377 F. Supp. 3d 1194
D. Nev.2019Background
- Plaintiff Michael Hendon was injured in a 2017 car accident and held a GEICO policy with uninsured motorist (UM) limits of $100,000 per person / $300,000 per incident.
- Hendon settled with the at-fault driver's insurer and then made a UM claim with GEICO; GEICO offered $27,067 to settle.
- Hendon sued in Nevada state court asserting two claims: breach of contract and violations of NRS § 686A.310 (statutory unfair claim practices); GEICO removed to federal court based on diversity.
- GEICO moved to dismiss the statutory claim under Rule 12(b)(6) (and alternatively to sever/bifurcate and stay bad-faith claims); Hendon opposed and sought leave to amend.
- The complaint alleged only that GEICO failed to provide adequate coverage and failed to settle in good faith, plus general negotiation facts and alleged counsel unresponsiveness.
- The court found the statutory claim to be conclusory and not plausibly pleaded, denied leave to amend as futile, granted GEICO’s motion to dismiss the NRS § 686A.310 claim, and denied GEICO’s motion to stay as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hendon plausibly pleaded a violation of NRS § 686A.310 | Hendon contends GEICO engaged in bad-faith/unfair claim practices and failed to settle his UM claim (pointing to negotiations and an interview) | GEICO argues the complaint contains only bare, conclusory allegations lacking factual detail to show a statutory violation | Dismissed: complaint’s allegations are threadbare and fail to state a plausible claim; dismissal with prejudice (amendment futile) |
| Whether leave to amend should be granted | Hendon attached a proposed amended complaint specifying subsections of NRS § 686A.310 | GEICO maintained the proposed amendment still lacks factual specificity | Denied: proposed amendment suffers same pleading defects; amendment would be futile |
| Whether the motion to stay/bifurcate bad-faith claims remains necessary | Hendon clarified his second claim is statutory under NRS § 686A.310, not a separate tort bad-faith claim | GEICO sought to dismiss or alternatively sever/bifurcate and stay any bad-faith tort claim | Moot/Denied: stay denied as moot because statutory claim dismissed and no separate tort claim was pursued |
| Whether litigation conduct of GEICO’s counsel supports statutory claim | Hendon pointed to counsel’s alleged unresponsiveness in negotiations | GEICO argued such litigation conduct is immaterial to statutory pleading requirements | Court agreed with GEICO: conduct allegations did not supply the required factual predicate |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must be plausible, not merely conceivable)
- Ashcroft v. Iqbal, 556 U.S. 662 (courts accept well-pled facts but not legal conclusions; two-step pleading analysis)
- Papasan v. Allain, 478 U.S. 265 (conclusory allegations need not be accepted as true)
- Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101 (complaint must allege all material elements to sustain recovery)