Recent Cases

The attorneys at Engles, Ketcham, Olson & Keith have successfully litigated a wide variety of cases for insurance companies, corporations and individuals.

One example is the landmark case of Schafersman v. Agland Coop, 631 NW2d 862, (2001), in which our firm prevailed in arguing for Nebraska to adopt the Daubert standard for the admissibility of expert testimony.
In the case of Van Lamb v. Sand Livestock, Dist. Ct. Platte Co. Nebraska, 2003, Dan Ketcham successfully obtained a defense verdict in a product liability suit against the manufacturer of a hog confinement system.
In a recent case in the District Court of Douglas Co. Bert Engles successfully defended a suit brought against the employer of a deliveryman, who had already been convicted of rape. Despite the inflammatory nature of the case the jury returned a low verdict.
In the case of Gombert v. Borders Inc., Dist. Ct. Doug. Co., 2003, Dan Ketcham defended a large retail chain on a premises liability claim. The jury returned a defense verdict.
Steve Olson recently defended a complex 1983 action in federal court. The trial successfully resulted in a defense verdict for Douglas County. Green v. Douglas Co. et al.
Robert Keith recently represented a bridge contractor in a wrongful death trial in York, Nebraska. The decedent died in an automobile accident in a state highway construction zone and suffered over $800,000 in economic damages and $1,000,000 in non-economic damages. The jury returned a defense verdict. Haghighi v. United Contractors.
Robert Keith successfully appealed a Federal District Court for the District of Nebraska’s refusal to grant a government employee qualified immunity against allegations of sexual harassment. The 8th Circuit Court of Appeals reversed the District Court’s decision and found the government employee was entitled to qualified immunity and therefore summary judgment on all claims against him was proper. Crutcher-Sanchez v. County of Dakota, 687 F.3d 979 (8th Cir. 2012).
Robert Keith successfully defended a high speed admitted liability auto negligence case by receiving a favorable verdict on March 6, 2013 after the jury deliberated less than an hour. Plaintiff’s claimed medical expenses exceeded $21,000 and she asked the jury to return a verdict for $139,000 based on a 10% permanent impairment rating and 41 year life expectancy. Defendant filed an Offer to Confess Judgment for $20,000. The jury returned a verdict for $6,002.23, including $5,022.23 in medical expenses the defense asked the jury to award to reimburse Plaintiff for related medical bills.

Case Law Updates

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Nebraska Law Updates

Exclusive Remedy
Pittman v. Western Engineering Co., Inc. 283 Neb. 913 (2012)

Issue: Whether a surviving spouse Plaintiff, who accepted workers’ compensation payments as a surviving spouse and dependent, is barred by the exclusive remedy provisions of the Nebraska Workers’ Compensation Act from maintaining a separate, negligence cause of action against the decedents’ employer?

Facts: Plaintiff was a surviving spouse of an individual killed in a workplace accident near Chappell, Nebraska. Subsequent to the decedent’s death, Plaintiff accepted worker’s compensation payments as a surviving spouse and dependent. Plaintiff further agreed to fully discharge the decedent’s employer from all liability under the Nebraska Workers’ Compensation laws. After approval of a lump sum death benefit, Plaintiff brought suit against the employer for negligent infliction of emotional distress. The defendants sought and were granted summary judgment, with the District Court finding Plaintiff’s cause of action barred by the exclusivity provision of the Nebraska Workers’ Compensation Act.

Holding: On appeal, Plaintiff argued his emotional injuries, were not covered by the Nebraska Workers’ Compensation Act. Notwithstanding this argument, the Nebraska Supreme Court found that Plaintiff, by accepting payment as a dependent, and pursuant to the Nebraska Workers’ Compensation Act, released the defendants from claims arising from decedent’s death. Plaintiff had also signed a settlement agreement to that effect. Accordingly, the Nebraska Supreme Court found the defendants were entitled to employer immunity under the Nebraska Workers’ Compensation Act.

For a complete copy of the Court’s opinion, click here

Estate Of Joseph James Teague, Deceased, By And Through His Personal Representative V. Crossroads Cooperative Association, A Nebraska Corporation, 286 Neb. 1, ___ N.W.2d ___ (2013).

Issue: Whether an employer’s willful violation of OSHA safety regulations resulting in the death of one of its employees constitutes an “accident” covered by the exclusive jurisdiction of the Workers’ Compensation Court.

Facts: Plaintiff’s decedent was employed by a grain cooperative. In violation of the Occupational Safety and Health Administration (OSHA) regulations, decedent was asked by his supervisor to enter a grain bin without a lifeline to shovel grain to the center of the bin’s conical base. The depth of the grain in the bin was high enough to present an engulfment hazard and Plaintiff’s supervisor left the auger running in the bin. Ultimately, Decedent was asphyxiated when he was engulfed in grain.

Plaintiff filed wrongful death, assault, and battery causes of action, as well as a declaratory action seeking a judgment that either the Workers’ Compensation Act did not apply or, alternatively, that it was unconstitutional on its face and as applied.

The District Court of Cheyenne County sustained the employer’s motion to dismiss for failure to state a claim on the basis that the employer’s willful negligence, even if proven, was insufficient to bring it outside the exclusivity of Nebraska’s Workers’ Compensation Act (“the Act”). Plaintiff appealed asking that the Nebraska Supreme Court recognize an intentional tort exception to the Act.

Holding: Intentional and tortious conduct by an employer falls within the exclusive jurisdiction of the Act. Further, the Nebraska Supreme Court concluded that the Act was not unconstitutional because “employers/employees” and “employed intentional tort victims/unemployed intentional tort victims” were not similarly situated; thus, it was proper for the Nebraska Legislature to treat such categories differently under the Act.

For a complete copy of the Court’s opinion, click here

Contributory Negligence
Curtis v. States Family Practice, LLC, 20 Neb.App. 234 (2012)

Issue: Whether beneficiary of estate not a party to a wrongful death action was properly included in the jury’s allocation of the percentages of contributory negligence.

Facts: Plaintiff was the mother and personal representative of decedent child. The father was not a named party in the wrongful death action filed against a medical clinic where decedent received treatment prior to his death. It was alleged Defendant breached the standard of care in failing to diagnose decedent with a serious infection in the days leading up to his death. As part of its defense, Defendant alleged the parents of decedent were contributorily negligent in failing to bring decedent to the emergency room sooner. At a jury trial the district court judge allowed a jury instruction regarding the allocation of percentages of contributory negligence that included the non-party father.

Holding: On appeal regarding the district court’s denial of Plaintiff’s Motion for New Trial, the Nebraska Court of Appeals took up the issue of the jury instruction as potential plain error. It held that under Nebraska’s wrongful death statute the father was decedent’s next of kin, and would have been awarded the avails of any judgment of damages as a beneficiary; thus, the jury could consider his degree of negligence.

For a complete copy of the Court’s opinion, click here

U.S. Bank Nat. Ass’n v. Peterson, 284 Neb. 820 (2012)

Issue: Whether request for admission was specifically denied to constitute a denial or if it was a bad response and, therefore, considered an admission.

Facts: U.S. Bank National Association (“the Bank”) sued five guarantors following defaults on underlying notes. The Bank served requests for admissions to each guarantor including a request to admit the specific amount due on the note for principal, accrued interest, and a prepayment fee that the Bank claimed was due under each of the notes. The guarantors responded to the prepayment admission stating “Defendant does not have the information with which to admit or deny the numbers set out under Request for Admissions … including prepayment amounts.” The Bank moved for summary judgment and offered the guarantor’s answers to the bank’s request for admissions. The trial court concluded the guarantor’s request for admission as to the prepayment fee was considered a denial and therefore, did not grant summary judgment as to the prepayment fee. The Bank appealed claiming the trial court erred when it treated the guarantor’s response to the Bank’s request for admission as a denial that a prepayment feed was owed.

Holding: The Nebraska Supreme Court reversed the trial court’s decision noting Rule 36 requires the answer to a request for admission “specifically deny the matter” or “set forth in detail the reasons why the answering party cannot truthfully admit or deny the matter.” Further, where the party lacks information, the party shall recite information showing he or she has made a reasonable inquiry. The Court considered the guarantor’s answer an admission because the guarantor did not specifically deny that a prepayment was owed and did not make the required assertions that the guarantor had made reasonable inquiry and that the information known or readily obtained by be the guarantor was insufficient to enable the guarantor to admit or deny that a prepayment fee was owed. Noting Rule 36, the Court stated “a bad response is treated as no response” and is an admission. Because the guarantor’s response did not comply with the requirements of Rule 36, it was a “bad response” and, therefore, a failure to respond which should have been treated as an admission.

For a complete copy of the Court’s opinion, click here

Pope-Gonzalez v. Husker Concrete, LLC, 21 Neb. App. 575 (2013)

Issue: Whether a trial court abused its discretion in determining dismissal of an action was an appropriate discovery sanction based on the Plaintiff’s noncompliance with discovery orders.

Facts: Plaintiff, a pro se litigant, filed a complaint against Defendant Husker Concrete in November 2008. Plaintiff failed to disclose any expert witnesses and the district court granted summary judgment in favor of Husker Concrete. On appeal, the Nebraska Court of Appeals remanded the case back to the district court.

On remand, the district court held a status conference and set a new discovery deadline more than ninety days in advance with a pretrial conference a month afterwards. Plaintiff filed a motion to extend the discovery deadline on the date it was due. At the pretrial conference date, the court granted Plaintiff an additional sixty days to complete discovery and specifically told Plaintiff that she would be subject to sanctions for failure to comply with her discovery and disclosure obligations. Plaintiff failed to comply and Husker Concrete moved for sanctions. Plaintiff did not appear at the hearing for Husker Concrete’s motion for sanctions and the court granted a default judgment in favor of Husker Concrete dismissing Plaintiff’s case. Plaintiff filed a motion to set aside the sanction stating a variety of reasons including she did not have notice of the hearing, she had been ill, she was a pro se litigant, and the sanction was “overly harsh.” The court denied Plaintiff’s motion and Plaintiff appealed.

Holding: The Nebraska Court of Appeals affirmed the district court’s order finding that the court did not abuse its discretion in dismissing Plaintiff’s case as a discovery sanction as the sanction was appropriate under the circumstances. The NCA relied on the facts that the record showed Husker Concrete mailed notice of the hearing, Plaintiff acknowledged that the additional sixty days would be sufficient to complete discovery, Plaintiff demonstrated little evidence on how her health affected her ability to complete discovery, and Plaintiff repeatedly failed to respond to discovery requests. Further, the NCA noted that a pro se litigant is held to the same standards as a litigant who is represented by counsel.

For a complete copy of the Court’s opinion, click here

Intentional Torts
Wulf v. Kunnath, 285 Neb. 472 (2013)

Issues: Whether the trial court erred by denying Plaintiff’s motion for directed verdict or by submitting the issue of battery to the jury, because reasonable minds could conclude Plaintiff consented to Defendant’s contact or that the contact did not cause her injuries.

Facts: Plaintiff, a nurse, brought suit after Dr. Kunnath, Defendant, used his hand to tap or strike the back of her neck in a lighthearted work setting. Defendant intended to make the contact at issue, but he did not intend to hurt Plaintiff. Plaintiff’s reaction to the contact was in dispute as Plaintiff alleged she immediately began to feel pain and made this known. Both Plaintiff and Defendant testified the office atmosphere was that of a close-knit group, who joked and teased one another. Plaintiff testified Defendant had “thumped” her on two or three occasions prior to the incident in question. She described these as “good-natured thumps” and she never complained about the thumping, never asked Defendant not to do it again, and did not find it to be offensive conduct. Plaintiff saw her physician approximately one week after the incident complaining of neck pain and pain radiating down her right arm. Ultimately, Plaintiff underwent two surgeries and argued this treatment was related to the incident in question. However, medical records revealed preexisting neck problems and her spine surgeon opined the precise etiology for her symptoms were unclear. At the close of all evidence, Plaintiff moved for a directed verdict on the issues of battery and injury. The district court overruled the motion. The jury subsequently returned a verdict for Defendant.

Holding: On appeal, Plaintiff argued the district courted erred when it failed to grant her motion for summary judgment, failing to direct a verdict for her on the issue of battery, and submitting jury instructions that allowed the jury to determine whether a battery occurred or whether an injury resulted from the action. The Nebraska Supreme Court did not consider whether the district court erred in denying Plaintiff’s motion for summary judgment because the denial of a summary judgment motion is neither appealable nor reviewable. The Nebraska Supreme Court concluded the district court did not err by denying Plaintiff’s motion for directed verdict or by submitting the issue of battery to the jury, because reasonable minds could conclude that Plaintiff consented to Defendant’s conduct given Defendant had previously “thumped” her and she never complained. The Court further held reasonable minds could conclude the contact did not cause her injuries.

For a complete copy of the Court’s opinion, click here

Black v. Brooks, 285 Neb. 440 (2013)

Issues: (1) What constitutes a sufficient demand of the return of a security deposit and (2) whether statutory attorney fees can be awarded when the tenant is represented by attorneys working pro bono?

Facts: Plaintiff rented a home located at 38th Avenue which later sustained water damage. As a result, Plaintiff moved to the Hoctor property owned by the same landlord. Plaintiff only paid a security deposit for the 38th Avenue Property. Plaintiff demanded her security deposit back for the Hoctor property as she believed the deposit rolled over to the Hoctor property. Defendant argued Plaintiff never demanded the deposit back from the 38th Avenue property because of the purported damage to that property. Defendant alternatively argued Plaintiff’s demand was deficient because she asked for the deposit back from the Hoctor property and not the 38th Avenue property. The trial court held the security deposit from 38th Avenue rolled over to serve as security against damage to the Hoctor property and that Plaintiff had made a proper demand. As such, the court awarded Plaintiff attorney fees pursuant to the Landlord Tenant Act.

Holding: On appeal, Defendant argued Plaintiff did not demand the return of her deposit and that attorney’s fees were not available because Plaintiff was represented by attorneys working pro bono. The Supreme Court affirmed the district court’s ruling that Plaintiff’s demand was sufficient stating that when a tenant files a lawsuit, a landlord has 14 days to either return the security deposit or itemize why the landlord is justified to keep the security deposit. The Court further held attorney’s fees are available to pro bono attorneys.

For a complete copy of the Court’s opinion, click here

Beveridge v. Savage, 285 Neb. 991 (2013)

Issue: Does a provision in a landlord-tenant lease agreement that a tenant must obtain “liability and renter’s insurance policy at the Tenant’s expense” overcome the presumption that a tenant is a coinsured under a landlord’s fire insurance policy?

Facts: Beveridge, a landlord, and Savage, a tenant signed a lease agreement for a rental property that required Savage to obtain a “liability and renter’s insurance policy ($100,000) at the Tenant’s expense.” After signing the lease, the property was damaged by a fire caused by a child using a lighter. Beveridge’s insurer paid for the loss and brought a subrogation action against Savage, claiming the lease agreement provision requiring Savage to obtain a “liability and renter’s insurance policy ($100,000) at the Tenant’s expense” overcame the presumption that a tenant is a coinsured under a landlord’s fire insurance policy.

Holding: On appeal, the court found when fire insurance is provided for a dwelling, it protects the interest of the owner, including the possessory interests of the tenant absent an express agreement to the contrary. The court found the lease agreement between Beveridge and Savage did not expressly state what kind of “liability” was to be covered under Savage’s policy. Liability insurance describes a wide variety of different insurance coverages. Therefore, the tenant’s obligations and what kind of liability the tenant was to insure was not clear under the lease agreement. The court found this language was ambiguous, and under principles of contract interpretation, was to be construed against the drafter/landlord. Further, renter’s insurance traditionally protects the tenant’s possessions and does not typically cover the structure of the leased premises. A requirement to obtain renter’s insurance did not require the tenant to insure building against loss by fire. Nothing in the lease agreement stated the landlord or his insurer had a right of subrogation against the tenant for damages caused by fire as a result of negligence. Therefore, the lease agreement provision was not sufficient to overcome the presumption that the tenant was a coinsured under the landlord’s fire insurance policy and an insurer may not bring a subrogation action against its own insured, barring Beveridge’s claim.

For a complete copy of the Court’s opinion, click here

Nebraska Procedure
Estate of Donna Mae Hansen v. Donald L. Bergmeier

Issue: Whether service upon discharged personal representative of closed estate was timely and proper in negligence action against estate’s decedent.

Facts: Plaintiff filed suit against discharged personal representative of closed estate arising out of January 9, 2006, motor vehicle accident. No errors concerning closing of the estate were alleged. Plaintiff claimed it only sought available liability insurance coverage. District court granted defendant’s motion for summary judgment arguing Plaintiff’s claim was time barred.

Holding: A closed estate, with a discharged personal representative, must be reopened and a personal representative appointed (or reappointed) before suit can be filed, even when the claimant is only seeking liability insurance proceeds. Estate was not reopened within applicable limitations period, thus district court dismissal affirmed.

For a complete copy of the Court’s opinion, click here

Mark Durre, as personal representative of the Estate of Diana Durre v. Wilkinson Development, Inc., et al. 285 Neb. 880, ____ N.W.2d _____ (2013)

Issue: Whether Nebraska’s statue of repose for breach of warranty on improvements to real property or deficiency in the design of improvement to real property (Neb. Rev. Stat. §25-223) applied to personal injury and wrongful death action involving alleged inherently dangerous condition or latent defect.

Facts: On April 3, 2009, Plaintiff and his wife were sitting in their vehicle parked at a gas station/fast-food restaurant in North Platte, Nebraska when the restaurant’s sign fell onto their vehicle, injuring Plaintiff and killing his wife. The sign collapsed as a result of the shearing of a section of the steel pole. It was determined that the total height of the sign was 9-10 feet taller than the height allowed by the city permit issued when the sign was constructed.

The sign was installed on or about May 15, 1999. In November 2008, the owner of the sign contracted with another sign company to replace lamps and ballasts in the sign. Plaintiff filed personal injury and wrongful death causes of action against the sign owner on November 13, 2009. Later, on March 10, 2011, Plaintiff filed an amended complaint to add the original sign installer as well as the subsequent sign company Plaintiff contracted with in 2008.

The district court sustained the original installer’s motion for summary judgment on the basis Plaintiff’s causes of action against it were barred by the 10-year statute of repose. The subsequent company obtained summary judgment on other grounds. As to the original installer, Plaintiff appealed claiming the statute of repose did not apply to personal injuries resulting from inherently dangerous conditions or latent defect of property caused by a contractor’s negligence.

Holding: The Nebraska Supreme Court affirmed the District Court of Lincoln County, Nebraska’s grant of summary judgment on the basis Neb. Rev. Stat. §25-223’s ten year statute of repose applied to all actions for damages, including causes of action for personal injury. In doing so it reaffirmed its prior holding in Williams v. Kingery Constr. Co. 225 Neb. 235 (1987) that the ten year statute of repose began to run when construction was completed.

For a complete copy of the Court’s opinion, click here

Aguirre v. Union Pacific RR. Co., 20 Neb.App. 597 (2013)

Issues: Whether the dismissal of a claim on the ground that the claim is not the proper remedy is a judgment on the merits and, therefore, any subsequent claims are barred by res judicata.

Facts: Plaintiff initially filed a cause of action against Union Pacific (“UP”) under the Federal Employers’ Liability Act alleging he was an employee of UP and sustained injuries in an October 21, 2007 accident as a result of UP’s negligence. The initial suit was dismissed because the district court found Plaintiff was not an employee. Plaintiff then filed a second suit under a common-law negligence theory for the same injuries he sustained in the October 21, 2007, accident. UP filed a motion to dismiss, which the district court granted. The district court concluded Plaintiff’s claim was barred by the doctrine of res judicata, because he had filed a previous claim against UP based on the same set of facts.

Holding: On appeal, the Nebraska Court of Appeals held the district court’s decision that Plaintiff was not a UP employee was not a judgment on the merits because the district court only concluded FELA was not the proper remedy. Therefore, the decision was not a judgment on the merits and Plaintiff was entitled to file a second suit as his claim was not barred by the doctrine of res judicata.

For a complete copy of the Court’s opinion, click here

Police Pursuits
Werner v. County of Platte, 284 Neb. 899 (2012)

Issue: Whether trial court properly held passenger was an “innocent third party,” under Political Subdivision Tort Claims Act (“PSTCA”) to allow for recovery, as well as other issues on credits and deductions and whether 5% reduction in damages for failing to wear seatbelt should be reduced from total damages or statutory cap of damages.

Facts: Brian Werner, a passenger, sued Platte County for injuries he sustained during a vehicular pursuit by a law enforcement officer under § 13-911 of the PSTCA, which authorizes compensation for damages to an “innocent third party” who is injured by such pursuit. The trial court held he was an innocent third party and found he sustained $3 million in damages. The court reduced those damages by 5% because Werner was not wearing his seatbelt when the car flipped. The court then reduced the overall award to $1 million under the statutory cap on damages under the PSTCA. An appeal followed as to whether Werner was an “innocent third party”, failing to properly calculate statutory credits and deductions, and failing to properly deduct 5% from the judgment after applying the statutory cap on damages.

Holding: The Supreme Court affirmed holding Werner, as passenger, was an “innocent third party” because he was never the target of the police officer’s pursuit. Whether a person is the target of a police officer’s pursuit is based on the officer’s knowledge before the pursuit occurs, and not what the officer discovers after the fact. An “innocent third party” is defined as a person that was not “sought to be apprehended” by the pursuing officer and as a person who did not promote, provoke, or persuade the driver to flee. The Court noted the Legislature was concerned with the “actions of the third party as those actions may relate to the flight of the driver sought to be apprehended.” Thus, a passenger does not lose “innocent third party” status if they break a law which did not cause the police officer to pursue or instigate the driver to flee.

Generally, a political subdivision can seek a deduction or credit from among other sources, the driver of the fleeing vehicle, or any organization liable for the driver’s conduct of the fleeing vehicle. Because Werner’s actual damages exceeded the capped amount by $2 million, and other sources provided only $140,000, the Supreme Court concluded the trial court properly concluded the County was not entitled to reimbursement.

Further, the 5% reduction for failure to wear a seat belt was properly reduced from the total damages prior to applying the statutory cap.

For a complete copy of the Court’s opinion, click here

Shawn T. Strasburg v. Union Pacific Railroad Company, 286 Neb. 743 (2013)

Issue: Whether railroad employer was entitled to a set-off of the entire amount of the medical expenses claimed by FELA plaintiff as opposed to just a set-off for the amount actually paid to settle the bills.

Facts: While attending a safety course hosted by his employer, Union Pacific, the chair upon which plaintiff was seated collapsed causing injury to his back which necessitated disk replacement surgery. Plaintiff initially filed a FELA claim against Union Pacific and a products liability claim against the manufacturer of the chair. In addition, plaintiff’s wife filed suit against the chair manufacturer for loss of consortium.

Plaintiff and his wife settled their case against the manufacturer for $725,000. Per the terms of the agreement, the settlement was allocated at $425,000 for plaintiff and $300,000 for plaintiff’s wife. A jury trial was held on the FELA claim and the jury returned a general verdict for plaintiff in the amount of $1,032,375.43.

Union Pacific filed a post-trial motion to enforce a lien on the manufacturer’s settlement in the amount that Union Pacific had paid in medical benefits. In addition to the amount of medical expenses paid ($139,845.03), Union Pacific also sought a lien for the amount of the write-off it had negotiated with Plaintiff’s medical providers ($121,468.40). Further, Union Pacific sought a setoff for the amount of the settlement plaintiff received from the manufacturer, and alleged that the allocation of the settlement between plaintiff and his wife should be modified to more accurately reflect the relative injury sustained by each. (As there is no loss of consortium under FELA, any settlement reached on a loss of consortium claim is no subject to a set-off against the FELA Defendant).

The district court granted the motion to enforce the medial lien for the amount paid by Union Pacific, but not the write-off amount. The district court refused to modify the allocation of the settlement, but allowed Union Pacific a set-off in the amount of plaintiff’s settlement with the manufacturer ($425,000).

Union Pacific appealed claiming the district court erred in not allowing a set-off for the portion of plaintiff’s medical bills written off as a result of negotiations between the medical providers and Union Pacific, and further erred in refusing to modify the allocation of the manufacturer settlement.

Holding: As Union Pacific did not pay or contribute to the write-off amount, it is not entitled to set off such amount under the plain language of FELA (45 U.S.C §55). Further, although the Court held that a district court should not simply rubberstamp a previous settlement in this type of case, it found that the district court did not abuse its discretion in approving the allocation of the manufacturer’s settlement.

For a complete copy of the Court’s opinion, click here

Buckeye State Mut. Ins. Co. v. Humlicek, 284 Neb. 463 (2012)

Issue: Does a landlord’s insurer have a right to subrogation against its tenant for property damages caused by the tenant’s negligence?

For a complete summary of the factual background of the case and court’s holding, click here

Facts: The insurer of the landlords of a duplex that was damaged by fire allegedly caused by the negligence of a certain tenant brought an action against that tenant to determine the insurer’s subrogation rights. The lease signed by the tenant required the tenant to take out a rental insurance policy to cover his own personal property, and also stated that the landlords would obtain fire and all risk extended coverage insurance for the full replacement value of the improvements located on the leased premises. After a fire, the insurer paid the landlords’ claims for damages resulting from the fire to both units and sought subrogation against the tenant who allegedly caused the fire for damages caused to the unit not covered by the tenant’s rental insurance policy. The tenant brought a motion for summary judgment that was granted by the district court, which reasoned that the tenant was an implied coinsured under the insurance policy covering the duplex structure and that an insurer cannot subrogate against its own insured. The insurer appealed. On appeal, the Nebraska Supreme Court upheld the ruling of the district court and found that whether an insurer had a right to subrogation was dependent upon whether recovery by the insurer against the wrongdoer would be “in effect” recovery from the insured for the very risk that the insurer agreed to take upon payment of the premium.

Holding: Absent an express subrogation agreement to the contrary, a tenant is conclusively presumed to be an implied coinsured of the landlord’s insurance policy, and under the anti-subrogation rule, no right of subrogation can arise in favor of an insurer against its own insured or coinsured for a risk covered by the policy, even if the insured is a negligent wrongdoer and regardless of the size of the dwelling or how it is divided.

For a complete copy of the Court’s opinion, click here

Bacon v. DBI/SALA, 284 Neb. 579 (2012)

Issues: (1) can an employer assert subrogation rights against a third party pursuant to § 48-118 in a case where the employer is a party but they did not initiate the action; (2) does the parent company of an injured person’s employer qualify as a “third person” under § 48-118; (3) does an employer’s insurer waive its right to future credits by including a waiver clause in the policy or by their counsel making statements regarding waiver during settlement negotiations.

Facts: Ronald Bacon (Bacon) was injured while working on a construction project as an employee of Davis Erection Co., Inc. (Davis). Davis and its insurer, Liberty Mutual Group (Liberty), began paying lifetime workers’ compensation benefits pursuant to an Owner Controlled Insurance Program (OCIP) issued to Kiewit Construction Co. (Kiewit). Kiewit was the general manager for the project. The OCIP insured the risk of Kiewit and its subcontractors and suppliers, including Davis. Bacon then brought a separate negligence action against Davis’ parent company, Ridgetop Holdings, Inc. (Ridgetop), and joined Davis and Liberty to the lawsuit for purposes of workers’ compensation subrogation. Ridgetop’s safety director had worked on the project under the supervision of Davis’ project manager, and Bacon alleged Ridgetop was independently liable for the safety director’s negligent acts which contributed to his injury. Bacon also added Kiewit and DBI/SALA as defendants under various theories of liability.

Bacon reached a settlement agreement with Ridgetop, after which the trial court granted Davis and Liberty’s motion for future credit pursuant to Neb. Rev. Stat. § 48-118 (Reissue 2010) against its continuing workers’ compensation obligations based on the settlement. The court reasoned that Ridgetop qualified as a “third person” under the statute, as opposed to an employer, and therefore the motion for future credit should be granted. Bacon appealed the order granting the future credit. At issue on appeal was (1) whether Davis, as Bacon’s employer, could assert subrogation rights in a case they did not initiate, (2) whether Ridgetop is a “third person” under § 48-118 and (3) whether Liberty waived its right to a future credit through a waiver clause in the OCIP and/or by statements made by their counsel during settlement negotiations.

On appeal, the Nebraska Supreme Court first addressed the issue of whether Davis, as Bacon’s employer, could assert subrogation rights in a case they did not initiate. The court began by reviewing the language of § 48-118, the statute which allows an employer to be subrogated to the rights of its employee when a third person is liable to the employee for an injury. Bacon argued that the language of the statute says “[a]ny recovery by the employer” and argued that since his employer, Davis, had not brought the lawsuit they were not entitled to recovery under § 48-118. The court reviewed previous Nebraska cases in which the court rejected any distinction between recovery by the employer and recovery by the employee, and affirmed the future credit granted by the trial court. The court reasoned that § 48-118, a provision of the Nebraska Workers’ Compensation Act, was enacted “for the benefit of the employer” and that “[i]nnocent employers who are required to compensate employees for injuries are intentionally granted a measure of relief equivalent to the compensation paid and the expenses incurred, where a third person negligently causes the loss and responds in damages to that extent.” Overall, the court found the language of the statute relied on by Bacon, “recovery by the employer” was trumped by the statute’s more general mandate that the employer shall be subrogated to the rights of the employee against third parties.

The court then addressed the second issue, whether Ridgetop is a third person under § 48-118. The court noted that “third person” is not defined by the Nebraska Workers’ Compensation Act. However, in previous holdings the court said that “third person” includes “any person other than the employer or those whom the Workmen’s Compensation Act makes an employer”. The court noted there is a strong presumption that a parent company is not the employer of its subsidiary’s employees, and Bacon was operating under this assumption when he sued Ridgetop as an independent entity that was not subject to workers’ compensation statutes. In addition, the court determined that the involvement of a Ridgetop employee in the work performed by Davis was inconsequential and that Ridgetop was not a coinsured under the policy. Therefore, the court affirmed the trial court determination that Ridgetop was a “third person” within the meaning of § 48-118.

Third, the court addressed whether Liberty waived its right to a future credit. On appeal Bacon argued that Liberty waived its right to a future credit through communications with Bacon’s counsel during the settlement negotiations and also through Liberty’s stipulation to the settlement with Ridgetop. The court noted that a carrier’s right to a future credit can be waived as part of a settlement. In addition, the court found that counsel for Liberty communicated with Bacon’s counsel and stated Liberty had no “’recovery’ rights as to any settlement monies from Kiewit or Ridgetop.” Furthermore, Liberty stipulated to the Ridgetop settlement which provided a release of any subrogation claims against Ridgetop. However, in both the communication between counsel and the settlement documents Liberty expressly reserved the right to a future credit under § 48-118. In the alternative Bacon argued that Liberty waived its right to subrogation by including a provision in its policy with Davis which waived rights to recover against all who performed work at the subject project. The court rejected this argument as the policy language relied on was in the OCIP and the Ridgetop was not an organization named in the schedule or in any of the policies under the OCIP. Based on these considerations the court found Liberty did not waive its right to a future credit.

Finally, the court addressed the issue of whether the settlement paid on behalf of Kiewit by Liberty and Kiewit’s additional insurer, which was separate from the Ridgetop settlement, should be deducted from the future credit provided Liberty and Davis. The court determined the settlement with Kiewit was not actually “recovered” by Bacon, the employee, due to a prior apportionment agreement, and therefore could not be included in the future credit.

Holding: (1) the employer of an injured employee may assert subrogation rights against a third party pursuant to § 48-118 in a case where they are a party but did not initiate the action; (2) the parent company of an injured person’s employer qualifies as a “third person” under § 48-118; (3) including a waiver clause in an OCIP will not affect an insurer’s right of subrogation against any individual or entity that is not a member of the OCIP.

For a complete copy of the Court’s opinion, click here

Iowa Law Updates

Kelly v. Riser, Inc., et al., No. 2-835/11-1898 (Iowa Ct.App. 2012)

Issue: Whether employee’s express contractual waiver of cause of action against client of employer for workplace injury, executed between the employee and employer, is enforceable by the client.

Facts: Plaintiff was a contract employee of temporary employment agency. Contract provided that if Plaintiff were ever injured in the course of wok for the agency any recovery would be limited to agency’s workers’ compensation insurance. Plaintiff became injured at worksite of agency’s client and filed a negligence action against the client. In defense client filed motion for summary judgment arguing it was third-party beneficiary of contract between Plaintiff and Plaintiff’s employer. The district court granted summary judgment in favor of client and Plaintiff appealed

Holding: On appeal the Iowa Court of Appeals held that the contractual waiver was enforceable because the language was unambiguous and did not prevent plaintiff from recovery. The Court further held that the repeated reference to client of employer clearly and expressly indicated that the release was to benefit third-party beneficiary client. Summary judgment was affirmed.

For a complete copy of the Court’s opinion, click here

Team Two, Inc. v. City of Des Moines, Iowa, No. 3-194 (Iowa Crt. App. 2013)

Issues: Whether the Court erred in not requiring the jury to show whether it based its verdict on a breach of a specific contract term or a breach of an implied covenant. Whether the Court erred in allowing the jury to award future damages to Plaintiff.

Facts: Plaintiff/Appellee, Team Two, Inc. contracted with Defendant/Appellant City of Des Moines, Iowa to provide various ambulance and emergency response services in the city. Team Two was paid certain rates by the City under the contract for services rendered and the City would remit payment on a monthly basis. Team Two also used the City’s database to access necessary information for insurance and billing purposes in order to bill individual patients. If Team Two was unsuccessful in collecting on patient debts, the uncollected debt was turned over to the City’s collection agency. The City’s collection agency utilized, among other methods, the Iowa Income Offset Program to collect unpaid debts and would remit to Team Two a percentage of collected funds.

After the contract between Team Two and the City expired, the parties were unable to reach a new agreement and the City entered into a service contract with another ambulance vendor. After the contract expired, the City denied Team Two access to the patient and billing information necessary for Team Two to track payments it was owed under the old contract. Team Two sued the City for breach of contract and breach of implied covenant of good faith and fair dealing based on the City’s practice of writing off certain debts owed jointly to the City and Team Two, removing them from collection activity.

A jury found that the City had breached its contract with Team Two and was entitled to past and future damages. The City appealed on the basis that there was insufficient evidence to support a finding of breach of an implied covenant and that the Court erred in allowing a general verdict form. It also contends the jury should not have been permitted to award future damages because the case involved only a partial breach.

Holding: The Court of Appeals of Iowa held that the evidence was sufficient to establish a finding that the City breached its implied covenant of good faith and fair dealing and thus the court did not err in allowing a general verdict form. The Court of Appeals further found that the trial court erred in allowing the jury to award future damages since the case involved a partial breach and contained.

For a complete copy of the Court’s opinion, click here

Farm Bureau Life Ins. Co. v. Holmes Murphy & Associates, Inc., 2013 WL 2127573 (Iowa 2013)

Issue: Does an underwriting exclusion within an insurance company professional liability policy preclude coverage for indemnity claims arising from a life insurance company’s failure to disclose findings of an applicant’s HIV positive status to that applicant?

Facts: A husband and wife applied for life insurance policies from Farm Bureau Life Insurance Company (“Farm Bureau”) and were denied due to “blood profile result,” which they later found was due to unknown HIV positive status. The couple sued Farm Bureau in federal court in Wyoming for negligent failure to disclose this information and the case was ultimately went on appeal to the 10th Circuit, which found Farm Bureau had a duty to disclose this information because a special relationship between the parties arose as a result of Farm Bureau’s policy eligibility investigation. The case was then settled.

Farm Bureau made a claim against its insurer, Federal Insurance Company, (“Federal”), under an Insurance Company Professional Liability Policy (“ICPL”) to cover this settlement. This claim was denied for failure to provide notice of the claim under the policy’s requirement and because claims “based upon, arising from, or in consequence of the underwriting of insurance,” were expressly excluded under the policy. Farm Bureau then sued Federal, and Federal was dismissed from the lawsuit on summary judgment based on Farm Bureau’s lack of timely notice. Farm Bureau also sued its insurance broker, Holmes Murphy & Associates, (“Holmes Murphy”), for breach of contract and negligence in failing to provide timely notice to Federal despite Farm Bureau’s timely notification to Holmes Murphy. Before the court made a determination on the claim for failure to provide timely notice, it was asked to rule on whether Farm Bureau’s claim against Federal would have been covered under the ICPL. The district court found coverage of Farm Bureau’s claim would have been precluded under the underwriting exclusion, rendering irrelevant any question on the issue of timely notice.

Holding: On appeal, the Supreme Court of Iowa affirmed that the underwriting exclusion precluded coverage because the HIV positive couple’s claims arose from Farm Bureau’s underwriting activity. “Underwriting” was not specifically defined in the ICPL policy, but the court found the dictionary definition of underwriting, that it is “the process of examining, accepting or rejecting insurance risks, and classifying those selected in order to charge the proper premium for each,” was consistent with the language of the ICPL exclusion and the definition applied by courts in other definitions. Insurers typically ask questions regarding an applicant’s medical background as part of the underwriting process of determining which persons or risks to insure. Records may be gathered and information obtained from attending physicians. The 10th Circuit had already found Farm Bureau’s duty to disclose the HIV positive testing was based upon a special relationship with the couple that arose as a result of its policy eligibility investigation. On these bases, the court found the HIV positive couple’s claims arose from Farm Bureau’s underwriting activity and the underwriting exclusion in the ICPL policy precluded Federal’s coverage for damages claimed even if Federal had received timely notice under its policy requirement.

For a complete copy of the Court’s opinion, click here

Putnam v. Kalber, Case No. 2-1166 (Iowa Ct. App. 2013).

Issues: Whether the trial court erred by excluding evidence of the plaintiff’s ingestion of THC (i.e. marijuana).

Facts: Plaintiff, Luke Putnam, filed a lawsuit against the defendant for injuries he received in a motor vehicle collision. At the trial, the defendant attempted to introduce a urine drug screen that was taken thirty minutes after the collision and indicated that Putnam tested positive for THC metabolites. Plaintiff filed a Motion in Limine seeking to exclude such evidence. In support of said motion, the plaintiff introduced the deposition of Dr. Corbett who testified that it is “impossible” to translate Putnam’s drug test results into evidence that he was impaired at the time of the incident. The deposition of Lieutenant Willner was also introduced; he testified that a positive test for marijuana use could result from smoking marijuana a week or more before the test. Based upon these depositions, the district court found that the drug test results would be more prejudicial than probative and, thus, it excluded the drug test under Iowa Rule of Evid. 5.403. The jury found the defendant was seventy percent at fault for the incident. The defendant appealed, claiming the district court erred when it excluded the results of Putnam’s drug test.

Holding: Evidence of Putnam’s positive drug test is not relevant to the issue of Putnam’s impairment at the time of the collision and would have been unfairly prejudicial to Putnam.

For a complete copy of the Court’s opinion, click here

Iowa Procedure
Rucker v. Taylor, 11-1394 (Iowa 2013)

Issues: Whether good-faith settlement negotiations satisfied the good-cause requirement for delaying service of the petition.

Facts: Plaintiff, Sharece Rucker and Defendants, Mike and Sherie Taylor, were involved in an automobile accident. On December 8, 2010, Plaintiff’s counsel sent a formal settlement demand to Defendants’ insurer. A claims representative responded to said demand with a counteroffer on December 20, 2010. Two days later, Plaintiff’s counsel responded to the claims representative, stating: “[w]e are filing the enclosed Petition at Law for [Sharece Rucker], but will wait to serve it until our negotiations break down. I will give you 21 days thereafter to seek counsel and defend. I don’t see any reason why we shouldn’t be able to workout a settlement” The claims representative did not respond to the letter and, on December 29, 2010, Plaintiff’s counsel filed the petition to commence an action against Defendants. Pursuant to Iowa R. Civ. P. 1.302(5) Plaintiff was required to serve Defendants with notice of the lawsuit within ninety days (i.e. by March 29, 2011) unless there was good cause to delay the service. Plaintiff continued settlement negotiations with the claims representative and did not serve the petition by March 29, 2011. Less than two weeks after receiving notice from the Court that the ninety day period for serving the petition had lapsed, Plaintiff served the petition upon Defendants. Defendants promptly filed a Motion to Dismiss for failing to timely serve the petition. The district court denied the motion, as it found Plaintiff’s expressed intent to delay service of the petition pending ongoing settlement negotiations combined with the adjuster’s participation in those settlement negotiations constituted good cause for Plaintiff’s delay in serving the petition.

Holding: An expressed or implied agreement to delay service of the petition is not needed to satisfy the good-cause requirement; instead, good-faith settlement negotiations satisfied the good-cause requirement for delaying service of the petition because the claims adjuster knew Plaintiff did not plan to pursue the timely service of the petition due to their ongoing negotiations and continued to engage in those negotiations.

For a complete copy of the Court’s opinion, click here

Caldwell v. Holiday Lake Owners’ Association, Inc., No. 3-485 (Iowa Ct. App. 2013)

Issue: Whether a defendant can join a party as a third-party defendant for purposes of contribution after the statute of limitations has run on Plaintiff’s cause(s) of action against that party.

Facts: Plaintiffs, the estate of decedent Scott McCarthy and McCarthy’s parents, filed suit against Defendant Holiday Lake Owners’ Association and Ricky Rizzo, alleging that the negligence of each party caused or contributed to Scott McCarthy’s death in a golf cart accident. Plaintiffs failed to serve Ricky Rizzo within the applicable statute of limitations. Defendant Holiday Lake filed a third-party complaint against Rizzo for contribution under Iowa Code section 668.5. Rizzo argued that he could not be joined since the statute of limitations had run and he was therefore not a party “who is or may be liable for all or part of the plaintiff’s claim” under Iowa’s impleader rule, Iowa R. Civ. P. 1.246(1). Rizzo also argued that any contribution claim was not ripe since there was not yet a judgment against Holiday Lake. Holiday Lake argued that Iowa R. Civ. P. 1.246(1) permits a defendant to file a cross petition “at any time after commencement of the action, ” and that the statute of limitations of the original action does not dictate the timing of bringing in a third-party defendant. The district court ruled that Rizzo could not be added.

Holding: The district court erred in finding that the statute of limitations of the original action controlled the timing of a defendant’s filing of a cross-petition under Iowa R. Civ. P. 1.246(1). A defendant is allowed to bring a third-party action even if the statute of limitations has run on the original claim so long as that party may be liable for all or part of the plaintiff’s claim.

For a complete copy of the Court’s opinion, click here

Donnell v. American Family Mutual Insurance Co., Iowa App., No. a-13-0672 (March 12, 2014).

Issue: Whether a one-year limitations provision provided in an insurance contract conforms with and is enforceable under Iowa law.

Facts: Sixteen months after lighting struck and damaged his home Appellant filed suit to recover insurance benefits from his insurer, the Appellee. The policy required that suit be instituted within one year from the date of loss. It also contained a conformity provision, wherein the insurer agreed that, if any terms of the policy were contrary to State law, it would reform the policy to conform to State law. Appellant argued that the one-year limitations provision was contrary to Iowa’s ten-year statute of limitations for instituting actions based upon written contracts and, therefore, the policy had to be reformed to comply therewith.

Holding: While Iowa has a ten-year statute of limitations for written contracts it also has a more specific one-year statute of limitations for fire insurance contracts. As such, Appellant’s insurance policy was not contrary to Iowa law and the one-year limitations period contained within the policy was enforceable.

For a complete copy of the Court’s opinion, click here

Travelers Property Casualty Co of America, et. al., v. Flexsteel Industries, Inc., Iowa App., Case No. 12-2014 (Mar. 26, 2014).

Issue: This case presented two issues: (1) whether a company is entitled to a dismissal or stay of a declaratory judgment action filed in Iowa that seeks a determination as to whether that company’s insurer must defend an Indiana lawsuit, and (2) whether Iowa’s law on pollution exclusions applies when the insured causes damage in Indiana.

Facts: Flexsteel Industries, Inc., a company headquartered in Dubuque, Iowa, was sued in Indiana by individuals who claimed they were exposed to chemicals released from two of Flexsteel’s Indiana plants. Flexsteel carried primary and excess liability insurance issued by a number of insurance companies, including Travelers Property Casualty Company of America. Travelers filed a declaratory judgment action in Iowa, seeking a declaration that the pollution exclusion in its policy eliminated coverage, including any duty to defend or indemnify Flexsteel in connection with the Indiana lawsuit. Flexsteel filed a motion requesting a dismissal or stay of the Iowa proceedings and further argued that Indiana law should be utilized to interpret the policy, in which case the pollution exclusion would not bar coverage.

Holding: Based upon the multiple factors considered when evaluating a motion to dismiss or stay a proceeding, it was not an abuse of discretion for the Iowa District Court to deny Flexsteel’s motion to dismiss or stay the Iowa lawsuit. It was, however, an error for the Iowa District Court to apply Iowa’s law when interpreting the policy’s pollution exclusion because the “principal location of the risk” was in Indiana, where a majority of the Flexsteel’s manufacturing facilities are located. Thus, Travelers had a duty to defend the Indiana lawsuit.

For a complete copy of the Court’s opinion, click here

Personal Jurisdiction
Shams v. Hassan, No. 12-0036 (Iowa 2013)

Issue: Whether the exercise of personal jurisdiction over a nonresident defendant to a lawsuit filed in Iowa that alleged misappropriated funds from an Iowa bank account violates the Due Process Clause of the Fourteenth Amendment.

Facts: Appellant Samir Shams and Appellee Sona Hassan are brother and sister. Shams was a resident of Iowa, with two children who resided in Iowa and one child who resided in Arizona. Hassan has been a resident of Maryland for many years and had not visisted Iowa since 1983. In 2003, Shams accepted an employment opportunity in Iraq. Before leaving Iowa, Shams set up a checking account at a bank in Des Moines for the purpose of depositing funds to provide for his children in his absence. Shams claimed that Hassan verbally agreed to use the account to provide for his children and pay his bills. He signed several blank checks and delivered them to Hassan in Maryland. Instead of using the checks to provide for the children, Hassan used the checks to withdraw funds, totaling $271,773.93, from the Iowa checking account for personal use.

Shams filed suit against Hassan in Iowa district court for breach of contract, conversion, bad faith, fraud, and breach of fiduciary duty. Hassan moved to dismiss for lack of personal jurisdiction. The district court granted the motion to dismiss and the court of appeals affirmed the decision.

Holding: The exercise of personal jurisdiction does not offend the Due Process Clause in this case. The injury in this case occurred almost totally in Iowa and, under the Calder test, Iowa was where the primary effect of the tortious act occurred. Therefore, sufficient minimum contact existed to justify the exercise of jurisdiction over Hassan.

For a complete copy of the Court’s opinion, click here

Premises Liability
Crawford v. Yotty, et. al., 11-0934 (Iowa 2013).

Issues: Whether a plaintiff in a negligent premises liability action is entitled to jury instructions that advise the jury as to a landlord’s obligations under Iowa’s Uniform Residential Landlord Tenant Act (IURLTA).

Facts: Plaintiff, RenElla Crawford, slipped and fell upon the steps leading to her son’s apartment. She filed a Complaint against her son’s landlord claiming they failed to adequately light the stairs, failed to remove snow and ice from the stairs, and failed to install a handrail. During the jury trial, Plaintiff requested jury instructions that would specifically inform the jury as to a landlord’s obligations under IURLTA. She argued that IURLTA imposes distinct duties upon a landlord and the jury should be instructed that those duties included obligations to: (1) comply with the requirements of applicable building and housing codes; (2) make all repairs and do whatever is necessary to keep the premises in a fit and habitable condition; (3) keep common areas of the premises in a clean and safe condition; and (4) maintain all facilities and appliances, including electric facilities, in good and safe working condition. The trial court declined to give that instruction and, instead, instructed the jury that the landlord owed a duty to exercise reasonable care in the maintenance of the premises and/or maintain the premises in a reasonably safe condition. The jury returned a verdict for the defendant. Plaintiff appealed.

Holding: Plaintiff was not entitled to jury instructions that recite the requirements of the IURLTA, as the concepts stated therein were embodied in other jury instructions, including the instruction that advised the jury that the landlord had a duty to exercise reasonable care in the maintenance of the premises and/or to maintain the premises in a reasonably safe condition.

For a complete copy of the Court’s opinion, click here

Sexual Harassment
Nelson v. James H. Knight DDS, P.C., 11-1857 (Iowa 2012)

Issue: Whether termination of a female employee because the employer’s wife, due to no fault of the employee, is concerned about the nature of the relationship between the employer and the employee constitutes sex discrimination in violation of the Iowa Civil Rights Act.

Facts: Plaintiff, Melissa Nelson (“Nelson”) was employed as a dental assistant in Defendant James Knight’s (“Knight”) dental office for over 10 years. On several occasions during the last year and a half, Knight complained to Nelson that her clothing was too tight and “distracting.” During the last six months of Nelson’s employment, Knight and Nelson began texting each about both work and personal matters. According to Nelson, most texts were relatively innocuous but were sexual in nature on at least one occasion. Nelson also testified that Knight made sexually suggestive comments to her at the workplace. However, she denied flirting with him or seeking an intimate relationship with him. Knight’s wife also worked at the office. When she learned about the text messages, she demanded Knight fire Nelson because of Nelson’s behavior and stating Nelson was, “a big threat to our marriage.” After consulting a family pastor, Knight terminated Nelson’s employment. Nelson sued alleging her termination was unlawful sex discrimination under the Iowa Civil Rights Acts. Nelson did not allege hostile work environment or sexual harassment. Knight moved for Summary Judgment, which was granted by the district court.

Holding: The Iowa Supreme Court affirmed the district court’s decision finding Nelson was fired because she was a threat to the employer’s marital relationship, not because of her gender. Thus, an employee who has not engaged in flirtatious conduct may be lawfully terminated because an employer views the employee as an “irresistible attraction.”

For a complete copy of the Court’s opinion, click here

Huyser v. Lynch, No. 11-1577 (Iowa Ct. App. 2012)

Issue: Whether evidence of loss or harm to reputation must be shown to justify an award of damages in slander per se cases.

Facts: Appellants, John D. Lynch and Mary Lynch, admitted to making slanderous statements to a minor child, of whom John Lynch is the father, about the child’s mother, Appellee Shaefen Huyser. The slanderous statements included statements that constitute slander per se under Iowa. Appellants argued that the Appellee did not present evidence of loss and thus was not entitled to a jury verdict for damages.

Holding: Slander per se is actionable without proof of harm to reputation; however, damages may not be awarded based solely on the defamatory statements. Recovery is limited to the natural and probable consequences of the publication and may include recovery for emotional distress and resulting bodily harm.

For a complete copy of the Court’s opinion, click here

Strict Liability
Burt v. Miller, Iowa App., Case No. 12-1934 (Mar. 26, 2014)

Issue: Whether Iowa Code section 351.28 imposes strict liability upon the owner of a dog for all damages caused by the dog, regardless of the contributory negligence of others and regardless of the owner’s knowledge of the dog’s vicious propensities.

Facts: While visiting his father at Appellant’s home, Salem Baker, an eleven-year old boy, was bit and seriously injured by a pit bull. Appellant admitted that he owned the pit bull, but argued it was an error to assess all damages against him because Salem’s father was caring for Salem and the dog when the incident occurred. Appellant further argued that strict liability should not be imposed because he did not know the dog had vicious propensities.

Holding: Iowa Code section 351.28 imposes strict liability upon the owner of a dog for all damages caused by the dog. The only defenses to strict liability imposed by this rule are set forth in Iowa Code section 351.28; it does not provide exceptions for the contributory negligence of a dog’s care giver or the owner’s knowledge of the dog’s vicious propensities.

For a complete copy of the Court’s opinion, click here

Uninsured Motorists
Moad v. Libby and Dakota Truck Underwriters, No. 2-721/12-0126 (Iowa Ct.App. 2012)

Issue: Under Iowa law, can a workers’ compensation lien be asserted against an employer’s uninsured motorist policy?

Facts: Douglas Moad, an over-the-road trucker, died following a motor vehicle accident with an uninsured driver that occurred while Moad was working in Iowa. The principle place of business of the company Moad worked for was in South Dakota. Following Moad’s death, Moad’s employer paid workers’ compensation benefits to Moad’s wife under its policy pursuant to South Dakota law. Moad’s estate also brought suit against the other driver, the employer’s uninsured motorist carrier, and Moad’s personal automobile insurer for uninsured motorist benefits. The workers’ compensation carrier filed a notice of subrogation lien related to the same. Settlement negotiations took place and Moad’s estate petitioned the court to accept the settlement. Moad’s estate also filed a motion to strike or extinguish the workers’ compensation carrier’s lien. The district court approved the settlement and extinguished the workers’ compensation lien, applying Iowa law, rather than South Dakota law, in doing so. The workers’ compensation carrier appealed asserting that South Dakota law should apply. If South Dakota law was applied, the workers’ compensation carrier would have been entitled to recover its lien from the uninsured motorist benefits paid from the employer’s uninsured motorist policy. The Iowa Court of Appeals analyzed the conflicts of law analysis asserted by the district court, found it was improperly applied, and remanded the case to the district court with instructions.

Holding: Aside from the conflicts of law issues and for purposes of our analysis, the key question at hand was whether a workers’ compensation lien can be asserted against an employer’s uninsured motorist policy under Iowa Law. Under Iowa law, a workers’ compensation carrier cannot recover its lien from the uninsured or underinsured motorist policy of the employer.

For a complete copy of the Court’s opinion, click here

Johnson v. Lockner, 2-1193 (Iowa Ct. App. 2013)

Issue: Whether a two-year limitation on the time allowed for filing a lawsuit for underinsured motorists coverage is reasonable and enforceable under Iowa law.

Facts: Plaintiff, Kevin Jones, was allegedly injured after being involved in an automobile accident with Nathan Lockner on August 16, 2009. Plaintiff had an automobile policy with Nationwide Insurance, which provided for underinsured motorists (UIM) coverage. That policy stated: “any suit against us under this Underinsured Motorists Coverage will be barred unless commenced within two years after the date of the accident.” On August 11, 2011, Plaintiff filed an action against Lockner; he did not attempt to add a claim against Nationwide for UIM coverage until November 4, 2011, well after the two-year period ended. Nationwide filed a Motion for Summary Judgment arguing the claim was bared by the policy’s requirement that the action be commenced within two years from the date of the accident. Plaintiff claimed he complied with this provision by providing a Nationwide agent with notice of the claim. Based upon this argument, the district court denied Nationwide’s Motion for Summary Judgment, as it found there were genuine issues of material fact concerning whether the two-year time limit prevented Plaintiff from recovering UIM benefits.

Holding: A two-year UIM policy deadline is enforceable as a matter of law because it matches Iowa’s two-year statute of limitations for filing a personal injury action. Because this policy expressly required commencing an action within two years, that provision was enforceable as a matter of law; Plaintiff’s failure to commence his action against Nationwide within that time frame was a bar to his action for UIM benefits.

For a complete copy of the Court’s opinion, click here

Esad Osmic v. Nationwide Agribusiness Insurance Company and Westfield National Insurance Company, No. 3-261 / 12-1295 (Iowa Ct. App. 2013)

Issue: Whether a third-party beneficiary asserting a claim against another insured’s UIM coverage with a contractual two-year limitation period is barred from asserting that claim after two years have passed, where the third-party was not advised of the limitation.

Facts: Plaintiff was injured in a motor vehicle accident while riding as a passenger in his brother’s SUV. Two years and thirty-one days later, Plaintiff sued seeking recovery under the underinsured motorist (UIM) provisions of his brother’s auto policy. Prior to filing suit, Plaintiff had engaged in correspondence with the insurer regarding a UIM claim, had requested the UIM policy declarations, had submitted much medical documentation, and had specifically asked whether the insurer required any additional information to process the claim.

The insurer filed a motion for summary judgment asserting the petition was barred by the UIM policy provision’s two-year deadline. The district court denied the motion and the insurer filed an interlocutory appeal.

Holding: The contractual two-year limitation period contained in the UIM policy was valid and enforceable as to the named insured; however, it was unenforceable as to the Plaintiff under the facts of the case. Specifically, the Iowa Court of Appeals held that it is reasonable to impose a duty on an insurer faced with a claim made by a passenger of its insured to inform such claimant of conditions precedent in the insurance contract, especially where the nonparty claimant has asked whether the insurer required any additional information in order to process the claim.

For a complete copy of the Court’s opinion, click here


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