USA – NEVADA Trends and Developments Contributed by: John Desmond, Alexis Taitel and Alice Samberg, Dickinson Wright PLLC
In November 2026, two Nevada Supreme Court jus- tices – Justice Kristina Pickering and Justice Douglas Herndon – are up for re-election, but they are both run- ning unopposed. Two more will be up for re-election in 2028, followed by three in 2030. In the coming years, as the Nevada Supreme Court’s makeup may change based on election results, its appetite for upholding large jury verdicts could likewise change. But for now, if Kuhn is any indication, substantial jury verdicts – including those for punitive damages – have a decent chance of being affirmed on appeal in Nevada. Takeaways • Insurers and their attorneys should avoid “lowball” offers and delayed tenders whenever possible, as both are likely to increase the insurer’s exposure to a finding of bad faith. • Along the same lines, insurers and their attorneys should undertake serious efforts to settle cases when the insured’s injuries are severe and well- documented. • Insurers should consider revising policy exclusions regularly to account for developments in medical science and avoid outdated or medically unsup- ported denials of coverage. • Nevada juries seem to be trending against insurers and in favour of injured plaintiffs, and the Nevada Supreme Court seems to be upholding these large verdicts, including jury awards for punitive dam- ages. Nevada Recognises That an Excess Insurer May Seek Equitable Subrogation Against a Primary Insurer for Failure to Settle The Ninth Circuit Court of Appeals certified a ques- tion to the Nevada Supreme Court, presenting the issue of whether, under Nevada law, an excess insurer can state a claim for equitable subrogation against a primary insurer when the underlying lawsuit settles within the combined policy limits of the insurers. The Nevada Supreme Court elected to answer the certified question, holding in its 29 January 2026 opinion that “an excess insurer may seek equitable subrogation against a primary insurer who fails to settle within pri- mary policy limits when the insured, but for the excess insurer’s contribution to the settlement, would have had a claim against the primary insurer for its failure to reasonably settle”.
North River Insurance Company, an excess insurer, and James River Insurance Company, a primary insurer, both issued liability insurance policies to their mutual insured, Alhambra Place. The primary insurer, James River, had a USD1 million policy limit, while North River provided a USD10 million excess policy. A wrongful death lawsuit was filed against Alhambra Place after a fatal shooting at the insured location, Shelter Island Apartments in Las Vegas, Nevada. James River declined three settlement offers that were at or below its policy limit, leading to a final settlement of USD5 million. James River contributed its policy limit of USD1 million, and North River contributed the remaining USD4 million under protest and with a res- ervation of its rights to seek reimbursement. North River then sued James River in California feder- al court for equitable subrogation, seeking reimburse- ment for the USD4 million it paid. North River argued that James River breached its duty of good faith and fair dealing by not settling within its policy limits. North River contended that Alhambra Place had an existing and assignable cause of action against James River for its failure to settle, to which North River alleged that it was subrogated by virtue of its payment to set- tle the suit. The federal district court dismissed the case, citing unpublished Nevada case law and finding that North River’s claim was barred because the set- tlement was within the combined policy limits. North River appealed to the Ninth Circuit, which found no controlling Nevada precedent and certified a question on the issue to the Nevada Supreme Court. Following the Nevada Supreme Court’s decision, the Ninth Circuit reversed the California district court’s dismissal of the action and remanded the case for fur- ther proceedings. On remand, the district court denied James River’s motion to dismiss, finding that North River had sufficiently alleged that James River’s rejec- tion of the insured’s USD975,000 settlement demand, despite warnings that the claim exceeded James Riv- er’s USD1 million policy limits, forced North River to contribute USD4 million toward settlement. The action is currently pending in the Central District of California. The Nevada Supreme Court’s decision on this issue aligns Nevada with other jurisdictions throughout the United States, including California, Hawaii, Missouri, Oregon, and Texas.
334 I NSURANCE L I T IGATI O N 2026
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