Background
Jesse Castillo went to a hospital for back pain and left partially paralyzed. He retained lawyers under contingency agreements to bring claims against the hospital, physicians, and others involved in his care. The agreements called for percentages ranging from one-third to 50 percent depending on when the matter resolved and whether an appeal occurred. Counsel pleaded professional-negligence claims and later added a count labeled ordinary negligence. The medical defendants disputed that label, but the case settled for a confidential amount before summary judgment.
A fee dispute then arose between Castillo and his former lawyers, including Atkinson Watkins & Hoffmann (AWH). Castillo argued that every negligence theory arose from medical care, bringing the settlement within NRS 7.095, Nevada’s statutory cap on contingent fees in professional-negligence actions. Counsel argued that the ordinary-negligence count removed the settlement from the cap. Two settlement checks also created an attorney-lien dispute: AWH gave formal notice after receiving the first check but before receiving the second. The district court enforced the contractual fee percentages and upheld both liens.
The Court’s Holding
The Supreme Court reversed and remanded. Justice Stiglich explained that courts determine whether a claim sounds in professional negligence from its substance, not its caption. Under Limprasert v. PAM Specialty Hospital of Las Vegas, the question is whether the challenged conduct occurred within a professional medical relationship. Castillo’s supposedly ordinary-negligence allegations concerned failures to enter physicians’ orders, communicate a critical MRI result, arrange an X-ray, transfer him appropriately, and follow an order that he remain without food or drink. Each alleged act occurred during professional medical care. NRS 7.095 therefore governed the settlement and limited the fee, notwithstanding counsel’s pleading label or the private contingency agreements.
The court applied Limprasert even though the case began under older precedent. Retroactivity is the default in Nevada civil cases, and the newer test clarified how to classify the claim. The district court’s cursory reliance on the claim’s form failed to adjudicate Castillo’s statutory rights. On remand, the court must calculate the amount due under the statutory cap rather than the larger contractual percentages.
The justices also clarified NRS 18.015 attorney liens. Counsel must serve the statutory lien notice before counsel or the client receives the recovered funds. AWH had possession of the first check before sending notice, so the lien never attached to that payment; equitable fairness could not excuse strict noncompliance. Notice preceded receipt of the second check, making that lien valid. AWH may pursue other lawful collection methods if the amount Castillo ultimately distributes falls short, but it cannot enforce an unperfected lien against the first payment.
Key Takeaways
- NRS 7.095 follows the substance of the settled claims. Adding an “ordinary negligence” label does not avoid Nevada’s contingency-fee cap when the alleged conduct occurred within a professional medical relationship.
- The Limprasert classification test applies retroactively in civil cases unless a recognized exception displaces Nevada’s default rule.
- Private fee agreements cannot require a client to pay more than the statutory maximum for a professional-negligence recovery.
- An NRS 18.015 lien must be perfected before counsel receives the recovery. Notice after the money reaches counsel is too late, and equity cannot replace strict statutory compliance.
Why It Matters
The ruling closes a potential pleading-based route around the fee protections accompanying Nevada’s NRS Chapter 41A medical-liability system. Plaintiffs’ counsel cannot preserve a higher contingency percentage simply by pairing medical-malpractice claims with an ordinary-negligence count based on the same professional care. Engagement letters, settlement allocations, and closing statements should account for NRS 7.095 from the outset.
The lien holding also creates a precise operational deadline. Firms handling Nevada recoveries should serve compliant notices before any settlement check or transfer reaches counsel, not merely before funds reach the client. A delay of even days can eliminate lien rights against a payment and leave the firm to pursue less secure collection remedies. That timing rule belongs in settlement checklists before disbursement instructions issue. When a recovery arrives in installments, each payment requires separate analysis: timely notice may secure a later check even though an earlier payment arrived too soon.