought.

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However, no evidence has been put before the Court regarding when this failure was discovered

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by Lebie. Accordingly, the Court cannot determine whether there are genuine disputes of

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material fact, or whether Encompass is entitled to judgment as a matter of law on this issue.
ii. Merits

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Much like the discussion above, Encompass has failed to bear its burden. It is undisputed

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that “an insurer can be liable for bad faith failure to settle even where a demand exceeds policy

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limits if the insured is willing and able to pay the amount of the proposed settlement that exceeds

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policy coverage.” Allstate Ins. Co. v. Miller, 212 P.3d 318, 329 (Nev. 2009). Encompass’s bald

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and self-serving assertions regarding these facts are wholly insufficient. For the reasons

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discussed above, Encompass’s motion for summary judgment is DENIED without prejudice on

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this claim.

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IV. Conclusion
In harmony with the foregoing analysis, Encompass’s claims are HEREBY GRANTED
in part and DENIED in part.

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DATED this 10th day of March 2015.

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_____________________________
Kent J. Dawson
United States District Judge

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