Justia Insurance Law Opinion Summaries

Articles Posted in Nebraska Supreme Court
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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

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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

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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

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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

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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

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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

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The Supreme Court reversed the decision of the district court granting summary judgment in favor of the insurer in this insurance dispute, holding that the district court abused its discretion in issuing declaratory relief on this record.Plaintiff, a limited liability company, presented a theft claim to Defendant insurer under the physical damage coverage of an aircraft policy. After denying coverage, Insurer sought a determination that Plaintiff’s theft claim was not covered under the policy. The district court granted summary judgment in favor of Plaintiff on the coverage question, concluding that Plaintiff’s claim was not covered under the physical damage coverage of the applicable policy. The Supreme Court reversed, holding (1) the district court’s order decided the legal effect of a state of facts which are future, contingent, or uncertain and resulted in a declaratory judgment adjudicating hypothetical or speculative situations which may never come to pass; and (2) therefore, the district court abused its discretion in entering declaratory relief. View "U.S. Specialty Insurance Co. v. D S Avionics Unlimited LLC" on Justia Law

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Millard Gutter Company’s voluntary dismissal of its civil action against American Family Insurance Company had no effect on the district court’s authority to make further rulings, but the court erred in taxing technology expenses and jury expenses as costs.After Millard Gutter filed a voluntary dismissal without prejudice, the district court entered a judgment of dismissal and taxed costs to Millard Gutter, including expenses incurred by American Family in setting up courtroom technology and expenses incurred by the court in compensation prospective jurors. On appeal, Millard Gutter argued that once it filed a voluntary dismissal, the district court lacked authority to make any further rulings and, alternatively, that the district court erred in taxing technology expenses and jury expenses as costs. The Supreme Court affirmed in part and in part reversed, holding (1) because Millard Gutter had no statutory right to voluntary dismissal at the time it filed its dismissal, the district court’s authority to make further rulings was unaffected by that filing; and (2) the district court abused its discretion in taxing such expenses as costs. View "Millard Gutter Co. v. American Family Insurance Co." on Justia Law

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The plain language of Neb. Rev. Stat. 44-513 does not require insurance policies to charge identical copayments for a covered service regardless of the type of provider.Health insurance policyholders brought this declaratory judgment action to determine whether section 44-513 allows insurance policies to impose higher copayments on policyholders when they obtain a covered service from a chiropractor rather than from a medical doctor. The district court dismissed the complaint, concluding that the statute did not require insurers to pay the same dollar amount to all providers or to set equal copayments for policyholders. The Supreme Court affirmed, holding that the plain language of the statute does not prohibit an insurer from requiring different copayments for different types of providers. View "Cookson v. Ramge" on Justia Law

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The district court lacked jurisdiction to vacate an arbitration award under the Federal Arbitration Act (FAA).Matt Karo and Michael Karo obtained federally reinsured crop insurance policies serviced by NAU Country Insurance Company (NAU). The Karos submitted “prevented planting” claims under their crop insurance policies alleging that they were unable to plant corn on certain acres due to wet conditions. NAU denied the Karos’ prevented planting claims. The parties then submitted their disputes to binding arbitration pursuant to a mandatory arbitration clause in the crop insurance policies. The arbitrator denied coverage. The Karos then sought to vacate the arbitration award under section ten of the FAA. The district court vacated the arbitration award, finding that the arbitrator exceeded his powers and manifestly disregarded the law. The Supreme court vacated the district court’s judgment and dismissed this appeal for lack of jurisdiction, holding that the district court lacked jurisdiction to enter a judgment vacating the arbitration award under the FAA because the Karos failed to comply with the three-month notice requirement of section twelve of the FAA. View "Karo v. NAU Country Insurance Co." on Justia Law