JENNIFER M. WALKER, Individually v. State Farm Mutual Automobile Insurance Company

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JENNIFER M. WALKER, Individually and
as Surviving Spouse and as Administrator
and Heir; and as Parent and Natural
Guardian on behalf of Estate of Travis J.
Walker on behalf of Carter Walker on behalf
of Nolan WalkerIndividually and as
Surviving Spouse and as Administrator and
Heir; and as Parent and Natural Guardian on
behalf of Estate of Travis J. Walker on
behalf of Carter Walker on behalf of Nolan
Walker,
Plaintiff-Appellant,
v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Defendant-Appellee.
No. 17-16102
D.C. No.
2:16-cv-00986-JCM-PAL
MEMORANDUM*
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Submitted February 11, 2019**
San Francisco, California
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
FILED
FEB 22 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Before: McKEOWN, W. FLETCHER, and MURGUIA, Circuit Judges.
Travis Walker was riding an ATV on sand dunes in Nevada when his ATV
stalled. He kneeled beside the ATV to inspect the problem, and was hit by a
sandrail.1 Walker died at the scene.
Appellant, Jennifer Walker, is Travis Walker’s widow. Ms. Walker opened
a claim under her own policies with State Farm Mutual Automobile Insurance
Company (“State Farm”) because the driver of the sandrail was uninsured. Though
State Farm authorized payment for Travis Walker’s funeral costs, it denied
coverage for uninsured motorist benefits based on the policy’s off-road vehicle
exclusion. Ms. Walker sued State Farm for (1) breach of contract; (2) violation of
the Unfair Claims Settlement Practices Act; (3) breach of the covenant of good
faith and fair dealing; (4) breach of fiduciary duty; (5) misrepresentation; and (6)
punitive damages. State Farm moved for summary judgment in its favor on all
claims, which the district court granted. Ms. Walker appeals the district court’s
order.2 We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
1 It appears that a sandrail is much like a dune buggy.
2 In her opening brief, Ms. Walker does not argue her breach of contract claim or
breach of fiduciary duty claim. Therefore, we limit our attention to the remaining
claims for violation of the Unfair Claims Settlement Practices Act, breach of the
covenant of good faith and fair dealing, and misrepresentation. Brookfield
Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1046 n.7 (9th Cir.
1999).

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We review a district court’s order granting summary judgment de novo.
Bravo v. City of Santa Maria, 665 F.3d 1076, 1083 (9th Cir. 2011). In diversity
actions, federal courts apply state substantive law. Erie R. Co. v. Tompkins, 304
U.S. 64, 78 (1938).
State Farm did not waive its right to the exclusion defense based on its
payment of funeral costs because it did not intentionally relinquish a known right.
Prime Ins. Syndicate, Inc. v. Damaso, 471 F. Supp. 2d 1087, 1098 (D. Nev. 2007)
(citing Santino v. Great Am. Ins. Co., 9 P.2d 1000, 1004 (Nev. 1932)). From the
outset, State Farm questioned whether the sandrail qualified as an uninsured motor
vehicle under the policy because it appeared to be an off-road vehicle and the
accident occurred off public roads. Indeed, State Farm issued a letter reserving its
rights to deny coverage because it had a concern regarding the nature of the
sandrail. See also Havas v. Atl. Ins. Co., 614 P.2d 1, 2 (Nev. 1980) (“Where . . .
the insurer asserts the [specific] defense from the outset via a non-waiver
agreement, a subsequent denial of coverage on other grounds does not constitute a
waiver of the [specific] defense.”).
State Farm conducted a reasonable investigation and therefore is not liable
under the Unfair Claims Settlement Practices Act. Nev. Rev. Stat.
§ 686A.310(1)(c); see Zurich Am. Ins. Co. v. Coeur Rochester, Inc., 720 F. Supp.
2d 1223, 1237 (D. Nev. 2010) (applying Nevada law). State Farm investigated the

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sandrail and the nature of the accident, and considered whether the sandrail fell
within the policy’s exclusion for off-road vehicles. Ms. Walker argues that State
Farm should have conducted a more thorough investigation but does not argue that
a more thorough investigation would lead to the conclusion that the sandrail was
not primarily an off-road vehicle. See Zurich Am. Ins. Co., 720 F. Supp. 2d at
1237 (“[Insurance company] did not fail to investigate [insured’s] claim
appropriately; rather, [insurance company] rejected [insured’s] reasoning in
support of its claim.”).
State Farm did not violate the covenant of good faith and fair dealing. “To
establish a prima facie case of bad-faith refusal to pay an insurance claim, the
plaintiff must establish that the insurer had no reasonable basis for disputing
coverage, and that the insurer knew or recklessly disregarded the fact that there
was no reasonable basis for disputing coverage.” Powers v. United Servs. Auto.
Ass’n, 962 P.2d 596, 604 (Nev. 1998). Ms. Walker does not raise a genuine issue
of material fact as to whether State Farm had a reasonable basis for denying
coverage. Ms. Walker’s policy clearly rejects coverage for an accident involving
an off-road vehicle if the accident occurred off public roads. State Farm’s
reasonable investigation revealed that Travis Walker was involved in an accident
with an off-road vehicle while on a sand dune. See Am. Excess Ins. Co. v. MGM
Grand Hotels, Inc., 729 P.2d 1352, 1354-55 (Nev. 1986) (“Bad faith involves an

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actual or implied awareness of the absence of a reasonable basis for denying
benefits of the policy.”).
State Farm is not liable for fraudulent misrepresentation. See Bulbman, Inc.
v. Nev. Bell, 825 P.2d 588, 592 (Nev. 1992) (stating the elements required to prove
a claim for fraudulent misrepresentation). Nowhere does Ms. Walker point to a
false representation made by State Farm. See id. Ms. Walker may have
misunderstood her policy in that she did not realize an exception for off-road
vehicles existed, but she offered no evidence showing that this misunderstanding
was due to an alleged false representation. See Farmers Ins. Exch. v. Young, 832
P.2d 376, 379 n.2 (Nev. 1992) (consumers are responsible for reading and
understanding their insurance policies).
The district court did not abuse its discretion by denying Ms. Walker’s
request for additional discovery under Federal Rule of Civil Procedure 56(d). See
Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822,
827 (9th Cir. 2008).3 Even if Ms. Walker was able to pursue additional discovery,
she did not show that any additional information exists that would be essential to
oppose summary judgment. Id.
3 Federal Rule of Civil Procedure 56(d) was previously numbered 56(f), thus some
previous case law refers to 56(f). For the sake of clarity it is referred to herein as
56(d). See 2010 Amendment to Fed. R. Civ. P. 56 (“Subdivision (d) carries
forward without substantial change the provisions of former subdivision (f)”).

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AFFIRMED.

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