Butler v. Progressive Direct Ins. Co. (2:23-cv-00566-APG-BNW)

Plaintiff sued a tortfeasor who had an insurance policy with our client, a prominent insurance carrier, and was awarded $625k in that tort action and subsequently assigned the insured's rights against our client. Anticipating a bad faith action, our firm was then hired by the carrier. Plaintiff/Assignee did bring a lawsuit claiming breach of contract, tortious and contractual breach of the covenant of good faith and fair dealing, as well as violations of the Nevada Unfair Claims Practices Act. Plaintiff also sought punitive damages. Plaintiff's claims focused on the fact that our client did not settle with Plaintiff before the underlying tort action was filed. 

Our firm successfully argued that under the plain terms of the policy, the tortfeasor failed to satisfy conditions precedent to coverage and, more specifically, we argued that the tortfeasor failed in her duty to cooperate. Plaintiff argued that as an injured third-party assignee, he was not subject to coverage defenses that our client held against the tortfeasor. We successfully argued that Nevada law does not place limitations on the defenses available against an assignee, prompting the U.S. District Judge to predict that the Nevada Supreme Court would hold that an insured's assignee is subject to the same defenses as the insurer had against its insured at the time of the assignment. 

 As a result, our motion for summary judgment was granted and all of the plaintiff's claims were dismissed with prejudice. And, our client's liability for the underlying tort action was instead limited to a statutory minimum coverage amount of $15k.