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Nev. SC upholds $32M verdict against Goodyear

By Jessica M. Karmasek | Jan 4, 2011


CARSON CITY, Nev. (Legal Newsline) - The Nevada Supreme Court last week refused to reconsider its decision to uphold a $32 million judgment against Goodyear Tire & Rubber Co. in a single-vehicle accident that killed three people.

The 2004 accident occurred near Moab, Utah, on Interstate 70 when a tire on a car blew out and the vehicle overturned. Those killed were Evertina Tapia, Andres Torres and Frank Enriquez.

The surviving relatives and guardians of the children involved filed suit against Goodyear, Ford Motor Co., and Valley View Hitch & Truck Rental. Ford and Valley View settled their claims.

In its July 1 decision, the Court addressed whether a district court's sanction of striking Goodyear's answer as to liability and only allowing it to contest damages was proper and whether an evidentiary hearing was required when the sanction was a non-case concluding sanction.

The state's high court ultimately upheld the sanction and ruled that when a sanction is non-case concluding, an evidentiary hearing is not mandatory. Goodyear and its amici curiae sought a rehearing of that opinion.

The Court, in its opinion released Thursday, said it "did not overlook or misapprehend any material matters, nor did we overlook, misapply, or fail to consider controlling legal authority."

However, it took the opportunity in its 6-1 decision, written by Justice Mark Gibbons, to "clarify certain holdings and legal conclusions set forth in our prior opinion and discuss authority cited or discussed by Goodyear and the amici in support of the petition for rehearing."

Goodyear argued that the Court misapplied Nevada law, thus depriving the company of due process and creating an unfair double standard between plaintiffs and defendants. Goodyear also argued that the Court's ruling is against the weight of other jurisdictions' authority.

The Court, in its most recent opinion, disagreed.

Gibbons wrote for the Court, "We followed clear Nevada precedent in Bahena I. Goodyear enjoyed sufficient due process in this matter, and plaintiffs and defendants receive similar treatment for discovery abuses under Nevada law.

"Additionally, while other jurisidictions' caselaw is not controlling, we note that the state cases relied upon by Goodyear and amici do not support the proposition for which Goodyear argues -- that defendants are always entitled to an evidentiary hearing before their answers are stricken as to liability only."

Justice Kristina Pickering, the lone dissenter to Thursday's majority opinion, wrote she would grant rehearing because she believes due process requires it.

"The $30,000,000 default judgment in this case rests on the district court choosing to believe one side's lawyers over another's, with no evidentiary hearing, no cross-examination, and a genuine dispute over willfulness, fault, and prejudice," she wrote.

Pickering said the question is not whether an evidentiary hearing is always required before a court strikes a party's complaint or answer for violation of a discovery order or rule. The question, she said, is whether an evidentiary hearing was required in this case.

"The 'controlling authority' that has been 'overlooked, misapplied or (not) consider(ed),' is fundamental: due process, the check and balance that makes the risk associated with litigation acceptable," the justice wrote.

"Liability should not be decided by sanction without a fair evidentiary hearing on all contested issues of fact material to the sanction imposed. Here, that did not occur."

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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