Valley Health Sys., LLC v. Estate of Doe

• Decision Date: 27 September 2018
• Docket Number: No. 71045,No. 70083,70083
• Citation: 427 P.3d 1021
• Parties: VALLEY HEALTH SYSTEM, LLC, a Nevada Limited Liability Company, d/b/a Centennial Hills Hospital Medical Center; and Universal Health Services, Inc., a Delaware Corporation, Appellants, v. ESTATE OF Jane DOE, BY AND THROUGH its Special Administrator, Misty PETERSON, Respondent. Hall Prangle & Schoonveld, LLC; Michael Prangle, Esq.; Kenneth M. Webster, Esq.; and John F. Bemis, Esq., Petitioners, v. The Eighth Judicial District Court of the State of Nevada, in and for the County of Clark; and the Honorable Richard Scotti, District Judge, Respondents, and Misty Peterson, as Special Administrator of the Estate of Jane Doe, Real Party in Interest.
• Court: Nevada Supreme Court

427 P.3d 1021

VALLEY HEALTH SYSTEM, LLC, a Nevada Limited Liability Company, d/b/a Centennial Hills Hospital Medical Center; and Universal Health Services, Inc., a Delaware Corporation, Appellants,

v.ESTATE OF Jane DOE, BY AND THROUGH its Special Administrator, Misty PETERSON, Respondent.

Hall Prangle & Schoonveld, LLC; Michael Prangle, Esq.; Kenneth M. Webster, Esq.; and John F. Bemis, Esq., Petitioners,

v.The Eighth Judicial District Court of the State of Nevada, in and for the County of Clark; and the Honorable Richard Scotti, District Judge, Respondents,andMisty Peterson, as Special Administrator of the Estate of Jane Doe, Real Party in Interest.

No. 70083

No. 71045

Supreme Court of Nevada.

FILED SEPTEMBER 27, 2018

As Corrected October 1, 2018

Bailey Kennedy and Dennis L. Kennedy, Joseph A. Liebman, and Joshua P. Gilmore, Las Vegas; Hall Prangle & Schoonveld, LLC, and Michael E. Prangle, Kenneth M. Webster, and John F. Bemis, Las Vegas, for Appellants/Petitioners.

Murdock & Associates, Chtd., and Robert E. Murdock, Las Vegas; Eckley M. Keach, Chtd., and Eckley M. Keach, Las Vegas, for Respondent Estate of Jane Doe and Real Party in Interest Misty Peterson, Special Administrator.

Adam Paul Laxalt, Attorney General, Ketan D. Bhirud, General Counsel, Gregory L. Zunino, Bureau Chief of Business and State Services, and Jordan T. Smith, Assistant Solicitor General, Carson City, for Respondents the Eighth Judicial District Court and The Honorable Richard Scotti, District Judge.

BEFORE THE COURT EN BANC.

OPINION

By the Court, HARDESTY, J.:

In this consolidated direct appeal and original petition for a writ of mandamus, we consider an order in which the district court sanctioned a party for discovery violations and found that the party’s attorneys violated Nevada Rule of Professional Conduct 3.3(a)(1) by making a false statement of fact or law to the district court.

First, we conclude that the district court acted within its discretion when it sanctioned the party. Second, we are asked to decide whether a district court’s citation to the RPC in support of a determination of attorney misconduct causes reputational harm that amounts to a sanction. Because we hold that it does, we entertain the writ but conclude that the district court correctly determined that the attorneys violated RPC 3.3(a)(1). We thus affirm the district court order and deny the writ petition.

FACTS AND PROCEDURAL HISTORY

In May 2008, appellants Valley Health System, LLC, d/b/a Centennial Hills Hospital Medical Center, and Universal Health Services, Inc. (collectively, Centennial) hired Steven Farmer as a certified nurses' assistant (CNA). Centennial had a contractual agreement with American Nursing Services to provide hospital staff, including CNAs, to Centennial. Jane Doe was a patient at Centennial during the time Farmer was employed there. On May 14, 2008, Farmer sexually assaulted Doe in her hospital room.

On May 15 and 16, 2008, Farmer sexually assaulted another patient, R.C., at Centennial. The assault was reported to Centennial, and Centennial began an internal investigation, hiring petitioners (collectively, Hall Prangle) as part of the investigation. While investigating the assault involving R.C., the attorneys from Hall Prangle interviewed several nurses employed at Centennial, including Margaret Wolfe in June 2008, Christine Murray in July 2008, and Ray Sumera in August 2008. Nurses Wolfe and Murray each gave statements to the Las Vegas Metropolitan Police Department (LVMPD) regarding the R.C. incident in May and June 2008, respectively. In their police statements, the nurses explained that they had raised concerns about Farmer before his assault on Doe because (1) he was overly attentive to female patients, (2) Farmer was anxious to perform procedures where female breasts would be exposed and possibly touched, and (3) Farmer was involved in an incident wherein an elderly woman Farmer was attending to yelled, "Get outta here! I don't want you by me!" During the course of the investigation of the R.C. incident, several of Centennial’s supervisory employees revealed that they had knowledge of the police reports and the nursing staff’s concerns about Farmer.

R.C. filed a complaint against Centennial and Farmer in September 2008 alleging claims of sexual assault, negligence, intentional infliction of emotional distress, negligent misrepresentation, and false imprisonment. After the R.C. incident became public, Doe reported Farmer’s sexual assault against her. Doe filed a lawsuit against Centennial in July 2009 for negligent failure to maintain the premises in a safe manner and vicarious liability for Farmer’s actions. Centennial retained Hall Prangle to represent it in the Doe case in August 2009.

Prior to the early case conference that was held in November 2009, Centennial filed an initial list of witnesses and documents pursuant to NRCP 16.1. The initial disclosures did not identify nurses Wolfe, Murray, or Sumera as persons with knowledge of relevant facts and did not disclose the existence of the police statements.

In September 2014, Doe filed a motion for summary judgment regarding liability, arguing that Centennial was strictly liable for Farmer’s assault. Centennial, through Hall Prangle, filed an opposition to Doe’s motion for summary judgment, arguing that strict liability did not apply because "Farmer’s actions weren't reasonably foreseeable under the facts and circumstances of th[is] case." As part of their foreseeability argument, Centennial cited to and summarized our decision in Wood v. Safeway, Inc ., 121 Nev. 724, 121 P.3d 1026 (2005), stating that "the Nevada Supreme Court concluded that ... because the assailant had no prior criminal record in the United States or Mexico, and because there w[ere] no prior complaints against the assailant for sexual harassment, that it was not reasonably foreseeable that the assailant would sexually assault a Safeway employee." Based on its interpretation of Wood, Centennial argued that "[i]n the instant situation, there were absolutely no known prior acts by Mr. Farmer that could potentially put Centennial Hills on notice that Mr. Farmer would assault a patient." The district court denied Doe’s motion, finding that there was a genuine issue of material fact regarding liability, especially whether Farmer’s misconduct was reasonably foreseeable.

In April 2015, Centennial, through Hall Prangle, filed a writ petition in this court challenging the district court’s order granting in part a motion for summary judgment. In explaining the factual and procedural history of this case, Centennial again explained that it "relied upon this [c]ourt’s decision in Wood v. Safeway, Inc., 121 Nev. 724, 737, 121 P.3d 1026, 1035 (2005), and urged that there were no known prior acts or any other circumstances that could have put Centennial Hills on notice that Farmer would sexually assault Ms. Doe." We denied the writ petition, determining that Centennial’s right to appeal following trial precluded extraordinary intervention. See Valley Health System, LLC v. Eighth Judicial Dist. Court, Docket No. 67886 (Order Denying Petition for Writ of Mandamus or Prohibition, May 20, 2015).

In October 2014, the discovery commissioner ordered Hall Prangle to produce a file provided to them by the LVMPD concerning the Farmer investigation. Doe learned of the nurses' police statements through the LVMPD file provided to them in 2015.

Doe filed a motion for NRCP 37 sanctions related to Centennial’s nondisclosure of the three nurses who had been interviewed during the internal investigation as well as their statements to police, seeking to establish that Farmer’s misconduct was reasonably foreseeable to Centennial as a matter of law. After briefing and oral argument, the discovery commissioner recommended full admission of the nurses' police statements, that Centennial pay a monetary sanction, and that the district court conduct an evidentiary hearing to determine whether (1) case-terminating sanctions were appropriate based on Centennial’s failure to disclose witnesses, (2) it was Centennial’s intention to thwart the discovery process and hinder Doe from discovering the relevant facts, and (3) Centennial misled the court. The discovery commissioner also recommended that the sanctions be reduced if Centennial could prove with a degree of probability that they had no knowledge of the witnesses until recently.

In its order setting the evidentiary hearing, the district court informed Hall Prangle and Centennial of the scope and purpose of the hearing, stating that it was considering case-terminating sanctions, whether there was intent to thwart the discovery process, and whether the defendants misled the court. Following the evidentiary hearing, the district court found the following:

based on evidence that this [c]ourt considers to be clear and convincing, Centennial intentionally and willfully (a) violated its discovery obligations under NRCP 16.1 in failing to timely disclose that nurses Murray, Wolfe, and Sumera possessed relevant and material evidence relating to the central issue in this case—whether it was reasonably foreseeable to Centennial that Mr. Farmer would commit a criminal sexual assault on a patient; and (b) violated its duty under NRCP 16.1 to timely disclose the [p]olice [s]tatements which also contained relevant and material evidence relating to the same central issue.

The district court sanctioned Centennial pursuant to NRCP 37 by striking its answer, thereby establishing liability against Centennial, allowing it only to litigate the damages, and ordering Centennial to pay $9,000 to Doe’s counsel and $9,000 to Legal Aid of Southern Nevada. As part of its finding that Centennial willfully violated its disclosure obligations, the district court also determined that Hall Prangle violated Rule 3.3 of the Nevada Rules of Professional Conduct by incorrectly representing that it had not withheld any relevant evidence.

Hall Prangle and...