Las Vegas Metropolitan Police Department v. Coregis Insurance Co.
127 Nev. 548
Nev.2011Background
- LVMPD held an excess insurance policy with Coregis to cover civil rights-related damages above a $1 million self-insured retention.
- Three policy sections require notice of a claim when a demand exceeds $500,000; the law enforcement liability section requires notice of an occurrence as soon as practicable and to send documents immediately.
- LVMPD was sued in a federal civil rights action; it provided notice in November 2006 after a settlement demand exceeded the retention amount.
- Coregis denied coverage due to late notice; LVMPD settled the civil rights action for $1.475 million and incurred defense costs.
- The district court granted summary judgment for Coregis; the Nevada Supreme Court reversed, holding that timely notice and prejudice must be evaluated with a notice-prejudice rule.
- Court remanded for proceedings consistent with adopting a notice-prejudice rule requiring proof of late notice and prejudice by the insurer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether notice was timely under the policy terms. | LVMPD argues genuine issues exist on timeliness under multiple notice sections. | Coregis contends notice was late under the policy terms. | There are genuine issues of material fact on timeliness; summary judgment improper. |
| Whether an insurer must show prejudice to deny coverage for late notice. | LVMPD advocates a prejudicial-proof requirement for insurer to deny. | Coregis argues late notice alone justifies denial. | Adopted notice-prejudice rule; insurer must prove late notice and prejudice. |
| Who bears the burden to prove prejudice or lack of prejudice. | LVMPD relies on prejudice rule but burden contested. | Insurer should prove prejudice. | Burden on insurer to show prejudice from late notice. |
| Effect of historic Cassinelli rule versus NAC guidance on notice. | Cassinelli historically precluded recovery for late notice. | NAC guidance supersedes Cassinelli. | Cassinelli abrogated to adopt notice-prejudice rule per NAC context. |
Key Cases Cited
- Cassinelli v. Insurance Co., 67 Nev. 227, 216 P.2d 606 (1950) (majority rule, prejudice not required to deny where notice is explicit condition)
- Las Vegas Star Taxi, Inc. v. St. Paul Fire & Marine Insurance, 102 Nev. 11, 714 P.2d 562 (1986) (abrogated Cassinelli regarding prejudice requirement)
- West Bay Exploration v. AIG Specialty Agencies, 915 F.2d 1030 (6th Cir. 1990) (prejudice standard for late notice as material fact issue)
- Mutual of Enumclaw Ins. Co. v. USF Ins. Co., 164 Wash.2d 411, 191 P.3d 866 (2008) (prejudice determination fact-dependent; insurer burden on prejudice)