Allied Mut. Ins. Co. v. City of Lincoln, S-03-1414.

• Decision Date: 08 April 2005
• Docket Number: No. S-03-1414.,S-03-1414.
• Parties: ALLIED MUTUAL INSURANCE COMPANY, APPELLANT AND CROSS-APPELLEE, v. CITY OF LINCOLN, APPELLEE AND CROSS-APPELLANT, AND GENESIS INSURANCE COMPANY, APPELLEE AND CROSS-APPELLEE.
• Court: Nebraska Supreme Court

269 Neb. 631

694 NW 2d 832

ALLIED MUTUAL INSURANCE COMPANY, APPELLANT AND CROSS-APPELLEE, v. CITY OF LINCOLN, APPELLEE AND CROSS-APPELLANT, AND GENESIS INSURANCE COMPANY, APPELLEE AND CROSS-APPELLEE.

No. S-03-1414.

Supreme Court of Nebraska.

Filed April 8, 2005.

Thomas B. Wood, of Wolfe, Snowden, Hurd, Luers & Ahl, L.L.P., for appellant.

Dana W. Roper, Lincoln City Attorney, and Ernest R. Peo for appellee City of Lincoln.

Robert T. Grimit and Andrew K. Smith, of Baylor, Evnen, Curtiss, Grimit & Witt, L.L.P., for appellee Genesis Insurance Company.

WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

McCORMACK, J.

NATURE OF CASE

Allied Mutual Insurance Company (Allied), an insurer for the City of Lincoln, filed a declaratory judgment action to construe and determine the validity of insurance contracts written by Allied and Genesis Insurance Company (Genesis) as insurers for the city. The city filed a cross-petition in the action and sought declaratory judgment that the Allied policy and the public entity policy issued by Genesis extended coverage for the city's liability. The claims against the city were based upon an automobile accident that occurred in March 1998, wherein Sarah Cockson was injured and Laura Cockson was killed when the car in which they were passengers collided with another automobile driven by Jeffrey Ireland. At the time of the accident, the automobile operated by Ireland was being pursued by an officer with the Lincoln Police Department. All parties moved for summary judgment. The district court entered summary judgment in favor of Genesis and denied summary judgment for Allied and the city. Allied appeals, and the city cross-appeals.

BACKGROUND

In 1999, Sarah Cockson, in her individual capacity, and Robert Cockson, as personal representative of the estate of Laura Cockson, filed a claim against the city under Neb. Rev. Stat. § 13-911 (Reissue 1997) of the Political Subdivisions Tort Claims Act, alleging that the accident was proximately caused by the actions of the police officer during the vehicular pursuit.

In 2000, a settlement agreement was reached between the city and the Cocksons. The city then demanded that Allied and Genesis indemnify it pursuant to the insurance policies issued by each insurer to the city. Allied had issued the city a business automobile policy for September 1, 1997, through September 1, 1998, and Genesis had issued the city a public entity policy for that same time period. Genesis denied that its policy provided coverage for the city's liability. Genesis claimed that its policy provided automobile hazard coverage only for those losses emanating out of the StarTran public transportation system. Allied did not concede that its policy provided coverage, but loaned the city $306,682 to use as a partial payment to satisfy the settlement. The receipt for Allied's loan provides that the city will repay amounts loaned by Allied in the event that a court finds that the Allied policy did not provide coverage for the injuries sustained by the Cocksons as a result of the accident.

Allied's policy provides, in relevant part:

SECTION II — LIABILITY COVERAGE

A. COVERAGE

We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto".

. . . .

B. EXCLUSIONS

This insurance does not apply to any of the following:

1. EXPECTED OR INTENDED INJURY

"Bodily injury" or "property damage" expected or intended from the standpoint of the "insured".

Endorsement No. 11 of the Genesis policy contains the following limitation: "Coverage provided by this policy within the automobile hazard, including no-fault (personal injury protection), uninsured motorists and underinsured motorists coverages, is limited to only those autos owned, operated, used, maintained or repaired, including loading or unloading, by StarTran."

All parties filed motions for summary judgment. On May 30, 2002, the district court sustained Genesis' motion, but denied Allied's motion. The district court did not address the city's motion at that time. In its order, the district court found that under endorsement No. 11 of the Genesis policy, the policy clearly provides coverage for automobile hazards, but the coverage is limited to those automobiles owned, operated, used, maintained, or repaired by StarTran. Since the claim against the city arose out of the use of a motor vehicle by the Lincoln Police Department, the exclusionary provision of the policy applied, and the court granted Genesis' motion for summary judgment. With regard to Allied's motion for summary judgment, the court stated that Allied contends that the coverage does not apply because the Cocksons' injuries did not arise out of the operation, ownership, and maintenance of an insured vehicle (the police car) because the collision was between the Cocksons' vehicle and another vehicle. Allied further claimed that the officer's continuance of the pursuit was an intentional act. The court found that the officer did act intentionally in continuing the chase and engaging his vehicle's lights and siren, but whether his actions amounted to expected or intended bodily injury or property damage from the standpoint of the insured, as required by Allied's policy exclusion, remained a genuine issue of material fact. The court, therefore, denied Allied's motion for summary judgment. The district court's order did not expressly direct the entry of final judgment as to any of the parties and did not expressly determine that there was no just reason for delay of an appeal.

Allied and the city filed notices of appeal on June 28 and July 1, 2002, respectively. Thereafter, on October 24, the city filed with the Nebraska Court of Appeals a motion to dismiss Allied's appeal for lack of jurisdiction. The city alleged that the district court's May 30 order was not a final judgment because it did not adjudicate the rights and liabilities of all the parties and the order did not direct the entry of final judgment pursuant to Neb. Rev. Stat. § 25-1315 (Cum. Supp. 2000). Citing Scottsdale Ins. Co. v. City of Lincoln, 260 Neb. 372, 617 N.W.2d 806 (2000), the Court of Appeals sustained the city's motion to dismiss. See Allied Mut. Ins. Co. v. City of Lincoln, 11 Neb. App. xxviii (No. A-02-747, Jan. 2, 2003). In Scottsdale Ins. Co., we addressed whether a city's insurers were required to indemnify the city for a judgment entered against it in a motorist's personal injury action for injuries the motorist sustained when the car in which she was riding was struck by a car that was being pursued by a city police officer. We held that an order granting one insurer's motion for summary judgment and denying another insurer's motion for summary judgment in the declaratory judgment action was not a final, appealable order, requiring dismissal of the city's appeal and one insurer's cross-appeal where the order did not adjudicate rights and liabilities of the parties to the action and the order made no express determinations. An exception to this rule exists, however, when multiple parties are involved in a claim. In such cases, a court may direct the entry of final judgment as to one or more but fewer than all of the claims or parties upon an express determination that there is no just reason for delay and upon an express direction for the entry of summary judgment. See § 25-1315. In its May 30 order, the district court did not expressly direct the entry of final judgment, nor did the court make a determination that there was no just reason for delay.

On March 25, 2003, following the dismissal of Allied's appeal by the Court of Appeals, Genesis filed a motion with the district court requesting that the court find the judgment entered on May 30, 2002, to be final pursuant to § 25-1315(1). The district court sustained Genesis' motion and, on August 14, 2003, entered an order directing that the May 30, 2002, judgment be entered as a final judgment as to Allied and as to the city's claims against Genesis. The district court also denied the city's motion for summary judgment in a separate order entered on that date. On August 25, 2003, Allied filed a motion for a new trial. Allied's motion was denied by the district court on November 13, and Allied filed its notice of appeal within 30 days of the district court's order. The city cross-appeals.

ASSIGNMENTS OF ERROR

Allied assigns seven errors, all of which can be consolidated into the following two restated errors: The district court erred by (1) determining that endorsement No. 11 of the Genesis insurance policy was an exclusion of coverage entitling Genesis to summary judgment and (2) failing to grant summary judgment in favor of Allied and finding that the motor vehicle pursuit by the Lincoln Police Department was not an intentional act and that the injuries were not intended or expected. The city, as cross-appellant, assigns two errors: The district court erred in (1) not determining that the police officer's action in apprehending Ireland, rather than the vehicular pursuit, constituted the efficient proximate cause of the injuries suffered by the Cocksons and (2) determining that endorsement No. 11 of the Genesis policy limited coverage for automobile hazards to StarTran vehicles.

STANDARD OF REVIEW

[1] The question of jurisdiction is a question of law, upon which an appellate court reaches a conclusion independent of the trial court. Cummins Mgmt. v. Gilroy, 266 Neb. 635, 667 N.W.2d 538 (2003).

[2] In reviewing a summary judgment, an appellate court views the evidence in the 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. Woodhouse Ford v. Laflan, 268 Neb. 722, 687 N.W.2d 672 (2004).

[3] The interpretation of an insurance policy...