Vegas Personal Injury Law Blog

Recently, I received a telephone call from a woman who was involved in an accident in her boyfriend’s garage. Her boyfriend had recently purchased a new home.  The girlfriend lived with the boyfriend about 75% of the time.  While the boyfriend was hospitalized, the girlfriend went into the garage to put some kitchen appliances in a cabinet that was hung on the wall.  As she was doing so the cabinet fell and landed on her foot causing an injury requiring surgery.

Although the girlfriend  had health insurance, her personal responsibility on her medical bills is in excess of $50,000.00, and her treatment is ongoing; and, she is still experiencing persistent pain and will require future medical treatment.   An inspection made after the girlfriend’s  accident showed that the cabinets were improperly secured to the wall.  The couple that sold the house to the boyfriend are elderly and now reside in a remote state.
The initial question that had to be answered was whether the boyfriend’s homeowners policy would provide any coverage for the girlfriend? There are two types of coverage on a homeowners policy that could possibly provide coverage for the girlfriend.  These two types of coverage are premises med pay and liability coverage. Premises med pay coverage (usually between $1,000.00 and $10,000.00 on a homeowner’s policy) will pay for the medical bills of a visitor that is injured while on your property, regardless of fault.  However, this coverage excludes resident relatives and non-relatives who live at the residence on a regular basis. Therefore, the girlfriend was not eligible for premises med pay coverage.

Liability homeowner’s coverage provides recovery for persons who are injured on your property. This coverage is fault-based.  So, for this coverage to apply the owner must be negligent in causing an accident.  Since the boyfriend did not hang the cabinets and did not know about  the defect that caused the cabinet to fall, liability coverage from the boyfriend’s policy was not available to the girlfriend for her accident on the boyfriend’s homeowner’s policy.

The second question that had to be answered was whether or not the sellers’ homeowner’s policy would provide liability coverage for the girlfriend?

Virtually all homeowner’s coverages and automobile coverages are “occurrence policies.”  With this type of coverage, the occurrence (negligent act and accident) must occur within the policy coverage period or term of the policy.  The girlfriend’s accident occurred the after the house was sold. The seller’s homeowners policy was not in effect at the time of the occurrence and the girlfriend’s accident  did not happen  within the coverage term.  So, the sellers’ homeowner’s carrier will deny liability coverage for the girlfriend’s accident.

If the same negligent act occurred within the coverage period, lets say during the walk-through, prior to the closing of the sale, then the negligent act and the girlfriend’s accident would have occurred within the coverage term or period, and there would have been liability coverage from the seller’s policy for the girlfriend’s loss.

With an occurrence policy, if the occurrence happens within the coverage period, and the policy then terminates, even if the a claim or lawsuit is made years later, the occurrence policy provides coverage.  For example, if you are in an injury producing  automobile accident today and you don’t like the way that your carrier is handling the accident, and you cancel your policy tomorrow, and the injured party sues you one year later, you will still have liability coverage for this accident. Your liability coverage will cover the costs of your legal defense and damages up to the limits of your liability coverage.

Therefore, occurrence coverage will cover incidents arising during the coverage period, regardless of when those claims are reported, so long as they are made within the applicable statute of limitations, which can range from one year to three years for  negligence, depending on which state the accident occurs.

So occurrence coverage has a tail coverage period which makes it more expensive than “claims-made” coverage which has no tail.  For that reason, claims-made coverage is cheaper than occurrence coverage.  We see claims-made policies on professional liability coverage, such as malpractice policies or business liability policies.  Claims-made policies cover incidents arising during the policy period which are also reported during the term of the policy.  You can purchase an endorsement on a claims-made policy that responds to incidents which occurred before the policy start date (also known as retroactive date).  You can also purchase a tail coverage on a claims-made policy which covers incidents that occur during the policy term, that have not been reported to your carrier during the policy term. So, if there are no prior acts or retroactive endorsements or tail endorsements on a claims-made policy, it will be  cheaper than occurrence coverage.

For example, many hospitals will purchase claims-made coverage for their doctors malpractice insurance.  On a claims-made basis, if the doctor leaves the hospital to enter private practice,  he should purchase tail coverage to cover occurrences that happened while he was working for the hospital that are reported after his employment with the hospital ends.

Getting back to the girlfriend’s accident, her only remedy is to file suit against the uninsured elderly sellers who reside out of state. If she could  afford to pay an attorney to obtain  a judgment against the sellers, she may never be able to collect on it.  So, before a suit is filed against the sellers, an asset check should be done to determine if the sellers are candidates for filing bankruptcy to avoid the judgement.  Remember, the sellers can liquidate all their assets and use them pay down their mortgage.  If the seller’s state has homestead laws; or, if the sellers file for bankruptcy, the girlfriend may not be able to execute on any judgment against the sellers.

Are there automobile accidents where auto insurance coverages do not apply?  The answer to that question is, unfortunately, yes.

On December 30, 2004, a young man was driving his pickup truck westbound on Hacienda.  The adverse driver, prior to the accident, was driving his pickup truck northbound in the southbound lanes on Rainbow (on the wrong side of the road), ran a red light at a very high rate of speed and collided with the driver’s side of the young man’s vehicle.  The young man died almost instantly.  The collision between the adverse vehicle and the decedent’s vehicle prevented the adverse vehicle from colliding head-on with the other vehicles that were stopped in the southbound lanes of Rainbow for a stop light.

The adverse driver claims to have experienced a seizure just prior to the accident.

The traffic accident report approximates the adverse driver’s speed at approximately sixty-nine to seventy-three (69-73) miles per hour.

The adverse driver was taken to University Medical Center after the accident. His Dilantin level was below therapeutic range.

In the litigation that followed this fatal accident, the Defendants (the adverse driver and his employer) asserted the affirmative defense of “sudden medical emergency” or “blackout”.

The sudden medical emergency defense was established by the Supreme Court of Ohio in a case dating back to 1956, Lehman v.  Haynam, 133 N.E 2d 97 (1956). The Ohio Supreme Court stated, “where the driver of an automobile is suddenly stricken by a period of unconsciousness which he had no reason to anticipate and which renders it impossible for him to control the car he is driving, he is not chargeable with negligence as to such lack of control.”

In that case, the Defendants Affirmative Defense stated “The subject accident and Plaintiffs’ damages, if any, were caused by an unavoidable sudden emergency and not by Defendants’ negligence or other actionable conduct, the existence of which is denied.”

The Ohio Supreme Court reviewed the sudden medical emergency defense in the case of Roman v. State of Gobbo, 99 Ohio St. 3d 260, (2003). This involved an accident where the Defendant Walter Roman suffered an incapacitating heart attack prior to the accident. In that accident, the Roman vehicle caused a multiple vehicle car accident resulting in the death of Nino Gobbo and his wife Frances.

The “sudden medical emergency” defense has not been adopted by the Nevada Supreme Court.  Public policy in Nevada dictates that it should not be adopted in the state of Nevada.  However, in several cases filed in our District Court, the Defendants have raised this defense.

The rational behind the adoption of the sudden medical emergency defense is based upon the premise that to find a Defendant liable for the effects of an unforeseen medical emergency that causes sudden unconsciousness is to impose strict liability for the violation of traffic statutes.

To that extent the doctrine may be logical, however in equating no negligence with no liability the doctrine is not sensible.

In the Roman case, the decedents and injured parties were not negligent either. They did nothing wrong except to be in the Defendant’s path when they died or were injured. Yet these individuals bear the harsh consequences of the sudden medical emergency doctrine.

Because of this defense they could not recover damages from the person who caused them death and destruction, even though they were completely innocent victims of a motor vehicle accident. They also can not recover from their uninsured motorist coverage, since this coverage is fault based. This also does not make sense.  See my prior post  on Uninsured Motorist Underinsurance Coverage.

The prohibition against driving left of center, speeding and driving through a red light are some of our most important traffic rules established for the protection of the public.  Nobody would be willing to drive on our roadways without the expectation that others will comply with these traffic laws.  Yet, even these laws are trumped by the Sudden Medical Emergency Doctrine. The questions is, “Why?”.

No valid public policy is served by applying the “Sudden Medical Emergency Doctrine.”  The doctrine prevents accident victims from pursuing damages from the person who caused their death and injury. The doctrine prevents accident victims from collecting uninsured motorist coverage on their own automobile insurance policies, which they purchased to protect themselves and their families from just such a catastrophe.

The end result of the adoption of the sudden medical emergency defense is that accident victims involved in these unfortunate accidents, regardless of the degree of their injuries, would not be able to collect their damages from any liability insurance or from their own uninsured motorist coverage. This makes absolutely no sense. The “Sudden Medical Emergency Doctrine” is not logical and should not be accepted.

A better rule would be to allow innocent victims, like the Plaintiffs in the first example case, to pursue damages against the auto insurance coverage of the person who’s sudden medical emergency resulted in a violation of traffic safety laws which were the proximate causes of death or injury.

Nevada Public Policy concerning epilepsy is expressed by our traffic laws.

In the state of Nevada one of the qualifications to drive a commercial motor vehicle and obtain a Commercial Drivers License is that the applicant does not have an established medical history or clinical diagnoses of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a motor vehicle. See, NRS 391.41 (d)(8).

This statute states that “epilepsy is a chronic functional disease characterized by seizures or episodes that occur without warning, resulting in loss of voluntary control which may lead to loss of consciousness and/or seizures. Therefore, the following drivers can not be qualified:

(1) A driver who had a medical history of epilepsy;

(2) A driver who has a current clinical diagnoses of epilepsy; or,

(3) A driver who is taking anti-seizure medication.

The sudden medical emergency defense is contrary to Nevada’s financial responsibility laws.

NRS 484.185 states as follows:

Every owner of a motor vehicle which is registered or required to be registered in this state shall continuously provide, while the motor vehicle is present or registered in this state, insurance:

1. In the amount of $15,000.00 for bodily injury of one person in any accident;

2. Subject to the limit for one person in the amount of $30,000.00 for bodily injury to or death of two or more persons in any one accident;

3. In the amount of $10,000.00 for injury to or destruction of property of others in any one accident, for the payment of tort liabilities arising from the maintenance or use of the motor vehicle. (emphasis added)

The purpose of this section is to ensure that motor vehicles carry continuous liability insurance. State, Dep’t of Motor Vehicles v. Lawlor, 101 Nev 616, 707 P 2d 1140 (1985).

The sudden medical emergency defense creates an exemption from Nevada’s financial responsibility law. This is a windfall to the liability insurance carriers of the person claiming “sudden medical emergency.”

The purpose of the motor vehicle financial responsibility law is to guarantee protection to one who is injured by an automobile not covered by liability insurance.  A.G.O. 250 (3-27-1957).

If the “sudden medical emergency” defense is adopted by our State Legislature or by Nevada Case law, the burden of financial responsibility will fall upon the deceased or injured individuals and their families because they will not be able to rely upon their own uninsured motorist coverage to recover their damages.  Innocent victims would then have to rely on other collateral sources for payment of their lost earnings, medical bills, funeral expenses, etc. The financial burden of the sudden medical emergency defense then fall upon first party health insurance companies.  Since this defense extinguishes fault (negligence), it extinguishes the right of subrogation.  Subrogation is a fault-based legal concept which allows insurance companies paying medical bills or property damage bills to recover their payments from the third-party tortfeasor.

Nevada law is replete with cases protecting the rights of injured parties, See, e.g, State Farm v. Hinkle, 87 Nev. 478, 488 P.2d 1151 (1971) (Restriction on uninsured motorist coverage for a minor injured while riding a motorcycle by an exclusionary provision violated express public policy); Buck v. Greyhound Lines, Inc., 105 Nev. 756, 783 P.2d 437 (1989) (Affirming joint and several liability for negligence-free passengers protecting the rights of innocent victims of accidents); Rockwell v. Sun Harbor Budget Suites, 112 Nev. 1217, 925 P.2d 1175 (1996) (Non-deligible duty to provide responsible third-party security personnel); Allison v. Merck and Co., Inc., 110 Nev. 762, 878 P.2d 948 (1994) (Public policy demands that the burden of accidental injuries caused by products intended for consumption be placed upon those that market them and be treated as a cost of production against which liability insurance can be obtained).

Assuming that no first party insurance is available in situations where the sudden medical emergency defense is asserted, then the burden of financial responsibility falls upon the general public. Our tax dollars in the form of public assistance will pay for medical care and living expenses of “sudden medical emergency” victims.

Whatdoyado to prevent the “Sudden Medical Emergency” defense from being adopted in Nevada?  Speak to your Legislators.

In my prior Blawgs, I mentioned that one of the purposes of auto insurance is to protect your assets. In the event that your liability limits are exhausted on your auto policy, your umbrella insurance policy takes over and provides you with additional protection. An umbrella insurance policy can also provide extra liability protection on your homeowner’s insurance policy.

Do you have enough liability coverage if one of your family members runs a stop sign and kills a pedestrian? Obviously, a judgment in a liability lawsuit can exceed your liability coverage and your net worth combined.

To qualify for an umbrella insurance policy, you must carry specified liability limits. Excess liability policies or umbrella policies, pick up where other policies leave off. Once the liability limits are exhausted on your home, auto, or other policy (RV, boat, personal water craft), a second layer of protection of at least ONE MILLION DOLLARS ($1,000,000.00) or higher is available through most insurance companies.

Umbrella policies on your auto insurance coverage can cover you, your spouse and family members living in your household with additional uninsured motorists and underinsurance for accidents which occur anywhere in the world. Excess policies also pay legal defense fees. I commented on in my earlier Blawgs.

Considering the extra security and extra protection that umbrella liability policies provide, the cost of this insurance is reasonable. Umbrella liability coverage is affordable and can be easily coordinated with your existing insurance policies. Umbrella coverage gets its name from the fact that it acts as an umbrella, on top of your auto and homeowner’s liability policies to provide extra protection.

Some examples of when umbrella coverage may come into play are:

1. A bad auto accident where you are at fault and your auto insurance is not sufficient to pay damages;
2. Bad accidents that occur on your property. A tree on your property crashes down on your neighbor’s home;
3. Your car can go out of control and crashes into an expensive home or business causing catastrophic damages;
4. Auto accidents where you have $300,000.00 in liability insurance and you get a judgment against you for $10,000,000.00 because the victim is now a quadriplegic.
5. Your dog attacks the neighbor’s child;
6. A premises accident on one of your rental properties;
7. A fire in your condo spreads to other units;
8. Umbrella coverages may also be applicable to incidents involving slander, liable, wrongful eviction and false arrest. They can pay for lawyers’ fees and associated court costs. Sometimes they can even cover intentional damage by a family member of your household;
9. They can provide additional liability coverage for accidents involving water crafts, jet skis, motorcycles, and most recreational vehicles.

Umbrella policies usually come in increments of ONE MILLION DOLLARS ($1,000,000.00), TWO MILLION DOLLARS ($2,000,000.00) and sometimes FIVE MILLION DOLLARS ($5,000,000.00), or more.

Premiums usually range around THREE HUNDRED DOLLARS ($300.00) to SIX HUNDRED DOLLARS ($600.00) per year for the first ONE MILLION DOLLARS ($1,000,000.00) worth of umbrella coverage. The cost of this insurance usually is based upon your driving history, claim history, and inquiries made against insurance policies. Umbrella liability coverage is associated with a deductible of usually ONE HUNDRED THOUSAND DOLLARS ($100,000.00) to THREE HUNDRED THOUSAND DOLLARS ($300,000.00). It does not activate until your underlying policy is exhausted.

It is not necessary that you obtain the umbrella coverage from the same insurance company supplying you with homeowner’s and automobile coverage. However, there usually is a substantial premium discount if you obtain your umbrella policy from your own company. Also, obtaining umbrella coverage from the same company as your liability carrier will generally insure a smooth transition when a liability claim turns into an excess claim.

It is important to know whether or not your umbrella coverage provides you with a ONE MILLION DOLLARS ($1,000,000.00) in additional coverage or ONE MILLION DOLLARS ($1,000,000.00) in total liability coverage. This is something you should
clarify with your insurance agent so that you know exactly how much total coverage you have.

Umbrella policies will also provide an additional layer of uninsured/underinsured motorists coverage. This coverage is extremely beneficial in the event that you are hit by an uninsured or underinsured driver and sustain disabling injuries. Remember the most likely cause of injury for most people is an auto accident.

It is important to note that the umbrella coverage probably will not add any coverage to your professional liability policy. Check to see if you can obtain excess professional liability insurance.

Also, umbrella coverage generally does not apply to intentional acts and will not pay for punitive damages. They do not coverage damages associated with your business activity. For that you need a business insurance policy.

I recommend umbrella insurance policies, especially for Nevada residents. In Nevada, we have a law referred to as “The Family Purpose Doctrine”. This law makes you liable for auto accidents involving vehicles owned by you which are being used by resident relatives. Do you have a teenager that drives your vehicle?

Do check with your insurance agent to explain the umbrella coverages that are provided by your insurance company. Have your agent explain to you any exclusions that apply to your existing umbrella policy.

Rental car coverage is a fairly inexpensive coverage which you can add to your auto insurance policy. Generally, this coverage will provide you with a finite sum of rental car coverage in the event your vehicle is involved in an accident and it needs repair or if it is a total loss. The upper limit on this coverage is generally less than $1,000.00. There is also a limit on the daily cost of the rental car. Generally speaking, most policies will pay up to $30.00 per day and will provide a maximum of $500.00 – $800.00 of coverage.

Another inexpensive coverage is towing coverage. In the event your vehicle breaks down, or if it is involved in an accident and needs towing, this coverage will pay your towing bill.

In the event you are involved in an accident, it is comforting to know you can have your vehicle towed to a repair shop, and that you can obtain a rental car without the detriment and delay involved with relying on the adverse driver’s insurance to pay for your towing and rental car expenses. Oftentimes, your carrier will arrange a direct billing with the rental car company. When they do allow for direct billing, the rental car company bills your insurance carrier directly instead of you. Most first-party and third-party carriers have this arrangement with Enterprise Rental Car.

In the event your auto insurance company pays under your collision coverage, rental car coverage, and towing coverage, they have the ability to subrogate against the at-fault party’s insurance company. They can be paid by the adverse carrier up to the limits of the adverse driver’s property damage liability limits. Many of the insurance companies have agreements under which they resolve these disputes outside of the court system.

Wage loss coverage is available on most auto policies. It will provide you with a finite sum of wage loss coverage. Each insurance company is different regarding the amount of wage loss coverage that they offer. In most cases, it can be as little as $1,000.00 or as high as $10,000.00. The premium for this coverage is reasonable. In most cases, there usually is a ten (10) day or two (2) week period that must elapse before this coverage becomes effective. Wage loss coverage pays only a portion of your wage loss, such as 2/3′s of the actual wages, and will only pay up to the limit of your coverage.

Once again, you should check your policy or consult your agent to determine the costs of these coverages and the terms and conditions associated with them.