Hauptman, O'Brien, Wolf & Lathrop, P.C. v. Auto-Owners Ins. Co.
| Decision Date | 23 March 2021 |
| Docket Number | No. A-20-516.,A-20-516. |
| Citation | 958 N.W.2d 428,29 Neb.App. 662 |
| Court | Nebraska Court of Appeals |
| Parties | HAUPTMAN, O'BRIEN, WOLF & LATHROP, P.C., appellee and cross-appellant, v. AUTO-OWNERS INSURANCE COMPANY, appellant and cross-appellee. |
Michael T. Gibbons, Omaha, and Raymond E. Walden, of Woodke & Gibbons, P.C., L.L.O., for appellant.
Joshua J. Yambor, Omaha, and Stevie Chesterman, of Hauptman, O'Brien, Wolf & Lathrop, P.C., for appellee.
Auto-Owners Insurance Company (the insurer) appeals from the order of the district court for Douglas County, which affirmed the Douglas County Court's order granting summary judgment to Hauptman, O'Brien, Wolfe & Lathrop, P.C. (the law firm). On appeal, the insurer asserts that Neb. Rev. Stat. § 44-3,128.01 (Reissue 2010) renders the common fund doctrine inapplicable to the law firm's recovery in this case. The law firm has cross-appealed, asserting that the district court abused its discretion in granting the insurer an extension of time to file its statement of errors. Finding no error, we affirm.
On April 13, 2017, Charlyn Imes was injured in a motor vehicle accident caused by the negligence of a third party (the tort-feasor). Imes was insured by the insurer, and under the medical payments provision of that policy, the insurer paid Imes $1,000 as a result of the accident (which was the policy limit for medical expenses arising from personal injury suffered by Imes during a covered accident). Imes retained the law firm to pursue her claim against the tort-feasor. After 9 months of work by the law firm, the tort-feasor's insurance company settled with Imes for $48,200, an amount less than the policy limit of the underlying tort-feasor, and Imes released the tort-feasor.
During the settlement process, the insurer sent a letter to the tort-feasor's insurance company, asserting a subrogation interest in any settlement or judgment involving Imes and the tort-feasor, to the extent of the $1,000 in benefits paid to Imes by the insurer, and advising, "We will not honor any requests for attorney fees unless we expressly request their assistance in pursuit of our subrogation." The tort-feasor's insurer acknowledged receipt of the subrogation interest letter, but a check for the $1,000 was sent to the law firm rather than to the insurer. The law firm asked the insurer to reduce its subrogation lien pursuant to the common fund doctrine and accept only two-thirds of its $1,000 interest. The insurer advised, however, that it would not accept less than the full $1,000 as reimbursement of its medical payments coverage on behalf of Imes and that the law firm was not to represent the insurer's subrogation interest.
On July 25, 2018, the law firm filed a complaint in the county court against the insurer. The law firm alleged that its work in obtaining a recovery on behalf of Imes, 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 and customary attorney fee pursuant to Nebraska common law was one-third of the amount recovered per the law firm's fee agreement with Imes. The law firm alleged that it had made demand upon the insurer for the fair and customary attorney fee, which the insurer had failed, refused, and neglected to pay. Accordingly, the law firm sought recovery against the insurer for $333.33 plus costs.
The insurer answered and filed a counterclaim, seeking a declaration that it was entitled to the full $1,000 under § 44-3,128.01 and the terms of the policy.
The parties filed opposing motions for summary judgment, which were heard by the county court on January 9, 2020. The court received various documentary exhibits offered by the parties, including copies of the insurance policy, certain correspondence, pleadings, discovery responses, and an affidavit from one of the attorneys in the law firm documenting work done in obtaining the recovery for Imes. In addition to the information already set forth above, we note the following provision in the insurance policy issued by the insurer to Imes, under the section entitled "Preserve Our Right to Recover Payments":
(Emphasis in original.)
On March 9, 2020, the county court entered an order finding no genuine issue of material fact. It granted the law firm's motion for summary judgment, entered judgment in the law firm's favor for $333.33, and denied the insurer's summary judgment motion.
On March 17, 2020, the insurer filed a notice of appeal in the county court, indicating its intent to appeal the county court's summary judgment ruling to the district court. The bill of exceptions from the county court proceeding was filed in the district court on April 14. On May 7, the insurer filed a statement of errors in the district court, asserting that the county court erred in granting summary judgment to the law firm and denying summary judgment to the insurer. Specifically, the insurer asserted that the county court erred by adopting the law firm's position with respect to the common fund doctrine and failing to recognize the preemptive effect of § 44-3,128.01.
On May 15, 2020, the law firm filed a motion to strike the insurer's statement of errors as untimely, because it had not been filed within 10 days of the filing of the bill of exceptions in the district court as required by Neb. Ct. R. § 6-1452(A)(7) (rev. 2011). The insurer subsequently filed a motion for extension of time to file its statement of errors, seeking to extend the time for filing to the date on which its statement of errors was actually filed.
On June 15, 2020, the district court heard the insurer's appeal from the county court proceedings and the parties’ motions with respect to the insurer's statement of errors. During argument with respect to the parties’ motions, the insurer's attorney admitted that during the course of filing his appeal, he "did not find" the rule with respect to when the statement of errors should be filed. The district court granted the insurer's motion for the extension of time, implicitly denying the law firm's motion to strike. Although the bill of exceptions was not marked as an exhibit, the court received it from the county court proceedings, which had been filed in the district court, and heard argument with regard to the appeal.
On June 26, 2020, the district court entered an order affirming the county court's summary judgment order. The district court first noted that the only effort by the insurer to obtain its subrogation claim of $1,000 was to send the tort-feasor's insurance carrier a letter demanding that it be paid the $1,000, while the law firm spent 9 months in efforts that resulted in a settlement for Imes and which benefited the insurer. The court determined that § 44-3,128.01 did not prevent the application of the common fund doctrine to allow the law firm to recover one-third of the insurer's $1,000 subrogation interest. The court observed that § 44-3,128.01 preserved the subrogation rights of insurers for medical payments and stated that preservation of the insurer's subrogation rights was not at issue in this case. The court stated that § 44-3,128.01 did not in any way limit the common fund doctrine, which "simply allows equity and fairness to compensate the attorney for providing a benefit to the subrogation insurance carrier."
The insurer subsequently perfected its appeal to this court, and the law firm cross-appealed.
The insurer asserts that the district court (1) erred in affirming the county court's order granting summary judgment to the law firm and denying summary judgment to the insurer and (2) erred as a matter of law by applying the common fund doctrine to the law firm's retention of a portion of the amount of medical payments reimbursement and failing to recognize the preemptive effect of § 44-3,128.01.
On cross-appeal, the law firm asserts that the district court abused its discretion when it granted the insurer's motion for an extension of time to file its statement of errors.
The district court and higher appellate courts generally review appeals from the county court for error appearing on the record. Schaefer Shapiro v. Ball , 305 Neb. 669, 941 N.W.2d 755 (2020). When reviewing a judgment for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable. Id.
However, in instances when an appellate court is required to review cases for error appearing on the record, questions of law are nonetheless reviewed de novo on the record. Panhandle Collections. v. Singh , 28 Neb. App. 924, 949 N.W.2d 554 (2020). Statutory interpretation is a question of law, which an appellate court resolves independently of the trial court. Egan v. County of Lancaster , 308 Neb. 48, 952 N.W.2d 664 (2020). The determination of whether the common fund doctrine applies is a question of law, with respect to which an appellate court must reach a conclusion independent of the trial court's ruling. Simon v. City of Omaha , 267 Neb. 718, 677 N.W.2d 129 (2004).
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