Butler v. Progressive Direct Insurance Company ( 2024 )

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 CHARLES BUTLER, Case No.: 2:23-cv-00566-APG-BNW 4 Plaintiff Order Granting Leave for Plaintiff to File v. a Rule 56(d) Motion 5 PROGRESSIVE DIRECT INSURANCE 6 COMPANY, 7 Defendant 8 9 Plaintiff Charles Butler, an assignee of decedent Terri Lynn Morrison, sues Morrison’s 10 insurer, defendant Progressive Direct Insurance Company. Butler alleges Progressive breached 11 its policy and violated its fiduciary duty to Morrison by failing to pay out Morrison’s $50,000 12 policy limit following a 2016 car accident between Morrison and Butler.1 He also alleges that 13 Progressive acted in bad faith by failing to adequately inform Morrison of Butler’s settlement 14 offer, and that it violated the Nevada Unfair Claims Practices Act (NUCPA) by failing to timely 15 effectuate a settlement. 16 Progressive moves for summary judgment, arguing that Morrison failed to cooperate with 17 Progressive, which was a condition precedent to suing Progressive under the policy. Progressive 18 contends that because Butler is Morrison’s assignee, his contractual claims are precluded by 19 Morrison’s failure to satisfy this condition. It also argues that Butler’s claims fail because the 20 complaint is poorly pleaded, and the undisputed facts do not support Butler’s claims. Butler 21 responds that Morrison’s non-compliance as a policyholder should not impact his ability to 22 23 1 According to Progressive, Morrison rear-ended another vehicle before swerving into Butler’s vehicle. ECF No. 28-6 at 11. 1 recover the full policy limit as an injured, third-party assignee. He also requests additional 2 discovery under Federal Rule of Civil Procedure 56(d) to determine whether evidence that 3 Morrison cooperated with Progressive exists. Progressive replies that Butler is not entitled to 4 additional discovery as he failed to adhere to Rule 56(d)’s requirements. 5 I grant Butler leave to file a proper Rule 56(d) motion and affidavit to comport with that 6 rule. I defer deciding on Progressive’s summary judgment motion until Butler files the brief and 7 affidavit. 8 I. LEGAL STANDARD 9 Summary judgment is appropriate if the movant shows “there is no genuine dispute as to 10 any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 11 56(a). A fact is material if it “might affect the outcome of the suit under the governing law.” 12 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine if “the evidence 13 is such that a reasonable jury could return a verdict for the nonmoving party.” Id. 14 The party seeking summary judgment bears the initial burden of informing the court of 15 the basis for its motion and identifying those portions of the record that demonstrate the absence 16 of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The 17 burden then shifts to the non-moving party to set forth specific facts demonstrating there is a 18 genuine issue of material fact for trial. Sonner v. Schwabe N. Am., Inc., 911 F.3d 989, 992 (9th 19 Cir. 2018) (“To defeat summary judgment, the nonmoving party must produce evidence of a 20 genuine dispute of material fact that could satisfy its burden at trial.”). I view the evidence and 21 reasonable inferences in the light most favorable to the non-moving party. Zetwick v. Cnty. of 22 Yolo, 850 F.3d 436, 440-41 (9th Cir. 2017). 23 1 Under Rule 56(d), if “a nonmovant shows by affidavit or declaration that, for specified 2 reasons, it cannot present facts essential to justify its opposition [to a motion for summary 3 judgment], the court may: (1) defer considering the motion or deny it; (2) allow time to obtain 4 affidavits or declarations or to take discovery; or (3) issue any other appropriate order.” A party 5 seeking additional discovery under Rule 56(d) must show that “(1) it has set forth in affidavit 6 form the specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and 7 (3) the sought-after facts are essential to oppose summary judgment.” InteliClear, LLC v. ETC 8 Glob. Holdings, Inc., 978 F.3d 653, 662 (9th Cir. 2020) (simplified). 9 II. ANALYSIS 10 Progressive argues that despite numerous and significant efforts over multiple years to 11 contact Morrison prior to her death, she was largely unresponsive and wholly uncooperative. 12 Specifically, it maintains that she never submitted an affidavit upon which Butler conditioned 13 settlement of his personal injury claim. Progressive asserts that this violated a condition 14 precedent to suing Progressive under the policy, and that Butler, as Morrison’s assignee, is 15 subject to the same defense. It also argues that it attempted to timely settle with Butler for the 16 full policy amount and the only reason it could not was because of Morrison’s failure to 17 cooperate. Thus, Progressive argues that Butler is not entitled to any additional amount beyond 18 the $15,000 that it previously paid to Butler.2 19 Butler responds that as an injured, third-party assignee, he is not subject to the 20 consequences of Morrison’s noncompliance with the policy terms, and he is entitled to the policy 21 22 2 Nevada’s absolute liability law requires an insurer to pay an injured third-party the statutory minimum coverage amount of $15,000 notwithstanding an insured’s failure to comply with the 23 policy after injuring another person. Torres v. Nev. Direct Ins. Co., 353 P.3d 1203, 1207-08 (Nev. 2015) (en banc). 1 maximum of $50,000. He argues that a genuine dispute over Morrison’s cooperation and 2 Progressive’s bad faith exists, especially as Progressive “attempts to mitigate its financial 3 responsibility by attributing blame to a deceased individual who cannot contest these 4 allegations.” ECF No. 30 at 11. Butler also requests additional discovery under Rule 56(d) for 5 any evidence that Morrison cooperated with Progressive and complied with the terms of her 6 insurance policy. He maintains that Progressive has repeatedly failed to produce its Rule 7 30(b)(6) witness who could shed light on the matter and filed this motion only “after the court 8 limited deposition topics but required Progressive to produce [its witness] for deposition.” Id. at 9 14. Butler asserts that additional discovery to depose Progressive’s witness is critical to 10 determine for himself (rather than taking Progressive at its word) whether Morrison complied 11 with the contract, given that Morrison is now deceased and Progressive produced a redacted 12 claim log. 13 Progressive responds that it has not been purposely obstructing Butler’s attempts to 14 depose Progressive’s Rule 30(b)(6) witness, and that the redactions on the claim log relate to 15 trade secrets, mental impressions, and confidential attorney-client information connected to the 16 underlying tort case. It also argues that Butler is not entitled to Rule 56(d) relief because he has 17 failed to submit an affidavit identifying the specific facts that further discovery would find and 18 why those facts would preclude summary judgment. Regardless, Progressive asserts that a 19 deposition of its 30(b)(6) witness would still fail to raise a genuine issue of material fact as it 20 contends that Morrison’s non-cooperation is “well documented.” ECF No. 33 at 10. 21 Butler has failed to meet Rule 56(d)’s requirements. He hopes that additional discovery 22 would yield instances of Morrison cooperating with Progressive. Those facts would be essential 23 to opposing summary judgment because if Morrison cooperated, then there may be a genuine 1}| dispute over whether Butler as her assignee is precluded from suing Progressive under Morrison’s policy. However, he has not set this out in affidavit form, nor provided a foundation for his belief that the facts exist. 4 Out of an abundance of caution, I grant Butler leave to file a proper Rule 56(d) motion 5] with the required affidavit fulfilling the Rule 56(d) requirements. The motion should lay out in 6|| affidavit form (1) the specific facts that Butler hopes to uncover from further discovery, (2) that 7|| the sought-after facts exist, and (3) that the facts are essential to oppose summary judgment. I 8|| will defer deciding Progressive’s motion for summary judgment until Butler submits this 9] motion.? 10 I. CONCLUSION 1] I THEREFORE ORDER that Charles Butler has until December 6, 2024 to file a motion and affidavit fulfilling the Rule 56(d) requirements. Progressive Direct Insurance Company may 13] file a response up to 14 days after Butler files the motion. Butler may file a reply up to seven 14|| days after Progressive files its response. 15 DATED this 21st day of November, 2024. 16 17 oe O——uqqlu ANDREW P. GORDON 18 CHIEF UNITED STATES DISTRICT JUDGE 19 20 1 > Tt is unclear whether Butler deposed Progressive’s Rule 30(b)(6) witness after summary judgment briefing was completed. The parties disagreed on the scope of questions that Butler 9 could ask the witness and that dispute was not resolved by the time Progressive filed its reply brief on summary judgment. See ECF Nos. 16, 18, 20, 21, 33, 37, 39, 40. Judge Weksler’s 3 September 13, 2024 order established constraints under which Butler should have proceeded to take the deposition. ECF No. 46 at 2. If Butler has since deposed the Rule 30(b)(6) witness, he should note in his motion what he has learned that might support his Rule 56(d) motion.