1

2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA 10 11 CENTEX HOMES, a Nevada general partnership, Case No. 2:19-CV-01284-JCM-VCF

12 Plaintiff, ORDER

13 v.

14 FINANCIAL PACIFIC INSURANCE COMPANY, et al. 15 Defendants. 16 17 18 Plaintiff Centex Homes (“Centex”) and defendant AXIS Surplus Lines Insurance Company 19 (“AXIS”) have agreed to settle Centex’ claims against AXIS. The terms of Centex’ and AXIS’ 20 settlement agreement provide that AXIS will pay Centex $75,000 and that the settlement is 21 contingent upon a judicial determination that the settlement was made in good faith. AXIS’ motion 22 for a good faith settlement determination is before the Court. 23 Under Nevada law, the determination of whether a settlement is in “good faith” under NRS 24 section 17.245 is “left to the discretion of the trial court based upon all relevant facts available.” 25 Velsicol Chemical Corp. v. Davidson,

,

(Nev. 1991). The factors 26 discussed in In re MGM Grand Hotel Fire Litigation,

(D. Nev. 1983), are 27 among those the Court may consider in the exercise of its “considerable discretion.” The Doctors 28 Co. v. Vincent,

,

(Nev. 2004). Such factors include “the amount 1 paid in settlement, the allocation of the settlement proceeds among plaintiffs, the insurance policy 2 limits of settling defendants, the financial condition of settling defendants, and the existence of 3 collusion, fraud or tortious conduct aimed to injure the interests of non-settling defendants.” In re 4 MGM,

(citing Commercial Union Ins. Co. v. Ford Motor Co.,

(9th 5 Cir. 1981)). However, Nevada law includes no requirement that a court consider or limit its analysis 6 to the In re MGM factors or hold a hearing before making a determination of good faith. Velsicol, 7

. 8 Generally, the amount paid in settlement is the primary factor in determination good faith. 9 In re MGM,

. Centex brought this lawsuit to recover approximately $690,000 in 10 defense fees and costs it incurred in the Underlying Action. Centex sued 11 insurers. A 1/11 share 11 of the amount Centex sought is about $63,000, less than the $75,000 settlement agreed upon by 12 Centex and AXIS. In addition, AXIS contends that Centex had the burden to show that it qualified 13 as an additional insured under the AXIS Policy (Nat’l Auto. & Cas. Ins. Co. v. Havas,

, 14 303 (1959)), but did not meet that burden until after it incurred all its fees and costs in the Underlying 15 Action. AXIS therefore has an argument that Centex should take nothing from AXIS in this action. 16 Moreover, the additional insured endorsement in the AXIS Policy limits coverage to the 17 additional insured’s liability for “property damage” caused in whole or in part by Sunworld’s work. 18 Sunworld was a defendant in the Underlying Action. AXIS paid $10,000 to settle the claims against 19 Sunworld. That amount was a small fraction of the monies paid to settle the Underlying Action. A 20 Court, sitting in equity, has wide discretion to allocate defense fees and costs among insurers. AXIS 21 has an argument that Centex faced little, if any, liability due to Sunworld’s work and that AXIS 22 share of Centex’s defense, if any, should be similarly limited. See Insurance Co. of West v. Great 23 American Ins. Co.,

, at *1 (D. Nev., Sept. 29, 2010, No. 2:09-CV-02150-KJD), 24 citing St. Paul Fire & Marine Ins. Co. v. Valley Forge Ins. Co.,

(N.D.Ga. 2009). 25 Further, if Centex and AXIS did not reach this settlement, they would have had to incur further fees 26 and costs in this litigation. 27 In light of the foregoing and upon review of the record, the Court finds that the settlement 28 between Centex and AXIS was made in good faith” under NRS section 17.245. 1 Accordingly, 2 IT IS HEREBY ORDERED, ADJUDGED, and DECREED that AXIS’ motion for determination of good faith settlement is GRANTED. 5|| DATED: April 14, 2021. 6 J . items ©. Atalan 7 UNITED)STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28