Valley Health Sys., LLC v. Eighth Judicial Dist. Court of Nev.
| Decision Date | 01 June 2022 |
| Docket Number | 84330 |
| Citation | 510 P.3d 777 (Table) |
| Parties | VALLEY HEALTH SYSTEM, LLC, d/b/a Centennial Hills Hospital Medical Center ; Greenberg Traurig, LLP; UHS of Delaware; and Tak-Ying Sheffield, R.N., Petitioners, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, IN AND FOR the COUNTY OF CLARK; and the Honorable Nadia Krall, District Judge, Respondents, and Raymond Bellavance; and Robin Bellavance, Individually and as Co -Guardians of Joseph Bellavance, a Protected Person, Real Parties in Interest. |
| Court | Nevada Supreme Court |
John H. Cotton & Associates, Ltd.
Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC/Las Vegas
Lipson Neilson P.C.
Greenberg Traurig, LLP/Las Vegas
Peterson Baker, PLLC
The Gage Law Firm, PLLC
Claggett & Sykes Law Firm
This original petition seeks a writ of mandamus or prohibition directing the district court to vacate discovery orders and assigning the case to a different district court department.
Real parties in interest Joseph Bellavance and his parents (collectively, Bellavance) sued petitioners Valley Health System, LLC (VHS) d/b/a Centennial Hills Hospital Medical Center (CHH) and Tak-Ying Sheffield, R.N., after Joseph suffered severe brain damage following a brain surgery
. The medical records that Bellavance obtained from CHH before suing, and those that CHH thereafter produced under NRCP 16.1, omitted Joseph's post-surgical assessment and treatment records. The omission did not come to light until deposition discovery was underway. When it did, counsel for CHH contacted the electronic record provider and supplemented its prior productions with what CHH maintains are the omitted records. CHH also offered to reimburse Bellavance for the expense associated with redoing the discovery that had taken place without the complete records. CHH also did not disclose all relevant insurance policies and, after several conferences, CHH supplemented these disclosures as well.
Asserting that CHH's untimely and incomplete productions prejudiced their case, Bellavance filed a motion requesting an "Order of sanctions against CHH and striking its Answer and defenses in accordance with NRCP 37." Up to that point, CHH was represented by a local medical malpractice firm as trial counsel. Thereafter, additional CHH counsel, petitioner Greenberg Traurig, LLP, sent a letter authored by attorney Jacob Bundick to Bellavance explaining that the medical record production was inadvertently incomplete due to a variety of issues related to the methods and processes CHH used to identify and gather the relevant documents from the electronic record provider. That letter included yet additional documents CHH found via new search methods and processes and attempted to explain the earlier incomplete productions and the variations in some of the documents.
CHH filed an opposition to Bellavance's sanction motion. In addition to generally arguing against sanctions for failing to disclose the medical records given that it asserted that it had now provided Bellavance a complete set, CHH also posited that sanctions were not warranted to deter future conduct regarding the failure to disclose relevant insurance policies because "CHH and its subsidiaries have had over 346 cases filed against them" in the previous two years with no discovery sanctions. This prompted Bellavance to ask the court to direct CHH to produce the initial disclosures from those 346 cases, arguing that the information was needed to determine the sanctions necessary to deter similar future conduct. The district court orally granted Bellavance's request and set the matter for an evidentiary hearing "on the issue[s] of the medical records and their alteration, and ... the insurance polic[ies]," and "to determine what, if any, sanctions" to impose.
Bellavance issued and served subpoenas on Bundick and his assistant, requiring them to testify at the hearing. Greenberg Traurig moved to quash the subpoenas, and CHH moved to reconsider the hearing's scope as it pertained to insurance disclosures in other CHH cases. CHH included an affidavit from Bundick wherein he claimed that he made an error as to the 346 cases, stating that number represented the cases that petitioner UHS of Delaware and all of its subsidiaries had been involved in, not CHH specifically. By its motion, CHH sought to limit the hearing and its production obligation to only cases involving CHH.
The district court orally addressed CHH's motion at the start of the evidentiary hearing. The district court limited the disclosures from CHH's other cases to only those in Nevada involving CHH and VHS. But the district court refused to quash Bundick's and his assistant's subpoenas, citing its concern that Bundick had misrepresented to the court when he and his firm became involved in the case and his client's insurance-disclosure and sanction record in other cases. In making its rulings, the district court found that (1) by writing the letter explaining the updated medical records disclosures, Bundick put privileged communications at issue, waiving the work product and attorney-client privileges and making himself a witness in the case, and (2) that the crime-fraud exception to the attorney-client privilege applied.
The evidentiary hearing proceeded and Bellavance called Bundick as a witness. CHH and Greenberg Traurig (who had its own counsel appear) objected numerous times during Bundick's questioning based on attorney-client and work-product privileges. Despite the court overruling these objections, the parties agreed to pause Bundick's testimony and instead call the witness who assisted CHH in obtaining and producing what it represented to be Bellavance's entire medical file from the electronic medical records provider. The second day of the hearing ended in the middle of that witness's testimony, and petitioners filed a writ petition with this court regarding the privilege issues. After we directed the district court to enter written orders regarding its decisions, the district court entered an order granting in part and denying in part CHH's motion for reconsideration of the scope of the evidentiary hearing, and an order denying Greenberg Traurig's motion to quash the subpoenas for Bundick and his assistant. Both orders stated that CHH's counsel had violated Nevada's Rules of Professional Conduct. Now before us is petitioners’ supplemental petition which asks us to vacate these orders. As directed, Bellavance has filed an answer and petitioners have filed a reply. Further proceedings on the sanctions hearing have been stayed pending decision on the writ petition.
Petitioners’ main contention is that the district court abused its discretion in concluding that attorney-client and work-product privileges were waived. A writ petition is the proper mechanism for petitioners to seek relief as to this issue. While we rarely consider petitions challenging discovery orders, consideration here is appropriate because the district court deemed certain privileges waived and, "once information is produced, any privilege applicable to that information cannot be restored."1 Valley Health Sys., LLC v. Eighth Judicial Dist. Court, 127 Nev. 167, 169, 252 P.3d 676, 677 (2011) ; see also Canarelli v. Eighth Judicial Dist. Court, 136 Nev. 247, 250, 464 P.3d 114, 119 (2020) (). And we disagree with Bellavance that the issue is moot due to Bundick and his assistant having completed their testimony because, in light of the district court's orders, nothing prevents Bellavance from recalling them or otherwise delving into privileged information. See Personhood Nev. v. Bristol, 126 Nev. 599, 602, 245 P.3d 572, 574 (2010) ().
Petitioners’ challenge to the district court's findings that counsel violated the Nevada Rules of Professional Conduct is also appropriately raised by writ petition. See Valley Health Sys., LLC v. Estate of Doe, 134 Nev. 634, 638, 427 P.3d 1021, 1026 (2018) (). We will consider petitioners’ remaining argument, whether the district court abused its discretion in entering orders against Sheffield and UHS, in the interest of judicial economy. See City of Mesquite v. Eighth Judicial Dist. Court, 135 Nev. 240, 243, 445 P.3d 1244, 1248 (2019) ().
Waiver of privileges
In its order denying Greenberg Traurig's motion to quash Bellavance's subpoenas of Bundick and his assistant, the district court concluded that petitioners had waived both attorney-client and work-product privileges on two grounds: the crime fraud-exception and the at-issue exception. We address each in turn.
Crime-fraud exception
NRS 49.115(1) sets forth the crime-fraud exception to attorney-client privilege: "There is no privilege under NRS 49.095 or NRS 41.105 ... [i]f the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit what the client knew or reasonably should have known to be a crime or fraud."2 For the statutory exception to apply, the party asserting the crime-fraud exception "has the burden of making a prima facie showing that the communications were in furtherance of an intended or present illegality ... and that there is some relationship between the communications and the illegality." In re Grand Jury Proceedings , 87 F.3d 377, 380 (9th Cir. 1996) (alteration in original) (quoting United States v. Laurins, 857 F.2d 529, 540 (9th Cir. 1988) ). The moving party cannot "merely ... allege that it has a sneaking suspicion the client was engaging in or intending to engage in a crime or fraud when it consulted the attorney." Id. at 381. The district court must instead "find reasonable cause to...
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