Dylan Lawter

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Case Synopsis

Former directors of Lewis & Clark LTC Risk Retention Group, Inc. filed a writ of mandamus in the Nevada Supreme Court, seeking (1) direction concerning the district court’s application of Shoen v. SAC Holding Corp. and (2) relief from that court’s judgment. The directors asserted that gross negligence does not support a viable claim for personal liability under the NRS 78.138. The Commissioner of Insurance for the State of Nevada maintained that gross negligence is an appropriate claim against directors under Shoen. The Court elected to consider the director’s petition for a writ of mandamus, clarified the language in Shoen, and held that NRS 78.138 provides the exclusive mechanism to hold directors and officers individually liable for damages in Nevada. The statute says that “knowing violations of law” require a knowledge of wrongfulness. Therefore, gross negligence allegations do not state an actionable claim under NRS 78.138.