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Hicks v. Dairyland Ins. Co.

United States Court of Appeals for the Ninth Circuit

May 12, 2011, Argued and Submitted, San Francisco, California; June 30, 2011, Filed

No. 10-15650


 [*464]  MEMORANDUM2

Ernest Hicks and Ronald Kleckley appeal the district court's order granting summary judgment in favor of Dairyland Insurance Company and dismissing Kleckley from the lawsuit. We review both orders de novo. Thomas v. Ponder, 611 F.3d 1144, 1149 (9th Cir. 2010); Gordon v. Virtumundo, Inc., 575 F.3d 1040, 1047 (9th Cir. 2009).  [**2] We affirm. Because the parties are familiar with the history of this case, we need not recount it here.

The district court properly dismissed the insurance bad faith claims of the third party claimant Kleckley. ] In Nevada, only parties with a valid contractual relationship with the insurer have standing to bring a bad faith claim. See Gunny v. Allstate Ins. Co., 108 Nev. 344, 830 P.2d 1335, 1335-36 (Nev. 1992). "When no contractual relationship exists, no recovery for bad faith is allowed." United Fire Ins. Co. v. McClelland, 105 Nev. 504, 780 P.2d 193, 197 (Nev. 1989). Thus, a third-party claimant does not have standing to bring a bad faith claim directly against an insurer. Gunny, 830 P.2d at 1335-36.

Kleckley argues that his status as a judgment creditor affords him standing, but that alone is not sufficient under Nevada law to confer standing. Bell v. American Family Mut. Auto. Ins., 2011 Nev. LEXIS 31, 2011 WL 855813 at *1 (Nev. Mar. 10, 2010); Pasina v. Cal. Cas. Indem. Exch., 2008 U.S. Dist. LEXIS 100145, 2008 WL 5083831 at *4 (D. Nev. Nov. 26, 2008); cf. Hall v. Enterprise Leasing Company-West, 122 Nev. 685, 137 P.3d 1104, 1104 (Nev.  [*465]  2006).3

Kleckley also argues that he had obtained a valid assignment of Hicks' first-party insured claims against Dairyland. However, as the district court correctly concluded, the purported assignment is not effective because it was not a "bargained for exchange," lacking consideration. The assignment by its terms was voidable, and the record demonstrated there was no valid consideration given for the assignment.

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441 Fed. Appx. 463 *; 2011 U.S. App. LEXIS 13419 **

ERNEST HICKS and RONALD KLECKLEY, Plaintiffs - Appellants, v. DAIRYLAND INSURANCE COMPANY; et al., Defendants - Appellees.


Subsequent History: Petition denied by Hicks v. Dairyland Ins. Co., 2012 U.S. LEXIS 1044 (U.S., Jan. 23, 2012)

Prior History:  [**1] Appeal from the United States District Court for the District of Nevada. D.C. No. 2:08-cv-01687-RCJ-PAL. Robert Clive Jones, District Judge, Presiding.

Hicks v. Dairyland Ins. Co., 2010 U.S. Dist. LEXIS 63597 (D. Nev., Mar. 3, 2010)

Disposition: AFFIRMED.


district court, insurer, settlement, bad faith

Civil Procedure, Justiciability, Standing, Third Party Standing, Insurance Law, Liability & Performance Standards, Bad Faith & Extracontractual Liability, General Overview, Good Faith & Fair Dealing, Third Party Claimants, Preliminary Considerations, Federal & State Interrelationships, Erie Doctrine, Jurisdiction, Diversity Jurisdiction, Settlements, Payment Delays & Denials