County of Clark, ex rel. University Medical Center v. Upchurch

• Decision Date: 27 July 1998
• Docket Number: No. 27368,27368
• Citation: 114 Nev. 749,961 P.2d 754
• Parties: COUNTY OF CLARK, ex rel., UNIVERSITY MEDICAL CENTER, Appellant, v. Kimberly UPCHURCH, a Minor, By and Through Martha Imelda UPCHURCH and John Lowell Upchurch, the Parents and Natural Guardians of Kimberly Upchurch; Martha Imelda Upchurch and John Lowell Upchurch, Individually, Respondents.
• Court: Nevada Supreme Court

Page 754

961 P.2d 754

114 Nev. 749

COUNTY OF CLARK, ex rel., UNIVERSITY MEDICAL CENTER, Appellant, v. Kimberly UPCHURCH, a Minor, By and Through Martha Imelda

UPCHURCH and John Lowell Upchurch, the Parents and Natural

Guardians of Kimberly Upchurch; Martha Imelda Upchurch and

John Lowell Upchurch, Individually, Respondents.

No. 27368.

Supreme Court of Nevada.

July 27, 1998.

Alverson, Taylor, Mortenson, Nelson & Sanders, and Marie Ellerton, Las Vegas, for appellant.

Lyles, Austin & Burnett, Ltd., and John R. Hawley, Las Vegas, for respondents.

OPINION

WAGNER ¹, District Judge.

On July 9, 1990, respondent Martha Imelda Upchurch ("Mrs.Upchurch"), age twenty-nine, gave birth to a daughter, respondent Kimberly Upchurch ("Kimberly"), at the hospital of appellant University Medical Center of Southern Nevada ("UMC") in Las Vegas. Kimberly was born with cerebral palsy.

Donald Roberts, M.D., and Edward Spoon, M.D., two obstetric-gynecology residents employed by the State of Nevada and the University of Nevada-Reno ("UNR") School of Medicine, were the attending physicians throughout the labor and delivery. Mrs. Upchurch and her husband, respondent John Lowell Upchurch ("Mr.Upchurch") (collectively "the Upchurches"), filed a complaint with the Nevada Department of Business and Industry, Division of Insurance, Medical-Legal Screening Panel. Kimberly, and Mr. and Mrs. Upchurch were each named claimants on the complaint. The Upchurches alleged that the medical mismanagement of various state actors, including Drs. Roberts and Spoon, the State of Nevada, and the UNR School of Medicine, caused their daughter's condition.

In October 1993, the Upchurches voluntarily settled their claims with the State of Nevada, the UNR School of Medicine, and Drs. Roberts and Spoon, for an aggregate sum of $150,000--$50,000 for each claimant (i.e., Kimberly, Mr. Upchurch, and Mrs. Upchurch). The Upchurches accepted this sum in conjunction with a release agreement "in full compromise, settlement and satisfaction of and as sole consideration for the final release and discharge of all actions, claims and demands whatsoever that now exist or may hereafter accrue ...." The release further stated that the settlement "shall not be deemed or construed as an admission of liability to [the Upchurches] by the persons, parties and entities released herein but, on the contrary, any and all such liability is expressly denied ."

Another provision in the parties' settlement agreement specified:

Said settlement funds represent the statutory "cap" applicable to the State of Nevada pursuant to NRS 41.035, and in no way constitute a release of any actions, claims or rights that the undersigned may have against all other parties, including but not limited to other governmental entities, Dr. Tayengco (the attending physician on the day of delivery), [UMC], the County of Clark as a separate governmental entity, or any of their agents, employees or representatives. The undersigned expressly reserve any rights they may have to claim a separate governmental entity "cap" from the County of Clark or to claim that no "cap" is applicable in this case.

Subsequently, the Upchurches filed an amended complaint with the Nevada Medical-Legal Screening Panel adding UMC and Dr. Tayengco and deleting all parties who signed the settlement agreement.

In December 1993, the Upchurches filed the instant action for declaratory relief against UMC, seeking a judicial determination that there is no applicable statutory "cap" as to UMC because UMC denied that Drs. Roberts and Spoon were employees, or alternatively, that the Upchurches were entitled to two separate sets of damage "caps" of $150,000 because Clark County (which operates and funds UMC) and the State of Nevada are separate and independent governmental entities.

The Upchurches filed a motion for summary judgment claiming that NRS 41.031 and NRS 41.035 provide them with the right to seek "a second set of statutory damage caps." UMC filed its opposition to the Upchurches, motion and a countermotion for summary judgment. UMC realleged its affirmative defenses and alleged that the Upchurches had no right to additional damages after having recouped the statutory damage limit from the state. The district court directed UMC to rebrief the substantive issues regarding NRS 41.031 and NRS 41.035 in the form of a motion to dismiss. The district court then entered an order, in effect, granting summary judgment for the Upchurches. The written order stated:

[The Upchurches] are not precluded from recovering a second set of statutory caps from County of Clark, pursuant to NRS 41.031 and NRS 41.035. Therefore, [UMC's] motion to dismiss is denied and, inasmuch as this decision resolves the subject declaratory relief action, this decision shall act as a final judgment on the declaratory relief action in favor of [the Upchurches] and against [UMC]. Therefore, the trial in this matter is moot....

UMC appeals this order, which was, in effect, a summary judgment.

Meanwhile, the Upchurches filed a separate complaint alleging that UMC was institutionally negligent and negligent for the damages arising from and out of Kimberly's birth, as well as vicariously negligent for the malpractice of the doctors and the nurses involved in Kimberly's delivery and care. This negligence claim is pending.

DISCUSSION

Declaratory relief is available only if: (1) a justiciable controversy exists between persons with adverse interests, (2) the party seeking declaratory relief has a legally protectable interest in the controversy, and (3) the issue is ripe for judicial determination. Knittle v. Progressive Casualty Ins. Co., 112 Nev. 8, 10, 908 P.2d 724, 725 (1996). However, whether a determination in an action for declaratory judgment is proper is a matter for the district court's discretion and will not be disturbed on appeal unless the district court abused that discretion. El Capitan Club v. Fireman's Fund Ins., 89 Nev. 65, 68, 506 P.2d 426, 428 (1973).

UMC argues that the issue of the statutory damage limitation is not ripe for judicial determination because the question of UMC's underlying liability remains unresolved. It is true that UMC's liability has not been determined. However, courts must also consider whether speedy resolution of the issue might promote economy in the litigation process or might lead to meaningful pretrial settlement. Cf. El Capitan Club, 89 Nev. at 70, 506 P.2d at 429. Although there has been no determination regarding UMC's liability, the resolution of the issue will likely end the controversy between the parties. Thus, immediate judicial review of this issue will promote economy in the litigation process.

Furthermore, the issue of whether the $50,000 statutory damage limitation applies separately to each governmental entity and its actors or whether it applies to all governmental entities in the aggregate is one of first impression and of fundamental public importance. This issue may profoundly affect the state treasury and budgets of other state agencies. In addition, this issue will likely arise again and its resolution might forestall future litigation. While the liability of UMC in this case has not been decided, resolution of the issue may end the controversy between the parties and could save them from undergoing a lengthy and expensive trial.

NRS 30.040 provides in relevant part:

Any person ... whose rights, status or other legal relations are affected by a statute ... may have determined any question of construction or validity arising under the ... statute ... and obtain a declaration of rights, status or other legal relations thereunder.

This provision suggests that immediate review of the rights of the Upchurches and UMC pursuant to NRS 41.031 and 41.035 is appropriate. Thus, we conclude that the district court did not abuse its discretion in granting declaratory relief.

In granting declaratory relief, the district court determined that the Upchurches were entitled to damages from UMC, even though the State of Nevada had already paid each claimant the maximum $50,000 allowed under NRS 41.035. UMC argues that the district court erred in determining that the Upchurches could seek a second set of statutory damage limitations under NRS 41.031 and 41.035. According to UMC, the legislature intended that the damage cap apply on a "per claimant, per wrong basis" rather than a "per claimant, per wrong, per government actor" basis.

The construction of a statute is a question of law subject to de novo review. State, Dep't of Mtr. Vehicles v. Lovett, 110 Nev. 473, 476, 874 P.2d 1247, 1249 (1994). The intent of the legislature is the controlling factor in statutory interpretation. Cleghorn v. Hess, 109 Nev. 544, 548, 853 P.2d 1260, 1262 (1993). However, "where a statute is susceptible to more than one interpretation it should be construed 'in line with what reason and public policy would indicate the legislature intended.' " Lovett, 110 Nev. at 477, 874 P.2d at 1249-50 (quoting State, Dep't Mtr. Vehicles v. Vezeris, 102 Nev. 232, 236, 720 P.2d 1208, 1211 (1986)).

NRS 41.031 provides, in relevant part:

1. The State of Nevada hereby waives its immunity from liability and action and hereby consents to have its liability determined in accordance with the same rules of law as are applied to civil actions against natural persons and corporations, except as otherwise provided in NRS 41.032 to 41.038, inclusive.... The State of Nevada further waives the immunity from liability and action of all political subdivisions of the state, and their liability must be determined in the same manner, except as otherwise provided in NRS 41.032 to 41.038, inclusive....

2. An action may be brought under this section against the State of Nevada or any political subdivision of the state. In any action against the State of Nevada, the action must be brought in the name of the State of Nevada on relation of the particular department,...