Opinion
Case No. 2:20-CV-927 JCM (EJY)
01-11-2021
AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY, Plaintiff(s), v. Stephen P. STUBBS, Defendant(s).
John T. Keating, Bryce B. Buckwalter, Keating Law Group, Las Vegas, NV, for Plaintiff(s). Dustin Eric Birch, Clear Counsel Law Group, Henderson, NV, for Defendant(s).
John T. Keating, Bryce B. Buckwalter, Keating Law Group, Las Vegas, NV, for Plaintiff(s).
Dustin Eric Birch, Clear Counsel Law Group, Henderson, NV, for Defendant(s).
ORDER
James C. Mahan, UNITED STATES DISTRICT JUDGE
Presently before the court is plaintiff and counter-defendant American National Property and Casualty Company's ("ANPAC") motion for summary judgment on its declaratory relief claim. (ECF No. 15). Defendant and counter-claimant Stephen P. Stubbs responded in opposition (ECF No. 17) to which ANPAC replied (ECF No. 19).
ECF No. 15 is a corrected image/document of ECF No. 13.
I. BACKGROUND
This is a dispute over whether an insured can maintain an uninsured/underinsured motorist ("UM/UIM") claim if he did not make direct physical contact with an unknown hit-and-run vehicle. Stubbs was riding his Harley Davidson motorcycle southbound on the US 95 freeway. (ECF No. 17 at 2). He avers that a white cooler lid flew out from the back of an unknown truck in front of him, bounced once onto the road, and struck him in the face. (Decl. of Stephen P. Stubbs, ECF No. 17 at 28). To date, he has accrued over $268,000 in past medical bills and "is suffering from a significant decrease in his focus, attention, and other cognitive defects." (ECF No. 17 at 2).
ANPAC denied Stubbs's UM/UIM claim, concluding that no physical contact occurred between him or his motorcycle and the unknown hit-and-run truck as required by the policy's language; NRS 690B.020(3)(f), which defines an uninsured motor vehicle; and Nevada case law interpreting this statute. (ECF No. 15 at 6). ANPAC filed the instant declaratory relief action to have this court determine as a matter of law that Stubbs is not entitled to any UM/UIM coverage. (Id. ). Stubbs asserts counterclaims for breach of contract, breach of the implied covenant of good faith and fair dealing, violations of Nevada's Unfair Claims Practices Act, and respondeat superior. (Stubbs Answer and Countercl., ECF No. 6).
ANPAC now moves for summary judgment on its declaratory relief claim. (ECF No. 15).
II. LEGAL STANDARD
Summary judgment is proper when the record shows that "there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). The purpose of summary judgment is "to isolate and dispose of factually unsupported claims or defenses," Celotex Corp. v. Catrett , 477 U.S. 317, 323–24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), and to avoid unnecessary trials on undisputed facts. Nw. Motorcycle Ass'n v. U.S. Dep't of Agric. , 18 F.3d 1468, 1471 (9th Cir. 1994).
Information contained in an inadmissible form may still be considered on summary judgment if the information itself would be admissible at trial. Fraser v. Goodale , 342 F.3d 1032, 1036 (9th Cir. 2003) (citing Block v. City of Los Angeles , 253 F.3d 410, 418–19 (9th Cir. 2001) ("To survive summary judgment, a party does not necessarily have to produce evidence in a form that would be admissible at trial, as long as the party satisfies the requirements of Federal Rules of Civil Procedure 56.")).
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When the moving party bears the burden of proof on a claim or defense, it must produce evidence "which would entitle it to a directed verdict if the evidence went uncontroverted at trial." C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc. , 213 F.3d 474, 480 (9th Cir. 2000) (internal citations omitted). In contrast, when the nonmoving party bears the burden of proof on a claim or defense, the moving party must "either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of [proof] at trial." Nissan Fire & Marine Ins. Co. v. Fritz Cos. , 210 F.3d 1099, 1102 (9th Cir. 2000).
If the moving party satisfies its initial burden, the burden then shifts to the party opposing summary judgment to establish a genuine issue of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). An issue is "genuine" if there is a sufficient evidentiary basis on which a reasonable factfinder could find for the nonmoving party and a fact is "material" if it could affect the outcome of the case under the governing law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The opposing party does not have to conclusively establish an issue of material fact in its favor. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n , 809 F.2d 626, 630 (9th Cir. 1987). But it must go beyond the pleadings and designate "specific facts" in the evidentiary record that show "there is a genuine issue for trial." Celotex , 477 U.S. at 324, 106 S.Ct. 2548. In other words, the opposing party must show that a judge or jury is required to resolve the parties’ differing versions of the truth. T.W. Elec. Serv. , 809 F.2d at 630.
The court must view all facts and draw all inferences in the light most favorable to the nonmoving party. Lujan v. Nat'l Wildlife Fed. , 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) ; Kaiser Cement Corp. v. Fischbach & Moore, Inc. , 793 F.2d 1100, 1103 (9th Cir. 1986). The court's role is not to weigh the evidence but to determine whether a genuine dispute exists for trial. Anderson , 477 U.S. at 249, 106 S.Ct. 2505.
III. DISCUSSION
A. Undisputed Facts
Based on the record and the parties’ summary judgment papers, there can be no genuine dispute over the following material facts:
On October 19, 2019, Stubbs was riding his motorcycle southbound on the US 95 freeway. (Nevada Highway Patrol Report, ECF No. 17 at 20). He was hit in the face by a white cooler lid that flew out from the back of a truck. (Decl. of Stephen P. Stubbs, ECF No. 17 at 28; Text Messages between Stubbs and Cantara, ECF No. 17 at 88; Photographs of Cooler Lid, ECF No. 17 at 78). The cooler lid was retrieved from the scene of the accident the next day. (Decl. of Stuart Cantara, ECF No. 17 at 76). Stubbs cannot identify the truck or its driver. (Stubbs Answer and Countercl., ECF No. 6 ¶ 6). Neither Stubbs nor his motorcycle made any direct physical contact with the unknown truck. (ECF No. 17 at 4). There was no damage to Stubbs's motorcycle. (Decl. of Stuart Cantara, ECF No. 17 at 76; Text Messages between Stubbs and Cantara, ECF No. 17 at 88).
Stubbs was insured under a motorcycle insurance policy issued by ANPAC at the time of his accident. (Stubbs Answer and Countercl., ECF No. 6 ¶ 7; Policy, ECF No. 15 at 25). The policy provided, among other coverage, UM/UIM coverage. (Policy, ECF No. 15 at 25). Stubbs timely submitted a UM/UIM claim under the policy on April 17, 2020. (ECF No. 15 at 2–3). ANPAC denied Stubbs's UM/UIM claim on the basis that the accident was not covered under the policy given the facts of the loss. (Id. ).
B. Minimum Statutory Requirements of UM/UIM Coverage
The court begins and ends with NRS 690B.020. This statute is "incorporated into all applicable Nevada auto insurance policies." Allstate Ins. Co. v. Fackett , 125 Nev. 132, 206 P.3d 572, 576 (2009). Any policy that "contravenes this statutory scheme is void and unenforceable." Id. A Nevada insurance policy must offer at least the UM/UIM coverage required by the statute. Estate of Lomastro ex rel. Lomastro v. Am. Family Ins. Grp. , 124 Nev. 1060, 195 P.3d 339, 347 (2008) ; see also DiPaolo v. State Farm Mut. Auto. Ins. Co. , No. 2:10-cv-001108-RLH-RJJ, 2011 WL 13305304, at *2 (D. Nev. Sept. 28, 2011). The relevant portion of the statute here is the definition of "uninsured motor vehicle":
3. For the purposes of this section, the term "uninsured motor vehicle" means a motor vehicle: ...
(f) The owner or operator of which is unknown or after reasonable diligence cannot be found if:
(1) The bodily injury or death has resulted from physical contact of the automobile with the named insured or the person claiming under the named insured or with an automobile which the named insured or such a person is occupying ....
Nev. Rev. Stat. § 690B.020(3)(f)(1) (emphasis added) ("Uninsured or hit-and-run vehicles; insolvency of insurer").
In Kern v. NIGA , the Nevada Supreme Court held that "the clear meaning of NRS 690B.020 (3)(f)(1) contemplates actual physical contact between the named insured and the uninsured/hit-and-run vehicle." 109 Nev. 752, 856 P.2d 1390, 1393–95 (1993). Thus, ANPAC contends that Kern ’s "crystal clear" interpretation of this statute forecloses any UM/UIM benefits because Stubbs "did not make direct physical contact with the alleged hit-and-run/unidentified truck." (ECF No. 15 at 12).
The purpose behind Kern ’s physical contact requirement is "to prevent fraudulent claims where the insured loses control of his or her car and claims a phantom driver forced him or her off the road." Kern , 856 P.2d at 1392 (internal quotation marks omitted). In a later case, the Nevada Supreme Court added that "the purpose of the physical contact requirement, as clarified in Kern , applies only in situations where the party at fault is unknown or unidentifiable." Estate of Lomastro ex rel. Lomastro v. Am. Family Ins. Grp. , 124 Nev. 1060, 195 P.3d 339, 349–50 (2008).
In establishing the physical contact requirement, the Kern court considered how other jurisdictions treated accidents "caused by objects lying in the road." Kern , 856 P.2d at 1393. It noted that in Kern's case, "no vehicle capable of discharging such a large quantity of the hazardous substance was shown to be within the area of the collision." Id. There was "a total lack of evidence which would tend to establish a causal connection between some vehicle and the oil-like substance." Id. (internal quotation marks omitted). "The slippery substance was not shown to be a part of a hit-and-run automobile." Id. The factual context in which Kern established the physical contact requirement is important and distinguishable from the case at bar. Kern is best read as standing for the narrow proposition that contact with a substance or object on a road which the insured cannot prove came from a vehicle does not meet the physical contact requirement. Kern should not be read, in the words of Stubbs, to always require that "the body of one vehicle contact the body of another vehicle in order for the injured party to recover under [his] UM/UIM policy." (ECF No. 17 at 12). And unlike the insured in Kern , Stubbs does not suffer from "a total lack of evidence which would tend to establish a causal connection between some vehicle" and his injury. Kern , 856 P.2d at 1393.
Thus, Stubbs's accident may fall into the outer contours of Kern ’s physical contact requirement. When this court is faced with an issue of first impression under Nevada state law, it must use its best judgment to predict how the Nevada Supreme Court would resolve it "using intermediate appellate court decisions, decisions from other jurisdictions, statutes, treatises, and restatements as guidance." Strother v. S. Cal. Permanente Med. Group , 79 F.3d 859, 865 (9th Cir. 1996).
The parties do not offer, and the court is not aware of, a Nevada case addressing the kind of accident at issue here. But Kern is informative:
In the context of an uninsured/hit-and-run "accident," various scenarios may exist. Although Kern has cited a variety of situations where an insured has recovered uninsured/hit-and-run benefits, the facts of those cases are readily distinguishable from the instant case. In the cases cited by Kern, the "physical contact" requirement was satisfied where a continuous and contemporaneous force was readily identifiable and there was a substantial physical nexus between the intermediate object and the insured's vehicle. Here, however, the facts reflect a substance coming to rest on a highway from some unknown source and as a result of some unknown cause, and remaining inert on the highway for some unknown period of time, however brief, until encountered by various vehicles, including Kern's. In instances where accidents have been caused by objects lying in the road, appellate courts have usually countenanced the insurer's rejection of the claim.
Kern , 856 P.2d at 1392 (emphasis added).
Stubbs also cites cases from other states that "do not require that the body of one vehicle contact the body of another vehicle in order for the injured party to recover under [his] UM/UIM policy." (ECF No. 17 at 12). Nevada courts often look to California caselaw for guidance. Stubbs cites to Pham v. Allstate Ins. Co. where the court held that "there is physical contact as required by the [California insurance statute] when either a part of a vehicle or an object which the vehicle is carrying strikes the insured or his vehicle." 206 Cal.App.3d 1193, 254 Cal. Rptr. 152, 155 (1988). In Pham , akin to the accident here, "a rock tumbling from [a] passing dump truck struck the ground and rebounded into the windshield of the insured vehicle [ ]. There was no intervening force to break the chain of causation, nor did the rock first come to rest before colliding with the car." Id. at 154.
Kern and Stubbs also both rely on Illinois Nat. Ins. Co. v. Palmer where an Illinois court refused to "read into [the statute or policy] a requirement that the [physical] contact be a direct contract by the whole unidentified vehicle" after the insured's vehicle was struck by a lug nut flying off a hit-and-run vehicle. 116 Ill.App.3d 1067, 72 Ill.Dec. 454, 452 N.E.2d 707, 708 (1983). ANPAC's reliance on other state courts holding otherwise shows, at best, that courts are split on how to treat the kind of accident at issue here. (ECF No. 19 at 5–6) (discussing Nationwide Ins. Co. v. Elchehimi , 249 S.W.3d 430 (Tex. 2008) ).
In addition, holding that Stubbs's policy is statutorily required to cover his accident furthers the purpose of the physical contact requirement. Stubbs did not lose control of his motorcycle and is not fraudulently claiming that a phantom driver forced him off the road. See Kern , 856 P.2d at 1392. And the party at fault here is unknown or unidentifiable. See Lomastro , 195 P.3d at 349–50.
And more broadly, the purpose of UM/UIM insurance is to "provide maximum and expeditious protections to the innocent victims of financially irresponsible motorists." Grayson v. State Farm Mut. Auto. Ins. , 114 Nev. 1379, 971 P.2d 798, 800 (1998), as modified on denial of reh'g (Mar. 19, 1999) (internal quotation marks and citation omitted). "[G]iven the public policy considerations concerning UM/UIM protection, [the Nevada Supreme Court] review[s] attempts to restrict such coverage with a high degree of scrutiny." State Farm Mut. Auto. Ins. Co. v. Fitts , 120 Nev. 707, 99 P.3d 1160, 1162 (2004).
Therefore, the court finds that the Nevada Supreme Court would determine that the physical contact requirement in NRS 690B.020(3)(f)(1) as interpreted by Kern can be met when there is "a continuous and contemporaneous force [that is] readily identifiable and there [is] a substantial physical nexus between the intermediate object and the insured's vehicle." Kern , 856 P.2d at 1392. For this reason, ANPAC's request for a declaratory judgment that its policy offers no UM/UIM coverage to Stubbs on the grounds that the physical contact requirement was not met is denied.
Because the court finds that ANPAC's policy is statutorily required to cover Stubbs's accident, it will not consider whether the policy language also requires coverage. (See ECF No. 15 at 9 ("[T]he Policy does NOT provide UM/UIM coverage to Stubbs because neither Stubbs nor his motorcycle were physically struck by and/or made direct contact with the unknown/unidentifiable vehicle as is specifically required under the definition of an uninsured motor vehicle set forth within the Policy.")).
IV. CONCLUSION
Accordingly,
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that ANPAC's motion for summary judgment on its declaratory relief claim (ECF No. 15) be, and the same hereby is, DENIED.
IT IS FURTHER ORDERED that Stubbs can recover UM/UIM benefits under his ANPAC policy provided that, consistent with the foregoing, he proves that he is otherwise legally entitled to recover under the policy.