Nevada Insurance Law

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.

GOT QUESTIONS?

These posts on the Mills & Associates Nevada Insurance Law blog are published to provide useful insights on Nevada insurance law to our clients and other subscribers. Many times the topics are suggested by recent case law, or issues raised by litigation. 

As part of our ongoing effort to provide both timely and helpful information, we invite all our readers to submit issues which they would like to see addressed in future blog posts. 

Likewise, please submit questions concerning prior posts.  We will do our best to provide additional information or updates on those topics. 

If you would like to submit a question, or a suggestion for a future blog post, please contact us at Mail@MCMillsLaw.com.

 

EVERY CASE IS DIFFERENT

In an earlier post HERE, we described some of the things an attorney must consider in deciding whether a case filed in state court must or should be removed to federal court.  Having just completed a trial in federal court I wanted to give my impressions about that experience. 

Unlike most of my recent trials, in this particular case, I represented an insurance carrier seeking subrogation recovery of a worker’s compensation payout.  My client was a Plaintiff-Intervenor, working in conjunction with a PI attorney who was pursuing damages that had not been paid by the worker’s compensation carrier.  The case ended up in federal court because of diversity.  The Defendant was from the State of Washington, the injured worker a truck driver operating out of Nevada and the Worker’s Compensation carrier a Nebraska Corporation.  Claimed damages were well over the $75,000 jurisdictional threshold. 

The controlling law was an interesting mash-up.  The accident itself happened in Wyoming meaning that Wyoming law controlled on liability.  Nevada Worker’s Compensation law controlled regarding the benefits due to the injured worker by the worker’s compensation carrier. 

Without going into the details of the accident, I came to understand more the frustrations of a plaintiff's attorney in the federal court system.  I think I also came to better understand the advantages to a defendant in the federal court system. 

The conduct of the trial was very different than what happens in state court.  The trial was conducted in a very officious manner, buttoned-down, full of starch and exceptionally formal.  Contrast that with a state court trial in which the judge, at least in Nevada, is popularly elected to the seat.  In Nevada state court, in my experience the judge caters much more to the jury and its needs than did this particular federal court judge.  The rules were followed much more strictly, which worked to our advantage in some instances and against us in others.  One of the disadvantages was that the federal judge was much less familiar with the state workers' compensation system and we were required to do a decent amount of educating regarding the ins and outs of Nevada's workers' comp laws.

Furthermore, post-trial the Plaintiffs face a tremendous disadvantage in Federal vs. State Court because of the difference in the Offer of Judgment rules.  Under the Nevada Rules of Civil Procedure, the Plaintiff can make Offers of Judgment and if the Plaintiff beats the Offer, the Plaintiff can recover attorney’s fees.  There is no comparable rule in the Federal Court.  In other words, there has to be a different basis besides the Federal Offer of Judgment rules for a Plaintiff to shift its fees to the other side.  To see more on Fee Shifting click HERE. 

In all, the lesson learned was:  Every case is going to be different and the attorney must look at the needs of that particular case and client and do his or her best to get the case to the venue that will be most advantageous to the client.

 

CAN’T KEEP A GOOD OFFER OF JUDGMENT DOWN.

Anyone familiar with our blog knows that Mills & Associates is a proponent of the Nevada Offer of Judgment rules.  Recently the Nevada Supreme Court provided yet another reason why Offers are worth making. In Re Estate of Miller, 125 Nev. Adv. Op. 42, 216 P.3d 239  (September 9, 2009).

Miller involved a will contest in which the Defendant made Offers of Judgment to the Plaintiffs.  At trial the Plaintiffs prevailed and the Defendant appealed.  On appeal the Nevada Supreme Court reversed and found in favor of the Defendant as a matter of law.

Following the appeal, Defendant sought to recover her attorney’s fees and costs.  While initially the District Court awarded Defendant $28,730.25 in costs and $100,000.00 in attorney’s fees the District Court reconsidered and reversed its award finding that a more favorable judgment could not be the result of an appellate reversal.  The Nevada Supreme Court reversed defining the word judgment within the Offer of Judgment rules to mean a “final judgment”.  Thus a trial court judgment which is challenged on appeal is not final for purposes of Offers of Judgment until the appeal is concluded and a final outcome is obtained.  .

Even more important, the Nevada Supreme Court’s found that the recoverable fees and costs include those incurred in bringing or defending the appeal itself, proving once again that the Offer of Judgment is a an often underused, but very powerful litigation tool.

Additional information on strategically implementing Offers of Judgment in Nevada litigation can be found by clicking HERE.  We also encourage you to explore the “Categories” listed in the right column for related topics.

If you have any questions about the Offer of Judgment or other effective litigation strategies, feel free to contact me at 702.240.6060 or by email.

--- Mike Mills

  
 

AN ATTORNEY REPRESENTING HIMSELF CANNOT CLAIM ATTORNEY’S FEES FOR THE TIME THAT HE SPENDS PROSECUTING HIS OWN CLAIM

It is often a phone call from a carrier that becomes the impetus for a new blog post.  This week’s phone call asked whether an attorney, representing himself, would be entitled to recover attorney’s fees for the time he spent prosecuting his own claim.  The company said that an attorney, whose fancy car had been damaged, threatened to take his claim to court.  The attorney insinuated that while there he intended to rack up outlandish attorney’s fees and thereby punish the carrier for not paying him the last couple of thousand dollars on his claim.  Apparently, the attorney has not read the case of Sellers v. Dist. Ct., 119 Nev. 256, 71 P.3d 495 (2003). 

In Sellers, an attorney represented himself in the Justice of the Peace Court.  He was awarded $230.00 for costs of suit and $1,500.00 in attorney’s fees.  There was a challenge to the award of attorney’s fees.  The opinion looked at how other states handle this type of situation.  The Nevada Supreme Court explained:

We join those states that decline to have one rule for attorneys who successfully represent themselves in court and a different a rule for non-attorneys who do the same.  We interpret NRS 69.030 to require that all proper person litigants, whether attorney or non-attorney, be obligated to pay attorney’s fees as a prerequisite for an award of prevailing party attorney’s fees.  This interpretation gives to the Legislature’s clear intent that the prevailing party in Justice’s Court be reimbursed by the losing party for out-of-pocket incurred to prosecute the suit.  To interpret the statute otherwise would require us to redefine what is meant by an attorney fee, which is commonly understood to be the sum paid or charged for legal services.

Because Matthews represented himself and did not pay or incur any obligation to pay attorney’s fees, the Justice’s Court exceeded its jurisdiction by awarding such fees.

It reaching its decision, the Nevada Supreme Court may have wanted to disarm attorneys from making the type of threat that the attorney made in this instance.  Whatever the reason for its decision, it is clear that Sellers prevents an attorney from running up attorney’s fees in a small property damage case based upon his own legal work.  His threats will be empty threats unless and until he hires a lawyer, other than himself, to prosecute that claim.

PUT UP OR SHUT UP! MAKING AN EFFECTIVE DEMAND FOR A NON-RESIDENT COST SECURITY

When Plaintiffs live outside the state of Nevada, the defense attorney can utter the litigation equivalent to these fighting words by filing a Demand for Security of Costs.  If the Demand is properly and timely filed, the Plaintiffs are forced to either post up the security or shut up by having their case dismissed.  The authority to demand that non-residents post a security for costs is found in N.R.S. 18.130. 

The statute provides that where a plaintiff resides out of the state or is a foreign corporation the Defendant may require Plaintiff to post security for costs and charges which may be awarded against that Plaintiff.  The Demand must be filed within the time allowed for the filing of the complaint.  Once the Demand is filed, the proceedings must cease until the Plaintiff secures the costs of the Defendant.  The security can be a cost bond or a cash deposit to the court for an amount not exceeding $500.00.  When the Plaintiff posts the security, he then must notify the Defendant, who has ten days from that notice to answer or otherwise plead to the complaint.

Plaintiff is allowed 30 days to post security.  If the Plaintiff hasn’t posted security 30 days from the date of service of the Demand, the court or judge may dismiss the action.  Although this Demand will not eliminate the claims of the persistent Plaintiffs, it will in fact buy the Defendants a little more time to prepare their defense.  

A FEE SHIFTING STRATEGY FOR NEVADA'S DISTRICT COURT: PART 1

WINNING A DEFENSE VERDICT IS NOT ENOUGH!
Why The Defense Needs To Use The Offer Of Judgment Strategy In Every District Court Case.

I can’t count the number of times I have heard a defense client or an insurance adjuster say, “The plaintiff’s case is a dog.  Why should I offer anything to the plaintiff to settle the case?”    My response to that question has always been, “Only by serving an Offer of Judgment, can the defense best position itself to either settle the case or try it.”  This article will explain why the Plaintiff faces minimal risk in negotiations or at trial, where no Offer of Judgment is served.  The article will demonstrate how an Offer of Judgment significantly ratchets up the threat to the Plaintiff, even in cases where the defense has stipulated to liability.   Finally, this article will teach you how to use this simple Offer of Judgment strategy in every case, thereby improving the possibility of settlement and also creating the chance to turn a tough defense case into a winner post-trial.

I.  The Best Way To Intensify The Threat Is To Place The Plaintiff At Risk To Pay The Defense Attorney's Fees
 
Following a trial, a prevailing defendant can make a motion to force its opponent to pay its costs.  See N.R.S. § 18.020 and § 18.050.  However, the court has the discretion to award or deny any of the claimed costs.  My experience is that cases, tried after arbitration, may have a few thousand dollars in defense costs.  Most plaintiffs and their attorneys are not put off by the threat that plaintiff might have to pay the defendant’s costs, should the defendant prevail.  This is especially true in light of the fact that they can ask the judge to exercise discretion and deny an award of costs to the defense.  On the other hand, attorney’s fees can be very expensive.  The bill for a defense attorney fees can easily reach $10,000 or more in a district court trial.  Therefore, the best way to increase the threat to the Plaintiff is to put that Plaintiff at risk for attorney’s fees. 

Some have argued that many Plaintiffs do not feel threatened by the possibility of paying thousands of dollars in attorney’s fees.  They suggest that the Plaintiff will simply file bankruptcy and avoid the threat if it ever comes to pass.  Although that might happen in some cases, it is impossible to know the effect that this threat might have on this particular Plaintiff.  The only way to know is to make the threat real.

II.  Normally, Everyone Pays Their Own Attorney's Fees
 
In most circumstances, all Nevada litigants will pay the fees of their own attorney.  Nevada has always followed the American Rule which says that unless there are exceptional circumstances, such as a special court rule or a statute, each of the litigants will pay their own attorney’s fees.  In the case of Smith v. Crown Fin. Svcs. Of America, 111 Nev. 277, 281, 890 P.2d 769, 771 (1995), the Nevada Supreme Court quoted Stuart M. Spiser’s treatise on Attorney’s Fees, explaining the American Rule as follows:

It has been a consistent rule throughout the United States that a litigant has no inherent right to have his attorneys' fees paid by his opponent or opponents. Such an item is not recoverable in the ordinary case as damages, nor as costs, and hence is held not allowable in the absence of some provision for its allowance either in a statute or rule of court, or some contractual provision or stipulation. This sweeping general rule has been applied in legions of cases to preclude recovery of attorneys' fees, whether by the plaintiff or by the defendant, from one's opponent in a civil action. 

Some have advocated a full scale adoption of the English Rule which is the converse of the American Rule.  The English Rule requires the loser to always pay the attorney’s fees of the prevailing party.  The advocates of the change say that adoption of the English Rule would discourage frivolous litigation.

However, until that happens, let’s look for some statutes or rules that deviate from the American rule and which can obligate your opponent to pay for your attorney.
 
III.  A Defendant Cannot Use N.R.S. §18.010(2)(a) In District Court As The Basis For An Award Of Attorney's Fees Even With A Defense Verdict
 
In Nevada, a commonly used exception to the American Rule of attorney’s fees is N.R.S. §18.010 (2)(a) which says:

2. In addition to the cases where an allowance is authorized by specific statute, the court may make an allowance of attorney's fees to a prevailing party:
(a) When he has not recovered more than $20,000;

Those involved in Nevada litigation for any period of time have known a Plaintiff who has collected attorney’s fees from a Defendant based upon this statute.  Plaintiffs recovering even a few hundred dollars in damages can rely on this statute as a basis for a claim of thousands in attorney’s fees.

Initially, prevailing District Court defendants argued that they could claim this exception because a defense verdict has a value of $20,000 or less.  The defendants then asked for attorney’s fees based upon NRS § 18.010(2)(a).

However, the Nevada Supreme Court has specifically said that a prevailing defendant may not use this statute as a basis for recovery of attorney’s fees.  Smith v. Crown Fin. Svcs. Of America, 111 Nev. 277, 281, 890 P.2d 769, 771 (1995).  In that case, Nevada Supreme Court said:
Under the present formulation of the statute, eliminating the requirement of a money judgment would afford some prevailing plaintiffs (those recovering no more than $20,000) and all prevailing defendants the opportunity to recover attorney fees. This over-inclusive result could deeply offend the policy underlying the American Rule which seeks to provide less affluent people with access to the courts. For example, a plaintiff in a personal injury or products liability case would not only be required to pit his meager resources against those of a large insurance company or manufacturer, he would also risk the potentially devastating burden of paying for this marshalling of superior resources should he lose.  
By retaining the requirement of a money judgment, this court preserves the right of some plaintiffs (and counterclaimants) to recover attorney fees while subjecting defendants to the common law rule. Although this under-inclusive rule gives plaintiffs an advantage, it does so only in cases involving $20,000 or less. This rule is faithful to the language of NRS 18.010(2)(a), it provides a significant portion of the intended class of beneficiaries with the intended benefit of being able to recover attorney fees, and it minimizes any harmful impact upon the policies underlying the American Rule. 

In other words, the court told defendants that do not have a counterclaim to look elsewhere to find a basis on which claim attorney’s fees.  In many cases, the only other way for a defendant to get an award of attorney’s fees is by making an Offer of Judgment.

IV.  Offers Of Judgment Are The Best Way To Threaten Plaintiff With A Shift Of Attorney's Fees

As seen above, the risk of a defense verdict is not much of a threat to Plaintiff because, the verdict alone does not threaten Plaintiff with a shift of attorney’s fees.  The most effective way to threaten a shift of attorney’s fees is with an Offer of Judgment.  Offers of Judgment can be made under either Rule 68 of the Nevada Rules of Civil Procedure or N.R.S. § 17.115.  If the Offer that the defense makes is superior to the jury verdict, the Offer of Judgment does two things.  First, it prevents the Plaintiff from recovering costs and attorney’s fees.  Second, it allows the defense the opportunity to recover attorney’s fees and costs from the date of the Offer.  Thus the amount and timing of the Offer of Judgment are critical in properly using this strategy.  The timing and amounts of Offers will be discussed in a future issue.

V.  Conclusion
 
When a District Court defendant fails to serve a timely and valid Offer of Judgment, that defendant has missed out on a prime negotiating opportunity.  Absent an Offer of Judgment (or a counterclaim for money damages), plaintiff will rarely face the threat of having to pay the defendant’s attorney’s fees.  That threat can be enough to force over zealous plaintiffs to rethink their negotiating posture.  Additionally, it positions the defendant to recover attorney’s fees and costs should the case go to trial.  Even if the attorney’s fee award could never be enforced, a defense Offer of Judgment should be made in every case to best use this critical negotiating strategy.  Be sure to browse "Fee Shifting Part 2" which discusses when is the best time to serve an Offer and how to determine the value to make the Offer most effective.

Additional information on strategically implementing Offers of Judgment in Nevada litigation can be found by clicking HERE.  We also encourage you to explore the “Categories” listed in the right column for related topics. 

If you have any questions about the Offer of Judgment or any other litigation strategies, feel free to contact me at 702.240.6060 or by email.

--- Mike Mills

A FEE SHIFTING STRATEGY FOR NEVADA'S DISTRICT COURTS: PART 2

WHEN SERVING AN OFFER OF JUDGMENT, TIMING AND FORM ARE EVERYTHING

In Part I of this Post, I discussed an Offer of Judgment strategy and detailed the advantages of serving a defense Offer of Judgment in every civil case.

An obvious advantage of serving an Offer of Judgment is that if the opponent accepts the offer, you have put an end to the case.  The less obvious advantage is that if the Offer expires without having been accepted, you have placed your opponent at risk of having to pay your subsequent attorney’s fees and costs.  By putting the Offer in the right form and by making the Offer the at the most opportune time, you can increase the possibility that the Offer will be accepted.  If the Offer of Judgment is not accepted and if you have used the right form, you will have simplified the Trial Judge’s task of determining whether the penalties detailed by the Offer of Judgment rules should be imposed post-trial.  Let’s talk about each one of these issues. 

I.  ONCE YOU SERVE AN OFFER OF JUDGMENT, IT WILL REMAIN OPEN FOR TEN DAYS WHETHER YOU LIKE IT OR NOT
 
An Offer of Judgment that is not accepted will expire, if after 10 days from service, the Offer has not been accepted.  N.R.C.P. 68(d) and (e).  N.R.S. 17.115(3) and (4).  Even if the offer expires, the offeror is free to make any number of subsequent Offers under any new terms.  The Nevada Supreme Court has recently said that the offeror must hold every Offer open for the full 10 days.  The offeror is not free to withdraw the Offer, even if the offeror has second thoughts.

In the case of Nava v. Second Jud. Dist. Ct., 118 Nev. 396, 46 P.3d 60 (2002), the offeror tried to withdraw a valid offer during this 10 day offer period.  The Nevada Supreme Court held that the Offer cannot be withdrawn during the 10 day period, even if the offeror changes his mind.

The lesson to be learned is that an Offer must be well thought out and made in the proper form, because once the Offer is served, you face the risk that the Offer could be accepted within the 10 days.  Always remember that if the Offer is not accepted, you will be free to make any subsequent offer under any other terms that you choose.
 
II.  AS A GENERAL RULE, THE SOONER YOU FILE THE OFFER OF JUDGMENT THE BETTER
 
There are great reasons to serve a defense Offer of Judgment as soon as possible after the Answer is filed.  If the Offer is accepted, the amount spent on defense attorney’s fees will be reduced.  In the alternative, if the Offer expires without being accepted, the earlier possible penalties may come into play.  N.R.C.P. 68(f) and N.R.S. 17.115(4).  In a case that ultimately goes to trial, those penalties can become significant. 

If the defendant obtains a verdict that is better than what had been offered, the Plaintiff cannot collect attorney’s fees, interest or costs from the date of service of the Offer. Therefore, the sooner you make the offer, the sooner you qualify to reap those benefits.  

Furthermore, the sooner the defense serves its offer, the sooner the defense has a basis from which to argue that it should recover its costs and attorney’s fees.  Thus, the earlier the Offer is made, the larger the amount of defense attorney’s fees and costs are subject to being recaptured.  And always remember, if this Offer is not accepted, you can always make another Offer under any other terms you want.
 
III.  WHERE POSSIBLE, OFFER TO PAY THE OPPONENT'S COSTS AS WELL AS THE FACE AMOUNT OF THE OFFER
 
For many years, defense attorneys used an Offer of Judgment form which reads that the amount offered “includes” costs and that the offeror would not pay any costs in addition to stated amount.  However, changes made to the Offer of Judgment rules in 1998 have caused careful practitioners to reconsider the use of that old form in light of the treatment given such an Offer by the Trial Judge following a verdict. 

To understand this concept, one must remember that the Offer of Judgment penalties only come into play when the amount of the Offer of Judgment is more favorable than the verdict.  In other words, the Trial Judge must compare the amount of the Offer to the amount of the Verdict and determine which is more favorable to the offeror.

Under the new rules, if an Offer of Judgment uses the old wording, the Trial Judge must subtract the costs that the Plaintiff had incurred at the time that the offer was made and then reduce the face value of the Offer by the amount of those costs.  Only then will the Trial Judge compare the verdict with the reduced value of the Offer of Judgment to determine which one is more favorable.  N.R.C.P. 68(g), N.R.S. 17.115(5).  In other words, the Plaintiff’s costs will be used to reduce the face value of the Offer before the decision as to which if the two is more favorable is made.
 
If the defense has used the old form, and the face value of the defense offer is only a few dollars below the verdict, the Plaintiff will be extremely motivated to prove any costs that it can in order to avoid the penalty provisions of the Offer of Judgment rules.  Under this hypothetical scenario, if the Plaintiff’s attorney were able to find just a few dollars in costs and thereby reduce the face value of the Offer below the amount of the verdict, that attorney may be protecting the Plaintiff from having to pay the Defendant’s attorney’s fees and reestablishing Plaintiff’s right to pre-judgment interest during the pendency of the trial.  The proof of just a few dollars in costs has the potential to swing the final outcome of the case by thousands or even tens of thousands of dollars. 

The old Offer of Judgment form can still be used, but should only be used as a tactic in an overall negotiation strategy.  If the defendant is unwilling to pay more than an exactly stated amount, the stated amount should increased by the amount of the estimated costs.  To do otherwise, gives the Plaintiff’s attorney too much power to affect the bottom line after the jury has rendered its verdict.   Keep in mind however that if costs can be reasonably estimated, there is no reason why the new form of the Offer of Judgment (which says that that it contemplates payment of costs over and above the stated of the Offer) should not be used contemplating a challenge to unreasonable costs by way of a Motion to Retax, if the Offer of Judgment is accepted.

IV.  CONCLUSION
 
The Offer of Judgment is the least understood and most underutilized strategic tool available to the trial attorney.  Make your Offers of Judgment as soon as possible after the Answer if filed, even if it is for a nuisance amount, thereby encouraging the Plaintiff’s attorney to discuss with the Plaintiff the real risks of litigation (namely the possibility of Plaintiff having to pay the defense attorney’s fees and costs).  In virtually every case, make your Offers of Judgment with the understanding that you will add the Plaintiff’s costs to the Offer.  You will always have the opportunity to ask the court to reduce excessive alleged costs with a Motion to Retax.  And remember, the earlier you make your Offer, the lower the Plaintiff’s costs will be.  By properly utilizing this strategy, you will be using the Offer of Judgment rules to their full potential and to your full advantage.  This Offer of Judgment strategy will encourage settlement of the case or will best position you to invoke the penalties of the rule when the opportunity presents itself after the verdict.

Additional information on strategically implementing Offers of Judgment in Nevada litigation can be found by clicking HERE.  We also encourage you to explore the “Categories” listed in the right column for related topics. 

 

A FEE SHIFTING STRATEGY FOR NEVADA'S DISTRICT COURTS: PART 3

AN OFFER OF JUDGMENT SUCCESS STORY

Over the course of the last few years, several Mills & Associates Newsletters have been devoted to the strategy of serving Offers of Judgment in defense litigation cases.  An exceptionally good example of how this Offer of Judgment strategy can make a difference presented itself in a wrongful death case that this office recently settled.  With the permission of the insurance carrier and the clients, please allow me to describe the circumstances related to the case and how the Offer of Judgment strategy managed to contribute to a good resolution of a case. 

I.  FACTS
 
This wrongful death case was brought by a young lady whose mother was killed in a drunk driving accident.  The mother was a passenger in a vehicle driven by a drunk driver.  The mother was also intoxicated with a blood alcohol content of .27. 

Mills & Associates represented the driver of a tractor trailer combination.  The accident occurred on a rural highway at night in Nevada with one lane going in each direction.  There were reports that the vehicle in which the decedent was riding had its taillights out.

The driver of the semi truck, approaching the other vehicle from the rear, began to pass the decedent’s vehicle.  Just as the tractor moved into the oncoming traffic lane to begin the pass, the driver of the decedents’ vehicle lost control and swerved directly into the path of the semi truck.  Both the driver and the passenger were instantly killed.

The investigating officers did not cite the semi truck driver.  Nevertheless, the daughter sued the semi driver and the owners of the semi truck.  The argument they made to the court was that the semi truck driver knew or should have known that the driver of the decedents’ vehicle was drunk and should not have tried to pass at the time and location where he did.

II.  PROCEDURAL BACKGROUND
 
In the lead up to trial, there were a number of decisions made by the court that persistently impacted the defense’s ability to put on its case.  As a result of discovery sanctions imposed as a result of delays from the semi truck driver, the judge ordered that the semi truck driver would not be allowed to testify at trial.  In addition, the court inexplicably ruled that the blood alcohol content of the passenger was not admissible at trial, stating that it is not illegal for a passenger to be drunk in a vehicle.  These two, and other less consequential rulings, meant that the defense was heading into trial with not only one but virtually both hands tied behind its back regarding how it would prove its case to the jury. 
 
III.  THE OFFER OF JUDGMENT
 
In Nevada, wrongful death cases are made up of two significant parts.  The first part of a wrongful death claim allows the estate of the decedent to recover for the final medical expenses leading up to the death of the decedent and the funeral expenses.  The second part, of a wrongful death claim deals with damages to the heir, including but not limited to the heirs grief and sorrow, as well as the loss of support, comfort, and consortium between the decedent and the heir.

Early in the case, the carrier offered to settle the claim of the heir for a nominal amount.  More importantly, however, the carrier served the estate with an Offer of Judgment to settle its claim for $5,000.  It was learned through discovery that there were no medical bills related to the treatment provided at the scene by the paramedics to the decedent.  Thus, the only special damage incurred by the estate was the funeral expense in the amount of $2,500.

IV.  HOW THE EFFECT OF THE OFFER OF JUDGMENT PLAYED ITSELF OUT IN THE DAYS BEFORE TRIAL
 
The Offer of Judgment that was served on the estate had a devastating effect from the plaintiff’s perspective.  Because the amount of the Offer of Judgment was twice what the estate could recover, even on its best day, it was clear that the Defense was going to obtain a result better that any result the estate could obtain at trial.  That meant that the estate was going to be subject to the effects allowed by the Offer of Judgment rules.  This gave the defense a great negotiating advantage.  This negotiating advantage overcame in part the rulings that the judge had made against the defense on issues of liability.  Even though the judge had ruled that our driver could not testify and had ruled that the blood alcohol content of the passenger was not relevant, it was obvious we were going to be able to better at trial the Offer of Judgment served on the estate. 

If the case had gone to trial, and assuming that the estate had recovered only  $2,500 as predicted, the defense would have been able to argue that it was entitled to recover all of its attorney’s fees and costs incurred since the time if served its Offer of Judgment very early on in the case.  Any award of attorney’s fees and costs against of the estate could have been offset against any verdict.  Furthermore, the only viable asset of the decedent was her home and it was an asset of the estate.  The daughter felt threatened that if the defense prevailed, that it might be able to take her mother’s home from her.

Just before trial, the daughter recognized this threat.  Her demands dropped from over a million dollars down to the hundreds of thousands.  Ultimately the settlement came at an amount well below $100,000. 

The plaintiff’s attorney admitted to me in discussions after the settlement had been reached that the Offer of Judgment made a huge effect in the settlement of the case.  His client realized that she could lose the house in which she was living and would never have the opportunity to regain it if the defense were to successfully obtain attorney’s fees and costs against the estate.
 
V.  CONCLUSION
 
Although the Offer of Judgment was not allowed to come to a full concluions following trial, it is clear that the Offer of Judgment had a moderating effect on the position advocated by the plaintiff.  I believe that it was one of the main factors in bringing this case to a resolution.  In light of the adverse evidentiary rulings by the court, the Offer of Judgment threat weighed heavily on their minds in making a decision as to how this matter should be resolved. 

This is just one very striking example of how Offers of Judgment can help bring cases to conclusion or in the alternative to obtain an advantage post trial.  The Offer of Judgment strategy is one that we advocate strongly.  If you have questions about it, please feel free to contact me to discuss how you can use that strategy in your case to your advantage.

Additional information on strategically implementing Offers of Judgment in Nevada litigation can be found by clicking HERE.  We also encourage you to explore the “Categories” listed in the right column for related topics. 

If you have any questions about the Offer of Judgment or any other litigation strategies, feel free to contact me at 702.240.6060 or by email.

--- Mike Mills

 

ATTORNEY'S FEES & COSTS

Costs are almost universally allowed to the prevailing party.  N.R.S. 18.005. 

Attorney's fees: Nevada follows the "American Rule" which is that each pays his own attorney's fees unless another statute of rule provides for the recovery of Attorney's fees.  Statutes and rules that provide for recovery of attorney's fees are more common for Plaintiffs than Defendants.

In District Court:
Under the right circumstances in District Court, Defendants can potentially recover their costs and attorney's fees if a case is forced to trial.   Unless the "Offer of Judgment Strategy" is followed, if the Defendant prevails, he or she is entitled to costs only.  However, if the Plaintiff prevails, he can recover attorney's fees if amount of recovery is $20,000 or less, plus costs.  N.R.S. 18.010.

If Defendants follow an "Offer of Judgment Strategy," they can recover attorney's fees as well as costs.  Recommended defense strategy: Make an Offer of Judgment as soon as possible when you enter litigation.  Make the Offer of Judgment for a set amount plus the costs.  That way, if you are forced to trial and you beat the Offer of Judgment, the judge's task of determining whether you qualify to recover attorney's fees will be made easier.

In Justice Court:
Attorney's fees are treated as "costs" and therefore the prevailing party, Plaintiff or Defendant, can get their attorney's fees, even if an offer of judgment is not filed.

In Small Claims Court:
Attorney's fees are not allowed.