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Gidget Swanson claimed injury from a motor vehicle accident. She said that a red car hit her from behind and pushed her into the car ahead of her. She said that the red car drove away and was never identified. She presented an uninsured motorist claim to her auto insurance company Acuity. The claim was not resolved and went to trial.
At trial, a jury found Acuity liable for compensatory damages in the amount of $150,000. The jury said that Acuity had breached its contract with Ms. Swanson, that it had breached its covenant of good faith and fair dealing and that it had violated Nevada’s Unfair Claims Practices Act, NRS 686A.310(1). The jury also found that Acuity acted with oppression, fraud or malice with respect to its handling of the claim.
During the punitive damages phase of the trial, Plaintiff’s attorney called as a witness an attorney from its office. That attorney was first identified as a witness the night before trial. Acuity objected on numerous grounds, but the attorney was allowed to testify, without giving Acuity the requested opportunity to take the deposition of the attorney.
The attorney testified on three principal topics. First, the attorney testified regarding settlement negotiations between Acuity and Plaintiff. Second the attorney testified about prior lawsuits involving Acuity, unrelated to the Swanson claim. Finally, the attorney testified about what a typical punitive damage award should be.
In the decision of Acuity v. Swanson, 2023 Nev. Unpub. LEXIS 948, the Nevada Supreme Court allowed the compensatory damages verdict and the findings supporting punitive damages to stand. However, the Supreme Court ordered the matter to be remanded for a new punitive damages hearing.
The Court agreed with Acuity’s argument that the attorney was not timely disclosed as a witness and found that the late disclosure was not excused or justified. NRCP 16.1 and NRCP 37(c)(1). The Court said:
The purpose of discovery is to prevent surprises at trial. Washoe Cty. Bd. of Sch. Trs. v. Pirhala, 84 Nev. 1, 5, 435 P.2d 756, 758 (1968). If a witness is not timely disclosed, a district court may nonetheless permit the witness to testify if the failure to disclose is substantially justified or harmless. NRCP 37(c)(1). If the failure to disclose is not substantially justified, the party will not be able to use the improperly disclosed witness or information. Capanna v. Orth, 134 Nev. 888, 894, 432 P.3d 726, 733 (2018). Here, the disclosure was untimely, as Swanson identified Pfau the night before trial. Because Swanson does not substantially justify this late disclosure, we conclude that it was not excused.
Acuity v. Swanson, 2023 Nev. Unpub. LEXIS 948, *5-6
The Court said that the attorney could not testify that Acuity had rejected a settlement agreement proposed by Plaintiff as evidence supporting a punitive damages claim. NRS 48.105(1) and NRS 48.109(2). The Court said that the attorney should not be allowed to testify in the capacity of an expert providing a formula (that the jury followed by the way) as to how punitive damages should be calculated. NRS 50.025(1)(a)Finally, the Court said that the attorney should not be allowed to testify about prior cases involving Acuity. The information was irrelevant and highly prejudicial the Court said. NRS 48.035(1)
If you have questions about properly disclosing witnesses, please contact Mike Mills at 702.240.6060×114 or email him at mmills@blwmlawfirm.com.
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