Nevada Insurance Law

  

BILLED VS. PAID: THE HOWELL / HAYGOOD DOCTRINES ACROSS THE COUNTRY

In December, 2011, the Nevada Law Blogs addressed the question of whether the Nevada Supreme Court would limit Plaintiffs to presenting evidence of the amount that their medical providers accepted in full payment, rather than allowing Plaintiffs to present evidence of the much higher unadjusted bill.  See HERE.

The Nevada Supreme Court decision still has not come down.  Even so, discussions from other states regarding this topic have taken off.  For example, on Linked In, attorneys from the various states have been posting their state’s treatment of the issue.  See HERE.  Check out the discussion.  It has been informative. NOTE: You must join this group (CLM) to see this discussion. It costs nothing and you can leave at any time.

We hope to hear from the Nevada Supreme Court soon.  Whatever the outcome, Mills & Associates will be sharing strategies on how to handle the new landscape when it becomes clear. 

THE STATUTE OF LIMITATIONS FOR AN UNDERINSURED MOTORIST CLAIM DOES NOT START TO RUN UNTIL THE CARRIER HAS BEEN CALLED ON TO SATISFY ITS DUTIES UNDER THE POLICY AND HAS FAILED TO DO SO

Most lawyers can recite by memory the number of years available under statute to bring certain types of lawsuits.  In Nevada, the statutes of limitation are found in Chapter 11 of the Nevada Revised Statutes.

Since insurance policies are contracts, the right to bring an action for breach of a policy is generally limited to six years.  See NRS 11.190(1)(a).  In Grayson v. State Farm Mut. Auto. Ins., 971 P.2d 798 (1998) the Nevada Supreme Court faced the question of the when this six-year statute of limitations began to run on Ms. Grayson’s uninsured / underinsured motorist dispute.

On June 12, 1990, Plaintiff Grayson was hurt in a motor vehicle accident. It wasn’t until August 2, 1996 that Grayson got around to filing suit against her UIM carrier State Farm.  She alleged that the value of her injuries exceeded the $15,000 policy limit of the tortfeasor’s liability policy.  State Farm moved for summary judgment arguing that the statute of limitations clock had started running on the date of the accident and thus, the six-year limitation of actions had expired.  The District Court granted summary judgment in favor of State Farm.

The Nevada Supreme Court saw things differently.  The Court ruled that a claim for breach of contract did not arise until the claimant called on the insurer to satisfy its duties under the contract and thereafter the insurer failed to do so.  The court explained that “it would be illogical to begin the statute of limitations before the insured even has a justiciable claim for breach of contract. See Allstate Ins. Co. v. Spinelli, 443 A.2d 1286 (Del. 1982).”

The Court pointed out that until the insurance company failed to perform, it would be unfair to time-bar an insured from compensation.  The Court also said that that its holding was consistent with the public policy behind the UM / UIM legislation.  The court said:

We note that “[t]he Nevada Legislature intended that uninsured and underinsured motorist benefits be available to Nevada citizens.” Mann v. Farmers Insurance Exchange, 108 Nev. 648, 650, 836 P.2d 620, 621 (1992) (citation omitted). UIM insurance serves an important public purpose to “provide maximum and expeditious protections to the innocent victims of financially irresponsible motorists . . .” Green v. Selective Insurance Co. of America, 676 A.2d 1074, 1078 (N.J. 1996).

The Court then addressed the foreseeable issue of possible prejudicial impact to insurance companies based on the Court’s ruling.  The Court commented that an insurer may protect against prejudice by including time limitations in the insurance contract itself. In addition, the insurance company may rely on the remedy of laches to address an insured’s unreasonable delay in filing a claim.  Nevertheless, the Nevada Supreme Court concluded that the six-year statute of limitations will not begin to run until the UIM carrier has been called upon to perform and has failed to do so. 

If you have questions regarding UM / UIM claims, please give Mike Mills a call at Mills & Associates at 702-240-6060.

PARENTS ARE STATUTORILY LIABLE FOR DAMAGES WILLFULLY CAUSED BY THEIR MINOR CHILDREN UP TO $10,000, BUT ARE THOSE DAMAGES COVERED?

As a practice, when a minor causes damage or injury, the plaintiff will name as defendants both the minor and the parents.  There are a variety of theories under which the parents can be held liable for the minor’s acts.  See HERE for example.  If the minor’s acts appear to have been intentional, one of theory of recovery is a Nevada statute.  N.R.S. 41.470 imposes limited vicarious liability on parents whose minor children willfully cause damage to others.  The statute reads:

                        NRS 41.470  Imposition of liability for minor's willful misconduct.

1.  Except as otherwise provided in NRS 424.085, any act of willful misconduct of a minor which results in any injury or death to another person or injury to the private property of another or to public property is imputed to the parents or guardian having custody and control of the minor for all purposes of civil damages, and the parents or guardian having custody or control are jointly and severally liable with the minor for all damages resulting from the willful misconduct.

2.  The joint and several liability of one or both parents or guardian having custody or control of a minor under this section must not exceed $10,000 for any such act of willful misconduct of the minor.

3.  The liability imposed by this section is in addition to any other liability imposed by law.

In Roddick v. Plank, 608 F.Supp. 220 (1985), the U.S. District Court for Nevada analyzed the term “willful misconduct” saying that the statute is not implicated unless there is evidence that the minor either intended to do harm or that the minor knew or should have known that the actions would very probably cause harm.  

In deciding whether there is coverage, there must be analysis from both the minor's and the parents' perspective.

Most policies exclude coverage for intentional acts of the minor.  But what about coverage for the  parents' rising from the statute? Will that be a covered exposure?

Every policy will have to be considered on its own merits.  If you have questions regarding intentional acts and parental liability, please give Mills & Associates a call at 702-240-6060 or email Mike Mills.

REPLACEMENT VALUE NOT ACV IS THE PROPER MEASURE OF DAMAGES IN A HOMEOWNER’S THEFT CLAIM WHERE POLICY PROVIDES FOR SAME

Victor and Arlene Havas took issue with the way their homeowner’s insurance company, Atlantic Insurance Company valued the property that they lost because of a theft at their home.  Mr. & Mrs. Havas submitted their claim to the insurance company seeking recovery of the value of the lost property.  The Havas’s insurance policy provided that recovery would be limited to an amount not exceeding either the cost of repair or replacement of the property with material of like kind and quality. 

Apparently, recovery of the replacement cost was insufficient for the Mr. & Mrs. Havas.  When the insurance company offered them the replacement value of the stolen property (based on documents they produced demonstrating the cost they paid to replace the property) they filed suit. 

In the case of Havas v. Atlantic Ins. Co., 95 Nev. 415, 596 P.2d, 246 (1979) they challenged the District Court’s decision awarding them only their replacement costs.  To the Havas’ chagrin, the Nevada Supreme Court agreed that replacement cost was the proper measure of damages under this policy.  As an interesting side note, this claim wasn’t the only beef that Mr. & Mrs. Havas had with Atlantic Insurance Company.  See Havas v. Atlantic Ins. Co., 96 Nev. 586, 614 P.2d 1 (1980) mentioned HERE.  The outcome in that case was even less favorable for Mr. & Mrs. Havas than was this earlier one. 

If you have questions regarding the proper measure of damage for an insured property loss, please feel free to contact Mills & Associates.

PAPER EXPERTS

When Nevada courts decide whether an expert witness will be allowed to testify, they do not look to the rules set by the U.S. Supreme Court in Daubert v. Merrell Dow Pharm., Inc, 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).  See, Dow Chem. Co. v. Mahlum, 114 Nev. 1468, 970 P.2d 98 (1998).  Instead, the Nevada Supreme Court is developing its own set of rules to determine whether an expert can give opinion testimony to the jury.

As we said in our post a few years back, HERE, the case of Hallmark v. Eldridge, 124 Nev. 492, 189 P.3d 646 (2008) offered several factors that the trial courts should consider in deciding whether an expert can testify.  The Nevada Supreme Court said that its trial judges should consider the proposed expert’s:
(1) formal schooling and academic degrees;
(2) licensure status;
(3) employment experience; and,
(4) practical experience and specialized training.

However, before the Hallmark decision came down, the Nevada Supreme Court had specifically said that an expert witness need not be licensed in a given field to qualify as an expert witness.  Staccato v. Valley Hosp., 123 Nev. 530, 170 P.3d 503, 505 (2007).  We blogged about the Staccato case HERE. So after Hallmark, Nevada trial court’s were left with the question of whether Hallmark’s reference to licensure had trumped Staccato’s statement that licensure wasn’t absolutely necessary. 

In the recent case of Williams v. Eighth Judicial Court, 127 Nev.Adv.Op. 45, 262 P.3d 360 (2011), the Nevada Supreme Court answered the question of where licensure fell on the scale of importance in making an analysis of an expert’s qualifications.  In Williams, a party had offered a nurse as its proposed expert, hoping that she could give expert opinion testimony as to why a patient had become sick.  The opponent of the expert argued that because the nurse was not a licensed physician, she could never qualify as an expert in the cause and effect analysis needed to reach a diagnosis because she lacked a license. 

Like in Stacatto, the Williams court decided that the lack of licensing wasn’t critical.  Instead, they said that the expert’s experience should carry the day as to whether that that expert would be allowed to render the proffered opinion. 

At first blush, it may appear that the Court had just opened the door to allowing any person to be considered an expert in any field.  But in reality, the Court had simply placed practical experience and specialized training well above academics and technical licensing issues on the hierarchy of factors to consider in deciding the qualifications of an expert. 

Applying that standard to this proffered nurse expert, the Williams court found that while the nurse was qualified to testify as to techniques of sterilization and equipment handling, she was not qualified to render a diagnosis because she had never actually diagnosed a patient who had become infected from improperly disinfected equipment.  Therefore, the nurse could not testify that the improperly disinfected equipment caused the patient’s illness.  The case suggests that had the nurse had more practical experience in diagnosing patients exposed to infected equipment that she would have been fully qualified to render an opinion against a doctor. 

The lesson learned is that while it is often easy to be impressed by “paper experts” with licensing, miles of credentials and extensive publications, the real standard is whether the “paper expert” can demonstrate actual hands on practical knowledge, skill, and expertise in the specific area at issue.   It’s the degree of knowledge, not just the degree that makes an expert.

WILL THE HOWELL DOCTRINE COME TO NEVADA?

In an earlier post HERE we reported that in Howell v. Hamilton Meats & Provisions, Inc., the California Supreme Court faced the question of what was the appropriate amount of an injured plaintiff’s recovery.  Should plaintiff recover the amount billed for the medical treatment?  Or should the Plaintiff recover the reduced amount that the health care insurance company had paid to satisfy the doctor’s bill?  In Howell, the California Supreme Court found that an injured plaintiff could recover only the amount that the health care insurance provider paid and not the amount of unreduced bill. 

That same issue is currently before the Nevada Supreme Court.  In the case of Tri-County Equipment & Leasing, LLC v. Klinke, Case No. 55121, plaintiff Klinke was injured in a motor vehicle accident.  A California worker’s compensation provider paid her medical bills.  As written by the providers, the bills totaled $17,510.00.  However, the actual payment for services that satisfied those bills totaled only $12,162.26.

Knowing the game that was afoot, Plaintiff filed a motion in limine arguing that the amount paid was not admissible because it violated the collateral source rule.  Because the workers' compensation provider was a California provider, NRS 616C.215(10) was not applicable.  The trial court granted that motion in limine to prevent the introduction of the amount paid. 

In spite of the motion in limine, defendant Tri-County made another assault at trial, arguing that the amount paid was the appropriate measure of damages and not the amount billed.  Again the defendant’s arguments were shut down.  Following the four-day jury trial, Tri County filed a post-trial motion requesting the verdict be reduced by the difference in the two amounts, namely $5,347.74.  The trial court denied the post-trial motion. 

Defendant brought the issue to the Nevada Supreme Court in June, 2010.  The answering brief and the reply brief were filed in July, 2010 and September, 2010 respectively.  In a 2-1 decision, the three member panel the Nevada Supreme Court entered an Order of Affirmance of the trial court’s rulings on April 27, 2011.  Justice Pickering filed a dissenting opinion.

Tri-County filed a Petition for Rehearing en banc.  After the briefing was done but before the Nevada Supreme Court had acted on the Petition for Reconsideration, the California Supreme Court ruled in the Howell case.  Defendant Tri-County supplemented that decision to the record.  Based upon the filings, the Court vacated the earlier Order of Affirmance and granted the Petition for en banc Reconsideration..  You can find the original briefing by searching the Nevada Supreme Court Case Management Website HERE.

It is interesting to note that the Nevada Justice Association, a plaintiffs' bar organization, appeared as an amicus asking the court to publish the Order of Affirmance.  However, they arrived too late.  Because the Court had already vacated the Order and the Petition for Reconsideration had been granted, the motion for publication was denied.

We will keep an eye on this issue and inform you about any upcoming decisions.  Please stay tuned.  In the meantime, if you need questions answered on this topic, please give us a call and we will gladly assist you in your search for answer.

THE TIME CLOCK ON STATUTES OF LIMITATION FOR CONTRIBUTION AND INDEMNITY DOES NOT START UNTIL AFTER THE JUDGMENT IS ENTERED

Nevada law provides generally that a negligent defendant should pay only that share the of damage that he or she caused. That legal concept, known as several liability, is codified in NRS 41.141. However, the Nevada Supreme Court has interpreted that statute to provide a number of exceptions to the general rule of several liability. [See HERE for example] If a plaintiff falls into one of those exceptions, he or she will enjoy the benefit of joint and several liability. The end result is that a plaintiff can sue anyone that he or she chooses. If the target defendant is even 1% liable, that defendant has to pay 100% of the plaintiff’s damages even though the negligence ofothers may have contributed to the loss. It is the burden of the target defendant to identify the other tort feasors and get them to pay their fair share of liability. In order to accomplish this feat, the target defendant has to identify and sue the other tort feasors and then collect that portion of the damages that is rightly ascribed to those others.The target defendant usually pleads causes of action for contribution and equitable indemnity. The idea behind actions for contribution and equitable indemnity is that the target defendant should not have to ultimately pay for that portion of the loss that it did not cause.

In the case of Saylor v. Arcotta, 126 Nev. Adv. Op. 9, 225 P.3d 1276 (2010), a taxicab passenger was injured when the cab in which he was riding was involved in an accident. Two weeks after the accident he had a heart attack and died.  The passenger’s heirs and estate filed suit against the taxicab driver and cab company. Discovery revealed that the death may have resulted from medical malpractice. The cab company sued the doctors for contribution and indemnity. The doctors argued that the statute of limitations had expired and therefore, they could not be held liable for the death. The trial court agreed.

The Nevada Supreme Court overruled the trial court, finding that the statute of limitations on either cause of actions had not even begun to run. Therefore the taxi company and driver were fully within their rights to file suit against the doctors and attempt to prove that a portion of the damage was related to medical malpractice.

The Supreme Court said that a cause of action for equitable indemnity would not start to run until the target defendant pays the actual loss by way of settlement or judgment. As soon as it does, the statute of limitations clock starts to run. The court taught that equitable indemnity is related to a quasi contract. The court called this a cause of action not founded on an instrument in writing. NRS 11.190(2)(c) sets a four year statute of limitation for those causes of action that meet this description.
The Supreme Court also found that the statute of limitations for a contribution claim was one year after judgment was entered against the target defendant as dictated by Nevada’s contribution statute, NRS 17.285(2).

In all, this is the right result. It allows the target defendant the choice of whether to pursue its cause of action for equitable indemnity or contribution immediately or whetherit should wait until after settlement or judgment to proceed. The target defendant is notforced into bringing such an action prematurely.

If you have any questions about contribution or equitable indemnity in Nevada, please feel free to give us a call here at Mills & Associates.

DO I NEED TO BUY THE INSURANCE THAT THE RENTAL CAR COMPANY OFFERS ME WHEN I RENT A CAR IN NEVADA?

In Nevada, rental car agents are legally obligated to confirm only two things about you before they rent you a car, that you have a current driver’s license and that the signature you made on the rental contract matches the signature on that driver’s license.  See N.R.S. 483.610 and our previous blog post on this topic, HERE. [Insert link to Feb 21, 2011 post on the Insurance Blog]  The rental car company is not obligated to ask you if you have insurance.  Instead, they will ask you to buy additional protection.  Do you need it? 

If You Have No Auto Coverage, Load Up On The Coverage That The Rental Car Company Offers 

If you have no automobile insurance, the answer is an unequivocal YES!.  If the rental car is damaged in
any way while it’s in your possession, you are going to be liable to pay back the rental car company for that damage.  That is true even if someone else (including mother nature) causes that damage.  Here is a sample of what you are agreeing to if you have no automobile insurance:

You are absolutely liable and you agree to pay us for any loss of or damage to the Vehicle, even if someone else caused it or the cause is unknown, whether due to theft, fire, hail, flood, collision, vandalism, or any other cause.

Keep in mind, damage to the rental car should be only a part of your concern.  How will the rental car company treat you if you hurt someone in an accident and you have no insurance?  Here is a preview of what’s in store if the rental company gets sued for your negligence:

You agree to indemnify and hold us harmless from and against, and will defend us against, any and all loss, liability or damages whatsoever caused by or arising out of the use or operation of the Vehicle during the rental plus costs and attorneys’ fees.

If you hire a lawyer to translate that legalese, he or she will explain it as follows:

If someone sues the rental car company and it is forced to pay for injuries or damage you caused using the rental car, you must reimburse the rental car company, not just for the amount that it paid but for its attorney’s fees as well.

So if you have no personal auto insurance, you need to load up on coverage offered by the rental car company.  Be sure to buy what is known as Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) coverage.  That will protect you from the rental car company coming after you if you damage their car.  Also buy the Supplemental Liability Insurance (SLI) which should protect you from most injuries or damage that you may cause to others. 

If You Have Auto Coverage, Read Your Personal Auto Policy Or Check With Your Insurance Company To Find Out What Will And Will Not Be Covered And Make Your Decision Accordingly 

As you can see, the consequences of not having insurance are significant.  The same consequences could befall you if the personal auto coverage that you have does not address the risks particular to renting a car.  For example, if you drive a clunker and you did opted not to buy comprehensive or collision coverage (the coverage that pays to have your car fixed if a tree falls on it or if it is involved in the accident) it is likely that your insurance will not pay for these same types of damage to a rental car.  If that is so, you will want to buy the CDW or LDW coverage from the rental car company.  You need to make the same type of analysis regarding liability coverage or other coverages that the rental car company offers. 

Obviously, you could gather the information on what is covered by reading your personal policy.  However, those documents are long, difficult to understand and often intimidating.  Therefore, a great source of information as to whether your personal coverage will be sufficient is your personal auto insurance company.  An agent or other representative of the company should be able to answer those questions for you. 

Have a great stay in Nevada.  Drive your rental car carefully.  But before you start on your trip, do this little bit of homework.  It could save you a lot of grief in the end.   

SEASON'S GREETINGS

I really enjoy this time of year.  It means that I get to spend more time with my family and splurge eating some foods that I would otherwise shun.

 

I hope that all of the readers of the Mills Law Blogs will also be sipping something warm, eating a little too much and staying safe out of the weather.  Most importantly, I hope that you all will be sharing this wonderful Season with those that you love. 

 

From all of us to all of you, have a Happy Holiday.

 

RESPONDING TO THE ANTICIPATED FALLOUT OF THE HAYGOOD AND HOWELL OPINIONS

No one is surprised when people who are hurt in accidents go to the doctor’s office for care.  In the past, many went to doctors who provided them care through their group health insurance programs.  These group healthcare providers usually have pre-negotiated reimbursement agreements with the group health insurance carriers.  Those insurance carriers pay the providers a sum certain for each service provided.  The pre-negotiated reimbursement agreements normally prevent the doctors from charging the patient more than the agreed reimbursement rate. 

The question presented in the cases of Howell v. Hamilton Meats & Provisions, Inc., 52 Cal. 4th 541, 257, P.3d 81, 128 Cal Rptr. 3d 658 (2011) and Haygood v. Escabedo, Slip Op. No. 09-0377 (Tex. Sup. Ct. July 1, 2011) is whether a defendant should be obliged to compensate the plaintiff for that difference between the doctor’s negotiated rate and the higher reimbursement rate that the provider would charge to someone who didn’t have insurance.  Even though the two courts followed different lines of reasoning, both reached the same conclusion.  Both courts said that Plaintiffs could recover from Defendants no more than the rate the doctor had negotiated with the health carrier.  The Plaintiff could not recover the higher un-negotiated rate because the Plaintiff never paid that higher amount. 

While Defendant’s and their attorneys may be celebrating these opinions, the fallout from these cases is easy to anticipate.  Plaintiffs’ attorneys will now have even more reason to encourage their clients to get their care from providers that are in the business of treating people who are injured in accidents.  In other words, more Plaintiffs will be seeking care on liens.  And without a doubt, the price of the lien care is going to be higher than the negotiated reimbursement rates authorized under a group health contract. 

So how does a good Defense attorney challenge the Plaintiff’s decision to choose the higher priced care over lower priced care that is available to her?  Usually the collateral source rule will prevent the defense from arguing to the jury that the Plaintiff failed to get the lower priced care from her own lower priced health insurance provider.  One tried and true attack is to challenge the credibility of the lien care provider as biased.  But what else can the defense do where the charges are out of line?

One choice is to obtain a medical bill audit.  Medical bill audits can be basic or in depth.  Basic medical bill audits will look simply at the bills to make sure that there are no duplicate charges and will determine whether charged amounts were within the “usual and customary” range of charges in the geographic area where the services were provided.  More in depth audits could also include a review of the medical records to insure that the providers delivered the services for which they billed.  Depending on the amount you want to spend, the medical bill auditors can provide a great amount of information from their review of the medical bills and records. 

Obviously, the defense can use these audit reports as negotiating points, in arbitrations and mediations.  However, if the matter is headed to trial, the defense is going to need an auditor that has the willingness and ability to take the stand and testify in support of the work that the auditor has done.  Finding the right auditor should start with that fact in mind. 

With an increasing percentage of Plaintiffs receiving their care on liens, Mills & Associates predicts that medical bill audits will become even more useful than they have been in the past.  In a recent case that we handled, Plaintiff had presented past bills in excess of $725,000.  The auditors that we used found almost $300,000 in reductions in charges. 

Please contact Mills & Associates to discuss how best to select and use medical bill auditors in the defense of your claim.