Dockins v. American Family Financial Services, Inc.

MEMORANDUM

Appellant Bobbi Jo Dockins appeals the district court’s order granting summary judgment to Appellees American Family Financial Services, Inc., and American Family Mutual Insurance Company.

Proof that Dockins is legally entitled to recover from Allen Jackson Lynn is a necessary element of her claims against Ap-pellees. for breach of contract and breach of the covenant of good faith and fair dealing for denying Dockins’s demand for underinsured motorist (“UIM”) coverage pursuant to the insurance policy she had with Appellees. Dockins’s state tort suit against Lynn was dismissed as a discovery sanction. The district court held that Nevada’s claim preclusion doctrine bars Doc-kins from establishing that she is legally entitled to recover from Lynn.

We reverse.

Federal courts sitting in diversity “determine the preclusive effect of a state court judgment by applying that state’s preclusion principles.” ReadyLink Healthcare, Inc. v. State Comp. Ins. Fund, 754 F.3d 754, 760 (9th Cir.2014) (citing 28 U.S.C. § 1788 ).

“[F]or claim preclusion to apply [under Nevada law,] the following factors must be met: (1) the same parties or their privies are involved in both cases, (2)…