MINUTES OF THE ASSEMBLY COMMITTEE ON JUDICIARY Sixty-eighth Session May 31, 1995 The Committee on Judiciary was called to order at 8:20 a.m., on Wednesday, May 31, 1995, Chairman Humke presiding in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. Bernie Anderson, Chairman Mr. David E. Humke, Chairman Ms. Barbara E. Buckley, Vice Chairman Mr. Brian Sandoval, Vice Chairman Mr. Thomas Batten Mr. John C. Carpenter Mr. David Goldwater Mr. Mark Manendo Mrs. Jan Monaghan Ms. Genie Ohrenschall Mr. Richard Perkins Mr. Michael A. (Mike) Schneider Ms. Dianne Steel Ms. Jeannine Stroth STAFF MEMBERS PRESENT: Dennis Neilander, Research Analyst Joi Davis, Committee Secretary OTHERS PRESENT: Joe Guild, Attorney at Law Ed Fend, American Association Retired Persons Ernest Nielsen, Attorney at Law, Washoe Legal Services Mary Liveratti, State of Nevada Division of Aging Services Myla Florence, State of Nevada Department of Welfare Betsy Kolkoski, State of Nevada Division of Aging Services Joe Johnson, private citizen Michael Bell, private citizen Despina Hatton, Attorney at Law, Senior Law Project Phil Galeoto, Lieutenant, Reno Police Department Chairman Humke announced a quorum was present and the committee would first consider Assembly Bill 585 noting Mr. Anderson had a bill draft request. B.D.R. 16-471 Authorizes counties to create departments of alternative sentencing. ASSEMBLYMAN ANDERSON MOVED FOR COMMITTEE INTRODUCTION OF B.D.R. 16-471. ASSEMBLYMAN BUCKLEY SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. * * * * * ASSEMBLY BILL 585 - Makes various changes to provisions prohibiting abuse, neglect and exploitation of older persons. Betsy Kolkoski, Chief of Elder Rights, State of Nevada Division of Aging Services, stated the Welfare Administrator, Myla Florence, and Mary Liveratti, Division of Aging Services would together present A.B. 585 as proponents of the bill. Ms. Kolkoski stated the division is requesting NRS 200.5091 be revised to better define the crime of elder abuse, to punish the wrongdoer, clarify the crimes of abuse, neglect, and exploitation against elders, and include penalties for abuse of powers of attorneys, and guardianships. Ms. Kolkoski declared since the printing of the bill there has been much confusion and concern about the drafting language in terms of the exploitation definition, specifically sections 1 and 2 of the bill. Further discussion regarding recommendations to these sections is contained in Ms. Kolkoski's prepared testimony attached hereto as (Exhibit C). She stated they would like to improve the monitoring and prosecution of elder abuse by having the coroner investigate the cause of death of an older person who has died as a result of abuse or neglect. The coroner's findings would then be sent to the Division of Aging Services and the district attorney. Ms. Kolkoski elaborated further on the intent behind A.B. 585 and concluded by stating they would like to see civil or criminal immunity extended to anyone who causes or conducts an investigation of elder abuse. Myla Florence, Administrator, State of Nevada Welfare Division, testified they support A.B. 585 with three minor amendments which would facilitate agency investigations. The amendments are included in her prepared testimony attached hereto as (Exhibit D). Ms. Florence remarked that normally when an investigation is commenced consent is obtained from the elderly person to review records. However, many times the elderly person is unable to give consent and there are no appointed guardians for the elder. Ms. Florence stated their amendment would allow investigators access to records for the sole purpose of determining if a complaint is valid. Further, another proposed amendment would allow the investigator to share information with the elderly persons' treating physician. Dennis Neilander, Senior Research Analyst, discussed the "flush rule" utilized in statutory construction in many states. Basically the rule prevents repetitive language. These comments were directed to Ms. Kolkoski's testimony with regard to the drafting of the bill and the definitions of abuse, neglect, and exploitation. Ms. Kolkoski replied she has discussed the matter with the Legislative Counsel Bureau (LCB) many times and she agrees. However, she was advised that it could be written either way. Mr. Neilander responded to re-write it would be in violation of the existing statutes but he would check with LCB. Mr. Carpenter expressed his concerns regarding the inspection of records without the elder's consent. He asked if that would be better accomplished by obtaining court approval. Ms. Florence stated the court process is cumbersome and time consuming and could impede the investigation. She reiterated the purpose of viewing the records would be for the sole purpose of determining validity of the complaint investigated. Mr. Carpenter asked if the agency can remove an elder from a potentially damaging situation. Ms. Florence stated this could be done with a court order adding that adult protective services are very different from child protective services. Ms. Ohrenschall stated southern Nevada agencies, including the Public Administrator, will immediately remove an elder sometimes without just cause. She then relayed a situation where this occurred and the removal was wrong. Ms. Florence stated the recommendation for the deletion of the word "written" in the bill as set forth in their amendments was at the request of the Las Vegas Metropolitan Police Department. She added the Public Administrators in southern Nevada have better access to judges whereas the same sort of access is not available in northern Nevada. Ms. Ohrenschall remarked she was in favor of protecting seniors but she was not in favor of presuming someone guilty until found innocent. She asked if what the Public Administrator is doing in southern Nevada could be expanding to the Division of Aging Services. Ms. Florence replied the investigating agency of abuse, neglect, and exploitation are State Welfare Division or a local, county protective service agency if one exists. Clark County is the only county with such an agency providing services to those over age 60 years who are not on welfare. The State Welfare Division provides the service for the remaining 16 counties in Nevada. Ms. Ohrenschall asked if the Public Administrator in southern Nevada was asked to testify on this bill. Ms. Kolkoski stated the Public Administrator was not asked to testify however he has been involved with the drafting of the bill since the inception. Chairman Humke informed Ms. Ohrenschall she could contact the Public Administrator outside the hearing and further indicated A.B. 585 would most likely be heading for a subcommittee. Mr. Anderson asked, with regard to Section 5 of the bill which discusses use of powers of attorney, if there could possibly be a misuse of these powers by family members of the elderly person and who makes the determination of the abuse or exploitation? Ms. Kolkoski stated the bill sets forth "undue influence" be coupled with the intention to "permanently deprive" so the division for aging services and Welfare in these cases would go to the police department and through them to the district attorney for investigation and prosecution. Mr. Anderson asked if the blood relationship alone is within the concept of "undue influence." Ms. Kolkoski stated the bill has sufficient protection for those persons with good intentions but would take care of and prosecute the bad apples, whether a blood relative or not. Further discussion was held in this regard between Mr. Anderson and Ms. Kolkoski. Mr. Anderson stated the "trust and confidence" issue has been met by the granting of the power of attorney. Ms. Kolkoski reminded the undue influence must be with the intention of permanently depriving the elder. Chairman Humke stated the material contained in Section 5 of the bill tends to shift the analysis the court goes through in an "undue influence" case in an estate matter. Now those same standards are being applied to the power of attorney matter and it is a high standard to be met with intent being proven. Ms. Kolkoski concurred and added her experience indicates the largest problem area is with powers of attorneys and guardianships. Mr. Carpenter stated he had similar concerns as Mr. Anderson pertaining to Section 5. Ms. Ohrenschall expressed her concern for individuals who care for their parents and someone may come along and determine they are not administering the appropriate level of care. Who determines what the best level of care is and does this mean all our seniors will be forced into nursing homes? Myla Florence, Nevada State Welfare, stated A.B. 585 does not have that intent. The first premise for elders is to have them as independent as possible. The level of care is ultimately determined by a physician in conjunction with the court. Sheila Smith, Deputy Attorney General, Welfare Division, stated the purpose of seeking the records of individuals not able to give consent is merely for the limited purposes of determining whether or not a complaint they have received is valid and would not be used for any other purpose. Ms. Ohrenschall asked how that would apply to a senior who has a joint tenancy in a bank account with other members of the family. Would that not be invading the privacy of those other family members? Ms. Smith reiterated the investigator would merely be looking at the account to view the claims concerning abuse, neglect, or exploitation in the complaint are valid. Ms. Kolkoski concluded by thanking the committee for their diligence and effort in reviewing the elder statutes and urged the committee to pass A.B. 585. Mr. Ed Fend, Chairman, American Association of Retired Persons (AARP), testified in support of A.B. 585. Mr. Fend stated laws have been provided during this legislative session to protect children and it is time to provide protection to elders and implement a range of penalties for crimes against elders. Mr. Fend's prepared testimony is attached hereto as (Exhibit E). Mr. Fend concluded other members from AARP were present to show their support but did not wish to testify. Despina Hatton, Attorney at Law, Senior Law Center, representing Washoe County residents over the age of 60, stated she was also testifying in support of counterpart in Las Vegas, Sherry Vogel. They both support A.B. 585 and they see the bill as being a tremendous help for their clientele. Chairman Humke announced Michael F. Bell, a private citizen of Carson City, was signed in to testify but needed to return to work. Mr. Bell provided his written testimony for the committee which is attached hereto as (Exhibit F). Phil Galeoto, Lieutenant, Reno Police Department, testified his department is in support of A.B. 585. He stated he sat on a panel last year wherein one of the primary goals from that panel was a recommendation to work on legislation to enhance the ability to protect senior citizens in the state of Nevada. A.B. 585 is a result of that effort. Mr. Galeoto acknowledged the concerns expressed by the committee members regarding the balance of civil rights versus the inability to protect senior citizens at times. However, A.B. 585 will provide the tools necessary when action needs to be taken. Mr. Galeoto informed he has personally investigated crimes against seniors and he is fully aware of the limitations placed on the state agencies. Further, the definition of exploitation on page 2, lines 31-35, places the same standards and rules of evidence as in other investigations and court cases and allows for immediate action due to fear of the safety of that individual. ASSEMBLY BILL 632 - Limits costs which are recoverable by landlord who enforces lien for unpaid rent. Despina Hatton, Attorney at Law, Senior Law Center, Washoe County, along with Joe Johnson, a lobbyist, and past legislator, and Ernest Nielsen, Attorney at Law, Washoe Legal Services, came forward to testify in support of A.B. 632. Mr. Johnson stated A.B. 632 is brought as a result of 1991 legislation dealing with mobile home liens. A problem arose surrounding the forms and notices involved with the lien process, specifically involving attorney's fees. However, the legislative intent from the 1991 legislation has been the subject of some confusion in that the original intent was to enable the owner of the mobile home park to prepare a simple form and notice of lien. A.B. 632, in part, addresses that issue. Ernest Nielsen stated he is the attorney for Washoe Legal Services which is a nonprofit law firm representing low income individuals in Washoe County. He stated he was involved in the 1991 legislation dealing with mobile home liens in addition to the current legislation of A.B. 632. Mr. Nielsen provided his prepared testimony and suggested changes to A.B. 632, attached hereto as (Exhibit G). Mr. Nielsen stated the purpose of A.B. 632 was to make the language in the statute consistent with the intent of the 1991 legislation. Particularly, the focus was on the transaction costs the attorney charges the park owner for filling out the notices and preparing the paperwork. The theory in 1991 was that the Department of Manufactured Housing would provide the forms to the park owners and the park owners would be filling them out themselves and therefore did not need attorneys. Mr. Nielsen went on to discuss the notice of lien procedure, time limits, fees and costs included therein. He added the tenant can challenge the lien process as little as five days after the second notice. Mr. Nielsen pointed out included in his testimony (Exhibit G) was a letter from Judge Kadlic which sets forth his position as most often awarding the landlord attorney's fees in lien situations that have been presented before his court. Mr. Nielsen stated the problem is the park owners still find difficulty in completing the forms and most often will hire an attorney to do so. He concluded they would be willing to work with their opposition as they do see some room for compromise on the issues involving this bill. Chairman Humke stated there were no questions for Mr. Nielsen at this time. Further, he announced, with regard to A.B. 585, the co-chairmen have appointed Mr. Anderson as subcommittee of one. Despina Hatton, Attorney, Senior Law Center in Reno, Nevada, testified prior to her position at the Senior Law Center she was the deputy attorney general for the Manufactured Housing Division so she has been dealing with the lien statutes for a long time. Ms. Hatton stated the majority of residents in mobile home parks are senior citizens. From time to time they may fall behind in their payments and if they are required to pay attorneys' fees of $350 on top of what they already owe, it becomes increasingly difficult to comply with the lien and they become subject to losing their home. Ms. Hatton advised the Division of Manufactured Housing, between July 1, 1994 and February 28, 1995, received 492 lien notices. Out of those, 102 went to notice of sale by auction. Many of liens include the routine charge of attorney's fees ranging from $90 to $350 total. Ms. Hatton concluded the inclusion of attorney's fees was inappropriate and not the intent of the lien statutes. If the notice of lien forms are creating the problem, then perhaps they can be revised. Ms. Hatton's prepared testimony is attached hereto as (Exhibit H). Ms. Buckley requested clarification that the bill would not limit the amount of attorney's fees the court could award in these cases. Ms. Hatton stated yes that was correct the bill only addresses the initial notice of lien not fees awarded in a court action. Ms. Buckley asked if courts award attorney's fees to the park owner based on the eviction action? Ernest Nielsen, Washoe Legal Services, responded if it is challenged the judge will routinely tag on the attorney's fees to the lien. Upon Ms. Buckley's inquiry, copies of the Notice of Lien, and Notice of Sale by Auction forms were distributed. Said notices are attached hereto as (Exhibit I). Ms. Monaghan asked if the amounts of liens filed from July, 1994 to February, 1995 as stated by Ms. Hatton included attorney's fees. Ms. Hatton stated she was not certain but she received information from Las Vegas involving claims from last month alone. She stated David Olshan from Nevada Legal Services and Connie Peacock reviewed 28 liens received in their office in May, 1995. Out of 28 liens, 14 included attorney's fees. Ms. Steel asked if an owner sells his mobile home to a buyer and thereafter the buyer falls behind in their rent, if they were to hire an attorney to go through the lien process, would they be able to obtain an award of attorney's fees even if they were disabled or elderly? Mr. Nielsen replied the lien deals with the relationship between the owner of the land and the person who owns the mobile home. So if you sell your mobile home to another party, this lien statute would not apply. It only applies to the mobile home park owner and the person who is not paying their monthly park payment. He concluded the 1991 legislation and discussions of other interested parties thereafter did not determine attorney's fees would be necessary in filling out the forms simply for the notice of lien. However, he acknowledged the persons representing the mobile home park owners indicate there is still some complexity in filling out the forms. Ms. Buckley commented there are many mobile home parks within her district and it is this state's public policy that is is appropriate for a person to come up with the back rent money. However, losing their home is a major loss so the question becomes how much attorney's fees should be added to the lien which may inhibit them from retaining their home. Ms. Buckley exponded somewhat on the homestead exemptions current within Nevada law. Further, Ms. Buckley disclosed she is an attorney with Nevada Legal Services on an unpaid leave of absence not now representing any clients. Mr. Carpenter declared he was a mobile home park owner and he finds it a hassle obtaining rent from individuals who fail to pay. When the tenant makes no effort to pay rent they almost have to go to a lawyer so that the lien process is accomplished correctly. In addition, Mr. Carpenter stated he does not find the seniors are the problem. In fact, the seniors are no problem at all. Mr. Nielsen concluded in 1991 the Legislature gave the responsibility to the Manufactured Housing Division to make the lien process simple through development of forms and instruction sheets. Apparently, that is not working. Mr. Nielsen reiterated they would be willing to work with the owners of mobile home parks on the language in A.B. 632 to address the issues on both sides. Joe Guild, Attorney at Law, representing the Nevada Mobile Home Park Owners Association, testified in opposition of A.B. 632 as presently drafted. Mr. Guild provided proposed amendments to the bill and a form utilized in the lien process. Those handouts are attached hereto as (Exhibit J). Mr. Guild introduced his legal assistant, Katherine Gregory, and Steve Marzullo, a lawyer from Las Vegas specializing in mobile home park matters. Mr. Guild drew the committees' attention to page two of the bill adding although he appears in opposition to this bill, he respects the views of Despina Hatton and Ernest Nielsen. Mr. Guild stated there are 28,000 mobile home park spaces in the state of Nevada. During the time period elucidated to earlier, there were 492 notices of liens filed in the entire state and only 102 notices of sale by auction. That means, the difference between the two were matters settled with no action and the rent was paid. Comparitively, these figures do not show a problem exists. Mr. Guild commented they are not in the business of taking homes away from people. They are in the business of enforcing the rights of landlords against tenants who do not pay their rent. Further, he could not recall the last time a senior citizen was involved in a lien to which he was involved--having performed approximately three to four liens per month. Mr. Guild stated the mobile home lien law, as far as he could see, was put into place because it is an item of personal property also the subject of a residential tenancy which creates an area of specialty. The lien law gives the landlord an absolute right of possession without judicial procedure. The reason is when tenants default on rent payments oftentimes the tenant will leave and sometimes move their home. Since the lien follows the coach the landlord does not have many remedies left. Most attorneys therefore will file a complaint for eviction under NRS 118B because if a lender is involved, they will not take possession when the cure is the back rent unless there has been an eviction. Mr. Guild stated the lien laws and the forms accompanying that procedure are not easy. He then directed the committee to his amendments (Exhibit J) attached hereto. Mr. Guild stated he was involved with the 1991 legislation in this regard and has worked with many people involved in the lien laws in the light of compromise. After dealing with the forms and the laws for the past three and one- half years, it has proven very difficult. Mr. Guild has even provided training to landlords so they would not have to hire an attorney during the process by completing the forms themselves. After doing it a couple times, the landlords will turn it back over to him because they find the entire process far too complicated. Mr. Guild discussed in further detail the Notice of Lien form and how the average lay person would be unable to fill out the form correctly. Lastly, Mr. Guild stated the lien laws set forth a requirement to provide notice of lien to all interested parties. This requires a title search through the Division of Manufactured Housing. However the form makes no mention of that requirement. Steven Marzullo, Attorney at Law, stated he represents 75 mobile home parks and does not find the need for A.B. 632 as he sees no alarming problem. He agreed with other testimony brought forth today that seniors are the most responsible payers in his parks. He clarified that a notice of sale by auction does not necessarily mean the mobile was sold as many get paid off at the last moment. In addition, compromises are made all the time, especially for seniors, who have come up with at least a major portion of the lien amount. Mr. Marzullo stated the need for attorney's fees can be shown by reviewing the statutes alone. At least three of the sections involved provide for reimbursement of costs. Mr. Marzullo went on to describe areas in the statutes which would not be made clear to the lay person. An attorney's involvement in the process would eliminate invalid fees from being filed as often. Mr. Marzullo clarified the lien process does not include attorney's fees for the eviction action. Yet, the eviction action is a prerequisite of doing the lien. Mr. Marzullo concluded he teaches courses throughout the state to managers of mobile home parks and no area causes more confusion than the area of liens. The calls he receives from judges and owners most often involve the lien laws so the inclusion of attorney's fees should remain. Ms. Buckley clarified Mr. Marzullo's testimony referring to the individual who has scraped up the money to pay the rent but perhaps does not have the money to pay the attorney's fees. Mr. Marzullo's comment was that is when a compromise takes place between most responsible people so the individual does not lose their home. Mr. Marzullo stated his testimony was that an attorney would be foolish not to take the money for back rent because if they went to court to fight that issue the judge would think they were crazy. Ms. Buckley stated she had no problem with park owners being able to claim attorney's fees since it is the cost of doing business. However, her concern is with the individual who has the rent money but cannot afford the extra attorney's fees and do not have an attorney to assist. Mr. Marzullo stated they would have legal aid or the Senior Law Center to aid them. Ms. Buckley pointed out the problem with that was Nevada Legal Services are only able to help 3% of the people who come into that office. Ms. Buckley continued her line of questioning by asking if he would consider amending the standard in the statute to allow the person to retain their home once they have tendered the rent money which still protects the park owners' rights to attorney's fees. Joe Guild, Attorney at Law, stated he would absolutely support that concept and he believes Mr. Marzullo would too. Further, the worst thing the landlord wants to do is take back a coach. Ms. Marzullo added he would be in agreement to that as long as it just applies to the residence and not the banks. Mrs. Monaghan asked if perhaps a time frame could be in place with regard to Ms. Buckley's suggestion so that you do not have an individual who drags things out to the last minute time and time again and two days before sale by auction they come up with the rent only. Mr. Guild stated he did not see any prevention of that happening by reiterating a story of one of his clients. Mr. Anderson commented if the notice of lien form could be perfected perhaps that would address the intent of the 1991 legislation and A.B. 632. Mr. Guild stressed he did not believe any form could be devised that a lay person could fill out and satisfy the dictates of the statutes as they are very complex and inconsistent. Catherine Gregory, Legal Assistant to Joe Guild, Attorney at Law, testified as to the specific procedure their office takes when a landlord calls with a non-paying tenant. First, they must obtain a title search. Second, they complete the Notice of Lien form and turn it into the Division of Manufactured Housing. The title search will indicate who is the registered owner, legal owner. The names of the tenant and the subtenant will be provided by the landlord. Notice is then provided to these persons along with any other interested persons. After approximately three months, the Notice of Sale by Auction can be filed. Ms. Gregory stated just because there is a notice of sale filed it does not mean the coach is sold. In fact, out of 102 notices of sale referred to earlier, their office would see approximately 20% of those actually go to sale. Ms. Gregory concluded there are many requirements involving time periods to both notice forms; however, the requirements are not provided on the form so the average person would not know how to properly complete the forms. Chairman Humke announced A.B. 632 would go to a subcommittee of Mr. Carpenter as Chairman and Ms. Buckley. The committee adjourned for a break at 10:25 a.m. and reconvened at 10:45 a.m. * * * * * B.D.R. 3-2111 Provides for the abatement of certain lewd activities as nuisances. ASSEMBLYMAN ANDERSON MOVED FOR COMMITTEE INTRODUCTION OF B.D.R. 3-2111. ASSEMBLYMAN BATTEN SECONDED THE MOTION. Ms. Steel asked what type of lewd activity the B.D.R. dealt with. Mr. Anderson stated it was dealing with prostitution, specifically obscene activities on sidewalks in Clark County and the distribution of leaflets and pamphlets. Chairman Humke brought the motion back to the floor for a vote. THE MOTION CARRIED. ASSEMBLYMEN CARPENTER, SCHNEIDER, AND SANDOVAL WERE NOT PRESENT. ASSEMBLY BILL 565 - Revises provisions governing granting of probation of parole to person convicted of harassment, stalking or crime constituting domestic violence. Chairman Humke announced a brief hearing would be held on A.B. 565. Mr. Anderson explained the co-chairmen were informed of a problem in getting the primary supporter of A.B. 565, a legislator from another state, present to testify and there was an oversight in the posting of the bill and another hearing on the bill will be heldd at a later date. Chairman Humke announced the hearing today would be continued to 6:30 p.m. in Room 332 to consider matters heard the week of May 29, 1995. There being no further business before the committee the meeting recessed until 6:30 p.m. Chairman Humke called the meeting to order at 6:40 p.m. by commencing with a subcommittee at that time announcing Assemblymen Batten and Schneider as excused. SENATE BILL 228 (FIRST REPRINT) - Revises provisions regarding enforcement of temporary and extended orders for protection against domestic violence. Chairman Humke announced, with regard to S.B. 228, he had been contacted by the domestic violence master from the Eighth Judicial District Court who informed him he had the approval of a judge from the Family Court Division to submit an amendment. That amendment was submitted on or about the day S.B. 228 was on second reading and the bill was then moved to the chief clerk's desk. Chairman Humke stated the effect of the amendment was to provide for civil service of process for temporary protective orders. However, in consultation with some of the domestic violence groups there is some concern as to whether the proposed amendment was needed so it is now the committee's choice. Ms. Stroth suggested Mr. Neilander may be of assistance because it may be addressed in Assembly Bill 378 which the committee has also been working on. Dennis Neilander, Senior Research Analyst, informed S.B. 228 affects the service of process and Section 5 of Assembly Bill 378 affects the issuance of the temporary protection order so there would be a new section to the bill. Mr. Anderson asserted it would appear that S.B. 228 is progressing through the process whereas Assembly Bill 378 is about to be reported from subcommittee so perhaps it would be better served for Assembly Bill 378 to continue through the process. Ms. Steel agreed that if the issue has been addressed in A.B. 378 and in S.B. 228 they should be put together in one bill. Chairman Humke asked for a show of hands if the committee wished to make the changes discussed regarding civil service of process to A.B. 378 and not to S.B. 228. A raise of hands indicated in the affirmative. Chairman Humke announced he would pull S.B. 228 off the chief clerk's desk on the next legislative day for processing. ASSEMBLY BILL 520 - Makes various changes to provisions relating to actions for medical malpractice. Chairman Humke noted Mr. Sandoval had amendments to A.B. 520 and asked him to provide the same to the committee. A copy of the proposed amendments is attached hereto as (Exhibit K). Mr. Sandoval went on to discuss the concepts behind the proposed amendments to A.B. 520, proceeding section by section. Mr. Sandoval stated Section 1 to A.B. 520 deals with the joint and several liability rule. The amendment indicates its application would be only to non-economic damages in medical malpractice cases rather than a global application. Upon discussion of this matter, Ms. Buckley stated after the few days of testimony held on A.B. 520 it has become apparent there is a need for more information in the closed claim study. Ms. Buckley expounded there was much testimony and information provided to the committee on this subject so perhaps a closed claim study would help the committee understand what is truly going on in the state of Nevada in this regard. Ms. Buckley declared she had some hesitation in making serious departures from existing law without knowing all the facts. For instance, during the hearing there was testimony indicating $50,000,000 was paid out in awards compared to $30,000,000 to defeat claims. She would like to have more factual data to substantiate the claim that the joint and several liability policy is what is escalating the medical malpractice premiums which in turn is what is escalating heath care costs. Mr. Anderson concurred a closed claim study was necessary; however, he would like some clarity with regard to Section 1 of the bill. Ms. Ohrenschall added she too would like clarification to Section 1. Chairman Humke stated the proposed amendments have been distributed between the two major groups for and against the bill and with the co-chairmen's concurrence, perhaps the two major groups, Nevada Trial Lawyers Association and the doctors' groups, could come forward to comment on the amendments only, not to add new testimony. Ms. Buckley asked if the amendments (Exhibit K) were as a result of negotiations between the doctors, lawyers, and the insurance companies. Chairman Humke stated the amendments were as a result of a meeting a couple days ago wherein the parties involved were asked to propose amendments to the co-chairmen by noon, May 31, 1995. Further discussion was held regarding the amendments. Bill Gregory, representing Nevada Coalition Allied Patients (NEVCAP) and Bill Bradley, representing Nevada Trial Lawyers Association (NTLA) came forward to respond to the proposed amendments (Exhibit K). Mr. Gregory stated they intended to submit amendments similar to those contained in (Exhibit K). However as he began to talk to the members about it, Mr. Sandoval stated he had some concerns and wanted to include his input. Mr. Gregory then decided they would change their amendments to reflect Mr. Sandoval's recommendations and they are in support thereof. Bill Bradley stated he was aware of the amendments and upon Chairman Humke's request, replied he was opposed to the amendments based on the past three days of testimony he has concerns as to why they are needed. In addition, pursuant to the meeting he attended a couple days ago with the co-chairmen, his understanding was that he was obligated to provide a copy of the closed claim study not amendments. Chairman Humke concurred. Chairman Humke announced perhaps the most appropriate way to deal with a closed claim study would be to recommend a resolution for an interim study rather creating a section in A.B. 520. Mr. Anderson concurred. Mr. Bradley stated it was his understanding NEVCAP has withdrawn the statute on caps for non-economic damages and withdrawn the cap on attorney's fees. Mr. Gregory agreed they would withdraw both provisions pertaining to contingency fee caps in A.B. 520. In addition, NEVCAP proposed amendments in A.B. 520 because they believe something needs to be done; however, they do support the concept of a closed claim study. Mr. Bradley, NTLA, commented the two cornerstones remaining are abolition of the collateral source rule and periodic payments. Therefore his testimony today would be similar to his opening presentation that if the goal of the legislation is reducing health care costs, retaining personal accountability, and frivolous lawsuits, he did not see any evidence that these goals would remain. Chairman Humke asked the two major groups involved in A.B. 520 (the doctors, and the trial lawyers) to limit their comments to the amendments rather than any type of rebuttal comments. Mr. Carpenter stated he agreed with the concept of a closed claim study but he believes there should be a definite plan on how it will commence and how it will be funded. Mr. Bradley discussed the closed claim study he provided through an independent consultant performing the Minnesota study to which the committee was provided a copy, attached hereto as (Exhibit L). Mr. Bradley indicated conversations he with leadership in both the Assembly and the Senate indicated a strong desire to approach the finance committees and ask for the money. Chairman Humke stated the consultant process should, in all fairness to the citizens of Nevada, go through some sort of a bid process. Mr. Gregory stated NEVCAP believes the closed claim study should be performed by an outside individual and, in addition to other items, should address 1) appropriateness of reserves held by malpractice insurers; 2) determine the reason for increases in physician medical liability payments; 3) the effect of non-economic damages on premiums; and 4) the amount of award received by plaintiff versus amount received by plaintiff's attorney. These items were submitted by Rick Bennett, Executive Director, NEVCAP for Mr. Gregory to read into the record. In reliance on the Minnesota Study, Mr. Bradley stated it was a comprehensive study. However, it is his understanding Mr. Bennett does not want to study the defense fees and he resents that. Upon Mr. Carpenter's inquiry, Mr. Bradley replied the Minnesota study cost between $50,000 to $75,000 total. Further discussion was held regarding who should pay for the study. Alice Molasky, Commissioner, Division of Insurance, stated they receive closed claims reports from physicians only. That data has not been compiled into a study for analysis due to insufficient staff. Ms. Buckley stated her short review of the Minnesota study would indicate the need for time lines on expenditures in the three page survey so that tracking of the amount of the demands, the offers, the costs, the settlements, and the verdicts would be made. Further, the Minnesota study does not have a screening panel and therefore that would be another necessary category to add to the closed claim study for Nevada. Mrs. Monaghan asked if the closed claim study would be a part of A.B. 520 or a resolution. Chairman Humke stated that had not been decided yet. Upon Ms. Monaghan's further inquiry, Mr. Bradley explained a closed claim study is where claims closed since the inception of the Medical Legal Screening Panel (MLSP) in 1985 are examined from when the insurance company first received notice of the injury until conclusion. They look at what kind of money was moved from profit accounts over to reserve accounts, etc. Alice Molasky, Commissioner, Division of Insurance, distributed a letter to the co- chairmen, attached hereto as (Exhibit M) which addresses the profitability of insurance carriers in Nevada and the NAIC study. Mr. Gregory added although he has not reviewed the Minnesota study in its entirety they support opening up the study to look at everything and the Legislative Counsel Bureau (LCB) could most likely develop a list of such items. Pat Cashill, attorney, NTLA stated they would be happy to submit a list of items to the LCB as swiftly as possible. Mr. Anderson stated if the bill is going to move forward, then the closed claim study should be part of the bill so they are not separated and lost along the way. Dennis Neilander, Senior Research Analyst, noted there was not a technical problem involved here as they were discussing the vehicle in which to include the closed claim study but it will have to have appropriations and therefore it will have to go to the money committees. Chairman Humke recaptured the discussions hereinabove pertaining to the closed claim study adding two options are available--that the study be made a part of A.B. 520 or that it be made a resolution and asked for thoughts from the committee. Mr. Anderson stated the closed claim was important yet parts of A.B. 520 and its amendments are important as well. Therefore, he does not want to see the study lost along the way so he would like to see them written together. Mrs. Monaghan agreed the closed claim study was essential however she would like to see another vehicle utilized other than including it in A.B. 520. Ms. Buckley stated she supported the idea of including the closed claim study in A.B. 520 because the public wants reform and if they see the bill amended with eliminations thereto it would be better to have the explanation that reform is not abandoned but rather seeking to find the responsible party prior to proceeding. Chairman Humke asked to ascertain the committees' desire to proceed with a closed claim study, excluding the decision of what vehicle will be utilized. ASSEMBLYMAN CARPENTER MOVED FOR A MOTION TO ADOPT THE CONCEPT OF A CLOSED CLAIM STUDY. ASSEMBLYMAN STEEL SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN GOLDWATER ABSTAINED. Chairman Humke announced, pursuant to testimony, both the primary parties will cooperate with Mr. Neilander and others from LCB to generate content for such a study. Upon Chairman Humke's direction, Mr. Sandoval proceeded with going through the amendments to A.B. 520, section by section. Beginning with Section 4(2), Mr. Sandoval asked for comments from the primary groups. Ms. Molasky had no comment with regard to that section. Mr. Bradley asked what lines 23-25 are attempting to address with regard to inadmissible evidence. Mr. Gregory stated he believes his clients' intent in Section 4(2) was an attempt to address all items for presentation to the MLSP out of fear that items were deliberately being withheld. Mr. Bradley stated that concern could be addressed in a different section of the bill and he has a problem with the language in this section. Chairman Humke stated testimony has revealed the MLSP has limited discovery. Further discussion was held regarding discovery and admissibility of evidence. Ms. Stroth added if the information was not available at the time of the MLSP but was later made known it could not be used in the discovery. However, in Assembly Bill 151, this committee amended that bill to include discovery of "known" information and perhaps that would be helpful in Section 4(2) of this bill. Chairman Humke commented on his understanding of this issue. Mr. Bradley stated Assembly Bill 151 is a criminal bill and there is a difference between criminal discovery and civil discovery. The original intent of the MLSP has been to review medical records, however, it has greatly extended beyond that but it still is not the final judge of the case. Further discussion was held in this regard. ASSEMBLYMAN CARPENTER MOVED THAT THE ITALICIZED LANGUAGE IN SECTION 4(2) OF A.B. 520 BE REMOVED. ASSEMBLYMAN ANDERSON SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMEN MONAGHAN AND STROTH VOTED NO. ASSEMBLYMAN GOLDWATER ABSTAINED. Mr. Sandoval moved to Section 5 of the bill considering the increase in number of panel members. The suggested amendment is to retain the number of panel members in northern Nevada to 40 and increase the number of panel members in southern Nevada to 60. ASSEMBLYMAN SANDOVAL MOVED TO ADOPT THE AMENDMENTS SUGGESTED FOR SECTION 5 OF A.B. 520 AS OUTLINED ABOVE. ASSEMBLYMAN MONAGHAN SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. Mr. Sandoval continued to Section 7(5) of the bill regarding the confidentiality of names of panel members. Mrs. Monaghan asked if the confidentiality could just be implemented immediately previous to the hearing rather than the entire time. Mr. Sandoval disclosed his role in relaying the suggested amendments should not be characterized as his support or opposition of the bill. Mr. Gregory stated his client would prefer to keep the language as is and the confidentiality was necessary for the entire time due to the pressure the lawyers and doctors may get from their colleagues. Ms. Molasky confirmed the names have always remained confidential due to a recent Attorney General Opinion. Mr. Carpenter agreed the provision should remain. ASSEMBLYMAN CARPENTER MOVED TO RETAIN SECTION 7(5) OF A.B. 520. ASSEMBLYMAN BUCKLEY SECONDED THE MOTION. Ms. Ohrenschall asked how the findings of the MLSP were accomplished. Specifically, does someone sign the written findings? Ms. Molasky stated none of the documents are signed. Each panelist has a single document where their finding is made and no names are identified. Chairman Humke brought the motion back to the floor for a vote. THE MOTION CARRIED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. Mr. Sandoval directed the attention of the committee to Section 8 of A.B. 520 dealing with tolling of the statute of limitations. Mr. Bradley stated his concern is the definition of a person is not included in the definition of a corporation and elaborated on the problems they may pose. Mr. Gregory supported Mr. Bradley's comments stating the intent behind this section was people bringing persons before the panel and then later naming partners or additional doctors at the time they file suit. Ms. Molasky stated they have no problem with this section of the bill. ASSEMBLYMAN CARPENTER MOVED TO RETAIN SECTION 8(4) OF A.B. 520. ASSEMBLYMAN STROTH SECONDED THE MOTION. Mr. Sandoval stated he would be voting in support of the motion however he wanted Mr. Bradley's concern clear on the record so if the language needed to be changed the bill drafters would be able to address the same. Chairman Humke brought the motion back to the floor for a vote. THE MOTION CARRIED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. Mr. Sandoval continued with the proposed amendments regarding the screening panel at Section 6(2)(b) requiring an affidavit by a medical expert to be filed with the allegations of the complaint. Mr. Gregory did not have a comment in this matter. Ms. Molasky, Division of Insurance, stated the way the provision is written it appears the insurance division would be responsible in determining whether the affidavit supports the allegations in the Complaint. In addition, it would appear the division would also have to determine if the person submitting the affidavit was in fact an expert. This would place the division in a quasi-judicial role. Chairman Humke agreed. Ms. Buckley concurred however acknowledged a medical expert opinion was necessary to proceed with a medical malpractice case but this type of affidavit would be difficult to obtain for a person of low income. Ms. Steel agreed enforcing an affidavit would most likely drive up the cost for many people going through the Medical Legal Screening Panel on their own. ASSEMBLYMAN CARPENTER MOVED TO DELETE SECTION 6(2)(b) OF A.B. 520. ASSEMBLYMAN STEEL SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. Mr. Sandoval continued to Section 6(4) stating there was not much controversy on this Section however he would like to hear comments from the witnesses. Ms. Molasky stated she has the same objections to the amendments to this Section as she had for the affidavit of expert whereby the Division of Insurance is being placed in the role of a fact finder. She concluded the suggestion that came forth in testimony regarding more efficient training of panelists would be more appropriate. In addition, she stressed there was a case a couple of years ago, Phelps v. Second Judicial District Court, 106 Nev. 917 (1990) which clearly set out that the panelists make these determinations. ASSEMBLYMAN SANDOVAL MOVED TO DELETE THE AMENDMENTS CONTAINED IN SECTION 6(4) OF A.B. 520 AT LINES 8-11 AS WELL AS THE ITALICIZED LANGUAGE ON LINE 13. ASSEMBLYMAN CARPENTER SECONDED THE MOTION. Mrs. Monaghan asked if the language could be changed from "division" to "panel." Ms. Molasky stated that determination is already in existing language. Mr. Gregory, NEVCAP, mentioned they would support any provision establishing better training of panel members. Mrs. Monaghan asked where the training portion is contained in the bill. Mr. Bradley stated the training language is already contained in the Division of Insurance regulations. Ms. Molasky added NRS 41A.024 requires the Division arrange training for each panelist before he or she sits on a panel. Her suggestion would be that the associations affected by this develop an effective training program. Mr. Bradley added video-training has been utilized in the past however the videotape so established was missing. Chairman Humke brought the motion back to the floor for a vote. THE MOTION CARRIED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. Mrs. Monaghan asked if it would be appropriate to do a letter of intent since they are not involved in the regulations. ASSEMBLYMAN MONAGHAN MOVED THE COMMITTEE TO PREPARE A LETTER OF INTENT TO THE DIVISION OF INSURANCE TO ADDRESS THE CONCERNS OF TRAINING OF PANEL MEMBERS. ASSEMBLYMAN BUCKLEY SECONDED THE MOTION. THE MOTION CARRIED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. Mr. Sandoval directed the committee to Section 2(3) of A.B. 520 dealing with the "immunity" for OB-GYN professions and recommended deletion of the same. ASSEMBLYMAN ANDERSON MOVED TO DELETE SECTION 2(3) OF A.B. 520. ASSEMBLYMAN CARPENTER SECONDED THE MOTION. In discussion, Mr. Gregory of NEVCAP stated they would support the above motion. Mr. Anderson and Mr. Carpenter set forth their concerns for the possible misuse involved in that provision. Further, the closed claim study would most likely bring forth more information in this area. Mrs. Monaghan stated she would not support the deletion of Section 2(3) of the bill as she finds it one of the best portions of the bill and only addresses "labor and delivery" emergency instances. Further discussion was held regarding concerns of the committee to this section. Mrs. Monaghan stated she would prefer to see the language worked out. Mr. Gregory, NEVCAP, concurred he supported the above motion because he did not see the votes. However, he would prefer to work on language in the section as it was intended to protect the doctor who has never seen the individual and does not know the care of the mother for the past nine months. Mr. Carpenter stated, after listening to Mrs. Monaghan's argument, perhaps there was something within the section that could be salvaged so perhaps this section could be brought back to another work section after working with the trial lawyers. Mr. Bradley stated the MLSP deals very well with the few types of these claims they see so immunity to OB-GYN physicians should not be given. Chairman Humke asked the maker of the motion, Mr. Anderson, if he would like to restate his motion. Mr. Anderson stated he would prefer to retain his motion. Mr. Carpenter, the seconder declined. ASSEMBLYMAN ANDERSON RESTATED HIS MOTION TO DELETE SECTION 2(3) OF A.B. 520. There being no seconder to the motion, the motion failed. ASSEMBLYMAN MONAGHAN MOVED TO APPROVE SECTION 2(3) OF A.B. 520 IN ITS ENTIRETY. ASSEMBLYMAN STROTH SECONDED THE MOTION. Ms. Buckley opposed the motion stating the section needs work. Ms. Ohrenschall concurred the language needed to be looked at in greater detail before the section is ready for passage. Mrs. Monaghan withdrew her motion and the seconder Ms. Stroth agreed. In discussing Section 4 of the bill dealing with the immunity to retired physicians, Mr. Bradley commented there was a bill in the Senate that gives the retired, voluntary physicians treating indigents absolute immunity. Mr. Bradley stated that bill has passed the Senate Judiciary committee. Mr. Anderson suggested leaving the section as it is for the time-being. Mr. Anderson noted the suggested amendments indicate Sections 3, 9, & 10 are to be deleted so perhaps the committee could handle them all in a single motion. Chairman Humke stated that would be appropriate and asked the parties to confirm they had stipulated to the deletion of the above sections. Mr. Gregory, NEVCAP agreed to the deletion of Sections 3, 9, & 10. Mr. Bradley, NTLA likewise agreed. ASSEMBLYMAN ANDERSON MOVED TO DELETE SECTIONS 3, 9, & 10 OF A.B. 520. ASSEMBLYMAN OHRENSCHALL SECONDED THE MOTION. Mrs. Monaghan stated she would be voting no to the above motion not necessarily out of opposition but rather she was not ready to vote at this time simply because of the lateness of the hour. Mr. Anderson clarified his motion was in light of the fact the interested parties have both agreed and stipulated to delete these sections of the bill and had nothing to do with the lateness of the hour. However, he would be more than happy to proceed section by section to allow for further discussion. Chairman Humke asked the committee how they would feel about breaking the sections into separate motions and proceeded as such with Mr. Anderson withdrawing his previous motion. ASSEMBLYMAN ANDERSON MOVED TO DELETE SECTION 3 OF A.B. 520 WHICH DEALS WITH THE CAP ON ATTORNEY'S FEES. ASSEMBLYMAN OHRENSCHALL SECONDED THE MOTION. Ms. Ohrenschall recapitulated that the parties have generally agreed a closed claim study is essential and this issue would be revealed in such a study. Chairman Humke brought the motion back to the floor for a vote. THE MOTION CARRIED. ASSEMBLYMAN MONAGHAN VOTED NO. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. * * * * * ASSEMBLYMAN ANDERSON MOVED TO DELETE SECTION 9 OF A.B. 520 WHICH DEALS WITH THE STATUTE OF LIMITATION PROVISIONS. ASSEMBLYMAN CARPENTER SECONDED THE MOTION. Mr. Anderson reiterated this matter would most likely be part of the closed claim study as well. Ms. Steel recalled there was in depth discussion regarding the reduction of statute of limitations and the practicality of doing so and that bill was indefinitely postponed by this committee. Therefore, she concurred with the motion. Chairman Humke brought the motion back to the floor for a vote. THE MOTION CARRIED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. * * * * * ASSEMBLYMAN ANDERSON MOVED TO DELETE SECTION 10 OF A.B. 520 WHICH DEALS WITH PUNITIVE DAMAGES. ASSEMBLYMAN OHRENSCHALL SECONDED THE MOTION. In discussion, Mr. Anderson stated this area would hopefully also be a part of the closed claim study. Mr. Bradley, NTLA, stated he did not believe there was even one case that would show an award of punitive damages in a medical malpractice case in this state. Mrs. Monaghan recalled discussion to retain the provision adding a requirement the punitive damage awards be delegated to the "rainy day" fund. ASSEMBLYMAN MONAGHAN MOVED TO AMEND THE MOTION TO DELETE SECTION 10 OF A.B. 520 TO ALLOW PUNITIVE DAMAGES IF PAID GO TO A NON-GENERAL FUND OF THE STATE OF NEVADA RATHER THAN AS DESIGNATED PRESENTLY FOR THE INDIGENT MEDICAL FUND. ASSEMBLYMAN ANDERSON SECONDED THE MOTION, AT THE INDULGENCE OF CHAIRMAN HUMKE. Ms. Steel suggested since there are no punitive damages awarded in medical malpractice cases perhaps a "rainy day" fund for punitive damages in other matters would be more appropriate in a place where it would come to fruition. Chairman Humke brought the motion back to the floor for vote. THE MOTION FAILED. ASSEMBLYMEN MONAGHAN AND HUMKE VOTED YES. ASSEMBLYMAN GOLDWATER ABSTAINED. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. * * * * * Chairman Humke brought the previous motion to delete section 10 back to the floor for a vote. THE MOTION CARRIED. ASSEMBLYMAN MONAGHAN VOTED NO. ASSEMBLYMAN PERKINS WAS NOT PRESENT FOR THE VOTE. ASSEMBLYMAN GOLDWATER ABSTAINED. There being no further business before the committee the meeting adjourned at 9:07 p.m. RESPECTFULLY SUBMITTED: ___________________________________ Joi Davis, Committee Secretary APPROVED BY: Assemblyman Bernie Anderson, Chairman _______________________________________ Assemblyman David E. Humke, Chairman Assembly Committee on Judiciary May 31, 1995 Page