Petition for Writ of Certiorari — James Nalder, et al., Petitioners v. United Automobile Insurance Company

No. 20-________

================================================================================================================

In The

Supreme Court of the United States

---------------------------------♦--------------------------------GARY LEWIS, ET AL.,

Petitioners,

v.

UNITED AUTOMOBILE INSURANCE COMPANY,

Respondent.

---------------------------------♦--------------------------------On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

---------------------------------♦--------------------------------PETITION FOR A WRIT OF CERTIORARI

---------------------------------♦--------------------------------THOMAS CHRISTENSEN, ESQ.

CHRISTENSEN LAW OFFICES

1000 S. Valley View Blvd.

Las Vegas, NV 89107

702-870-1000

courtnotices@injuryhelpnow.com

Counsel for Petitioners

================================================================================================================

COCKLE LEGAL BRIEFS (800) 225-6964

WWW.COCKLELEGALBRIEFS.COM

i

QUESTION PRESENTED

This Court has recognized three immutables:

1. Appellate courts are limited to reviewing the trial

court record for errors of law and do not decide issues

of fact; 2. Appellate courts are limited to considering

issues raised in the trial court, appealed, and briefed

on appeal, based on the stage of the litigation below;

and, 3. Federal courts deciding diversity cases must

faithfully apply state substantive law, including protecting the right to trial by jury. Here, the Ninth

Circuit’s unpublished order violates these three principles. It undermines Nevada’s insurance regulatory

regime and our federalism.

After thirteen years of litigation, the Ninth Circuit

dismissed Plaintiffs’ appeal for lack of standing citing

no injury. Plaintiffs alleged, proved and were awarded

partial damages by the trial court. The Defendant did

not appeal the damages awarded. Only Plaintiff appealed, claiming: 1. additional damages alleged below

flowing from Defendant’s breaches; and, 2. the court’s

summary disposition took Plaintiffs’ claims from the

jury. Four years into the appeal, and three years after

the alleged post-judgment lapse of one item of damage,

Defendants raised a substantive factual damage issue,

couched as “standing” to avoid waiver.

The question presented is whether a federal appeals court may be divested of jurisdiction by evaluating facts of an alleged post-judgment reduction in the

amount of damages and conclude Plaintiffs lacked

“standing” on appeal while simultaneously maintaining standing in the trial court.

ii

PARTIES TO THE PROCEEDINGS

Petitioners and Plaintiffs Gary Lewis and James

Nalder were the Plaintiffs in the Nevada District

Court and Appellants in the Ninth Circuit Court of

Appeals.

Respondent and Defendant United Automobile

Insurance Company was the Defendant in the Nevada

District Court and Appellees in the Ninth Circuit

Court of Appeals.

RULE 29.6 DISCLOSURE

Gary Lewis is a resident of California and James

Nalder is a resident of Nevada. Plaintiffs are not related to any corporate entity.

RELATED CASES

Century Surety Company v. Andrew, Supreme Court of

Nevada; Case number 73756; Order answering Certified Question filed December 13, 2018.

Nalder v. Eighth Judicial District Court of Nevada,

et al., Supreme Court of Nevada; Case number 78085,

consolidated with 78243; Petitions granted in part and

denied in part issued April 20, 2020. (Reported at 136

Nev., Advance Opinion 24)

Nalder v. Lewis, Superior Court of California, County

of Los Angeles; Case number KS021378; Judgment

entered July 24, 2018.

iii

RELATED CASES—Continued

Nalder v. Lewis, District Court, Clark County Nevada,

Case number 07A549111; Judgment entered June 3,

2008; Amended Judgment entered March 28, 2018.

Nalder v. Lewis, District Court, Clark County, Nevada,

Case number 18-772220; Judgment entered January

23, 2019.

Nalder v. United Automobile Insurance Company; U.S.

Court of Appeals, Ninth Circuit, Case number 1115010 consolidated with 11-15462, Reversed and Remanded in Part, Affirmed in Part, December 17, 2012.

(Reported as Nalder v. United Auto. Ins. Co., 500 F.

App’x 701 (9th Cir. 2012)).

Nalder v. United Automobile Insurance Company, U.S.

Court of Appeals, Ninth Circuit; Case number 1317441, Order Dismissing Appeal entered June 4, 2020.

Nalder v. United Automobile Insurance Company, 2:09cv-1348; Judgment entered October 30, 2013.

Nalder v. United Auto. Ins. Co., Supreme Court of Nevada; Case number 70504; Order Answering Certified

Questions filed September 20, 2019.

Nalder v. United Auto. Ins. Co., Supreme Court of Nevada; Case number 79487; pending.

Nalder v. United Auto. Ins. Co., Supreme Court of Nevada; Case number 81510 consolidated with 81710;

pending.

iv

RELATED CASES—Continued

United Automobile Insurance Company v. Christensen,

Arntz & Lewis, U.S. District Court of Nevada; Case

number 2:18-cv-2269; pending.

United Automobile Insurance Company v. Christensen,

Arntz & Lewis, U.S. Court of Appeals, Ninth Circuit;

Case number 20-16729; pending.

United Auto. Ins. Co. v. Eighth Judicial District Court

of Nevada, Supreme Court of Nevada; Case number

80965; Order denying Petition for Writ filed April 22,

2020.

v

TABLE OF CONTENTS

Page

QUESTION PRESENTED...................................

i

PARTIES TO THE PROCEEDINGS ...................

ii

RULE 29.6 DISCLOSURE...................................

ii

RELATED CASES ...............................................

ii

TABLE OF CONTENTS ......................................

v

TABLE OF AUTHORITIES ................................. viii

OPINION BELOW ...............................................

1

BASIS OF JURISDICTION .................................

1

RELEVANT STATUTORY AND CONSTITUTIONAL PROVISIONS ....................................

2

INTRODUCTION ................................................

3

STATEMENT OF THE CASE..............................

6

A.

Legal Framework ......................................

6

B.

Factual and Procedural History ................ 19

REASONS FOR GRANTING THE WRIT............ 24

I.

THE NINTH CIRCUIT’S UNPUBLISHED

ORDER

CONFLICTS

WITH

THIS

COURT’S PRECEDENT AND CREATES A

DIVIDE OVER WHEN AND ON WHAT

GROUNDS JURISDICTION MAY BE

TERMINATED DENYING PLAINTIFFS

THE RIGHT TO TRIAL BY JURY AND

UNDERMINING NEVADA’S INSURANCE

REGULATORY REGIME ........................... 25

vi

TABLE OF CONTENTS—Continued

Page

A. The Ninth Circuit’s Unpublished Order

Creates Inconsistency Over Whether

Appellate Courts May Take Evidence

And Find Facts Contrary To The Trial

Court Record ........................................ 25

B. The Ninth Circuit’s Unpublished Order

Conflicts With This Courts Published

Opinions, The Published Opinions Of

Other Circuit Courts And Even The Published Opinions Of The Ninth Circuit

Which Hold That Federal Appellate

Courts Are Limited To Legal Issues

Raised In The Trial Court, Appealed,

Briefed On Appeal And Decided Based

On The Stage Of The Litigation Below .... 28

C. The Ninth Circuit Acted Beyond Its Appellate Authority Damaging The Federal System Of Respect For And

Faithful Application Of State Law, By

Denying The Right To Trial By Jury ..... 32

II.

THE FAITHFUL APPLICATION OF STATE

STATUTORY AND DECISIONAL LAW

REGULATING INSURANCE COMPANIES

IN DIVERSITY CASES PRESENTS AN

IMPORTANT AND RECURRING QUESTION .......................................................... 35

III.

SUMMARY REVERSAL IN THIS CASE

IS APPROPRIATE ..................................... 36

CONCLUSION..................................................... 37

vii

TABLE OF CONTENTS—Continued

Page

APPENDIX

Opinion of the U.S. Court of Appeals for the

Ninth Circuit (June 4, 2020) ............................ App. 1

Order and Judgment of the United States District Court for the District of Nevada (Oct. 30,

2013) ................................................................. App. 6

Order of the U.S. Court of Appeals for the Ninth

Circuit Denying Petition for Rehearing and

Rehearing En Banc (July 14, 2020) ............... App. 25

FRAP 28(j) letter ............................................... App. 26

Court of Appeals Petition for Panel Rehearing .... App. 68

viii

TABLE OF AUTHORITIES

Page

CASES

Ace v. Aetna Life Insurance, 139 F.3d 1241 (9th

Cir. 1998) .................................................................34

Adickes v. S. H. Kress & Co., 398 U.S. 144, 90

S. Ct. 1598, 26 L.Ed.2d 142 (1970) ..................... 6, 34

Ainsworth v. Combined Ins. Co. of Am., 104 Nev.

587, 763 P.2d 673 (1988) ..................................... 7, 36

Allen v. Wright, 468 U.S. 737 (1984) ...........................16

Allstate Insurance v. Miller, 125 Nev. Adv. Op.

No. 28, 49760 (2009), 212 P.3d 318 (Nev.

2009) .......................................................... 8, 9, 33, 34

Anderson v. Liberty Lobby, Inc., 477 U.S. 242

(1986) ....................................................... 6, 33, 34, 35

Andrew v. Century Sur. Co., 134 F. Supp. 3d 1249

(D. Nev. 2015) ..........................................................22

Barrows v. Jackson, 346 U.S. 249 (1953) ....................16

Beacon Theatres, Inc. v. Westover, 359 U.S. 500

(1959) .......................................................................18

Beck v. Farmers Ins. Exch., 701 P.2d 795 (Utah

1985) ........................................................................10

Bender v. Williamsport Area Sch. Dist., 475 U.S.

534 (1986) ................................................................16

Blakely v. USAA Cas. Ins. Co., No. 15-4059 (10th

Cir. June 27, 2017) ..................................................11

Brosseau v. Haugen, 543 U.S. 194 (2004) ...................36

Cabaness v. Thomas, 232 P.3d 486 (Utah 2010) ........11

ix

TABLE OF AUTHORITIES—Continued

Page

Cavallini v. State Farm Mut. Auto Ins. Co., 44

F.3d 256 (5th Cir. 1995) ...........................................15

Century Sur. Co. v. Andrew, 432 P.3d 180 (Nev.

2018) .................................................. 9, 10, 24, 31, 33

Clinton v. New York, 524 U.S. 417 (1998) ...................10

Cmty. House, Inc. v. City of Boise, 490 F.3d 1041

(9th Cir. 2006)..........................................................14

Continental Ore Co. v. Union Carbide Carbon

Corp., 368 U.S. 886 (1961) .......................................34

Cornhusker Cas. Co. v. Skaj, 786 F.3d 842 (10th

Cir. 2015) ........................................................... 17, 31

DeMarco v. United States, 415 U.S. 449 (1974) ..........26

Erie Railroad v. Tompkins, 304 U.S. 64, 58 S. Ct.

817, 82 L.Ed. 1188 (1938) .........................................6

Gladstone, Realtors v. Village of Bellwood, 441

U.S. 91 ......................................................................15

Health v. Helmick, 173 F.2d 156 (9th Cir. 1949) ........13

Humana Inc. v. Forsyth, 525 U.S. 299

(1999) ................................................... 7, 9, 33, 35, 36

In re Cellular 101, Inc., 539 F.3d 1150 (9th Cir.

2008) ........................................................................13

In re Lockheed Martin Corp., 503 F.3d 351 (4th

Cir. 2007) .................................................................18

In re Zeth S., 31 Cal. 4th 396 (2003) ..........................26

Khan v. Landmark Am. Ins. Co., 326 Ga.App.

539, 757 S.E.2d 151 (2014) .......................................9

x

TABLE OF AUTHORITIES—Continued

Page

Kimes v. Stone, 84 F.3d 1121 (9th Cir.1996) ..............14

Kirshner v. Uniden Corp. of America, 842 F.2d

1074 (9th Cir. 1988) .................................................13

Kreisner v. City of San Diego, 1 F.3d 775 (9th Cir.

1993) ........................................................................14

Lexington Ins. Co. v. Rugg Knopp, Inc., 165 F.3d

1087 (7th Cir. 1999) ...................................................6

Lowry v. Barnhart, 329 F.3d 1019 (9th Cir. 2003) ... 15, 26

Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992).... 15, 16, 29

Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574 (1986) .......................................33

Nalder v. UAIC, 824 F.3d 854 (9th Cir. 2016) ... 21, 22, 24

Nalder v. United Auto. Ins. Co., 500 F. App’x 701

(9th Cir. 2012).................................................... 10, 20

Nalder v. United Auto Ins. Co., 878 F.3d 754 (9th

Cir. 2017) .................................................................19

Overton v. Ohio, 534 U.S. 982, 122 S. Ct. 389

(2001) .......................................................................37

Pakootas v. Teck Cominco Metals, Ltd., 830 F.3d

975 (9th Cir. 2016) ...................................................14

Panaview Door Window Co. v. Reynolds Metals

Co., 255 F.2d 920 (9th Cir. 1958) ............................12

Parmalat Capital Finance Ltd. v. Bank of Am.

Corp., 671 F.3d 261 (2d Cir. 2012) ..........................13

Perry v. Thomas, 482 U.S. 483, 107 S. Ct. 2520,

96 L.Ed.2d 426 (1987) ....................................... 17, 31

xi

TABLE OF AUTHORITIES—Continued

Page

Pershing Park Villas v. United Pacific, 219 F.3d

895 (9th Cir. 2000)................................. 12, 17, 31, 32

Pisciotta v. Old National Bancorp, 499 F.3d 629

(7th Cir. 2007)..........................................................30

Pullman-Standard v. Swint, 456 U.S. 273

(1982) ............................................................. 12, 26, 28

Rhodes v. Stewart, 488 U.S. 1 (1988) ..........................36

Ripplinger v. Collins, 868 F.2d 1043 (1989) ...............16

Rosado v. Wyman, 397 U.S. 397 (1970)................. 18, 32

San Diego Navy Federal Credit Union v. Cumis

Insurance Society, Inc., 162 Cal. App. 3d 358,

208 Cal. Rptr. 494 (Ct. App. 1984) ............................8

Sierra Club v. Morton, 405 U.S. 727 (1972) ...............10

Smith v. Sperling, 354 U.S. 91 (1957)................... 18, 32

Smithers v. Smith, 204 U.S. 632 (1907) ................ 18, 32

Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) ............11

St. Paul Mercury Indemnity Co. v. Red Cab Co.,

303 U.S. 283 (1938) ........................................... 18, 32

State Farm Mut. Auto. Ins. Co. v. Hansen, 131

Nev. Adv. Op. 74 (9/24/2015)......................................8

State Farm Mutual Automobile Insurance v.

Pate, 275 F.3d 666 (7th Cir. 2001) .............................6

Stephens v. C.I.T. Group/Equipment Financing,

Inc., 955 F.2d 1023 (5th Cir. 1992) .................... 14, 29

Sycuan Band of Mission Indians v. Roache, 54

F.3d 535 (9th Cir. 1995) ..................................... 17, 32

xii

TABLE OF AUTHORITIES—Continued

Page

Tex. Democratic Party v. Benkiser, 459 F.3d 582

(5th Cir. 2006)..........................................................10

Texas v. United States, No. 19-10011 (5th Cir.

Dec. 18, 2019) ..........................................................12

Torres de la Cruz v. Maurer, 483 F.3d 1013 (10th

Cir. 2007) .................................................................11

Tupman v. Haberkern, 208 Cal. 256 (1929) ...............26

United Food and Commercial Workers Union Local

751 v. Brown Group, Inc., 517 U.S. 544 (1996) ...........16

United States Fidelity Guaranty Co. v. Peterson,

91 Nev. 617, 540 P.2d 1070 (1975) .................. 7, 8, 36

United States v. Dreyer, 804 F.3d 1266 (9th Cir.

2015) ........................................................................13

United States v. Green, 964 F.2d 365 (5th Cir.

1992) ........................................................................14

United States v. McEnry, 659 F.3d 893 (9th Cir.

2011) ........................................................................14

United States v. Porter, 405 F.3d 1136 (10th Cir.

2005) .................................................................. 14, 29

United States v. Raines, 362 U.S. 17 (1960) ...............16

United States v. Walker, 601 F.2d 1051 (9th Cir.

1979) .................................................................. 12, 13

Village of Elk Grove Village v. Evans, 997 F.2d

328 (7th Cir.1993) ............................................. 12, 30

Vt. Agency of Nat. Res. v. United States, 529 U.S.

765 (1998) ................................................................10

xiii

TABLE OF AUTHORITIES—Continued

Page

Wall v. Astrue, 561 F.3d 1048 (10th Cir. 2009) ..... 11, 14

Warth v. Seldin, 422 U.S. 490 (1975) ..........................15

Watson v. Rhode Island Ins. Co., 196 F.2d 254

(5th Cir. 1952)..........................................................13

Wichita Royalty Co. v. City Nat’l Bank, 306 U.S.

103, 59 S. Ct. 420, 83 L.Ed. 515 (U.S. Tex. Jan.

30, 1939) ....................................................................6

Zenith Radio Corp. v. Hazeltine Research, Inc.,

395 U.S. 100 (1969) .................................................26

STATUTES AND CONSTITUTIONAL PROVISIONS

28 U.S.C. § 1254(1) ........................................................2

28 U.S.C. § 1332 ............................................................6

28 U.S.C. § 1332(a) ........................................................2

Nev. Const. Art. I, § 3 ....................................................2

Nev. Rev. Stat. § 42.005(1) ............................................9

Nev. Rev. Stat. § 686A.010 .................................. 7, 8, 35

Nev. Rev. Stat. § 686A.310 ...................... 3, 4, 20, 21, 32

U.S. Const. Amend. VII .................................................2

U.S. Const. Art. III, § 2.......................... 2, 10, 11, 16, 27

RULES

Fed.R.App.P. 28(a)(6) ..................................................15

Fed.R.App.P. 28(j) ................................................. 24, 30

xiv

TABLE OF AUTHORITIES—Continued

Page

Fed.R.Civ.P. 52(a)(6)....................................................25

Fed.R.Civ.P. 56(c) ........................................................33

OTHER AUTHORITIES

C. Wright, Federal Courts § 33 (1963) ................. 18, 32

1

No. 20-________

---------------------------------♦---------------------------------

In The

Supreme Court of the United States

---------------------------------♦---------------------------------

GARY LEWIS, ET AL.,

Petitioners,

v.

UNITED AUTOMOBILE INSURANCE COMPANY,

Respondent.

---------------------------------♦---------------------------------

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

---------------------------------♦---------------------------------

PETITION FOR A WRIT OF CERTIORARI

OPINION BELOW

The memorandum opinion of the United States

Court of Appeals for the Ninth Circuit is unpublished.

---------------------------------♦---------------------------------

BASIS FOR JURISDICTION

The Ninth Circuit Court’s unpublished order dismissing the appeal was filed on June 4, 2020. Lewis

and Nalder timely filed a petition for rehearing and rehearing en banc, which was denied on July 14, 2020.

2

This Court has jurisdiction of this petition to review

pursuant to 28 U.S.C. § 1254(1).

---------------------------------♦---------------------------------

RELEVANT STATUTORY AND

CONSTITUTIONAL PROVISIONS

U.S. Constitution, Article III, § 2 provides, in relevant part:

The judicial Power shall extend to all cases, in

law and equity, . . . to controversies . . . between Citizens of different States;

Amendment VII

In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by

jury shall be preserved, and no fact tried by a jury, shall

be otherwise re-examined in any Court of the United

States, than according to the rules of the common law.

28 U.S.C. § 1332(a) The district courts shall have

original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000,

exclusive of interest and costs, and is between—

(1) citizens of different States;

Nevada Constitution Article I, § 3. Provides, in relevant part: Trial by jury; waiver in civil cases. The

right of trial by Jury shall be secured to all and remain

inviolate forever; but a Jury trial may be waived by the

parties in all civil cases in the manner to be prescribed

by law.

3

NRS 686A.310 Unfair practices in settling

claims; liability of insurer for damages.

1. Engaging in any of the following activities is

considered to be an unfair practice:

(a)

. . . (p) . . .

2. In addition to any rights or remedies available

to the Commissioner, an insurer is liable to its insured

for any damages sustained by the insured as a result

of the commission of any act set forth in subsection 1

as an unfair practice.

(Added to NRS by 1975, 1285; A 1987, 1067; 1991,

2202)

---------------------------------♦---------------------------------

INTRODUCTION

This case presents the important question of

whether, despite a legally supported award of partial

damages on summary judgment, an alleged reduction

in one item of damage occurring post judgment, during

appeal, can be raised for the first time late in an appeal

and divest just the appellate court of jurisdiction in a

diversity case while Plaintiffs still have standing and

damages and the district court maintains jurisdiction.

Plaintiffs appealed from the trial court’s judgment

entered in their favor on Plaintiffs’ motion for partial

summary judgment and Defendant’s cross motion for

summary judgment. The trial court found the full judgment as uncontroverted damages, but limited the

4

award in its judgment to the insurance policy limit.

This finding of damage and award of damages conclusively establishes Plaintiffs’ standing. The Defendant

did not contest the judgment as damages below, nor did

Defendant appeal the damages awarded on partial

summary judgment. The parties briefed the issues on

appeal, including the issue of the granting of partial

summary judgment which cut off Plaintiffs’ right under Nevada law to have two material issues of fact

decided by a jury: 1. The question of the full consequential damages for breach of the duty to defend; and, 2.

Whether the Defendant’s actions breached the duty of

affirmative good faith and fair dealing or violated the

unfair claims settlement practices act in NRS

686A.310 causing further damage to Plaintiffs.

After being fully briefed, these issues were argued

orally before the Ninth Circuit panel. Regarding the

first issue, the parties then fully briefed a certified

question to the Nevada Supreme Court. Following the

completed briefing to the Nevada Supreme Court, and

perhaps sensing impending loss of the appeal, Defendant raised a new issue, couched as “standing” and not

before presented to any court. Four years into the appeal, and three years after the alleged lapse of only one

of the items of damage, Defendant raised a substantive

fact-dependent damage issue labeled as a “standing”

issue. It was presented as “standing” to work around

having not raised the issue earlier in the appeal, nor

in the trial court. The newly claimed loss of “standing”

was not raised in the court below in response to Plaintiffs’ motion for partial summary judgment, was

5

contradicted by the finding that the Nevada state court

judgment against the insured damaged him and

awarding the policy limits to Plaintiffs (which Defendant failed to appeal), was contradicted by the record

on appeal (which the Ninth circuit did not supplement), was not raised in the appellate brief, was not

raised at oral argument, and was not raised in the

briefing of the first certified question to the Nevada

Supreme Court.

The Ninth Circuit’s unpublished order invites

abusive and wasteful litigation. The Appellate Court

must base its review on the trial court record and its

rulings must be consistent with the trial court’s factual

findings. If the Ninth Circuit is not checked, then in

every case where a Plaintiff has been awarded a partial summary judgment prior to trial and standing is

challenged for the first time on appeal, the Plaintiff

will lose. Either a Plaintiff has no additional damages

than those found by the trial court, or, even if the Plaintiff has additional damages, they will not be allowed to

present them because they were not part of the trial

record when the case was summarily decided. By giving the Defendant insurance company a “free pass” after so many years of litigation and only after it lost on

appeal, the Ninth Circuit encourages this type of abuse

and waste. The Ninth Circuit’s unpublished order also

undermines Nevada’s insurance regulatory regime. To

foreclose such abuse in the future, this Court should

grant certiorari, or, in the alternative, summarily reverse the Ninth Circuit’s unpublished order.

---------------------------------♦---------------------------------

6

STATEMENT OF THE CASE

A. Legal Framework

1.

Under diversity jurisdiction, a federal

court must apply the substantive law of

the state. 28 U.S.C. § 1332 provides diversity

jurisdiction in the federal courts over state

law claims. In fulfilling the mandate of Erie

Railroad v. Tompkins, 304 U.S. 64, 58 S. Ct.

817, 82 L.Ed. 1188 (1938), a United States district court sitting in diversity must apply the

law of the state as it believes the highest court

of the state would apply it if the issue were

presently before that tribunal. See Erie, 304

U.S. at 80, 58 S. Ct. 817; see also Wichita Royalty Co. v. City Nat’l Bank, 306 U.S. 103, 107,

59 S. Ct. 420, 83 L.Ed. 515 (1939); Lexington

Ins. Co. v. Rugg Knopp, Inc., 165 F.3d 1087,

1090 (7th Cir. 1999). State Farm Mutual Automobile Insurance v. Pate, 275 F.3d 666, 669

(7th Cir. 2001). This includes the right to a

jury trial of state claims. “[R]uling on summary judgment motions does not denigrate

the role of the jury. It by no means authorizes

trial on affidavits. Credibility determinations,

the weighing of the evidence, and the drawing

of legitimate inferences from the facts are jury

functions, not those of a judge, whether he is

ruling on a motion for summary judgment or

for a directed verdict. The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

255 (1986), quoting Adickes v. S. H. Kress &

Co., No. 79, 398 U.S. 158-159 (1970).

7

2.

The substantive law of the State of Nevada provides an insurance regulatory

regime that relies heavily on private enforcement through damage awards to insureds. This court has recognized that

Nevada has a comprehensive statutory and

common-law insurance regulatory regime

which relies heavily on private causes of action brought by policyholders. “Nevada provides both statutory and common-law

remedies to check insurance fraud.” Humana

Inc. v. Forsyth, 525 U.S. 299, 311 (1999) “The

Nevada Unfair Insurance Practices Act, Nev.

Rev. Stat. § 686A.010 et seq. (1996), . . . , is a

comprehensive administrative scheme that

prohibits various forms of insurance fraud

and misrepresentation.” Id. at 311, 312. In Nevada the insured is typically the enforcement

mechanism through a private right of action.

“The Unfair Insurance Practices Act authorizes a private right of action for violations of a

number of unfair insurance practices.” Id. at

312. “Moreover, the Act is not hermetically

sealed; it does not exclude application of other

state laws, statutory or decisional. Specifically, Nevada law provides that an insurer is

under a common-law duty “to negotiate with

its insureds in good faith and to deal with

them fairly.” Ainsworth v. Combined Ins. Co. of

Am., 104 Nev. 587, 592, 763 P.2d 673, 676

(1988); see United States Fidelity Guaranty

Co. v. Peterson, 91 Nev. 617, 620, 540 P.2d

1070, 1071 (1975) (recognizing tort action

against insurance company for breach of implied covenant of good faith and fair dealing).”

8

Id. at 617, 619. Damages available to Nevada

insureds include that an insurer must pay for

independent counsel where there is a conflict

of interest. San Diego Navy Federal Credit

Union v. Cumis Insurance Society, Inc., 162

Cal. App. 3d 358, 208 Cal. Rptr. 494 (Ct. App.

1984) and State Farm Mut. Auto. Ins. Co. v.

Hansen, 131 Nev. Adv. Op. 74 (9/24/2015).

3.

Nevada’s insurance regulatory regime

requires that issues of breach and damages are questions of fact and must be

submitted to the jury. Nevada’s insurance

regulatory regime establishes that the questions of breach of the duty of affirmative good

faith and fair dealing or violation of the Nev.

Rev. Stat. § 686A.010 et seq. (1996), particularly regarding breach of the duty to defend

including adequately communicating settlement offers, is a question of fact for the

jury to decide and is therefore not properly

disposed of by summary judgment. In Allstate

Insurance v. Miller, 125 Nev. Adv. Op. No. 28,

49760 (2009), 212 P.3d 318, 13 (Nev. 2009),

the Nevada Supreme Court has made it clear

that the reasonableness of an insurer’s actions are for jury determination. “Allstate

never told Miller about the details of Hopkins’

settlement offer. Therefore, there is a factual

dispute as to whether Allstate complied with

its duty to adequately inform Miller of the

offer and to protect Miller’s interests.” Id. The

substantive law of Nevada requires that the

failure to inform an insured of a settlement

opportunity is a genuine material issue of fact

that must be submitted to the jury. “We now

9

join these jurisdictions and conclude that an

insurer’s failure to adequately inform an insured of a settlement offer is a factor for the

trier of fact to consider when evaluating a

bad-faith claim.” Id. at 318, 325. This Court

has recognised that the individual insured

may recover consequential and punitive damages for violations of the unfair claims practices act and breach of the duty of affirmative

good faith and fair dealing. “In addition, . . . an

insurer is liable to its insured for any damages sustained by the insured as a result of

the commission of any act set forth in subsection 1 as an unfair practice. . . . Furthermore,

aggrieved insured parties may be awarded

punitive damages if a jury finds clear and convincing evidence that the insurer is guilty of

‘oppression, fraud or malice.’ Nev. Rev. Stat.

§ 42.005(1) (1995).” Humana at 313 (1999).

Nevada has also decided in Century Sur.

Co. v. Andrew, 432 P.3d 180, 186 (Nev. 2018),

that the consequential damages, specifically

from a breach of the duty to defend, are for the

jury to decide. “The determination of the insurer’s liability depends on the unique facts of

each case and is one that is left to the jury’s

determination. See Khan v. Landmark Am.

Ins. Co., 326 Ga.App. 539, 757 S.E.2d 151, 155

(2014) (‘[W]hether the full amount of the judgment was recoverable was a jury question

that depended upon what damages were

found to flow from the breach of the contractual duty to defend.’).” Century Sur. Co. v.

Andrew, 432 P.3d 180, 186 (Nev. 2018).

10

This general rule that the consequential

damages presents a jury question, as expressed in Century Sur. Co. was applied directly to these parties by the Nevada Supreme

Court in answering the certified questions.

“UAIC’s argument—essentially that UAIC’s

refusal to defend in this case was more reasonable than the insurer’s refusal to defend in

Century Surety—is undermined by Century

Surety’s holding ‘that good-faith determinations are irrelevant for determining damages

upon a breach of [the duty to defend].’ ” Nalder

v. United Auto. Ins. Co., No. 70504, at *2 (Nev.

Sep. 20, 2019).

It goes without saying that these type of

economic damages are appropriate damages

upon which to base standing, as this Court

and both the Fifth and Tenth Circuits have

found. “Economic injury” of this sort is “a

quintessential injury upon which to base

standing.” Tex. Democratic Party v. Benkiser,

459 F.3d 582, 586 (5th Cir. 2006); see also Vt.

Agency of Nat. Res. v. United States, 529 U.S.

765, 772-77 (1998) (finding Article III injury

from financial harm); Clinton v. New York, 524

U.S. 417, 432 (1998) (same); Sierra Club v.

Morton, 405 U.S. 727, 733-34 (1972). “The

Utah Supreme Court has explained that insurance is purchased to ‘provide peace of

mind.’ Beck v. Farmers Ins. Exch., 701 P.2d

795, 802 (Utah 1985). And a breach of the implied covenant of good faith for a contract that

is “specifically directed toward matters of

mental concern and solicitude” is likely to result in damages for emotional distress and

11

mental anguish. Cabaness v. Thomas, 232

P.3d 486, 508 (Utah 2010).” Blakely v. USAA

Cas. Ins. Co., No. 15-4059, at *42-43 (10th Cir.

June 27, 2017).

4.

The trial court finding damages and reducing a portion to judgment, when not

appealed, establishes Article III standing. In Spokeo, Inc. v. Robins, 136 S. Ct. 1540

(2016), this Court held that a statutory violation alone does not confer Article III standing.

Instead, standing requires the Plaintiff to allege and prove a “concrete injury” caused by

the statutory violation. Id. at 1549. In this

case, the trial court found and awarded damages to Plaintiffs. In order to faithfully apply

Nevada substantive law and “[i]n order to preserve the integrity of the appellate structure,

[the appellate courts] should not be considered a ‘second-shot’ forum . . . where secondary, back-up theories may be mounted for the

first time. Parties must be encouraged to give

it everything they’ve got at the trial level.

Thus, an issue must be presented to, considered and decided by the trial court before it

can be raised on appeal.” Torres de la Cruz v.

Maurer, 483 F.3d 1013, 1023 (10th Cir. 2007).

Wall v. Astrue, 561 F.3d 1048, 1067 n.25 (10th

Cir. 2009). The appellate court decides issues

based on the record as it presented to the

trial court, especially regarding factual issues

like the damages awarded in a judgment.

“Reliance does not dispute the jury’s wellsupported conclusion that it breached the covenant of good faith and fair dealing when it

wrongfully withdrew the developers’ defense.”

12

Pershing Park Villas v. United Pacific, 219

F.3d 895, 902 “The jury found that Reliance’s

withdrawal of the developers’ defense in the

construction-defect suit resulted in entry of a

default judgment . . . There can be no question

that these injuries are concrete, traceable to

Reliance’s conduct, and remediable by money

damages.” Id. at 895, 900 (9th Cir. 2000). Failure of only one item of damage does not destroy jurisdiction. Village of Elk Grove Village

v. Evans, 997 F.2d 328, 329 (7th Cir. 1993) “Accordingly, the district court expressly found

that Hurley and Nantz bought health insurance because they are obligated to, and we

must defer to that factual finding.” Texas v.

United States, No. 19-10011, at *20 (5th Cir.

Dec. 18, 2019). “The intervenor-defendant

states fail to point to any evidence contradicting these declarations, and they did not challenge this evidence in the district court.” Texas

v. United States, No. 19-10011, at 20 (5th Cir.

Dec. 18, 2019).

5.

An appellate court must base its actions

on the appellate record. Fact finding is the

“basic responsibility” of trial courts “rather

than appellate courts.” Pullman-Standard v.

Swint, 456 U.S. 273, 291 (1982). “Papers not

filed with the district court or admitted into

evidence in that court are not part of the

clerk’s record and cannot be part of the record

on appeal.” See United States v. Walker, 601

F.2d 1051, 1054-55 (9th Cir. 1979) (affidavits

that “were not part of the evidence presented

to the district court” would not be considered

on appeal); Panaview Door Window Co. v.

13

Reynolds Metals Co., 255 F.2d 920, 922 (9th

Cir. 1958) (striking from record an exhibit

that had been attached to appellant’s trial

court memorandum of points and authorities

and a document that had been marked for

identification, neither of which had been received in evidence); Watson v. Rhode Island

Ins. Co., 196 F.2d 254, 255-56 (5th Cir. 1952)

(granting motion to strike documents that

were tendered as exhibits to brief on appeal

but that had not been offered in evidence below). Kirshner v. Uniden Corp. of America, 842

F.2d 1074, 1077 (9th Cir. 1988). See Walker,

601 F.2d at 1055 (“We are here concerned only

with the record before the trial judge when his

decision was made.”); Health v. Helmick, 173

F.2d 156, 156-57 (9th Cir. 1949) (striking from

record on appeal papers that were filed in district court after judgment from which appeal

was taken) (“The cause must be tried here

upon the record made at the original trial.”).”

Id. at 1074, 1077-78.

6.

Even issues raised in the trial court and

appealed are waived if not also raised in

the first brief filed on appeal. Not only

must a party raise an issue in the trial court

and appeal the issue, a party must also raise

the issue in its first brief on appeal. Raise it or

waive it is the rule on appeal. United States v.

Dreyer, 804 F.3d 1266, 1277 (9th Cir. 2015)

(“Generally, an appellee waives any argument

it fails to raise in its answering brief.”); In re

Cellular 101, Inc., 539 F.3d 1150, 1155 (9th

Cir. 2008); cf. Parmalat Capital Finance Ltd.

v. Bank of Am. Corp., 671 F.3d 261, 270-71 (2d

14

Cir. 2012) (parties waived argument by failing

to raise it in the first round of appeal). Supplemental briefs are not the place for new substantive arguments. Pakootas v. Teck Cominco

Metals, Ltd., 830 F.3d 975, 986 n. 12 (9th Cir.

2016) (citing United States v. McEnry, 659

F.3d 893, 902 (9th Cir. 2011)); Kreisner v. City

of San Diego, 1 F.3d 775, 778 n.2 (9th Cir.

1993). “We, therefore, refuse to address Claimant’s argument for the first time on appeal.

See United States v. Porter, 405 F.3d 1136,

1141-42 (10th Cir. 2005) (“We do not consider

issues not presented to the district court, and

they are deemed waived.”).” Wall v. Astrue,

561 F.3d 1048, 1067 (10th Cir. 2009) “We will

review an issue that has been raised for the

first time on appeal under certain narrow circumstances . . . [:](1) to prevent a miscarriage

of justice; (2) when a change in law raises a

new issue while an appeal is pending; and (3)

when the issue is purely one of law.” Kimes v.

Stone, 84 F.3d 1121, 1126 (9th Cir. 1996) (internal citations omitted). “The decision to

consider an issue not raised below is discretionary, and such an issue should not be decided if it would prejudice the other party.” Id.

“Needless to say, we do not consider issues

raised for the first time in a reply brief. See

Stephens v. C.I.T. Group/Equipment Financing, Inc., 955 F.2d 1023, 1026 (5th Cir. 1992).”

Cmty. House, Inc. v. City of Boise, 490 F.3d

1041, 1053 (9th Cir. 2006). Moreover, the failure to provide any legal or factual analysis of

an issue results in waiver of that issue. See

United States v. Green, 964 F.2d 365, 371 (5th

15

Cir. 1992), cert. denied, ___ U.S. ___, 113 S. Ct.

984, 122 L.Ed.2d 137 (1993); Fed.R.App.P.

28(a)(6).” “Supplementing the appellate record is possible only “in extraordinary cases”

and only to support substantive arguments

properly before the Court. Lowry v. Barnhart,

329 F.3d 1019, 1024-25 (9th Cir. 2003).” Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d

256, 260 n.9 (5th Cir. 1995).

7.

Prior to trial below, allegations of damage must be accepted as true, even on appeal. The test for standing and the level of

proof required changes as a case proceeds.

Lujan v. Defs. of Wildlife, 504 U.S. 555, 561

(1992). To satisfy the standing requirement

throughout the Plaintiff ’s case, “each element

must be supported in the same way as any

other matter on which the Plaintiff bears the

burden of proof, i.e., with the manner and degree of evidence required at the successive

stages of the litigation.” Id. Thus, at the pleading stage, factual allegations of injury suffice;

at summary judgment, the Plaintiff must offer facts; and at trial, “those facts (if controverted) must be ‘supported adequately by the

evidence adduced at trial.” Id. (quoting Gladstone, Realtors v. Village of Bellwood, 441 U.S.

91, 115 n. 31 (1979)).

8.

Prudential standing improperly raised

is subject to waiver. At the most general

level, “[the standing] inquiry involves both

constitutional limitations on federal-court jurisdiction and prudential limitations on its

exercise.” Warth v. Seldin, 422 U.S. 490, 498

16

(1975). Constitutional standing concerns

whether the Plaintiff ’s personal stake in the

lawsuit is sufficient to make out a concrete

“case” or “controversy” to which the federal judicial power may extend under Article III, § 2.

See United Food and Commercial Workers

Union Local 751 v. Brown Group, Inc., 517

U.S. 544, 551 (1996); Lujan, 504 U.S. at 555,

559. Beyond this constitutional core, “the prudential doctrine of standing has come to encompass ‘several judicially self-imposed limits

on the exercise of federal jurisdiction.’ ” Brown

Group, 517 U.S. at 551 (quoting Allen v.

Wright, 468 U.S. 737, 751 (1984)). To satisfy

the standing requirement throughout the

Plaintiff ’s case, “each element must be supported in the same way as any other matter

on which the Plaintiff bears the burden of

proof, i.e., with the manner and degree of evidence required at the successive stages of

the litigation. Lujan, 504 U.S. at 555, 561.

Principles of prudential standing are not “ordained by the Constitution, but constitute rather ‘rule(s) of practice,’ albeit weighty ones;

hence some exceptions to them where there

are weighty countervailing policies have been

and are recognized.” United States v. Raines,

362 U.S. 17, 22 (1960) (alteration in original)

(citation omitted) (quoting Barrows v. Jackson, 346 U.S. 249, 257 (1953)). “Because issues

of constitutional standing are jurisdictional,

they must be addressed whenever raised. See

Ripplinger v. Collins, 868 F.2d 1043, 1046-47

(9th Cir. 1989) (citing Bender v. Williamsport

Area Sch. Dist., 475 U.S. 534, 541-42 (1986)).

17

By contrast, a party waives objections to nonconstitutional standing not properly raised

before the district court. See Sycuan Band of

Mission Indians v. Roache, 54 F.3d 535, 538

(9th Cir. 1995) (as amended).” Pershing Park

Villas v. United Pacific, 219 F.3d 895, 899-900

(9th Cir. 2000).

9.

Just framing an issue as “standing” does

not allow its consideration at any time.

This Court has dispelled the notion that a

“ ‘standing’ argument [that] simply presents a

straightforward issue of contract interpretation” can serve as a legally cognizable “standing” argument. Perry v. Thomas, 482 U.S. 483,

492, 107 S. Ct. 2520, 96 L.Ed.2d 426 (1987).

“Perry . . . makes clear that Cornhusker’s purported standing argument does not implicate

our subject-matter jurisdiction. In other

words, it is not a true standing argument, in

the conventional sense, at all.” Cornhusker

Cas. Co. v. Skaj, 786 F.3d 842, 851 (10th Cir.

2015). Consistent with those decisions, this

Court has refused to adopt a strict rule requiring that if a litigant claims an issue is a standing issue, the court can consider it without

regard to its proper development below. “We

likewise decline to reach Thomas’ contention

that Perry and Johnston lack “standing” to enforce the agreement to arbitrate any of these

claims, since the courts below did not address

this alternative argument for refusing to compel arbitration.” Perry, 482 U.S. at 483, 492.

It has therefore rejected an approach that

would require dismissal of contrived “standing” arguments. Such an approach defies “the

18

common sense policy—the conservation of judicial energy and the avoidance of multiplicity

of litigation” Rosado v. Wyman, 397 U.S. 397,

405 (1970) “the well-settled rule that a federal

court does not lose jurisdiction over a diversity action which was well founded at the outset even though one of the parties may later

change domicile or the amount recovered falls

short of $10,000. See Smith v. Sperling, 354

U.S. 91, 93 n. 1 (1957); St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289290 (1938); Smithers v. Smith, 204 U.S. 632

(1907); see generally C. Wright, Federal Courts

§ 33, pp. 93-94 (1963).” Rosado, 397 U.S. at

397, 405 .

10. Jury trial is a constitutional right provided to civil litigants by both the U.S.

and Nevada constitutions. “We are inclined to the view that General’s petition for

Writ of Mandamus is properly before us for

consideration since the question presented

pertains to a denial of the constitutional right

to trial by jury.”); see also Beacon Theatres, Inc.

v. Westover, 359 U.S. 500, 511, 79 S. Ct. 948, 3

L.Ed.2d 988 (1959) (“[T]he right to grant mandamus to require jury trial where it has been

improperly denied is settled.”). In re Lockheed

Martin Corp., 503 F.3d 351, 353 (4th Cir.

2007).

19

B.

Factual and Procedural History

1

1.

UAIC is a non-standard insurer that issues

policies on a deceptive “monthly” basis to skirt

certain requirements of Nevada and other

states insurance regulatory regimes.

2.

On July 8, 2007, Gary Lewis, insured by

UAIC, negligently caused severe injuries to

nine-year-old Cheyanne Nalder (born April 4,

1998).1

3.

James Nalder (“Nalder”), Cheyanne’s father,

made an offer to UAIC to settle Cheyanne’s

claim for $15,000, the insurance policy limit.

UAIC rejected the offer, never informing its

insured, Lewis, that Nalder was willing to settle.

4.

Nalder sued Lewis in Nevada state court

(Case No.07A549111). UAIC was notified of

the lawsuit but declined to defend Lewis or

file a declaratory relief action regarding coverage. Nalder obtained a judgment against

Lewis for $3,500,000.00. Notice of entry of

judgment was filed on August 26, 2008.

5.

After judgment was entered, Lewis and

Nalder filed suit against UAIC in state court

(State Court Case No. A-09-590967-C) to

establish coverage and alleged general, special and punitive damages consequential to

breach of contract, breach of the covenant of

affirmative good faith and fair dealing, fraud,

and violation of Nevada Revised Statute

The statement of facts herein is based on Nalder v. United

Auto Ins. Co., 878 F.3d 754 (9th Cir. 2017).

20

§ 686A.310. Lewis and Nalder entered into a

settlement agreement in lieu of execution on

the judgment, which immediately damaged

Lewis in an amount in excess of the judgment

as he transferred valuable rights to Nalder as

payment on the judgment. The case was removed by UAIC to Federal Court based on diversity jurisdiction (Case No. 2:09-cv-01348ECR-GWF).

6.

UAIC moved for summary judgment on the

basis that Lewis had no insurance coverage

on the date of the accident. Lewis opposed the

motion arguing that Lewis was covered on the

date of the accident because the renewal notice was ambiguous as to when payment had

to be received to avoid a lapse in coverage, and

that this ambiguity had to be construed in favor of the insured as a matter of law. The district court agreed with UAIC but was later

reversed by the Ninth Circuit Court of Appeals. Nalder v. United Auto. Ins. Co., 500 F.

App’x 701, 702 (9th Cir. 2012).

7.

On remand, on October 30, 2013, the district

court granted partial summary judgment to

each party. (App. 6-24) First, the court found

the renewal statement ambiguous, so it construed this ambiguity against UAIC as required by Nevada’s insurance regulatory

regime by finding that Lewis was covered on

the date of the accident. Second, the court

found that UAIC breached its duty to defend

Lewis and that Lewis was damaged in the

amount of the state court judgment entered

against him but sua sponte capped the award

21

of damages in the amount of the policy limits.

Third, the court took the issue of the reasonableness of UAIC’s breach of the duty to defend,

breach of the duty of affirmative good faith

and fair dealing and violation of NRS

686A.310 away from the jury and construed

disputed facts regarding the reasonableness

of UAIC’s actions in favor of the movant UAIC.

UAIC made three payments that Lewis paid

to Nalder on the judgment pursuant to the assignment agreement: on June 23, 2014; on

June 25, 2014; and on March 5, 2015, but

made no effort to defend Lewis or relieve him

of the full amount of the judgment against

him.

8.

Lewis appealed (Case No 13-17441 Federal

Court, Appeal No. 2) both the limitation of the

award of damages to the policy limits in the

October 30, 2013 judgment and the taking

from the jury the question of the reasonableness of UAIC’s denial of coverage, refusal to

defend and failure to communicate settlement

offers. UAIC did not appeal the damages

found or awarded. The parties filed appellate

briefs and argued the issues to the Ninth Circuit. In Nalder v. UAIC, 824 F.3d 854 (9th Cir.

2016), the following question was then certified to the Nevada Supreme Court:

Whether, under Nevada law, the liability of an insurer that has breached

its duty to defend, but has not acted

in bad faith, is capped at the policy

limit plus any costs incurred by the

insured in mounting a defense, or is

22

the insurer liable for all losses consequential to the insurer’s breach? Id.

at 855.2

9.

The first certified question was fully briefed

when UAIC, for the first time, moved to dismiss the appeal for lack of standing because

the ability of Nalder to execute further on the

judgment against Lewis had allegedly expired. Lewis opposed the motion on the

grounds that regardless of the claimed expiration, Lewis had already been awarded damages, had suffered damage by the assignment

agreement, had alleged other damages, had

alleged punitive damages, and had appealed

the district court’s refusal to submit the question of reasonableness of UAIC’s actions to the

jury. Lewis also objected that the framing as a

lack of standing was improper and that the

question of proof of damages which necessarily involves factual issues should be submitted to the trial court on remand.

10. Nalder took action against Lewis, as UAIC

suggested she should do, in Nevada and in

California, to assure and confirm the continued ability to collect her judgment from Lewis.

The resulting Nevada and California state

2

The first certified question arose in light of conflicting opinions within the Nevada District Court. Unlike Judge Jones’ decision to cap damages in the underlying Nalder case, the Hon.

Andrew P. Gordon issued a directly opposite decision in Andrew

v. Century Sur. Co., 134 F. Supp. 3d 1249 (D. Nev. 2015), whereby

Judge Gordon ruled “[t]here is no special rule for insurers that

caps their liability at policy limits for a breach of the duty to defend.” Id. at 1249.

23

court judgments are further harming Lewis.

These judgments arose as a consequence of

UAIC’s attempts to escape responsibility by

making misrepresentations to the Federal

and State Courts and putting its interests

ahead of its insured’s interests—further violations of Nevada’s insurance regulatory regime. UAIC has also failed to recognize and

pay Breen Arntz who Lewis hired as independent Cumis/Hansen counsel defending the

ongoing state court action brought by Nalder.

11. The Ninth Circuit Court of Appeals certified a

second question to the Nevada Supreme

Court, which the Nevada Supreme Court restated as follows:

In an action against an insurer for

breach of the duty to defend its insured, can the Plaintiff continue to

seek consequential damages in the

amount of a default judgment

against the insured when the judgment against the insured was not renewed and the time for doing so

expired while the action against the

insurer was pending?

12. Rather than letting the ongoing litigation process unfold in the Ninth Circuit Court of Appeals and Nevada District Court, UAIC has

further damaged its insured Lewis, and his

attorneys by filing a SLAPP lawsuit alleging

medieval barratry.

13. The first and second certified questions were

answered by the Nevada Supreme Court on

24

December 13, 2018, in a related case wherein

the Nevada Supreme Court held:

In answering the certified question,

we conclude that an insured may recover any damages consequential to

the insurer’s beach of its duty to defend. As a result, an insurer’s liability

for the breach of the duty to defend is

not capped at the policy limits, even

in the absence of bad faith. Century

Sur. Co. v. Andrew, 432 P.3d 180, 186,

134 Nev. Adv. Op. 100 (Nev. 2018).

(App. 28-43).

14. Thirteen years into the litigation the Ninth

Circuit disregarded the law expressed by the

Nevada Supreme Court in Andrew and

Nalder, the record finding and awarding damages in the court below, the Fed.R.App.P. 28(j)

letter, and dismissed the appeal for lack of

standing based on no damages.

15. Lewis petitioned for rehearing and rehearing

en banc. (App. 68-89) That petition was denied

on July 14, 2020. (App. 25)

---------------------------------♦---------------------------------

REASONS FOR GRANTING THE WRIT

The Court should grant the writ to decide important questions regarding the Appellate Court’s ability to decline jurisdiction, to make factual findings

contrary to the factual findings of the trial court (about

post-judgment events not contained in the record) and

to disregard Nevada’s insurance regulatory regime.

25

I.

THE NINTH CIRCUIT’S UNPUBLISHED

ORDER CONFLICTS WITH THIS COURT’S

PRECEDENT AND CREATES A DIVIDE

OVER WHEN AND ON WHAT GROUNDS

JURISDICTION MAY BE TERMINATED,

DENYING PLAINTIFFS THE RIGHT TO

TRIAL BY JURY AND UNDERMINING NEVADA’S INSURANCE REGULATORY REGIME.

A. The Ninth Circuit’s Unpublished Order

Creates Inconsistency Over Whether Appellate Courts May Take Evidence And

Find Facts Contrary To The Trial Court

Record.

1.

Trial courts issue findings of fact and conclusions of law. Under Federal Rule of Civil Procedure 52(a)(6), “[f ]indings of fact, whether

based on oral or other evidence, must not be

set aside unless clearly erroneous, and the reviewing court must give due regard to the

trial court’s opportunity to judge the witnesses’ credibility.” Stability and judicial economy is promoted by recognizing that the trial

court, not the appellate tribunal, should be

the finder of the facts. To permit courts of appeals to share more actively in the fact-finding

function undermines the legitimacy of the district courts in the eyes of litigants, multiplies

appeals by encouraging appellate retrial of

factual issues, and needlessly reallocates judicial authority. In this case, the Ninth Circuit

received and evaluated facts alleged by the

Defendant, all occurring post-judgment, and

26

used unsubstantiated evidence, not contained

in the record, to support its dismissal of the

appeal. This was in direct conflict with the

trial court’s finding and award of damages in

favor of Plaintiffs. A finding not appealed by

Defendant.

Fact finding is the “basic responsibility” of

trial courts “rather than appellate courts.” Pullman-Standard v. Swint, 456 U.S. 273, 291

(1982) (quoting DeMarco v. United States, 415

U.S. 449, 450 n.22 (1974)); see also Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S.

100, 123 (1969) (“appellate courts must constantly have in mind that their function is not

to decide factual issues”). This limitation is

fundamental because appellate courts lack

the means to authenticate documents and

must rely on the district court’s designation of

submitted documents as part of the record.

Lowry v. Barnhart, 329 F.3d 1019, 1024 (9th

Cir. 2003). The California Supreme Court’s

formulation of this “essential distinction between the trial and the appellate court” is that

it is “the province of the trial court to decide

questions of fact and of the appellate court to

decide questions of law.” In re Zeth S., 31 Cal.

4th 396, 405 (2003), quoting Tupman v.

Haberkern, 208 Cal. 256, 262-63 (1929). A consequence of this division of responsibilities is

that an appellate court’s review is cabined by

the universe of facts that were “before the

trial court for its consideration.” Zeth S., 31

Cal. 4th at 405.

27

The Ninth Circuit here has dispelled that

notion and made factual determinations dispositive of the underlying case and contrary

to the trial court’s favorable ruling of damages

awarded to Plaintiffs, and not appealed by

Defendant. The Appellate court couched its

factual evaluation as relevant to “standing,”

but that approach misses the mark. The Defendant offered “standing” as a distraction,

but this case does not present an Article III

standing issue. Plaintiffs prevailed below.

Damages were found and awarded. Plaintiff ’s

have alleged ongoing damage and have concrete injury, in addition to the judgment Defendants claim “expired” while the case was

on appeal. The universe of facts that were before the trial court for its consideration at the

summary judgment proceeding that resulted

in the appeal included only a valid and enforceable judgment against an insured as a result of his insurance company’s breach of the

duty to defend.

28

B. The Ninth Circuit’s Unpublished Order

Conflicts With This Courts Published

Opinions, The Published Opinions Of

Other Circuit Courts And Even The Published Opinions Of The Ninth Circuit,

Which Hold That Federal Appellate

Courts Are Limited To Legal Issues

Raised In The Trial Court, Appealed,

Briefed On Appeal And Decided Based

On The Stage Of The Litigation Below.

1.

Even if this court was to allow the Ninth

Circuit to disregard Plaintiffs’ standing conclusively established in the trial court, Defendant’s attempt to undermine that finding

deviates from this court’s and other circuit

courts’ opinions. The Ninth Circuit allowed

Defendant to raise a substantive factual issue

related to damages, couched as “standing,” in

a Motion to Dismiss filed four years into the

pending appeal, after briefing and oral argument. This conflicts with the principle that

fact finding is the “basic responsibility” of trial

courts “rather than appellate courts.” PullmanStandard v. Swint, 456 U.S. 273, 291 (1982).

This requires federal courts to refuse to consider issues not raised in the trial court, not

appealed, not supported in the appellate record, not raised in the initial appellate brief

and not raised at oral argument. The Ninth

Circuit’s actions also conflict with the Tenth

and Fifth Circuits, which have established the

rule on appeal to be: raise it or waive it. In the

Tenth Circuit: “We, therefore, refuse to address Claimant’s argument for the first time

29

on appeal. See United States v. Porter, 405 F.3d

1136, 1141-42 (10th Cir. 2005); and, the Fifth

Circuit: “Needless to say, we do not consider

issues raised for the first time in a reply brief.”

See Stephens v. C.I.T. Group/Equipment Financing, Inc., 955 F.2d 1023, 1026 (5th Cir.

1992). In the case at hand, the Ninth Circuit

entertained facts alleged for the first time in

a Motion filed after the initial briefing and

oral argument in Plaintiffs’ appeal and even

after the complete briefing of a certified question to the Nevada Supreme Court.

2.

Even if conclusive standing below is disregarded and belatedly bringing up the issue is

condoned, this Court has long held that a review of standing must be based on the record

before the trial court and the stage of the proceeding below. The Ninth Circuit justified its

dismissal of this appeal by reasoning that the

new damages (that weren’t in existence when

the trial court awarded damages) cannot be

damages proving standing. App. 28. That ignores the standards this Court has established for pleading and proving standing. “At

the pleading stage, general factual allegations

of injury resulting from the Defendant’s conduct may suffice . . . ” Lujan v. Defs. of Wildlife,

504 U.S. 555, 561 (1992), 504 U.S. 555, 561. “At

summary judgment, there must be some evidence and at trial the injury must be proven.”

Id. Here, the Ninth Circuit has held that a

party who appealed from a summary judgment awarding partial damages must allege

and prove additional damages (on appeal) to

maintain jurisdiction; but that same party is

30

not allowed to present new evidence to provide the requested proof. Plaintiffs satisfied

the standing requirement at the pleading

stage. Plaintiffs satisfied the standing requirement on the motion for partial summary

judgment. And, Plaintiffs satisfied the standing requirement on appeal. Because the case

had not yet gone to trial below, the proper

standard on appeal is that allegations of damages must be accepted as true. Trial has not

occurred and the summary judgment grant

was not based on a failure of damages. The

Ninth Circuit did not allow any supplements

to the record. However, the Ninth Circuit did

consider an affidavit of defense counsel on

issues of fact. It did not consider competing

affidavits from Plaintiffs or consider evidence of judgments submitted pursuant to

Fed.R.App.P. 28(j) contradicting defense counsel’s affidavit and conclusively proving Plaintiffs’ continuing damages.(App. 26-67).

3.

In addition, the Ninth Circuit’s unpublished

order divides from the universally accepted

principle, even in the Ninth Circuit, that failure of only one item of damage does not destroy jurisdiction. Village of Elk Grove Village

v. Evans, 997 F.2d 328, 329 (7th Cir. 1993).

(“[E]ven a small probability of injury is sufficient to create a case or controversy—to take

a suit out of the category of the hypothetical—

provided of course that the relief sought

would, if granted, reduce the probability.”)

Pisciotta v. Old National Bancorp, 499 F.3d

629, 634 n.4 (7th Cir. 2007). “Reliance is therefore liable to the developers for the amount of

31

the judgment, and all other damages consequential to it.” Pershing Park Villas v. United

Pacific, 219 F.3d 895, 902 (9th Cir. 2000).

4.

The Ninth Circuit’s unpublished order conflicts with this Court’s and the Tenth Circuit’s

holding that issues framed as “standing,” that

do not actually implicate constitutional standing, do not impact the jurisdiction of the court.

Citing to Perry v. Thomas, 482 U.S. 483, 487,

107 S. Ct. 2520, 96 L.Ed.2d 426 (1987), the

Tenth Circuit in Cornhusker Cas. Co. v. Skaj,

786 F.3d 842, 851 (10th Cir. 2015) concluded,

“the Perry Court did not countenance a litigant’s argument[,] . . . characterize[d] as one

of ‘standing,’ when the contention was merely

that [his opponents] were ‘not parties’ to [an]

agreement.” Perry applies with equal force

to this appeal—that is, it makes clear that

UAIC’s purported standing argument does

not implicate the subject-matter jurisdiction

of the appellate court. In other words, it is not

a true standing argument, in the conventional

sense, at all. The issue raised is actually a

substantive question of fact to be considered

in fixing what damages were actually suffered

and should be awarded. This is a factual determination for the jury under Nevada law.

Century Sur. Co. v. Andrew, 432 P.3d 180, 186

(Nev. 2018). This damage issue is not one for

the trial court to decide and certainly not for

the appellate court to decide.

5.

The Ninth Circuit’s order also conflicts

with the “[T]he well-settled rule that a

federal court does not lose jurisdiction

32

over a diversity action which was well

founded at the outset even though one of

the parties may later change domicile or

the amount recovered falls short of

$10,000. See Smith v. Sperling, 354 U.S. 91,

93 n. 1 (1957); St. Paul Mercury Indemnity Co.

v. Red Cab Co., 303 U.S. 283, 289-290 (1938);

Smithers v. Smith, 204 U.S. 632 (1907); see

generally C. Wright, Federal Courts § 33, pp.

93-94 (1963).” Rosado v. Wyman, 397 U.S. 397,

405 n.6 (1970). The Ninth Circuit applies this

same general rule in its published opinions to

non-constitutional standing. “A party waives

objections to non-constitutional standing not

properly raised before the district court. See

Sycuan Band of Mission Indians v. Roache, 54

F.3d 535, 538 (9th Cir. 1995) (as amended).”

Pershing Park Villas v. United Pacific, 219

F.3d 895, 899-900 (9th Cir. 2000).

C. The Ninth Circuit Acted Beyond Its Appellate Authority, Damaging The Federal System Of Respect For And Faithful

Application Of State Law, By Denying

The Right To Trial By Jury.

1.

The Ninth Circuit’s unpublished order conflicts with this Court’s pronouncement that

Nevada law provides for expansive damages

over and above the state court judgment

amount, including punitive damages, for

breach of the duty of affirmative good faith

and fair dealing and violation of the unfair

claims practices act—NRS 686A.310. See

33

Humana, Century Sur. Co. and Allstate Insurance v. Miller.

2.

Summary judgment is appropriate only when

“the pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any, show that there is

no genuine issue as to any material fact and

that the moving party is entitled to judgment

as a matter of law.” Fed.R.Civ.P. 56(c). In assessing a motion for summary judgment, the

evidence, together with all inferences that can

reasonably be drawn therefrom, must be read

in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 587 (1986).

A “material fact” is a fact “that might affect

the outcome of the suit under the governing

law . . . ” Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248 (1986).”) The governing law in

this case is the law of Nevada that requires

these two issues be submitted to a jury. Finding lack of standing and dismissing the appeal

frustrates the Nevada insurance regulatory

regime, by cutting of review of the trial court’s

summary resolution contrary to Nevada law.

3.

Appellate Courts are restricted from overturning a jury verdict because it constitutes

interference with an important constitutional

right. Dismissals with impunity, using the

wrong standard on Summary Judgment and

the wrong standard to evaluate standing, in a

more egregious way, also interferes with that

right. “In evaluating the sufficiency of the

evidence, the district court failed to consider

34

it as a whole and to resolve all inferences in

favor of the jury’s verdict. See Continental Ore

Co. v. Union Carbide Carbon Corp., 370 U.S.

690, 699 (1962) (“In cases such as this, Plaintiffs should be given the full benefit of their

proof without tightly compartmentalizing the

various factual components and wiping the

slate clean after scrutiny of each.”) Viewing

the evidence in the light most favorable to the

nonmoving party, we cannot say the evidence

does not reasonably support an award of punitive damages.” Ace v. Aetna Life Insurance,

139 F.3d 1241, 1247 (9th Cir. 1998). The lower

court in this case determined the reasonableness of UAIC’s failure to defend in granting a

counter-motion for summary judgment. This

flies directly in the face of Nevada’s insurance

regulatory regime and Nevada case law that

requires the reasonableness of the insurance

company’s actions to be determined by a jury.

Allstate v. Miller, 125 Nev. Adv. Op. No. 28,

49760 (2009), 212 P.3d 318 (Nev. 2009).

4.

“[I]n Adickes v. S. H. Kress Co., 398 U.S. 144

(1970), the Court emphasized that the availability of summary judgment turned on

whether a proper jury question was presented.” Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 249 (1986). “Our holding . . . does not

denigrate the role of the jury. It by no means

authorizes trial on affidavits. Credibility determinations, the weighing of the evidence,

and the drawing of legitimate inferences from

the facts are jury functions, not those of a

judge, whether he is ruling on a motion for

summary judgment or for a directed verdict.

35

The evidence of the nonmovant is to be believed, and all justifiable inferences are to be

drawn in his favor.” Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 255 (1986). In the instant

case, the Ninth Circuit’s unpublished order

has the ultimate effect of denying Plaintiff ’s

right to have a jury decide factual issues, resulting in an usurping of Nevada’s insurance

regulatory regime.

II.

THE FAITHFUL APPLICATION OF STATE

STATUTORY AND DECISIONAL LAW

REGULATING INSURANCE COMPANIES

IN DIVERSITY CASES PRESENTS AN IMPORTANT AND RECURRING QUESTION.

This court has recognized that Nevada has a comprehensive statutory and common-law insurance regulatory regime which relies heavily on private causes

of action brought by policyholders. “Nevada provides

both statutory and common-law remedies to check insurance fraud.” Humana Inc. v. Forsyth, 525 U.S. 299,

311 (1999). “The Nevada Unfair Insurance Practices

Act, Nev. Rev. Stat. § 686A.010 et seq. (1996), . . . , is a

comprehensive administrative scheme that prohibits

various forms of insurance fraud and misrepresentation.” Id. at 311, 312. In Nevada, the insured is typically the enforcement mechanism through a private

right of action. “The Unfair Insurance Practices Act authorizes a private right of action for violations of a

number of unfair insurance practices.” Id. at 312.

“Moreover, the Act is not hermetically sealed; it does

not exclude application of other state laws, statutory

36

or decisional. Specifically, Nevada law provides that an

insurer is under a common-law duty ‘to negotiate with

its insureds in good faith and to deal with them fairly.’

Ainsworth v. Combined Ins. Co. of Am., 104 Nev. 587,

592, 763 P. 2d 673, 676 (1988); see United States Fidelity & Guaranty Co. v. Peterson, 91 Nev. 617, 620, 540

P. 2d 1070, 1071 (1975) (recognizing tort action against

insurance company for breach of implied covenant of

good faith and fair dealing).” Id. at 312.

This federalist concept of the federal courts enforcing the various state regimes of insurance regulation

is undermined by unpublished and unrestrained exercises of judicial power. Insureds expend enormous effort to hold insurers responsible to follow the law.

Here, the Ninth Circuit ruled directly contrary to the

decisional law of the Nevada Supreme Court in dismissing the appeal for a lack of standing. This deprived

the litigants at the eleventh hour of their due process

rights to have the remaining disputed facts of this case

(most importantly, damages) tried by a jury, consistent

with Nevada’s insurance regulatory regime.

III. SUMMARY REVERSAL IN THIS CASE IS

APPROPRIATE.

Where the Court of Appeals’ opinion reflects that

it misapprehends this Court’s precedent, summary reversal is appropriate. Rhodes v. Stewart, 488 U.S. 1, 3

(1988); Brosseau v. Haugen, 543 U.S. 194, 198 n. 3

(2004) (exercise summary reversal procedure “to correct a clear misapprehension of the controlling legal

37

standard); see also Overton v. Ohio, 534 U.S. 982,

983, 122 S. Ct. 389, 389 (2001) (summary reversal

is warranted when lower court fails to apply “wellestablished Supreme Court case law”) (Breyer, J.,

dissenting from denial of petition for certiorari). As

discussed above, the Ninth Circuit’s unpublished

opinion is inconsistent with a long line of this Court’s

appellate review precedent and is predicated on two

fundamental errors: (1) Disregarding standing conclusively established in the trial court and not appealed;

and (2) ignoring the fact that Plaintiffs also pleaded

and appealed additional damages and causes of action

for which they plainly had standing. Because the decision below is so clearly wrong, as an alternative to

granting a writ of certiorari, this Court should summarily reverse the Ninth Circuit’s unpublished order.

---------------------------------♦---------------------------------

CONCLUSION

The petition for a writ of certiorari should be

granted or summary reversal should be ordered.

Respectfully submitted,

THOMAS CHRISTENSEN, ESQ.

CHRISTENSEN LAW OFFICES

1000 S. Valley View Blvd.

Las Vegas, NV 89107

courtnotices@injuryhelpnow.com

Counsel for Petitioners