Justia Insurance Law Opinion SummariesArticles Posted in Nevada Supreme Court
Munda v. Summerlin Life & Health Ins. Co.
Respondent, an insurer/managed care organization, contracted with an endoscopy center and gastroenterology center (collectively, the Clinic) to provide health care services to its insureds. After the Nevada Health District found that the Clinic engaged in a number of unsafe medical practices, Respondent terminated its contract with the Clinic. Janice Munda was insured by Respondent through her employer's health plan, which was governed by ERISA. Munda was diagnosed with hepatitis C, which the Health District determined she contracted as a result of being treated at the Clinic. Janise and her husband (collectively, Appellants) sued Respondent for negligence, negligence per se, breach of implied covenant of good faith and fair dealing, and loss of consortium. The district court granted Respondent's motion to dismiss, finding that Appellants' claims were preempted by ERISA. The Supreme Court reversed, holding that under the facts, there was no preemption because Respondent's alleged actions were independent of the administration of the ERISA plan.
Fourth St. Place v. Travelers Indem. Co.
Appellant, an LLC, purchased an "all-risks" insurance policy for an office building it owned from Insurer. The building was significantly damaged after a general contractor Appellant had hired to renovate the building removed the waterproof membrane on the roof and the building was exposed to substantial rainfall. Insurer denied coverage, concluding that the damage did not result from a covered cause of loss. Appellant sued Insurer, alleging that Insurer breached the insurance policy and denied coverage in bad faith. The district court granted summary judgment in favor of Insurer, concluding that the policy unambiguously excluded from coverage for the damage sustained to the building. The Supreme Court affirmed, holding that the damages sustained by the building were excluded from coverage based on the policy's rain limitation and the contractor's faulty workmanship in repairing the roof. In addition, although the doctrine of efficient proximate cause did not provide relief under the facts of this case, the Court adopted the doctrine of efficient proximate cause in Nevada.
Pub. Agency Comp. Trust v. Blake
Employee suffered a work-related injury to his back in 2004. Employee had also suffered previous accidents resulting in injuries to his lower back. A rating physician determined that Employee's permanent partial disability (PPD) benefits for the 2004 injury should be calculated using a net twenty-six percent impairment rating. Employer's Insurer offered an award to Employee based on a net seventeen percent impairment rating. An appeals officer ordered Insurer to offer Employee a PPD award based on the original impairment rating. The district court affirmed, concluding that Employee's prior impairment rating, which was calculated using an older version of the AMA Guides, should be deducted from his current impairment rating, which was calculated using the current edition of the AMA Guides. The Supreme Court reversed, holding (1) the governing statute required the rating physician to reconcile the different editions of the AMA Guides by first recalculating the percentage of the previous impairment rating using the current edition and then subtracting that recalculated percentage from the current level of impairment; and (2) the district court and appeals officer erred in determining the amount due, and therefore, the PPD award based on the seventeen percent impairment rating for the current injury was proper.
Cervantes v. Health Plan of Nevada
Appellant Margerita Cervantes allegedly contracted hepatitis C as a result of treatment she received at the Endoscopy Center of Southern Nevada (ECSN). Appellant obtained treatment at ECSN as part of the health care benefits she received through her culinary union. The union operated a self-funded ERISA health care plan and retained Respondents, Health Plan of Nevada and other health and life insurance entities, as its agents to assist in establishing a network of the plan's chosen medical provider. Appellant filed a lawsuit alleging that Respondents were responsible for her injuries because they failed to ensure the quality of care provided by ECSN and referred her to a blatantly unsafe medical provider. The district court concluded that Cervantes' claims were preempted by ERISA section 514(a). The Supreme Court affirmed, holding that state law claims of negligence and negligence per se against a managed care organization contracted by an ERISA plan to facilitate the development of the ERISA plan's network of health care providers were precluded by ERISA section 514.
City of North Las Vegas v. Warburton
Mallory Warburton was working for the City of North Las Vegas when she was involved in a car accident and suffered numerous injuries. The City started paying workers' compensation benefits to Warburton at a rate of $10 an hour. At the time of the accident, Warburton was expected to make $12 an hour because of a promotion to manager of one of the City's pools. After an administrative appeal, a hearing officer instructed the City to redetermine Warburton's benefits using the $12-an-hour rate of pay for a pool manager. An appeals officer reversed, concluding Warburton's benefits should be based on the $10-an-hour rate of pay she was actually receiving at the time of the accident. The district court reversed the appeals officer's decision. The Supreme Court affirmed, holding that the appeals officer's conclusion was not supported by substantial evidence and that substantial evidence supported the district court's determination that (1) Warburton's primary job at the time of the accident was that of pool manager, and (2) Warburton's workers' compensation benefits must be determined using an average monthly wage calculation at the $12-an-hour rate of pay.
Las Vegas Metro. Police Dep’t v. Coregis Ins. Co.
Las Vegas Metropolitan Police Department (LVMPD) was named as a defendant in an action alleging civil rights violations. LVMPD had an insurance policy with respondent Coregis Insurance to protect against liability for police officer actions when the damages exceeded a certain amount. Coregis denied LVMPD coverage for the civil rights claims because LVMPD did not notify Coregis of its potential liability until ten years after the incident that led to the lawsuit. After settling the action, LVMPD filed a declaratory-judgment action seeking a judicial determination that Coregis was required to defend and indemnify LVMPD for damages related to the civil rights claims. The district court entered summary judgment in favor of Coregis, concluding that LVMPD's notice was clearly late and that Coregis was prejudiced by the late notice. The Supreme Court reversed the summary judgment, holding (1) when an insurer denies coverage of a claim because the insured party failed to provide timely notice of the claim, the insurer must demonstrate that notice was late and that it was prejudiced by the late notice in order to assert a late-notice defense to coverage; and (2) there were genuine issues of material fact regarding the timeliness of LVMPD's notice. Remanded.
Gallegos v. Malco Enterprises of Nev., Inc.
Pedro Gallegos was injured by David Gonzalez in a car accident. At the time of the accident, Gonzalez was driving a car rented from respondent Malco Enterprises, for which he purchased a liability insurance policy issued by respondent First American and managed by respondent Knight Management. Gallegos obtained a default judgment against Gonzalez. After Gallegos was unable to collect on the judgment, he sought a judicial assignment of Gonzalez's unasserted claims against respondents, which was granted. Gallegos brought the assigned claims, which related to Gonzalez's insurance policy with respondents, in a separate district court action. Respondents moved for summary judgment on the basis that the previous district court could not assign the right of action in a proceeding supplementary to the execution of the judgment, and thus, Gallegos lacked standing to bring Gonzalez's claims. The district court granted the respondents' motion for summary judgment, vacating the earlier assignment order. The Supreme Court reversed, holding (1) rights of action held by a judgment debtor are subject to execution toward satisfaction of a judgment and may be judicially assigned; and (2) Gallegos properly asserted a right of action assigned to him by another district court. Remanded.
Costello v. Casler
Debbie Costello and Philip Casler were involved in an automobile accident, after which Casler died from unrelated causes. Costello submitted a claim with Casler's insurance provider, American Family, for injuries relating to the accident. After the statute of limitations expired, Costello submitted a motion in the district court pursuant to Nev. R. Civ. P. 25, seeking to substitute the special administratrix of Casler's estate for Casler. American Family submitted a countermotion for summary judgment, arguing that any amendment adding a party was now time-barred because the statute of limitations had expired. The district court granted Casler's countermotion for summary judgment. The Supreme Court reversed, holding (1) under Nev. R. Civ. P. 15(c), an amendment to a complaint adding a decedent's estate as a party to an action will relate back to the date of the original pleading filed prior to the expiration of the statute of limitations; and (2) a decedent insurer's notice and knowledge of the institution of an action may be imputed to the decedent's estate for purposes of satisfying the relation back requirements of Rule 15(c). Remanded.
Benchmark Ins. Co. v. Sparks
Policyholder Robert Sparks was sued by victims and families of an automobile accident in which Sparks was involved. Sparks's insurance company, Benchmark, filed an interpleader action, seeking permission to deposit the $30,000 policy limits with the district court for dispersal to the plaintiffs. Benchmark then filed a motion for summary judgment, seeking a determination that once the court accepted the deposited funds, Benchmark would have no further obligation to defend Sparks in the underlying tort lawsuit. The district court granted Benchmark permission to deposit the policy liability limits but denied it's motion for summary judgment, determining that Benchmark's duty to defend Sparks extended beyond its tender of the policy limits. On appeal, the Supreme Court affirmed, holding (1) the policy did not unambiguously alert Sparks that Bench could terminate its duty to defend him by depositing the policy's limits with the district court; and (2) that a policyholder in Sparks' position would reasonably expect his insurer to procure a settlement on his behalf or defend him until the policy limits have been used to satisfy a judgment entered against him.
Arguello v. Sunset Station, Inc.
In 2006, appellantâs vehicle was stolen from respondent hotelâs valet parking lot. Appellantâs insurer issued a check to appellant for the cost of the vehicle but not including the cost of customizations. Appellant filed a lawsuit in district court against respondent, alleging negligence and breach of a bailment contract and seeking damages exceeding $10,000. The district court determined that Nev. Rev. Stat. 651.101(1) shielded respondent from liability and entered summary judgment in favor of respondent. Appellant appealed, and the Supreme Court reversed. The Court found as a threshold matter appellant to be a real party in interest with standing to sue because appellant was not fully compensated by his insurer for his losses and thus the principle of total subrogation did not apply. The Court also held that Nev. Rev. Stat. 651.101(1) did not protect respondent against liability arising out of the theft of appellantâs vehicle because the statute, which limits the liability of hotels for the theft or destruction of any property brought by a patron upon the premises or "left in a motor vehicle upon the premises," unambiguously places motor vehicles outside of its scope.