NV Supreme Court Summaries (7-19-12)

The NSC Summaries are provided by attorney Joe Tommasino and published by the Clark County Bar Association (CCBA). All rights reserved.To request permissions to reprint, contact CCBA at (702) 387-6011.

Appellate Review: En banc reconsideration is appropriate when needed to preserve precedential uniformity or the matter presents issues involving substantial precedential, constitutional, or public policy value. On appeal, Choy argued that the district court erred in denying his request under NRCP 56(f) and granting summary judgment. This court issued an opinion affirming the district court’s order. Choy thereafter filed a timely petition for rehearing, which was denied. Choy then filed this timely petition for en banc reconsideration. The Court reiterated that NRCP 56(f) requires that the party opposing a motion for summary judgment and seeking a denial or continuance of the motion in order to conduct further discovery must provide an affidavit giving the reasons why the party cannot present “facts essential to justify the party’s opposition.” Choy v. Ameristar Casinos, Inc., 128 Nev. Adv. Op. No. 29, ___ P.3d ___ (June 28, 2012).

Civil Procedure: (1) The claim for equitable indemnity in this case fails as a matter of law based on the lack of any preexisting relationship between the third parties and the third-party plaintiffs’ active negligence. (2) A party need not pay toward a judgment before bringing a claim for contribution. (3) When a claim for contribution is contingent upon a successful showing of medical malpractice, a claimant must satisfy the expert affidavit requirement of NRS 41A.071. Thus, the third-party plaintiffs’ failure to attach an expert affidavit warranted dismissal of their complaint without prejudice. With respect to the third issue, the Court stated that while it had not yet considered the applicability of NRS 41A.071 to third-party claims for contribution, the Court has recognized that statutory limitations should apply to protect doctors from frivolous claims where a given action requires proof of malpractice before relief may be granted. Pack v. LaTourette, 128 Nev. Adv. Op. No. 25, ___ P.3d ___ (May 31, 2012).

Criminal Procedure: A judgment of conviction that imposes restitution but does not set an amount of restitution, in violation of Nevada statutes, is not final and therefore does not trigger the one-year time limit for filing a post-conviction petition for a writ of habeas corpus. The Court observed that if the district court concludes that no restitution is required or warranted as part of a defendant’s sentence, a judgment of conviction need not address restitution to be final. “Only a judgment of conviction that imposes restitution in an unspecified amount is not final. . . .” Whitehead v. State, 128 Nev. Adv. Op. No. 24, ___ P.3d ___ (May 31, 2012).

Evidence: Proof of California workers’ compensation payments can be admitted into evidence in a personal injury action in Nevada. Because Nevada, the forum state, and California, the state in which the payments were made, both have statutes that permit proof of workers’ compensation payments to be allowed into evidence in personal injury actions, Nevada law governs. Applying Nevada law, the Court decided that evidence of the actual amount of workers’ compensation benefits paid should have been admitted and that a clarifying jury instruction provided by statute should have been given. Tri-County Equipment & Leasing v. Klinke, 128 Nev. Adv. Op. No. 33, ___ P.3d ___ (June 28, 2012).

Insurance: Under a claims-made professional liability insurance policy, for a “report” of a potential demand for damages to qualify as a “claim” requires sufficient specificity to alert the insurer’s claim department to the existence of a potential demand for damages arising out of an identifiable incident, involving an identified or identifiable claimant or claimants, with actual or anticipated injuries. Allowing coverage to be triggered by broadly phrased, innocuous, or non-specific statements would permit an unbargained-for expansion of the policy, undermining the key distinguishing characteristics of a claims-made policy (reduced exposure for the insurer and lower premiums for the insured). Physicians Insurance Co. v. Williams, 128 Nev. Adv. Op. No. 30, ___ P.3d ___ (June 28, 2012).

Juvenile Courts: NRS 62B.330(3)(e)(2) divests a juvenile court of jurisdiction over a person who commits a class A or B felony between 16 and 18 years of age but is not identified until after reaching 21 years of age. This statutory provision governs jurisdiction over any proceedings initiated after the provision went into effect on October 1, 2009, regardless of when the offense was committed. Here, respondent Gregory Barren allegedly committed class A and B felonies at 17 years of age but was not identified until after reaching 21 years of age. Because NRS 62B.330(3)(e)(2) was in effect when the State initiated proceedings against Barren, the district court, and not the juvenile court, has jurisdiction over his criminal case. State v. Barren, 128 Nev. Adv. Op. No. 31, ___ P.3d ___ (June 28, 2012).

Juvenile Courts: NRS 62B.335 only applies to delinquent acts and therefore does not apply to acts that are “deemed not to be a delinquent act” under NRS 62B.330(3). Thus, if the case is excluded from the juvenile court’s jurisdiction under NRS 62B.330(3), then the juvenile court does not obtain jurisdiction by virtue of NRS 62B.335. NRS 62B.330(3)(e)(1) and NRS 62B.335 address a person who has been charged with committing an offense when the person was between 16 and 18 years of age that would be a category A or B felony if committed by an adult. In those circumstances, NRS 62B.330(3)(e)(1) provides that the act is not a “delinquent act” and divests the juvenile court of jurisdiction if the person is identified and charged between the ages of 20 years, 3 months and 21 years. Pursuant to NRS 62B.335, if a person charged with a delinquent act that would have been a category A or B felony if committed by an adult is identified before reaching 21 years of age but is not apprehended until after reaching 21 years of age, then the juvenile court retains jurisdiction to conduct a hearing. The purpose of the hearing authorized under NRS 62B.335 is to determine whether to dismiss the charges or transfer the case to district court for criminal proceedings. In re George J., 128 Nev. Adv. Op. No. 32, ___ P.3d ___ (June 28, 2012).

Medical Malpractice: (1) The accrual date for NRS 41A.097(2)’s one-year discovery period ordinarily presents a question of fact to be decided by the jury. Only when the evidence irrefutably demonstrates that a plaintiff was put on inquiry notice of a cause of action should the district court determine this discovery date as a matter of law. (2) A plaintiff must satisfy a two-prong test in order to establish that subsection 2’s limitation periods should be tolled for concealment, and this test requires consideration of whether a party “intentionally withheld information” that was “material,” meaning the information would have hindered a reasonably diligent plaintiff from timely filing suit. The Court also ruled that “[o]ne defendant’s concealment cannot serve as a basis for tolling subsection 2’s limitation periods as to defendants who played no role in the concealment.” Winn v. Sunrise Hospital & Medical Center, 128 Nev. Adv. Op. No. 23, ___ P.3d ___ (May 31, 2012).

Professional Conduct: The screening of lawyers, under the applicable rules of professional conduct, may be used to rebut the presumption of shared confidences. Although the Nevada Rules of Professional Conduct (RPC) permit the screening of disqualified attorneys to prevent an associated law firm’s imputed disqualification in some cases, the Court had never before considered whether screening is appropriate with regard to a settlement judge acting under the Court’s settlement conference program or how to determine the sufficiency of any screening measures utilized. The Court took this opportunity to consider the practice of attorney screening to cure imputed disqualification. When presented with a dispute over whether a lawyer has been properly screened, Nevada courts should conduct an evidentiary hearing to determine the adequacy and timeliness of the screening measures on a case-by-case basis. The burden of proof is upon the party seeking to cure an imputed disqualification with screening to demonstrate that the use of screening is appropriate for the situation and that the disqualified attorney is timely and properly screened. When considering whether the screening measures implemented are adequate, courts are to be guided by the following nonexhaustive list of factors:

(1) instructions given to ban the exchange of information between the disqualified attorney and other members of the firm;
(2) restricted access to files and other information about the case;
(3) the size of the law firm and its structural divisions;
(4) the likelihood of contact between the quarantined lawyer and other members of the firm; and
(5) the timing of the screening.

As with motions to disqualify, the consideration of the adequacy of screening is within the sound discretion of the district court; however, the district court must justify its determination as to the adequacy of the screening in a written order with specific findings of fact and conclusions of law. Ryan’s Express v. Amador Stage Lines, 128 Nev. Adv. Op. No. 27, ___ P.3d ___ (June 14, 2012).

Real Property: NRS 645.251 provides that real estate licensees are “not required to comply with any principles of common law that may otherwise apply to any of the duties of the licensee as set forth in NRS 645.252, 645.253 and 645.254.” Although the statute does not, in all instances, shield real estate licensees from common law forms of liability, it precludes such liability when the type of conduct complained of is covered by NRS 645.252, 645.253, or 645.254. The Court addressed two additional issues. First, NRS 645.257 declares that “actual damages” may be recovered for a real estate licensee’s breach of the duties set forth in NRS 645.252-645.254. “Actual damages” is synonymous with “compensatory damages.” Second, NRS 48.105 provides that evidence of offers of compromise must be excluded when introduced “to prove liability for or invalidity of the claim or its amount.” The statute also provides that exclusion is not required “when the evidence is offered for another purpose.” However, evidence of compromise offers is not admissible for the purpose of demonstrating a failure to mitigate damages, for evidence demonstrating a failure to mitigate damages necessarily goes to the “amount” of a claim. Davis v. Beling, 128 Nev. Adv. Op. No. 28, ___ P.3d ___ (June 14, 2012).

Torts: The “mode of operation” approach to premises liability (under which the plaintiff does not have to prove the defendant’s knowledge of a particular hazardous condition if the plaintiff can prove that the nature of the defendant’s business tends to create a substantial risk of the type of harm the plaintiff suffered) applies in the self-service context. However, because the “mode of operation” approach is premised on the idea that business owners should be held responsible for the risks that their choice to have customers serve themselves creates, the approach does not extend to “sit-down” restaurants. In this opinion, the Court commented on two evidentiary issues. First, the test for competency of medical expert testimony depends on the purpose for which the testimony is offered. If medical expert testimony is offered to establish causation, it “must be stated to a reasonable degree of medical probability.” However, if expert testimony is offered to contradict the party opponent’s expert testimony, the offered testimony must only be “competent and supported by relevant evidence or research.” Additionally, for defense expert testimony to constitute a contradiction of the party opponent’s expert testimony, the defense expert must include the plaintiff’s causation theory in his analysis. Second, evidence of a party’s possible intoxication may be probative of the issues of causation and comparative negligence. Evidence of intoxication, however, should not be admitted if there is no support for finding a causal link between the alleged impairment and the injury. In addition to causation, evidence of intoxication is relevant to a person’s ability to perceive and, thus, may be “admissible to attack a witness on [his or] her ability to perceive and remember.” FGA, Inc. v. Giglio, 128 Nev. Adv. Op. No. 26, ___ P.3d ___ (June 14, 2012).

Water Rights: NRS 533.450(1) does not limit subject matter jurisdiction according to the location of an applicant’s water rights. NRS 533.450(1) affords judicial review “in the nature of an appeal” to “[a]ny person feeling aggrieved by any order or decision of the State [Water] Engineer . . . affecting the person’s interests.” The appeal “must be initiated in the proper court of the county in which the matters affected or a portion thereof are situated.” This opinion analyzes what the statute means by “matters affected.” The Court found that “the statute’s wording plainly contemplates more than one permissible forum, depending on the location, nature, and origin of the interests assertedly affected.” In re State Engineer Ruling No. 5823, 128 Nev. Adv. Op. No. 22, ___ P.3d ___ (May 31, 2012).

The NV Supreme Court Summaries are authored by Joe Tommasino. Tommasino has served as Staff Attorney for the Las Vegas Justice Court since 1996. Joe is the President of the Nevada Association for Court Career Advancement (NACCA).

NV Supreme Court Summaries (5/24/2012)

Attorney Depositions: A party seeking to depose opposing counsel must demonstrate that the information sought cannot be obtained by other means, is relevant and nonprivileged, and is crucial to the preparation of the case. Nevada’s discovery rules grant broad powers to litigants promoting and expediting the trial of civil matters by allowing those litigants an adequate means of discovery during the period of trial preparation. NRCP 26(a) permits discovery of information in a variety of methods including “depositions upon oral examination.” Such depositions are governed by NRCP 30, which allows a party to depose “any person” by oral examination. NRCP 30(a)(1). Thus, the rule does not prohibit the taking of opposing counsel’s deposition. Nevertheless, the district court may, based on good cause shown, bar or limit discovery to prevent, among other things, an undue burden. NRCP 26(c).

Forcing an opposing party’s trial counsel to personally participate in trial as a witness has long been discouraged and recognized as disrupting the adversarial nature of the judicial system. In particular, requiring attorneys to participate in such a manner may increase the time and costs of litigation, create delays to resolve work-product and attorney-client objections, distract the attorney from representation of the client, and prevent clients from openly communicating with their attorneys. Permitting the unbridled deposition of a party’s attorney could further command delays to resolve collateral issues raised by the attorney’s testimony. Additionally, such depositions could provide a back-door method for attorneys to glean privileged information about an opponent’s litigation strategy from the opposing attorney’s awareness of various documents. Based on the aforesaid apprehensions of placing counsel under the microscope of interrogation, courts across this country have disfavored the practice of taking the deposition of a party’s attorney.

While the Nevada Supreme Court has not encountered rampant attorney depositions in Nevada, the Court is “wholeheartedly concerned” with this vehicle of discovery and its imaginable ability to create an undue burden. However, opposing counsel should not be absolutely immune from being deposed. Therefore, the Court concluded that such depositions should only be permitted under exceptionally limited circumstances. The Court adopted the framework espoused by the Eighth Circuit Court of Appeals in Shelton v. American Motors Corp., 805 F.2d 1323 (8th Cir. 1986). The Shelton case relies upon a stringent three-factor test under which the party seeking to take the deposition of an opposing party’s counsel has the burden of proving the following:

(1) No other means exist to obtain the information than to depose opposing counsel;
(2) The information sought is relevant and nonprivileged; and
(3) The information is crucial to the preparation of the case.

The Nevada Supreme Court agreed that, in the absence of these conditions, a party should not be permitted to depose an opposing party’s attorney. In evaluating the three factors, the district court should consider whether the attorney is a percipient witness to the facts giving rise to the complaint. By establishing this heightened standard when a party is attempting to depose opposing counsel, the Nevada Supreme Court advised litigants to resort to alternative discovery methods, and the Court discouraged endeavors to seek confidential and privileged information. When the facts and circumstances are so remarkable as to allow a party to depose the opposing party’s counsel, the district court should provide specific limiting instructions to ensure that the parties avoid improper disclosure of protected information. Club Vista Financial Servs. v. Dist. Ct., 128 Nev. Adv. Op. No. 21, ___ P.3d ___ (May 17, 2012).

Financial Institutions: The jurisdictional bar of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), 12 U.S.C. § 1821 (2006), divests a district court of jurisdiction to consider claims and counterclaims asserted against a successor in interest to the Federal Deposit Insurance Corporation (FDIC) not first adjudicated through FIRREA’s claims process. However, the jurisdictional bar does not apply to defenses or affirmative defenses raised by a debtor in response to the successor in interest’s complaint for collection. Congress enacted FIRREA to enable the federal government to respond swiftly and effectively to the declining financial condition of the nation’s banks and savings institutions. The statute grants the FDIC, as receiver, broad powers to determine claims asserted against failed banks. To enable the FDIC’s powers, Congress created a claims process for the filing, consideration, and determination of claims against insolvent banks that encourages the FDIC to quickly resolve claims without overburdening the courts. Accordingly, if a financial institution has failed, subsequent claims must be presented first to the FDIC for an administrative determination on whether they should be paid. Importantly, a claimant must first complete the claims process before seeking judicial review. If the claims process is not followed, then FIRREA bars judicial jurisdiction.

The federal courts, by and large, that have considered the issue have concluded that a successor in interest is entitled to benefit from FIRREA’s jurisdictional bar against claims falling within the statute’s terms that have not been administratively pursued. The Nevada Supreme Court agreed with the reasoning of these federal courts and similarly concluded that, with respect to claims relating to acts or omissions of the failed bank, a successor in interest is entitled to benefit from FIRREA’s jurisdictional bar. Similarly, a majority of courts have held that while FIRREA’s jurisdictional bar applies to claims and counterclaims, it does not apply to defenses and affirmative defenses. The Court joined in the majority’s reasoning and reached the same conclusion. The Court explained that “[r]ecoupment is [a] right of the defendant to have a deduction from the amount of the plaintiff’s damages, for the reason that the plaintiff has not complied with the cross-obligations or independent covenants arising under the same contract.” Recoupment must arise out of the same transaction and involve the same parties; thus, it does not apply when the defendant’s allegations arise out of a transaction “extrinsic to the plaintiff’s cause of action.” While the defendant may thus defend against the plaintiff’s claim by asserting competing rights arising out of the same transaction and thereby extinguish or reduce any judgment awarded to the plaintiff, recoupment “does not allow the defendant to pursue damages in excess of the plaintiff’s judgment award.” Thus, by its very nature and, regardless of whether the same facts could constitute a separate claim for damages, recoupment seeks to challenge the foundation of the plaintiff’s claim and, consequently, the Court recognized recoupment as an affirmative defense not barred by FIRREA. Schettler v. RalRon Capital Corporation, 128 Nev. Adv. Op. No. 20, ___ P.3d ___ (May 3, 2012).

The NV Supreme Court Summaries are authored by Joe Tommasino. Tommasino has served as Staff Attorney for the Las Vegas Justice Court since 1996. Joe is the President of the Nevada Association for Court Career Advancement (NACCA).