Court Opinion

ID: 3155667
Source: CourtListenerOpinion
Date Created: 2015-11-18 16:09:08.485948+00
Date Added: 2024-06-11T11:58:17.665718
License: Public Domain

case with respondents for a total amount of $8,515,951.05, plus post-
                   judgment interest. However, the insurance policy the Whiteheads held
                   with Farmers had a policy limit of $30,000 per person or $60,000 per
                   occurrence.
                                 Farmers filed a complaint for declaratory relief against
                   respondents claiming that its liability should be capped at its policy limits
                   and it did not act in bad faith in defending the Whiteheads. Respondents
                   conceded that Farmers only had a contractual duty to pay out $60,000 per
                   occurrence, but claimed that Farmers acted in bad faith and should,
                   therefore, be liable for the excess judgment under a theory of tort liability.
                   The district court dismissed Farmers' complaint for declaratory relief,
                   finding that Farmers was trying to prevent respondents from claiming
                   that Farmers breached its duty of good faith and fair dealing and
                   questions of fact remained on that issue. Although respondents filed a
                   separate lawsuit alleging Farmers is liable under a tort theory of liability,
                   Farmers appealed to this court the dismissal of its separate action for
                   declaratory relief.
                                 Even when another adequate remedy exists, declaratory relief
                   is permitted in an appropriate case. NRCP 57. Declaratory relief may be
                   appropriate in a case involving a written contract and "a declaration of
                   rights, status or other legal relations thereunder." NRS 30.040(1).
                   However, declaratory relief is within the discretion of the district court,
                   which may refuse to enter a declaratory judgment if the judgment "would
                   not terminate the uncertainty or controversy giving rise to the
                   proceeding." NRS 30.080.
                                 Here, the district court did not abuse its discretion in
                   determining that declaratory relief is inappropriate in this case for four

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                        reasons. First, the briefing is inadequate to support Farmers' assertion
                        that declaratory relief is appropriate for a tortious breach of the duty of
                        good faith and fair dealing. Farmers only cites to NRS 30.040 as its basis
                        for declaratory relief, but that statute does not endorse declaratory relief
                        in what appears, at this point, to be primarily a tort dispute. See Edwards
                        v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d 1280, 1288
                        n.38 (2006) (stating that this court need not consider claims that are not
                        cogently argued or supported by relevant authority). Second, as the
                        district court found, questions of fact remain regarding whether Farmers
                        acted in bad faith. It would be inappropriate for this court to preclude
                        respondents' claims of bad faith with an undeveloped record on this issue.
                        See Cuzze v. Univ. & Cmty. Coll. Sys. of Nev.,      123 Nev. 598, 603, 172 P.3d
                        131, 135 (2007) (holding appellant responsible for making an adequate
                        appellate record, and when "appellant fails to include necessary
                        documentation in the record, we necessarily presume that the missing
                        portion supports the district court's decision").
                                    Third, while Farmers included its insureds, the Whiteheads,
                        as defendants to its declaratory relief complaint along with respondents,
                        Farmers concedes on appeal in response to the order to show cause that
                        only respondents are parties, apparently conceding that the dismissal of
                        its declaratory relief complaint was appropriate as to its insureds, a
                        concession that damages what arguments Farmers otherwise might have
                        to support its claim for declaratory judgment. Finally, respondents' direct
                        action against Farmers alleging breach of the covenant of good faith and
                        fair dealing is the appropriate vehicle for Farmers to present its current
                        arguments, which will allow for discovery to resolve any questions of fact.

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                                    Accordingly, as the district court did not abuse its discretion in
                        dismissing Farmers' complaint for declaratory relief, we
                                    ORDER the judgment of the district court AFFIRMED.

                                                            Gibbons

                        cc: Hon. Robert W. Lane, District Judge
                             Thomas J. Tanksley, Settlement Judge
                             Kaufman, Dolowich & Voluck, LLP
                             Atkin Winner & Sherrod
                             Christensen Law Offices, LLC
                             Nye County Clerk

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