Impleader, Insurers, and Post‑Remand Timeliness: Nevada Supreme Court Limits Plaintiff Third‑Party Practice and Clarifies NRCP 81(c) — Commentary on Ohio Security Ins. Co. v. Eighth Judicial District Court (Gallagher)

Impleader, Insurers, and Post‑Remand Timeliness: Nevada Supreme Court Limits Plaintiff Third‑Party Practice and Clarifies NRCP 81(c) — Commentary on Ohio Security Ins. Co. v. Eighth Judicial District Court (Gallagher)

I. Introduction

The Nevada Supreme Court’s decision in Ohio Security Insurance Co.; Ohio Casualty Insurance Co.; Peerless Indemnity Insurance Co.; and West American Insurance Co. v. Eighth Judicial District Court (Gallagher), No. 89926 (Nov. 4, 2025), arises out of the high‑profile “Real Water” litigation, where consumers alleged serious injuries from contaminated bottled water produced by Affinitylifestyles.com d/b/a Real Water and related entities (“Real Water Defendants”).

The underlying “Gallagher action” is a products‑liability and personal‑injury suit brought by multiple injured plaintiffs (collectively, the real parties in interest, or “RPIs,” including a minor child O.G., represented by guardians ad litem, and various individual and estate claimants) against the Real Water Defendants. That case proceeded to jury trial in 2023, resulting in a verdict for the plaintiffs and a judgment now on appeal.

After prevailing at trial, the RPIs filed a third‑party complaint in the same state‑court action against Real Water’s insurers (the petitioners), asserting intentional interference with contract and intentional interference with prospective economic advantage. These new claims were based not on the contaminated water itself, but on the insurers’ alleged conduct in Real Water’s subsequent bankruptcy proceeding and related insurance‑coverage settlement with the bankruptcy trustee.

The insurers removed the third‑party action to federal bankruptcy court. When the case was later remanded to state court, the insurers promptly moved to sever the third‑party complaint, arguing (1) the motion was timely under NRCP 81(c)’s post‑remand rule and (2) the third‑party complaint was improper under Nevada’s impleader rule, NRCP 14, because plaintiffs cannot use NRCP 14 to bring independent tort claims against a defendant’s insurer. The district court denied the motion, holding that:

  • the motion to sever was untimely and thus waived;
  • the third‑party complaint was proper under NRCP 14; and
  • severance was unwarranted under NRCP 21’s discretionary severance standard.

The insurers then petitioned the Nevada Supreme Court for a writ of mandamus ordering the district court to grant severance. The Supreme Court granted the petition, finding a manifest abuse of discretion and misapplication of the Nevada Rules of Civil Procedure.

This opinion is important procedurally: it clarifies (1) the timeliness of motions after remand under NRCP 81(c); (2) the limited scope of third‑party practice under NRCP 14, especially regarding plaintiffs’ attempts to implead a defendant’s insurer for independent torts; and (3) how district courts must rigorously apply and explain the A Cab / NRCP 21 severance factors.

II. Summary of the Opinion

In a per curiam order granting mandamus relief, the Nevada Supreme Court held:

  1. Writ entertained and relief appropriate.
    The Court exercised its discretionary power to entertain the mandamus petition because the district court had manifestly abused its discretion in refusing to sever the third‑party complaint, satisfying the strict standard for writ relief.
  2. Timeliness under NRCP 81(c) after remand.
    When a case is removed to federal court, the state court’s jurisdiction is suspended under 28 U.S.C. § 1446(d). Upon remand, NRCP 81(c) allows a defendant 14 days after service of the remand order’s notice of entry to “move or plead as it might have done had the action not been removed.” Here:
    • Remand occurred on September 27, 2024;
    • The severance motion was filed on October 9, 2024 (12 days later).
    Therefore, the motion was timely, and the district court manifestly abused its discretion by finding waiver based on the 11‑month interval since the insurers were first joined.
  3. Third‑party complaint improper under NRCP 14.
    Interpreting NRCP 14 de novo, the Court reiterated that:
    • Under NRCP 14(a)(1), a defending party may implead a nonparty “who is or may be liable to it for all or part of the claim against it.”
    • Under NRCP 14(b), a plaintiff may implead a third party only if the same conditions apply—i.e., there must be a claim asserted against the plaintiff, and the third party must be potentially liable to the plaintiff for all or part of that claim.
    • Under Nevada precedent (Lund and Pack), NRCP 14 is limited to contribution and indemnity claims.
    Because:
    • No claims were ever asserted against the plaintiffs (RPIs) in the Gallagher action; and
    • The third‑party claims (intentional interference torts) were direct claims, not for contribution or indemnity, and arose from separate conduct in Real Water’s bankruptcy and insurance‑coverage settlement,
    the Court held that the RPIs’ third‑party complaint was improper under NRCP 14 and should have been brought, if at all, as a separate, standalone action.
  4. Abuse of discretion in denying severance under NRCP 21.
    Applying the five factors adopted in A Cab, LLC v. Murray (from the Sixth Circuit’s decision in Parchman v. SLM Corp.), the Court held that:
    • the claims did not arise from the same transaction or occurrence;
    • there were no common questions of law or fact between the products‑liability case and the interference claims;
    • severance would facilitate settlement and judicial economy;
    • failure to sever would prejudice the insurers by dropping them into a case that had already gone through years of litigation and a jury verdict; and
    • the claims would require different witnesses and documentary proof.
    The district court’s unexplained conclusion that all five factors weighed against severance was unsustainable. The record instead showed that each factor supported severance. Denial of severance therefore constituted an abuse of discretion.
  5. Mandamus issued.
    The Court granted the petition and directed the clerk to issue a writ of mandamus ordering the district court to:
    • vacate its prior order denying the motion to sever; and
    • enter an order granting the motion to sever the third‑party complaint from the Gallagher action.

III. Detailed Analysis

A. Writ of Mandamus and the Standard of Review

The Court begins by situating its review within Nevada’s well‑developed law on extraordinary writs:

  • Smith v. Eighth Judicial Dist. Ct., 107 Nev. 674, 818 P.2d 849 (1991)
    Establishes that entertaining a mandamus petition is purely discretionary. There is no entitlement to writ review, even if legal error is alleged.
  • Archon Corp. v. Eighth Judicial Dist. Ct., 133 Nev. 816, 407 P.3d 702 (2017)
    Reaffirms that writ relief is an extraordinary remedy reserved for situations where there is no “plain, speedy and adequate remedy in the ordinary course of law.” This usually means there is no practical right to appeal or no effective relief via appeal.
  • Walker v. Second Judicial Dist. Ct., 136 Nev. 678, 476 P.3d 1194 (2020)
    Clarifies that when the district court has discretion (as it does regarding severance), mandamus will issue only if that discretion was:
    • manifestly abused, or
    • exercised in an arbitrary or capricious manner, or
    • tainted by partiality, prejudice, bias, or ill will.
    A mere “error in judgment” is not enough.

Against that backdrop, the Court identifies not merely technical error but a manifest abuse of discretion on two fronts:

  1. The district court declared the severance motion untimely despite NRCP 81(c)’s clear 14‑day post‑remand window.
  2. The district court both misapplied NRCP 14 and misused its severance discretion under NRCP 21, while failing to articulate a defensible analysis of the relevant factors.

This combination of clear procedural missteps and misinterpretation of the civil‑procedure rules justifies extraordinary relief, especially because the insurers would otherwise be forced to litigate complex, misjoined claims inside a fully tried products‑liability case already on appeal.

B. Timeliness of Post‑Remand Motions under NRCP 81(c)

1. Federal removal and state‑court jurisdiction

The Court first addresses whether the insurers’ motion to sever was untimely because it was filed 11 months after they had first been joined as third‑party defendants. The key statutory and rule provisions are:

  • 28 U.S.C. § 1446(d)
    When a case is removed from state to federal court, the state court “shall proceed no further unless and until the case is remanded.” In other words, the state court’s jurisdiction is effectively stayed while the case is in federal court.
  • NRCP 81(c)
    After remand, “within 14 days after service of written notice of entry of the remand order,” a defendant may “move or plead as it might have done had the action not been removed.”

Because the state court lacked authority to act while the case was in federal court, the “11 months since joinder” reasoning is legally incomplete. Once the case was remanded, NRCP 81(c) provided a during which defendants could file motions that would have been available but for the removal.

2. Application to the insurers’ motion

The timeline is undisputed:

  • Case remanded to state court: September 27, 2024;
  • Motion to sever filed: October 9, 2024 (12 days later).

As the Court succinctly states, “[b]ecause the motion to sever was filed within the 14‑day period prescribed in NRCP 81(c), the motion was timely.” The district court’s ruling that the insurers had waived their right to seek severance was, therefore, a manifest abuse of discretion.

Doctrinal significance: This ruling clarifies that in Nevada:

  • Removal to federal court pauses state‑court deadlines; and
  • After remand, defendants have a 14‑day grace period under NRCP 81(c) to file motions they could have brought originally, regardless of how much time elapsed during the federal detour.

Practitioners should therefore treat remand as a reset opportunity for certain procedural moves, including motions to sever, provided they act within the NRCP 81(c) 14‑day window.

C. Scope of Third‑Party Practice under NRCP 14

1. The text of NRCP 14(a) and (b)

The Court quotes and applies the core language of NRCP 14:

  • NRCP 14(a)(1):
    “A defending party may, as third‑party plaintiff, file a third‑party complaint against a nonparty … who is or may be liable to it for all or part of the claim against it.”
  • NRCP 14(b):
    “When a claim is asserted against a plaintiff, the plaintiff may bring in a third party if this rule would allow a defendant to do so.”

Two structural points follow:

  1. NRCP 14 is derivative: the third‑party defendant’s liability must be contingent on (or secondary to) a claim already asserted against the third‑party plaintiff.
  2. For a plaintiff to use NRCP 14(b), there must be:
    • a claim asserted against the plaintiff, and
    • a third party who “is or may be liable” to that plaintiff for all or part of that claim.

2. Nevada’s precedents limiting NRCP 14 to indemnity and contribution

The Court underscores that, under existing Nevada case law, NRCP 14 is not a general joinder device; it is limited to indemnity and contribution contexts:

  • Moseley v. Eighth Judicial Dist. Ct., 124 Nev. 654, 188 P.3d 1136 (2008)
    Establishes that interpretation of the Nevada Rules of Civil Procedure is reviewed de novo. That allows the Supreme Court to restate and reinforce the proper scope of NRCP 14 without deference to the district court’s reading.
  • Lund v. Eighth Judicial Dist. Ct., 127 Nev. 358, 255 P.3d 280 (2011)
    Describes the third‑party rule as “reserved for claims based on indemnity.” In other words, impleader is designed to bring in parties who must reimburse or “stand behind” the defending party if that party is held liable.
  • Pack v. LaTourette, 128 Nev. 264, 277 P.3d 1246 (2012)
    Recognizes that NRCP 14(a) can also support third‑party complaints based on contribution in addition to indemnity. Contribution involves apportionment among joint tortfeasors for a common liability.

Drawing on these precedents, the Court reaffirms the principle that NRCP 14 impleader is limited to indemnity and contribution‑type claims—i.e., claims where the third‑party defendant’s liability is derivative of the main claim.

3. Application to plaintiffs suing a defendant’s insurer

The district court reasoned that the RPIs’ third‑party complaint was proper because the insurers might be liable for the Gallagher judgment as Real Water’s liability insurers. The Supreme Court rejects that reasoning for two key reasons:

  1. The cited law applies to defendants impleading their own insurers, not to plaintiffs impleading those insurers.
    It is a long‑standing practice in many jurisdictions—sometimes restricted, sometimes allowed—for a defendant to implead its insurer to ensure coverage, defense, or indemnity. But that logic does not translate to a plaintiff using NRCP 14:
    • NRCP 14(a) addresses a “defending party” seeking someone who may be liable to it for the plaintiff’s claim.
    • NRCP 14(b) lets a plaintiff do the same only when the plaintiff has itself been sued and is thus functioning in a “defending” capacity.
    • In this case, no one had sued the plaintiffs in the Gallagher action.
  2. The third‑party claims were direct tort claims, not indemnity or contribution.
    The RPIs’ third‑party complaint asserted:
    • intentional interference with contract; and
    • intentional interference with prospective economic advantage.
    These are stand‑alone tort claims that:
    • do not derive from any claim asserted against the RPIs;
    • do not seek indemnity or contribution for liability the RPIs might face; and
    • instead allege wrongful conduct by the insurers in Real Water’s bankruptcy proceedings and an insurance‑coverage settlement with the trustee.

4. No claim “asserted against the plaintiff”

The RPIs argued that “Real Water sued [them] months before the [third‑party complaint] was filed,” pointing to an injunction that Real Water filed in the bankruptcy case. The Court rejects this as a basis for NRCP 14(b):

  • The injunction was filed in the bankruptcy action, not in the state‑court Gallagher action.
  • The injunction was voluntarily dismissed on October 24, 2023, nine days before the third‑party complaint was filed.
  • Thus, it was not a “claim asserted against [the] plaintiff” within the meaning of NRCP 14 in the state‑court case.

Because there was no claim against the plaintiffs in the Gallagher action:

  • the predicate for NRCP 14(b) was missing; and
  • the third‑party complaint could not be supported as a proper impleader claim.

5. Result: the third‑party complaint must be a separate action

The Court’s bottom line is categorical:

  • The RPIs’ interference claims against the insurers are direct claims, not derivative of any liability asserted against the RPIs.
  • Such claims “must be filed in a separate action.”

New/clarified principle: In Nevada, plaintiffs cannot use NRCP 14 as a vehicle to bring independent tort claims against a defendant’s insurer unless:

  • a claim has been asserted against the plaintiff in the underlying action; and
  • the insurer is or may be derivatively liable to the plaintiff for all or part of that claim (e.g., indemnity/contribution).

If plaintiffs wish to pursue claims like intentional interference arising from insurers’ conduct in separate proceedings (e.g., bankruptcy or coverage litigation), they must do so in a separate lawsuit, not via NRCP 14 impleader in the original tort action.

D. Severance under NRCP 21 and the A Cab Factors

1. NRCP 21 and the A Cab framework

NRCP 21 allows a court to drop or add parties or sever claims when appropriate. In A Cab, LLC v. Murray, 137 Nev. 805, 501 P.3d 961 (2021), the Nevada Supreme Court adopted a five‑factor test (borrowed from the Sixth Circuit's Parchman v. SLM Corp.) for evaluating severance:

  1. whether the claims arise out of the same transaction or occurrence;
  2. whether the claims present some common questions of law or fact;
  3. whether settlement of the claims or judicial economy would be facilitated;
  4. whether prejudice would be avoided if severance were granted; and
  5. whether different witnesses and documentary proof are required for the separate claims.

The district court’s order merely recited that it had “relied upon … and considered” these factors and concluded that “each of the factors weigh against severance,” without explaining how. The Supreme Court criticizes this as insufficient: without articulated reasoning, appellate review is hampered, and, here, the record flatly contradicts the district court’s conclusion.

2. Same transaction or occurrence

The Court looks to Mendenhall v. Tassinari, 133 Nev. 614, 403 P.3d 364 (2017), which, in the context of permissive counterclaims, defines the “same transaction or occurrence” test as whether “the pertinent facts of the different claims are so logically related that issues of judicial economy and fairness mandate that all issues be tried in one suit.”

Applied here:

  • The Gallagher action is about:
    • contamination of bottled water;
    • product defect and failure in purification systems; and
    • personal injuries and damages arising from consumption of the water.
  • The third‑party interference claims concern:
    • a settlement agreement between the insurers and the Real Water bankruptcy trustee;
    • alleged interference with plaintiffs’ contractual or economic advantages arising from that settlement and the bankruptcy process; and
    • conduct during litigation in bankruptcy court, not the original product or injuries.

These fact patterns are temporally, legally, and logically distinct. The Court concludes they are not so logically related as to demand a single lawsuit. Accordingly, the first factor favors severance.

3. Common questions of law or fact

Again, the Court finds no meaningful overlap:

  • Facts and law in the Gallagher action center on:
    • product design and manufacturing processes;
    • causation of bodily injury; and
    • damages (medical, economic, noneconomic).
  • Facts and law in the interference claims focus on:
    • the terms and negotiation of an insurance‑coverage settlement in bankruptcy court;
    • insurers’ motives and conduct vis‑à‑vis the trustee and plaintiffs; and
    • elements of intentional interference with contract and prospective economic advantage.

Any overlap is tangential at best (e.g., proof that Real Water was insured). The core evidence and legal issues are different. The second factor therefore also favors severance.

4. Facilitation of settlement and judicial economy

The Court places considerable weight on the litigation posture:

  • The Gallagher action has already:
    • proceeded to jury trial;
    • resulted in a verdict and judgment for plaintiffs; and
    • reached the appellate stage in the Nevada Supreme Court.
  • The third‑party complaint is at the “beginning stages of litigation.”

Consolidating a fully tried personal‑injury case with a nascent interference case:

  • complicates case management;
  • risks confusing issues and delay; and
  • does not meaningfully promote global settlement because the parties, claims, and defenses are very different.

By contrast, severance would:

  • allow the underlying judgment and appeal to proceed without entanglement;
  • keep the insurance‑interference claims in a separate track where appropriate discovery and motions can occur; and
  • facilitate realistic settlement discussions focused on each case’s distinct issues.

Thus, factor three strongly favors severance.

5. Prejudice to the insurers if severance is denied

The Court emphasizes that:

  • The insurers would be entering a case that has already:
    • undergone years of discovery and motion practice;
    • resulted in stipulations and the appointment of a discovery referee; and
    • culminated in a jury verdict.
  • To bind the insurers to prior stipulations, discovery frameworks, or practical constraints developed for a different dispute risks denying them due process.
  • They would effectively be litigating their first‑instance liability in the shadow of a completed trial and judgment regarding unrelated product‑defect issues.

The Court thus finds serious prejudice if severance is denied. This is particularly acute because the claims involve allegations of intentional torts against the insurers themselves, yet they would be defending those claims in a procedural environment built around the underlying product‑liability trial.

6. Different witnesses and documentary proof

The Court notes that the Gallagher action and the interference claims will require largely distinct evidence:

  • For the Gallagher action:
    • scientific, engineering, or manufacturing experts regarding water purification;
    • medical experts on causation and injury; and
    • fact witnesses about water production and distribution.
  • For the interference claims:
    • witnesses involved in the bankruptcy case and settlement (trustee, lawyers, insurer representatives);
    • documents relating to insurance policies, settlement negotiations, and bankruptcy court filings; and
    • evidence bearing on the elements of intentional interference (knowledge, intent, improper means, causation of economic harm).

Except for high‑level background (that the insurers provided coverage to Real Water), the evidentiary bases are distinct. This further supports severance.

7. Overall conclusion under NRCP 21

Weighing all five factors, the Court concludes they “weigh in favor of severance,” the exact opposite of the district court’s unreasoned conclusion. On this record, denying severance constituted an abuse of discretion.

The decision reinforces two practical points for trial courts:

  • They must explicitly analyze and explain the A Cab factors when ruling on severance; and
  • They must be alert to the risks of prejudice and procedural unfairness when late‑added, legally distinct claims (particularly against new parties) are tethered to a mature or completed litigation track.

E. Role of the Cited Precedents in Shaping the Decision

The decision weaves together several strands of Nevada procedural law:

  1. Smith, Archon, and Walker:
    • Define writ relief as extraordinary, discretionary, and limited to situations of manifest abuse of discretion or misapplication of law.
    • Provide the lens through which the Supreme Court scrutinizes the district court’s procedural and substantive decisions on timeliness, NRCP 14, and NRCP 21.
  2. Moseley:
    • Ensures that NRCP 14’s scope is reviewed de novo, letting the Court restate, and effectively tighten, the rule’s limitations on third‑party practice—especially for plaintiffs and insurers.
  3. Lund and Pack:
    • Frame NRCP 14 as primarily an indemnity and contribution tool, preventing it from morphing into a general joinder mechanism for all manner of related or tangential claims.
    • Provide the doctrinal basis for holding that interference‑tort claims must be brought separately, not as NRCP 14 third‑party claims.
  4. A Cab and Parchman:
    • Supply the structured five‑factor test for NRCP 21 severance.
    • Anchor the Court’s criticism of the district court’s conclusory approach and support its factor‑by‑factor reweighing in favor of severance.
  5. Mendenhall:
    • Offers the “logical relationship” test for “same transaction or occurrence,” which, though articulated in the counterclaim context, is imported to evaluate relatedness for severance.
    • Justifies the conclusion that contamination injuries and bankruptcy‑settlement interference are too distinct to be tried together.

Collectively, these precedents cement a coherent procedural message: extraordinary remedies like mandamus will be used to correct lower courts that (1) misread procedural rules governing timeliness and impleader, and (2) fail to meaningfully exercise severance discretion when confronted with misjoined, prejudicial claims.

IV. Complex Concepts Simplified

1. Writ of mandamus

A writ of mandamus is an extraordinary order from a higher court directing a lower court or public officer to perform a clear legal duty. It is not a routine appeal; it is used sparingly, typically when:

  • there is no adequate remedy by normal appeal; and
  • the lower court’s action is clearly unlawful or a gross abuse of discretion.

Here, the insurers used mandamus to argue that the district court had no discretion to misapply NRCP 81(c) and NRCP 14, and that it grossly mishandled NRCP 21 severance.

2. Removal and remand

  • Removal is when a defendant moves a case from state court to federal court (e.g., on federal‑question or bankruptcy‑related grounds).
  • Remand is when the federal court sends the case back to state court (often because federal jurisdiction is found lacking or for other reasons).

While a case is removed, the state court generally cannot act. After remand, state rules like NRCP 81(c) give parties a short window (14 days here) to file motions they otherwise could have filed earlier, recognizing that removal may have paused their ability to do so.

3. Third‑party complaints and impleader (NRCP 14)

An NRCP 14 third‑party complaint—also called “impleader”—allows a defending party to bring in another party (a third‑party defendant) who may be liable to the defending party for all or part of the plaintiff’s claim. Common examples include:

  • a contractor sued by a property owner bringing in a subcontractor for indemnity; or
  • a defendant bringing in another alleged joint tortfeasor for contribution.

Key points:

  • The third‑party’s liability is derivative of the main claim, not an independent tort.
  • A plaintiff can use NRCP 14(b) only when the plaintiff has itself been sued and is thus in a defending posture.
  • NRCP 14 is not a device to unite any claim the plaintiff may have against any other party, even if factually connected.

4. Indemnity and contribution

  • Indemnity is when one party (often by contract or equitable principles) must completely reimburse another for liability or loss. Example: an insurer indemnifies its insured for a judgment, or a subcontractor indemnifies a general contractor.
  • Contribution is when parties who share a common liability (e.g., joint tortfeasors) must apportion that liability among themselves.

NRCP 14 is tailored to these types of derivative claims; it is not meant for plaintiffs to assert new, unrelated torts against new parties.

5. Intentional interference with contract / prospective economic advantage

  • Intentional interference with contract generally requires:
    • a valid contract between the plaintiff and a third party;
    • the defendant’s knowledge of that contract;
    • intentional acts by the defendant designed to disrupt the contract;
    • actual disruption; and
    • resulting damage.
  • Intentional interference with prospective economic advantage is similar but concerns expected, but not yet formalized, economic relationships (e.g., a likely future contract, business expectancy, or ongoing negotiations).

These are direct economic torts against the alleged interferer and are fundamentally different from indemnity or contribution claims.

6. Severance under NRCP 21

Severance allows a court to split off claims or parties into separate cases when:

  • claims are not closely related;
  • including them together would cause prejudice, confusion, or inefficiency; or
  • distinct evidence and legal issues are involved.

The A Cab five‑factor test, applied here, is a structured way to decide whether severance promotes fairness and efficiency.

V. Impact and Broader Significance

1. For Nevada civil procedure and trial courts

  • Clear post‑remand timing rule: The decision solidifies that NRCP 81(c) provides a 14‑day window after remand during which defendants can file motions (like severance) that might otherwise be considered late under ordinary timeliness doctrines.
  • Narrowed use of NRCP 14 by plaintiffs: Plaintiffs in Nevada:
    • cannot piggyback new, independent tort claims (especially against insurers) onto an existing case via NRCP 14; and
    • must instead file a separate complaint if their claims are not truly derivative of a claim asserted against them.
  • Heightened scrutiny of severance decisions: District courts must:
    • apply the A Cab factors with rigor;
    • provide a reasoned, factor‑by‑factor explanation; and
    • avoid perfunctory endorsements that are contradicted by the record.

2. For plaintiffs and mass‑tort strategy

In high‑stakes tort litigation (like the Real Water cases), plaintiffs sometimes seek to:

  • leverage their victory against the primary defendant to pressure insurers; and
  • add claims against insurers based on alleged bad faith, interference, or coverage conduct.

This decision signals that:

  • efforts to fold those insurer claims into the original tort action via NRCP 14 will likely fail unless they are indemnity/contribution‑type claims formally tied to a claim against the plaintiffs; and
  • insurer‑focused tort or contract claims related to bankruptcy, settlement, or coverage disputes must be pursued separately.

3. For insurers and coverage litigation

Insurers gain leverage from this decision in several ways:

  • They are less likely to be dragged into late‑stage tort cases through third‑party complaints asserting independent torts.
  • They can argue that:
    • NRCP 14 is strictly limited to indemnity and contribution; and
    • misjoined third‑party claims should either be dismissed or severed.
  • They have a clear procedural precedent to:
    • remove misjoined claims when appropriate;
    • upon remand, quickly seek severance under NRCP 81(c); and
    • pursue writ relief if the district court refuses to sever on an unsound basis.

4. For bankruptcy‑related and satellite litigation

The case highlights the growing intersection between:

  • mass torts and product‑liability suits in state court;
  • debtor‑insurer settlements in bankruptcy court; and
  • subsequent “satellite litigation” over those settlements (e.g., interference or bad‑faith claims).

The Court’s message is that such satellite claims, even if factually related to the underlying tort case, may properly belong in separate proceedings:

  • to respect jurisdictional boundaries (e.g., state vs. bankruptcy court); and
  • to prevent prejudice to parties who were not involved in the original trial.

VI. Conclusion

Ohio Security Insurance Co. v. Eighth Judicial District Court (Gallagher) is a significant procedural decision that:

  • clarifies the operation of NRCP 81(c) in the wake of federal remand, confirming that defendants have a 14‑day window to file motions such as severance;
  • reaffirms and sharpens the limited scope of NRCP 14, holding that plaintiffs may not use third‑party practice to bring independent tort claims, particularly against a defendant’s insurer, absent a claim asserted against them and a derivative indemnity/contribution relationship; and
  • insists on a disciplined application of the A Cab severance factors under NRCP 21, finding an abuse of discretion where the district court’s conclusion contradicted the record and lacked articulated reasoning.

By granting mandamus and ordering severance of the third‑party complaint, the Nevada Supreme Court not only corrects the procedural handling of the Real Water–related Gallagher litigation, but also lays down clearer guidance for future civil litigants, insurers, and trial courts. The decision will likely influence how parties structure their claims against insurers, handle post‑remand motion practice, and approach severance in complex, multi‑phase litigation.

Case Details

Year: 2025
Court: Supreme Court of Nevada

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