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A Nevada Employer Must Have Knowledge of an Employee’s Previous Injury to Receive Reimbursement

In Holiday Retirement Corporation V The State Of Nevada Division Of Industrial Relations, the Supreme Court of the State of Nevada held an employer is required to acquire knowledge of an employee’s permanent physical impairment before a subsequent injury occurs to qualify for reimbursement from the Subsequent Injury Account for Private Carriers.

Holiday Retirement Corporation hired a couple as co-managers of a retirement residence. At the time the wife was hired, Holiday was not aware that the wife had had two back surgeries, including one to treat an on-the-job injury. While working for Holiday, the wife reinjured her back. An MRI revealed the prior back surgeries, and that the wife needed another back surgery. After surgery, Holiday put the wife on modified work duty restrictions. A year later, she and her husband quit.

The wife’s permanent partial disability (PPD) evaluation showed the wife had a 35% whole person impairment, with 75% of the impairment due to the Holiday injury. She was awarded compensation. Holiday’s insurer sought reimbursement under NRS 616B.587, arguing that the wife’s compensation was based on her combined injuries and would be less if she just received compensation for only her Holiday injury.

The State of Nevada Division of Industrial Relations (DIR) denied the insurer’s request for reimbursement. Under NRS 616B.587(4), an insurer is not entitled to reimbursement if the insurer ” had knowledge of the ‘permanent physical impairment’ at the time the employee was hired or if the employee was hired after the employer acquired such knowledge.” Because Holiday did not have knowledge of the wife’s prior permanent physical impairment until after she was injured working for Holiday, no reimbursement was allowed.

Holiday appealed to the DIR and then the District Court, both of which affirmed the original DIR determination. Holiday appealed to the Supreme Court of Nevada.

“The language in NRS 616B.587(4) is plain and unambiguous. The “critical difference” between an employer who retains a permanently physically impaired worker before a subsequent injury occurs and one who retains a permanently physically impaired worker after the subsequent injury has already occurred. In the former situation the potential for liability remains contingent; in the latter, the potential for liability is certain. Permitting reimbursement in the latter situation is akin to “providing employers an option to buy casualty insurance to cover a casualty that has already occurred.”

District Court affirmed. Holiday Retirement Corporation V The State Of Nevada Division Of Industrial Relations, No. 54968, Sup. Ct. Nev., (April 05, 2012)

The Las Vegas law office of Lagomarsino Law did not represent anyone involved in the above-referenced case. The commentary is for educational and commentary purposes only. If you would like to be represented by a Nevada attorney, contact our office for a free confidential case review and receive a response within hours. Call Toll Free 866-414-0400.