Justia Nebraska Supreme Court Opinion Summaries

The Supreme Court held that Neb. Rev. Stat. 44-3,128.01, which grants an insurer the right of subrogation, does not preempt a common-law rule, known as the common fund doctrine, allowing an attorney to collect a pro rata share of his or her fees from an insurer.A law firm sued an insurer in county county, alleging that its work in obtaining a recovery on behalf of the law firm's client, including the insurer's subrogation interest in the claim, created a common fund, that the insurer benefited from the law firm's work, and that a fair attorney fee under Nebraska common law was one-third of the amount recovered per the law firm's agreement with its client. The county court sustained the law firm's motion, and the district court and court of appeals affirmed. The Supreme Court affirmed, holding that the court of appeals did not err in failing to determine that the common fund doctrine was preempted by section 44-3-128. View "Hauptman, O'Brien, Wolf & Lathrop, P.C. v. Auto-Owners Insurance Co." on Justia Law

The Supreme Court affirmed the order of the district court denying a political subdivision's motion for summary judgment in this subrogation action, holding that summary judgment was improper.Great Northern Insurance Company filed this subrogation action seeking compensation from Transit Authority of the City of Omaha, d/b/a Metro Area Transit, under the Political Subdivisions Tort Claims Act, Neb. Rev. Stat. 13-901 et seq., for funds paid on an insurance claim on behalf of its insured. Metro filed a motion for summary judgment. The district court denied the motion, finding that Metro had failed to demonstrate that there was no genuine issue concerning Great Northern's affirmative defense of equitable estoppel. The Supreme Court affirmed, holding that summary judgment was not proper under the facts of this case. View "Great Northern Insurance Co. v. Transit Authority of Omaha" on Justia Law

The Supreme Court affirmed the judgment of the district court finding that State Farm Fire & Casualty Company had no obligation to defend or indemnify TFG Enterprises, LLC and its principal, Jeffrey Leonard, in a lawsuit, holding that the district court correctly concluded that State Farm had no potential liability under the insurance policy at issue.Jeffrey Barkhurst filed a lawsuit against TFG and Leonard (together, Defendants) asserting that they were liable for breach of contract, negligent misrepresentation, and fraudulent concealment. State Farm agreed to defend Defendants in a reservation of rights and then filed this action seeking a declaration that it owed no coverage obligations to Defendants under the rental policy State Farm had issued to TFG. The district court granted summary judgment in favor of Stat Farm, finding that State Farm had no coverage obligations. The Supreme Court affirmed, holding the State Farm had no potential liability from the underlying lawsuit under the rental policy and thus had no duty to defend or indemnify Defendants. View "State Farm Fire & Casualty Co. v. TFG Enterprises, LLC" on Justia Law

In this insurance dispute, the Supreme Court affirmed the decision of the district court granting summary judgment for Allstate Indemnity Company, holding that property loss from Plaintiffs' tenants' producing or using methamphetamine indoors was not a covered peril under the insurance policy.Plaintiff filed an insurance claim alleging that his tenants damaged his rental house by producing or using methamphetamine indoors. Allstate denied the claim. Plaintiff subsequently filed a complaint against Allstate alleging breach of contract and bad faith. The district court granted summary judgment for Allstate, concluding that Plaintiff's property loss was excluded from coverage under certain portions of the insurance policy and was not covered by other portions of the policy. The Supreme Court affirmed, holding that Plaintiff's assignments of error were without merit. View "Kaiser v. Allstate Indemnity Co." on Justia Law

The Supreme Court affirmed the order of the district court granting in part judgment notwithstanding a jury verdict (JNOV) in favor of American Family Insurance Company on Valley Boys, Inc.'s complaint alleging that American Family failed to pay the full amounts due under postloss assignments of insurance proceeds, holding that the district court did not err in finding that eight of Valley Boys' nine assignments were unenforceable.In 2014, nine homeowners sustained property damage in a hailstorm. The properties were insured under a homeowner's insurance policy issued by American Family. The homeowners assigned their proceeds under the insurance policies to Valley Boys, a roofing company. Eight of the assignments incorporated a Customer Service Agreement (CSA). Valley Boys, as assignee, later filed suit against American Family for failing to pay the full amount of repair and/or replacement costs due under the policies. The jury returned a verdict for Valley Boys. American Family moved for JNOV, arguing that the assignments were unenforceable. The court granted the motion as to the claims based on the eight assignments that incorporated the CSA. The Supreme Court affirmed, holding that the assignments were unenforceable under general contract principles. View "Valley Boys, Inc. v. American Family Insurance Co." on Justia Law

The Supreme Court held that a federal regulation does not impose a duty on insurers to issue policies that satisfy a motor carrier's minimum level of financial responsibility because compliance with the financial responsibility requirements under Neb. Rev. Stat. 75-363 and the pertinent federal regulations is the duty of the motor carrier and not its insurer.Through Neb. Rev. Stat. 75-363 the Nebraska Legislature adopted several parts of the Federal Motor Carrier Safety Regulations and made those regulations applicable to certain intrastate motor carriers otherwise not subject to the federal regulations. One of the federal regulations adopted by section 75-363(3)(d) sets out minimum levels of financial responsibility for motor carriers. At issue before the Supreme Court was whether 49 C.F.R. 387 imposes a duty on an insurer to issue a policy with liability limits that satisfy the motor carrier's financial responsibility. The Supreme Court held that compliance with section 75-363 and section 387 is the responsibility of the motor carrier, not on the insurer. View "Shelter Insurance Co. v. Gomez" on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment in favor of Plaintiff's employer's insurance broker and insurer and dismissing Plaintiff's action claiming that the broker had a duty to advise the employer to obtain workers' compensation insurance and that the insurer had a duty to defend the employer in the underlying action, holding that the district court did not err.Plaintiff was injured in an accident during the course and scope of his employement. Plaintiff reached a settlement with his employer and received an assignment of rights against his employer's insurance broker and insurer. Plaintiff then brought this action. The district court concluded that both the broker and the insurer were entitled to judgment as a matter of law. The Supreme Court affirmed, holding that the district court did not err in (1) applying case law applicable to insurance agents rather than insurance brokers; (2) finding that the broker fulfilled its duties as an insurance broker to the employer; and (3) finding that the insurer did not owe a duty to defend the insurer. View "Merrick v. Fischer, Rounds & Associates, Inc." on Justia Law

In this insurance dispute, the Supreme Court reversed the decision of the district court granting summary judgment to Shelter Mutual Insurance Company on its declaratory judgment action, holding that Neb. Rev. Stat. 60-310 does not allow provisions known as partial household exclusion clauses.Larry Freudenburg was injured in an accident where he was the passenger in a car covered by a policy Freudenburg and his wife had purchased from Shelter. Shelter refused to pay Freudenburg's request for reimbursement of expenses in the amount of the policy limit for bodily injury based on a partial household exclusion clause in Freudenburg's policy. Partial household exclusion clauses reduce automobile liability coverage from the policy amount to the state minimum when the injured person is an insured, relative, or resident of the insured's household. The district court concluded that partial household exclusions are not prohibited by section 60-310. The Supreme Court reversed, holding that an automobile liability policy policy in any coverage amount is not permitted to exclude or reduce liability coverage under the policy on the ground that the claimant is a named insured or resident in the named insured's household. View "Shelter Mutual Insurance Co. v. Freudenburg" on Justia Law

In this declaratory judgment action, the Supreme Court reversed the district court's decision entering summary judgment in favor of Gage County's insurer, Employers Mutual Casualty Company (EMC), and dismissing Gage County's claim that EMC had defense and indemnity obligations for federal court judgments entered against Gage County in 2016, holding that it was error to grant summary judgment for EMC.The district court granted EMC's summary judgment motion and denied Gage County's partial summary judgment motion, ruling that a commercial general liability policy's professional services exclusion barred coverage under the CGL policy for all claims brought against Gage County in the earlier litigation and that there was no coverage under either a linebacker policy or an umbrella policy. The Supreme Court reversed and remanded the cause with directions to sustain Gage County's motion for partial summary judgment, holding that the professional services exclusion in the CGL policy did not preclude coverage for Gage County's insurance claims. View "Gage County v. Employers Mutual Casualty Co." on Justia Law

The Supreme Court affirmed the judgment of the district court upholding the order of the Nebraska Department of Insurance determining that Mark Diamond, a licensed insurance producer, had violated three provisions of the Insurance Producers Licensing Act, Neb. Rev. Stat. 44-4047 to 44-4069, and imposing an administrative fine, holding that the district court's decision conformed to the law, was supported by competent evidence, and was neither arbitrary, capricious, nor unreasonable.On appeal, Diamond argued that his confession of liability in the consent judgment did not "admit" to "fraud" within the meaning of Neb. Rev. Stat. 44-4059(1)(g). The Supreme Court disagreed after applying settled rules of statutory interpretation, holding (1) because Diamond did not report the consent judgment taken against him in another jurisdiction within thirty days of the final disposition of the civil action, he violated section 44-4065(1), and the Department had the authority to levy an administrative fine; and (2) within the meaning of section 44-4059(1)(g), Diamond's confession of liability in the consent judgment constituted an admission of fraud. View "Diamond v. State" on Justia Law