Lori McGrath v. Liberty Mutual Fire Insurance ( 2020 )


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  •                            NOT FOR PUBLICATION                           FILED
    UNITED STATES COURT OF APPEALS                        DEC 9 2020
    MOLLY C. DWYER, CLERK
    U.S. COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    LORI MCGRATH,                                   No.    20-15730
    Plaintiff-Appellant,            D.C. No.
    2:19-cv-00036-JCM-DJA
    v.
    LIBERTY MUTUAL FIRE INSURANCE                   MEMORANDUM*
    COMPANY,
    Defendant-Appellee.
    Appeal from the United States District Court
    for the District of Nevada
    James C. Mahan, District Judge, Presiding
    Submitted December 7, 2020**
    Seattle, Washington
    Before: MILLER and BRESS, Circuit Judges, and BASTIAN,*** District Judge.
    Lori McGrath appeals from the district court’s order granting summary
    judgment to Liberty Mutual Fire Insurance Company on her claims of breach of
    *
    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).
    ***
    The Honorable Stanley Allen Bastian, Chief United States District
    Judge for the Eastern District of Washington, sitting by designation.
    contract and breach of the implied covenant of good faith and fair dealing. We
    have jurisdiction under 
    28 U.S.C. § 1291
    , and we affirm.
    1.     We review the district court’s grant of summary judgment de novo.
    L.F. v. Lake Wash. Sch. Dist. #414, 
    947 F.3d 621
    , 625 (9th Cir. 2020). At summary
    judgment, the moving party “bears the initial burden of demonstrating the absence
    of a genuine issue of fact for trial.” Devereaux v. Abbey, 
    263 F.3d 1070
    , 1076 (9th
    Cir. 2001). But on an issue as to which the nonmoving party bears the burden of
    proof at trial, the moving party need not show more than “an absence of evidence
    to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 
    477 U.S. 317
    ,
    325 (1986). If the nonmoving party fails to then “make a showing sufficient to
    establish the existence of an element essential to that party’s case,” summary
    judgment is proper. 
    Id. at 322
    . Because McGrath failed to make a showing
    sufficient to challenge the validity of the terms of her Liberty Mutual insurance
    policy, the district court did not err in granting summary judgment to Liberty
    Mutual on McGrath’s breach of contract claim.
    McGrath contends that Liberty Mutual did not present sufficient evidence to
    demonstrate the validity of its policy’s “other insurance” provision. When another
    insurer has paid part of the insured’s loss, that provision limits Liberty Mutual’s
    liability by capping the insured’s total recovery at the higher of the applicable
    policy limits. Because State Farm has already provided McGrath with coverage up
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    to the $100,000 limit of both the State Farm and Liberty Mutual policies, the
    “other insurance” provision permits Liberty Mutual to deny further coverage.
    Under Nevada law, an “other insurance” provision is invalid “when it conflicts
    with a similar clause contained in another policy of insurance” because the
    conflicting terms could result in both insurers’ disclaiming liability. Travelers Ins.
    Co. v. Lopez, 
    567 P.2d 471
    , 474 (Nev. 1977). Such a conflict is unlikely to arise
    here because McGrath has conceded that the State Farm policy provides primary
    coverage, while the Liberty Mutual policy provides excess coverage. See Zervas v.
    USAA Gen. Indem. Co., 
    370 F. Supp. 3d 1169
    , 1172–75 (D. Nev. 2019).
    But if there is a conflict between the two policies, it is impossible for us to
    discern it because the State Farm policy is not part of the record. McGrath
    maintains that Liberty Mutual was responsible for providing the State Farm policy
    to the district court. We disagree. Under Nevada law, an “other insurance”
    provision is valid unless it conflicts with another “other insurance” provision.
    Travelers Ins. Co., 
    567 P.2d at 474
    ; Yosemite Ins. Co. v. State Farm Mut. Auto.
    Ins., 
    653 P.2d 149
    , 150 (Nev. 1982). Therefore, McGrath, as the party challenging
    the validity of the provision, bears the ultimate burden of demonstrating a conflict
    between Liberty Mutual’s “other insurance” provision and a similar provision in
    State Farm’s policy. Celotex, 
    477 U.S. at 322
    .
    McGrath relies on cases involving anti-stacking clauses for her argument
    3
    that Liberty Mutual bore the burden of producing the State Farm policy. But anti-
    stacking clauses, which limit an insurer’s ability to aggregate coverage limits, are
    distinct from “other insurance” provisions. Zervas, 370 F. Supp. 3d at 1175–76;
    see also Travelers Ins. Co., 
    567 P.2d at
    472–75 (Nev. 1977). Unlike “other
    insurance” provisions, anti-stacking clauses are presumed void unless they comply
    with the requirements of Nevada law. See Nev. Rev. Stat. § 687B.145(1). For that
    reason, the insurer in an anti-stacking case bears the burden of proving the validity
    of the anti-stacking clause, including producing the relevant insurance policies.
    Torres v. Farmers Ins. Exchange, 
    793 P.2d 839
    , 842 (Nev. 1990).
    The same is not true in cases involving “other insurance” provisions because
    the essential evidence includes the insurance policy of another insurer. Here, there
    is no suggestion that Liberty Mutual had the State Farm insurance policy within its
    control.
    Because McGrath did not meet her burden of producing evidence of a
    conflict with the State Farm policy, the district court did not err in granting
    summary judgment to Liberty Mutual.
    2.     McGrath also argues that ambiguities in the Liberty Mutual policy
    preclude summary judgment. To the extent McGrath has not forfeited that
    argument by not raising it below, see In re Mercury Interactive Corp. Sec. Litig.,
    
    618 F.3d 988
    , 992 (9th Cir. 2010), we agree with the district court that the
    4
    language of the policy is unambiguous, see Travelers Ins. Co., 
    567 P.2d at 474
    (holding a similar “other insurance” provision to be unambiguous).
    3.     The crux of McGrath’s claim that Liberty Mutual breached the
    implied covenant of good faith and fair dealing is that Liberty Mutual’s denial of
    benefits on the basis of the “other insurance” provision was unreasonable. See
    Falline v. GNLV Corp., 
    823 P.2d 888
    , 891 (Nev. 1991). Because we agree with the
    district court that Liberty Mutual’s “other insurance” provision bars McGrath’s
    recovery, Liberty Mutual’s decision to deny McGrath benefits was not
    unreasonable. Thus, the district court did not err in granting summary judgment to
    Liberty Mutual on that claim.
    AFFIRMED.
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