Lorene McCall v. State Farm Mutual Auto Ins. ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 30 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LORENE MCCALL, No. 18-16622
Plaintiff-Appellant, D.C. No.
2:16-cv-01058-JAD-GWF
v.
STATE FARM MUTUAL AUTOMOBILE MEMORANDUM*
INSURANCE COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Nevada
Jennifer A. Dorsey, District Judge, Presiding
Submitted March 26, 2020**
Las Vegas, Nevada
Before: W. FLETCHER, BYBEE, and WATFORD, Circuit Judges.
Plaintiff Lorene McCall appeals from the district court’s order granting
summary judgment in favor of defendant State Farm Mutual Automobile Insurance
Company on her claims for (1) breach of contract, (2) breach of the implied
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Page 2 of 3
covenant of good faith and fair dealing, and (3) violation of the Nevada Unfair
Insurance Practices Act. We affirm.
1. The district court correctly granted summary judgment to State Farm on
McCall’s breach of contract claim, as McCall did not produce evidence from
which a reasonable trier of fact could find that State Farm breached the insurance
policy. State Farm ultimately paid McCall the full policy limit to which she was
entitled ($25,000), albeit after initially denying her claim and forcing her to initiate
litigation. But, as noted below, State Farm had a reasonable basis for its initial
denial of the claim. The insurance policy gave State Farm the right to investigate
claims before paying them, and the evidence shows that State Farm continued to
investigate McCall’s claim after the initial denial, until new evidence surfaced that
caused it to change its position. As the district court stated, the fact that McCall
did not receive payment within the timeframe she desired does not establish a
breach of contract.
2. The district court also correctly granted summary judgment to State Farm
on McCall’s claim for breach of the implied covenant of good faith and fair
dealing. To prevail on this claim, McCall had to prove, among other things, that
State Farm lacked a reasonable basis for its initial denial of her claim. See Powers
v. United Servs. Auto. Ass’n, 962 P.2d 596, 604 (Nev. 1998), opinion modified on
denial of reh’g, 979 P.2d 1286 (Nev. 1999) (modifying on an unrelated ground).
Page 3 of 3
McCall failed to produce evidence at the summary judgment stage sufficient to
support such a finding. An expert retained by State Farm, Dr. Basu, concluded that
a large portion of McCall’s medical treatments were attributable to her preexisting
medical conditions rather than the injuries she sustained in the covered accident.
State Farm credited Dr. Basu’s opinion over the conflicting opinions of McCall’s
physicians and determined that McCall had already been adequately compensated
for the portion of her medical treatments attributable to the accident. That State
Farm chose to credit its own medical expert over McCall’s experts does not
establish that it acted in bad faith.
3. Finally, the district court correctly concluded that McCall’s unfair
practices claim under Nevada Revised Statutes § 686A.310 fails because she
proffered no evidence suggesting that an officer, director, or department head at
State Farm knew of and permitted any of the allegedly unfair practices. See Nev.
Rev. Stat. § 686A.270.
AFFIRMED.