Case Title: Garcia v. Awerbach

Citation: 136 Nev. Adv. Op. No. 27

Docket Number: 68602

State: nevada

Court: Nevada Supreme Court

Date: 2020-05-21T00:00:00Z

Document:
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436Nev, Advance Opinion 2°7
IN THE SUPREME COURT OF THE STATE OF NEVADA

EMILIA GARCIA, No. 71348

oe FILED

ANDREA AWERBACH,
Respondent. MAY 21 2020

m1

Appeal from a district court judgment, certified as final under
NRCP 54(b), in a tort action. Eighth Judicial District Court, Clark County;
Jerry A. Wiese, Judge.

Vacated and remanded.

Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC, and D. Lee Roberts, Jr.,
Ryan T. Gormley, and Timothy A. Mott, Las Vegas; Glen J. Lerner &
Associates and Corey M. Eschweiler, Las Vegas,

for Appellant.

Lewis Roca Rothgerber Christie LLP and Daniel F. Polsenberg, Joel D.
Henriod, and Abraham G. Smith, Las Vegas; Mazzeo Law LLC and Peter

A. Mazzeo, Las Vegas,
for Respondent.

BEFORE HARDESTY, STIGLICH and SILVER, JJ.

10-\ArIo

 

 

 
OPINION
By the Court, HARDESTY, J.

‘The original district court judge assigned to this case entered a
discovery sanction against respondent establishing as a matter of law that
respondent permitted her son to drive the vehicle involved in an accident
that injured appellant. When a new district court judge was assigned to the
matter, that judge sua sponte determined that establishing permissive use
as a matter of law was unfair because it would prevent respondent from
defending against appellant's punitive damages claim. We now clarify that
permissive use, established as a matter of law, does not prevent a defendant
from defending against a claim for punitive damages. We further conclude
that the timing of the district court’s modification of the discovery sanction
was prejudicial, as trial had begun. We therefore reverse the district court's

 

order modifying the discovery sanction and remand for a new ti
FACTS AND PROCEDURAL HISTORY
Jared Awerbach was driving respondent Andrea Awerbach's

 

car when he and appellant Emilia Garcia were involved in a collision.
Emilia filed an amended complaint against Jared for negligence and driving
under the influence, against Andrea for negligent entrustment and liability
under NRS 41.440, and against both parties for punitive damages. Andrea’s
answer to Emilia’s original complaint admitted that she had entrusted her
car to Jared. Additionally, in Andrea's response to Emilia’s request for
admissions, Andrea admitted that Jared was operating her car with her
permission on the day of the collision. However, Andrea denied giving Jared
permission to drive her car (1) in her answer to the amended complaint,
(2) in her response to Emilia’s interrogatories, (3) in two depositions, and
(4) at trial.

 

 

 
om

During discovery, Emilia sought production of Andrea's
insurance claims file regarding the collision. Andrea produced the file but
redacted a claims note pertinent to the permissive-use issue in this case,
Emilia obtained the unredacted version of the claims note after she

 

subpoenaed the file from Andrea’
stated that Andrea had let Jared use her car in the past to practice for
driver's permit; Andrea let Jared take her keys earlier that day to get

\surer. The redacted portion of the note

 

 

something from her car; and Andrea usually kept her keys on the mantle,
where Jared would have had access to them. The note also stated, however,
that Andrea did not give Jared permission to, or know that he would, drive
her car on the day of accident.

Emilia filed a motion to strike Andrea’s answer to the amended
complaint as a discovery sanction for withholding the claims note. District
Court Judge Nancy Allf, the original judge presiding over the case, entered
an order denying Emilia’s motion to strike Andrea’s answer but granted a
discovery sanction against Andrea that established permissive use as a
matter of law. Specifically, Judge Allf found that “Andrea gave [Jared]
permission to use the car and a finding of permissive use is appropriate
because the claims note was concealed improperly, was relevant, and was
willfully withheld by (] Andrea.” Andrea filed a motion seeking relief from
this order, which was denied. The order denying Andrea's motion for relief
stated that the

finding of permissive use does not prevent
adjudication on the merits because (Emilia) still
maintains the burden of showing causation and
damages. The withholding of the note and the
misleading privilege log was willful, and sanctions
are necessary ....The sanction was crafted to

 
provide a fair result to both parties, given the
severity of the issue.

In August 2015, Judge Allf recused herself from the case due to
a conflict with Jared’s new counsel. The matter was assigned to District
Court Judge Jerry Wiese. In February 2016, on the first day of trial, Judge
Wiese informed the parties of his intent to modify the discovery sanction,
Although Judge Wiese acknowledged that Judge Allf found permissive use
as a matter of law, he stated that he would move forward with the order
based on Judge Allf's intention. Judge Wiese stated that he had spoken
with Judge Allf and her intention was for the parties to present
contradictory statements regarding permissive use at trial. Additionally,
Judge Wiese stated that Judge Allf also intended for the sanction to be a
rebuttable presumption of permissive use. Judge Wiese further informed
the parties that Emilia was not obligated to introduce evidence of
permissive use, but that Andrea could introduce evidence that rebutted the
presumption. On the fifth day of trial, Judge Wiese sua sponte entered an
order modifying Judge Alif’s discovery sanction so that permissive use was
established as a rebuttable presumption, instead of as a matter of law. The
modification order stated that regardless of whether Judge Wiese had
contacted Judge Allf, and regardless of her intention, he believed it “more
‘fair’ to all involved parties{ ] to modify” the order. Judge Wiese's order
modifying the sanction provided:

‘Andrea filed a petition for a writ of mandamus or prohibition with
this court seeking to vacate Judge Allfs sanction, which we denied.
Awerbach v. Eighth Judicial Dist. Court, Docket No. 68602 (Order Denying
Petition for Writ of Mandamus or Prohibition, Sept. 11, 2015).

 
one

The Court was not inclined to disturb the prior
findings and orders of Judge Allf, but the Court was
faced with the dilemma that Judge Allf's prior
{o}rder not only established “permission” by Andrea
Awerbach to Jared Awerbach, but it also essentially
established an element of [Emilia’s) claim for
Punitive damages against Andrea Awerbach,
without allowing Ms. Awerbach the opportunity to
explain herself. This Court was not comfortable
with such a finding, especially as it applied to the
punitive damages claim....(AJnd instead of
“permissive use” being established as a matter of
law, this Court will impose a [rjebuttable
[plresumption that “permissive use” is established
against Andrea Awerbach. The presumption still
serves the purpose of sanctioning [Andrea] for the
discovery improprieties,... and allows [Andrea]
the opportunity to defend against (Emilia’s) claim
for punitive damages.

(Emphasis added.)
At trial, Andrea introduced evidence rebutting the permissive

 

 

use presumption. The jury ultimately found in favor of Andrea on the
ground that she “did not give express or implied permission to Jared” to use
her car on the collision date and “did not negligently entrust her [car] to an
inexperienced or incompetent person” on that date? The district court
entered judgment in favor of Andrea. Emilia now appeals, arguing that
Judge Wiese erred in modifying Judge Allfs finding of permissive use as a
matter of law.

*The jury also found in favor of Emilia against Jared, but because this
appeal from a judgment certified as final under NRCP 54(b) only concerns
claims against Andrea, we do not address any issue concerning claims
against Jared.

 

 
DISCUSSION

The district court erred in finding that permissive use, established as a
matter of law, prevented Andrea from defending against the punitive
damages claim

Emilia claimed that Andrea was liable for Jared’s actions
because she negligently entrusted her vehicle to him, To establish a prima
facie case of negligent entrustment, a plaintiff must show two key elements:
(2) that an entrustment occurred, and (2) that the entrustment was
negligent. Zugel v. Miller, 100 Nev. 525, 528, 688 P.2d 310, 313 (1984).

Emilia also sought punitive damages against Andrea for her
negligent entrustment. “A plaintiff is not automatically entitled to punitive
damages.” Bongiovi v. Sullivan, 122 Nev. 556, 581, 138 P.3d 433, 450
(2006). “[Plunitive damages may be awarded when the plaintiff proves by
clear and convincing evidence that the defendant is guilty of oppression,
fraud or malice, express or implied.” Id. at 581, 138 P.3d at 450-51 (internal
quotations omitted); see also NRS 42.005(1). “Oppression’. means
despicable conduct that subjects a person to cruel and unjust hardship with
conscious disregard of the rights of the person.” NRS 42.001(4). “Fraud”
means an intentional misrepresentation, deception or concealment of a
material fact known to the person with the intent to deprive another person
of his or her rights or property or to otherwise injure another person.” NRS
42.001(2). Express malice is conduct intended to injure a person, while
implied malice is despicable conduct that a person engages in with conscious
disregard of another's rights. Bongiovi, 122 Nev. at 581, 138 P.3d at 451;
see also NRS 42.001(3). A defendant acts with conscious disregard when he
or she has “knowledge of the probable harmful consequences of a wrongful
act and... willfullly) and deliberatelly] faills) to act to avoid those
consequences.” NRS 42.001(1). “In other words, under NRS 42.001(1), to

 

 
justify punitive damages, the defendant's conduct must have exceeded mere
recklessness or gross negligence.” Wyeth v. Rowatt, 126 Nev. 446, 473, 244
P.3d 765, 783 (2010) (emphasis added) (internal quotation omitted).

Emilia asserts that permissive use, established as a matter of
law, could not affect the punitive damages claim because permissive use
establ
We agree. A finding of permissive use establishes that an entrustment

 

ies only one element of negligent entrustment, not the entire claim,

 

occurred. It does not, however, establish the second element of negligent
entrustment—that the entrustment was negligent. Accordingly, even if the
istrict court found permissive use as a matter of law, Emilia still had to
prove that Andrea's entrustment was negligent to succeed on her claim of
negligent entrustment.

Additionally, the permissive use finding could not have
prevented Andrea from defending against the punitive damages claim, even
if Emilia had proven her underlying claim of negligent entrustment.
Because the tort of negligent entrustment does not require proof of a
culpable state of mind, a finding of negligent entrustment is not by itself
sufficient to justify punitive damages. Negligent entrustment requires a
showing that the entrustment was negligent, but a punitive damages award
requires a showing that the defendant's conduct exceeded mere
recklessness or gross negligence. Thus, we conclude that the district court’s
finding of permissive use established as a matter of law, without more, does
not establish oppression, fraud, or malice for purposes of punitive damages.

In the instant case, the original sanction establishing
permissive use as a matter of law did not necessarily establish the culpable
state of mind required to prove a punitive damages claim. Accordingly, the
sanction could not, as a matter of law, affect Andrea’s ability to defend

 

 
on

against the punitive damages claim.’ Therefore, the district court
‘committed legal error by modifying the sanction on this ground.

The timing of the district court’s sua sponte modification of the discovery
sanction was prejudicial

The district court informed the parties of its intent to modify
the discovery sanction on the first day of trial and entered its order on the
fifth day of trial, approximately one year after Judge Allf granted the
discovery sanction. Emilia argues the timing of the modification unfairly
prejudiced her ability to present her case at trial. We agree.

In its order modifying the sanction, the district court
acknowledged that such modification “may result in the parties needing to
modify how they planned to present this case to the jury.” During the
district court proceedings below, Emilia raised concerns about the timing of
the modification. Although the district court offered expedited discovery
and alternative accommodations, we are not convinced that the district
court's timing in modifying the sanction was not unduly prejudicial given
the circumstances of the underlying case.

3We acknowledge that Andrea admitted to other facts, which
combined with a permissive use finding as a matter of law may have
affected her ability to defend against the punitive damages claim. Andrea’s
concession to these other facts, however, does not warrant the modification
of the discovery sanction when permissive use, alone, cannot affect her
ability to defend against the punitive damages claim.

‘Emilia’s counsel suggested that she would need more time to depose
witnesses and gather evidence to prove an additional element of her
negligent entrustment claim. However, any additional delays regarding the
trial date risked running afoul of the five-year rule. See NRCP 41(eX2XB)
(The court must dismiss an action for want of prosecution if a plaintiff fails
to bring the action to trial within 5 years after the action was filed.”).
Although Emilia was willing to waive the five-year rule and seek a

 

 
The original sanction guided Emilia’s discovery strategy and
trial preparation. Prior to the district court’s modification of the sanction,
Emilia did not have to present any evidence regarding permissive use
because Judge Allfs order had established it as a matter of law. Following
the modification, if Andrea presented evidence rebutting the presumption,
Emilia would need evidence to support the presumption. Given that the
parties were explicitly informed of the district court's intent to modify the
sanction on the first day of trial, we conclude Emilia was prejudiced in
presenting evidence on the issue of permissive use. See Meyers v. Garmire,
324 So, 2d 134, 185 (Fla, Dist. Ct. App. 1975) (finding that, although the
trial court was permitted to modify a pretrial order that limited the issues
tobe presented at trial, permitting the addition of matters outside the scope

 

of the pretrial order at the time of trial was prejudicial to petitioners, who
were not prepared to present evidence on those issues). Therefore, we
conclude the district erred in the timing of its sua sponte modification of the
discovery sanction.

continuance to adequately prepare for the issue of permissive use, Andrea
was not. Accordingly, the district court moved forward with the original
trial date.

 
Accordingly, we vacate the underlying judgment, reverse the
district court’s order modifying the discovery sanction, and remand this
‘matter to the district court for a new trial.

DAe tock, a.

Hardesty

We concur:

Stiglich

Liter)

Silver

 

“Although not raised at the district court proceedings below, Emilia
argues on appeal that Judge Wiese improperly modified the sanction based
on his communication with Judge Allf in violation of District Court Rule
(DCR) 18(1) because Judge Allf did not provide Judge Wiese with a written
request that he modify the sanction. See DCR 18(1) (providing that “Iwlhen
any district judge shall have entered upon the trial or hearing of any cause,
proceeding or motion, or made any ruling, order or decision therein, no other
Judge shall do any act or thing in or about such cause, proceeding or motion,
unless upon the written request of the judge who shalll have first entered
upon the trial or hearing of such cause, proceeding or motion.”). Emilia
additionally argues that Judge Wiese’s decision to modify the sanction
based on his communication with Judge Allf was improper because a judge
should have no influence or involvement in a case once they have been
recused. Given our disposition, however, it is not necessary to reach these
issues.

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