Strategies, Challenges, and Answers

Nevada Does Not Recognize Third-Party Bad Faith

Greg Gunny claimed that his father Ralph negligently operated his boat and injured him. Greg wasn’t happy with the speed at which his father’s insurance, Allstate, was handling the claim.  Greg Gunny sued Allstate directly for bad faith.

Gunny v. Allstate, Nevada Coverage Law, Nevada Bad Faith Law, Mills & Associates Nevada Insurance and Coverage Lawyers, Las Vegas Insurance and Coverage Lawyers 702-240-6060In the case of Gunny v. Allstate Ins. Co., 108 Nev. 344, 830 P.2d 1335 (1992) the Nevada Supreme Court addressed the question of whether the third-party son had a cause of action for bad faith directly against his father’s insurance company.  The Nevada Supreme Court said no.  According to the court, Greg lacked standing because he was not a party to the insurance contract.  The court said:

We conclude that Greg lacks standing to sue because he had no contractual relationship with Allstate. Greg presented no evidence that he had substantially relied on the insurance company’s representations or that he was a specific intended beneficiary of the insurance policy. While we may recognize a beneficiary’s cause of action if he or she has relied on actions or representations of the insurance company to his or her detriment we need not address that question since no such evidence was presented.

108 Nev. at 345, 346.  (citations omitted).

Greg Gunny also sued Allstate claiming that the company violated NRS 686A.310, Nevada’s Unfair Claims Settlement Practices Act.  Continue reading HERE to learn whether Greg Gunny was successful in seeking third-party recovery under this statute.  If you have other questions on Nevada Bad Faith, please feel free to contact Mike Mills at Mills & Associates.  He will be glad to talk with you.