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Empty Chairs at Empty Tables – Nevada’s Stance on Non-Party Liability

Author: Christian Miles

Guest Editor: Danielle Vukovich

September 3, 2019 10:00am

Introduction

As a relatively new attorney starting my first insurance defense job, I was assigned to a case that led me to research Nevada law regarding what is colloquially known as the “empty chair defense.”  I was somewhat surprised by what I learned.  If you are unfamiliar with the phrase “empty chair defense,” an “empty chair” refers to a non-party to a civil lawsuit who might be liable for damages if he or she was an active party to the lawsuit.  An “empty chair defense” is a legal strategy where a defendant attempts to shift liability to the empty chair (the missing non-party).  The success of an empty chair defense depends on a number of factors, not the least of which is the law of the forum state.  Nevada law takes a minority position with respect to assigning fault to non-parties at trial, and to fully appreciate the position, you need to be familiar with Nevada’s comparative negligence standard.

Background

Nevada follows a modified comparative negligence standard, which is codified in Nevada Revised Statute (“NRS”) 41.141 and was adopted in 1973.  NRS 41.141 served to eliminate contributory negligence as a bar to a plaintiff’s recovery where the defendants’ collective negligence equaled or exceeded the plaintiff’s negligence.  Warmbrodt v. Blanchard, 100 Nev. 703, 708, 692 P.2d 1282, 1286 (1984).  The statute “also abolished joint and several liability among joint tortfeasors, substituting several, proportionate liability based upon fault.  One defendant who was among several found responsible for the plaintiff’s damages would therefore only be held liable for damages ‘in proportion to his negligence,’ as determined by the trier of fact.”  Id.  Traditional joint and several liability is a plaintiff-friendly doctrine that allows multiple defendants to be found independently liable for the same act or event, and if a plaintiff receives a monetary judgment against the defendants, the plaintiff can collect 100% of the judgment from any one of the defendants.  Nevada changed its laws to move away from this harsh approach and towards several liability, allowing defendant liability for damages to be dependent on comparative fault in certain situations.

Law

The irony of NRS 41.141, and what surprised me when I learned about it, is that this law meant to move Nevada away from joint and several liability was specifically written with an exception that allows joint and several liability to persist in situations where an empty chair is present.  NRS 41.141 provides the following in an action to recover damages for death or personal injury, or injury to property, where comparative negligence is asserted as a defense:

If a defendant . . . settles with the plaintiff before the entry of judgment, the comparative negligence of that defendant and the amount of the settlement must not thereafter be admitted into evidence nor considered by the jury. The judge shall deduct the amount of the settlement from the net sum otherwise recoverable by the plaintiff pursuant to the general and special verdicts.

NRS 41.141(3), emphasis added; see also NRS 41.141(1).  Further, the jury is only allowed to ascribe a percentage of negligence to the parties remaining in the action. NRS 41.141(2)(b)(2).  This means that if there are persons or entities  potentially liable for a plaintiff’s injuries, and they are not parties to the case at the time of trial (either because they were never sued or because they settled before trial), then the defendant(s) remaining in the case cannot present evidence to support the comparative negligence of the missing nonparties, and the jury cannot assign liability to the nonparties.

This law is especially worrisome in situations where potentially liable defendants settle, and a single defendant is left to defend the case at trial.  That defendant runs the risk of being saddled with liability and a judgment that is disproportionate to its own comparative negligence.  The defendant can point to the empty chair and argue that it has no liability because the nonparty is 100% liable, but the defendant cannot argue or submit evidence in support of a nonparty’s comparative negligence.

An example where this scenario played out can be found in Banks ex rel. Banks v. Sunrise Hosp., 120 Nev. 822, 102 P.3d 52 (2004).  In Banks, a patient underwent a shoulder surgery, suffered cardiac arrest during the procedure, and was left in a persistent vegetative state.  Id. at 827-28.  The patient’s guardian ad litem subsequently sued the surgeon, the anesthesiologist, and the hospital.  The surgeon and the anesthesiologist settled on the eve of trial.  Id. at 829.  The first jury trial resulted in mistrial due to a hung jury.  Id. at 830.  At the second trial, the hospital attempted an empty chair defense by directing the blame at the anesthesiologist that had settled.  Id. at 842.  The jury did not buy the argument and returned a plaintiff verdict awarding nearly 5.5 million in damages, which increased to 6.9 million after prejudgment interest was added.  Pursuant to NRS 41.141(3), the doctors’ collective 1.9 million in prior settlement money was subtracted from the 6.9 million award, resulting in a second amended judgment against the hospital in the amount of $4,825,450.17.  Id. at 830.

Takeaway

In the case discussed above, the hospital arguably shouldered greater liability and a larger verdict than it would have if the jury had been permitted to consider the comparative fault of the doctors that settled and were not parties at trial. There are other states that allow the jury to consider the comparative negligence of nonparties in rendering a verdict, but Nevada takes a minority, plaintiff-friendly stance on the issue of empty chair defenses and consideration of nonparty liability. This is important to keep in mind as a case progresses, settlement is considered, and motions for determination of good faith settlement are filed and opposed. In a death or personal injury suit in Nevada with multiple potentially liable defendants, it is good practice to avoid being caught holding the bag alone at trial unless you have a strong liability defense. You might end up shouldering more than your share of the damages. Nevada may eventually change its law to completely do away with joint and several liability in the future, but for now, we still have to deal with this small but important exception to the rule.

 

Christian Miles is an Associate at TYSON & MENDES, LLP, and primarily represents clients in personal injury litigation, including wrongful death, motor vehicle accidents, premises liability, product liability, and medical malpractice.

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