                                                                           FILED
                            NOT FOR PUBLICATION                             JUN 30 2011

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



ERNEST HICKS and RONALD                          No. 10-15650
KLECKLEY,
                                                 D.C. No. 2:08-cv-01687-RCJ-PAL
              Plaintiffs - Appellants,

  v.                                             MEMORANDUM *

DAIRYLAND INSURANCE
COMPANY; et al.,

              Defendants - Appellees.



                    Appeal from the United States District Court
                             for the District of Nevada
                    Robert Clive Jones, District Judge, Presiding

                       Argued and Submitted May 12, 2011
                            San Francisco, California

Before: B. FLETCHER and THOMAS, Circuit Judges, and ROSENTHAL,
District Judge.**




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

       **
            The Honorable Lee H. Rosenthal, District Judge for the U.S. District
Court for Southern Texas, Houston, sitting by designation.
      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). We affirm. Because the parties are familiar with the history

of this case, we need not recount it here.

                                             I

      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., 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, 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 WL 855813 at *1 (Nev. Mar. 10, 2010);

Pasina v. Cal. Cas. Indem. Exch., 2008 WL 5083831 at *4 (D. Nev. Nov. 26,


                                             2
2008); cf. Hall v. Enterprise Leasing Company-West, 137 P.3d 1104, 1104 (Nev.

2006).1

      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.

      Absent a valid assignment of rights recognized under Nevada law, Kleckley

lacked standing to pursue a direct cause of action against Dairyland. The district

court properly dismissed his third party claims.

                                          II

      Although Hicks asserted multiple claims for relief against Dairyland, the

only claim raised on appeal is the alleged breach of the covenant of good faith and


      1
         We recognize that the Nevada Supreme Court has not directly addressed
this issue in a precedential decision. If a state’s highest court has not decided an
issue, the task of a federal court sitting in diversity is to predict how the court
would resolve it. Dimidowich v. Bell & Howell, 803 F.2d 1473, 1482 (9th Cir.
1986). In making that prediction, we may look to persuasive authority, including
non-precedential state decisions, treatises, and well-reasoned authority from other
jurisdictions. Id. Thus, we may consider Bell, which is a non-precedential Nevada
Supreme Court decision, as well as Pasina, which Bell quoted with approval.


                                          3
fair dealing. Hicks argues there are genuine issues of material fact as to whether

Dairyland committed bad faith by failing to inform Hicks of an early time-limited

demand letter and delaying the claim settlement process. The district court

properly granted summary judgment on this claim.

                                          A

      In Allstate Ins. Co. v. Miller, 212 P.3d 318, 325 (Nev. 2009), the Nevada

Supreme Court held that insurers have a “duty to communicate to the insured any

reasonable settlement offer that could affect the insured’s interest.” (emphasis

added). Hicks contends that Dairyland violated this duty by not communicating

Kleckley’s initial demand letter.

      The undisputed record shows that Kleckley’s attorney sent a form letter 2 to

Dairyland before filing suit. He demanded the “policy limits” for the Dairyland

policy, but he did not know what those limits were and had only scant knowledge

regarding the extent of Kleckley’s injuries. He provided no medical information,

but only a signed authorization for the insurer to obtain medical records. At the

time, Kleckley’s medical bills totaled only $2,120, well shy of the $15,000 policy



      2
        The district court noted in a similar case involving the same counsel that it
was aware of a number of cases in which an identical demand letter was used by
counsel, citing this case. See AAA Nev. Ins. Co. v. Chau, 2010 WL 2802164, at *4
n.1 (D. Nev. July 10, 2010).

                                          4
limit. Despite knowing so little about the claim, Kleckley’s attorney demanded

that Dairyland settle for the then-unknown policy limits within two weeks or the

offer would be withdrawn. Dairyland’s claims agent did not see the letter until

after the two-week period had expired because of normal mailing time and an

intervening holiday. During this period, the insured was homeless, with no

telephone or address through which Dairyland could contact him directly.

      The district court properly concluded that a demand made under these

circumstances was not a “reasonable settlement offer” within the meaning of Miller

because the demand established an unreasonable time limit and did not afford

Dairyland sufficient information with which to evaluate the claim. See, e.g., Pavia

v. State Farm Mut. Auto. Ins. Co., 626 N.E.2d 24, 28–29 (N.Y. 1993); Glenn v.

Fleming, 799 P.2d 79, 86 (Kan. 1990) (concluding a two-week demand letter was

unreasonable); Adduci v. Vigilant Ins. Co., Inc., 424 N.E.2d 645, 649 (Ill. App.

1981); DeLaune v. Liberty Mut. Ins. Co., 314 So. 2d 601 (Fla. App. 1975) (holding

that a 10-day time limit for a settlement demand was “totally unreasonable” and




                                          5
“made it virtually impossible to make an intelligent acceptance.”), cert. denied, 330

So. 2d 16 (1976).3

      Finally, there is no evidence in the record that the offer “could affect the

insured’s interest” as required by Miller, 212 P.3d at 325, nor does Hicks explain

how he suffered any prejudice from Dairyland’s failure to communicate the offer.

The offer had expired by the time the insurer saw it and, as the record indicates,

Hicks was homeless, destitute, and had no ability to fund any portion of a

settlement. Thus, he was not deprived of any opportunity to settle the case

independent of the insurance policy.

                                          B

      The district court also properly granted summary judgment on Hicks’ claims

that Dairyland unreasonably delayed the claim process. In this context, the Nevada

Supreme Court has defined bad faith as “an actual or implied awareness of the

absence of a reasonable basis for denying benefits of the [insurance] policy.” Am.

Excess Ins. Co. v. MGM Grand Hotels, Inc., 729 P.2d 1352, 1354–55 (Nev. 1986).




      3
       The Nevada Supreme Court has not spoken specifically on this question.
However, in predicting how the Nevada Supreme Court would rule on this issue,
we are permitted to consider well-reasoned authority from other jurisdictions.
Burns v. Int’l Ins. Co., 929 F.2d 1422, 1424 (9th Cir. 1991).

                                          6
      The record shows that after Dairyland’s claims agent viewed the demand

letter, she promptly set out to acquire the medical information that Hicks’ attorney

had failed to provide. Dairyland did not unreasonably delay the claims process

between the time it received the claim and its agent reviewed the claim. After the

agent received the medical information, she tendered the policy limits, even though

there was then no settlement demand on the table. The district court correctly

concluded that this conduct did not amount to bad faith under Nevada law.

      Hicks raises other bad faith theories, but he does so for the first time on

appeal. We decline to consider them. See Travelers Prop. Cas. Co. of Am. v.

ConocoPhillips Co., 546 F.3d 1142, 1146 (9th Cir. 2008).

                                          III

      In sum, the district court correctly dismissed the third-party bad faith claims

for lack of standing and properly granted summary judgment in favor of Dairyland

on the first-party bad faith claims.

      AFFIRMED.




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