In Capriati Construction Corp. v. Yahyavi, 137 Nev. Adv. Op. 69, 498 P.3d 226 (2021), a motorist brought an action against a forklift operator's employer to recover for injuries caused by a collision with the forklift. At trial, the forklift operator admitted fault, and the plaintiff told the jury that the defendant had discarded the forklift operator’s employment file. After the plaintiff rested, the defendant employer elicited testimony that it had filed for reorganization under the bankruptcy laws. The plaintiff objected on the ground that the bankruptcy evidence was inadmissible because it suggested that the defendant would be unable to pay a judgment. The defendant argued that the evidence was introduced in order to rebut the plaintiff’s allegation of spoliation of the employment file.
The trial court agreed with the plaintiff and instructed the jury that the defendant had liability insurance to satisfy any verdict. On appeal, an issue of first impression was whether evidence of the defendant’s liability insurance was admissible. The Nevada Supreme Court ruled that evidence of a tortfeasor’s insurance is admissible if the defendant first introduces evidence suggesting an inability to pay a judgment. In support of its conclusion, the court cited two cases from other jurisdictions: Wheeler v. Murphy, 192 W. Va. 325, 452 S.E.2d 416 (1994); and Younts v. Baldor Electric Co. , 310 Ark. 86, 832 S.W.2d 832 (1992). The court added that the jury instruction was not improper under the collateral source rule, which bars evidence showing that an injured party received a collateral payment. The court reasoned that the collateral source rule would not apply because the source of payments from an insurance policy would be the tortfeasor rather than a collateral source.