RSUI Indemnity Company v. Sportsman's Royal Manor, LLC

1 Gena L. Sluga, SBN 9910 Martin J. Kravitz SBN 83 2 Tyler J. Watson SBN 11735 Christian, Kravitz, Dichter, Johnson & Sluga, PLLC 3 8985 Eastern Avenue, Suite 200 Las Vegas, Nevada 89123 4 gsluga@cdslawfirm.com mkravitz@ksjattorneys.com 5 tjwatson@ksjattorneys.com Attorney for RSUI Indemnity Company [7] UNITED STATES DISTRICT COURT [8] DISTRICT OF NEVADA [9] RSUI INDEMNITY COMPANY, a New Case No.: 2:20-cv-01484-RFB-VCF Hampshire Stock Company; and EVANSTON [10] INSURANCE COMPANY, an Illinois ORDER GRANTING RSUI INDEMNITY corporation; 11 COMPANY AND EVANSTON Plaintiffs, vs. INSURANCE COMPANY’S 12 EMERGENCY JOINT MOTION FOR SPORTSMAN’S ROYAL MANOR, LLC, a GOOD FAITH SETTLEMENT [ECF NO. [13] Nevada Limited Liability Company; 100] DOMONIQUE BROWNING-PALMER, [14] individually; GARY BRENNAN, individually, [15] Defendants. 16 SPORTSMAN’S ROYAL MANOR, LLC; GARY BRENNAN [17] Counter-claimants, 18 vs. 19 RSUI INDEMNITY COMPANY; EVANSTON 20 INSURANCE COMPANY; KAERCHER CAMPBELL & ASSOCIATES INSURANCE 21 BROKERAGE OF NEVADA, LLC; KAERCHER INSURANCE, AN ALERA 22 GROUP AGENCY, LLC; and DOE DEFENDANTS 1-10; ROE DEFENDANTS 23 11-20; 24 Counter-defendants. 25 Plaintiff/Counter-Defendant, RSUI INDEMNITY COMPANY, by and through its counsel 26 of record, CHRISTIAN, KRAVITZ, DICHTER, JOHNSON & SLUGA, PLLC, and 27 Plaintiff/Counter-Defendant, EVANSTON INSURANCE COMPANY, by and through its counsel of record, CLYDE & CO US, LLP, Emergency Joint Motion for Good Faith Settlement having 1 been heard on the 22nd day of August, 2022, before the Honorable Magistrate Judge Cam 2 Ferenbach: Michelle D. Alarie, Esq. appearing on behalf of Sportsman’s Royal Manor 3 (“Sportsman’s”) and Gary Brennan, Tyler J. Watson, Esq. appearing on behalf of RSUI Indemnity 4 Company (“RSUI”), Peter J. Whalen, Esq. appearing on behalf of Evanston Insurance Company 5 (“Evanston”), Matthew L. Sharp, Esq. appearing on behalf of Domonique Browning-Palmer 6 (“Browning-Palmer”), and Amanda Ebert, Esq. appearing on behalf of Kaercher Campbell & 7 Associates Insurance Brokerage of Nevada, LLC and Kaercher Insurance (“Kaercher”), the Court 8 having heard oral arguments and having been fully advised in this matter and good cause appearing 9 therefore, makes the following Findings of Fact, Conclusions of Law, and Order: 10 I. FINDINGS OF FACT 11 1. On July 28, 2022, RSUI and Evanston filed their Emergency Joint Motion for Good 12 Faith Settlement (“Motion”). 13 2. On August 1, 2022, Sportsman’s and Gary Brennan filed a Non-Opposition to the 14 Motion. 15 3. On August 4, 2022, Defendant Browning-Palmer filed a Non-Opposition to the 16 Motion. 17 4. On August 4, 2022, Kaercher filed a Response to the Motion. 18 5. On August 5, 2022, RSUI and Evanston filed their Reply in Support of the Motion. 19 6. On August 8, 2022, the Parties appeared for the hearing on the Motion and, at the 20 request of Kaercher, the hearing was continued to August 22, 2022 to afford Kaercher additional 21 time to determine whether to oppose the Motion on a substantive basis. 22 7. On August 18, 2022, Kaercher filed a notice withdrawing their Response and a 23 Notice of Non-Opposition. 24 8. Notwithstanding the lack of opposition, this Court applied the following factors as 25 enumerated in The Doctor’s Co. v. Vincent, 120 Nev. 644, 651-52 , 98 P.3d 681, 686 (2004)(quoting 26 In re MGM Grand Fire Litigation, 570 F. Supp. 913, 927 (D. Nev. 1983)), to the present case to 27 determine whether Plaintiffs/Counter-Defendants RSUI and Evanston’s settlement agreement was 1 proceeds amongst the Plaintiffs; (3) the insurance policy limits of settling Defendants; (4) the 2 financial condition of the settling Defendants; and (5) the existence of collusion, fraud or tortious 3 conduct aimed to injure the interests of non-settling Defendants. 4 9. The Court finds that the first factor, the amount paid in settlement, favors a finding 5 of good faith settlement. RSUI will contribute $262,500 and Evanston will contribute $25,000 to 6 Sportsman’s to assist it in efforts to resolve Browning-Palmer’s pending claims against Sportsman’s 7 in Nevada’s Eighth Judicial District Court. Given the arguments that neither RSUI nor Evanston 8 owe any coverage in the Browning-Palmer action, the settlement figures are more than reasonable. 9 As set forth in the Joint Motion, pursuant to the James River Assault and Battery Endorsement, 10 Sportsman’s primary carrier, the limit of the James River Policy is reduced from $1,000,000 per 11 “occurrence” to $50,000 per “occurrence” for all “claims expenses” and damages because of “bodily 12 injury” asserted in the Browning-Palmer action. In other words, the limit available under the James 13 River Policy for the Browning-Palmer action is $50,000, rather than the $1,000,000 specified in the 14 Schedule of Underlying Insurance of the RSUI Policy for this type of claim. RSUI and Evanston 15 contend that the Schedule of Underlying Insurance makes no mention of self-insurance. 16 Accordingly, RSUI maintains that the “Sublimited Underlying Coverage” exclusion in the RSUI 17 Policy applies and bars coverage for this matter. As the Evanston Policy generally follows form to 18 the underlying RSUI excess Policy, Evanston maintains that the Evanston Policy also provides no 19 coverage for the Browning-Palmer claim. 20 10. The Court finds that the second factor, the allocation of settlement proceeds, favors 21 a finding of good faith settlement. As this settlement relates to resolving the counterclaims 22 Sportsman’s asserted against RSUI and Evanston (as well as rendering RSUI and Evanston’s claims 23 moot), the question of allocation is not at issue for the purposes of this settlement. 24 11. The Court finds that the third factor, the insurance policy limits of the settling parties 25 favor a finding of good faith settlement. Because the settling parties are insurance companies, as 26 opposed to individuals or entities holding an insurance policy, this factor is inapplicable. 27 12. The Court finds that the fourth factor, the financial condition of the settlement 1 as opposed to individuals or other entities, the question of financial condition is inapplicable. 2 13. The Court finds that the fifth factor, the existence of collusion, fraud, or tortious 3 conduct aimed to injure the interests of the non-settling Defendant, favors a finding of good faith 4 settlement. The purpose of this settlement is for RSUI and Evanston to buy their peace before 5 incurring significant time and expense regarding expert witness retention, conducting depositions, 6 drafting of discovery and dispositive motions, and preparing for and conducting a trial on the merits. 7 Moreover, despite strong arguments that RSUI and Evanston’s excess policies do not provide any 8 coverage for the subject Browning-Palmer litigation, this settlement allows RSUI and Evanston to 9 protect the insured from further exposure. Lastly, the parties utilized the services of a mediator, the 10 Hon. Jennifer Togliatti (Ret.,) which serves as further proof that no collusion, fraud, or tortious 11 conduct occurred between the parties in reaching this agreement. 12 14. The Court finds that an application of the five articulated factors to this case 13 establishes that RSUI and Evanston’s settlement was made in good faith. 14 15. The Court further finds that RSUI and Evanston are discharged from any and all equitable 15 potential liability for any contribution or indemnity claims including, but not limited to, any 16 potential, but not yet asserted, claim from Kaercher. 17 II. CONCLUSIONS OF LAW 18 1. In Nevada, courts have discretion as to the determination of good faith based upon 19 all relevant facts available. Veliscol Chemical Corp. v. Davidson, 107 Nev. 356, 360 , 811 P. 2d 561 20 (1991). 21 2. Under Nevada law, courts consider the following factors in determining whether a 22 settlement was reached in good faith: (1) the amount paid in settlement; (2) the allocation of the 23 settlement proceeds amongst the Plaintiffs; (3) the insurance policy limits of settling Defendants; 24 (4) the financial condition of the settling Defendants; and (5) the existence of collusion, fraud or 25 tortious conduct aimed to injure the interests of non-settling Defendants. The Doctor’s Co. v. 26 Vincent, 120 Nev. 644, 651-52 , 98 P.3d 681, 686 (2004)(quoting In re MGM Grand Fire Litigation, [27] 570 F. Supp. 913, 927 (D. Nev. 1983)). 1 || reached was made in good faith pursuant to the five factors set forth in The Doctor’s Co. v. Vincent. \\I0. ORDER 3 IT IS HEREBY ORDERED, ADJUDGED AND AGREED that Plaintiffs/Counter4 || Defendants RSUI and Evanston’s Joint Emergency Motion for Good Faith Settlement is hereby 5 || GRANTED. 6 IT IS HEREBY FURTHER ORDERED, ADJUDGED AND AGREED that the granting 7 || of Plaintiffs/Counter-Defendants RSUI and Evanston’s Joint Emergency Motion for Good Faith 8 || Settlement precludes any non-settling party from bringing any potential claim for equitable Q || indemnity and/or contribution in the future. [10] U.S. DISTRICT COURT JUDGE 11 || Respectfully Submitted By: CHRISTIAN, KRAVITZ, DICHTER, CLYDE & Co, US, LLP Jounson & SLUGA, PLLC 13 /s/ Tyler J. Watson, Esq. /s/ Peter J. Whalen, Esq. Gena L. Sluga Peter J. Whalen 14}| Martin J. Kravitz Jennifer D. McKee Tyler J. Watson 3960 Howard Hughes Parkway, Suite 500 15 58 asters ven pute 200 Las Vegas, Nevada 89169 as Vegas, Nevada || Attorney for RSUI Indemnity Company Attorneys for Evanston Insurance Company [17] Approved to as to Form and Content: 18 || ARMSTRONG TEASDALE, LLP LIPSON NEILSON, P.C. /s/ Michelle D. Alarie, Esq. /s/_ Amanda A. Ebert, Esq. KevinR. Stolworthy, Esq. Joseph P. Garin, Esq. 0 Michelle D. Alarie, Esq. Amanda A. Ebert, Esq. 3770 Howard Hughes Parkway, Suite 200 9900 Covington Cross Dr. Suite 120 || Las Vegas, NV 89169 Las Vegas, NV 89144 Attorneys for Plaintiffs/Counter-claimants Attorneys for Counterdefendants, Kaercher 22 || Sportsman’s Royal Manor, LLC and Campbell & Associates Insurance Brokerage Gary Brennan Of Nevada, LLC and Kaercher Insurance, 23 An Alera Group Agency, LLC 24 MATTHEW L. SHARP, LTD. IT IS SO ORDERED. 25 || 2/Matthew L. Sharp, Esq. 2 . Matthew L. Sharp, Esq. Load ote. 26 || 432 Ridge St. Ce Reno, NV 89509 Cam Ferenbach 27 Attorney for Defendant Domonique United States Magistrate Judge 28 Browning-Palmer 8-26-2022 DATED