Nevada Supreme Court – Duane Morris Insurance Law

By: Dominica C. Anderson and Daniel B. Heidtke

In a 4-3 decision filed on March 11, the Nevada Supreme Court responded to a certified question from the United States Court of Appeals for the Ninth Circuit. In Nautilus Insurance Company v. Access Medical, LLC; Robert Clark Wood, II; and Flournoy Management LLC, 137 Nev. Adv. Op. 10 (Nev. 2021), the court held that an insurer that reserves its right to seek reimbursement of defense costs paid to defend an insured may recover those defense costs from the insured upon a showing that the claim was not covered. The court held, “when a court finally determines that the insurer had no contractual duty to defend, the insurer may ordinarily recover in restitution if it has clearly reserved the right to do so in writing.”

The coverage dispute arose out of underlying litigation between former business partners that worked together selling medical devices. “After the partnership soured,” one of the former business partners alleged in a lawsuit that his former business partners (the insureds, in the coverage dispute) intentionally interfered with his new business, including by allegedly telling a prospective client that he was “banned” from selling medical devices. The former business partner-insureds tendered the intentional interference claim to their insurance carrier.

Continue reading “Insurers in Nevada Are Entitled to Reimbursement of Defense Costs Paid to Defend Non-Covered Claims”

By Dominica C. Anderson and Daniel B. Heidtke

In a 6-0 decision issued on September 24, 2015, the Nevada Supreme Court held that the California rule first announced in San Diego Fed. Credit Union v. Cumis Ins. Soc’y, 162 Cal. App. 3d 358 (1984), and the analysis of the California Court of Appeal’s decision in Fed. Ins. Co. v. MBL, Inc., 160 Cal. Rptr. 3d 910, 920 (Ct. App. 2013), a case in which Duane Morris LLP represented the insurer, also applies in Nevada. With its decision in State Farm Mutual Automobile Ins. Co. v. Hansen, 131 Nev. Adv. Op. 74, Case No. 64484 (2015), the Nevada Supreme Court held Nevada law requires an insurer to provide independent counsel for its insured when an actual conflict of interest arises between the insurer and the insured. Consistent with California law on the matter, the Court also held that a reservation of rights does not create a per se conflict of interest between insurer and insured. Continue reading “Nevada Supreme Court Holds That California Cumis Rule Applies In Nevada, But An Actual Conflict Is A Prerequisite For Independent Counsel”