Benchmark Insurance Co. v. Sparks, 127 Nev. 407

Summary

The Supreme Court of Nevada held that an automobile liability insurance policy's exhaustion provision was ambiguous as to whether the insurer could terminate its duty to defend by depositing the policy limits with the court. Construing the provision according to the insured's reasonable expectations, the court held that the insurer's duty to defend continued until it procured a settlement or the policy limits were used to satisfy a judgment, and affirmed the district court's rulings.

Holdings

1. The exhaustion provision was ambiguous because, read as a whole, it was reasonably susceptible to an interpretation under which Benchmark could exhaust its liability only by settling the claim or defending until a judgment was satisfied, rather than by merely depositing the policy limits with the court.
2. Benchmark's duty to defend continued because it had not procured a settlement on Sparks's behalf and the policy limits had not been used to satisfy a judgment.
3. Universal properly received summary judgment because Benchmark's continuing duty to defend meant that any potential duty Universal might have had to indemnify Sparks as a permissive user was not triggered.
4. Benchmark's appeal was properly before the Supreme Court because the order appealed from constituted a final judgment under NRAP 3A(b)(1), even though an order denying summary judgment ordinarily is interlocutory and not independently appealable.

Questions Presented

1. Whether Benchmark's automobile liability policy unambiguously allowed Benchmark to terminate its duty to defend Sparks by depositing the policy's liability limits with the district court.
2. Whether the district court properly granted Universal summary judgment on the ground that Universal had no duty to defend or indemnify Sparks.
3. Whether the Supreme Court had appellate jurisdiction over Benchmark's challenge to the denial of summary judgment.

Disposition

affirmed