Herman Bros., Inc. v. Great West Cas. Co.
| Decision Date | 24 July 1998 |
| Docket Number | No. S-97-274,S-97-274 |
| Citation | 582 N.W.2d 328,255 Neb. 88 |
| Parties | HERMAN BROS., INC., Appellant, v. GREAT WEST CASUALTY COMPANY, Appellee. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Summary Judgment. Summary judgment is proper when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.
2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence.
3. Judgments: Appeal and Error. As to questions of law, an appellate court has an obligation to reach a conclusion independent from the trial court's conclusion.
4. Summary Judgment. On a motion for summary judgment, the question is not how the factual issue is to be decided, but whether any real issue of material fact exists.
5. Summary Judgment: Proof. The party moving for summary judgment has the burden to show that no genuine issue of material fact exists and must produce sufficient evidence to demonstrate that the moving party is entitled to judgment as a matter of law.
6. Summary Judgment: Proof. A movant for summary judgment makes a prima facie case by producing enough evidence to demonstrate that the movant is entitled to a judgment if the evidence were uncontroverted at trial. At that point, the burden of producing evidence shifts to the party opposing the motion.
7. Insurance: Contracts: Judgments: Appeal and Error. Interpretation and construction of an unambiguous term in an insurance contract or policy involves questions of law, in connection with which an appellate court has an obligation to reach its conclusions independent of the determinations made by the court below.
8. Insurance: Contracts: Notice: Claims. The purpose of a notice provision in an insurance policy is to alert the insurer of a possible claim and give it the opportunity to make an investigation in order to enable it to process any future claim.
9. Insurance: Notice: Claims. Where there is no evidence of collusion and it is not shown that the insurer has been prejudiced in its handling of a claim, the failure to give timely notice is not a defense to the claim.
Kermit A. Brashear, Donald J. Straka, Mary P. Galligan, Scott E. Daniel, and Anna M. Bednar, of Brashear & Ginn, Omaha, for appellant.
Eugene P. Welch, of Gross & Welch, P.C., Omaha, for appellee.
Herman Bros., Inc. (HBI), commenced this action against its insurer, Great West Casualty Company (Great West), for damages based upon a denial of coverage. Both parties moved for summary judgment. The trial court found that HBI had failed to give adequate and timely notice of its claim to Great West and that Great West had been prejudiced by this lack of notice. The court entered summary judgment in favor of Great West, and HBI appeals.
Summary judgment is proper when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law. Chalupa v. Chalupa, 254 Neb. 59, 574 N.W.2d 509 (1998).
In reviewing a summary judgment, an appellate court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence. Id.
As to questions of law, an appellate court has an obligation to reach a conclusion independent from the trial court's conclusion. Heins v. Webster County, 250 Neb. 750, 552 N.W.2d 51 (1996).
On December 1, 1988, Great West issued a series of umbrella policies to HBI for successive 1-year periods through December 1, 1991. The umbrella policies provided excess coverage over HBI's liability policies and workers' compensation policy. Pursuant to the umbrella policies, Great West agreed to pay on behalf of HBI all sums in excess of HBI's self-insured retention amount of $10,000, which HBI became obligated to pay as a result of personal injury liability, together with expenses associated with the investigation, negotiation, settlement, and defense of any suit seeking damages for personal injuries.
In 1988, HBI provided interstate trucking services for Liquid Air Corporation (Liquid Air). HBI operated a terminal at Sharon, Pennsylvania, under various collective bargaining agreements with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 261, AFL-CIO (the Union). Since HBI's contract with Liquid Air was due to expire in October 1988, it began negotiations with Liquid Air. HBI sought several concessions from the Union in order to make a competitive bid to renew its contract, but the Union refused these concessions. Liquid Air subsequently canceled its contract with HBI and entered into a new contract with Quickie Transport Co., Inc. (Quickie).
Quickie was a nonunion trucking company based in Minneapolis, Minnesota, and had a terminal located in Masury, Ohio. On February 17, 1989, HBI closed its Sharon, Pennsylvania, terminal and permanently laid off the employees at the terminal. On April 7, a "Charge Against Employer" was filed with the National Labor Relations Board (NLRB) by the Union against HBI, Liquid Air, and Quickie.
On April 17, 1991, an amended charge was filed against HBI. This amended charge alleged that HBI had laid off its employees at the Sharon, Pennsylvania, facility because of their union membership and that HBI had failed to collectively bargain with the Union regarding rates of pay, wages, hours of employment, and other conditions of employment, in violation of § 8(a)(1), (3), and (5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1), (3), and (5) (1994).
A formal complaint was filed by the NLRB on April 19, 1991, alleging that HBI failed to bargain collectively and in good faith and that it discriminated against individual members of the Union in regard to their hiring, tenure, and terms or conditions of employment. The NLRB sought to impose liability on HBI by alleging that HBI and Quickie constituted a single employer.
In June, October, and December 1992, hearings were held in connection with the NLRB action. During a recess at one of the hearings, HBI commenced settlement negotiations with the NLRB. Following negotiations, the NLRB and HBI reached a tentative settlement of $290,000.
In early December 1992, soon after the tentative settlement agreement was drafted, representatives of HBI met with Todd Zeller, an employee of the insurance brokerage firm which sold HBI its umbrella policy, to review the policy to determine whether coverage existed regarding the claim. Zeller opined that because the umbrella policy had a broad personal injury definition and was excess over the underlying policies, HBI could submit its claim to Great West for coverage.
On December 8, 1992, Zeller and representatives of HBI met with John Fitzgerald and Pat Kuehl of Great West for the purpose of reviewing the various insurance policies and to notify Great West of the NLRB action. Fitzgerald requested HBI to provide additional information concerning the claim and advised that Great West would check the language of the umbrella policy. On December 23, HBI sent Great West written notification of its claim which set forth the factual basis of the claim, including the amended charge, the NLRB complaint, and the status of the proposed settlement. HBI demanded that Great West pay $290,000 less the $10,000 In a response dated December 30, 1992, Great West denied coverage and refused to provide payment. After receipt of the correspondence from Great West, HBI paid the Union $290,000.
policy retention amount before January 1, 1993.
On March 23, 1994, HBI commenced this action against Great West to recover the amount of the settlement plus the attorney fees it incurred in connection with the NLRB action. In its answer, Great West asserted that notice of the claim was untimely; Great West was not given an opportunity to "associate in the defense and control of" the claim; HBI had not sustained a personal injury; and HBI had engaged in acts that were committed with actual malice or a willful violation of a penal statute or ordinance and, therefore, no coverage was provided.
Following a hearing on each party's respective motion for summary judgment, the trial court concluded that HBI had failed to give adequate and timely notice of the claim and that this lack of notice had prejudiced Great West. Accordingly, the trial court overruled HBI's motion for summary judgment and sustained Great West's motion for summary judgment.
HBI makes the following assignments of error: (1) The trial court erred in sustaining Great West's motion for summary judgment, finding that HBI had failed to give adequate notice of the underlying claim and that Great West had been prejudiced as a matter of law, and (2) the trial court erred in overruling HBI's motion for summary judgment.
In summary, HBI argues that there is a material issue of fact regarding whether the date of the occurrence was the date that the amended charge was filed or the date of the December 1992 hearing and that there is a material issue of fact regarding whether Great West received adequate and timely notice of the claim. HBI also claims that Great West failed to prove that it was substantially prejudiced as a result of the alleged late notice.
On a motion for summary judgment, the...
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