Court Decisions. Nevada Supreme. Workers Compensation

Transcription

1 Winter 2011 Highlights Employer of Independent Contractor Not Liable for Independent Contractor s Negligence The Nevada Supreme Court confirmed that an entity that hires an independent contractor is not liable to the independent contractor s employees for injuries sustained as a result of the independent contractor s negligence. Exceptions to the rule apply only if the employees can show control by the hirer of the independent contractor, negligent hiring of the independent contractor, or some other basis for direct liability on the part of the hirer. Ford and Lincoln Not Liable for Alleged Defective Driver s Seat After an 11 day trial, a Nevada jury returned a verdict for Ford Motor Company and Lincoln Mercury. The Plaintiff had alleged that Defendants failed to properly design, test and manufacture the driver s seat and seat back assembly in her Ford automobile. Defendants maintained that the vehicle exceeded applicable federal regulations and requirements. Plaintiff Awarded Almost $700,000 for Fall Over Abnormal Speed Bump A Nevada tourist allegedly tripped and fell over an abnormal speed bump that allegedly violated building code standards. Plaintiff claimed to have sustained a dislocated shoulder and was expected to have residual pain for her lifetime. The jury returned a verdict for Plaintiff but determined that she was twenty percent at fault for the alleged incident. Nevada Supreme Court Decisions Workers Compensation Employees Injured in the Workplace Due to Exposure to Risks Made Greater to the Employee than the General Public May Recover Workers Compensation Benefits Kathryn Phillips was an employee of Rio All-Suite Hotel & Casino (Rio) in Las Vegas, Nevada, for 17 years. Ms. Phillips was a poker and blackjack dealer and was required to take six 20-minute breaks during her normal eight hour shift. To access the employees break room, Ms. Phillips had to traverse two flights of stairs. During her first mandatory break on an eight hour shift in October 2006, Ms. Phillips started to walk down the stairs which led to the employees break room and twisted her foot. Ms. Phillips stated that she did not take a misstep, did not lose her balance, and did not slip on any substance. She also did not contend that the stairs were defective or contained debris. An x-ray of Ms. Phillips foot following the incident revealed that she had fractured her ankle. After being evaluated at a local medical center the following day, Ms. Phillips completed a workers compensation form. In November 2006, the Rio s third-party administrator for workers compensation claims denied Ms. Phillips claim because she was unable to prove that her injury occurred within the course of her employment, as required by Nevada s workers compensation law. Ms. Phillips appealed the denial of her claim, and the appeals officer reversed the thirdparty administrator s decision. The Rio then filed a petition for judicial review in district court, which was denied by the district court judge. The Rio and its third-party administrator appealed the district court s decision to the Nevada Supreme Court. The Nevada Supreme Court began by reiterating circumstances under which workers compensation can be recovered. Specifically, the Court stated that under Nevada s workers compensation law, the injured employee must establish that her injury arose out of and in the course of her employment. The dispute in this case was not whether Ms. Phillips injury occurred during the course of her employment, but only whether the injury arose out of her employment. The Court also clarified that the type of risk faced by the employee was an In This Issue NEVADA SUPREME COURT Workers Compensation.... Page 1 Negligence Page 2 NEVADA JURY VERDICTS Product Liability Page 3 Personal Injury Page 3 Premises Liability Page 4 Medical Malpractice Page 4 COMMENT Page 5

2 Page 2 Nevada Legal Update important step in the analysis. The Court identified three categories of risks an employee may encounter during employment: (1) solely employment related; (2) purely personal; and (3) neutral. Injuries resulting from employment-related risks are obvious industrial injuries, and are generally compensable. Personal risks are so clearly personal that even if they occur on the job, they could not possibly be attributed to employment, and thus are not compensable. Neutral risks are those that are neither distinctly employment nor distinctly personal. The Court classified Ms. Phillips injury as being caused by a neutral risk, and examined how other courts have determined whether an employee injured by a neutral risk was eligible to recover workers compensation benefits. Three tests were identified as being used by other jurisdictions: the increasedrisk test, the actual-risk test, and the positional-risk test. The Court first rejected the positional-risk test as the test conflicted with the two-level analysis in Nevada s workers compensation statute, NRS 616C.150(1), and because the test heavily favored employees which was inconsistent with Nevada s neutral position towards employers and employees in the workers compensation context. The actual-risk test was also rejected by the Court as it was very similar to the positional-risk test, leading to the same problems. The Court adopted the increased-risk test which evaluates whether the employment exposed the employee to a risk greater than the risk to which the general public was exposed. This test was favorable, according to the Court, because it struck a balance between the employee s right to be compensated for injuries he did not personally cause and the employer s right to not be liable for every injury which occurs in the workplace. Turning its focus to Ms. Phillips injury, the Court first stated that descending a staircase at work, in and of itself, did not pose a greater risk to an employee than to the general public. The Court noted, however, that when an employee is forced to use stairs more frequently than a member of the general public, that employee is faced with an increased risk of injury. The Court held that because Ms. Phillips was forced to use the stairs to access the employees break room during her breaks, and no evidence was presented that there was an alternative path to access the break room, the frequency with which Ms. Phillips was required to use the stairs subjected her to a significantly greater risk of injury than the risk faced by the general public. As a result, the Court concluded that Ms. Phillips injury arose out of the course of her employment, and thus she was eligible for workers compensation benefits. Rio All-Suite Hotel and Casino and Sedgewick CMS/Cannon Cochran Management Services, Inc. v. Kathryn Phillips, filed September 30, Negligence Employees of Independent Contractors Cannot Recover from the Entity Who Hired the Independent Contractor Unless that Entity Had Knowledge of the Independent Contractor s Negligence PSC, who was in the business of recycling industrial waste, contracted with Depressurized Technologies, Inc. (DTI) in Minden, Nevada, to sort and decant aerosol cans. DTI developed an automated decanting process which was slow and proved troublesome in decanting certain foams. The problems with the automated process caused DTI to develop a manual decanting process in which an employee in a 40- foot shipping container punctured the aerosol can on a spike and allowed the contents of the can to drain into a drum. DTI kept its manual decanting process a secret from government inspection agencies and clients, including PSC. Several employees of DTI were injured while performing the manual decanting process. The shipping container used during the process had a wooden hood which vented the gasses released from the aerosol cans. On the day of the accident at issue, the employees were decanting foam that did not have an obnoxious odor, so the ventilation hood was turned off. A spark from a forklift engine ignited the gas that had accumulated in the shipping container, causing an explosion which injured five workers, one fatally. Three of the four surviving DTI employees and the estate of the deceased employee received benefits from Nevada s workers compensation system and also filed a law suit against PSC, claiming that PSC should answer for DTI s negligence since DTI was insolvent. PSC filed a motion for summary judgment, which the district court granted. The DTI employees then appealed. The Nevada Supreme Court noted that the competency and solvency of an independent contractor should not be taken into consideration when determining whether a person employed by an independent contractor can recover from the entity who hired that independent contractor. The Court also restated the general rule that, with limited exceptions, the employer of an independent contractor is not liable for physical injury caused to a third-party by the acts of the independent contractor or its employees. The important exception was that an employer of an independent contractor could be liable for the wrongs of the independent contractor and its agents if the employer knew, or should have known, that the work created a peculiar risk of physical harm to others and did not take reasonable precautions to prevent such harm. The Court cited cases from other jurisdictions which defined the word others in this

3 Nevada Legal Update Page 3 context to include persons employed by independent contractors. T h e C o u r t n o t e d t h a t a n overwhelming majority of courts have now agreed that a person who hires an independent contractor is not liable to the contractor s employees absent: (1) control by the hirer of the independent contractor; (2) negligent hiring of the independent contractor; or (3) some other basis for direct liability on the part of the hirer of the independent contractor. This rule is favorable because the workers compensation program shields an independent contractor from liability to its employees, and it would be illogical and unfair to subject the person or entity who hires the independent contractor to more liability than that imposed on the independent contractor itself. Thus, the Court held that the district court was correct in dismissing the plaintiffs case because the plaintiffs had recovered from Nevada s workers compensation program. The employees also failed to demonstrate that PSC had any knowledge of DTI s illegal and negligent manual decanting process. Elias San Juan, et al. v. PSC Industrial Outsourcing, Inc., filed October 7, Nevada Jury Verdicts Product Liability Plaintiff Awarded More Than $100 Million in Compensatory and Punitive Damages Plaintiff, a male Nevada school headmaster, was infected with Hepatitis C via multi-dosing from a fifty-milliliter container of propofol during the course of a colonoscopy conducted by medical personnel at a non-party endoscopy center. Plaintiff alleged that Defendant pharmaceutical companies, Teva Parenteral Medicines, Inc. and Baxter Healthcare Corp., knew of at least 148 prior problematic incidents regarding the fifty-milliliter multiple-dose vials of propofol, yet continued to market and sell the vials. Plaintiff also alleged Defendants knew the risk of selling these fifty-milliliter vials to clinics where cross-contamination by reuse of syringes was common, and that the contaminated multiple-dose propofol vials exposed patients to communicable and infectious diseases. Defendants denied liability. Plaintiff sought compensatory and punitive damages and Plaintiff s spouse asserted a claim for loss of consortium. Plaintiff made a pretrial demand of $1.7 million and Defendants refused to tender an offer. After a 22 day trial, the jury returned with an award of $3.25 million in compensatory damages for Defendants failure to warn and breach of implied warranty of fitness for a particular purpose. The jury also awarded Plaintiff s spouse $1.85 million for loss of consortium. In the subsequent punitive damages phase of the trial, the jury awarded punitive damages in the amount of $356 million against Defendant Teva and $144 million in punitive damages against Defendant Baxter. Chanin v. Teva Parenteral Medicines, Inc., formerly known as Sicor Pharmaceuticals, Inc., and Baxter Healthcare, Corp., decided May 7, Jury Finds for Defendants Ford and Lincoln in Case of Alleged Negligent Design and Manufacture Plaintiff, a self-employed Nevada resident, was operating a 1999 Mercury Mountaineer, which was designed and manufactured by Defendant Ford Motor Company and sold by Defendant Lincoln Mercury. Plaintiff alleged that when she was rear-ended, the driver s seat of her vehicle collapsed, causing the seat to go flat. Plaintiff allegedly fell backward injuring her cervical and thoracic spine, knee, shoulder, and thumb. She also suffered a laceration to her leg, which developed an infection. Plaintiff claimed she needed multiple surgeries to treat her various injuries. Plaintiff alleged that Defendant Ford was negligent in its design, testing, manufacture, assembly, and inspection of the driver s seat and seat back assembly. Plaintiff also claimed that Defendants failed to provide adequate warnings and instructions to vehicle owners, and that the vehicle was unfit, defectively designed, and unreasonably dangerous. Defendants denied liability, claiming the vehicle met and exceeded the federal government s seat strength standard. During the trial, Plaintiff sought compensatory damages and an unspecified amount for past and future medical expenses and lost wages. After 11 days of trial and two days of deliberation, the jury returned a verdict for Defendants Ford and Lincoln. Scheer v. Ford Motor Company and Lincoln Mercury, Inc., decided July 21, Personal Injury Defendant Prevails in Case of Alleged Rear-End Collision Plaintiffs, mother and daughter Nevada residents, were rear-ended by Defendant who was allegedly travelling approximately 45 miles per hour at the time of impact. Defendant, a male mechanic, admitted negligence, but argued that his foot slipped off the brake pedal while stopped, and that he only rolled into Plaintiffs vehicle. Plaintiff mother allegedly sustained cervical, thoracic, and lumbar strains and exacerbated her preexistent multiple sclerosis. Plaintiff daughter alleged that she sustained cervical, thoracic, and lumbar strains and sprains. Plaintiffs called a chiropractor and psychiatrist as expert witnesses who opined that

4 Page 4 Nevada Legal Update Plaintiffs injuries were causally related to the alleged incident. Defendant also called a chiropractor as an expert witness. Defendant s expert was of the opinion that the mother did not sustain an exacerbation of her preexistent condition, and claimed there were no objective findings of injury to the daughter. Plaintiffs pretrial demand was $15, and Defendant offered $4, During closing arguments for this one-day short-trial, Plaintiffs counsel asked the jury to award approximately $20, Defense counsel argued that Plaintiffs were not injured. Four jurors deliberated for 45 minutes and found in favor of Defendant. Haar v. Gonzaga, decided August 5, Defendant Student Not Liable for Plaintiff s Personal Injuries Plaintiff, a Nevada resident bookkeeper, alleged that she was travelling in the right travel lane of a roadway. Plaintiff claimed that Defendant negligently executed a left turn across stopped traffic, into Plaintiff s path, causing a collision. Defendant, a 20-year old college student, denied liability, claiming she came to a complete stop in the left turn lane. According to Defendant, when all three lanes of traffic stopped, she was waived forward. After Defendant began to turn, her vehicle was struck by Plaintiff who was entering the shoulder after passing the other stopped vehicles on the right. Defendant called an accident reconstructionist who was of the opinion that Plaintiff was travelling on the shoulder at the time of impact. He also opined that the damage to the vehicles did not support Plaintiff s claim that she was stopped before impact. Plaintiff alleged that she sustained cervical, thoracic, and lumbar soft tissue injuries and medical expenses of at least $11, Defendant made a pretrial settlement offer in the amount of $9, During closing arguments, Plaintiff s counsel argued that Defendant was 100 percent at fault and asked the jury to award Plaintiff $23, for pain and suffering, as well as the full cost of her medical expenses. Defense counsel argued liability and alleged, in the alternative, that Plaintiff was at least 50 percent at fault. The jury deliberated for less than one hour and found in favor of the Defendant. Bone v. Bonca, decided August 19, Premises Liability Plaintiff Found Twenty-Five Percent at Fault in a Slip and Fall in Bellagio Bathroom Plaintiff, a male taxi-cab driver, alleged that as he exited Defendant Bellagio s restroom, he slipped and fell on water that had accumulated on the marble floor near the hand sinks. Plaintiff claimed that Defendant had notice of the slippery nature of the tile and could have eliminated the hazard by using rubber mats. Defendant denied liability, arguing that it had no notice of the potential hazard and took reasonable precautions by placing an attendant in the restroom. Defendant also alleged that Plaintiff s fall was caused by his own negligence. Plaintiff sustained a fractured fourth metatarsal of the foot and cervical, thoracic, and lumbar soft tissue injuries. Plaintiff sought $7, for medical expenses. By stipulation, four jurors deliberated as part of the Nevada Short-Trial Program. The jury awarded Nevada Legal Update is published quarterly by Alverson, Taylor, Mortensen & Sanders 7401 W. Charleston Blvd. Las Vegas, Nevada (702) Fax (702) Plaintiff $18, in damages but determined that he was 25 percent at fault. Plaintiff s award was reduced to $13, Peer v. Bellagio, L.L.C. dba Bellagio Hotel and Casino, decided August 5, Plaintiff Awarded $699, for Trip and Fall at Harrah s Plaintiff, a 68 year-old female Nevada visitor, alleged that while visiting Defendant s premises, she tripped and fell over a speed bump. Plaintiff alleged that the speed bump was not a normal speed bump and actually created a trip hazard. Plaintiff called an expert accident reconstructionist who testified that the speed bump had vertical edges that were dangerous to pedestrians and that the speed bump violated building code standards. Defendant denied liability, advancing the defense that the condition was open and obvious, and Plaintiff was inattentive. As a result of the subject incident, Plaintiff sustained a dislocated shoulder and a fractured humeral head. Due to Plaintiff s age, she was not recommended for surgery but was determined to have residual pain for the remainder of her life. Plaintiff made a pretrial demand of $120, Defendant offered $10, After a five day trial, the jury deliberated for two hours and returned with an award of $874, The jury determined, however, that Plaintiff was 20 percent at fault, and therefore reduced her damages to $699, Swanson v. Harrah s Entertainment Inc., decided August 6, Medical Malpractice Defendant Hospital and Doctors Prevail in Case of Alleged Medical Malpractice The Decedent presented at Defendant s hospital emergency room

5 Nevada Legal Update Page 5 with complaints of back pain. An MRI of Decedent s back was performed, and Defendant physicians noted that Decedent had difficulty breathing. The Decedent was discharged from the emergency room. Two days later, the Decedent s wife contacted the hospital requesting that an ambulance transport Decedent, who was having difficulty breathing. The Decedent died at home that afternoon of pneumonia. The Decedent was survived by his spouse and child, who brought suit for his wrongful death. Plaintiffs alleged that Defendants treatment fell below the standard of care and that the narcotic medication administered to the Decedent caused his pneumonia. Plaintiffs called a nursing standards expert who testified that the hospital s nursing staff failed to maintain adequate records, failed to respond to the wife s call regarding Decedent s breathing problems, and improperly advised Plaintiff that the Decedent s problems were a side effect of the narcotic medication. Plaintiffs also called an emergency medicine specialist who testified the narcotic medication prescribed suppressed the Decedent s gag reflex, which caused his aspiration. Defendant hospital and physicians argued that the Decedent s pneumonia was very fast acting and did not present itself when the Decedent was seen in the emergency room. Defendants also denied that the wife contacted the hospital requesting an ambulance, and asserted Defendant physicians were not responsible for Decedent s continuing care after he left the emergency room. During closing arguments, Plaintiffs counsel asked the jury to award Plaintiffs $1,500, Defense counsel argued liability. After a five-day trial, the jury deliberated for three hours and returned with a verdict in favor of the Defendants. Morton v. Emergency Care, Inc., dba Emergency Physicians of Winnemucca, et al., decided August 27, Plaintiff Bodybuilder s Allegation of Medical Malpractice Unsuccessful Plaintiff, a male champion bodybuilder, personal trainer, and owner of a discount nutrition center, sustained a complete rupture of his left distal biceps tendon due to a hyperextension injury when a ping-pong table he was unloading suddenly slipped off a truck. Plaintiff was initially diagnosed at a nonparty medical center where a non-party orthopedic physician recommended surgical repair for preservation of strength as well as correction of the deformity of the biceps. The non-party orthopod informed Plaintiff that there was only a limited time in which surgical repair could be accomplished. Plaintiff elected to pursue care for his injury at non-party Veterans Administration (VA) facility, where he consulted with Defendant internist. Plaintiff alleged that Defendant internist fell below the standard of care when he informed Plaintiff there was no urgency for the surgery, ordered a non-urgent MRI of the arm, and instructed Plaintiff to use a sling. Additionally, Plaintiff claims Defendant fell below the standard of care when he ordered a MRA (magnetic resonance angiography) rather than an MRI (magnetic resonance image), and failed to timely refer Plaintiff to an orthopedic surgeon. Almost one and one half months after the injury was sustained, Plaintiff was finally treated by a VA orthopod, who referred him back to the original orthopedic physician for surgery. Plaintiff s proximal tendon was found to be scarred and consequently, could not be reattached. Further, the cosmetic deformity and loss of strength in the arm could not to be corrected. Defendant denied liability and asserted that he took all the steps necessary to comply with non-party VA s referral procedure, and that Plaintiff failed to timely see an orthopod. Defendant also alleged Plaintiff s history of anabolic steroid use contributed to his injury. Plaintiff claimed that Defendant s negligence resulted in permanent injury to his biceps tendon and deformity, which caused Plaintiff emotional trauma and lost earning capacity. Plaintiff presented expert testimony from three medical experts. After a five-day trial, and three hours of deliberation, the jury returned a verdict in favor of the Defendant. Pape v. Gullapalli, M.D., decided March 19, Comment On November 2, 2010, voters in Nevada took to the polls to select seven new District Court judges for Clark County. The race for the newly created Department 26 was won by Gloria Sturman, who will be leaving the law firm of Buckley King to assume the bench. Judge Elect Sturman attended law school at Arizona State University and was admitted to the Nevada Bar in September While in the private sector, Ms. Sturman s practice included several areas of civil litigation and she has tried over 20 cases to verdict. Along with her extensive litigation background, Ms. Sturman served as a judge for Nevada s Short-Trial Program and as a Justice of the Peace in Judge Elect Nancy Allf prevailed in the election for Department 27. Ms. Allf received her Juris Doctorate from the Salmon P. Chase College of Law at Northern Kentucky University in 1982, and was admitted to practice in Nevada in September She served as judge pro tem in Clark County as well as President of both the Clark County Bar Association and State Bar of Nevada. Ms. Allf has practiced in Nevada for 27 years in all areas of civil practice in state and federal court. Ron Israel will be the new judge in Department 28. Mr. Israel obtained his Juris Doctorate from the University of San Diego and was admitted to practice in Nevada in December During his 28 years of practice in civil litigation, Mr. Israel

6 Alverson Taylor Mortensen & Sanders 7401 W. Charleston Blvd. Las Vegas, Nevada PRST STD U.S. POSTAGE PAID LAS VEGAS, NV PERMIT NO. 447 The information included in this newsletter is not a substitute for consultation with an attorney. Specific circumstances require consultation with appropriate legal professionals. has represented clients in both civil and criminal matters. His civil practice largely involved the representation of plaintiffs in personal injury matters. Mr. Israel also served as an arbitrator and short-trial judge in Clark County, as well as a judge pro tem for eight years. Susan Scann won the election for the judicial seat created in District 29. Judge Elect Scann received her Juris Doctorate from California Western University School of Law in 1976 and was admitted to practice in Nevada in September She has practiced civil litigation in Nevada for 33 years and has served as an alternative Municipal Court judge in Clark County since Ms. Scann also served as an arbitrator for the Eighth Judicial District Arbitration Program for approximately three years before her election to the bench. The election for the bench in Department 30 was won by Jerry A. Wiese. Mr. Wiese obtained his Juris Doctorate from the University of the Pacific, McGeorge School of Law in 1994 and was admitted to practice in Nevada in October He has practiced as a civil trial attorney for 16 years, was appointed by the court as an arbitrator where he heard over 150 cases, and served as a judge pro tem for nearly six years before being elected. Joanna Kishner was elected to Department 31. Judge Elect Kishner obtained her Juris Doctorate from the UCLA School of Law in 1989 and was admitted to practice in Nevada in October Formerly with the firm of DLA Piper, Ms. Kishner spent the last 20 years in civil practice, including mediating and arbitrating a wide range of cases. She also served as a Justice of the Peace pro tem, a pro tem small claims referee, a pro tem traffic court referee, and an arbitrator for a number of years. Ron Bare will be the new judge in Department 32. Mr. Bare received his Juris Doctorate from the University of Pittsburgh School of Law in 1988 and was admitted to practice in Nevada in October During the first four years of his legal career, Mr. Bare served as a commissioned officer in the United States Army where he served in the Judge Advocate General Corps practicing in the area of criminal law. For the past 17 years, Mr. Bare has been counsel for the State Bar of Nevada, and served as the full-time presiding judge in the City of Las Vegas, Municipal Court from January 1, 2007 until July 1, 2007, after being unanimously appointed by the Las Vegas City Council. These new departments in the Clark County District Court were created by the Nevada State Legislature to help eliminate a backlog of cases facing the court. These newly elected judges will begin their terms in January 2011.