Riverport Insurance Company v. State Farm Fire and Casualty Company

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA [3] RIVERPORT INSURANCE COMPANY, ) 4 ) Plaintiff, ) Case No.: 2:18-cv-00330-GMN-NJK 5 ) vs. ) ORDER [6] ) 7 STATE FARM FIRE AND CASUALTY ) COMPANY, ) 8 ) Defendant. ) [9] ) [10] 11 Pending before the Court are the Motions for Summary Judgment, (ECF Nos. 13, 22), 12 filed by Defendant State Farm Fire and Casualty Company (“State Farm”). Plaintiff Riverport 13 Insurance Company (“Riverport”) filed Responses, (ECF Nos. 15, 34), and State Farm filed 14 Replies, (ECF Nos. 16, 37). 15 Also pending before the Court is Riverport’s Motion for Summary Judgment, (ECF No. 16 25). State Farm filed a Response, (ECF No. 31), and Riverport filed a Reply, (ECF No. 33). 17 State Farm and Riverport provided Supplemental Briefs, (ECF Nos. 46, 48), in support of their 18 Motions. 19 For the reasons discussed below, the Court GRANTS State Farm’s Motions for 20 Summary Judgment, and DENIES Riverport’s Motion for Summary Judgment. 21 I. BACKGROUND 22 The case arises from injuries sustained by Angela DiMaria (“DiMaria”) when she fell in 23 a shopping center parking lot owned by D&L Development (“D&L”). (State Farm’s Mot. 24 Summ. J. (“MSJ”) 8:4–16, ECF No. 13); (Exam. DiMaria at 26:11–29:6, 30:14–42:10, Ex. N to 25 State Farm’s MSJ, ECF No. 13-14); (Riverport’s MSJ 3:16–18, ECF No. 25); (Lease, Ex. 2 to 1 Riverport’s MSJ, ECF No. 25-2). DiMaria’s fall occurred right after she left Spirals Hair & 2 Nails Salon (“Spirals”), which was one of the tenants renting space within D&L’s shopping 3 center. (Exam. DiMaria 8:10–38:23, Ex. 4 to Riverport’s MSJ); (Lease, Ex. 2 to Riverport’s 4 MSJ). DiMaria attributed her fall to an uneven and cracked portion of asphalt that she tripped 5 on while getting into her car located in one of the shopping center’s handicapped parking 6 spaces. (Exam. DiMaria 27:4–38:23, Ex. 4 to Riverport’s MSJ).1 7 As part of the Lease Agreement between Spirals and D&L, Spirals had to have “public 8 liability insurance to protect against any liability to the public, incident to the use of or resulting 9 from any occurrence in or about said premises.” (Lease, Ex. 2 to Riverport’s MSJ, ECF No. 2510 2). The Lease Agreement defined the “premises” for Spirals as “8544 Del Webb Blvd. . . . 11 Together with the use of driveways and parking in common with the other tenants of Rampart 12 Plaza.” (Id.). Spirals accordingly obtained a commercial general liability policy from State 13 Farm (the “Policy”), and listed D&L as an additional insured on that Policy. D&L also 14 maintained its own insurance through Riverport. 15 On June 27, 2016, D&L received correspondence from an attorney for DiMaria 16 (“Demand Letter”), which notified D&L of DiMaria’s injuries and her potential claims for 17 damages. (Letter from Royi Moas, Esq. to D&L, Ex. 5 to Riverport’s MSJ, ECF No. 25-5). 18 About four months later, D&L’s counsel (David J. Feldman, Esq.) sent DiMaria’s Demand 19 Letter to Spirals and State Farm, alongside correspondence discussing DiMaria’s threatened 20 claims. (Nov. 2, 2016 Letter at 9-11, Ex. 5 to Riverport’s MSJ, ECF No. 25-5). D&L’s counsel 21 also demanded that State Farm defend and indemnify D&L for any of DiMaria’s claims. (Id.). 22 State Farm responded a few weeks later, stating that it was reviewing the documents from [24] 1 At the time of DiMaria’s fall, she was eighty-nine years old; and she illustrated her route after leaving Spirals 25 as walking along a sidewalk, down a ramp, then onto the parking lot. (Exam. DiMaria 8:8–16:7, Ex. 4 to Riverport’s MSJ, ECF No. 25-4). DiMaria explained that her fall occurred on the asphalt of the parking lot, not on an adjoining portion with the ramp. (Id.). 1 D&L, and that it would advise D&L of its decision to accept or reject the tendered request for 2 defense and indemnity. (Nov. 29, 2016 Letter from State Farm at 12, Ex. 5 to Riverport’s MSJ). 3 On February 28, 2017—after Riverport received State Farm’s response, but before State 4 Farm decided to accept or deny coverage—Riverport and DiMaria participated in a mediation. 5 (Aff. David Feldman (“Feldman”) ¶¶ 8–12, Ex. 1. to Riverport’s MSJ, ECF No. 25-1). Though 6 State Farm did not participate in that mediation, Riverport and DiMaria reached a settlement for 7 $190,000.00. (Id. ¶ 13). Riverport then paid that settlement amount on behalf of D&L based on 8 D&L’s insurance policy with Riverport. (Id.). 9 Roughly two months after that mediation, State Farm notified Riverport that it was 10 denying coverage for DiMaria’s injuries because Spirals only purchased coverage for the 11 “actual floor space” leased to Spirals, and not the parking lot leased and used in common with 12 other tenants. (April 21, 2017 Letter from State Farm to Feldman, Ex. 5 to Riverport’s MSJ, 13 ECF No. 25-5). Because State Farm denied D&L’s demand for defense and indemnification, 14 Riverport commenced this action seeking a declaration of coverage under the Policy and 15 seeking indemnity or contribution for the amount that Riverport paid to settle with DiMaria. 16 (Compl., ECF No. 1). Riverport’s Complaint asserts five causes of action: (1) declaratory 17 relief; (2) equitable indemnity; (3) equitable subrogation; (4) equitable contribution; (5) breach 18 of contract. (Id. ¶¶ 14–43). 19 State Farm now moves for summary judgment in its favor for each of Riverport’s 20 claims. (State Farm’s MSJs, ECF Nos. 13, 22). Riverport conversely moves for summary 21 judgment in its favor and against State Farm on all claims. (Riverport’s MSJ, ECF No. 25). 22 II. LEGAL STANDARD 23 The Federal Rules of Civil Procedure provide for summary adjudication when the 24 pleadings, depositions, answers to interrogatories, and admissions on file, together with the 25 affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant 1 is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Material facts are those that 2 may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242 , 248 3 (1986). A dispute as to a material fact is genuine if there is a sufficient evidentiary basis on 4 which a reasonable fact-finder could rely to find for the nonmoving party. See id. “The amount 5 of evidence necessary to raise a genuine issue of material fact is enough ‘to require a jury or 6 judge to resolve the parties’ differing versions of the truth at trial.’” Aydin Corp. v. Loral Corp., [7] 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat’l Bank v. Cities Serv. Co., 391 U.S. 253 , 8 288–89 (1968)). “Summary judgment is inappropriate if reasonable jurors, drawing all 9 inferences in favor of the nonmoving party, could return a verdict in the nonmoving party’s 10 favor.” Diaz v. Eagle Produce Ltd. P’ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United 11 States v. Shumway, 199 F.3d 1093 , 1103–04 (9th Cir. 1999)). A principal purpose of summary 12 judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, [13] 477 U.S. 317 , 323–24 (1986). 14 In determining summary judgment, a court applies a burden-shifting analysis. “When 15 the party moving for summary judgment would bear the burden of proof at trial, it must come 16 forward with evidence which would entitle it to a directed verdict if the evidence went 17 uncontroverted at trial. In such a case, the moving party has the initial burden of establishing 18 the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. 19 Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474 , 480 (9th Cir. 2000) (citations omitted). In 20 contrast, when the nonmoving party bears the burden of proving the claim or defense, the 21 moving party can meet its burden in two ways: (1) by presenting evidence to negate an 22 essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving 23 party failed to make a showing sufficient to establish an element essential to that party’s case 24 on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323– 25 24. If the moving party fails to meet its initial burden, summary judgment must be denied and 1 the court need not consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co., [2] 398 U.S. 144 , 159–60 (1970). 3 If the moving party satisfies its initial burden, the burden then shifts to the opposing 4 party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. 5 Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, 6 the opposing party need not establish a material issue of fact conclusively in its favor. It is 7 sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the 8 parties’ differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors 9 Ass’n, 809 F.2d 626, 631 (9th Cir. 1987). However, the nonmoving party “may not rely on 10 denials in the pleadings but must produce specific evidence, through affidavits or admissible 11 discovery material, to show that the dispute exists,” Bhan v. NME Hosps., Inc., 929 F.2d 1404 , 12 1409 (9th Cir. 1991), and “must do more than simply show that there is some metaphysical 13 doubt as to the material facts.” Orr v. Bank of America, 285 F.3d 764, 783 (9th Cir. 2002) 14 (internal citations omitted). “The mere existence of a scintilla of evidence in support of the 15 plaintiff’s position will be insufficient.” Anderson, 477 U.S. at 252 . In other words, the 16 nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations 17 that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). 18 Instead, the opposition must go beyond the assertions and allegations of the pleadings and set 19 forth specific facts by producing competent evidence that shows a genuine issue for trial. See 20 Celotex Corp., 477 U.S. at 324. 21 At summary judgment, a court’s function is not to weigh the evidence and determine the 22 truth but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249 . 23 The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn 24 in his favor.” Id. at 255 . But if the evidence of the nonmoving party is merely colorable or is 25 not significantly probative, summary judgment may be granted. See id. at 249–50. 1 III. DISCUSSION 2 State Farm moves for summary judgment by arguing that Riverport’s claims fail as a 3 matter of law because State Farm’s Policy with Spirals does not include insurance coverage for 4 DiMaria’s injuries sustained in D&L’s shopping center parking lot. (State Farm’s MSJ 2:1–6, 5 11:22–22:9, ECF No. 13); (State Farm’s MSJ 6:24–17:5, ECF No. 22). Riverport conversely 6 moves for summary judgment by arguing that the Policy covers DiMaria’s injuries based on 7 both the plain language of the Policy and surrounding evidence that reveals the parties’ intent 8 when obtaining the Policy. (Riverport’s MSJ 10:7–11:15, ECF No. 25). Riverport further 9 argues that State Farm had a duty to defend D&L against DiMaria’s potential claims, which 10 State Farm failed to satisfy prior to Riverport’s settlement with DiMaria. (Id. 11:16–14:11). 11 The Court’s discussion below first addresses the extent of the Policy’s coverage. The 12 Court then addresses the merits of Riverport’s claims based on the extent of that coverage. 13 A. State Farm’s Coverage of D&L as An Additional Insured 14 “An insurance policy should ‘be read as a whole,’ and its ‘language should be analyzed 15 from the perspective of one untrained in law or in the insurance business. Policy terms should 16 be viewed in their plain, ordinary and popular connotations.’” Fourth St. Place v. Travelers 17 Indem. Co., 270 P.3d 1235, 1239 (Nev. 2011), as modified on reh’g (May 23, 2012). “[A] 18 court must look to the entire contract of insurance for a true understanding of what risks are 19 assumed by the insurer and what risks are excluded.” Nat’l Union Fire Ins. Co. of State of Pa. 20 v. Reno’s Exec. Air, Inc., 682 P.2d 1380, 1382 (Nev. 1984). 21 1. Ambiguous Language 22 The central language at issue in State Farm’s Policy is the language that names D&L as 23 an “additional insured,” which states: [24] 1. Section II – WHO IS AN ADDITIONAL INSURED of SECTION II – LIABILITY 25 is amended to include as an additional insured, any person or organization shown in the Schedule, but only with respect to liability arising out of the ownership, 1 maintenance or use of that part of the premises leased to you and shown in the Schedule. [2] 3 (Certified Copy of Policy No. 98-BJ-M302-8 at 79, Ex. L to State Farm’s MSJ, ECF No. 134 12). The corresponding “Schedule” defines “additional insured” as “D&L Development & ALI 5 BUBBA INC DBA THE EQUITY GROUP”; and it identifies the “premises” of Spirals as 6 “8544 DEL WEBB BLVD LAS VEGAS NV 89134.” (Id.). 7 State Farm argues that, based on the terms of the Schedule and Policy alone, there is no 8 mention of indemnity coverage for an additional insured with the driveways or parking lot that 9 Spirals shared with other tenants of the shopping center. (State Farm’s MSJ 12:8–26). 10 Therefore, State Farm contends that the Policy does not include coverage of D&L for 11 DiMaria’s injuries. (Id.). 12 Nevada courts interpreting insurance policies with similar “arising out of” language as 13 that in the Policy have found such language to be ambiguous. For example, the Nevada 14 Supreme Court in National Union Fire Insurance Co. v. Caesars Palace Hotel & Casino, 729 15 P.2d 1129 (Nev. 1990), had to interpret an insurance policy that named Caesars Palace Hotel 16 and Casino as an additional insured, “but only with respect to liability arising out of operations 17 performed for such insured, by or on behalf of the named insured.” Nat’l Union Fire Ins. Co., 18 792 P.2d at 1130 (emphasis added). That insurance policy covered a boxing match promoted 19 by the policy’s named insured, and the match took place on a temporary arena set up in 20 Caesars’ parking lot. Id. at 1129–30. When the match ended, a spectator was injured while 21 leaving the temporary arena through a corridor leading to Caesars’ hotel. Id. The injured 22 spectator later recovered a judgment in a personal injury action against Caesars; and Caesars 23 sought indemnification for the expenses and settlement of the personal injury action through the 24 named insured’s insurance policy. Id. The named insured rejected coverage on the ground that 25 the spectator’s injuries occurred after the boxing match and inside Caesars’ hotel. Id. The 1 Nevada Supreme Court was then faced with the issue of whether the insurance policy’s 2 language—particularly the “arising out of operations” language—was ambiguous and could 3 potentially include coverage for the spectator’s injuries in the corridor. The court concluded 4 that, “[h]ere, the scope of coverage provided by virtue of the words ‘arising out of operations’ 5 is ambiguous.” Id. at 1130. The court accordingly remanded the case to the district court for 6 discovery on the parties’ intent when obtaining the Policy regarding the expected scope of 7 liability coverage. Id. 8 Like in National Union Fire Insurance, Riverport and State Farm offer different but 9 reasonable interpretations of the Policy’s “arising out of” language regarding coverage of D&L 10 as an additional insured. According to Riverport, the Policy’s language does not explicitly 11 limit coverage to the interior of Spirals, meaning the Policy’s coverage might extend to areas 12 around the exterior and into common areas. (Riverport’s MSJ 10:7–11:15, ECF No. 25). Other 13 provisions of the Policy also reflect coverage of circumstances outside the interior of Spirals, 14 though those other provisions concern coverage for physical loss of property and in the context 15 of Spirals as the primary insured. (Certified Copy of Policy No. 98-BJ-M302-8 at 16, Ex. L to 16 State Farm’s MSJ, ECF No. 13-12) (discussing coverage for buildings and personal property 17 within “100 feet of the described premises”). State Farm, by contrast, argues that the “arising 18 out of” language would include coverage of an additional insured only for an incident within 19 the precise square-footage for the unit leased by Spirals as stated in the Schedule. (State Farm’s 20 MSJ 12:8–26, ECF No. 13). This interpretation aligns with the Policy’s narrow definition of 21 “premises” to reflect the mere address of Spirals stated in the Schedule, and not the parking lot 22 and common areas as discussed in the parties’ Lease. (See Certified Copy of Policy No. 98-BJ- 23 M302-8 at 79, Ex. L to State Farm’s MSJ). 24 When looking at the Policy’s terms in their “plain, ordinary and popular connotations,” 25 and in the context of the Policy “as a whole,” the Court finds that the Policy’s language on its 1 coverage of D&L as an additional insured is ambiguous. See Fourth St. Place, 270 P.3d at 2 1239. To determine the meaning of the Policy’s coverage of D&L as an additional insured, the 3 Court therefore considers not merely the language of the Policy, “but also the intent of the 4 parties, the subject matter of the policy, the circumstances surrounding its issuance.” Nat’l 5 Union Fire Ins. Co., 792 P.2d at 1130; Nat’l Union Fire Ins. Co. of State of Pa. v. Reno’s Exec. 6 Air, Inc., 682 P.2d 1380, 1382 (Nev. 1984). Further, Nevada uses the contract principle that “in 7 the absence of any concrete facts pointing to a different intent . . . unclear terms are interpreted 8 against the insurer and, unless express limiting language exists, in favor of coverage.” Fed. Ins. 9 Co. v. Am. Hardware Mut. Ins. Co., 184 P.3d 390, 395 (Nev. 2008). 10 2. Intent of the Parties 11 In interpreting the Policy by looking beyond the Policy’s language, the Court should 12 seek “to effectuate the reasonable expectations of the insured.” Nat’l Union Fire Ins. Co. of 13 State of Pa., 682 P.2d at 1383 (citations omitted). The Court’s analysis thus begins with 14 evidence as to D&L’s intent. 15 The testimony of Sue Ellen Crider (“Crider”), who D&L designated pursuant to Federal 16 Rule of Civil Procedure 30(b)(6) as its representative, is most helpful to determining the intent 17 behind the Policy. During her deposition testimony, State Farm’s counsel asked, “And would 18 you agree with me that Spirals only leased the interior of 8544 Del Webb Boulevard, Nevada, 19 89134,” to which Crider responded, “yes.” (Dep. Sue Ellen Crider at 6, Ex. 2 to State Farm’s 20 MSJ, ECF No. 31-2). Further, when asked if “Section II” of the Policy covered only the 21 “inside of the building [of Spirals],” she answered, “yes,” since D&L had its own insurance for 22 the outside of the building. (Id. at 6–8). Especially striking is Crider’s testimony agreeing with 23 State Farm’s counsel that “Spirals would not be responsible” for DiMaria’s injuries. (Id. at 8, 24 9). Crider also testified that the Policy appears to comply with the Lease’s indemnity 25 requirement between D&L and Spirals. (Id. at 9–16). 1 Riverport contends that, when construing the Policy with the Lease’s terms, the Policy 2 could not be limited to the mere interior of Spirals as argued by State Farm. (Riverport’s MSJ 3 10:7–11:15, ECF No. 25). Specifically, Riverport points to the Lease’s terms stating that 4 Spirals must maintain liability insurance for incidents “in or about the premises,” and that the 5 “LESSEE assumes all risks of injury or damages . . . in or about the premise.” (Id.). This 6 contention appears correct: the Policy’s language and the Lease together suggest coverage 7 beyond the exact interior square-footage of Spirals. Indeed, State Farm’s Claims Team 8 Manager, Brain Ingersoll (“Ingersoll”), testified that the Policy may include the “sidewalks. . . . 9 [or] the ‘ways and means adjacent to the building,” which “may” include the parking lot. (Dep. 10 Brian Ingersoll at 14, Ex. 4 to Resp., ECF No. 34-4). However, Ingersoll did not testify that the 11 Policy did, or did not, include the parking lot. (See id.). In light of that equivocal statement, 12 Crider’s testimony again serves as guidance—principally where Crider stated that “in and about 13 the premises” does not go all the way to the parking lot. (Dep. Sue Ellen Crider at 6, 8, 9, Ex. 2 14 to State Farm’s MSJ, ECF No. 31-2). Moreover, the Lease has a crossed-out portion about 15 repair and maintenance of the parking lot being the lessor’s responsibility, but other portions 16 about the “windows, doors, air-conditioning, and heating equipment” are in-tact. (Dep. Sue 17 Rokaw at 5, Ex. M to State Farm’s MSJ, ECF No. 22-13). Thus, in light of D&L’s stated intent 18 for creating the Lease and creating the condition that it be named as an additional insured on 19 the Policy, the intent behind the Policy reveals it to not extend coverage for DiMaria’s injuries 20 suffered in the shopping center parking lot. 21 Discerning the intent behind the Policy as not including coverage for DiMaria’s injures 22 also appears to be a reasonable and often-taken approach with insurance policies that use the 23 “arising out of” language for an additional insured. For example, in Seaway Properties, LLC v. 24 Fireman’s Fund Ins. Co., 16 F. Supp. 3d 1240 (W.D. Wash. 2014), the court explained how its 25 “review of case law suggests that most states’ courts have reached the same conclusion . . . . 1 The mere fact that a person intending to visit a lessee is injured in a common area is insufficient 2 to confer coverage on a lessor who is the lessee’s additional insured.” Seaway Properties, LLC, [3] 16 F. Supp. 3d at 1250 ; see also Fireman’s Fund Ins. Co. v. Discover Prop. & Cas. Ins. Co., 4 No. C 08-03079 WHA, 2009 WL 2591394 , at *4 (N.D. Cal. Aug. 21, 2009) (finding that a 5 bookstore’s insurance policy, which extended liability to a strip mall owner for “liability arising 6 out of the [bookstore’s] ownership, maintenance or use of . . . the premises,” did not cover a 7 person’s injuries suffered while “walking on the public sidewalk to the bookstore.”). The court 8 in Seaway ultimately found that Washington state law required a finding that the additional 9 insured was covered by the named insured’s policy for injuries sustained in common areas, as 10 other courts have found when interpreting their state’s laws. Seaway Properties, LLC, 16 F. 11 Supp. 3d at 1249–52; see Nat’l Fire Ins. Co. of Hartford v. Fed. Ins. Co., 843 F. Supp. 2d 1011 , 12 1016 (N.D. Cal. 2012). But the evidence here shows that D&L and Spirals did not intend the 13 Policy to extend indemnity coverage to D&L for DiMaria’s injuries suffered after leaving 14 Spirals and after walking past the adjoining sidewalk, down a ramp, and into the shopping 15 center parking lot shared by all tenants. 16 While courts are hesitant to grant summary judgment when an ambiguity exists with a 17 contract, summary judgment is appropriate when the court is not faced with “contradictory or 18 conflicting evidence.” San Diego Gas & Elec. Co. v. Canadian Hunter Mktg. Ltd., 132 F.3d 19 1303, 1307 (9th Cir. 1997). Moreover, when parties stipulate to the relevant facts, contract 20 interpretation is a question of law. Zurich Am. Ins. Co. v. Coeur Rochester, Inc., 720 F. Supp. 21 2d 1223, 1231 (D. Nev. 2010); (State Farm’s MSJ 2:16–20, ECF No. 13); (Resp. 3:26–27, ECF 22 No. 15). The evidence here shows the Policy as not including indemnity coverage for D&L 23 with DiMaria’s injuries in the common area parking lot, and no evidence contradicts or 24 conflicts with that showing. Summary judgment is therefore appropriate in favor of State Farm 25 on this issue. The Court consequently addresses Riverport’s claims in light of this conclusion. 1 B. Declaratory Relief: Duty to Defend and Indemnify 2 Riverport’s first claim seeks declaratory relief as to whether State Farm breached its 3 duty to defend D&L from liability related to DiMaria’s fall and injuries. (Riverport’s MSJ 4 11:16–14:11, ECF No. 25). Riverport claims that it initiated this duty when it sent State Farm 5 the Demand Letter from DiMaria, requested indemnification, and notified State Farm of its 6 upcoming mediation with DiMaria. (Id.). 7 “The duty to defend is broader than the duty to indemnify.” United Nat’l Ins. Co. v. 8 Frontier Ins. Co., 99 P.3d 1153, 1158 (Nev. 2004). The duty arises when the insurer 9 “ascertains facts which give rise to the potential of liability under the [insurance] policy.” Id. 10 (quoting Gray v. Zurich Insurance Company, 419 P.2d 168, 177 (Cal. 1966)). “The purpose 11 behind construing the duty to defend so broadly is to prevent an insurer from evading its 12 obligation to provide a defense for an insured without at least investigating the facts behind a 13 complaint.” United Nat’l Ins. Co., 99 P.3d at 1158 . Breach of this duty to defend could prevent 14 an insurer from later contesting coverage and indemnification. See Andrew v. Century Sur. Co., [15] 134 F. Supp. 3d 1249, 1262 (D. Nev. 2015). 16 The Court does not find that Riverport triggered State Farm’s duty to defend by merely 17 notifying State Farm of DiMaria’s Demand Letter accompanied by a notice of the scheduled 18 mediation. Prior to D&L’s settlement with DiMaria, a complaint had not been filed to 19 commence litigation, and Riverport does not provide evidence that it or D&L had an obligation 20 to enter into mediation with DiMaria at that time. United Nat’l Ins. Co., 99 P.3d at 1158 21 (“Determining whether an insurer owes a duty to defend is achieved by comparing the 22 allegations of the complaint with the terms of the policy.”). Though DiMaria’s Demand Letter 23 stated facts about her fall and injuries, it only created a threat of litigation rather than 24 “immediate and severe implications” that could affect Riverport and D&L’s rights. Cf Aetna 25 Cas. & Sur. Co. v. Pintlar Corp., 948 F.2d 1507 , 1516 (9th Cir. 1991) (distinguishing 1 circumstances that trigger a duty to defend, such as filing a complaint to begin litigation or an 2 administrative claim, from instances involving a “garden variety demand letter” which “only 3 exposes one to a potential threat of future litigation”). Moreover, at the time of the settlement, 4 State Farm was still reviewing the Policy’s terms to evaluate the potential for coverage. (Decl. 5 Feldman ¶¶ 4–12, Ex. 1 to Riverport’s MSJ, ECF No. 25-1); (Nov. 29, 2016 Letter from State 6 Farm to Feldman at 12, Ex. 5 to Riverport’s MSJ, ECF No. 25-5). 7 Additionally, Riverport did not trigger State Farm’s duty to defend D&L based on the 8 Policy’s terms. The Policy states that State Farm will “have the right and duty to defend the 9 insured against any ‘suit’ seeking . . . damages.” (Policy at 36, Ex. 3 to Riverport’s MSJ, ECF 10 No. 25-3). The Policy later defines “suit” as: 11 “a civil proceeding in which damages because of ‘bodily injury’ . . . are alleged. ‘Suit’ includes . . . an arbitration proceeding . . . to which the insured must submit 12 or does submit with our consent; or any other alternative dispute resolution proceeding . . to which the insured submits with our consent.” [13] 14 (Id. at 50) (emphasis added). Riverport claims that it satisfied the Policy’s requirements 15 because State Farm gave its “implicit[] consent[]” by not immediately denying coverage or 16 objecting to settlement discussions. (Riverport’s MSJ 13:25–28, ECF No. 25). The facts, 17 however, do not suggest implied consent. As discussed above, around the time of the 18 mediation, State Farm explicitly stated that it was still reviewing DiMaria’s Demand Letter and 19 investigating whether its Policy covered her injuries; and Riverport has not provided evidence 20 to prove that State Farm, D&L, or Riverport were required to participate in the mediation. 21 (Nov. 29, 2016 Letter from State Farm to Feldman at 12, Ex. 5 to Riverport’s MSJ). Thus, the 22 Policy did not impose a duty on State Farm to defend D&L at the time of the settlement. 23 C. Equitable Indemnity 24 Riverport argues that it is entitled to summary judgment on its equitable indemnity claim 25 because “State Farm refused to discharge its contractual duties, which required Riverport to 1 assume D&L’s defense and indemnify it to the tune of $190,000.” (Riverport’s MSJ 19:20– 2 20:14, ECF No. 25). However, for the reasons discussed in this Order, State Farm’s Policy did 3 not extend coverage to D&L for DiMaria’s injuries in the parking lot. Riverport’s claim for 4 equitable indemnity therefore fails. 5 D. Equitable Subrogation 6 Riverport’s third claim is for equitable subrogation, which is a claim that “arises when 7 one party has been compelled to satisfy an obligation that is ultimately determined to be the 8 obligation of another.” See Colony Ins. Co. v. Colorado Cas. Ins. Co., Case No. 2:12-cv-017279 RFB-NJK, 2018 WL 3312965 , at *5 (D. Nev. July 5, 2018) (recognizing equitable subrogation 10 in the context of primary and excess insurance carriers); (Riverport’s MSJ 14:13–17, ECF No. 11 25); (Compl. ¶¶ 23–34, ECF No. 1). For this claim, the Court considers several factors to 12 determine if the equities favor requiring one party to be responsible for another’s expenses: (1) 13 the insured suffered a loss for which the defendant is liable, either as the wrongdoer whose act 14 or omission caused the loss or because the defendant is legally responsible to the insured for the 15 loss caused by the wrongdoer; (2) the claimed loss was one for which the insurer was not 16 primarily liable; (3) the insurer has compensated the insured in whole or in part for the same 17 loss for which the defendant is primarily liable; (4) the insurer has paid the claim of its insured 18 to protect its own interest and not as a volunteer; (5) the insured has an existing, assignable 19 cause of action against the defendant that the insured could have asserted for its own benefit 20 had it not been compensated for its loss by the insurer; (6) the insurer has suffered damages 21 caused by the act or omission upon which the liability of the defendant depends; (7) justice 22 requires that the loss be entirely shifted from the insurer to the defendant, whose equitable 23 position is inferior to that of the insurer; and (8) the insurer’s damages are in a liquidated sum. 24 Id. at *6. [25] 1 Here, the factors weight against equitable subrogation by State Farm for Riverport’s 2 settlement with DiMaria. First, State Farm is not the wrongdoer whose act or omission caused 3 the loss, nor is it legally responsible for the loss caused by the wrongdoer under the Policy. 4 Rather, repair and maintenance of the parking lot was D&L’s responsibility according to the 5 Lease. (See Dep. Sue Rokaw at 5, Ex. M to State Farm’s MSJ, ECF No. 22-13). Similarly, 6 because the Policy did not cover DiMaria’s injuries, Riverport’s claimed loss was not 7 something State Farm is primarily or partially responsible. Thus, in total, justice does not 8 require that Riverport’s settlement payment be entirely shifted from Riverport to State Farm, 9 meaning summary judgment in favor of State Farm is appropriate on this claim. 10 E. Equitable Contribution 11 Next, Riverport claims that it is entitled to equitable contribution in the event that the 12 Court declines to enforce the Policy’s language about Riverport’s insurance being 13 noncontributory. (Riverport’s MSJ 20:15–21:22, ECF No. 25). An equitable contribution claim 14 arises “where multiple insurance carriers insure the same insured and cover the same risk.” N. 15 Am. Specialty Ins. Co. v. Nat’l Fire & Marine Ins. Co., No. 2:10-cv-01859-GMN, 2013 WL 16 1332205, at *2 (D. Nev. Apr. 2, 2013) (citing Fireman’s Fund Ins. Co. v. Md. Cas. Co., 77 Cal. 17 Rptr. 2d 296, 303 (Cal. Ct. App. 1998)). In that circumstance, “each insurer has independent 18 standing to assert a cause of action against its coinsurers for equitable contribution when it has 19 undertaken the defense or indemnification of the common insured.” Id. 20 Because the Court finds that State Farm’s Policy does not cover DiMaria’s injuries, it 21 follows that State Farm is not a co-obligor required to provide equitable contribution for those 22 injuries. Thus, summary judgment is granted in favor of State Farm on this claim. 23 F. Breach of Contract 24 Last, Riverport asserts a claim for breach of contract against State Farm claiming that, 25 based on the Policy, State Farm breached its duty by refusing to defend and indemnify D&L as 1 required. (Riverport’s MSJ 21:23–22:21, ECF No. 25). Under Nevada law, breach of contract 2 has three elements: (1) the existence of a valid contract; (2) a breach by the defendant; and (3) 3 damage as a result of the breach. Saini v. Int’l Game Tech., 434 F.Supp.2d 913 , 919–20 (D. 4 Nev. 2006 ) (citing Richardson v. Jones, 1 Nev. 405, 405 (Nev. 1865)). 5 Here, the Court does not find that State Farm breached the terms of the Policy because it 6 did not have a duty to cover DiMaria’s injuries sustained in the shopping center parking lot. 7 Accordingly, summary judgment is granted in favor of State Farm as to this claim. 8 IV. CONCLUSION 9 IT IS HEREBY ORDERED that State Farm’s Motions for Summary Judgment, (ECF 10 Nos. 13, 22), are GRANTED. 11 IT IS FURTHER ORDERED that Riverport’s Motion for Summary Judgment, (ECF 12 No. 25), is DENIED. 13 The Clerk of Court shall enter judgment accordingly and close the case. 14 DATED this ___2_0_ day of September, 2019. [15] 16 ___________________________________ Gloria M. Navarro, District Judge [17] United States District Court