Thursday, October 27, 2011

Pacificare of Nevada v. Rogers, 127 Nev. Adv. Op. 71 (October 27, 2011)

Before the Court en banc. Opinion by Parraguirre.
In this appeal from denial of a motion to compel arbitration, the Nevada Supreme Court addressed two issues concerning arbitration clauses. Respondent Rogers was a Medicare recipient who received benefits through appellant Pacificare, with whom she executed contracts in 2007 and 2008. The 2007 contract contained an arbitration clause but the 2008 contract did not. The Court adopted the law commonly applied in other jurisdictions that an arbitration provision survives the expiration of a contract unless the clause is expressly rescinded. Furthermore, adopting the reasoning of the Ninth Circuit Court of Appeals in Do Sung Uhm v. Humana, Inc., 620 F.3d 1134 (9th Cir. 2010), the Court determined that the Medicare Act expressly preempts Nevada’s common law doctrine of unconscionability. As such, the Court concluded that the district court improperly denied the motion to compel arbitration. Reversed and remanded. (Kerry Doyle, Associate in the Reno office of McDonald Carano Wilson)

Cervantes v. Health Plan of Nevada, 127 Nev. Adv. Op. 70 (October 27, 2011)

Before the Court en banc. Opinion by Douglas.
In this appeal from a district court order granting summary judgment, the Nevada Supreme Court considered whether ERISA section 514 preempts a state law claim of negligence against a managed care organization (MCO) that an ERISA plan contracted with to develop the ERISA plan’s health care provider network. Appellant Cervantes alleged that she contracted hepatitis C after treatment at the Endoscopy Center of Southern Nevada (ECSN) due to the failure of the MCO hired by her union to insure the quality of care provided by ECSN as required by NRS 695G.050. In upholding the district court’s summary judgment finding that Cervantes’s claims were preempted, the Nevada Supreme Court followed the reasoning of several United States Supreme Court and Ninth Circuit opinions limiting section 514(a)’s preemption of state laws that are “related to” any employee benefit plan, by requiring that a state law be “connected with” or “refer to” an ERISA plan. Concluding that only the “connection with” test applied in this case, the Court determined that the MCO’s acts were connected with the ERISA plan because the MCO’s negotiation of contracts with health care providers selected by the ERISA plan involved the administration of an ERISA plan. Therefore, Cervantes’s claims against the MCO pursuant to NRS 695G are preempted by ERISA section 514(a). Affirmed. (Seth T. Floyd, Associate in the Las Vegas office of McDonald Carano Wilson)

Thursday, October 20, 2011

State, Dep’t of Taxation v. Masco Builder, 127 Nev. Adv. Op. 67 (October 20, 2011)

Before Saitta, Hardesty and Parraguirre. Per curiam.
In this case involving a taxpayer’s request for a refund, the Court confronted two issues: (1) whether the Nevada Tax Commission (Commission) had improperly substituted its judgment for that of an administrative law judge (ALJ) in reversing the ALJ’s determination that the taxpayer was due a refund; and (2) whether the statute of limitations governing the time within which a taxpayer must file a formal refund request is tolled where the Department of Taxation (Department) has caused the taxpayer to believe that a formal filing was unnecessary. First, the Court noted that the Commission was required to affirm the ALJ’s decision if it was based on substantial evidence. Because the taxpayer, Masco Builder, had presented numerous contracts with customers evidencing its tax status, the ALJ’s decision was based on substantial evidence, which the Commission ignored in reversing the ALJ. Second, the Court applied the doctrine of equitable tolling to hold that Masco could obtain a refund for the entire 2003-2006 period because the Department’s auditor had given Masco false assurances that its refund would not be time-barred, Masco had acted diligently to preserve its rights, Masco had complied with all technical procedures necessary to request a refund, there was no danger of prejudice to the Department because it had already reviewed and rejected Masco’s request for a refund, and justice required that the statute of limitations be tolled because the Department had “actively participated in and contributed to Masco’s delay in formally filing its refund claims.” Affirmed. (Rory Kay, Associate in the Las Vegas office of McDonald Carano Wilson)

Thursday, October 13, 2011

Walters v. Eighth Judicial Dist. Ct., 127 Nev. Adv. Op. 66 (October 13, 2011)

Before the court en banc (with a voluntary recusal by Pickering). Opinion by Douglas.
In this petition for a writ of mandamus or prohibition, the petitioner challenged the district court’s orders denying petitioner’s motion for summary judgment and granting, in part, the real party in interest’s motion for summary judgment. The issue presented is whether a counterclaim, cross-claim, and written motion setting the grounds for the application and the relief sought satisfies the requirements of NRS Chapter 40 for seeking a deficiency judgment based upon a breach of guaranty. Petitioner William Walters (“Walters”) argued that real party in interest Community Bank of Nevada (“CBN”) failed to apply to the district court for deficiency judgment within the statutory six-month period. CBN argued that it clearly asserted a claim that comported with NRS 40.459 by calculating the amount Walters owed as a result of the deficiency. This was done via CBN’s counterclaim, cross-claim, and summary judgment motion which asserted a deficiency against Walters. The Nevada Supreme Court affirmed the district court’s decision by stating that NRS 40.455(1) requires a judgment creditor to apply for a deficiency judgment within six months after the foreclosure sale but does not state that it must be specifically labeled as a deficiency judgment application. While NRS 40.455(1) does not state how an application should be made, NRCP 7(b)(1) states that “[a]n application to the court for an order shall be by motion which, unless made during a hearing or trial, shall be made in writing, shall state with particularity the grounds therefor, and shall set forth the relief or order sought. The requirement of a writing is fulfilled if the motion is stated in a written notice of the hearing of the motion.” The Nevada Supreme Court found that CBN’s summary judgment motion met the requirements of NRCP 7(b)(1) because it was: (1) made in writing, (2) set forth in particularity the grounds for the application, and (3) set forth the relief sought. Thus, an application was made pursuant to NRS 40.455(1) within the six month period. Further, the Nevada Supreme Court found that CBN was not seeking double recovery because the $5 million credit bid was factored into the calculation of the amount owed by Walters under his guaranty and because the district court planned on determining the fair market value of the subject real property at a deficiency hearing. Petition for writ of mandamus or prohibition denied. (By Lisa Wiltshire, Associate in the Las Vegas office of McDonald Carano Wilson)

Congratulations to Jeff Silvestri, Andrew Gordon, and Lisa Wiltshire for their win for the FDIC!

Thursday, October 6, 2011

G.C. Wallace, Inc. v. Eighth Judicial Dist. Court ex rel. County of Clark, 127 Nev. Adv. Op. 64 (October 6, 2011)

Before Saitta, Hardesty and Parraguirre. Opinion by Saitta.
In this petition for a writ of mandamus from the denial of a motion for summary judgment, the Nevada Supreme Court clarified the procedure for claiming damages after obtaining a summary eviction. After obtaining a summary eviction in justice court pursuant to NRS 40.253, a landlord brought a damages claim against the tenant in district court. The tenant moved for summary judgment arguing that claim preclusion prevented the second action for damages. Reaffirming the test for claim preclusion announced in Five Star Capital Corp. v. Ruby, 124 Nev. 1048 (2008), the Court determined that claim preclusion would usually apply because the parties were identical, the justice court’s judgment on summary eviction was final and valid, and the claim for damages, which arose from the same breach as the claim for eviction, could have been brought in justice court up to the jurisdictional limit. Interpreting NRS 40.253 as it existed before recent amendments, however, the Court determined landlords must be allowed to avail themselves of the swift and straightforward summary eviction procedure and then seek damages in a later proceeding because to require damages claims to be brought at the same time as claims for eviction would needlessly complicate the summary proceedings and defeat their entire purpose. As such, the Court concluded that an exception to the doctrine of claim preclusion exists for summary eviction proceedings under NRS 40.253, allowing landlords seeking summary eviction and damages to bring the claim in a single action or separate actions at their election. Petition denied. (By Amanda Hogeg, Associate in the Las Vegas office of McDonald Carano Wilson)

Merits Incentives, LLC v. Eighth Judicial Dist. Ct., 127 Nev. Adv. Op. 63 (October 6, 2011)

Before Saitta, Hardesty and Parraguirre. Opinion by Hardesty.
In the petition for a writ of mandamus, the petitioners challenged the district court’s order denying a motion to dismiss or, alternatively, to disqualify counsel and to prohibit the use of certain information. After initiation of the lawsuit by petitioners, real party in interest Bumble and Bumble Products, LLC (“Bumble”) received an anonymous package from Lebanon at its New York headquarters. The package contained a disk and a note stating that the package should be forwarded to Bumble’s counsel in Las Vegas. Subsequently, Bumble’s counsel disclosed the disk and contents therein in NRCP 16.1 supplemental disclosures. Petitioners sought to disqualify Bumble’s counsel for use of this disk. The Nevada Supreme Court affirmed the district court’s decision that Bumble’s counsel acted reasonably and within the Nevada Rules of Professional Conduct and adopted the following: (1) a notification requirement that an attorney who receives documents anonymously or from a third party unrelated to the litigation must promptly notify opposing counsel that the documents were not received in the ordinary course of discovery and describe, with particularity, the facts and circumstances that explain how the documents or evidence came into counsel’s or his or her client’s possession; and (2) a nonexhaustive list of factors to aid trial courts in determining whether disqualification of counsel is appropriate, as stated in In re Meador, 968 S.W. 2d 346 (Tex. 1998), of: (a) whether the attorney knew or should have known that the material was privileged; (b) the promptness with which the attorney notifies the opposing side that he or she has received its privileged information; (c) the extent to which the attorney reviews and digests the privileged information; (d) the significance of the privileged information, i.e., the extent to which its disclosure may prejudice the movant’s claim or defense, and the extent to which return of the documents will mitigate the prejudice; (e) the extent to which movant may be at fault for the unauthorized disclosure; and (f) the extent to which the nonmovant will suffer prejudice from the disqualification of his or her attorney. Petition denied. (By Lisa Wiltshire, Associate in the Las Vegas office of McDonald Carano Wilson)

City of North Las Vegas v. Warburton, 127 Nev. Adv. Op. 62 (October 6, 2011)

Before Saitta, Hardesty and Parraguirre. Opinion by Hardesty.
In this appeal affirming a district court’s order granting an employee’s petition for judicial review, the Nevada Supreme Court considered the proper method of calculating workers’ compensation benefits for an employee who was promoted but was injured before receiving the wage increase associated with the promotion. The hearing officer initially determined the employee’s wages should be calculated using the wage with the promotion; however, an appeals officer reversed, concluding that, based on administrative regulations (NAC 616.435), the wage had to be based on her earnings at the time of the injury. The employee petitioned for judicial review by the district court; the district court reversed the appeal officer’s ruling and the city/employer appealed. The Court upheld the district court’s decision that the employee was entitled to compensation based on her position as of the date of the injury, despite the fact that her promotion was still being processed on the date of the underlying injury. The Court reviewed NAC 616C.435 and NAC 616C.444 in making its determination. Typically, an employee’s workers’ compensation benefits are calculated by averaging a 12-week history of past earnings. See NAC 616C.435(1). If a 12-week history is not available, the average monthly wage can be calculated by using a 4-week history, pursuant to NAC 616C.435(4). However, if the methods set forth in NAC 616C.435 cannot be applied reasonably and fairly, the average monthly wage must be calculated in a manner that reasonably represents the average monthly wage. See NAC 616C.435(7)(a). The Court determined that the calculations set forth in NAC 616C.435(1) and (4) did not “reasonably and fairly” determine the amount of the employee’s workers’ compensation benefits, instead finding that NAC 616C.444(1) set forth a more specific method for calculating a worker’s wage in the circumstances presented. NAC 616C.444 requires that the average monthly wage must be calculated such that the primary job at the time of the accident must be used in the calculation. The Court noted that a specific statute or administrative regulation controls over a general statute on the same issue and the provisions of NAC 616C.435(7) and NAC 616C.444 were plain and unambiguous. The Court ultimately determined that there was ample evidence in the record to demonstrate that the employee’s primary job was that of the promoted position and upheld the district court’s order, and affirmed the hearing officer’s decision. (By Kristen Gallagher, Associate in the Las Vegas office of McDonald Carano Wilson)

Emerson v. Dist. Ct., 127 Nev. Adv. Op. 61 (October 6, 2011)

Before Saitta, Hardesty and Parraguirre. Opinion by Hardesty.
In this continuation of the well-known attorney misconduct case Lioce v. Cohen, 124 Nev. 1 (2008), the Court addressed whether a district court retains jurisdiction after voluntary dismissal of an action to order sanctions for attorney misconduct that occurred before the dismissal. In Lioce, the Nevada Supreme Court determined that defense attorney Phillip Emerson nullified the jury by making impermissible comments reflecting his personal opinion of the case and remanded with instructions for the district court to determine the necessity of a new trial. The district court granted the new trial as to a portion of the case and plaintiff’s counsel filed a motion for sanctions based on Emerson’s misconduct in the first trial. The district court announced its intent to impose sanctions, but did not immediately file a written order. The parties stipulated to dismiss the case, and after the order dismissing was entered, the district court entered its order granting sanctions. Following federal precedent regarding FRCP 11 sanctions, the Supreme Court concluded that a court retains jurisdiction over the collateral matter of imposing sanctions after parties stipulate to dismiss an action with prejudice. The Court further concluded that the district court had the inherent authority to sanction attorney misconduct and the sanctions did not need to be authorized by NRS 7.085. Finally, addressing authority regarding the proportionality of the sanctions award, the Court emphasized the district court’s discretion in determining an appropriate amount of sanctions and concluded that even though only nominal damages had been awarded in other instances of attorney trial misconduct, in this case the award of over $19,000 in attorneys’ fees and costs accrued in preparing for the first trial were not unreasonable since Emerson’s misconduct caused the court to order a new trial. Petition denied. (By Kerry S. Doyle, Associate in the Reno office of McDonald Carano Wilson)

Francis v. Wynn Las Vegas, LLC, d/b/a Wynn Las Vegas, 127 Nev. Adv. Op. 60 (October 6, 2011)

Before Saitta, Hardesty and Parraguirre. Opinion by Saitta.
In this appeal arising from a civil litigant’s invocation of the Fifth Amendment, the Court held that in response to a civil litigant’s request for accommodation of his or her privilege, the district court should balance the interests of the invoking party and the opposing party’s right to fair treatment. The Court set forth the following considerations a district court must consider in making this determination: (1) the nature of the invocation, which includes consideration of the timeliness of the invocation, whether the party attempts to withdraw the invocation and the manner and timing of the attempt to withdraw; (2) the nature of the civil proceeding; and (3) the extent of prejudice that the opposing party will incur if remedial action is not taken. With these considerations in mind, the Court found that if the circumstances so required, there was a wide range of remedial measures that could be taken when balancing the interests of the invoking party and the opposing party’s right to fair treatment. The Court also noted that an invocation “is not a substitute for relevant evidence” and therefore, the invoking party is not “freed from adducing proof in support of a burden which would otherwise have been his.” In other words, a party who asserts the privilege against self-incrimination must bear the consequences of lack of evidence. The Court confirmed, therefore, that a “claim of privilege will not prevent an adverse finding or even summary judgment if the litigant does not present sufficient evidence to satisfy the usual evidentiary burdens in the litigation.” Based on all of these considerations, the Court affirmed the district court’s decision finding that the district court did not abuse its discretion in refusing to permit appellant to withdraw his invocation or in denying appellant’s request to reopen discovery. The Court further concluded that the district court did not abuse its discretion in denying appellant’s NRCP 56(f) motion, nor did it err in granting respondent summary judgment. (Amanda C. Yen, Associate in the Las Vegas office of McDonald Carano Wilson.)