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ESAs, School Choice, and the Nevada Education Revolution

**2016 Update** Neal Morton of the RJ1)One of the few who survived the purge, not that I want to jinx it reports that oral arguments for Nevada's school choice bill will be on Friday.

There are 2 lawsuits, both against the state. One was filed by a group of Carson City parents (Schwartz v. Lopez), the other by the ACLU (Duncan v. State of Nevada). Both will be argued on Friday.

I reread the essay below, and I do want to tell you all that I have moderated my stance a bit when it comes to school choice. As you'll see, last year I found the idea absurd on its face. Between now and then, I've talked with Nevada parents that support this law, and they persuaded me to moderate my views a bit. I can come back to you one year later and admit that at least now I can understand why a parent of a child in a fail school would want this bill2)The fact this wasn't readily obvious to me is a failure of the school choice campaign which seems to only discuss this problem on a child-to-child basis, rarely addressing the aggregate.

For those (likely childless like me) that are looking at education from an abstract, aggregate view3)To those parents out there who just want us to but out, we care too. I promise I am not just giving you a hard time, this bill looks as suspicious now as it ever has.

I'm sure there are a number of good-intentioned parents that just want their kids to go to the best school possible, and in the short term, supporting this bill seems like the best way to reach that goal. I'm not too concerned with these good folks.

I am worried though that there are people using our education policy debate to graft public money4)The attorney general is paying more than $500,000 dollars to outside (the state) counsel to argue the case (with your tax money). Also, as you will see, private firms get to take a transaction fee on your ESA, which of course is not defined in the law. I wish more people at the state level shared this concern.

I stand by everything I wrote last July, and we should insist that the state answer at least some of my questions below before radically upending our education system.

 

Is This What They Meant By School Choice?

The Nevada legislature had quite the busy 2015 session. Besides the new law reforming gun control, the most famous/notorious bill passed was Senate Bill (SB) 302, which creates education savings accounts (ESA) for those parents that want to take their kids out of public school.

From a perusal of the press writings on SB 302, there seems to be much more speculation than fact regarding the new program.

Today, I will take you through the text of SB 302 and discuss its advantages/disadvantages without (hopefully) degenerating into partisan name-calling.

 

How SB 302 Changes Education in Nevada

Well the change could be quite profound; it will all depend upon how the state implements SB 302, and how many folks decide to take advantage of the new program. But before all that, let us avoid getting the cart before the horse and take a glance at the text of SB 302.

The bill is quite a bit longer than others we have discussed on the Clear Counsel Legal Blog, so with the hopes of keeping you engaged, I have excerpted the most pertinent parts for you and your children5)read the entire bill here.

The fun begins in Section 7, which authorized the education savings accounts. Here is subsection 1:

 

Section 7.

1. Except as otherwise provided in subsection 10, the parent of any child required by NRS 392.040 to attend a public school who has been enrolled in a public school in this State during the period immediately preceding the establishment of an education savings account pursuant to this section for not less than 100 school days without interruption may establish an education savings account for the child by entering into a written agreement with the State Treasurer, in a manner and on a form provided by the State Treasurer. The agreement must provide that:

(a) The child will receive instruction in this State from a participating entity for the school year for which the agreement applies;

(b) The child will receive a grant, in the form of money deposited pursuant to section 8 of this act in the education savings account established for the child pursuant to subsection 2;

(c) The money in the education savings account established for the child must be expended only as authorized by section 9 of this act; and

(d) The State Treasurer will freeze money in the education savings account during any break in the school year, including any break between school years.

 

According the media accounts, the Nevada treasury plans on issuing debit cards to parents who opt-in to the program, and these cards will have the funds loaded onto them at an interval determined by the treasury.

The most controversial issue of Section 7 is the 100 days minimum attendance at a public school before a student will have access to the funds.  As I am sure you can guess, no one is happy about this term of the bill.

Smaller private schools are worried that hordes of students will unroll from their current private schools to meet the 100 day requirement, then come back in the spring term6)read more here  The smaller private schools claim that their finances will not be able to survive a mass exodus, and staff layoffs would ensue.

There is some talk of the state permitting kids to enroll in one public school class for the 100 days requirement, but the practicalities of that have not been worked out7)Would the kid go to public school from 8am to 9am, then head off to private school? Who will drive him? May the student just take a single, online, public-school course during the fall semester; is that sufficient? We are all waiting for clarification.

Folks that have been paying private school tuition are irritated as well; they claim they have been contributing toward public education all this time with no (direct) benefit to their own families.

Why should they have to jump through hoops to get what is rightfully theirs8)your property taxes do not just go toward educating your own children, but in educating the communities children. If that does not move the dial for you, think about how less likely an educated person will turn to a life of crime and debauchery. We all benefit from a safer community.?

The answer may be that the state is protecting against fraud.  Just imagine how fast this program would go belly-up if folks did not need to establish long term residency in the school districts.

What if a child is only partly educated in the public schools? Subsection 3 of Section 8 provides guidance:

 

Section 8:

3. If a child receives a portion of his or her instruction from a participating entity and a portion of his or her instruction from a public school, for the school year for which the grant is made, the grant required by subsection 1 must be in a pro rata based on amount the percentage of the total instruction provided to the child by the participating entity in proportion to the total instruction provided to the child.

Is “total instruction” this based on time or coursework? Who makes the determination of the pro-rata share? This has not been clarified 9)Rarely are laws put into effect too quickly, but this might be an example.  I see the potential for trouble.

 

How May You Utilize These Education Funds?

Those suspicious of the program are concerned that folks will open an education savings account and not properly allocate the funds towards their child’s education10)this would be fraud.  Luckily, SB 302 specifies how the funds may be spent:

 

Section 9

1. Money deposited in an education savings account must be used only to pay for:

(a) Tuition and fees at a school that is a participating entity in which the child is enrolled;

(b) Textbooks required for a child who enrolls in a school that is a participating entity;

(c) Tutoring or other teaching services provided by a tutor or tutoring facility that is a participating entity;

(d) Tuition and fees for a program of distance education that is a participating entity;

(e) Fees for any national norm-referenced achievement examination, advanced placement or similar examination or standardized examination required for admission to a college or university;

(f) If the child is a pupil with a disability, as that term is defined in NRS 388.440, fees for any special instruction or special services provided to the child;

(g) Tuition and fees at an eligible institution that is a participating entity;

(h) Textbooks required for the child at an eligible institution that is a participating entity or to receive instruction from any other participating entity;

(i) Fees for the management of the education savings account, as described in section 10 of this act;

(j) Transportation required for the child to travel to and from a participating entity or any combination of participating entities up to but not to exceed $750 per school year; or

(k) Purchasing a curriculum or any supplemental materials required to administer the curriculum.

 

A good start! In particular, I like the cap on transportation costs in subsection (j)11)the last thing we need is folks spending all their kids’ education money on new wheels.  The majority of the list seem like good areas to invest in for a child’s education, but how is a parent, who is not a professional educator or accountant, to know how much of the funds should be allocated to what area? Hopefully, the state plans on offering some guidance.

Additionally, subsection (k)’s reference to “supplemental materials” raises a few red flags.  Could not most items, if construed by a creative enough person, be considered “supplemental” to a child’s education? This type of catch-all may be taken advantage of unless the state clarifies.

How will the state enforce the terms of section 9? See Section 10:

 

Section 10.

1. The State Treasurer shall qualify one or more private financial management firms to manage education savings accounts and shall establish reasonable fees, based on market rates, for the management of education savings accounts.

2. An education savings account must be audited randomly each year by a certified or licensed public accountant. The State Treasurer may provide for additional audits of an education savings account as it determines necessary.

3. If the State Treasurer determines that there has been substantial misuse of the money in an education savings account, the State Treasurer may:

(a) Freeze or dissolve the account, subject to any regulations adopted by the State Treasurer providing for notice of such action and opportunity to respond to the notice; and (b) Give notice of his or her determination to the Attorney General or the district attorney of the county in which the parent resides.

 

I can hear my friends on the left getting upset already. The bill is supposed to provide more school choice for at-risk kids, but now “private financial management firms” are permitted to take “reasonable fees” to administer these accounts.  I caution my tree-loving friends; do not just assume this is just another scheme for private companies to get into the coffers of public education monies.  Give it at least until January to see what they mean by “reasonable fees,” but by all means, keep tabs on the going-ons.

Also, it is important to note that if you sign up for an education savings account, it is possible that your spending of the funds will be randomly audited at some point in the year. If I was using an education savings account during this first run, I would keep all my receipts given that there is no telling how strict an audit this may be.  The national press has been making hay out of this new program,12)apparently it is the most extreme voucher program in the country now so folks will be just itching to catch fraudulent behavior. Be careful!

 

A Few Questions About Nevada Education That Are More Important Than School Choice

Since the state has until January to implement the new program, there is not more information available into the mechanics of how the education savings accounts will be implemented.  We know that students with education savings accounts will have to take a math and English test each year to demonstrate progress, but it has not been clarified which test, and if all the students have to take the same test.

I think folks from all sides can agree that we need to improve our education system in Nevada. No matter the metric used13)Kids Count released a report at the beginning of the week ranking Nevada 47 out of 50 states, Nevada schools continue to be near the bottom of the rankings. From this starting point, each political side immediately begins talking dollar and cents.

My liberal friends want to spend unlimited amounts on education, while my conservative friends are irritated on how the money is being spent, and want to apply market dynamics to help improve the system.

I want to take a step back and ask the question that should come before all the money inquiries: what are our collective goals to be reached by our education spending? What do we want of our kids to be able to do by the time they graduate? Really try to be specific in your answer. Throwing money at unspecified problems will result in unspecified results.

Let me put it this way: what is the bare minimum we should expect of a graduating high school student? Is it imperative that kids be able to fluently understand all the different topics offered in the high schools, or are there necessary topics we need them to know, and anything additional would be gravy?

But an even more fundamental question: what do we want our kids to take away from more than 12 years of education? Civic engagement? A love of learning? The school curriculum is designed as if this will be the last chance for child to ever learn anything ever again; so instead of going into depth in a few topic areas,14)and thus exposing kids the highest level of joy that Plato spoke of, the joy of understanding we teach very little of a lot of topics.

Is this the best approach? Ask a random graduate of the Clark County school system a random science/social science/humanities question that was covered in high school. How much did s/he retain?

We may need to come to terms that we cannot teach kids everything they need to know about life in the 13 years we have to educate them. And if that is the case, I ask again, what should our goals be?

I applaud the Assembly and Governor for not being satisfied with the status quo and perhaps their bill will lead to a large growth in specialize charters (like Washington D.C. has) that can better meet the needs of a diverse student population.

But I worry that only students with very engaged parents to get the real benefits of the program.  For those kids with parents that are less engaged 15)for whatever reason, they will remain in public schools with even less funds16)I assume that the state will withdraw the funds from the schools with less students, without the fellow students who are most engaged in the curriculum.

The last thing we need are those kids already behind the others to fall even further back.

If the goal of our public education system is to help those who have manifested a desire to help themselves, then this might be the best course of action.

However, before I would radically alter our education framework, these are some of the questions I would ask. Then I would see if my proposed reforms were the most efficacious means to achieve my goals.

At least in Clark County, we have too many unengaged students in overcrowded classrooms taught by overextended/underpaid teachers.  A desire for change is not unreasonable.  Instituting change without knowing how or why, might be.

All the links you need for further reading:

The RGJ on parents demanding payments

The RGJ on the legislature passing the education reforms

EdWeek on the public policy implications

The Education Writers Association has 10 questions about the new law

The Washington Post on the political implications

The Washington Post has the statistics on education spending by state

US News thinks the new reform will increase inequality

The Las Vegas Sun on a potential Constitutional challenge

The National Review celebrates the new reforms (without calling anyone a Nazi)

The Text of SB 302

Footnotes

Footnotes
1 One of the few who survived the purge, not that I want to jinx it
2 The fact this wasn't readily obvious to me is a failure of the school choice campaign which seems to only discuss this problem on a child-to-child basis, rarely addressing the aggregate
3 To those parents out there who just want us to but out, we care too. I promise I am not just giving you a hard time
4 The attorney general is paying more than $500,000 dollars to outside (the state) counsel to argue the case (with your tax money). Also, as you will see, private firms get to take a transaction fee on your ESA, which of course is not defined in the law
5 read the entire bill here
6 read more here
7 Would the kid go to public school from 8am to 9am, then head off to private school? Who will drive him? May the student just take a single, online, public-school course during the fall semester; is that sufficient? We are all waiting for clarification
8 your property taxes do not just go toward educating your own children, but in educating the communities children. If that does not move the dial for you, think about how less likely an educated person will turn to a life of crime and debauchery. We all benefit from a safer community.
9 Rarely are laws put into effect too quickly, but this might be an example
10 this would be fraud
11 the last thing we need is folks spending all their kids’ education money on new wheels
12 apparently it is the most extreme voucher program in the country now
13 Kids Count released a report at the beginning of the week ranking Nevada 47 out of 50 states
14 and thus exposing kids the highest level of joy that Plato spoke of, the joy of understanding
15 for whatever reason
16 I assume that the state will withdraw the funds from the schools with less students
Stressed businessman at work

Formally Ending an Attorney Client Relationship

It is much easier to enter into an attorney-client relationship than it is to end one. Sometimes, even speaking casually with someone about their personal legal matter can bind an attorney into an attorney-client relationship recognized by the court. In any instance where someone might be considered a “prospective client” an attorney needs to be extra careful as to what s/he says if the lawyer does not intend to formally represent that person.1)See Nevada Rule of Professional Conduct 1.18. Although a person with no genuine intent to hire you as an attorney is not technically a prospective client, it would be hard to prove that lack of intent if s/he claimed you were his or her attorney. For that reason, it is best to decline to enter into casual conversation with someone about any of their personal legal matters.

 

How to talk to a prospective client

If you do formally or informally consult with someone for the purposes of possibly representing him or her, make it clear from the outset of the consultation that you are not entering into an attorney-client relationship until a retainer agreement is signed. But, in order to protect yourself and your firm, an attorney should always make it clear that the initial consultation does not result in formal representation. In the rare scenario that a client believes you did agree to represent him or her, and claims to have relied on your advice, it is best to have an iron-clad paper trail showing that you consulted and did not enter into an engagement.

For those clients that you do retain, you should also be careful to outline the terms of representation. If you are engaged for specific litigation, then note so in the retainer agreement and it will be expressly stated that you follow through until formal dismissal unless you later decide otherwise. If you limit the scope of engagement for a particular purpose, make sure that you clearly outline the terms of representation and when that representation ceases. And when that time arrives, make sure that you send the client notification with a paper trail and also formally file a Petition to Withdraw with the court if active litigation is pending.2)See Nevada Rule of Professional Conduct 1.2.

 

Withdrawal from an attorney-client relationship with active litigation

During an active litigation, if an attorney needs to withdraw, a petition seeking the Court’s permission to do so must be filed. Nevada Supreme Court Rule 46 permits the Court to allow withdrawal of an attorney in the middle of an active case if the client consents or with the Court’s permission. Eighth Judicial District Court Rule 8 limits this Rule by stating that if withdrawal will delay trial or other matters in the case, withdrawal will not be granted. The Court has wide discretion for allowing withdrawal and may grant it for non-payment, disagreements between clients and attorneys, substitution of other counsel, difficulties in client contact, and various other reasons where the attorney cannot dutifully represent the client. But, if the client’s interests will be greatly harmed with withdrawal, the Court will be hesitant to grant it without another attorney stepping in. If a Petition to Withdraw is granted, it is still important to send letters to the client creating a paper trail showing that you do not represent them and will not appear in any matter on his or her behalf. If a limited scope engagement has ended, it is still best to file a Petition to Withdraw because if the Court still has your name as attorney of record, you may receive notices that the client does not receive, which may cause problems for you down the road.

So always remember to make it crystal clear when you do and do not represent clients. Also, be sure to create all necessary paper trails, whether by  filing petitions or sending letters to ensure there can be no question that you do not represent the client in question. You never want to be left on the hook when things go wrong for a client you did not even realize you represent.

Footnotes

Footnotes
1 See Nevada Rule of Professional Conduct 1.18.
2 See Nevada Rule of Professional Conduct 1.2.

Do You Have Residency in Nevada?

**Late January 2017 Update**

[Editor's note]

Below an excellent primer on Nevada citizenship written by friend of firm Ethan Featherstone. Assuming you are an American citizen, the question of citizenship in Nevada was difficult to define by statute, as you will see below.

Bottom line: it's a question of your personal intent. If you intend for Nevada to be your primary residence, so long as you live here, there shouldn't be a problem.1)You still are required to timely register.

There's been some talk recently about folks that are registered to vote in 2 different states.

I'll cut through the noise for you; that's perfectly fine. People move. It is not illegal to be registered to vote in two jurisdictions.

What is illegal is to vote in a state where you do not reside. This is the definition of voter fraud.

For the 2016 election, there is zero proof that people registered in multiple jurisdictions voted more than once. That's what matters.2)There is no evidence of voters illegally casting ballots at the most recent election in Nevada."

Crimes require proof.3)This over-simplifies it. There are two necessary elements. You need a mental element, intent, called mens rea, which I guess multiple regisrations would speak to [not sufficiently in my eyes. I would want to see a statement made by a person]. The second element, entirely absent here, is the actus reus, or the action of the crime. Will someone please produce the actual voter that voted fraudulently in 2016? It is not proper to speak of voter fraud [because the discussion often leads to voter suppression efforts. This needs to be done very carefully.] unless the accuser has a specific person/instance in mind. It is imperative that the public believe that the elections are legitimate; if you think about it hard enough, you will realize everything we have is dependant upon popular sovereignty of the elected. If it is important to all of us that the President win the popular vote, it's much simpler to eliminate the electoral college.

Just imagine how unfair our criminal justice system would be if you could press charges based on solely on innuendo..

-Brian

[End note]

Residency in Nevada

The residency of a person is important in many circumstances, such as whether you may file a lawsuit. Other categories, such as taxes, divorce, and possibly others may have additional or separate residency requirements and are not addressed here. The Research Division Legislative Counsel Bureau has produced a Fact Sheet regarding residency requirements in Nevada that will assist in most residency inquiries.

What is legal residency under Nevada law?

“Legal residence” is defined by statute under NRS 10.155, which is listed here in its entirety:

Unless otherwise provided by specific statute, the legal residence of a person with reference to the person’s right of naturalization, right to maintain or defend any suit at law or in equity, or any other right dependent on residence, is that place where the person has been physically present within the State or county, as the case may be, during all of the period for which residence is claimed by the person. Should any person absent himself or herself from the jurisdiction of his or her residence with the intention in good faith to return without delay and continue his or her residence, the time of such absence is not considered in determining the fact of residence. (emphasis added).

 

The statute contained in NRS 10.155 has remained largely unchanged since 1911. In fact, the portions relating to a person’s right to maintain or defend a suit has only changed to make it gender neutral.4)Compare with 1911 statute quoted in Fleming v. Fleming, 36 Nev. 135, 134 P. 445, 446 [1913]

 

How Nevada Courts define residency

The Nevada Supreme Court has held that “residency is a question of fact to be determined by the district court.”5) Vaile v. Eighth Judicial Dist. Court ex rel. Cnty. of Clark, 118 Nev. 262, 271, 44 P.3d 506, 512 [2002]. This is different from most facts in a case which are determined by the trier of fact 6)typically a jury, but may be the judge at trial if a jury is not requested in a timely manner/is not desired by the party bringing suit. The standard of proof for residency is clear and convincing.7)McKim v. Dist. Court of Second Judicial Dist. of Nevada, 33 Nev. 44, 110 P. 4, 5 [1910]. This standard is higher than a 'preponderance of the evidence', but lower than 'beyond a reasonable doubt'

There are two main elements to determining residency in Nevada under NRS 10.155: 1. an intent to reside in Nevada for an indefinite period of time and 2. actual, physical presence in Nevada. 8)Vaile v. Eighth Judicial Dist. Court ex rel. Cnty. of Clark, 118 Nev. 262, 269, 44 P.3d 506, 511 [2002]. The term residency carries with it the idea of permanency as well as continuity.9)Id. These two elements—physical presence and intent to remain—have not been analyzed separately by Nevada courts.

In Aldabe v. Aldabe,10)84 Nev. 392, 441 P.2d 691 [1968], the Court found that evidence of “mailing address, voting registration, school attendance, medical care, business and financial affairs, auto and operators' licenses, taxes, wills, and employment” all in Nevada as well as a “declared intention of Nevada residence and performed continuous daily activities in Nevada” supported a finding that a person was a Nevada resident.11)Id. at 397, 694. Furthermore, the lack of evidence demonstrating any intention to give up “residence as Nevadans to acquire that of any other state” was also persuasive.12)Id. The Aldabe Court found that a husband and wife were residents in Nevada in a divorce action because of the above evidence even though the property of their marital residence included land on both sides of the California-Nevada border with the living quarters located in California.13)Id. at 395, 693.

Affidavits by a party or witness regarding the person’s physical presence and intentions are also considered by Courts in the analysis of residency.14)118 Nev. at 270, 44 P.3d at 512; Moore v. Moore, 78 Nev. 186, 187, 370 P.2d 690, 690 [1962]; Klepper v. Klepper, 51 Nev. 468, 279 P. 758, 758 [1929];  Fleming v. Fleming, 36 Nev. 135, 134 P. 445, 446 [1913].

While there are requirements that a person must live in Nevada for a period of time in order to be eligible for some rights or entitlements, such as divorce, there is no such requirement for residency. Under NRS 125.020, a person must have resided in Nevada for six weeks before bringing suit for divorce. This assumes residency was already established. The Research Division Legislative Counsel Bureau has provided a “Fact Sheet” wherein it states “Legal residence starts on the day that such actual physical presence begins.” This is consistent with the Nevada Supreme Court’s holdings that a person need only be physically present and intend to remain indefinitely, which could be at the first moment the person crosses the Nevada border.

This was originally published by Ethan Featherstone

Footnotes

Footnotes
1 You still are required to timely register.
2 There is no evidence of voters illegally casting ballots at the most recent election in Nevada."
3 This over-simplifies it. There are two necessary elements. You need a mental element, intent, called mens rea, which I guess multiple regisrations would speak to [not sufficiently in my eyes. I would want to see a statement made by a person]. The second element, entirely absent here, is the actus reus, or the action of the crime. Will someone please produce the actual voter that voted fraudulently in 2016? It is not proper to speak of voter fraud [because the discussion often leads to voter suppression efforts. This needs to be done very carefully.] unless the accuser has a specific person/instance in mind. It is imperative that the public believe that the elections are legitimate; if you think about it hard enough, you will realize everything we have is dependant upon popular sovereignty of the elected. If it is important to all of us that the President win the popular vote, it's much simpler to eliminate the electoral college.
4 Compare with 1911 statute quoted in Fleming v. Fleming, 36 Nev. 135, 134 P. 445, 446 [1913]
5  Vaile v. Eighth Judicial Dist. Court ex rel. Cnty. of Clark, 118 Nev. 262, 271, 44 P.3d 506, 512 [2002]
6 typically a jury, but may be the judge at trial if a jury is not requested in a timely manner/is not desired by the party bringing suit
7 McKim v. Dist. Court of Second Judicial Dist. of Nevada, 33 Nev. 44, 110 P. 4, 5 [1910]. This standard is higher than a 'preponderance of the evidence', but lower than 'beyond a reasonable doubt'
8 Vaile v. Eighth Judicial Dist. Court ex rel. Cnty. of Clark, 118 Nev. 262, 269, 44 P.3d 506, 511 [2002]
9, 12 Id.
10 84 Nev. 392, 441 P.2d 691 [1968]
11 Id. at 397, 694.
13 Id. at 395, 693.
14 118 Nev. at 270, 44 P.3d at 512; Moore v. Moore, 78 Nev. 186, 187, 370 P.2d 690, 690 [1962]; Klepper v. Klepper, 51 Nev. 468, 279 P. 758, 758 [1929];  Fleming v. Fleming, 36 Nev. 135, 134 P. 445, 446 [1913].
Car Safety

Supplements to Auto Insurance and Nevada Law

Most folks1)that drive are familiar with how automobile insurance works.  Of those folks, less are familiar with the mechanics of the supplemental offerings, underinsured and uninsured motorist protection and MedPay. The law in Nevada treats uninsured and underinsured motorist protection in a similar manner, but applies a distinction2)with a difference for MedPay.  This post will discuss what these types of supplemental insurances are, and how the law treats them differently.

 

A few insurance definitions

What is underinsured motorist (UIM) protection?

A supplemental option to your liability policy that insures you if you the victim of an automobile accident, and the perpetrator does not have a sufficient amount of insurance to cover the costs of your damages. Many policies cover the driver and members of the driver's household whether they are in the primary automobile or in the automobile of another.  The terms of the UIM policy differ between companies, and as you will see, it is imperative that you read your policy carefully.

 

What is uninsured motorist (UM) protection?

Similar to UIM, only it insures you in case the perpetrator does not have any insurance at all to cover the costs of your injuries.

 

What is MedPay?

Known as auto medical payments insurance, it is an insurance extension that pays for medical expenses3)the amount is capped if you or household member is injured in an automobile accident. Depending the specifics of the policy4)again, make sure to read it carefully! it may cover you and household members while in other vehicles, while riding public transportation, and even when walking.

 

Nevada law and the above insurance supplements

And you thought these supplemental insurance concepts were simple, eh? Well it is time to go spelunking in the Nevada Revised Statutes (NRS); as it turns out, insurance companies are required by law to offer UIM, UM, and MedPay:

NRS 687B.145  

      2.  Except as otherwise provided in subsection 5, insurance companies transacting motor vehicle insurance in this State must offer, on a form approved by the Commissioner, uninsured and underinsured vehicle coverage in an amount equal to the limits of coverage for bodily injury sold to an insured under a policy of insurance covering the use of a passenger car. The insurer is not required to reoffer the coverage to the insured in any replacement, reinstatement, substitute or amended policy, but the insured may purchase the coverage by requesting it in writing from the insurer. Each renewal must include a copy of the form offering such coverage. Uninsured and underinsured vehicle coverage must include a provision which enables the insured to recover up to the limits of the insured’s own coverage any amount of damages for bodily injury from the insured’s insurer which the insured is legally entitled to recover from the owner or operator of the other vehicle to the extent that those damages exceed the limits of the coverage for bodily injury carried by that owner or operator. If an insured suffers actual damages subject to the limitation of liability provided pursuant to NRS 41.035, underinsured vehicle coverage must include a provision which enables the insured to recover up to the limits of the insured’s own coverage any amount of damages for bodily injury from the insured’s insurer for the actual damages suffered by the insured that exceed that limitation of liability.

 3.  An insurance company transacting motor vehicle insurance in this State must offer an insured under a policy covering the use of a passenger car, the option of purchasing coverage in an amount of at least $1,000 for the payment of reasonable and necessary medical expenses resulting from an accident. The offer must be made on a form approved by the Commissioner. The insurer is not required to reoffer the coverage to the insured in any replacement, reinstatement, substitute or amended policy, but the insured may purchase the coverage by requesting it in writing from the insurer. Each renewal must include a copy of the form offering such coverage. (emphasis added)

 

So it is clear5)once we whack our way through all that verbiage that insurance companies must provide an option to Nevada residents to purchase UIM, UM and MedPay supplements to their automobile insurance coverage.  But are there requirements as to how insurance consumers must decline the supplemental coverage? NRS 690B.020 provides guidance in reference to UIM and UM:

 NRS 690B.020  

      1.  Except as otherwise provided in this section and NRS 690B.035, no policy insuring against liability arising out of the ownership, maintenance or use of any motor vehicle may be delivered or issued for delivery in this State unless coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages, from owners or operators of uninsured or hit-and-run motor vehicles, for bodily injury, sickness or disease, including death, resulting from the ownership, maintenance or use of the uninsured or hit-and-run motor vehicle. No such coverage is required in or supplemental to a policy issued to the State of Nevada or any political subdivision thereof, or where rejected in writing, on a form furnished by the insurer describing the coverage being rejected, by an insured named therein, or upon any renewal of such a policy unless the coverage is then requested in writing by the named insured. The coverage required in this section may be referred to as “uninsured vehicle coverage.” (emphasis added)

      2.  The amount of coverage to be provided must be not less than the minimum limits for liability insurance for bodily injury provided for under chapter 485 of NRS, but may be in an amount not to exceed the coverage for bodily injury purchased by the policyholder.

 

Ok, UIM and UM policy supplements must be rejected in writing. Additionally, the amount of under-insurance “must not by less than the minimum amounts for liability insurance.” NRS 485.185 provides instruction as to what those amounts are:

 NRS 485.185     

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 provided by an insurance company licensed by the Division of Insurance of the Department of Business and Industry and approved to do business in this State:

      1.  In the amount of $15,000 for bodily injury to or death of one person in any one accident;

      2.  Subject to the limit for one person, in the amount of $30,000 for bodily injury to or death of two or more persons in any one accident; and

      3.  In the amount of $10,000 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. (Added to NRS by 1979, 1820; A 1981, 18621987, 10901993, 24841995, 27342007, 2049) (emphasis added)

 

So we know that the NRS requires insurance companies to offer UIM, UM and MedPay.  We also know that a customer must reject UIM and UM in expressly in writing, while the statute is silent on how MedPay is to be declined.  Additionally, we know there are statutory minimums for the amount of UIM and UM to be offered6)$15,000 for an individual, $30,000 for two or more persons.

Yet there are more ambiguities to be clarified.  If an insurance company does not have a written declination for MedPay, do they have to pay out under NRS 687B.145? What happens if you have a six-figure UIM policy, but the insurance company includes a non-occupancy exclusion as a term, and you are in an accident while riding in the vehicle of another. Will you be able to recover anything? We will need to examine case law to get clarification.

 

Wingco v. Gov’t Employees Ins. Co. (GEICO)

Wingco determines if a written rejection is necessary for a MedPay policy:

By its terms, NRS 687B.145(3) requires Nevada motor vehicle insurers to offer insureds the option of purchasing medical payment or "medpay" coverage in the amount of at least $1,000. But the statute does not state that the insurer must obtain a written rejection of this coverage. For Wingco to prevail, this court would have to read a written rejection requirement into NRS 687B.145(3) that it does not expressly include7)Wingco v. Gov't Emps. Ins. Co., 130 Nev. Adv. Op. No. 20 . Mar 27, 2014, page 4. Read the case here

The court goes on to state that because the statute is unambiguous, it is improper to read the written requirement of rejection into the statute8)if the legislature desired insurance companies to obtain a written rejection for MedPay, the statute would say so explicitly.  Because no written evidence is required, the issue of if a consumer was offered MedPay will be one ‘of fact,’ meaning at trial, each side would need to present evidence proving that MedPay was or was not offered9)a fairly expensive option to obtain the statutory minimum of $1,000.

 

Continental Insurance Co. v. Murphy

A written rejection of UIM is necessary per NRS 690B.020(1). In Cont'l Ins. Co. v. Murphy,10)120 Nev. 506, 511, 96 P.3d 747, 751 (2004). Read the case here, the Nevada Supreme Court reaffirmed that a 1st Party Carrier must have a written rejection in order to deny coverage. In that case, the Plaintiff had a $300,000 UIM policy, but was injured while not occupying an insured vehicle. Continental Insurance had a non-occupancy exclusion as part of the UIM policy and denied they had to pay anything. The Nevada Supreme Court held:

(1) There must be a written waiver of UIM, so there non-occupancy exclusion was invalid,

(2) Nevada public policy only requires minimum coverage as determined by the statute.

So while the non-occupancy clause was invalid, it was only invalid as to the minimum coverage. Thus, on a $300,000 UIM policy with a non-occupancy exclusion and no written waiver, the 1st party carrier must provide at least $15,000 in coverage.

So, one last time, it is imperative to read your insurance policy.  The poor folks in the case above thought their $300,000 of UIM followed them no matter how they traveled, but learned that hard way that it was not the case.

Footnotes

Footnotes
1 that drive
2 with a difference
3 the amount is capped
4 again, make sure to read it carefully!
5 once we whack our way through all that verbiage
6 $15,000 for an individual, $30,000 for two or more persons
7 Wingco v. Gov't Emps. Ins. Co., 130 Nev. Adv. Op. No. 20 . Mar 27, 2014, page 4. Read the case here
8 if the legislature desired insurance companies to obtain a written rejection for MedPay, the statute would say so explicitly
9 a fairly expensive option to obtain the statutory minimum of $1,000
10 120 Nev. 506, 511, 96 P.3d 747, 751 (2004). Read the case here
Thumbs up sign in coffee

Facebook as Service of Process

Nevada Rule of Civil Procedure1)NRCP4 states that a person must be served with notice of a lawsuit filed against him or her. The rule requires that someone be personally served with the legal papers and requires great effort be undertaken to find said person. The purpose of the rule is to ensure that someone is given fair notice of a legal proceeding against him or her so s/he will have every opportunity to show up to court and defend him or herself. If you cannot personally serve, sometimes you may send notice through the DMV, or you must file a motion with the court asking for permission to serve by publication. In the case of publication, notice of the lawsuit against someone will be posted in a newspaper for four week,s and this is deemed to be fair notice.

 

Facebook as a means to an end

It seems a bit backwards these days to require these great lengths to personally serve someone. If you are unable to find a person, to then require publication in a newspaper, whose readership is lower than it ever has been2)this is likely true for newspapers across the country. But what about modern methods of communication that people do read? For instance, what if you cannot personally serve someone, and you know there are sure-fire ways you can reach them through text or email? While these means of service are not a viable at this time, one judge in New York recently found that publishing notice of a lawsuit over Facebook is valid notice. In that case, a family court judge in Manhattan ruled that a soon-to-be ex-wife could serve her future ex-husband divorce papers through a private message on Facebook. The judge noted that this was a way the couple often communicated and when a process server could not personally find the husband, the judge knew that he would receive notice because he regularly responded to Facebook messages. The judge stated his belief that service over social media was “the next frontier” in the rules of service. The judge stressed that the Facebook message served that fundamental purpose of providing notice. The husband had no permanent address, no job, and appeared to be dodging service. The court required the notice to be sent over Facebook several times over a period of weeks, similar to the traditional publication rules.

It makes perfect sense that a judge could reach this conclusion, although it was quite nontraditional. Rare is the person these days who does not regularly use Facebook, and for those of us who do, it most likely a regular habit to check it and see what has been posted. So, if it is the policy of the court to do all we can to provide notice of a lawsuit against someone, sending a Facebook message makes much more sense than newspaper publication3)particularly where the notices are published in the paper; it might be a different story if the judicial notices were published on the front page. Fewer folks than ever read newspapers in this electronic-media age, so it is all the more likely someone will receive true and fair notice if posted on Facebook. If you find yourself in a situation where you cannot find an opposing party, it cannot hurt to think outside the box.

It does not seem too far off in the future that other courts might allow for service by publication through Facebook and other popular social media sites. But for the time being in Nevada, stick with traditional methods to ensure you properly serve notice of lawsuits. If you have questions about effectuating proper service, contact us today.

 

Footnotes

Footnotes
1 NRCP
2 this is likely true for newspapers across the country
3 particularly where the notices are published in the paper; it might be a different story if the judicial notices were published on the front page
Portrait of van driver

Seat Belt, Helmet, and Social Costs

If someone were to ask me whether failing to wear a helmet or a seat belt was a contributing factor to an injury, I would tell them "no" and that evidence of the seat belt and helmet should not be admissible.  The idea being that there is a difference between (1) causing an accident and (2) failing to do everything you can to protect yourself from injury, just in case someone else causes an accident.

Generally, it is accepted that evidence of seat belt use is not admissible in trial unless you are suing the manufacturer for an injury related to the seat belt.  Courts around the country go either way on the seat belt defense, but the prohibition of the seat belt defense is codified in NRS 484D.495(4)(b) and (c), which states that not wearing a seat belt:

(b) May not be considered as negligence or as causation in any civil action or as negligent or reckless driving under NRS 484B.653.

(c) May not be considered as misuse or abuse of a product or as causation in any action brought to recover damages for injury to a person or property resulting from the manufacture, distribution, sale or use of a product.

 

Thus, Nevada does not allow evidence of the use of a seat belt, except when the seatbelt manufacturer is being sued under a products liability theory.1)Naturally, it makes sense to let the product manufacturer argue that its product did not cause the injury because the victim was not using the product at the time

Nevada does not have a corresponding helmet admissibility rule, but the principle is the same.  To the extent that courts accept the wisdom of "failure to wear a helmet did not cause the injury, instead the driver that knocked you off the motorcycle caused the injury" then a jury should never know about the helmet.

 

A few (not so) rhetorical questions to consider in reference to a seat belt or helmet

1) Did the failure to use a seat belt or helmet cause the accident?  No. Use (or lack thereof) of a seat belt or helmet had nothing to do with the accident.  The negligence of the defendant caused the accident.

2) Did the failure to use a seat belt or helmet cause the injury?  No, the impact of the victim's head on the ground caused the injury.  Thus, use or non-use of seat belt or helmet has nothing to do with causation of the accident or the causation of the injury.

​3) Most importantly, did the plaintiff violate the Rule of Avoidable Consequences and fail to mitigate damages by non-use of a seat belt or helmet?  Here people differ.  I agree with the courts that say "no".  Failure to mitigate the harm of the tort only involves actions taken after the accident.  The decision to not use a seat belt or helmet happens before the tort occurs. Thus, the plaintiff’s requirement to mitigate damages does not apply, unless the plaintiff had the power2)as most 7 year olds think they have to put the seat belt on between the time that the crash was obviously imminent and when the injury was sustained.

4) What about the statutory obligation to use seat belts or helmets?  Interesting question.  To whom does that duty run?  Does my duty to wear a helmet run to the state or society generally3)to decrease public obligation to pay hospital bills, does it run to me, or does it run to the person who hit me?  It does not seem reasonable that I should owe a duty to the person who hit me.  If it does not run to the person who hit me, s/he should not gain the benefit of said duty.

It may seem unfair that a tortfeasor should pay for an injury that could have been avoided by the prudence of the victim.  But which is more unfair?

 

Consider the following scenario:

A 30 year old single mother of two is riding as a passenger on a motorcycle and is not wearing a helmet.  At a stop light, a car rear-ends the bike, ejecting our victim.  She clearly is not at fault for the accident.   She dies as a result of a traumatic brain injury from the accident.  It is likely that she would not have been severely injured if she had been wearing a helmet.  Do we really give the driver of the car a break because the person he killed might have lived if she was wearing a helmet?  Does that really lessen his fault in the accident?  As a society, where is it just to assign the burden of the loss?  On the innocent victim who knows that there is some risk of an accident every time she goes on the road, but does not consent to being hit?  Or on the tortfeasor who actually has committed a wrongful act?

Any simple Coasian4)Read The Problem of Social Cost here analysis would conclude that haphazard driving of the tortfeasor is adding no utility to society, so why should s/he be shielded from liability? Although we would prefer that all folks wear seat belt or helmet, but the primary objective of the law in these instances is to encourage people to drive with prudence, regardless of their fellow road travelers are helmeted/wearing a seat belt.

Footnotes

Footnotes
1 Naturally, it makes sense to let the product manufacturer argue that its product did not cause the injury because the victim was not using the product at the time
2 as most 7 year olds think they have
3 to decrease public obligation to pay hospital bills
4 Read The Problem of Social Cost here
Young Couple Riding Motor Scooter Along Country Road

The Rights of a Scooter to Drive on the Shoulder

A client recently received a traffic citation for driving his motorized scooter on the shoulder of a city street in Las Vegas, Nevada, after an accident with another vehicle. The citation listed 0610 “restricted access” as the violation. I have seen many scooters drive on the shoulder of a road in the Las Vegas area; thus, I wondered whether the officer was correct in asserting that it is illegal for scooters to drive on the shoulder.1)For purposes of this blog post, “shoulder” means the area of the road to the right of the right-most lane, on the opposite side of the white, solid line.

The short answer is “most likely.” There is ambiguity in the law, but for the reasons stated below, an officer is most likely supported in citing a scooter driver for violating the law if driving to the right of a solid white line on a shoulder. However, if the scooter driver is involved in an accident while driving the scooter that was not his fault, he may not be precluded from recovering damages from the accident.

 

The rights of motorized scooters are not fully defined in the NRS

The Nevada Revised Statutes (NRS) that pertain to traffic laws and are found in NRS 484A-484E, and they do not contain a provision or law that appears to match the violation of “restricted access” cited by the police officer in my client’s case. A statute that refers restricted areas that may be the closest to the relevant situation is found in NRS 484B.510, which is titled “Stopping, standing or parking in restricted parking zone.” The NRS does not specifically define restricted parking zone, but the text of this statute makes such a zone sound like an area that has signs marking it—such as a 10 minute loading zone or similar. This is not the typical roadway shoulder found in the Las Vegas valley.

The violation of crossing a white line on the freeway is governed by NRS 484B.587, but there is no reference to non-freeways. Thus, while an officer may be supported in believing there was a violation for the driving of a scooter on the shoulder of a non-freeway, the “restricted access” violation likely does not match with the alleged improper actions.

 

Applying statutory definitions of moped, vehicle, roadway, and shoulder to better understand the rights of  a motorized scooter

My conclusions that scooters are nonetheless not permitted to drive on the shoulder are almost exclusively based upon the definitions found in the NRS with some corroboration with the Nevada Administrative Code (NAC) and the Nevada Department of Motor Vehicles (DMV). Case law on the topic in Nevada is silent. The main definitions upon which I rely are “moped,” “vehicle,” “roadway,” and “shoulder,” the last of which is only provided in the NAC.

Under Nevada law, a motorized scooter is identified as a “moped,” which is defined under NRS 484A.125:

a motor-driven scooter, motor-driven cycle or similar vehicle that is propelled by a small engine which produces not more than 2 gross brake horsepower, has a displacement of not more than 50 cubic centimeters or produces not more than 1500 watts final output, and

1. Is designed to travel on not more than three wheels in contact with the ground but is not a tractor; and

2. Is capable of a maximum speed of not more than 30 miles per hour on a flat surface with not more than 1 percent grade in any direction when the motor is engaged.

 

NRS 484A.125 specifically states that “moped” does not include an electric bicycle. On the other hand, a moped is a “vehicle” under NRS 484A.320 because it is a transportation device that may be used on a highway and is not moved by human power: NRS 484A.320 defines a “vehicle” as follows:

“Vehicle” means every device in, upon or by which any person or property is or may be transported or drawn upon a highway, except:

1. Devices moved by human power or used exclusively upon stationary rails; and

2. Electric personal assistive mobility devices as defined in NRS 482.029.

 

Since a moped is a transportation device not moved by human power nor is it an electric personal assistive mobility device, it is a vehicle under Nevada law. There is some circularity in the definitions here because the definition of highway under NRS 484A.095 states that it designed for vehicles, and the definition of vehicle states it is a device allowed on a highway. However, to say that a moped is not a permitted on a highway would lead to an absurd result of not allowing a moped on the road at all; therefore, my conclusion assumes that mopeds are permitted on the highway and are thus vehicles. This means that any law that applies to vehicles also applies to mopeds unless there is an exception.

It is important to recognize that a highway in Nevada is defined very broadly as follows:

“Highway” means the entire width between the boundary lines of every way dedicated to a public authority when any part of the way is open to the use of the public for purposes of vehicular traffic, whether or not the public authority is maintaining the way.2)NRS 484A.095

 

Many people may think of a highway as a major street or road that is not a freeway, often due to famous highways such as Highway 69 or 101. As shown by the above statute, when dealing with the Nevada laws on traffic, the word “highway” is specifically defined and is simply the entire publicly open surface available for “vehicular traffic.” Under NRS 484A.215, a “road” is basically the same as a highway except that it is “outside the territorial limits of a city.”

On the other hand, a “roadway” is narrower in scope than “highway” because it includes just the improved portion of the surface that excludes the shoulder. NRS 484A.220 defines “roadway” as “that portion of a highway which is improved and ordinarily used for vehicular traffic, exclusive of the shoulder.” (emphasis added). The definition of roadway thus shows that the shoulder is not a part and it is for vehicles, which includes mopeds. It does not state that vehicles are not permitted to travel in the shoulder. The term “shoulder” is not defined in NRS 484A-484E.

It is a false inference to think that because the roadway is for vehicles, the shoulder is not. The fact that the roadway excludes the shoulder just differentiates the roadway from the shoulder, but there is nothing that states that the roadway is the only area for vehicular traffic or that the shoulder is not for vehicular traffic; the roadway is ordinarily used for vehicular traffic as opposed to the traffic of horses, pedestrians, bicyclists, sheep, or other possible roadway users, all of which may be permitted but are not the ordinary users. Just because the roadway’s ordinary use is for vehicular traffic does not mean that the shoulder is not also for a similar use.

The same logic may be applied to NRS 484A.300, which is titled “Traveled portion of highway” and is defined as that portion of a highway improved, designed or ordinarily used for vehicular traffic, exclusive of the berm or shoulder.” Just because the traveled portion of the highway is designed for or used by vehicles does not mean that the shoulder is not. The exclusion of the shoulder as part of the roadway or traveled portion of the highway is a physical characteristic of the respective public thoroughfares, and the use by vehicular traffic is a characteristic of its intended use.

There is no statute that specifically states that vehicles, including mopeds, are not allowed on the shoulder; however, there would be an absurd result if vehicles were permitted to travel on the shoulder. The shoulder is separate because it has a different function; it is also usually marked with a solid white line. If the shoulder were permitted for vehicular travel, then why paint the solid white line at all or even refer to it as a shoulder? Frequently, the shoulder is not large enough to safely drive a vehicle while remaining entirely on pavement and not encroaching on a neighboring lane.

Thus, logically, the shoulder is different from a regular vehicle travel lane, and since it has no specifically stated purpose, it is likely not a lane designated for ordinary vehicular traffic. It is a commonly accepted rule that cars and trucks are not permitted to drive on the shoulder. The law establishes that mopeds are vehicles. If you put the two together, mopeds are not allowed to drive on the shoulder.

 

The Nevada Administrative Code is instructive

The Nevada Administrative Code3)NRS 408.215 [4] grants authority to the Director of the Department of Transportation to "adopt such regulations as may be necessary to carry out and enforce" the intent of the NRS with regards to transportation regulation, while not a direct authority, provides more specific guidance. It defines “roadway” and “traveled way” similar to the NRS but also includes a definition of “shoulder.”4)NAC 408.245, 408.260 NAC 408.250, it states that “Shoulder” means the portion of the roadway contiguous with the traveled way for the accommodation of stopped vehicles, emergency use and the lateral support of the base and surface.

Thus, when read with the NRS definition of vehicle to include mopeds, NAC 408.250 shows that shoulders are not available for moped travel and may only be used for stops and emergencies.

The DMV Driver’s handbook contains a more thorough statement regarding the purpose and function of solid white lines. It states that “a solid white line is also used to mark the edge of the highway as well as the boundary between a travel lane and a highway shoulder.”5)DMV Driver’s handbook, page 30, July, 2014 While the DMV handbook is not an authority, it would be persuasive in its interpretation of the law.6)particularly because the term "boundary" is not defined in the NRS

While it is likely that a traffic citation issued to a driver of a scooter or moped for driving on the right side of a solid white line is likely proper. The law is not clear that mopeds are not allowed to drive on the shoulder, but the law identifies mopeds as vehicles, and vehicles should not drive on shoulders.

Even if a person violates that law by driving on the shoulder on a scooter, other drivers have a duty to drive safely and watch for other users of the highway. Just because the scooter driver was driving on the shoulder at the time of the accident does not mean that they will be found at fault for the accident. In 2005, the Nevada Supreme Court ruled that a violation of a traffic statute by a victim of a vehicle accident will not preclude the victim from recovery.  You can read Langon v. Matamoros here.

The outcome of every case is fact sensitive. Please contact an attorney if you have questions about this or any related matter as this is not legal advice.

Footnotes

Footnotes
1 For purposes of this blog post, “shoulder” means the area of the road to the right of the right-most lane, on the opposite side of the white, solid line.
2 NRS 484A.095
3 NRS 408.215 [4] grants authority to the Director of the Department of Transportation to "adopt such regulations as may be necessary to carry out and enforce" the intent of the NRS with regards to transportation regulation
4 NAC 408.245, 408.260
5 DMV Driver’s handbook, page 30, July, 2014
6 particularly because the term "boundary" is not defined in the NRS
Past due notice

Help! I need assistance with debt collection!

 

Often, people find themselves in a situation where someone owes them money, but refuses to pay. Clients often expect the process of collecting a debt that is clearly owed to be simple and straightforward. But unfortunately, as is often the case with the law, it is anything but. The process for debt collection is lengthy and complicated to say the least.

First, you, as the creditor, may make a demand for payment from the debtor under threat of a lawsuit. If the money is not paid, you may proceed with a lawsuit. You will have to follow through with the lawsuit by proving the accused owes the debt1)including the correct amount and obtain a judgment from which you may then collect. Once you get the judgment, if s/he still does not pay willingly, you may conduct a judgment debtor’s exam to acquire all of the debtor’s relevant information; where s/he works, what assets s/he has, whether the property may be exempt from collection and any other relevant factors that may weigh in on your collection of the debt.

 

How the debt collection process works

Keep in mind that the state of the Nevada lists many exemptions of property that you may not take from the debtor to ensure the debtor is not left destitute. But, notwithstanding those exemptions, you may levy bank accounts, take items of personal property2)not you, but a sheriff's deputy, place a lien on a house, and garnish wages all within the specific constraints of the law. The process at this stage is quite complicated because you need a government entity, such as a sheriff to actually take the property as you may not do it yourself. With each step, there are specific pleadings that need to be filed and served to make sure you are not wrongfully taking property. Although this may seem bizarre since the person owes you money, the legislature has created many protections against “self help” to prevent people from going to someone’s house and taking property to get the value of their money back. There are many possibilities to take property and sell it to get your money back and your attorney can discuss the pros and cons of each.

If you are afraid the debtor might hide assets from you early on, you might need to “attach” or freeze the property prior to obtaining a judgment. Before you may do this, you need to prove to the court that you are in fact owed the money and there is a likelihood that s/he will hide assets.

Client-creditors always want the debtor to pay their attorneys’ fees, but unless you had some type of  previous agreement providing for this, it is unlikely you will be able to collect the fees. In certain cases, you might be able to get your attorneys’ fees paid, but each case is different and depends on the unique circumstances.

In the future, before you lend money, have a lawyer draw up a contract with terms that benefit you such as interest owed, specific time limits for repayment, and a provision for payment of your attorneys’ fees if you have to seek legal action.

Each step of collection is so complicated, between filing deadlines, procedural hurdles, and proper documentation that it is always best to hire an experienced attorney to ensure that you are paid back the money you deserve.

In some cases, it may be the case that there is no money to collect from the debtor. But, if you continue to renew your judgment you will preserve your right to collect until such time that the debtor does have assets.

For reliable assistance with the debt collection process, contact us for a free consultation.

Footnotes

Footnotes
1 including the correct amount
2 not you, but a sheriff's deputy
Pile of files

Businesses Must Maintain Proper Records or Risk Discovery Sanctions for Missing Documents

Once a lawsuit is filed, all parties involved have an obligation to diligently search through their records and disclose to the other parties any and all relevant documents and witnesses. If you own a business and get sued, you have an obligation to go through your records and find anything that is relevant to the suit. If you do not, you risk being sanctioned for failure to participate in meaningful discovery. But how far this duty goes varies from case to case. For instance, it does not seem reasonable to hold a company liable for maintaining 15 years’ worth of paper files, but what if the lawsuit centers around the identity of a beneficiary of a 20 year old insurance policy? Situations have arisen where companies have taken old paper files, had employees make electronic records, and then shredded the paper files. But what if there is reason to believe that the named beneficiary was electronically inputted inaccurately? Did the company have a duty to maintain the records for something as important as the naming of a beneficiary 20 years ago? The answer is: Perhaps.

A scenario that could also cause problems for disclosing relevant documents is when companies have disorganized files. What if someone’s health insurance application gets misfiled and they are later accused of not disclosing their true health conditions? If a company is accused of negligently failing to disclose the relevant documents, they may have to pay the wronged party’s attorneys’ fees and costs caused by their actions.

 

A discovery example from California

In the California case of Finley v. the Hartford Life and Accident Insurance Company, the Hartford failed to disclose a highly relevant surveillance tape until very late in the discovery process. 1)249 F.R.D. 329 [N.D. Cal. 2008]. The Hartford claimed that they had diligently searched their files but did not initially find the tape. The Court agreed with Hartford that the failure to find the tape was an administrative oversight and not a malicious act but still sanctioned the company for not locating and turning over the tape earlier on. Although it was an accidental misplacement of the tape, the policy iterated by the court is that it is not an excuse to keep disorganized files and not promptly find relevant items and documents. The Court found that if something should show up in a routine search of the files, then it is not excusable when it does not turn up. This case is just one example of how important it is to maintain accurate and up-to-date files in the event that litigation arises. In the Finley case, if the videotape was disclosed earlier, the entire lawsuit could have been disposed of. The court did not look fondly upon an administrative error, and in turn, it cost the guilty party a lot of time, money, and stress.

If there were never the threat of sanctions, then parties would be incentivized to “misplace” documents, undermining the transparency/effectiveness of the judicial process. If you have reason to know a dispute is looming, it would be best to ensure that your files are properly preserved so anything relevant will be accessible during a routine search. Also always make sure to maintain accurate electronic records because courts expect this in the modern technology-driven world. Before you find yourself in a discovery mess, consult one of our attorneys for guidance through each and every step of the litigation process.

Footnotes

Footnotes
1 249 F.R.D. 329 [N.D. Cal. 2008]
play with fireworks

How to Play with Fireworks in Nevada and Avoid the Slammer

Welcome to Part III of our combustible1)sorry, the puns end here series on fireworks.  In Part I we learned that, contrary to popular sentiment, the fireworks stand are regulated fairly well as Clark County enforces a good amount of code to ensure the public is safe2)a lot of effort especially given that sales go on only seven days a year.

In Part II we untangled the mess that is our Home Rule local law, discovering that our local municipalities regulate fireworks3)with permission of the state legislature and that the fireworks regulations are not uniform across the Las Vegas Valley4)silly Vegas.

To wrap up our series on fireworks, and hopefully not throwing a damp cloth on everyone’s 4 July fun, we will discuss the possible consequences for “when the fun stops.”5)insert the fading sunset, though it is unlikely that over-gaming will get you a serious violent felony charge[key word there is “violent,” we will save that discussion for another time]

For teenagers and parents alike, it is good to know that keeping things a bit too real6)the most unartful Chappelle Show reference ever (a la play with fireworks) can go seriously wrong.

 

How About We Play with Fireworks but Avoid that Serious Felony Charge

In short, be careful and mindful of others7)I can hear you out there yelling “square” at me. You want square? How about spending the holiday weekend in prison? On second thought, just go ahead and do it..  As I am sure you can intuit, purposely using fireworks to harm other people or property is a serious crime.

Considering fireworks are just low-grade explosives, the law makes sense in this regard. The controlling law for this scenario is NRS 202.830:

NRS 202.830  Use of explosives to damage or destroy property prohibited; penalties.

      1.  Unless a greater penalty is provided pursuant to subsection 2, a person who maliciously damages or destroys, attempts to damage or destroy, or conspires with another person to damage or destroy, by means of an explosive, any building, vehicle or real property in the State:

      (a) If no substantial bodily harm results, is guilty of a category B felony and shall be punished by imprisonment in the state prison for a minimum term of not less than 2 years and a maximum term of not more than 10 years, or by a fine of not less than $2,000 nor more than $10,000, or by both fine and imprisonment.

      (b) If substantial bodily harm results, is guilty of a category B felony and shall be punished by imprisonment in the state prison for a minimum term of not less than 2 years and a maximum term of not more than 20 years, or by a fine of not less than $2,000 nor more than $20,000, or by both fine and imprisonment.

      2.  A person who maliciously damages or destroys, attempts to damage or destroy, or conspires with another person to damage or destroy, by means of an explosive, any building, vehicle or real property in the State, knowing or having reason to believe that a human being is therein at the time, is guilty of a category A felony8)unlike school, if you get drawn into the world of felony charges, the lower the letter grade, the better off you are. Things are really not going well if you get hit with a category A felony and shall be punished by imprisonment in the state prison:

      (a) For life without the possibility of parole;

      (b) For life with the possibility of parole, with eligibility for parole beginning when a minimum of 10 years has been served; or

      (c) For a definite term of 25 years, with eligibility for parole beginning when a minimum of 10 years has been served, in the discretion of the jury, or of the court upon a plea of guilty or guilty but mentally ill.

      (Added to NRS by 1971, 1282; A 1973, 1807; 1995, 12102009, 21)

Yikes.  You went out to play with some friends on what seemed to be a normal Saturday night, then bam! 25 years to life.  Remember kids, the line between a bomb and fireworks is only a matter of degree. I want to call your attention to the clause from subsection 2 that states that the accused committed the crime “knowing or having reason to believe that a human being is therein at the time.”

You can be charged with murder even if you did not know for certain there was a person there.  I am not going to propose hypothetical, depraved heart crimes for your 4 July celebration.  All that is necessary is a “reason to believe” that a person would be hurt through the property destruction.

Purposely destroying property is bad, doing so in an area likely to be occupied by innocent bystanders could turn out to be much, much worse.

 

But It Was an Accident, I Swear!

No matter my brother; you are still in serious trouble.  The statute discussed above covers crimes that the perpetrator committed intentionally.  Now we turn to scenarios that, although accidental, will still incur a criminal penalty. NRS 202.595 provides the relevant law:

NRS 202.595  Performance of act or neglect of duty in willful or wanton disregard of safety of persons or property; penalty.  Unless a greater penalty is otherwise provided by statute and except under the circumstances described in NRS 484B.653, a person who performs any act or neglects any duty imposed by law in willful or wanton disregard of the safety of persons or property shall be punished:

      1.  If the act or neglect does not result in the substantial bodily harm or death of a person, for a gross misdemeanor.

      2.  If the act or neglect results in the substantial bodily harm or death of a person, for a category C felony as provided in NRS 193.130.

      (Added to NRS by 1995, 466; A 1995, 1332)

Given that it is illegal to play with fireworks in the street, it is safe to assume that this statute will take effect if you happen to (accidently or not) destroy property or injure another9)not to mention to possible civil liability.  You can go ahead and take the prohibition against playing with fireworks in the street as duty made expressly by municipal codes.

I think it would be difficult to contend that to play with fireworks in a neighborhood surrounded by homes, cars, and children is not a “willful or wanton disregard of the safety of persons or property.”10)willful or wanton can be understood to mean very negligent

It is not like we are not surrounded with acres of empty desert where it is much safer to play with fireworks. I advocate being cautious as you play with fireworks this 4 July not only because you are legally required to, but because morally, it is the right thing to do.  We might be more transient than other communities, but that does not mean we cannot love each other just as much.

Happy 4 July!

God Save the United States of America.

Footnotes

Footnotes
1 sorry, the puns end here
2 a lot of effort especially given that sales go on only seven days a year
3 with permission of the state legislature
4 silly Vegas
5 insert the fading sunset, though it is unlikely that over-gaming will get you a serious violent felony charge[key word there is “violent,” we will save that discussion for another time]
6 the most unartful Chappelle Show reference ever
7 I can hear you out there yelling “square” at me. You want square? How about spending the holiday weekend in prison? On second thought, just go ahead and do it.
8 unlike school, if you get drawn into the world of felony charges, the lower the letter grade, the better off you are. Things are really not going well if you get hit with a category A felony
9 not to mention to possible civil liability
10 willful or wanton can be understood to mean very negligent
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