The Letter of The Law: August 2013

IN THIS ISSUE:

INSURANCE: Defending Against Bad Faith Claims in Nevada

FAMILY LAW: Top 5 Myths About Divorce

Defending Against Bad Faith Claims in Nevada

By: Merielle Enriquez

Las Vegas, Nevada is a unique venue for civil litigation and insurance claims. In recent years, there has been concerted effort by some members of the Plaintiff's bar to immediately bring issues of bad faith into every personal injury claim possible by issuing arbitrary settlement demands of unreasonable amounts that are time limited. The Defense will benefit from recognizing certain tactics and knowing the proper response to such tactics.

A common scenario that occurs in the claims level and litigation process of personal injury matters in Las Vegas is the immediate issuance of a time limited demand for the policy limits, of an unreasonable time frame.

For example, driver one is hit by driver two in an automobile accident. Driver two has relatively high policy limits on their insurance policy ($100,000 per person in coverage or more.) Driver one's attorney sends a ten day time limited demand to driver two's insurance company for the policy limits and provides an inordinate amount of previously unproduced medical records. Plaintiff's attorney includes language in the correspondence demanding that the insurance company send a copy of the letter to their insured and insinuating that the insurance company is acting in bad faith if it fails to do so. The insurer is not in a position to respond within the timeframe, as liability is in dispute and the demand package is questionable as to medical causation. If the defense does not respond within the arbitrary time frame unilaterally set forth by Plaintiff's counsel, Plaintiff's counsel then alleges that any offer of the policy limits is too late and that the insurance company has acted in bad faith. Litigation ensues and Plaintiff's counsel drives up the costs, medical special damages during litigation, and demands for well in excess of the applicable policy limits.

Each particular case or claim has its own unique set of facts and no one response fits every situation. However, there are certain things an insurance carrier can do to minimize exposure to a future bad faith law suit. Nevada law does allow a direct insured to file a viable bad faith lawsuit against their insurer. Gunny v. Allstate Ins., 108 Nev. 344 (1992). Nevada law does not authorize third-party bad faith claims, but the insured can assign its rights on a potential bad faith lawsuit.

Keeping the insured informed about the details of the case is key, which includes notifying the insurer of any settlement demands. Allstate Ins. v. Miller, 125 Nev. 300 (2009). Nevada law does not treat the failure to accept an arbitrary, unreasonable in amount, and unreasonably time-limited settlement demand as bad faith. AAA v. Chau, 808 F.Supp.2d (D. Nev. 2010). In fact, an insurer has the right to conduct a fair and reasonable investigation of the claim and a mere disagreement in the value of a case is not sufficient grounds to establish bad faith on the part of the insurance company. Schumacher v. State Farm, 467 F.Supp.2d 1090 (D. Nev. 2006).

As such, the best defense against this Plaintiff's tactic is for the insurer to keep in steady communication with the insured, advise the insured of any settlement demands for the policy limits, engage in a fair and reasonable investigation of the alleged damages, keep an accurate record of any and all good faith attempts to settle this claim, and retain defense counsel to ensure that the insured's rights are being protected in the underlying claim or litigation.

Top 5 Myths About Divorce

By: Hoang-Anh Zapien

1) If we share 50/50 custody of our kids, neither parent has to pay child support.
False. Child Support is calculated using a mathematical formula that takes into account the gross earnings of each parent as well as each party's time share with the children. Therefore, even if the parties share 50/50 physical custody of the children, the parent who earns more money than the other will likely pay child support.

2) My divorce will be final 6 months after I file for divorce.
False. In the state of California, the earliest a divorce can be finalized is six months after the Petition was filed. This does not mean that all divorces are automatically final six months later. Rather, divorces can take up to a year and in some cases several years to complete. In addition to the six month time frame, all the family law state and local procedures must be completed prior to a judgment being entered to finalize the divorce.

Parties may decide to settle their divorce before the six month time frame has expired, but a judge will not sign the judgment finalizing the divorce until six months have passed.

3) My ex does not pay child support, so I do not have to let him/her visit our child.
False. Custody/Visitation and Child Support are two entirely different issues. Courts will always protect children's rights to have consistent contact with both parents. Therefore, parties are not entitled to withhold visitation because the other parent fails to pay their support obligation. If support is not being paid, speak with an attorney about going back to court to have the judge make orders to assist in collecting the unpaid support.

4) If I was married for over 10 years, I will collect spousal support for the rest of my life.
False. Spousal support is not guaranteed in any case. Courts must weigh relevant factors such as the age, health, and earning capacity of the spouse seeking support when determining an award of spousal support. California requires every individual to make a reasonable effort to become self-supporting within a reasonable amount of time. Simply because the parties were married for over ten years does not mean the party seeking support can live off spousal support the rest of their life. They must take reasonable steps to become self-supporting or a case could be made to terminate spousal support altogether.

5) My child support payment should be lowered because my expenses are too high.
False. California Courts adopted a guideline child support calculation in 1984, which factors in the gross incomes of the parents, timeshare each parent has with the children, as well as tax exemptions and filing status when determining the amount of child support a party owes. A party's expenses are not factored in when determining the child support due, because courts treat child support as the primary financial obligation that must be paid prior to any other bills.

Kring & Chung Partners Selected as "Top Attorneys" in O.C.
Congratulations to Kring & Chung Partners, Kyle D. Kring, Kenneth W. Chung, and Laura C. Hess on being selected as top attorneys in Orange County for 2013 by OC Register Metro Magazine. The issue comes out Monday, July 30th and will be distributed with the Orange County Register newspaper in nearly 140,000 homes and businesses throughout the region.

OC Register Metro obtains their list through contract with Avvo, a Seattle-based firm that ranks lawyers, using a mathematical model that considers years of experience, board certification, education, disciplinary history, professional achievement and industry recognition to rank attorneys.