Goldman v. Vigilant Insurance Company

• Court: District Court, D. Nevada
• Decided: February 15, 2023
• Docket: 2:19-cv-02227
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Robert L. Goldman, Case No.: 2:19-cv-02227-JAD-BNW

4 Plaintiff Order Denying Motion to Alter or Amend 5 v. Judgment

6 Vigilant Insurance Company, [ECF No. 85]

7 Defendant

8 This case arose from an insurance-coverage dispute between Vigilant Insurance 9 Company and its insured Robert Goldman after a water leak caused damage to Goldman’s 10 property.1 During the claim-adjusting process, Goldman took the position that Vigilant’s bad- 11 faith claim-handling practices rendered it equitably estopped from enforcing its rights under the 12 policy, including asserting an examination condition that requires Goldman to submit to 13 examinations under oath.2 And though the policy contains a legal-action clause that precludes 14 Goldman from bringing suit without having complied with all policy conditions, he filed this 15 case without first sitting for a requested examination.3 Because I found that the examination 16 condition and legal-action clause were conditions precedent and that Goldman failed to comply 17 with the examination condition pre-suit, I granted Vigilant’s motion for summary judgment and 18 dismissed his action.4 But I did so “without prejudice to Goldman’s ability to refile it once he 19 20 1 ECF No. 1 at 28, 120. This order does not restate the entire relevant factual background 21 detailed in my prior order dismissing Goldman’s claims without prejudice, see ECF No. 83, which I incorporate herein by reference. 22 2 ECF No. 1 at 110; ECF No. 33-2 at 59. 23 3 ECF No. 33-2 at 60. 4 ECF No. 83 at 20. 1 brings himself into compliance with his policy conditions[,]” reasoning that Goldman’s “failure 2 merely suspends his ability to bring suit” instead of permanently foreclosing coverage.5 3 Vigilant now moves to alter or amend that without-prejudice dismissal to a preclusive 4 one.6 It argues that this court clearly erred by applying the law of states other than Nevada and 5 that Nevada law compels a dismissal with prejudice.7 Vigilant fails to cite any controlling

6 Nevada authority that commands that result or show that, in the absence of any controlling 7 authority, the court erred in consulting federal-court decisions in other jurisdictions to predict 8 Nevada law. So I deny Vigilant’s motion. 9 Discussion 10 I. Standard for motion to alter or amend judgment 11 FRCP 59(e) allows a court to alter or amend a judgment in limited circumstances only.8 12 The Ninth Circuit has cautioned against the frequent use of such a motion, explaining that it 13 “should not be granted, absent highly unusual circumstances.”9 Reconsideration is only 14 “appropriate under [FRCP] 59(e) if (1) the district court is presented with newly discovered

15 evidence, (2) the district court committed clear error or made an initial decision that was 16 manifestly unjust, or (3) there is an intervening change in controlling law.”10 This rule does not 17 give parties a chance to relitigate previously decided issues or “raise arguments or present 18

19 5 Id. at 19–20. 20 6 ECF No. 85 at 1. 7 Id. at 3–4. 21 8 Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003). 22 9 Kona Enters., Inc. v. Est. of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (quoting 389 Orange Street Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)). 23 10 Zimmerman v. City of Oakland, 255 F.3d 734, 740 (9th Cir. 2001) (citing Sch. Dist. No. 1J, Multnomah Cnty. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993)). 1 evidence for the first time” that “could reasonably have been raised earlier in the litigation.”11 2 And “the district court enjoys considerable discretion in granting or denying the motion.”12 3 II. Vigilant fails to justify an altered or amended judgment.13 4 A. The court did not improperly apply the law of other states. 5 Vigilant first contends that this court improperly “appl[ied] the substantive law of the

6 states of Oregon, Michigan, and Texas” instead of Nevada.14 But, as Vigilant acknowledges,15 in 7 the absence of controlling authority, the court’s “role is . . . to predict how [the Supreme Court of 8 Nevada] would resolve the question.”16 As discussed below, Vigilant fails to point to any 9 controlling authority that compels a prejudicial dismissal.17 So my role was to predict whether 10 the Supreme Court of Nevada would dismiss the case with or without prejudice. Making that 11 prediction in view of decisions from other jurisdictions is not the same as applying the law of 12 13 11 Carroll, 342 F.3d at 945; see Weeks v. Bayer, 246 F.3d 1231, 1236 (9th Cir. 2001) (explaining 14 that “the purpose of Rule 59” is not to give parties a “forbidden ‘second bite at the apple’”) (quoting Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998)). 15 12 Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011). 16 13 Vigilant also fails to explain why, even if Goldman is permanently barred from coverage, Goldman’s bad-faith and statutory claims—the merits of which do not depend on Goldman’s 17 ability to collect under the policy—should be dismissed with prejudice. Cf. Allstate Ins. Co. v. Miller, 212 P.3d 318, 325 (Nev. 2009) (holding that “a bad-faith action applies to more than just 18 an insurer’s denial or delay in paying a claim”). Though I found in my prior order that Vigilant did not waive its ability to assert the examination condition, I made no similar finding as to the 19 other conditions or whether they were asserted in bad faith. See ECF No. 83 at 18 (noting that Vigilant’s statement that it needed only limited follow-up information may have been 20 inconsistent with its later request for many additional documents). 14 ECF No. 85 at 3. 21 15 Id. at 4. 22 16 U.S. Bank, N.A., Tr. for Banc of Am. Funding Corp. Mortg. Pass-Through Certificates, Series 2005-F v. White Horse Ests. Homeowners Ass’n, 987 F.3d 858, 863 (9th Cir. 2021) (citation 23 omitted). 17 See infra Section II.B. 1 those jurisdictions. Indeed, the Supreme Court of Nevada regularly looks to decisions from other 2 states, including in the very insurance cases that Vigilant relies on.18 Doing so is especially 3 appropriate here because Nevada contract law is similar to the law applied in the cases I found 4 persuasive.19 So this court did not apply the law of other jurisdictions, nor did it clearly err in 5 citing persuasive authority from other jurisdictions in its order.

11 18 See State Farm Mut. Auto. Ins. Co. v. Cassinelli, 216 P.2d 606, 616 (Nev. 1950) (holding that prejudice is immaterial “[b]y reason of the overwhelming weight of authority of the courts of last 12 resort within the United States”); Las Vegas Metro. Police Dep’t v. Coregis Ins. Co., 256 P.3d 958, 965 (Nev. 2011) (adopting the notice-prejudice rule “[i]n accordance with the majority of 13 jurisdictions”). 19 Compare Century Sur. Co. v. Casino W., Inc., 329 P.3d 614, 616 (Nev. 2014) (explaining that 14 Nevada courts interpret contracts, including insurance policies, to determine the parties’ intent and “from the perspective of one not trained in law or insurance, with the terms of the contract 15 viewed in their plain, ordinary[,] and popular sense” and that the interpretation should “consider the policy as a whole ‘to give reasonable harmonious meaning to the entire policy” and “should 16 not lead to an absurd or unreasonable result”) (quoting Siggelkow v. Phoenix Ins. Co., 846 P.2d 303, 304 (Nev. 1993)); Powell v. Liberty Mut. Fire Ins. Co., 252 P.3d 668, 672 (Nev. 2011) 17 (noting that ambiguities in the policy “will be interpreted against the insurer”) with Holloway v. Republic Indem. Co. of Am., 147 P.3d 329, 333 (Or. 2006) (explaining that interpreting insurance 18 policies involves “ascertain[ing] the intention of the parties[,] . . . consider[ing] whether [a] phrase in question has a plain meaning[,] . . . and resolv[ing] [doubts] against the insurance 19 company”); Frankenmuth Mut. Ins. Co. v. Masters, 595 N.W.2d 832, 837 (Mich. 1999) (explaining that Michigan courts “construe [insurance] polic[ies] in favor of the insured” and 20 “interpret the terms of an insurance contract in accordance with their commonly used meaning”) (internal quotations omitted); Klapp v. United Ins. Grp. Agency, Inc., 663 N.W.2d 447, 453 21 (Mich. 2003) (“Courts must also give effect to every word, phrase, and clause in a contract and avoid an interpretation that would render any part of the contract surplusage or nugatory”); 22 Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254, 257 (Tex. 2017) (explaining that “Texas courts are to construe insurance policies using ordinary rules of contract interpretation”; to 23 “harmonize and give effect to all provisions”; and adopt reasonable, unambiguous interpretations) (citations omitted). 1 B. Vigilant fails to show that Nevada law clearly compels a with-prejudice 2 dismissal. 3 Vigilant next contends that this court committed clear error by granting a non-prejudicial 4 dismissal contrary to Nevada law.20 It asserts that “Nevada law permanently precludes an 5 insured from pursuing an action[] and requires dismissal with prejudice when an insured 6 breaches conditions precedent to coverage.”21 Vigilant divines this purported rule from Black’s 7 Law Dictionary’s definition of “preclude”—“[t]o prohibit or prevent from doing something”22— 8 and a slate of cases—primarily State Farm Mutual Automobile Insurance Company v. 9 Cassinelli—holding that “insureds are ‘precluded from recovery by reason of their failure’ to 10 satisfy conditions precedent.”23 Vigilant overreads Cassinelli. 11 In Cassinelli, the Supreme Court of Nevada considered “whether the insured was 12 precluded from recover[ing]” coverage under his car-insurance policy because he “fail[]ed to 13 give the notices required by the policy.”24 The policy required the insured to provide “written 14 notice . . . to the company as soon as practicable” after an accident, including notices of

15 lawsuits.25 The policy also contained a legal-action clause that barred suit “against the company 16 unless . . . the insured shall have fully complied with all the terms of th[e] policy.”26 The insured 17 18 20 ECF No. 85 at 3. Though it does not explicitly rely on the clear-error prong of Rule 59(e), 19 Vigilant does not cite new evidence or a change in the law or appear to contend that the order was unjust; it instead questions this court’s application of existing law. 20 21 ECF No. 85 at 3 (emphasis added). 21 22 Id. at 5 (citing Black’s Law Dictionary (6th ed. 2019)). 23 Id. at 6 (cleaned up) (quoting Cassinelli, 216 P.2d at 607). 22 24 Cassinelli, 216 P.2d at 609. 23 25 Id. 26 Id. 1 was involved in a car accident and was sued but failed to notify State Farm until four months 2 later.27 Because of this delay, the Court held that the insured “fail[ed] to perform the condition 3 precedent . . . of giving notice of the suit . . . within a reasonable time” and directed the lower 4 court to enter judgment for the defendant.28 5 Cassinelli does not compel a similar result here. Though Vigilant attempts to similize the

6 conditions precedent in Cassinelli to those in Goldman’s policy,29 there is a key distinction: the 7 condition in Cassinelli required notice of suits “as soon as practicable[,]”30 whereas the condition 8 here requires Goldman to sit for an examination under oath without any reference to time.31 So, 9 while Mr. Cassinelli could never put the genie back in the bottle and cure his delay—making 10 judgment with prejudice appropriate—Goldman can still satisfy the examination condition 11 precedent—making judgment without prejudice more suitable.32 The other Supreme Court of 12 13 14

15 16

27 Id. 17 28 Id. at 616. 18 29 ECF No. 85 at 6. 19 30 Cassinelli, 216 P.2d at 609. 31 ECF No. 33-2 at 60. Vigilant appears to attempt to raise other conditions that it contends 20 Goldman violated. ECF No. 85 at 2. But my prior order only found that Goldman violated the examination condition by failing to sit for a requested examination and the legal-action clause by 21 suing without first complying with the examination condition. ECF No. 83 at 10. 32 Cassinelli also doesn’t compel dismissal with prejudice due to Goldman’s violation of the 22 legal-action clause; that clause, unlike the condition in Cassinelli and the examination condition here, is a condition precedent to filing suit, not a condition precedent to coverage. See ECF No. 23 83 at 8. Regardless, Vigilant does not appear to rely on the legal-action clause for its argument that dismissal with prejudice is warranted. 1 Nevada cases that Vigilant relies on also involved lawsuit-notice conditions that required timely 2 notice,33 so they are similarly inapposite.34 3 Vigilant’s Ninth Circuit authority likewise doesn’t compel dismissal with prejudice. In 4 Keller v. Federal Insurance Company, a panel of the Ninth Circuit—in an unpublished decision 5 based on California law—affirmed summary judgment for an insurer that denied coverage

6 because the insureds failed to bring their lawsuit within the time required by the policy.35 But 7 while an untimely suit would justify dismissal with prejudice, Vigilant does not argue that 8 Goldman waited too long to file suit. Vigilant’s reliance on Cordova v. American Family Mutual 9 Insurance Company—an order from another judge in this district—is also unavailing. Vigilant 10

11 33 ECF No. 85 at 6. See Las Vegas Star Taxi, Inc. v. St. Paul Fire & Marine Ins. Co., 714 P.2d 562, 562 (Nev. 1986) (noting that “[t]he language used in the policy makes it amply clear that 12 timely notice is a condition of coverage and must be carried out in order to render the insurance company liable under its contract of insurance”) (emphasis added); Las Vegas Metro. Police 13 Dep’t v. Coregis Ins. Co., 256 P.3d 958, 960 (Nev. 2011) (noting that the condition “required [the insured] to provide [the insurer] notice of an occurrence that may result in a claim as soon as 14 practicable and to immediately provide [the insurer] copies of any demands or other legal documents”) (emphases added). 15 34 Even though the examination condition here doesn’t specify a time requirement, Nevada law may nonetheless require Goldman to sit for an examination in a reasonable time. Mayfield v. 16 Koroghli, 184 P.3d 362, 366 (Nev. 2008) (holding that a party to a contract is “excused from performing under the contract” if the other party “fail[s] to perform within a reasonable time” 17 under the circumstances). Nevada law may also foreclose coverage permanently if Goldman continues to refuse to sit for the examination even though I rejected his argument that Vigilant 18 could not request one. Cf. Brown v. State Farm Fire & Cas. Co., 381 P.3d 597, 597 (Nev. 2012) (unpublished) (holding that “once appellant failed to attend the [examination] after the district 19 court addressed appellant’s arguments concerning the scope of the [examination], the district court did not err in determining that respondent was not required to provide coverage for the 20 accident to appellant based on appellant’s violation of the insurance contract”). But I make no findings or conclusions on these issues because the parties did not adequately address them in the 21 briefing underlying this or my prior order. For the same reason, I do not address whether Vigilant, by sending a letter that it would reconsider its denial after Goldman filed the lawsuit, 22 waived its ability to argue that Goldman’s lawsuit permanently relieves Vigilant of the burden to provide coverage. See ECF No. 33-38 at 2. The parties can address these issues if Goldman or 23 Vigilant brings another action. 35 Keller v. Fed. Ins. Co., 765 F. App’x 271, 273 (9th Cir. 2019) (unpublished). cites Cordova for the proposition that if an insured “fails to comply with [his] duty [under the policy], then [the insurer] has no duty to provide coverage if it is prejudiced by [the insured’s] noncompliance.”*° But neither Cordova nor the Ninth Circuit’s partial, unpublished affirmance of it turned on that statement or whether dismissal with or without prejudice was appropriate, as 5|| the district court let the insured’s breach-of-contract claim go to trial because it was “unclear 6|| whether [the insured] was prejudiced.”?” So none of the authority that Vigilant cites clearly 7|| compels a with-prejudice dismissal here.** 8 Conclusion 9 IT IS THEREFORE ORDERED that Vigilant’s motion to alter or amend judgment [ECF No. 85] is DENIED. 11 cL YY, 12 □ RDEA U.S. Dist#ict Jud ge Jennifer A. Dorsey 13 February 15, 2023 14 15 16 17 18 19 20 3° ECF No. 85 at 8 (quoting Cordova v. Am. Fam. Mut. Ins. Co., 2015 WL 3660329, at *3 (D. Nev. June 12, 2015)). 2213” Cordova, 2015 WL 3660329, at *3; Cordova y. Am. Fam. Mut. Ins. Co., 700 F. App’x 762 (9th Cir. 2017) (unpublished). 2 Vigilant also points to several cases from other judges in this district, none of which is controlling and all of which I find distinguishable or unpersuasive. ECF No. 85 at 6-8.