USA – NEVADA Trends and Developments Contributed by: John Desmond, Alexis Taitel and Alice Samberg, Dickinson Wright PLLC
Introduction Recent developments in Nevada case law signal heightened scrutiny of claims handling and settlement conduct. In the last two years, Nevada has seen hun- dred-million-dollar jury verdicts against insurers for bad-faith claims handling and/or denial of coverage, suggesting that the Nevada public is likely to award, and appellate courts are likely to uphold, steep puni- tive damages awards, particularly when the insured has suffered severe and well-documented bodily inju- ries. These verdicts coincide with a 29 January 2026 Nevada Supreme Court ruling on equitable subro- gation in failure-to-settle scenarios, confirming that an excess insurer may pursue the primary carrier for unreasonable refusal to settle within primary policy limits, notwithstanding subsequent settlement within combined primary and excess policy limits. Collectively, these outcomes highlight the importance of timely and well-documented claims evaluations, serious settlement engagement when injuries are sub- stantiated, and proactive coordination between pri- mary and excess carriers. Nevada jury verdicts appear to be trending toward insured-friendly findings and substantial punitive damages awards against insur- ers. This necessarily means that the conduct of the carrier and coverage counsel early in claims handling processes and litigation may have a significant impact later as the case develops. Jury Verdicts in Insurer Bad-Faith Litigation Kuhn v Hector Cervantes-Andrade et al. In early 2025, a Las Vegas jury returned a USD107 million verdict for policyholder Timothy Todd Kuhn on his bad-faith claims against USAA Casualty Insurance Company (USAA) for its handling of his claim under his underinsured motorist (UIM) policy. Mr Kuhn initiated his case in September 2020, alleging that he suffered disabling injuries when another driver rear-ended Mr Kuhn while driving on a Nevada interstate highway. Mr Kuhn’s original complaint named only the rear-ending driver and alleged against him a single claim for neg- ligence. USAA moved to intervene, asserting an interest in the action on the grounds that it issued the automobile
insurance policy to Mr Kuhn’s spouse, under which Mr Kuhn sought UIM benefits for his injuries. Indeed, Nevada recognises a UIM insurer’s right to intervene in an action between its insured and the alleged tort- feasor because of the insurer’s potential liability under the policy at issue to pay any judgment entered in the action in favour of the insured. Following the court’s decision to grant USAA’s motion to intervene, Mr Kuhn amended his complaint to name USAA as a defendant and allege three causes of action against it: (i) negligence for its failure to rea- sonably investigate Mr Kuhn’s bodily injury claims and make reasonable payments to Mr Kuhn accordingly; (ii) breach of contract for its failure to make any pay- ment under the operative policy to Mr Kuhn for his bodily injuries; and (iii) bad-faith denial of UIM benefits under the operative policy. As the parties progressed through discovery, Mr Kuhn produced medical documentation and expert opinion in support of his alleged injuries to his head, neck, spine, and organs, including what he described as symptoms of traumatic brain injury – such as memory loss, headaches, loss of smell, and troubled execu- tive functions. USAA’s initial settlement offer, however, was only USD10,000, which was significantly lower than Mr Kuhn’s medical bills and claimed losses. Days before trial, USAA made a second settlement offer to pay the policy limit of USD250,000 on the operative policy, which Mr Kuhn denied in favour of proceeding in front of a jury at trial. Mr Kuhn’s decision to proceed to trial paid off. The jury returned a total verdict of USD114 million, consisting of USD7 million against the individual at-fault driver and USD107 million against USAA. Of that USD107 million, USD7 million constituted compensatory dam- ages and the remaining USD100 million was a punitive damages award. The jury ostensibly returned such a large punitive damages verdict based upon Mr Kuhn’s argument that USAA delayed investigation and failed to pay out under the policy despite Mr Kuhn’s obvi- ous and severe injuries. The theory was that this con- stituted a malicious strategy designed to minimise USAA’s payment under the policy, which was conduct meriting punishment. Indeed, the court remitted the jury’s USD100 million punitive damages award, indi-
332 I NSURANCE L I T IGATI O N 2026
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