Nevada Supreme Court to Set Precedent on Equitable Subrogation Claims

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The district court dismissed the case, ruling that Nevada law does not allow an excess insurer to pursue an equitable subrogation claim when the settlement is within the policy limits of both insurers. On appeal, the Ninth Circuit observed a potential conflict in Nevada’s case law and referred the matter to the Nevada Supreme Court for a definitive ruling.

Legal Implications

The Nevada Supreme Court’s decision will likely have broad implications for the scope of equitable subrogation claims in the state. Currently, Nevada law requires an excess insurer to demonstrate that the insured suffered damages before pursuing such a claim. If the Nevada Supreme Court sides with North River, it could follow the approach of California, which allows excess insurers to pursue subrogation claims even when there are no excess damages.

California courts do not require excess insurers to show that the insured suffered harm before making such claims, which could expand the scope of equitable subrogation in Nevada. This contrasts with Nevada’s traditional stance, which requires the insured to have a viable claim for damages.