Cummings v. Charter Hosp. of Las Vegas, Inc.

• Citation: 896 P.2d 1137,111 Nev. 639
• Decision Date: 25 May 1995
• Docket Number: No. 23603,23603
• Parties: , RICO Bus.Disp.Guide 8880 Elaine CUMMINGS, Nancy Patnaude and Deborah White, on Behalf of Themselves and all Others Similarly Situated, Appellants, v. CHARTER HOSPITAL OF LAS VEGAS, INC., Scott Gladstone, Robert Brewer and Doris Javine, Respondents.
• Court: Nevada Supreme Court

Page 1137

896 P.2d 1137

111 Nev. 639, RICO Bus.Disp.Guide 8880

Elaine CUMMINGS, Nancy Patnaude and Deborah White, on Behalf of Themselves and all Others Similarly Situated, Appellants, v. CHARTER HOSPITAL OF LAS VEGAS, INC., Scott Gladstone, Robert Brewer and Doris Javine, Respondents.

No. 23603.

Supreme Court of Nevada.

May 25, 1995.

[111 Nev. 640] Hamilton D. Moore, Las Vegas, for appellants.

Hafen & Mayor, Las Vegas, for respondent Charter Hosp.

Alverson, Taylor, Mortensen & Nelson, Las Vegas, for respondents Gladstone and Brewer.

Barker, Gillock, Koning, Brown & Earley and Anthony V. Sorrentino, Las Vegas, for respondent Javine.

OPINION

ROSE, Justice:

Based on their involuntary detention in the respondent mental hospital, appellants Elaine Cummings (Cummings), Nancy Patnaude (Patnaude), and Deborah White (White) (collectively the patients), filed a class action complaint alleging, inter alia, a 42 U.S.C. § 1983 civil rights claim and a claim for civil racketeering. The district court declined to certify the action as a class action. The district court also dismissed the patients' action for civil racketeering for lack of specificity in pleading and the patients' § 1983 civil rights claim because there was no showing of state action. We conclude that in detaining the patients against their will, the respondents were clothed with the authority of state law and exercised a power possessed by virtue of that law. Accordingly, respondents were state actors for the purposes of the § 1983 claim, and the district court erred in dismissing that claim with prejudice.

FACTS

Since this case consists of review of an order dismissing the action, allegations set forth in the patients' complaint must be taken as true. See Blanchard v. Blanchard, 108 Nev. 908, 910, 839 P.2d 1320, 1321 (1992); Squires v. Sierra Nev. Educational Found., 107 Nev. 902, 905, 823 P.2d 256, 257 (1991). The basis for the complaint is that the patients were held, against their will, by the respondents at respondent Charter Hospital of Las Vegas (Charter) without any legal or medical basis for the purposes of fraudulently and illegally obtaining health care insurance benefits from the patients' insurance providers. The patients' complaint alleged: (1) that Cummings was held against her will at Charter from October 20, 1989, to November 15, 1989; (2) that Patnaude was held against her will from August 1, 1990, to August 18, 1990; and (3) that White was held against her will from July 18, 1990, to July 23, 1990. The complaint further alleged that respondents Scott Gladstone (Gladstone), Robert Brewer (Brewer), and Doris Javine (Javine), physicians at Charter, were responsible for the patients' detention.

On October 28, 1991, the patients filed a class action complaint naming as plaintiffs themselves, Debra Schlotfeldt (Schlotfeldt), ¹ and all others similarly situated. The complaint averred causes of action for false imprisonment, intentional or negligent infliction of emotional distress, intentional or negligent misrepresentation, civil racketeering, and violation of civil rights under 42 U.S.C. § 1983.

Charter filed a motion to dismiss the patients' class action complaint, and Gladstone, Brewer, and Javine joined in the motion. Charter, along with Gladstone, Brewer, and Javine, argued that the patients' complaint must be dismissed as a class action, that the § 1983 claim must be dismissed because there was no showing of "state action," and that the civil racketeering claim must be dismissed for lack of specificity in pleading.

The district court declined to allow the action to proceed as a class action, and it dismissed the complaint, with prejudice, insofar as it was brought as a class action. The district court further dismissed the patients' racketeering claim without prejudice and the patients' § 1983 claim with prejudice. Finally, the district court invited the patients to renew their claims by refiling separate actions, not to include any § 1983 claims. The district court's order stated, "Each of the remaining Plaintiffs' actions of the remaining Plaintiffs, Nancy Patnaude, Deborah White and Elaine Cummings are hereby dismissed without prejudice. Each of said Plaintiffs may refile new lawsuits, nunc pro tunc, individually and in a manner consistent with this Court's Order." The patients appeal from this order.

DISCUSSION

Class Action

The patients contend that the district court erred in declining to certify the patients as a class so that the patients could proceed with the case as a class action. NRCP 23(a) states:

Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

"[T]he determination to use the class action is a discretionary function wherein the district court must pragmatically determine whether it is better to proceed as a single action, or many individual actions in order to redress a single fundamental wrong." Deal v. 999 Lakeshore Association, 94 Nev. 301, 306, 579 P.2d 775, 778-79 (1978).

In the instant case, Schlotfeldt has not challenged on appeal her dismissal from the action. The remaining three patients cannot point to any others who might be included in the class, although they claim that there may be thousands of people in the class. It is the plaintiffs' burden to prove that the case is appropriate for resolution as a class action. Perez v. Personnel Bd. of City of Chicago, 690 F.Supp. 670, 672 (N.D.Ill.1988). This burden includes the burden of proving that the plaintiff class is so large that proceeding as a class action is the only manageable method of resolving the controversy. It is "incumbent upon [the plaintiffs] under the numerosity requirement of [NRCP 23] to identify some individuals who fall within [the proposed class], and that their number is so great as to render joinder impracticable." Id. at 672; see Hahn v. Breed, 606 F.Supp. 1557, 1563 (S.D.N.Y.1985). We conclude that the patients have failed to make such a showing here.

In Kane v. Sierra Lincoln-Mercury, Inc., 91 Nev. 178, 533 P.2d 464 (1975), we held that a class of five plaintiffs is not so numerous that joinder of all members would be impracticable. Id. at 180, 533 P.2d at 465-66. We stated that "the class [of five persons] is far too small to justify a class action and on this basis alone the trial court properly dismissed the suit." Id. at 180, 533 P.2d at 466. Accordingly, the class of three plaintiffs in the instant case is insufficiently numerous to justify proceeding with the case as a class action.

In addition, the third claim for relief in the patients' complaint is a claim for fraud. In Johnson v. Travelers Insurance Co., 89 Nev. 467, 515 P.2d 68 (1973), we stated:

As a general proposition, it is fair to state that a class suit to recover damages for fraud allegedly practiced upon numerous persons is not warranted. The inherent uniqueness of misrepresentation actions makes it difficult to find central facts susceptible of proof on a common basis.

Id. at 472, 515 P.2d at 72 (citation omitted). The patients' claim for fraud further militates against allowing the action to proceed as a class action. We conclude the district court did not abuse its discretion in precluding the patients from proceeding with the case as a class action.

Misjoinder and Severance of Parties

The patients contend that the district court erred in dismissing the patients' complaint on the grounds of misjoinder. NRCP 20(a) states, in part:

Permissive Joinder. All persons may join in one action as plaintiffs if they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or of fact common to all these persons will arise in the action.

NRCP 21 states:

Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately.

The district court has broad discretion to allow or deny joinder of parties. See Swanigan v. Rossi, 617 F.Supp. 66, 67 (E.D.Mich.1985); see also 7 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1652, at 372-73 (1986). In the instant case, none of the patients was admitted or released from Charter at the same time, and their claims involve different incidents with different physicians and employees. We conclude that the district court acted within its discretion in determining that the patients' claims did not arise out of the same transaction, occurrence or series of transactions or occurrences, but rather arose from separate incidents.

After determining that the patients could not proceed with the case as a class action, the district court "dismissed without prejudice" the actions of the patients and allowed them to "refile new lawsuits, nunc pro tunc, individually." The district court's order did not function as a dismissal of the patients' actions, in violation of NRCP 21, but rather severed the actions of the patients and allowed them to proceed separately, which is permissible under NRCP 21. The district court's dismissal of the complaint was necessary since the complaint, captioned "Class Action Complaint," was brought as a class action, and the district court declined to allow it to proceed as a class action. Accordingly, we conclude that the district court did not abuse its discretion in...