Nevada Insurance Law

  

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.

HAPPY THANKSGIVING FROM MILLS & ASSOCIATES

All of us at Mills & Associates would like to take a moment and wish clients, family and friends (including our blog readers), a very joyous and happy Thanksgiving. 

Whether you are celebrating with a small gathering, or preparing for what is shaping up to be dinner for a small country, we wish you and yours all the very best.

LexisNexis NAMES NEVADA INSURANCE LAW AS A TOP INSURANCE LAW BLOG FOR 2011

The Advisory Board of the LexisNexis Insurance Law Community has selected Mills & Associates' Nevada Insurance Law as one of the nation’s Top Insurance Law Blogs for 2011.  The Advisory Board described what it saw in the winning blogs.

The Top Blogs contain some of the best writing out there on insurance law.  They contain a wealth of information for the insurance law community with timely news items, practical information, expert analysis, practice tips, frequent postings, and helpful links to other sites.  These blogsites demonstrate how bloggers can impact the world of insurance law. 

Mills & Associates is proud to be among that group of great bloggers.  In the Nevada Insurance Law blog, Mills & Associates strives to provide its readers with concise, informative posts on Nevada’s most current insurance law developments and trends. 

We thank the Board for recognizing the Mills & Associates Nevada Insurance Law Blog as one of the best in the country.

REVISITING THE POLICY OF ADJUDICATION OF DISPUTES ON THE MERITS UNDER THE “MOON” CASE: TURNING A NEW LEAF OR MAKING AN EXCEPTION?

Nevada courts regularly say that they favor adjudication of disputes on the merits of the claim and not some resolution based on a technical failure by a party or his/her attorney.  See Young v. Johnny Ribeiro Building,.106 Nev. 88, 92, 787 P.2d 777 (1990).  While there are a few exceptions to that general rule [click HERE], this policy of adjudication on the merits gives most claimants the opportunity to pursue almost any potentially viable cause of action all the way to trial.  This adjudication on the merits policy has also thwarted many an attempt to shut down a somewhat questionable case based upon a technical discovery violation.  However, the case of Moon v. McDonald, Carano & Wilson, LLP, 126 Nev. Adv. Op. 47, 245 P.3d 1138 (2010) raises the question whether the Court is softening it policy of adjudication on the merits or whether the court created an exception due to the particular facts. 

This case involves Nevada’s Mandatory Court-Annexed Arbitration program. 
For those of our readers
who aren’t familiar with this program, it provides for mandatory arbitration of most civil cases that have a value of $50,000 or less.  See N.R.S. 38.250.  There are obvious exceptions and Moon deals with a case that appears to have fallen through the crack between this arbitration program and the cases that are exempted from the program.  Nevada’s Supreme Court Rules Governing Alternative Dispute Resolution put flesh to this program in the Nevada Arbitration Rule (N.A.R).  The language of N.A.R. Rule 5(A) says that a case remains in the arbitration process until the Petition for Exemption is granted unless it is automatically exempt. 

In Moon, Appellants filed a legal malpractice action against their former attorney and law firm on November 3, 2006. The case did not qualify for automatic exemption. Hoping to gain an exemption, Moon filed a Petition for Exemption from Arbitration claiming that the amount in controversy exceeded the $50,000 arbitration threshold.  After the case was filed but before the Petition for Exemption from the program could be heard, the deadline set by the conventional discovery rules for non-arbitration cases, namely to hold an Early Case Conference and file a Joint Case Conference Report pursuant to Nevada Rule of Civil Procedure 16.1, came and went.  Subsequently, the court granted the Petition for Exemption on March 29, 2007.

Thereafter, the law firm filed and prevailed on a motion to dismiss Appellant’s complaint arguing that Moon had failed to comply with the N.R.C.P. Rule 16.1 pretrial discovery rules.

On appeal to the Nevada Supreme Court, Moon argued that a case should be controlled by the arbitration rules until the matter is exempted.  However, the Supreme Court pointed out that N.A.R. 4(C) provides that the Nevada Rules of Civil Procedure apply “[b]efore a case is submitted or ordered to the program, and after a request for trial de novo is filed”. The Supreme Court further cited to N.A.R. 4(C) which provides that the requirements of NRCP 16.1 cease to apply after a case is accepted or remanded into the arbitration program. The Supreme Court refuted the apparent inconsistency between N.A.R. 5 and the instant ruling, explaining that although N.A.R. 5 maintains the case is “subject” to the arbitration program immediately upon filing the initial pleading, the case is not actually “in” the program until an arbitrator is appointed.

The Supreme Court upheld the district court’s order dismissing the case.  The Supreme Court said that the Nevada Rules of Civil Procedure, not the Nevada Arbitration Rules, govern cases awaiting exemption. Consequently, cases are subject to the requirements of N.R.C.P. 16.1 during the interim period and are subject to the sanction of dismissal for noncompliance.

The Supreme Court’s ruling clearly raises litigation management issues. In a perfect world, the Plaintiff’s request for exemption would be filed within 20 days of an answer and opposed, if such is the case, within 5 days thereafter, pursuant to N.A.R. 5(A) before obviating the need to even deal the obligations under N.R.C.P.’s 16.1 early case conference requirements.  If, however, if the court delays a ruling on a Petition for Exemption, a party will have the obligation to comply with both sets of rules.  (i.e. participation in an Early Case Conference and an Early Arbitration Conference as well as disclosures pursuant to both.) Nevertheless, this appears to be a small sacrifice in comparison to a possible dismissal of a complaint for non-compliance. When, and if, an arbitrator is appointed, the N.R.C.P. process then comes to an abrupt halt and the parties must shift gears to comply with N.A.R.  One queries whether this is the most efficient process.

The Moon case involved a legal malpractice lawsuit by a client against its former attorneys, a law firm with a long Nevada heritage.  The end-result was the ultimate sanction . . . dismissal of the lawsuit premised on the Moon’s failure to timely comply with mandatory pre-trial discovery requirements. The case presented an issue of first impression with procedural implications.  And from a technical standpoint appears to be a correct interpretation.  But what of the policy of adjudication on the merits?  Has it been weakened?  It remains to be seen whether the Moon holding will be enforced on a go forward basis or whether this was just an isolated incident based on these particular facts. 

ARE MOTIONS IN LIMINE EVEN WORTH THE TROUBLE?

Trying a case is an expensive proposition.  The attorneys need to prepare the evidence, the arguments and the examinations.  Clients see any opportunity to economize on the trial prep side as a positive.  In the past, attorneys have made it a practice to file pre-trial motions in limine.  Motions in limine are heard with the hope that the judge will make early evidentiary rulings and thereby speed up the trial.  However, the Nevada Supreme Court case of BMW v. Roth, 127 Nev. Adv. Op. 11 (2011) calls into question whether the attorney should even bother to file motions in limine.  Mills & Associates believes that in spite of this decision, motions in limine are still an important tool in pre-trial preparations.  Please let us explain why. 

Roth was rendered a paraplegic when the BMW in which she was riding rolled over and she was ejected.
Roth sued the driver for negligence and BMW for strict product liability.  Roth claimed that at the time of the accident she was wearing her seatbelt and that due to a defect it failed to restrain her.  BMW’s experts said Roth was not even wearing a seat belt. 

One of Roths’ pre-trial motions in limine dealt with NRS 484D.495(4), Nevada’s seatbelt statute which says that failure to use a seat belt “[m]ay not be considered as negligence or as causation in any civil action or as negligent or reckless driving under NRS 484B.653.”  Roth didn’t want BMW to even be allowed to say that she was not using her seatbelt.  BMW countered that it must be permitted to show that Plaintiff was not wearing her seatbelt in order to defend against her allegations of a vehicle defect. 

The district court granted in part and denied in part the motion.  The court ruled that BMW could not argue that Roth was negligent in failing to use her seatbelt.  However, BMW could introduce evidence that she was not using her seatbelt to demonstrate that the car was not defective.  The trial went forward.  The jury awarded Roth a $5.9 million verdict against the driver.  However, the jury found that the BMW automobile was not defective.

Roth asked for a new trial.  Plaintiff argued that during the trial BMW’s attorney had stepped over the line that had been drawn by the court’s order on the motions in limine.  Roth claimed that during the trial BMW’s attorneys had suggested in their questions and arguments that Roth had been negligent in failing to use her seatbelt.  The court granted the new trial.  BMW appealed. 

The Nevada Supreme Court had to decide whether the order in limine standing alone was enough to warn BMW’s attorney of where not to tread in his questions and arguments.  Or alternatively, whether Roth’s attorney was obligated to object contemporaneously to the violations of the order. 

The Nevada Supreme Court rejected Roth’s argument that the motion in limine constituted a continuous objection and that no contemporaneous object was necessary.  Rather the Court found that an objection must be made at the time of the alleged violation of an ambiguous order in limine in order to preserve the violation for appeal.

If the violation of the order is “objected-to”, the moving party must demonstrate that the “misconduct is so extreme that objection, admonishment, and curative instruction cannot remove its effect.”  Lioce v. Cohen, 124 Nev. 1, 17-18, 174 P.3d 970 (2008).  On the other hand, where the violations are “not objected-to”, the appeals court will consider the issue waived unless that misconduct constitutes plain error. Id. Nev. at 19.  The Court reasoned that that if the order in limine is unclear, contemporaneous objections give the trial judge an opportunity clear up any confusion as the trial moves forward.  The Supreme Court found that the subject order in limine was unclear and that contemporaneous objections were needed.  Because there were none, the Nevada Supreme Court ruled that the objections were waived and overturned the trial court’s grant of a new trial.  

This leads us to the question that is the subject of this post.  If you have to make contemporaneous

objections anyway, why bother spending the time and money preparing, filing and arguing motions in limine?  The answers are simple.  Motions in limine teach the judge the evidentiary issues that are in play.  They give the judge the chance to better understand the reasoning and the precedent behind the arguments.  Thus, it helps the judge to more appropriately rule on the question both at the time of the motion in limine and during trial. 

Furthermore, filed motions in limine make a clear record of the legal arguments and issues that you could never make during the course of the trial.  At a side bar before the bench, there is insufficient time to make anything other than a brief argument.  Even if the court excuses the jury and gives the attorney a couple of minutes, the jurors will be cooling their heels in the hallway and chomping at the bit to get back in the box and get to work.  The court is very sensitive to that fact.  Furthermore, in the rush you might forget an important detail or critical citation. 

So if you, the consumer of the legal services, ever asks your attorney, do we really need to spend time and money on motions in limine when you have to object at trial anyway, the answer is a definitive yes.  It’s Mills & Associates advice that motions in limine are still absolutely necessary.  

 

MILLS & ASSOCIATES JOINS TIDA TO GIVE BACK TO THE LAS VEGAS COMMUNITY

Mills & Associates maintains active membership in the Trucking Industry Defense Association, also known as TIDA. TIDA, which was founded in 1993, is a non profit association whose members share knowledge and resources in defense of the trucking industry. TIDA members include motor carriers, trucking insurers, defense attorneys and claims servicing companies.

This year, the TIDA held its 19^th Annual Industry Seminar in Las Vegas, Nevada from October 12, 2011 

through October14, 2011.  TIDA members kicked off this year’s meeting by participating in a community service outreach event at Three Square. Three Square serves as the primary distribution center for donated goods to charitable organizations serving individuals and families in the Las Vegas area. Three Square’s mission is to “provide wholesome food to hungry people, while passionately pursuing a hunger-free community.”

TIDA members from across the country rolled up their sleeves to make a difference. The attendees sorted and packaged boxes of food and supplies for delivery to local charities serving the Las Vegas population impacted by the economic downturn. In addition, TIDA members packaged nutritious lunches for distribution to school age children.  TIDA members boxed several tons of food and packed over 3,000 lunches.

Mills & Associates, led by Michael C. Mills, attended this event in full force including attorneys, paralegals and staff to contribute toward this worthy cause. TIDA, its staff and members should be commended for giving back to the community and serving as an example for other organizations to follow. We thank Three Squares for allowing us the opportunity to serve the Las Vegas community.