Motor Coach Indus., Inc. v. Khiabani

• Citation: 493 P.3d 1007
• Decision Date: 19 August 2021
• Docket Number: No. 78701,78701
• Court: Nevada Supreme Court
• Parties: MOTOR COACH INDUSTRIES, INC., a Delaware Corporation, Appellant, v. Keon KHIABANI and Aria Khiabani, Minors, BY AND THROUGH their Guardian Marie-Claude RIGAUD; Siamak Barin, as Executor of the Estate of Kayvan Khiabani, M.D. (Decedent); the Estate of Kayvan Khiabani, M.D. (Decedent); Siamak Barin, as Executor of the Estate of Katayoun Barin, DDS (Decedent); and the Estate of Katayoun Barin, DDS, (Decedent), Respondents.

493 P.3d 1007

MOTOR COACH INDUSTRIES, INC., a Delaware Corporation, Appellant,

v.Keon KHIABANI and Aria Khiabani, Minors, BY AND THROUGH their Guardian Marie-Claude RIGAUD; Siamak Barin, as Executor of the Estate of Kayvan Khiabani, M.D. (Decedent); the Estate of Kayvan Khiabani, M.D. (Decedent); Siamak Barin, as Executor of the Estate of Katayoun Barin, DDS (Decedent); and the Estate of Katayoun Barin, DDS, (Decedent), Respondents.

No. 78701

Supreme Court of Nevada.

FILED AUGUST 19, 2021

Lewis Roca Rothgerber Christie LLP and Daniel F. Polsenberg, Joel D. Henriod, and Abraham G. Smith, Las Vegas; Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC, and D. Lee Roberts, Jr., and Howard J. Russell, Las Vegas; Hartline Dacus Barger Dreyer LLP and Darrell L. Barger and Michael G. Terry, Corpus Christi, Texas; Hartline Dacus Barger Dreyer LLP and John C. Dacus and Brian Rawson, Dallas, Texas, for Appellant.

Christiansen Law Offices and Peter S. Christiansen and Kendelee L. Works, Las Vegas; Kemp Jones, LLP, and Will Kemp and Eric M. Pepperman, Las Vegas, for Respondents.

BEFORE THE SUPREME COURT, EN BANC.

OPINION

By the Court, STIGLICH, J.:

Dr. Kayvan Khiabani was riding a bicycle when he collided with a passing bus and was fatally injured. His estate and surviving family members, respondents in this appeal, sued several defendants, including appellant Motor Coach Industries, Inc. (MCI), the designer and manufacturer of the bus. Each defendant except MCI settled with respondents before trial. At trial, respondents argued that MCI was liable under theories of defective design and failure to warn. The jury returned a verdict for respondents on the failure-to-warn theory. MCI moved for judgment as a matter of law, for a new trial, to alter or amend the judgment to offset the settlement proceeds paid by the other defendants, and to retax costs. The district court denied each of these motions. MCI appeals.

We affirm the district court's denial of MCI's motions for judgment as a matter of law, for a new trial, and to retax costs. We reverse and remand based on the district court's denial of MCI's motion to alter or amend the judgment, however, because MCI was entitled to an offset of the settlement proceeds as MCI and the settling defendants were liable for the same injury. We also take the opportunity presented in this matter to clarify Nevada law on calculating loss-of-support awards, the causation element of failure-to-warn claims, and special verdict forms.

BACKGROUND

Collision

In spring 2017, Edward Hubbard was driving a large bus designed and manufactured by MCI on Charleston Boulevard in Las Vegas. At the same time, Khiabani, a successful hand surgeon employed by the University of Nevada, Reno's (UNR) School of Medicine in Las Vegas, was cycling in the same direction in the bicycle lane. Khiabani turned right onto South Pavilion Center Drive, followed by Hubbard, who drove in the rightmost lane. Hubbard did not see Khiabani again until further down the road, when he attempted to overtake the bicycle. According to a witness, the side of the bus came within two to three feet of Khiabani. While the front of the bus passed without incident, Hubbard soon saw Khiabani drifting into the vehicle lane. Although Hubbard immediately turned the bus away in an attempt to avoid impact, Khiabani collided with the side of the bus, slid underneath, and was hit by its rear wheel. Khiabani did not survive the collision.

Khiabani's estate, widow, and children sued various defendants, including MCI, the manufacturers of the helmet Khiabani was wearing and the bicycle he was riding, the company operating the bus, and Hubbard. Good-faith settlements were reached before trial with all defendants except MCI.

Trial

Respondents proceeded against MCI on several product-defect theories, including failure to warn of an alleged defect. At trial, respondents argued that the boxy design of the bus caused air displacement that created a suction force on objects in close proximity to the sides of the bus, like bicyclists. This "air blast" effect, according to respondents, pulled Khiabani under the bus and led to his death. Respondents argued that this effect was both an unreasonably dangerous design defect and an unreasonably dangerous condition against which MCI failed to warn purchasers and drivers of the bus.

To calculate loss-of-support damages, the jury was informed of Khiabani's gross, i.e., pretax, pay. MCI requested that the jury be informed of Dr. Khiabani's net pay instead, on the ground that no earner supports a family with his or her pretax income, but only with what is actually taken home. The district court denied this request.

After the close of respondents’ presentation of evidence, MCI moved for judgment as a matter of law, partially on the ground that respondents had not sufficiently proven the causation element of their failure-to-warn theory. The district court denied this motion.

The jury ultimately found MCI liable on the failure-to-warn theory and awarded $18,746,003.62 in damages to respondents. $2,700,000 of that award was for loss of financial support.

Post-trial

Thereafter, MCI renewed its motion for judgment as a matter of law. The district court found that many of MCI's arguments were not preserved in its original motion at the close of respondents’ presentation of evidence and also rejected the arguments that it found were preserved. The district court taxed MCI with respondents’ trial costs. The district court also denied MCI's motion to alter or amend the judgment to offset the settlement proceeds paid by other defendants.

Alleged new evidence

At the time of the collision, UNR's medical school in Las Vegas (Khiabani's employer) was in the process of merging with a new medical school under the University of Nevada, Las Vegas and was conducting an audit to facilitate and guide that merger. In April 2018—after trial had been completed and the verdict returned—the local CBS affiliate published and televised investigative reporting details regarding the UNR medical school and the audit. The reporters had obtained several leaked internal documents and emails and alleged a practice of overbilling fraud. The reporters alleged that, at the time of his death, Khiabani had already lost or was about to lose his job as a result of the findings of that audit. UNR's medical school made a statement largely denying the allegations and emphatically said that the audit did not make findings or conclusions "related to Medicare fraud or abuse."

In light of these developments, MCI asked for limited post-trial discovery, but the district court denied the request. In addition, MCI filed a motion for new trial based on newly discovered evidence: namely, that Khiabani's job and medical license had potentially been in jeopardy. MCI argued that this situation, combined with other factors,¹ suggested that Khiabani's death was not accidental. MCI also argued that the jury's loss-of-financial-support award presupposed that Khiabani's job and earning capacity were stable at the time of his death. In addition to the newly discovered evidence issue, MCI argued that a new trial on the failure-to-warn claim was necessary because the jury was not asked to find causation linking any failure to warn to Khiabani's death and because the award was based on Khiabani's gross income. The district court denied the motion, agreeing with respondents that MCI had every opportunity before trial to seek discovery regarding Khiabani's continued employment and that MCI's other claims lacked merit. MCI appeals.

DISCUSSION

MCI claims that the district court erred in denying its motions for judgment as a matter of law, for a new trial, to alter or amend the judgment to offset the settlement proceeds paid by other defendants, and to retax costs. We address each in turn.

Respondents presented sufficient evidence for the causation element of the failure-to-warn claim, and thus the district court properly denied MCI's motions for judgment as a matter of law

MCI asserts that the district court erred in denying its motion and renewed motion for judgment as a matter of law because respondents presented insufficient evidence of the causation element of their failure-to-warn claim.² We review the district court's denial of such motions de novo. See Nelson v. Beer , 123 Nev. 217, 223, 163 P.3d 420, 425 (2007).

In Nevada, those bringing a failure-to-warn claim must demonstrate "the same elements as in other strict product liability cases." Rivera v. Philip Morris, Inc., 125 Nev. 185, 191, 209 P.3d 271, 275 (2009). One must show that "(1) the product had a defect which rendered it unreasonably dangerous, (2) the defect existed at the time the product left the manufacturer, and (3) the defect caused the plaintiffs injury." Id. In such cases, the lack of a warning functions as the relevant "defect." See id. "[S]trict liability may be imposed even though the product is faultlessly made if it was unreasonably dangerous to place the product in the hands of the user without suitable and adequate warning concerning safe and proper use." Lewis v. Sea Ray Boats, Inc., 119 Nev. 100, 107, 65 P.3d 245, 249 (2003) (quoting Outboard Marine Corp. v. Schupbach , 93 Nev. 158, 162, 561 P.2d 450, 453 (1977) ). "[T]he burden of proving causation can be satisfied in failure-to-warn cases by demonstrating that a different warning would have altered the way the plaintiff used the product or would have prompted [the] plaintiff to take precautions to avoid the injury." Rivera, 125 Nev. at 191, 209 P.3d at 275 (internal quotation marks omitted).

MCI contends that respondents did not prove causation as a matter of law for three reasons: (1) respondents did not propose what specific warning was absent, (2) any warning was superfluous because the potential for collisions with cyclists is an open and obvious danger, and (3) there was no evidence that Hubbard could have avoided the accident even if he had been warned. We agree with the...