Howe v. GEICO Advantage Insurance Company

Filing 15

ORDERED that ECF No. 13 Defendant's Motion to Stay Discovery is GRANTED as unopposed. IT IS FURTHER ORDERED that the hearing scheduled for 12/9/2022 is VACATED. Signed by Magistrate Judge Brenda Weksler on 11/21/2022. (Copies have been distributed pursuant to the NEF - DRM)

Case 2:22-cv-01171-ART-BNW Document 15
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THOMAS E. WINNER
Nevada Bar No. 5168
MATTHEW DOUGLAS
Nevada Bar No. 11371
WINNER & BOOZE
1117 South Rancho Drive
Las Vegas, Nevada 89102
Phone [phone]
Facsimile [phone]
[e-mail]
Attorneys for Defendant GEICO Advantage Insurance.

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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ADAM HOWE, Individually,
Plaintiff,

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CASE NO.: 2:22-cv-01171

vs.
GEICO ADVANTAGE INSURANCE,
DOES I through X, ROE CORPORATIONS
I through X, inclusive,

DEFENDANT GEICO ADVANTAGE
INSURANCE’S MOTION TO STAY
DISCOVERY ON EXTRACONTRACTUAL CLAIMS, COUNTS
TWO AND THREE OF PLAINTIFF’S
AMENDED COMPLAINT

Defendant(s)

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COME NOW, Defendant, GEICO ADVANTAGE INSURANCE, by and through its
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counsel, the law firm of WINNER & BOOZE, for the purpose of presenting the instant Motion
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to stay discovery on the extra-contractual or, “bad faith”, claims (counts II & III of Plaintiffs’

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Amended Complaint), in order to avoid unfair prejudice against the defendant and save costs
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until the pending Motion for partial summary judgment in regard to said claims (ECF No. 11) is
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heard.
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This motion is made and based upon the pleadings and papers on file herein, the
Memorandum of Points and Authorities attached hereto, exhibits attached hereto, defendant’s
motion for partial summary judgment and the exhibits attached thereto (ECF No. 11), and any
oral argument this Court may entertain at the time of hearing.
DATED this __2nd _ day of November, 2022.

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WINNER & BOOZE

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/s/ Matthew J. Douglas
Matthew J. Douglas, Esq.
Nevada Bar No. 11371
1117 South Rancho Drive
Las Vegas, Nevada 89102
Attorneys for GEICO Advantage Ins.

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DECLARATION OF MATTHEW J. DOUGLAS IN SUPPORT OF
DEFENDANT'S MOTION TO STAY DISCOVERY IN COMPLIANCE
WITH LR 26-6(c) & LR IA 1-3(f)

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I, Matthew J. Douglas, under penalty of perjury, does hereby declare as follows:

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1.

I am an attorney duly licensed to practice in all courts of the State of Nevada and

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Nevada Federal District Courts, at the law firm of WINNER & BOOZE, the attorneys of record

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for Defendant, GEICO ADVANTAGE INSURANCE (hereinafter “GEICO”), herein.

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2.

I have personal knowledge of the matters set forth below and could competently

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testify thereto if called to do so, and I attest to the contents of this Declaration in support of

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Defendant’s instant Motion to Stay Discovery.

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3.

Pursuant to LR 26-6(c) and LR IA 1-3(f), I personally spoke with and, conferred

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with, Plaintiff’s counsel, Justin Wilson, Esq. on November 1, 2022, to discuss the possibility of

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resolving the issues raised in this Motion to stay discovery without having to seek the

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intervention of the Court.

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4.

Per the discussions, plaintiff was not agreeable to staying discovery in regard to

counts II & III of their Amended Complaint, for breach of the covenant of good faith and fair
dealing as well as for Breach of the Nevada Unfair Claims Practices Act.
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I attest that this motion has not been filed for any improper purpose.

I declare under penalty of perjury that the foregoing is true and correct.
Dated: November 2, 2022
Signed: Matthew J. Douglas
Matthew J. Douglas

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MEMORANDUM OF POINTS AND AUTHORITIES
I.
INTRODUCTION & FACTUAL BACKGROUND
Defendant will no re-state all facts as same are more fully set forth in defendant’s motion
for partial summary judgment and, defendant refers the court to same as if said facts were more
fully set forth herein. See ECF No. 11. That said, the salient facts for this motion are that Plaintiff
was involved in a motor vehicle accident on February 8, 2020 and, after collecting the $25,000
liability insurance limits from the tortfeasor made an Underinsured (UIM) claim with his own
insurer, defendant GEICO. After the initial demand was received GEICO asked for additional
information (recorded statement) and, then, prior medical records and an Independent Medical
Exam (“IME”) of plaintiff. Although plaintiff never returned a legible medical records
authorization or, prior medical records, GEICO went ahead with the IME which concluded
plaintiff’s claimed future was unrelated to the loss. Accordingly, GEICO made plaintiff a UIM
offer based on the IME, but which an amount far less than the $100,000 UIM policy limit
plaintiff had demanded and, the present suit followed. As such, defendant maintains the present
action is nothing more than a value dispute – based on a medical expert opinion – which creates
a genuine dispute that precludes ‘bad faith.’ Accordingly, defendant has brought a motion for
partial summary judgment on said ‘bad faith’ claims.’ See ECF No. 11.

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Following the motion for partial summary judgment being filed, defendant asked
plaintiff if he would stay discovery on his extra-contractual or, ‘bad faith’ claims. After a meet
and confer the parties were still unable to agree and, thus, the present motion is brought. The
breadth of the discovery plaintiffs seek makes the potential costs and prejudice too great for
defendant considering the position of this case and, thus, asks this court to rule on this motion.

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Quite simply, defendant can meet the 2-prong test for a stay – i.e. that there is a
dispositive motion pending which would completely potentially dispose of Counts II & III of
the Amended Complaint and, second, no further discovery is needed for the court to address the
motion for partial judgment on those claims.

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Therefore, allowing any discovery by plaintiff into GEICO’s claims handling/training
materials and/or other discovery regarding alleged “bad faith”, would only serve to increase the
expense of these proceedings without any chance of plaintiff prevailing on these claims. Further,
unfettered discovery into unrelated claims is too broad and costly for the issues involved herein.
As such, discovery on the “extra-contractual” claims – for breach of the implied covenant of
good faith and fair dealing and Breach of the Nevada Unfair Claims Practices Act, should be
stayed.
II.
ARGUMENT

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Defendant moves to stay discovery on extra-contractual claims (i.e. “bad faith”), Counts

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II & III, pending a ruling on the motion for partial summary judgment on those claims.

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Defendant asserts that the pending partial summary judgment motion is potentially dispositive

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on those claims, no further discovery is required for the court to rule, and no prejudice results to
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Plaintiff while substantial prejudice would accrue to GEICO.

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The Ninth Circuit has affirmed that district courts have “wide discretion in controlling

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discovery.” Little v. City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988). While the Ninth Circuit

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has not provided a clear standard for evaluating a motion to stay discovery pending resolution

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of a potentially dispositive motion, it has affirmed that district courts may grant such a motion

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for good cause. Id. (affirming district court's decision to stay discovery pending resolution of

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motion for summary judgment); See Wenger v. Monroe, 282 F.3d 1068, 1077 (9th Cir.
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2002) (affirming district court's grant of protective order staying discovery pending resolution

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of motion to dismiss). Federal Rule of Civil Procedure 26 states “[t]he court may, for good

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cause, issue an order to protect a party or person from annoyance, embarrassment, oppression,

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or undue burden or expense,” including forbidding discovery. Fed. R. Civ. P. 26(c)(1). Indeed,

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the U.S. Supreme Court has endorsed that discovery may be stayed pending resolution of a

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dispositive motion. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1954 (2009) (“Because respondent’s
complaint is deficient under Rule 8, he is not entitled to discovery…”); Bell Atlantic Corp. v.

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Twombly, 550 U.S. 554, 564, n. 8 (2007) (Referring to an “understanding that, before proceeding
to discovery, a complaint must allege facts suggestive of illegal conduct”).

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“[T]he Federal Rules of Civil Procedure does not provide for automatic or blanket stays

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of discovery when a potentially dispositive motion is pending.” Mlejnecky v. Olympus Imaging

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Am. Inc., 2011 WL 489743, at 6 (E.D. Cal. 2011). District courts do not favor blanket stays of
discovery because “delaying or prolonging discovery can create unnecessary litigation expenses

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and case management problems.” Salazar v. Honest Tea, Inc., 2015 WL 6537813, at 1 (E.D.
Cal. 2015) (citing Simpson v. Specialty Retail Concepts, Inc., 121 F.R.D. 261, 263 (M.D.N.C.

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1988)). When considering a motion to stay discovery a district court “inevitably must balance

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the harm produced by a delay in discovery against the possibility that the motion will be granted

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and entirely eliminate the need for such discovery.” Simpson, 121 F.R.D. at 263.

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District courts in the Ninth Circuit may apply a two-pronged test to evaluate whether a

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stay discovery of discovery may issue. Mlejnecky, 2011 WL 489743, at 6; Seven Springs Ltd.
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P'ship v. Fox Capital Mgmt. Corp., 2007 WL 1146607, at 1 (E.D. Cal. 2007), Tradebay LLC v.

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eBay, Inc., 278 F.R.D. 597, 602 (D. Nev. 2011). The first prong of the test requires that the

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pending motion “be potentially dispositive of the entire case, or at least dispositive on the issue

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at which discovery is aimed.” Id. For the second prong, the court can “determine whether the

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pending, potentially dispositive motion can be decided absent additional discovery.” Id. If either
prong is not met, discovery should proceed. Id.

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Defendant asserts the motion for partial summary judgment would be potentially

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dispositive of both Counts ii & III and that the decision on the motion to dismiss can be made

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absent further discovery. Defendant incorporates by reference its entire Motion for partial

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summary judgment, ECF No. 11, as if it were more fully set forth herein.1 First, as this court can
plainly see, defendant’s motion is clearly dispositive on the extra-contractual claims as, if it is

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granted, would completely dispose of counts II & II under F.R.C.P. 56. Accordingly, defendant

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satisfies prong one of the test for a stay of discovery – the motion is clearly dispositive on the

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merits for counts II & III.

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Defendant also clearly satisfies prong two of the test – that no further discovery is needed
to decide the motion and, thus, the motion is ready for ruling without the need of additional
discovery. Indeed, defendant’s motion is based on a legal issue – namely whether GEICO’s

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reliance on a medical expert report to dispute plaintiff’s valuation of his claim is sufficient to
create a ‘genuine dispute’, precluding ‘bad faith.’

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In this way, the motion for partial summary judgment is set for ruling on a discrete legal

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issue, which is potentially dispositive of both counts II & III, and for which no further discovery

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is needed. In the case of Sekera v Allstate Ins. Co., 763 Fed. Appx. 629 (9th Cir. 2019), the Ninth

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The Court may take a look at the merits of the underlying motions to dismiss in considering
whether a limited stay is warranted. Tradebay LLC v. eBay, Inc., 278 F.R.D. 597, 602 (D. Nev. 2011)
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Circuit held that an insurer’s reliance on the findings of an Independent Medical Exam is

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evidence of a ‘genuine dispute’, precluding bad faith. See also Fraley v Allstate Ins. Co., 97 Cal.

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Rptr. 2d 386 (Ca. App. 4th 2000) (reliance upon experts for repair estimates considered a

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genuine dispute).
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Defendant asserts its chances for success are good given the above-cited case law. In

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short, as a genuine dispute exists, plaintiff cannot maintain either counts II or III of his complaint

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either and, as this issue is dispositive and, requires no further discovery, defendant asks this

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court to stay discovery on alleged extra-contractual claims.

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Conducting discovery would be unfairly prejudicial to GEICO where plaintiffs’ clearly
seek expensive, confidential, and intrusive discovery into claims handling and, issues wholly
unrelated to the plaintiffs’ deficient claims. This type of discovery is not only costly, but also

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clearly unrelated, prejudicial, and unnecessary when it is founded upon deficient claims. Thus,

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the court should weigh this clear prejudice and costs to defendant along with any claim of

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efficiency in deciding to stay. As such, it is respectfully requested that this Court stay all

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discovery or, alternatively stay all discovery on the extra-contractual claims.

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III.

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CONCLUSION

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WHEREFORE, defendant GEICO ADVANTAGE INSURANCE respectfully requests
that this Honorable Court GRANT defendant’s Motion to Stay the discovery on counts two and
three of plaintiffs’ complaint, for breach of the implied convenant of good faith and fair dealing,
and breach of the Nevada Unfair Claims Practices Act pending the outcome of the dispositive
motion regarding same claims, ECF No. 11.
DATED this 2nd

day of November, 2022.

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WINNER & BOOZE

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/S/ Matthew J. Douglas
Matthew J. Douglas
Nevada Bar No. 11371
1117 South Rancho Drive
Las Vegas, Nevada 89102
Attorneys for Defendant GEICO

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ORDER
IT IS ORDERED that ECF No. 13 Defendant's Motion to Stay
Discovery is GRANTED as unopposed. See LR 7-2(d).
IT IS FURTHER ORDERED that the hearing scheduled for
12/9/2022 is VACATED.
IT IS SO ORDERED
DATED: 12:01 pm, November 21, 2022

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BRENDA WEKSLER
UNITED STATES MAGISTRATE JUDGE

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