James River Insurance Company v. Hilton

District Court, D. Nevada·Decided October 2, 2023·No. 2:20-cv-00687·Unknown

Opinion

1 | MICHAEL C. MILLS, ESQ. BAUMAN LOEWE WITT & MAXWELL 2 | 3650 N. Rancho Dr., Suite 114 Las Vegas, NV 89130 3 | Telephone: oe) 240-6060 Facsimile: (702) 240-4267 4 | E-mail: mmills@blwmlawfirm.com 5 |H. DOUGLAS GALT, ESQ. WOOLLS PEER DOLLINGER & SCHER APC 6 | 12401 Wilshire Blvd., Second Floor Los Angeles, CA 90025-1089 7 | Telephone: GB) 629-1600 Facsimile: 13) 629-1660 8 | E-mail: dgalt@wpdslaw.com 9 | Attorneys for Plaintiff James River Insurance Co. 10 UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA — LAS VEGAS

13 4 JAMES RIVER INSURANCE COMPANY, Case No.: 2:20-cv-00687-CDS-VCF Plaintiff 6 Vv. JOINT PRE-TRIAL ORDER CORY J. HILTON; LAW OFFICES OF 17 | CORY J. HILTON; MOUNTAIN VISTA LAW GROUP, LLC; TOMIKO BARNES; 18 | and BRIAN GOTTI 19 Defendants 20 21 22 23 24 25 26 27 28

| After pretrial proceedings in this case, 2 IT IS ORDERED: 3 I. 4 This is an action for rescission of insurance policies and damages due to 5 | fraudulent concealment by the insured. Plaintiff is James River Insurance Company 6 | (“James River”). James River issued professional liability policies to defendants Cory 7 Hilton, Esq., Law Offices of Cory J. Hilton and Mountain Vista Law Group, LLC. 8 | (‘the Law Firm Defendants”). Defendant Brian Gotti (“Gotti”) was a client of the Law 9 | Firm Defendants who presented two claims under a James River policy (“the Gotti 10 | Claims”). Defendant Tamiko Barnes (“Barnes”) was a client of the Law Firm 11 | Defendants who presented a claim under a James River policy (“the Barnes □□□□□□□□ 12 James River began insuring the Law Firm Defendants under an annual policy _ 13 |(“the Policy”) that incepted on December 14, 2013. The Law Firm Defendants 14 | submitted renewal applications each fall, and James River renewed the Policy each year, 15 | with the last one expiring on December 14, 2020. The Policy provides coverage for 16 | claims first made during the policy period and first reported during the policy period or | the extended reporting period. 18 The Barnes Claim was first made during the 12/14/18 — 12/14/19 Policy. The 19 | Gotti Claims were first made during the 12/14/19 — 12/14/20 Policy. 20 James River contends that it has the right to rescind the 12/14/18 — 12/14/19 21 | Policy duc to material misrepresentations or omissions in the applications submitted by 22 | the Law Firm Defendants, and, with the rescission of the 12/14/18 — 12/14/19 Policy, 23 | there is no coverage for the Barnes Claim. This issue was presented in a motion for 24 | summary judgment, and the Court (the Honorable Richard Boulware, Judge presiding) 25 | granted the motion. [Doc. #43.] After granting motions for reconsideration, the Court 26 | (the Honorable Cristina D. Silva, Judge presiding) again held that James River had the 27 | right to rescind the 12/14/18 — 12/14/19 Policy. [Doc. #67 (p. 14).] Accordingly the 28

1 | issue of coverage for the Barnes claim will not be tried. 2 James River contends that it has the right to rescind the 12/14/19 — 12/14/20 3 | Policy due to material misrepresentations or omissions in the applications submitted by 4 | the Law Firm Defendants, and, with the rescission of the 12/14/19 — 12/14/20 Policy, 5 | there is no coverage for the Gotti Claims. James River further contends that, because it 6 | would not have issued the 12/14/18 — 12/14/19 Policy had the Law Firm Defendants’ 7 | applications contained truthful and complete answers, it would have declined to issue 8 | the subsequent 12/14/19 — 12/14/20 Policy. 9 James River also contends that, as a proximate result of the material false 10 | statements or omissions made by the Law Firm Defendants, it has suffered damages, 11 | including costs and fees incurred to defend the Law Firm Defendants against the Barnes 12 | and Gotti claims.

The Law Firm Defendants contend they did not make false statements of, or omit 14 | to state, material facts in their applications to James River and that James River is not 13 | entitled to rescind either of the involved policies. They further contend James River 16 | was fully apprised (or should have been fully apprised) of the status of the Law Firm Defendants because James River’s agent/broker, who procured the policies on behalf 18 | of James River and who independently prepared the submitted application to James 19 | River, was fully apprised of the involved situations. Further, the discipline of any 20 | attorney in Nevada is a matter of public record and is deemed to be within the purview 21 | of James River at the time it issued these policies. James River also continued to 22 | actively solicit the continued business of and accepted the policy premiums from the 23 | Law Firm Defendants even after this allegedly disqualifying information was known. 24 | Finally, James River, if it truly deemed the Law Firm Defendants were unfit insureds 25 | due to issues with the State Bar, is obligated to return all the accepted premiums paid 26 | during the time of such alleged unacceptablility. 27 Gotti contends the Law Firm Defendants did not make false statements of, or 28

1 | omit to state, material facts in their applications and that James River is not entitled to 2 | rescind the 123/14/19 — 12/14/20 Policy. 3 4 II. 5 The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because 6 |there is complete diversity of citizenship among the parties and the amount in 7 | controversy, exclusive of interests and costs, exceeds Seventy-Five Thousand Dollars 8 | ($75,000.00). 9 James River is a corporation organized and existing under the laws of the State 10 | of Ohio, with its principal place of business in Richmond, Virginia, and authorized to 11 | do business and actually doing business as an insurance carrier under the laws of the 12 | State of Nevada.

13 Defendant Cory J. Hilton, Esq., is an individual, and at all times mentioned in 14 | this Complaint has been a Nevada resident. During the relevant times, he was the owner 13 | of a Nevada corporation known as Law Offices of Cory J. Hilton. 16 Defendant Mountain Vista Law Group, LLC, is a limited liability corporation organized and existing under the laws of the State of Nevada, with its principal place of 18 | business in Las Vegas, Nevada. 19 Defendant Barnes 1s an individual and a resident of Nevada. 20 Defendant Gotti is an individual and a resident of Nevada. 21 Venue is proper in this District pursuant to 28 U.S.C. § 1391 (a) (2), in that a 22 | substantial part of the events giving rise to the claim occurred in this District. 23 24 I. 25 The following facts are admitted by the parties and require no proof: 26 1. James River is not an “admitted” insurance company in the State of 27 | Nevada. Accordingly, it does not interact directly with a prospective insured. To obtain 28

1 | coverage from James River, a Nevada applicant works with a Nevada insurance broker, 2 | which is commonly referred to as the “retail agent”. 3 2. In November 2013, Harrison Insurance Agency, as the “retail agent” and 4 | Worldwide Facilities, Inc., as the wholesale broker, submitted an application to James 5 | River for professional liability insurance for defendant Law Office of Cory Hilton. 6 3. As of November 2013, and continuing to today, James River had and has 7 |no agency agreement with Harrison Insurance Agency. 8 4. In successive years beginning in December 2014, Law Office of Cory 9 | Hilton or its successor law firm (defendant Mountain Vista Law Group, LLC) submitted 10 | applications for renewal policies from James River. 1 5. Each of the professional liability policies issued to Law Office of Cory 12 | Hilton or its successor was written on a “claims made and reported” coverage form.

13 6.

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James River Insurance Company v. Hilton, (D. Nev. 2023).

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