Selene Olivia Corona Villa v. Loya Insurance Company, D/B/A Fred Loya Insurance, et al.

• Court: District Court, D. Nevada
• Decided: October 2, 2025
• Docket: 2:25-cv-00378
• Status: Unknown

Opinion

3 UNITED STATES DISTRICT COURT

4 DISTRICT OF NEVADA

5 * * *

6 SELENE OLIVIA CORONA VILLA, Case No. 2:25-cv-00378-MMD-BNW

7 Plaintiffs, ORDER v. 8 LOYA INSURANCE COMPANY, D/B/A 9 FRED LOYA INSURANCE, et al.,

10 Defendants.

11 12 I. SUMMARY 13 Plaintiff Selene Olivia Corona Villa sued Defendant Loya Insurance Company d/b/a 14 Fred Loya Insurance in state court after Defendant failed to pay a judgment that Plaintiff 15 won against Defendant’s insured in another case arising out of a car accident. (ECF No. 16 1-2 (“Complaint”).) Defendant subsequently removed this case.1 (ECF No. 1.) Before the 17 Court is Defendant’s motion to dismiss the Complaint.2 (ECF No. 7 (“Motion”).) As further 18 explained below, because Defendant did not breach the insurance policy providing the 19 basis for the Complaint, the Court will grant the Motion. 20 II. BACKGROUND 21 The following facts are adapted from the Complaint.3 On March 12, 2022, Plaintiff 22 was injured in a motor vehicle accident involving John David Klug (Defendant’s insured), 23

24 1The Court ordered Defendant to show cause as to why this case should not be remanded for lack of jurisdiction (ECF No. 6) and found the order to show cause had been 25 satisfied (ECF No. 15).

26 2Plaintiff responded (ECF No. 11), and Defendant replied (ECF No. 12).

27 3Defendant requests the Court take judicial notice of the insurance policy (ECF No. 7-2), which Plaintiff references in her Complaint. (ECF No. 8.) On a motion to dismiss 28 under Rule 12(b)(6), the Court may consider materials “incorporated by reference” into the complaint and may take judicial notice of “matters of public record.” See Mack v. S. 2 liability coverage (the “Policy”). (ECF No. 1-2 at 4-5.) Defendant issued the Policy to Klug 3 covering a period from March 10, 2022 to April 9, 2022. (ECF No. 7-2 at 2.) Beginning in 4 May 2022, Plaintiff sent Defendant multiple offers to settle within the $25,000 policy limit. 5 (ECF No. 1-2 at 5-6.) Then, on November 4, 2022, Plaintiff sued Klug in an underlying 6 action to recover for the bodily injuries sustained in the accident. (Id. at 7.) 7 On April 12, 2024, a trial was held, and the jury found in favor of Plaintiff, awarding 8 $25,000 in damages. (Id. at 8.) Factoring in attorneys’ fees and interest, Plaintiff received 9 a total judgment of $44,689.38 against Defendant’s insured, which Plaintiff sought to 10 recover from Defendant directly after obtaining a judicial assignment of Klug’s rights 11 against Loya. (Id. at 9, 12.) On August 30, 2024, Plaintiff received $25,000 in settlement 12 funds from Defendant—the maximum amount the Policy required Defendant to pay to 13 indemnify the insured for any bodily injury damages awarded against him. (Id. at 11; see 14 also ECF No. 7-2 at 10-11.) Plaintiff subsequently initiated this action seeking to recover 15 the amount of the total judgment plus general and punitive damages and fees and costs. 16 (ECF No. 1-2 at 12, 18.) 17 Plaintiff asserts five failure-to-settle claims: (1) breach of contract4; (2, 3) 18 contractual and tortious breaches of the implied covenant of good faith and fair dealing5; 19 20

21 Bay Beer Distribs., 798 F.2d 1279, 1282 (9th Cir. 1986); see also United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (“A court may…consider certain materials—documents 22 attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice—without converting the motion to dismiss into a motion for 23 summary judgment.”). If the Court otherwise considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. See Fed. R. Civ. 24 P. 12(d). Accordingly, the Court takes judicial notice of the insurance policy as to its content, including the $25,000 per-person-limit in bodily injury liability coverage (ECF No. 25 7-2 at 11).

26 4Specifically, Plaintiff alleges that Defendant breached the Policy by failing to indemnify Klug, inform him of the policy-limits demand, and settle within the policy limit. 27 (ECF No. 1-2 at 13.)

28 5Plaintiff’s second claim alleges a breach of the implied covenant of good faith and fair dealing under contract law, while her third claim asserts a tortious breach of the same. 2 damages. (Id. at 12-18.) 3 III. DISCUSSION 4 Defendant seeks dismissal under Federal Rule of Civil Procedure 12(b)(6), arguing 5 that Plaintiff’s “bad faith” failure-to-settle claims fail because the duty to settle was never 6 triggered, as Plaintiff has not shown that the insurance claim was substantially likely to 7 exceed the policy limit. (ECF No. 7 at 5-6.) In particular, Defendant asserts that, under 8 the implied covenant of good faith and fair dealing, an insurer need only accept a 9 settlement demand “when there is a substantial likelihood that the value of the claim will 10 exceed the policy limit.” (Id. at 5.) For the reasons explained below, the Court agrees with 11 Defendant that Plaintiff fails to state a valid failure-to-settle claim.6 12 Under Nevada law, insurers are subject to a covenant of good faith and fair dealing, 13 a violation of which can result in bad-faith tort liability. See Sharp Plumbing, Inc. v. Nat’l 14 Fire & Marine Ins. Co., 633 F. App’x 441, 442 (9th Cir. 2016). Under the covenant, 15 insurers are required to “settle a claim against its insured within policy limits whenever 16 there is a substantial likelihood of recovery in excess of those limits.” Id. (citing Johansen 17 v. Cal. State Auto Ass'n Inter–Ins. Bureau, 538 P.2d 744, 747 (Cal. Aug. 11, 1975)). 18 Generally, an insurer’s “duty to accept a reasonable settlement offer” arises only when 19 the claim is covered under the policy. Id.; see also Johansen, 538 P.2d 744 (describing 20 the standard for determining whether a settlement offer is “reasonable”). As discussed 21 above, the claim against Klug (Defendant’s insured) is covered by the bodily injury liability 22 portion of the Policy (ECF No. 7-2 at 11). 23 To evaluate the reasonableness of a settlement offer, courts look to “the victim's 24 injuries and the probable liability of the insured” as the “only permissible consideration” in 25 determining whether a judgment is likely to exceed the amount of the settlement offer. 26 See Johansen, 538 P.2d 744; see also Archdale v. Am. Int’l. Specialty Lines Ins. Co., 154 27

28 6Because the Court agrees with Defendant’s first dispositive argument, the Court declines to address Defendant’s remaining arguments. 1 || Cal. App. 4th 449, 464 (2007). Here, the Court agrees that Plaintiff's failure-to-settle 2 || claims fail because the jury awarded exactly $25,000 for her bodily injuries—the full 3 || amount of the Policy limit—indicating, as Defendant correctly argues, that the claim was 4 || not worth more than the Policy provided, notwithstanding Plaintiff's contentions that her 5 || damages exceeded that amount.’ (See ECF No. 7 at 6.) Accordingly, the Court grants 6 || Defendant’s Motion and dismisses Plaintiff's failure-to-settle claims for failure to state a 7 || claim. 8 CONCLUSION 9 The Court notes that the parties made several arguments and cited to several 10 || cases not discussed above. The Court has reviewed these arguments and cases and 11 || determines that they do not warrant discussion as they do not affect the outcome of the 12 || Motion before the Court. 13 It is further ordered that Loya Insurance Company’s motion to dismiss (ECF No. 7) 14 || is granted. 15 The Clerk of Court is directed to enter judgment in accordance with this Order and 16 || close this case. 17 DATED THIS 2" Day of October 2025. 18

20 MIRANDA M. DU 21 UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 Plaintiff, in response, fails to properly address the jury’s $25,000 verdict and sets forth a series of frivolous arguments, which the Court is unpersuaded by.