Zervas v. USAA General Indemnity Company

Opinion

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Emily Zervas, Case No.: 2:18-cv-00051-JAD-EJY

4 Plaintiff Order Denying USAA’s Motion for 5 v. Reconsideration, Certification to the Supreme Court of Nevada, or Certification 6 USAA General Indemnity Co., for Interlocutory Appeal and Denying USAA’s Motion to Dismiss as Moot 7 Defendant [ECF Nos. 52, 67] 8

9 Defendant USAA moves for reconsideration of my order granting summary judgment in 10 favor of plaintiff Emily Zervas. In that order, I found that because USAA’s “other insurance” 11 provision conflicted with other policies providing coverage for the underlying incident, the rule 12 articulated by the Oregon Supreme Court in Lamb-Weston, Inc. v. Oregon Automobile Insurance 13 Co.1—and later adopted by the Supreme Court of Nevada2—applies.3 And because USAA paid 14 Zervas only a portion of the amount owed to her under the Lamb-Weston rule, I granted 15 summary judgment to Zervas on her breach-of-contract and declaratory-relief claims.4 16 USAA now argues that I erred because the legislative history of N.R.S. § 687B.145, 17 which permits insurers to prohibit stacking of insurance policies, suggests that the statute 18 abrogated the Lamb-Weston rule.5 As an alternative to reconsideration, USAA requests that I 19 certify the question to the Supreme Court of Nevada or certify the order for interlocutory appeal 20

21 1 Lamb-Weston, Inc. v. Oregon Auto. Ins. Co., 346 P.2d 643 (Or. 1959). 2 Travelers Inc. Co. v. Lopez, 567 P.2d 471, 474 (Nev. 1977). 22 3 ECF No. 47 at 3–7. 23 4 Id. at 7–9. 5 ECF No. 67 at 6–8. 1 under 28 U.S.C. § 1292(b).6 Because USAA had ample opportunity to argue that § 687B.145 2 displaced the Lamb-Weston rule in its summary-judgment briefing but failed do so, I deny its 3 motion for reconsideration and alternative request to certify a question to the Supreme Court of 4 Nevada. I also deny USAA’s request to certify my order for interlocutory appeal because I find 5 that it would not materially advance resolution of this litigation. USAA also moves for dismissal

6 of or summary judgment on Zervas’s amended complaint, but Zervas has since filed a second 7 amended complaint. So I deny that motion as moot. 8 Discussion7 9 I. Motion to dismiss or for summary judgment (ECF No. 52) 10 USAA moves to dismiss Zervas’s amended complaint or, in the alternative, grant it 11 summary judgment.8 “It is well-established in [the Ninth Circuit] that an ‘amended complaint 12 supersedes the original, the latter being treated thereafter as non-existent.’”9 An amended 13 complaint thus moots any motion directed at an earlier version of the complaint.10 Zervas filed a 14 second amended complaint after USAA filed its motion to dismiss Zervas’s first amended

15 complaint.11 So, I deny USAA’s motion as moot.12 16 17 6 Id. at 11–17. 18 7 The parties are familiar with the facts of this case and I will not repeat them in detail here. I incorporate herein the facts detailed in my summary-judgment order. ECF No. 57 19 8 ECF No. 52. 20 9 Ramirez v. Cty. of San Bernardino, 806 F.3d 1002, 1008 (9th Cir. 2015) (quoting Forsyth v. Humana, Inc., 114 F.3d 1467, 1474 (9th Cir. 1997)). 21 10 See id. 22 11 ECF No. 86. 12 See also ECF No. 85 (order granting leave to file second amended complaint) (“Defendant 23 may file a motion to dismiss or a motion for summary judgment regarding Plaintiff’s Extra Contractual Causes of Action in her Second Amended Complaint.”). 1 II. Motion for reconsideration, certification to the Supreme Court of Nevada, or 2 certification for interlocutory appeal (ECF No. 67) 3 A. Reconsideration 4 USAA argues that I erred by applying the Lamb-Weston rule to void USAA’s allocation 5 provision because N.R.S. § 687B.145 was intended to supersede judicial decisions allowing

6 stacking of insurance policies, including the Lamb-Weston rule.13 Zervas responds that 7 reconsideration is inappropriate because USAA could have raised this argument in its motion for 8 summary judgment.14 9 A district court “possesses the inherent procedural power to reconsider, rescind, or 10 modify an interlocutory order for cause seen by it to be sufficient[,]” so long as it has 11 jurisdiction.15 A motion to reconsider must set forth “some valid reason why the court should 12 reconsider its prior decision” by presenting “facts or law of a strongly convincing nature.”16 13 Reconsideration is appropriate if the court “(1) is presented with newly discovered evidence, (2) 14 committed clear error or the initial decision was manifestly unjust, or (3) if there is an

15 intervening change in controlling law.”17 “A motion for reconsideration is not an avenue to re- 16 litigate the same issues and arguments upon which the court already has ruled.”18 And a motion 17 18

19 13 ECF No. 67. 20 14 ECF No. 72 15 City of Los Angeles, Harbor Div. v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir. 21 2001) (quotation and emphasis omitted); see also Smith v. Clark Cty. Sch. Dist., 727 F.3d 950, 955 (9th Cir. 2013); LR 59-1. 22 16 Frasure v. United States, 256 F. Supp. 2d 1180, 1183 (D. Nev. 2003). 23 17 Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). 18 Brown v. Kinross Gold, U.S.A., 378 F. Supp. 2d 1280, 1288 (D. Nev. 2005). 1 for reconsideration may not be based on arguments or evidence that could have been raised 2 previously.19 3 USAA could have argued that the Lamb-Weston rule was abrogated by § 687B.145 in its 4 summary-judgment briefing. The legislative history it points to is from 1979.20 It is not new 5 information. In reply, USAA seeks to justify its omission on its “expectation . . . that a clear and

6 unambiguous statute [§ 687B.145] will be enforced as written without the need for discussion of 7 legislative intent.”21 But USAA argued in its motion for summary judgment that the Lamb- 8 Weston rule was merely inapplicable on these facts.22 It now maintains that the Lamb-Weston 9 rule is not only inapplicable here, but was in fact superseded by § 687B.145.23 So, USAA chose 10 to litigate Lamb-Weston’s applicability rather than viability, and now asks me to reconsider my 11 order on the basis of the latter. I decline to. Because reconsideration is inappropriate when a 12 party could have raised an argument earlier but failed to do so, I deny USAA’s motion for 13 reconsideration. 14

15 16 19 See Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). 17 20 ECF No. 67 at 7. 18 21 ECF No. 88 at 4. 22 ECF No. 14 at 8–9. USAA previously argued that the Lamb-Weston rule remains good law in 19 Nevada. Id. at 8 (“This result is in accord with Nevada law which has adopted the Oregon or ‘Lamb-Weston’ rule of insurance law concerning conflicting Other Insurance clauses.” (emphasis 20 omitted)). The doctrine of judicial estoppel might otherwise apply here to “protect against a litigant playing fast and loose with the courts,” but I do not decide the motion on this basis 21 because Zervas does not raise it. Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001) (quoting Russell v. Rolfs, 893 F.2d 1033, 1037 (9th Cir. 1990)); see also Helfand 22 v. Gerson, 105 F.3d 530, 535 (9th Cir. 1997) (“[J]udicial estoppel applies to a party’s stated position, regardless of whether it is an expression of intention, a statement of fact, or a legal 23 assertion.”). 23 ECF No. 88 at 4 (“[T]he statute abrogated the Lamb-Weston rule.”). 1 B. Certification to the Supreme Court of Nevada 2 USAA moves to certify two questions to the Supreme Court of Nevada: (1) whether 3 N.R.S. § 687B.145 overruled the Lamb-Weston rule and (2) if not, how Lamb-Weston applies 4 when an insurer limits liability in conformance with § 687B.145 but other insurance policies 5 also apply.24 Zervas responds that certification is inappropriate where, as here, USAA already

6 lost the issue.25 7 “Certification of open questions of state law to the state supreme court . . . rests in the 8 sound discretion of the federal court.”26 “There is a presumption against certifying a question to 9 a state supreme court after the federal district court has issued a decision.”27 The Ninth Circuit 10 has held that a “party should not be allowed ‘a second chance at victory’ through certification by 11 the appeals court after an adverse district court ruling,”28 and the same rationale disfavors 12 certification on a motion for reconsideration.29 13 As discussed above, USAA could have litigated the viability of the Lamb-Weston rule, 14 but chose not to do so. Had it litigated that issue, USAA could have requested that I certify

15 questions to the Supreme Court of Nevada in its summary-judgment briefing. But it did not. 16 Because I will not permit USAA “a second chance at victory” at this juncture, I deny its request 17 to certify questions to the Supreme Court of Nevada. 18 19

24 ECF No. 67 at 11. 20 25 ECF No. 72 at 7–9. 21 26 Thompson v. Paul, 547 F.3d 1055, 1065 (9th Cir. 2008) (quoting Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974)). 22 27 Id. 23 28 Id. (quoting In re Complaint of McLinn, 744 F.2d 677, 681 (9th Cir. 1984)). 29 See, e.g., Carolina Cas. Ins. Co. v. McGhan, 572 F. Supp. 2d 1222, 1226 (D. Nev. 2008). 1 C. Certification for interlocutory appeal 2 USAA alternatively requests that I certify my order granting summary judgment in favor 3 of Zervas for interlocutory appeal under 28 USC § 1292(b).30 Zervas responds that an 4 interlocutory appeal would be inefficient and criticizes USAA’s request as a ploy for leverage.31 5 Generally, the United States Courts of Appeals have appellate jurisdiction only over

6 “final decisions of the district courts.”32 Congress has, however, created a narrow exception to 7 this final-judgment rule. Under 28 U.S.C. § 1292(b), a district judge may certify a non- 8 appealable order to the Court of Appeals for interlocutory review if the order (1) “involves a 9 controlling question of law” (2) “as to which there is a substantial ground for difference of 10 opinion” and (3) “an immediate appeal from the order [may] materially advance the ultimate 11 termination of the litigation.”33 The Ninth Circuit has noted that “§ 1292(b) is to be applied 12 sparingly and only in exceptional cases.”34 Because the interlocutory-appeal statute “is a 13 departure from the [final-judgment rule], it must be construed narrowly.”35 It is intended to be 14 used only in exceptional situations in which allowing an interlocutory appeal would avoid

15 protracted and expensive litigation.36 16 Although my prior order involves a controlling question of law, I find that this is not an 17 “exceptional situation” because an interlocutory appeal would not materially advance the 18

19 30 ECF No. 67 at 13–17. 31 ECF No. 72 at 9. 20 32 28 U.S.C. § 1291. 21 33 See 28 U.S.C. § 1292(b); see also In re Cement, 673 F.2d 1020, 1026 (9th Cir. 1982) (en banc). 22 34 United States v. Woodbury, 263 F.2d 784, 788 n. 11 (9th Cir. 1959) (citations omitted). 23 35 James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1068 n.6 (9th Cir. 2002). 36 In re Cement, 673 F.2d at 1026. 1}/ litigation. The grant of summary judgment on Zervas’s breach-of-contract and declaratory-relief 2|| claims leaves only her extra-contractual claims to be determined. These remaining claims are likely to be resolved on summary judgment. Indeed, USAA moved in the alternative for Al summary judgment on the extra-contractual claims in Zervas’s amended complaint,*’ suggesting 5|| that the same claims in Zervas’s second amended complaint can also be resolved on a summary- 6]| judgment motion.** I thus deny USAA’s motion to certify my prior order for interlocutory 7\| appeal. 8 Conclusion 9 Accordingly, IT IS HEREBY ORDERED that USAA’s motion to dismiss [ECF No. 10|| 52] is DENIED as moot. 11 IT IS FURTHER ORDERED that USAA’s motion for reconsideration, certification to Supreme Court of Nevada, or certification for interlocutory appeal [ECF No. 67] is DENIED. 14|| Dated: December 18, 2019 15 7 □□ □□ U. 8. District Judge Ipanite A. Dorsey 16 17 18 19 20 21); ——___ 37 ECF No. 52. It appears that the deadline for such motions has long-since lapsed. See ECF No. 12 (citing 3 August 31, 2018 as the dispositive-motion deadline). But Plaintiff has only recently amended her complaint. See ECF No. 86. I do not intend by this order to prejudge the likely success of any forthcoming request to reopen deadlines.