MINUTES OF THE MEETING

OF THE

LEGISLATIVE COMMISSION’S SUBCOMMITTEE CONCERNING THE STATUTORY LIMITATION ON DAMAGES THAT MAY BE AWARDED

TO A PERSON IN A TORT ACTION AGAINST THE STATE OF NEVADA,

ITS POLITICAL SUBDIVISIONS OR CERTAIN OTHER PERSONS

(Assembly Concurrent Resolution No. 46, File No. 140, Statutes of Nevada 1999)

May 19, 2000

Carson City, Nevada

 

 

 

The fifth meeting of the Legislative Commission’s Subcommittee Concerning the Statutory Limitation on Damages that may be Awarded to a Person in a Tort Action Against the State of Nevada, Its Political Subdivisions or Certain Other Persons (Assembly Concurrent Resolution No. 46, File No. 140, Statutes of Nevada 1999) for the 1999-2000 interim was held on Friday, May 19, 2000, at 9:30 a.m., at the Legislative Building, 401 South Carson Street, Room 3138, Carson City, Nevada.   The meeting was video  conferenced to the Grant Sawyer State Office Building, 555 East Washington Avenue, Room 4401, Las Vegas, Nevada.  Pages 3 and 4 contain the “Meeting Notice and Agenda” for this meeting.

 

            SUBCOMMITTEE MEMBERS PRESENT IN CARSON CITY:

 

                        Assemblyman Bernie Anderson, Chairman

Senator Maurice E. Washington, Vice Chairman

Senator Mike McGinness

Senator Dean A. Rhoads

Assemblyman John C. Carpenter

                        Assemblyman Jerry D. Claborn

                        Assemblywoman Genie Ohrenschall

 

            SUBCOMMITTEE MEMBER PRESENT IN LAS VEGAS:

 

                        Senator Michael A. Schneider

                                   

ADVISORY COMMITTEE MEMBERS PRESENT IN CARSON CITY:

 

Bill Bradley, Representing the Nevada Trial Lawyers Association

Mike Davidson, Representing the Nevada Association of Counties

Bill Isaeff, Representing the Nevada League of Cities

Madelyn Shipman, Representing the Nevada Association of Counties

 

ADVISORY COMMITTEE MEMBERS PRESENT IN LAS VEGAS:

 

J.R. Crockett, Jr., Representing the Nevada Trial Lawyers Association

Bill Hoffman, Representing the Nevada Association of School Boards

 

 


            ADVISORY COMMITTEE MEMBERS ABSENT:

 

                        P. Mark Ghan, Solicitor General, Office of Attorney General

                        Shauna Hughes, Representing the Nevada League of Cities

 

LEGISLATIVE COUNSEL BUREAU STAFF PRESENT:

 

                        Scott Young, Principal Research Analyst

                        Risa B. Lang, Principal Deputy Legislative Counsel

                        Roxanne Duer, Senior Research Secretary

 

 

 

 

 


 

MEETING NOTICE AND AGENDA

 

Name of Organization:      Legislative Commission’s Subcommittee to Study the Statutory Limitation on Damages that may be Awarded to a Person in a Tort Action Against the State of Nevada, its Political Subdivisions or Certain Other Persons (A.C.R. 46)

 

Date and Time of Meeting:            Friday, May 19, 2000

9:30 a.m.

 

Place of Meeting:                        Legislative Building

Room 3138

401 South Carson Street

Carson City, Nevada

 

Note:     Some members of the Subcommittee may be attending the meeting and other persons may observe the meeting and provide testimony, through a simultaneous videoconference conducted at the following location:

 

Grant Sawyer State Office Building

Room 4401

555 East Washington Avenue

Las Vegas, Nevada

 

If you cannot attend the meeting, you can listen to it live over the Internet.  The address for the legislative web site is   For audio broadcasts, click on the link “Listen to Meetings Live on the Internet.”

 

AGENDA

 

       I.       Opening Remarks and Introductions

 

Assemblyman Bernie Anderson, Chairman

 

    *II.       Approval of Minutes for the Subcommittee’s Meeting in Carson City, Nevada, on April 19, 2000

 

   *III.       Presentation by Staff of the Fiscal Analysis Division, Legislative Counsel Bureau, Regarding Possible Sources of Revenue for Contribution by the State of Nevada to the Special Fund Proposed in Recommendation No. 3 in the April 19, 2000, “Work Session Document”

 

 

 

   *IV.       Presentation Regarding how a Claim Would be Processed Under Recommendation No. 3 of the April 19, 2000, “Work Session Document”

 

Wayne E. Carlson, Executive Director, Nevada Public Agency Insurance Pool and Public Agency Compensation Trust

 

    *V.       Presentation in Response to Issues Raised at the April 19, 2000, Meeting of the A.C.R. 46 Subcommittee Regarding the Number of State Tort Cases that Potentially Would be Eligible for Compensation from the Special Fund Compared to the Total Number of Potentially Eligible Claims From Other Public Entities, and Information on the Amount of Excess Insurance Public Entities Could Obtain if the Projected $2.2 Million in Proposed Funding for the Special Fund were Instead used to Purchase Excess Insurance

 

P. Mark Ghan, Solicitor General, Office of the Attorney General

 


 

    VI.       Public Testimony

 

  *VII.       Work Session — Discussion and Subcommittee Action on Recommendations to the 71st Session of the Nevada Legislature (see Attached “Work Session Document” for a Summary of Proposals Compiled from Previous Subcommittee Meetings and Correspondence)

 

  VIII.       Adjournment

       

*Denotes items on which the Subcommittee may take action.

 

Note:   We are pleased to make reasonable accommodations for members of the public who are disabled and wish to attend the meeting.  If special arrangements for the meeting are necessary, please notify the Research Division of the Legislative Counsel Bureau, in writing, at the Legislative Building, 401 South Carson Street, Carson City, Nevada 89701-4747, or call Roxanne Duer, at 775/684-6825, as soon as possible.

 

 

Notice of this meeting was posted in the following Carson City, Nevada, locations:  Blasdel Building, 209 East Musser Street; Capitol Press Corps, Basement, Capitol Building; City Hall, 201 North Carson Street; Legislative Building, 401 South Carson Street; and Nevada State Library, 100 Stewart Street.  Notice of this meeting was faxed for posting to the following Las Vegas, Nevada, locations:  Grant Sawyer State Office Building, 555 East Washington Avenue; and Clark County Office, 500 South Grand Central Parkway.

 

 

 

 

 

 

 


 

 

LEGISLATIVE COMMISSION’S SUBCOMMITTEE

CONCERNING THE STATUTORY LIMITATION ON DAMAGES

THAT MAY BE AWARDED TO A PERSON IN A TORT ACTION

AGAINST THE STATE OF NEVADA, ITS POLITICAL SUBDIVISIONS

OR CERTAIN OTHER PERSONS

(Assembly Concurrent Resolution No. 46, File No. 140, Statutes of Nevada 1999)

 

Work Session Document

April 19, 2000

 

 

This work session document was prepared by the staff of the A.C.R. 46 Subcommittee.  It contains a summary of major recommendations which have been presented in public hearings and correspondence during the course of the study.  It is designed as a working document to assist the members of the Subcommittee in making decisions during the work session.

 

The possible recommendations listed in this document do not necessarily have the support or opposition of the Subcommittee.  These proposals simply are compiled and organized so the members may review them to decide if they should be adopted, changed, rejected, or considered further.  The source of each recommendation is noted in parentheses.  Any recommendations adopted by the Subcommittee will be submitted to the Legislative Commission for consideration.  The recommendations, if any, will be highlighted in the Subcommittee’s report, and any recommendations for legislation will be included in the report as bill draft requests (BDRs).  The report will be made to the 71st Session of the Nevada Legislature.

 

Subsection 2 of Nevada Revised Statutes (NRS) 218.240 provides that an interim committee or Subcommittee appointed by the Legislative Commission may request no more than ten BDRs. However, Subcommittees may request the preparation of additional legislative measures if the Legislative Commission approves each additional BDR by a majority vote.

 

Threshold Issue

 

Under the provisions of A.C.R. 46, the Subcommittee may adopt a recommendation only if a majority of the Senators and a majority of the Assemblymen on the Subcommittee concur.  Given the foregoing requirement, the Subcommittee may wish to consider at the outset whether there is sufficient support for changing the existing statutory cap prior to examining specific proposals to effectuate any change.

 

Recommendations for Changing the Existing Statutory Tort Damage Cap

 


1.                Enact legislation effective July 1, 2001, eliminating the cap for damages incurred for medical expenses and lost wages but retaining the existing cap of $50,000 set forth in NRS 41.035 until July 1, 2003, for all other types of damages (this includes, without limitation, pain and suffering, loss of consortium).  Additionally, include a provision to:

 

a.       Increase the cap set forth in NRS 41.035 for counties with a population greater than 100,000 to:

 

i.       $75,000 for incidents occurring on or after July 1, 2003; and

 

ii.      $100,000 for incidents on or after July 1, 2005; and

 

b.      Increase the cap set forth in NRS 41.035 for counties with a population less than 100,000 to:

           

i.       $60,000 for incidents on or after July 1, 2003; and

 

ii.      $75,000 for incidents on or after July 1, 2005.  (Proposed by Chairman Bernie Anderson at the February 23,2000, meeting).

 

2.          Enact legislation establishing a special fund for governmental entities that service a population of less than 100,000, including those governmental entities which are located within counties with a population of more than 100,000.  (Proposed by Chairman Bernie Anderson at the February 23, 2000, meeting.)

 

3.          Enact legislation to amend NRS 41.035 to increase the cap on damages and to create a special fund for persons injured by public agencies as follows:  (Proposed by Bill Isaeff representing the Nevada League of Cities, and Wayne Carlson of the Nevada Public Agency Insurance Pool in an e-mail dated March 22, 2000, a copy of which is attached hereto as Exhibit A; supported [except as noted] by the Nevada Association of Counties per a letter from Robert S. Hadfield, Executive Director, dated March 22, 2000, a copy of which is attached hereto as Exhibit B; supported by the Nevada Association of School Boards per Bill Hoffman, representative for Nevada Association of School Boards.)

 

a.       Increase Tort Cap and Create Special Fund for Certain Cases.

 

i.       Increase the cap set forth in NRS 41.035 and limit the amount of damages in tort actions:  For any accident or occurrence on or after October 1, 2001, except as provided in Recommendation No. 3.a.ii, an award for tort damages against a present or former officer or an employee of the state or any political subdivision, immune contractor or state legislator arising out of an act or omission within the scope of his public duties or employment may not exceed $75,000, exclusive of interest computed from the date of judgment, to or for the benefit of any claimant, subject to a total limit of $150,000 in the aggregate for all separate, distinct, and independent causes of action or number of state actors involved for any one person arising out of said accident or occurrence.  An award may not include any amount for prejudgment interest or as exemplary or punitive damages.

 

ii.      Certain persons may apply for money from special fund:  For any accident or occurrence on or after October 1, 2001, a person injured in any occurrence involving a public agency, including the state or any political subdivision of the state, which results in paraplegia, quadriplegia, a persistive vegetative state, permanent total physical incapacitation from any gainful employment or death, may apply to the Special Fund for Persons Injured by Public Agencies for payment up to $250,000 for medical expenses and loss of earnings damages combined that exceed the amount resulting from the application of the limitation on damages pursuant to NRS 41.035 concluded by settlement or judgment.

 

b.      Eligibility for Payment from Special Fund.

 

i.       Determination of damages:  Eligibility to make application to the Special Fund for medical expenses and loss of earnings damages must be certified in writing to the Board of Trustees by the public agency in the settlement agreement or be adjudicated by the court.  In the event the parties to a settlement cannot agree as to the amount of such damages, the parties may agree to petition the court for a determination of the amount of damages incurred, which determination shall be binding upon the parties.  In the alternative, either party may request a jury trial to determine both liability and damages, if any.  “Medical expenses and loss of earnings damages” means damages that are specifically claimed and proven and shown to have been sustained in the circumstances of the particular wrong and may include future loss of earnings and medical expenses.

 

ii.        Application process:  The Board of Trustees of the Special Fund shall review the application and approve or disapprove reimbursement of all or part of the unpaid medical expenses or loss of earnings damages.  Applications must be filed with the Board within 30 days after a final determination of damages has been made.  If reimbursement or partial reimbursement is approved, payment of such damages to the person injured must be made from the fund, to the extent money is available in the fund for this purpose.   Within 30 days after the close of a fiscal year, the Board shall determine the amount of money on hand as of the close of the fiscal year.  If claims against the fund in any given year exceed the amount of money available at the close of the fiscal year, the available money shall be distributed on a pro rata basis among all recipients eligible in that year.  The method of determining the pro rate division of money in the Special Fund shall be fixed by regulations adopted by the Board.  An applicant is eligible to receive payment from the Special Fund for an accident or occurrence only once.  The determination by the Board of Trustees as to the amount of money available for reimbursement or partial reimbursement of medical expenses and loss of earnings damages is made in the sole discretion of the board and is final and binding on the applicant.

 

iii.     The application to the Board must be in such form and contain such information as the Board requires by regulation.  No application will be processed without a certification of medical expenses and loss of earnings damages by the public agency.

 

c.       Creation and Powers of Board of Trustees.

 

i.       The Board of Trustees shall consist of five members of which one member shall be from each county with a population of 100,000 or greater, two shall be from counties with a population of less than 100,000, and one shall be a representative from the State Board of Examiners.  The Board shall have the same powers as the Board of Trustees for the Fund for Hospital Care to Indigent Persons as set forth in NRS 428.205.  [If the state does not participate in the Special Fund as outlined in Section e below, then the proposed revisions to NRS Chapter 41 and the provisions of the Special Fund will not apply to the state and the fifth member of the Board shall be from a county with a population of less than 100,000.]

 

-Or-

 

ii.      The existing Board of Trustees for the Fund for Hospital Care to Indigent Persons established pursuant to NRS 428.195 shall administer the Special Fund.  The Nevada Association of Counties, under the control of the Board, shall serve as the administrative and claims agency for the Special Fund.

 

-And-

 

iii.     Once the Special Fund has been initially funded, the Board shall have authority to determine future allocations of excess Special Fund Revenue to support the Fund for Hospital Care to Indigent Persons and the Fund for the Institutional Care for the Medically Indigent, based on the funding needs of all three funds.  (Recommendation No. 3.c.ii and iii proposed by the Nevada Association of Counties per a letter from Robert S. Hadfield, Executive Director, dated March 22, 2000, attached hereto as Exhibit B.)

 

d.       Reimbursement of Medical Expenses or Loss of Earnings; Board Subrogated to  Right of Applicant.

 

Upon payment of medical expenses or loss of earnings to the applicant, the Board of Trustees is subrogated to the right of the applicant to recover the unpaid charges from any responsible party other than the certifying public agency or the applicant to the extent of the reimbursement or partial reimbursement paid, and may maintain an independent action therefor in a manner similar to that employed by the  Board of Trustees for the Fund for Hospital Care to Indigent Persons pursuant to NRS 428.245.

           

            e.       Funding for Special Fund

 

               From the taxes levied pursuant to NRS 428.185 and any tax levied pursuant to NRS 450.425, the board of county commissioners of each county shall set aside money from the ad valorem tax at a rate of 0.25 cents (one‑quarter of a cent). 

 

-And-

 

i.              If a permanent source of money is identified in the legislation to match the money contributed to the special fund by the earmarking of the 0.25 cents from the ad valorem tax, then the bill will be drafted so that a person injured by an employee of the state may apply for money under the special fund.  This permanent source of money could include dedicating a portion of an existing state tax or creating a new tax for this purpose. [The estimated annual revenue if the state matches equally at 0.25 cents (one-quarter of a cent) is $2,248,373.]

 

               -Or-

 

ii.      If a permanent source of money is not identified, then the bill will be drafted so that a person injured by a state employee may not apply for money in the fund.  In addition, the bill will be drafted so that the limitation on awards for damages in tort actions set forth in NRS 41.035 will remain at $50,000 for state employees and there will be no restriction on the number of causes of action that may be brought against the state.

 

                                 STAFF NOTE:  If the bill is drafted pursuant to Recommendation No. 3.e.i, the source of money to be committed must be identified before the bill may be drafted.  If the bill is drafted pursuant to Recommendation No. 3.e.ii, then the different award of damages available to a person who is injured by a state employee rather than a local government employee will have to be shown to meet the rational basis test.

 

4.          Enact legislation increasing the tort cap set forth in NRS 41.035 for all claims to $125,000 while continuing to allow multiple causes of action arising from the same incident.  The new cap applies to all claims occurring on or after October 1, 2001.  (Proposed by Bill Bradley representing the Nevada Trial Lawyers Association in a March 28, 2000, letter, a copy of which is attached hereto as Exhibit C.)

 

5.          Enact legislation increasing the cap for all claims as provided in Recommendation No. 4 and in addition, authorize an interim legislative study to consider the feasibility of creating a catastrophic injury fund for claims which exceed the new statutory cap.  (Proposed by J.R. Crockett, Jr., representing the Nevada Trial Lawyers Association at the January 10, 2000, Advisory Committee meeting.)

 

6.          Enact legislation providing for an index in the cap as established in Recommendation No. 4 to automatically increase the cap in the future to keep pace with the cost of living based on the Consumer Price Index-All Urban Consumers (Current Series).  (Proposed by J.R. Crockett, Jr., representing the Nevada Trial Lawyers Association at the January 10, 2000, Advisory Committee meeting.)

 

7.             Enact legislation effective July 1, 2001, retaining the existing cap of $50,000 set forth in NRS 41.035 but establishing a schedule providing for higher caps for certain specified injuries as follows:

 

$75,000 for total loss of hearing in both ears;

 

$100,000 for the loss of one foot, one leg, or of one hand or arm;

 

$200,000 for the loss of both feet or legs, or of both hands or arms;

 

$300,000 for the loss of vision in both eyes;

 

$400,000 for paraplegia or quadriplegia; and

 

                                    $500,000 for death.

 

Funding for the increased caps would be provided as specified in Recommendation No. 3.b. through 3.e.  (Proposed by Assemblyman John C. Carpenter on April 12, 2000.)

 

8.          Enact a sunset provision effective at the end of four years for any change in the cap to allow for evaluation of the effects of the change.  (Proposed by Senator Maurice E. Washington at the February 26, 2000, meeting.)

 

Additional Options

 

On February 23, 2000, the Advisory Committee submitted a report concerning its two meetings which occurred on January 10, 2000, and February 16, 2000.  Although the Advisory Committee was not able to reach consensus on any recommendations to present to the Subcommittee, it did present a list of options the Subcommittee could consider.  These options are included here in the event the Subcommittee does not want to adopt any of the proposals set out above, but still wants to consider other options.  However, more detail would be necessary before most of these options could be drafted.  The list of options is attached hereto as Exhibit D.

 

 



A.C.R. 46 ADVISORY COMMITTEE

LIST OF OPTIONS

 

1.                   No change in the current statutory limitation or cap.

 

2.          No change in the current cap, but create a new fund for major injury and death cases.

 

3.          Increase the cap by:

 

a.          Immediate cost of living adjustment (COLA) from 1979 to present.

 

            b.         Gradual phase-in of any increase in the cap.

 

            c.          Prospective only COLA adjustment.

 

            d.         Immediate COLA adjustment and thereafter COLA adjustments annually or some other period of time.

 

            e.          Increasing only within counties whose population is above a certain number.

 

            f.          Increasing for medical negligence cases only.

 

            g.          Increasing the amount for each claim, but reducing or limiting the number of claims under which an individual may recover.

 

            h.         A fixed amount, but with a sunset provision to allow study of the effects of the increase.

 

            i.          Random selection of a new cap amount.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                                                                                                                                Exhibit D


 

OPENING REMARKS AND INTRODUCTIONS

 

Chairman Anderson called the meeting to order and roll was called.  He explained the purpose of today’s hearing will be consideration of the proposals that were reviewed during the Subcommittee’s April 19, 2000, meeting.  He explained that any recommendation must have the support of a majority of the members from both the Assembly and the Senate in order to pass.  Chairman Anderson called for a motion to approve the April 19, 2000, minutes.

 

 

APPROVAL OF MINUTES  FOR THE SUBCOMMITTEE’S MEETING

IN CARSON CITY, NEVADA, ON APRIL 19, 2000

 

ASSEMBLYMAN CARPENTER MOVED FOR APPROVAL OF THE MINUTES OF THE APRIL 19, 2000, MEETING OF THE LEGISLATIVE COMMISSION’S SUBCOMMITTEE TO STUDY THE STATUTORY LIMITATION ON DAMAGES THAT MAY BE AWARDED TO A PERSON IN A TORT ACTION AGAINST THE STATE OF NEVADA, ITS POLITICAL SUBDIVISIONS OR CERTAIN OTHER PERSONS, WHICH WAS HELD IN CARSON CITY, NEVADA.  ASSEMBLYWOMAN OHRENSCHALL SECONDED THE MOTION WHICH PASSED UNANIMOUSLY.

 

Before proceeding with the formal portion of the meeting, Chairman Anderson expressed his appreciation to the members of the A.C.R. 46 Subcommittee and the Advisory Committee for their commitment of time and energy as well as their insight and experience.  He also commended staff for the clerical, technical, and legal support provided to the Subcommittee. 

 

 

PRESENTATION BY STAFF OF THE FISCAL ANALYSIS DIVISION,

LEGISLATIVE COUNSEL BUREAU, REGARDING POSSIBLE SOURCES

OF REVENUE FOR CONTRIBUTION BY THE STATE OF NEVADA TO THE SPECIAL FUND PROPOSED IN RECOMMENDATION NO. 3 IN THE

APRIL 19, 2000, “WORK SESSION DOCUMENT”

 

Mark Stevens

 

Mark Stevens, Assembly Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau (LCB), provided the Subcommittee with information relevant to Recommendation No. 3 which includes:

 

                     A memorandum from Ted A. Zuend, Deputy Fiscal Analyst, Fiscal Analysis Division, LCB, to the Chairman and Members of the A.C.R. 46 Subcommittee titled “State-Imposed Revenues Dedicated to Purposes Other Than General Fund,” please see Exhibit A;

 

                     A written request to the Attorney General’s Office addressing the issues involved with increasing the statutory cap as it relates to Recommendation No. 3, from Rick Combs, Program Analyst of the Fiscal Analysis Division, LCB, refer to Exhibit B; and

 

                     Correspondence from Jon Hansen, Tort Claims Administrator, Attorney General’s Office, responding to questions posed by the Fiscal Analysis Division, please refer to Exhibit C.

 

Mr. Stevens explained the mechanism currently in place to pay tort claims is based on state personnel and vehicle assessments (please refer to Exhibit D).  An assessment of $139.46 per state employee and $117.04 per vehicle generates $3,733,270 annually in revenue.  These figures are based on the $50,000 cap; however, if the limit were increased to $75,000, the assessments would increase to $154.96 and $130.05 respectively and would equate to an increase of $415,000.  Mr. Stevens noted the amounts depicted are estimates from the Attorney General’s Office and indicated an accurate figure would require an actuarial study.

 

Discussion ensued regarding the state’s contribution to the Special Fund as proposed in Recommendation No. 3.  The proposal, as it stands, would allocate money from the ad valorem tax of each county at a rate of 0.25 cents and would be matched by the state.  He did note, however, the following restrictions:

 

                     The proposal for matching funds from the state would involve federal funding. 

 

                     The state indicated its employees account for 20 percent of the public workers rather than  50 percent.  Therefore, the state would be responsible for 20 percent of the claims.  If the state’s participation was 20 percent, its total assessment revenue would increase by $700,000; a 50 percent match would result in an increase of $1,539,186. 

 

                     The state could only participate in expenses related to its employees and not those of local subdivisions.

 

                     The state’s portion of money in the Special Fund would be restricted to the state’s share of revenue and could only be utilized for claims related to its employees.  Additionally, if excess funds were available at the end of the fiscal year, the state’s portion could not be transferred to the Fund for Hospital Care to Indigent Persons.

 

Responding to an inquiry from Assemblyman Carpenter, Mr. Stevens explained the involvement of the federal government.  The funding mechanism utilized is an assessment of employees and vehicles and the money generated is allocated to specific state or federal budget accounts. 

 

If revenue from a general fund account is funded 100 percent from the State General Fund, the state would pay the assessment; however, if the budget account is funded solely by the federal government, federal funds would be utilized.  The total assessment revenue is divided approximately 50 percent to the general fund account and 50 percent to non-general fund.  A significant portion of the non-general fund consists of federal monies.  Thus, an agreement with the federal government regarding utilization of federal funds would be needed.

 

Chairman Anderson asked if a formula is currently used based on federally funded employees and, if so, could the formula be extended by increasing the $50,000 cap to the proposed $75,000?  Mr. Stevens replied in the affirmative and indicated the assessment would have to be actuarially determined.

 

Jon Hansen

 

Jon Hansen, Tort Claims Administrator, Litigation Division, Office of the Attorney General, representing P. Mark Ghan, Solicitor General, Attorney General’s Office, responding to  inquiries from Assemblyman Carpenter, indicated:

 

                     The 11 percent increase associated with raising the tort cap to $75,000 is based on increased limits tables.  For example, if automobile insurance were purchased with limits of $100,000 and then increased to $200,000, the premium would not necessarily double.  The number of claims between $100,000 and $200,000 does not incrementally increase as rapidly as does the first layer.  The 11 percent increase of $415,000 was based on formula tables developed by the insurance industry. 

 

                     A work program has been prepared for approximately $800,000 seeking additional funding from the Legislature’s Interim Finance Committee to pay tort claims because the total assessment of  $3,733,270 has been depleted.   A major portion of the claims involve constitutional and civil rights claims; therefore, the funding request is a match for federal funds.

 

Senator Washington asked Mr. Hansen if the Attorney General’s Office is obligated to pay attorney’s fees if a case is settled out of court.  Mr. Hansen replied in the affirmative.  He also explained that under federal law, the prevailing party in a federal lawsuit is entitled to attorney’s fees and quite often the prevailing party receives a relatively small settlement with substantial attorney’s fees attached. 

 

Bill Bradley

 

Bill Bradley, representing the Nevada Trial Lawyers Association (NTLA), indicated that under the current $50,000 cap if a claim is paid within a reasonable period of time, that is the extent of a government entity’s exposure.  However, if a dispute arises between the entity and the claimant and the party files an Offer of Judgment for settlement under the $50,000 and no settlement is reached, a jury or judge can award a verdict in excess of the offer.  Further, there is an obligation  to award attorney’s fees in addition to the amount awarded by the court.   The converse is also true; if a state or government entity offers $35,000 and the offer is not accepted, the court could award less than what the state offered and attorney’s fees can be sought from the victim.

 

Continuing, Mr. Hansen indicated attorney’s fees are paid from the tort claims fund, not the State’s General Fund.  If there is not adequate revenue in the tort fund, a request would be made to the Interim Finance Committee to transfer monies from the reserve account which currently has a balance of $2 million.  Furthermore, if the reserve were to reach a zero balance, the fund for statutory contingency could be utilized.

 

Senator Washington suggested information be provided to the Subcommittee summarizing the dollar amount of attorney’s fees that have been awarded on tort claims.  Chairman Anderson remarked that information would be beneficial if it was available for the 71st Legislative Session for future discussions.

 

Mr. Bradley explained that awarding attorney’s fees is not a certainty.  There are five factors the District Court utilizes to decide whether to award fees.  The Court reviews those factors, determines the lawyer’s expenses, and makes a discretionary award.  In his experience, there have been three such cases in which this scenario has occurred in the past two years.

 

Responding to Chairman Anderson’s question regarding individual fund payments, Mr. Stevens stated Recommendation No. 3 stipulates that if sufficient funds are not available to make claim payments, they would be paid on a pro rata basis.  If the proposed funding mechanism were utilized,  the funds would be accounted for separately; one for the state fund and the other for local government entities.  Each would operate independently so it is possible that one fund may prorate and the other fund may not.

 

 

PRESENTATION REGARDING HOW A CLAIM WOULD BE PROCESSED

UNDER RECOMMENDATION NO. 3 OF THE APRIL 19, 2000,

“WORK SESSION DOCUMENT”

 

Wayne E. Carlson

 

Wayne E. Carlson, Executive Director, Nevada Public Agency Insurance Pool (POOL) and Public Agency Compensation Trust, provided the Subcommittee with a diagram based on Recommendation No. 3 which depicts a scenario for application to the Special Fund (please refer to Exhibit E).  He summarized the process as follows:

 

1.                   A plaintiff and a governmental defendant either reach a settlement agreement or the parties proceed to court where a decision is reached.

 

2.          As part of the agreement or decision, the parties would have to agree to, or the court would have to order the amount of damages, at which time it would be determined if the plaintiff is eligible for the Special Fund.  Once damages for wage loss and medical expenses have been determined and eligibility has been established, a decision is made.

 

3.          If total damages are less than $150,000, the claimant cannot qualify for the Fund.  However, if combined wage loss and medical expenses exceed the $150,000 limit, application can be made to the Special Fund. 

 

4.          The Special Fund then receives an application from the plaintiff along with confirming information from the public agency and is reviewed for eligibility (nature of injury per statute) and amount of damages (from settlement or court decision).

 

5.          The application proceeds to the Fund Board for determination of fund availability.  The Board evaluates the total amount of all claims and pays proportionate amounts to all eligible claimants, up to $250,000 each.  If more claims are submitted than there are funds available, claims would be paid on a pro rata basis.

 

Mr. Carlson stated Recommendation No. 3 was not originally proposed to function with bifurcated funds between the state and local entities; its purpose was to operate as an integrated fund for all governmental defendants.  He noted the assessment formula used by the state is actuarially developed and if it were changed to a designated tax rate or removed from the State General Fund entirely, that alternative would not activate federal involvement.  The Fund for Hospital Care for Indigent Persons is based on a statewide tax rate that does not affect the rate of the counties.  Through that source, the counties have determined they could appropriate a small percentage of the tax based on the number of current claims.  Referring to the state’s theory of using employees as a base for its formula, Mr. Carlson indicated that the amount the POOL assesses to build the loss fund for tort and federal claims, is less than the amount the state asserts it is spending.

 

Responding to questions from Chairman Anderson, Mr. Carlson replied:

 

                     Depending on how claims would be distributed from a bifurcated fund, there could potentially be less money available for the victim if either the state or local government funds were depleted based on the number and dollar amounts of claims filed in any given period.

 

                     An integrated fund was initially proposed because data is not available that depicts an accurate number of paraplegic, quadriplegic, or death cases to determine a specific dollar amount.

 

Bill Isaeff

 

Bill Isaeff, representing the Nevada League of Cities, commented that an integrated fund was initially proposed to enable claims to be paid at a 100 percent payout on a more consistent basis.  If the fund is bifurcated into state and local government segments, the possibility that people will face proration of their claims rather than receiving full payment increases.  He urged the Subcommittee to give favorable consideration to the integrated proposal and pursue a funding source that would not involve federal funding.

 

Responding to inquiries from the Subcommittee, Mr. Carlson stated that:

 

                     Relative to increasing the cap and the ability of the rural counties to adjust to an increase,  consideration of the value of limiting the aggregate amount of tort claims against an increase was the main factor.  He referred to a claim in which there were 100 causes of action filed at $50,000 each.  The POOL prevailed in that particular case; however, a successful claim of that magnitude would have exceeded the POOL’s reserves and reverted back to the local government depleting their entire budget.  Thus, by setting an aggregate tort limit of $150,000, the potential risk of a worst case scenario has been reduced; and

 

                     The counties pay for medically indigent persons until they are state certified for Medicaid.  The program is county funded; cities and school districts are not involved. 

 

Bill Hoffman

 

Bill Hoffman, representing the Nevada Association of School Boards, stated that in the event of an incident involving a school district employee and medical expenses exceed the current $50,000 cap, the county would ultimately pay for any medical expenses of the indigent victim that surpass the tort limit. 

 

Chairman Anderson introduced a chart comparing current tort law and the proposals of Mr. Bradley and Mr. Isaeff.  He asked staff to provide the Subcommittee with a brief overview of the tables (please refer to Exhibit F).

 

Scott Young

 

Mr. Young, Principal Research Analyst, Research Division, LCB, stated two fact situations which were previously presented to the Subcommittee by Mr. Bradley (Recommendation No. 4) and Mr. Isaeff (Recommendation No. 3) which are included in the Work Session Document (please refer to Exhibit G) were used in the comparison.  He noted that in certain fact situations one proposal might provide a greater reimbursement for an injured person and a lesser amount in another situation.  The comparison did not find that there was consistently one proposal that would always provide a greater dollar amount.  Mr. Young addressed the following considerations relative to the recommendations:

 

1.                   Recommendation No. 3 applies to specified types of injuries for certain persons applying to the Special Fund:  paraplegia, quadraplegia, persistive vegetative state, and an inability to return to gainful employment.  However, there are injuries which would be very severe but not necessarily eligible for recovery from the Fund.  For example, a person with an injury that resulted in internal injuries, perhaps shattered limbs, with a long period of recovery, would not fall into one of the eligible categories if they were not paralyzed.

 

2.          The property damage category was difficult to realistically include in the examples.  Utilizing the current cap of $50,000 as an example, there could be automobile accidents that could potentially result in damages of $50,000 to a vehicle.  However, increasing the tort amount to $75,000 or $125,000 per claim may not maximize that amount of recovery on a property claim since most vehicles are not that expensive.

 

Referring to the comparison chart, Mr. Young explained the following scenarios:

 

1.                   A fact situation where one person is injured and has no spouse or child.  Under current law there is a potential for a maximum recovery of $100,000 for the individual; under Recommendation No. 3 as much as $400,000; and Recommendation No. 4, $250,000.

 

2.          The second scenario is more complex.  A mother, father, and a child are in a motor vehicle accident and the child is injured and dies after lingering for a number of months. 

 

Ř             Under current law the mother and father would have a cause of action for emotional distress and  the wrongful death of the child.  The mother would a have a total claim of $100,000; the father $150,000; and the estate of the child $50,000, for a total award of $300,000. 

 

Ř             Under Recommendation No. 3, the injured child would receive $325,000; the mother $150,000, and the father $225,000.  Mr. Young noted, however, that under this proposal there is a limit of two causes of action per individual.  Under current law the father could claim three causes of action for emotional distress, property damage, and wrongful death.  Recommendation No. 3 recognizes only two causes of action, which would equate to a grand total of $625,000.  The point of this example illustrates that Recommendation No. 4 would produce a higher recovery ($750,000) when the total amounts recoverable are compared. 

 

Mr. Isaeff, identified previously, clarified that Recommendation No. 3 has a maximum award of $150,000 in damages per occurrence per person; therefore, it is possible that all three of the claims in Mr. Young’s example might receive compensation.  Victims can continue to plead multiple causes of action; however, the $150,000 is the controlling amount.  Mr. Isaeff stated the concept of “stacking” was not imposed by the Legislature, it was a judicial decision that allowed multiple causes of action.

 

Mr. Young concurred with Mr. Isaeff and referred to the second example and indicated it is possible there could be an award of $30,000 in each of the three categories which would not exceed the $150,000 limit.  Therefore, there could be more than two identifiable causes of action, they simply could not total more than $150,000.

 

J.R. Crockett, Jr.

 

J.R. Crockett, Jr., representing the Nevada Trial Lawyers Association, was of the opinion the property damage claim should be reduced and not used to track the value of a personal injury claim.  The intent of the Subcommittee should be to provide a method of recovery for damages an individual could not otherwise provide for.  He remarked that a person cannot purchase insurance coverage to protect against pain and suffering and permanent disability.  That is an area that should be expanded to enhance recovery for the injured party or survivors.

 

Discussion ensued regarding the $250,000 allocated for medical expenses and lost wages. Mr. Carlson illustrated another scenario in which a spouse and children, under certain circumstances, could submit a claim for the wage loss of the wage earner.  The Special Fund provides for other parties to apply for a wage loss claim not just the individual who is severely injured or killed.  The Fund could pay $250,000 for the spouse and $250,000 for each of the two children for a total of $750,000 in this type of scenario.  Mr. Bradley responded that if there is only one wage earner, only one claim can be filed for lost wages. If that wage earner is also supporting one of his children through college, that child has a claim for loss of support in addition to the loss of support that the wife had.  However, young children who are receiving no assistance from their parents cannot claim loss of wages.

Assemblyman Claborn reiterated his previous position in which he recommended increasing the cap to $75,000 for three years, retaining the existing statutory provisions, and then raising it to $100,000.

 

 

PRESENTATION IN RESPONSE TO ISSUES RAISED

AT THE APRIL 19, 2000, MEETING OF THE A.C.R. 46 SUBCOMMITTEE REGARDING THE NUMBER OF STATE TORT CASES THAT POTENTIALLY WOULD BE ELIGIBLE FOR COMPENSATION FROM THE SPECIAL FUND COMPARED TO THE TOTAL NUMBER OF POTENTIALLY ELIGIBLE CLAIMS FROM OTHER PUBLIC ENTITIES, AND INFORMATION ON THE AMOUNT OF EXCESS INSURANCE PUBLIC ENTITIES COULD OBTAIN IF THE PROJECTED $2.2 MILLION IN PROPOSED FUNDING FOR THE SPECIAL FUND WERE INSTEAD USED TO PURCHASE EXCESS INSURANCE

 

Mr. Hansen, identified previously, indicated it would be considerably more expensive to purchase insurance as a funding mechanism for the catastrophic pool than to self-fund.  He stated he could provide the Subcommittee with extensive background information justifying his statement if they so desired.

 

Chairman Anderson asked Mr. Hansen to submit the information as it may be a beneficial resource during the legislative process in the 71st Legislative Session if this particular issue is explored.

 

Anne Cathcart

 

Anne Cathcart, Senior Attorney General, Attorney General’s Office, clarified that the memorandum submitted under Mr. Hansen’s signature focused primarily on answering specific questions posed by the Legislative Counsel Bureau and estimates relative to the cost of additional resources such as staffing were not included.  She indicated the position of the Attorney General’s Office is neutral on the recommendations under consideration and the Office serves as a resource to the Subcommittee and, if appropriate, to the Legislature in the evaluation of proposals.

 

 

PUBLIC TESTIMONY

 

Bill Bradley

 

Bill Bradley, representing the Nevada Trial Lawyers Association (NTLA), stated the NTLA appreciates the efforts of the counties in identifying a source of funds for such a difficult problem.  He remarked that if there is a desire to consider Recommendation No. 3, he wanted to make the following observations:

 

                     In order to be eligible for the Special Fund, a person must qualify in one of the five categories referred to in previous testimony.  Of concern is the category of “permanent total physical incapacitation from any gainful employment or death.”  It is unfair that a victim of government’s negligence has to prove that he is unable to work in any capacity. There are, however, numerous paraplegics and quadriplegics who have made amazing strides and efforts in overcoming their disability and yet they would not be entitled to any Fund benefit if they could perform some type of menial job.   Mr. Bradley suggested that “unable to work” or “customary and ususal” be defined relative to a victim’s previous employment or an ability to resume gainful employment.

 

                     At the suggestion of the NTLA, it is proposed that the element of pain and suffering be included as a component of damage within the five categories.  That would allow a victim’s attorney to assert that a portion of those damages are intended for the individual.  If pain and suffering are not included, the lien holder for the medical bills will be the recipient of money.

 

                     Regarding the issue of property damage, Mr. Bradley suggested it not be included as part of the injured victim’s claim.

 

                     Expressing the concerns of Mr. Isaeff and Mr. Carlson regarding the bifurcated fund and the state’s 20 percent exposure, he was of the opinion 97 percent of state employees are office workers who have minor risk exposure.  He suggested an alternative method of analyzing the state’s exposure be used rather than basing it solely on full time employees.

 

Jeff Blanck

 

Jeff Blanck, District Counsel, Washoe County School District (WCSD), made the following observations:

 

                     Whether there are adequate resources to increase the tort limit to $75,000 is a financial issue.  According to the state’s representative it is a fiscal decision dependent on what action the Legislature takes. 

 

                     The experience of the WCSD is that uninsured individuals welcome assistance with their medical bills.  The school district has settled cases in the past solely for the amount of the medicals.  Given previous testimony, one could get the impression that settling for medical expenses is not something that is advantageous to a victim; however, from the WCSD’s experience, that is not the case. 

 

                     It is the Legislature’s function to review the court’s decisions relative to “stacking” and determine if that legal doctrine is consistent with the original intent of the governmental immunity statutes.

 

There being no further public testimony, Chairman Anderson closed that portion of the hearing and brought the meeting back to the Subcommittee for further questions and discussion.

 

Responding to a question from Assemblyman Claborn, Mr. Bradley was of the opinion there should be a minimum of three claims – one for property damage and two claims for injuries.  If there is a limit of two claims, as proposed in Recommendation No. 3, and one is designated for property damage, that leaves only one claim for personal injuries.  An individual should be entitled to two separate causes of action.

 

Mr. Isaeff reiterated that the number of claims filed is not limited under Recommendation No. 3.  There is a $75,000 maximum for a single claim, and a $150,000 maximum for a single occurrence per claimant.  For example, an individual could have a $20,000 property claim, a physical injury claim of $75,000, and a third claim awardable up to the maximum of $150,000.

 

In response to Mr. Bradley’s inquiry, Mr. Carlson replied that a property damage insurance claim belongs to the individual who filed the claim.  The insurance company is subrogated to the individual’s rights and pursues recovery for damages on behalf of a claimant, but actually sues in the name of the person.  Under the property damage portion of a claim, if an insurance company “made you whole,” they are entitled to seek recovery to “make themselves whole.”

 

 

WORK SESSION

DISCUSSION AND SUBCOMMITTEE ACTION

ON RECOMMENDATIONS TO THE 71ST SESSION

OF THE NEVADA LEGISLATURE

 

Chairman Anderson referred to the “Work Session Document,” presented as Exhibit G, and noted it is identical to the document presented at the Subcommittee’s April 19, 2000, meeting.  The recommendations contained in the “Work Session Document” are listed below in bold text and precede the actions of the Subcommittee.

 

Recommendations for Changing the Existing Statutory Tort Damage Cap

 

1.                Enact legislation effective July 1, 2001, eliminating the cap for damages incurred for medical expenses and lost wages but retaining the existing cap of $50,000 set forth in NRS 41.035 until July 1, 2003, for all other types of damages (this includes, without limitation, pain and suffering, loss of consortium).  Additionally, include a provision to:

 

a.       Increase the cap set forth in NRS 41.035 for counties with a population greater than 100,000 to:

 

                     i.       $75,000 for incidents occurring on or after July 1, 2003; and

 

                     ii.      $100,000 for incidents on or after July 1, 2005; and

 

            b.      Increase the cap set forth in NRS 41.035 for counties with a population less than 100,000 to:

           

i.       $60,000 for incidents on or after July 1, 2003; and

 

ii.      $75,000 for incidents on or after July 1, 2005.  (Proposed by Chairman Bernie Anderson at the February 23,2000, meeting).

 

The Subcommittee did not take action on Recommendation No. 1.

 

2.        Enact legislation establishing a special fund for governmental entities that service a population of less than 100,000, including those governmental entities which are located within counties with a population of more than 100,000.  (Proposed by Chairman Bernie Anderson at the February 23, 2000, meeting.)

 

The Subcommittee did not take action on Recommendation No. 2.

 

3.        Enact legislation to amend NRS 41.035 to increase the cap on damages and to create a special fund for persons injured by public agencies as follows:  (Proposed by Bill Isaeff representing the Nevada League of Cities, and Wayne Carlson of the Nevada Public Agency Insurance Pool in an e-mail dated March 22, 2000, a copy of which is attached hereto as Exhibit A; supported [except as noted] by the Nevada Association of Counties per a letter from Robert S. Hadfield, Executive Director, dated March 22, 2000, a copy of which is attached hereto as Exhibit B; supported by the Nevada Association of School Boards per Bill Hoffman, representative for Nevada Association of School Boards.)

 

a.        Increase Tort Cap and Create Special Fund for Certain Cases.

 

i.       Increase the cap set forth in NRS 41.035 and limit the amount of damages in tort actions:  For any accident or occurrence on or after October 1, 2001, except as provided in Recommendation No. 3.a.ii, an award for tort damages against a present or former officer or an employee of the state or any political subdivision, immune contractor or state legislator arising out of an act or omission within the scope of his public duties or employment may not exceed $75,000, exclusive of interest computed from the date of judgment, to or for the benefit of any claimant, subject to a total limit of $150,000 in the aggregate for all separate, distinct, and independent causes of action or number of state actors involved for any one person arising out of said accident or occurrence.  An award may not include any amount for prejudgment interest or as exemplary or punitive damages.

 

ii.      Certain persons may apply for money from special fund:  For any accident or occurrence on or after October 1, 2001, a person injured in any occurrence involving a public agency, including the state or any political subdivision of the state, which results in paraplegia, quadriplegia, a persistive vegetative state, permanent total physical incapacitation from any gainful employment or death, may apply to the Special Fund for Persons Injured by Public Agencies for payment up to $250,000 for medical expenses and loss of earnings damages combined that exceed the amount resulting from the application of the limitation on damages pursuant to NRS 41.035 concluded by settlement or judgment.

 

b.        Eligibility for Payment from Special Fund.

 

i.       Determination of damages:  Eligibility to make application to the Special Fund for medical expenses and loss of earnings damages must be certified in writing to the Board of Trustees by the public agency in the settlement agreement or be adjudicated by the court.  In the event the parties to a settlement cannot agree as to the amount of such damages, the parties may agree to petition the court for a determination of the amount of damages incurred, which determination shall be binding upon the parties.  In the alternative, either party may request a jury trial to determine both liability and damages, if any.  “Medical expenses and loss of earnings damages” means damages that are specifically claimed and proven and shown to have been sustained in the circumstances of the particular wrong and may include future loss of earnings and medical expenses.

 

ii.        Application process:  The Board of Trustees of the Special Fund shall review the application and approve or disapprove reimbursement of all or part of the unpaid medical expenses or loss of earnings damages.  Applications must be filed with the Board within 30 days after a final determination of damages has been made.  If reimbursement or partial reimbursement is approved, payment of such damages to the person injured must be made from the fund, to the extent money is available in the fund for this purpose.   Within 30 days after the close of a fiscal year, the Board shall determine the amount of money on hand as of the close of the fiscal year.  If claims against the fund in any given year exceed the amount of money available at the close of the fiscal year, the available money shall be distributed on a pro rata basis among all recipients eligible in that year.  The method of determining the pro rate division of money in the Special Fund shall be fixed by regulations adopted by the Board.  An applicant is eligible to receive payment from the Special Fund for an accident or occurrence only once.  The determination by the Board of Trustees as to the amount of money available for reimbursement or partial reimbursement of medical expenses and loss of earnings damages is made in the sole discretion of the board and is final and binding on the applicant.

 

iii.     The application to the Board must be in such form and contain such information as the Board requires by regulation.  No application will be processed without a certification of medical expenses and loss of earnings damages by the public agency.

 

c.          Creation and Powers of Board of Trustees.

 

i.       The Board of Trustees shall consist of five members of which one member shall be from each county with a population of 100,000 or greater, two shall be from counties with a population of less than 100,000, and one shall be a representative from the State Board of Examiners.  The Board shall have the same powers as the Board of Trustees for the Fund for Hospital Care to Indigent Persons as set forth in NRS 428.205.  [If the state does not participate in the Special Fund as outlined in Section e below, then the proposed revisions to NRS Chapter 41 and the provisions of the Special Fund will not apply to the state and the fifth member of the Board shall be from a county with a population of less than 100,000.]

 

-Or-

 

ii.      The existing Board of Trustees for the Fund for Hospital Care to Indigent Persons established pursuant to NRS 428.195 shall administer the Special Fund.  The Nevada Association of Counties, under the control of the Board, shall serve as the administrative and claims agency for the Special Fund.

 

-And-

 

iii.     Once the Special Fund has been initially funded, the Board shall have authority to determine future allocations of excess Special Fund Revenue to support the Fund for Hospital Care to Indigent Persons and the Fund for the Institutional Care for the Medically Indigent, based on the funding needs of all three funds.  (Recommendation No. 3.c.ii and iii proposed by the Nevada Association of Counties per a letter from Robert S. Hadfield, Executive Director4, dated March 22, 2000, attached hereto as Exhibit B.)

 

d.       Reimbursement of Medical Expenses or Loss of Earnings; Board Subrogated to  Right of Applicant.

 

Upon payment of medical expenses or loss of earnings to the applicant, the Board of Trustees is subrogated to the right of the applicant to recover the unpaid charges from any responsible party other than the certifying public agency or the applicant to the extent of the reimbursement or partial reimbursement paid, and may maintain an independent action therefor in a manner similar to that employed by the  Board of Trustees for the Fund for Hospital Care to Indigent Persons pursuant to NRS 428.245.

           

            e.       Funding for Special Fund

 

               From the taxes levied pursuant to NRS 428.185 and any tax levied pursuant to NRS 450.425, the board of county commissioners of each county shall set aside money from the ad valorem tax at a rate of 0.25 cents (one‑quarter of a cent). 

 

-And-

 

i.                    If a permanent source of money is identified in the legislation to match the money contributed to the special fund by the earmarking of the 0.25 cents from the ad valorem tax, then the bill will be drafted so that a person injured by an employee of the state may apply for money under the special fund.  This permanent source of money could include dedicating a portion of an existing state tax or creating a new tax for this purpose. [The estimated annual revenue if the state matches equally at 0.25 cents (one-quarter of a cent) is $2,248,373.]

               -Or-

 

ii.         If a permanent source of money is not identified, then the bill will be drafted so that a person injured by a state employee may not apply for money in the fund.  In addition, the bill will be drafted so that the limitation on awards for damages in tort actions set forth in NRS 41.035 will remain at $50,000 for state employees and there will be no restriction on the number of causes of action that may be brought against the state.

 

                                 STAFF NOTE:  If the bill is drafted pursuant to Recommendation No. 3.e.i, the source of money to be committed must be identified before the bill may be drafted.  If the bill is drafted pursuant to Recommendation No. 3.e.ii, then the different award of damages available to a person who is injured by a state employee rather than a local government employee will have to be shown to meet the rational basis test.

 

Discussion ensued in which the Subcommittee addressed the following issues relative to Recommendation No. 3:

 

                     Assemblywoman Ohrenschall indicated the definition of an individual’s ability to return to work should be addressed with more specificity if the Special Fund is employed in the proposal.  Chairman Anderson stated that issue would be reviewed when legislation is considered in the 71st Legislative Session rather than through the Subcommittee’s work session process.

 

                     Assemblyman Carpenter stated Recommendation No. 3 is a proposal the governmental entities can financially support and concurred with Assemblywoman Ohrenschall’s concern that there be a definitive definition for victims who cannot pursue gainful employment.  He remarked that in previous testimony Mr. Bradley suggested employing the language “unable to work” or “customary and ususal” to define an individual’s previous employment.

 

                     Chairman Anderson noted the financial dilemma this proposal creates for the State of Nevada as well as the Legislature in determining a viable funding mechanism for participation in the Special Fund.

 

Additionally, Senator Washington identified the following issues he felt were relevant to the passage of Recommendation No. 3:

 

                     Increasing the cap to $75,000 and eliminate “stacking” by setting a monetary limit of $150,000 for multiple causes of action;

 

                     Identifying a permanent source of money to fund the Special Fund as proposed in Recommendation No. 3; and 

 

                     Determine if the state will participate in the Special Fund.  If it is determined the state will participate, he recommended the proposal be presented to the Senate Committees on Finance and Taxation and the Assembly Committees on Ways and Means and Taxation for review.

 

Senator Washington remarked he was in favor of increasing the tort cap to $75,000 based on the funding mechanism authored by the governmental entities, and the state’s participation in the Special Fund.

 

Chairman Anderson indicated he was in favor of increasing the cap and sympathetic to the financial situation of the rural counties.  However, he was not sure that if the Subcommittee approved legislation to limit stacking it would be amenable to the judicial system and was of the opinion there would be future confrontations with the court system relative to that particular scenario.  Therefore, he indicated his reluctance to setting a cap on the number of causes of action.

 

Assemblywoman Ohrenschall asked if there was, in fact, a separation of powers issue if legislation is passed relative to limiting “stacking.”

 

Risa B. Lang

 

Risa B. Lang, Principal Deputy Legislative Counsel, Legal Division, LCB, indicated it should not be an issue and in the past legislation has been drafted pertinent to awarding damages.

 

Chairman Anderson asked if there was a motion for approval from the Subcommittee.

 

SENATOR MCGINNESS MOVED TO ADOPT RECOMMENDATION NO. 3 TO ENACT LEGISLATION AMENDING NEVADA REVISED STATUTES 41.035 TO INCREASE THE TORT CAP ON DAMAGES AND  CREATE A SPECIAL FUND FOR PERSONS INJURED BY PUBLIC AGENCIES.  SENATOR SCHNEIDER SECONDED THE MOTION WHICH PASSED UNANIMOUSLY.

 

Chairman Anderson indicated the motion should be drafted in “skeleton” form and include the following criteria:

 

                     Increase the tort cap to $75,000;

 

                     Create a mechanism by which victims may apply for special funds;

 

                     Eligibility for payment from the Special Fund;

 

                     The creation and powers of the Board of Trustees; and

 

                     Establish a funding mechanism for the Special Fund.

 

Responding to an inquiry from Assemblywoman Ohrenschall, Chairman Anderson clarified that Senator McGinness’ motion would include the following sections from Recommendation No. 3 of the “Work Session Document”:

 

                     Page 6, subsections 3.c.i and 3.c.iii; and

 

                     Page 7, subsections 3.d and 3.e.i.

 

Assemblyman Claborn stated that although he cast his vote in the affirmative to recommend approval of the recommendation in skeleton form, he may not support the final bill draft in the 71st Legislative Session.

 

Assemblywoman Ohrenschall indicated she would vote in the affirmative but was of the opinion the cap may need to be increased beyond the proposed $75,000 limit to ensure just compensation for injured parties.

 

Chairman Anderson voiced his pleasure with the fact that the governmental entities have been able to identify a potential funding source, but was disappointed that a restriction has been imposed which limits compensation to injured persons.  He indicated his preference would have been to increase the cap to $75,000 and address the issue of “stacking” at a later date.  Chairman Anderson stated there are many unresolved issues to be addressed and in particular identifying a funding source.  He voiced his concern about setting a “dangerous precedent” by earmarking funds that may bind legislative dollars in future legislative sessions. 

 

4.          Enact legislation increasing the tort cap set forth in NRS 41.035 for all claims to $125,000 while continuing to allow multiple causes of action arising from the same incident.  The new cap applies to all claims occurring on or after October 1, 2001.  (Proposed by Bill Bradley representing the Nevada Trial Lawyers Association in a March 28, 2000, letter, a copy of which is attached hereto as Exhibit C.)

 

The Subcommittee did not take action on Recommendation No. 4.

 

5.          Enact legislation increasing the cap for all claims as provided in Recommendation No. 4 and in addition, authorize an interim legislative study to consider the feasibility of creating a catastrophic injury fund for claims which exceed the new statutory cap.  (Proposed by J.R. Crockett, Jr., representing the Nevada Trial Lawyers Association at the January 10, 2000, Advisory Committee meeting.)

 

The Subcommittee did not take action on Recommendation No. 5.

 

6.          Enact legislation providing for an index in the cap as established in Recommendation No. 4 to automatically increase the cap in the future to keep pace with the cost of living based on the Consumer Price Index-All Urban Consumers (Current Series).  (Proposed by J.R. Crockett, Jr., representing the Nevada Trial Lawyers Association at the January 10, 2000, Advisory Committee meeting.)

 

The Subcommittee did not take action on Recommendation No. 6.

 

7.          Enact legislation effective July 1, 2001, retaining the existing cap of $50,000 set forth in NRS 41.035 but establishing a schedule providing for higher caps for certain specified injuries as follows:

 

$75,000 for total loss of hearing in both ears;

 

$100,000 for the loss of one foot, one leg, or of one hand or arm;

 

$200,000 for the loss of both feet or legs, or of both hands or arms;

 

$300,000 for the loss of vision in both eyes;

 

$400,000 for paraplegia or quadriplegia; and

 

                           $500,000 for death.

 

      Funding for the increased caps would be provided as specified in Recommendation  No. 3.b. through 3.e.  (Proposed by Assemblyman  John C. Carpenter on April 12, 2000.)

 

The Subcommittee took no action on Recommendation No. 7.

 

8.          Enact a sunset provision effective at the end of four years for any change in the cap to allow for evaluation of the effects of the change.  (Proposed by Senator Maurice E. Washington at the February 26, 2000, meeting.)

 

The Subcommittee took no action on Recommendation No. 8.

 

Additional Options

 

On February 23, 2000, the Advisory Committee submitted a report concerning its two meetings which occurred on January 10, 2000, and February 16, 2000.  Although the Advisory Committee was not able to reach consensus on any recommendations to present to the Subcommittee, it did present a list of options the Subcommittee could consider.  These options are included here in the event the Subcommittee does not want to adopt any of the proposals set out above, but still wants to consider other options.  However, more detail would be necessary before most of these options could be drafted.  The list of options is attached hereto as Exhibit D.

 

The Subcommittee took no action on the additional options listed in Exhibit D of the “Work Session Document.”

 

 

ADJOURNMENT

 

In conclusion, Chairman Anderson asked for comments from the members of the A.C.R. 46 Subcommittee and the Advisory Committee.  Mr. Isaeff stated that on behalf of the League of Cities it has been a pleasure to work with the Advisory members on this delicate issue and he was aware, however, of the work to be accomplished in the next legislative session and looks forward to being an integral part of the process.  He also thanked Mr. Bradley and the trial lawyers for their cooperation in dealing with some very difficult issues during the interim meetings of the A.C.R. 46 Subcommittee and the Advisory Committee.

 

Exhibit H is the “Attendance Record” for this meeting.

 

There being no further business, the meeting adjourned at 12:30 p.m.

 

Respectfully submitted,

 

 

 

Roxanne Duer

Senior Research Secretary

 

 

 

Scott Young

Principal Research Analyst

 

Approved By:

 

 

 

_____________________________________

Assemblyman Bernie Anderson, Chairman

 

_____________________________________

Date

 


 

LIST OF EXHIBITS

 

Exhibit A is correspondence to the Chairman and Members of the A.C.R. 46 Subcommittee to Study Statutory Limitation on Damages from Ted A. Zuend, Deputy Fiscal Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, titled “State-Imposed Revenues Dedicated to Purposes Other Than General Fund,” dated May 16, 2000.

 

Exhibit B is a memorandum addressed to The Honorable Frankie Sue Del Papa, Nevada Attorney General, from Rick Combs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, titled “ACR 46 Statutory Limitation on Damages Subcommittee,” dated April 27, 2000.

 

Exhibit C is correspondence to Rick Combs, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, from Jon Hansen, Tort Claims Administrator, Office of the Attorney General, titled “ACR 46 Statutory Limitation on Damages Subcommittee,” dated May 12, 2000.

 

Exhibit D is a table that estimates the fiscal impact of Recommendation No. 3 to the State of Nevada based on information provided by the Office of the Attorney General, titled “ACR 46 Statutory Limitation on Damages Subcommittee.”

 

Exhibit E is a flow chart titled “ACR 46 Scenario for Application to Special Fund,” submitted by Wayne E. Carlson, Executive Director, Nevada Public Agency Insurance Pool and Public Agency Compensation Trust, and dated May 15, 2000.

 

Exhibit F is comprised of two comparative charts prepared by Scott Young, Principal Research Analyst, Research Division, Legislative Counsel Bureau.

 

Exhibit G is the “Work Session Document,” dated April 19, 2000

 

Exhibit H is the “Attendance Record” for this meeting.

 

Copies of the materials distributed during the meeting are on file in the Research Library of the Legislative Counsel Bureau, Carson City, Nevada.  You may contact the library at (775) 684‑6827.