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Email Smart adjusters have avoided paying a Plaintiff’s verdict and have recovered their own costs and attorney’s fees by properly using Offers of Judgment rules as a defense strategy, even where liability is adverse. However, a Nevada Supreme Court case could cause an unwary adjuster to undervalue the Offer of Judgment and thereby miss out on the advantages that are available under those rules. Don’t sabotage your position while using the Offer of Judgment strategy because you are unaware of this Supreme Court case.
Dugan vs. Gotsopoulos
A savvy adjuster will never overlook the issue of property damage when evaluating the case to decide on the right amount for an Offer of Judgment. The seriousness of learning this lesson is demonstrated by the recent Nevada Supreme Court case of Dugan v. Gotsopoulos, 117 Nev. 285, 22 P.3d 203 (2001).
This case involved a 1995 auto accident. The Plaintiff claimed personal injury and property damage. A repair estimate for the Plaintiff’s car, a 1988 Pontiac Firebird, totaled $2,800.00. The Plaintiff did not have the car repaired but continued to drive it in its post-accident condition. Over time, the condition of the car deteriorated until Plaintiff could no longer drive it.
At trial, the Judge prevented the Plaintiff from introducing several pieces of evidence. First, the Judge refused admission of testimony of the Plaintiff as to the value of her car and refused to allow the Plaintiff to submit information from the Kelly Blue Book to prove value. Second, the Judge would not allow the Plaintiff to introduce evidence of rental car costs to establish the value of her loss of use, even though the Plaintiff had not rented a car.
The Supreme Court overruled the trial court. The Supreme Court said that Ms. Dugan could testify from her own experience as to the value of her car. The Court also said that the Kelly Blue Book value was not inadmissible as hearsay.
The Supreme Court also said that an expert witness would not be necessary to prove loss of use damages. Instead, the Court said that Plaintiff could recover damages for the inconvenience of loss of use even if she did not rent a car. The Court said that if she had investigated the cost of renting a car, she could testify as to that amount and could recover loss of use for a reasonable period within which to repair the vehicle.
The Effect of the Dugan Case on Offers of Judgment
The Dugan case makes it much easier for Plaintiffs to introduce evidence about their property damage losses. Plaintiffs will be allowed to testify about the value of their own property. Plaintiffs will be allowed to introduce pages from the Kelly Blue Book about the value of a total loss. Additionally, assuming that they have done their homework, Plaintiffs will be allowed to testify about how much it would have cost them to rent a car and to recover that amount in damages, even if they have not rented a car.
Imagine for an instant the effect that this type of testimony will have on the final verdict in the case. If Plaintiff’s property damage claim has not been settled, Plaintiff will be able to testify that the car lost in the accident was valued at a certain amount. Plaintiff will then be able to show the jury the Kelly Blue Book. Finally, the Plaintiff will be allowed to quote the price of a rental car and argue that it would have been reasonable to have had a rental car for any number of days.
If the value of the personal injury portion of the case is small, the Dugan case gives the Plaintiff an opportunity to substantially effect the final verdict and thereby thwart the effect of the Defendant’s Offer of Judgment. Here is how it would happen.
As you know, in deciding whether the Defense has bettered its Offer of Judgment, the Judge will compare the Offer with the amount of the verdict. The Judge will not be able to decide whether the Offer was made based on the value of the personal injuries or just the property damage. The Judge will simply look at the Offer and compare it with the verdict. If the jury agrees with the Plaintiff’s testimony about the value of the car or the Kelly Blue Book, or the loss of use, those damages will be added into the verdict. If the adjuster’s Offer of Judgment is based on the amount of the personal injuries alone, the final verdict could potentially be much higher than the Offer of Judgment.
How to Avoid Sabotaging Your Offers of Judgment
The easy way to avoid sabotaging your own Offer of Judgment is to always consider the value the property damage in reaching the decision on how much to offer.
The first and easiest way to avoid a problem is to settle the property damage portion of the claim prior to determining how much you want to offer the Plaintiff by way of your Offer of Judgment. The best practice will be to get a Property Damage Release for the amount paid. That way, you can be readily assured that the matter is closed. Make sure that the release forecloses claims for all property losses, including loss of use.
If you are unable to get a Property Damage Release, you must be sure to include the value the of property damage as part of the Offer of Judgment amount. As you are deciding how much to offer by way of an Offer of Judgment, keep in mind that the Plaintiff will have almost free rein in telling the jury his or her opinion about the value of the property. You will need to arm your defense counsel with evidence to overcome what Plaintiff might say.
For example, you will want your attorney to have evidence to back up the arguments that you have made that loss is smaller than the Plaintiff believes. That might require the defense attorney to call a property damage adjuster to give testimony. The adjuster must also be prepared to testify about the price of comparable rental car. The adjuster will also need to discuss what is a reasonable period of time in which the repairs could take place or the time it would take for Plaintiff to find an alternative vehicle if the auto was a total loss. If the defense does not offer this type of evidence, the Plaintiff’s testimony will be the only evidence before the jury on the subject.
In Conclusion
Defendants and their carriers have done a good job of evaluating personal injury cases. The valuations have allowed carriers to take advantage of the Offer of Judgment rules, by not only depriving Plaintiffs of any recovery, but also giving the Defendants a chance to recover their attorney’s fees and costs. It would be a shame to let the time spent making these evaluations go to waste by not considering the value of the property loss before reaching a decision on how much to Offer.
The best practice is to settle the property loss before going to trial to save the time and money of preparing a defense of a property damage trial. If that can’t be done, make sure that you add in the value of the property damage to the Offer of Judgment.
Additional information on strategically implementing Offers of Judgment in Nevada litigation can be found by clicking HERE. We also encourage you to explore the “Categories” listed in the right column for related topics.
If you have any questions about the Offer of Judgment or any other litigation strategies, feel free to contact me at 702.240.6060 or by email.
— Mike Mills
About Michael Mills
