Cleaver-Brooks, Inc. v. Twin City Fire Ins. Co.
| Decision Date | 02 July 2015 |
| Docket Number | No. S–14–822,S–14–822 |
| Citation | 865 N.W.2d 105 |
| Parties | Cleaver–Brooks, Inc., appellee, v. Twin City Fire Insurance Company, a subsidiary of The Hartford Insurance Company, appellant, and American Insurance Company et al., appellees. |
| Court | Nebraska Supreme Court |
Andrew T. Schlosser, of Fitzgerald, Schorr, Barmettler & Brennan, P.C., L.L.O., Omaha, for appellant.
Terry R. Wittler, of Cline, Williams, Wright, Johnson & Oldfather, L.L.P., Lincoln, for appellees SSW, Inc., formerly known as National Dynamics Corporation, et al.
J. Scott Paul, of McGrath, North, Mullin & Kratz, P.C., L.L.O., Omaha, for appellee American Insurance Company.
Tiernan T. Siems, Omaha, and Andrew M. Collins, of Erickson & Sederstrom, P.C., for appellee Cleaver–Brooks, Inc.
1. Summary Judgment: Appeal and Error.An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts 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, the court views the evidence in the light most favorable to the party against whom the judgment was granted and gives such party the benefit of all reasonable inferences deducible from the evidence.
3. Judgments: Estoppel: Appeal and Error.An appellate court reviews a court's application of judicial estoppel to the facts of a case for abuse of discretion and reviews its underlying factual findings for clear error.
4. Workers' Compensation: Appeal and Error.In light of the beneficent purpose of the Nebraska Workers' Compensation Act, the appellate courts give the act a liberal construction to carry out justly the spirit of the act.
5. Workers' Compensation.Delay, cost, and uncertainty are contrary to the underlying purposes of the Nebraska Workers' Compensation Act.
6. Workers' Compensation: Legislature: Intent: Employer and Employee: Time.The Nebraska Workers' Compensation Act was intended by the Legislature to simplify legal proceedings and to bring about a speedy settlement of disputes between the injured employee and the employer by taking the place of expensive court actions with tedious delays and technicalities.
7. Equity: Estoppel.Judicial estoppel is an equitable doctrine that a court invokes at its discretion to protect the integrity of the judicial process.
8. Estoppel.The doctrine of judicial estoppel protects the integrity of the judicial process by preventing a party from taking a position inconsistent with one successfully and unequivocally asserted by the same party in a prior proceeding.
9. Estoppel.Judicial estoppel prevents parties from gaining an advantage by taking one position in a proceeding and then switching to a different position when convenient in a later proceeding.
10. Estoppel.Judicial estoppel is to be applied with caution so as to avoid impinging on the truth-seeking function of the court, because the doctrine precludes a contradictory position without examining the truth of either statement.
11. Laches.The defense of laches is not favored in Nebraska.
12. Laches.Laches occurs only if a litigant has been guilty of inexcusable neglect in enforcing a right and his or her adversary has suffered prejudice.
13. Laches: Equity.Laches does not result from the mere passage of time, but because during the lapse of time, circumstances changed such that to enforce the claim would work inequitably to the disadvantage or prejudice of another.
14. Laches.What constitutes laches depends on the circumstances of the case.
15. Negligence.For actionable negligence to exist, there must be a legal duty on the part of the defendant to protect the plaintiff from injury, a failure to discharge that duty, and damage proximately resulting from such undischarged duty.
16. Negligence.Whether a legal duty exists for actionable negligence is a question of law dependent on the facts in a particular case.
17. Negligence.Absent a duty, a negligence claim fails.
18. Negligence: Insurance: Claims.When a claim arises, an insurer generally owes a duty to the insured to exercise reasonable care in defending the suit.
James E. Risor, an employee at a boiler manufacturing plant in Lincoln, Nebraska, sustained permanent hearing loss as a result of his employment. Between the time Risor was injured and the time he filed his workers' compensation claim, the plant changed ownership. Counsel representing the new owner's insurer, American Insurance Company (American), mistakenly believed American had insured the plant during the time of the injury. Twin City Fire Insurance Company (Twin City), which insured the plant for the previous owner, was not given notice of the claim until after entry of an award.
The new owner of the plant filed a declaratory judgment action against the previous owner and both insurers to determine who is liable for payment of the award. The district court determined that Twin City was liable. Twin City appeals. We find the district court correctly determined that Twin City was liable for the award and hence affirm.
The parties have entered into a stipulation, so the facts are not in dispute by any party.
Risor began working at a boiler manufacturing plant, colloquially referred to as “Nebraska Boiler,” in Lincoln in 1973, and remained continuously employed at the plant until his retirement in 2004. During the course of Risor's employment, he suffered permanent hearing loss in both ears. Risor filed a claim against Nebraska Boiler in the Nebraska Workers' Compensation Court on January 20, 2004.
The plant has been owned by several different entities from 1973 to the present, although a company with the exact legal name of “Nebraska Boiler” has never owned the plant. In 1976, Daniel T. Scully, Roger L. Swanson, and Verlyn L. Westra purchased the plant and incorporated it as Nebraska Boiler Company, Inc. In 1989, Nebraska Boiler Company, Inc., merged with National Dynamics Corporation (National Dynamics), and after the merger, Nebraska Boiler Company, Inc., ceased to exist. Scully, Swanson, and Westra were shareholders of National Dynamics.
In 1998, Aqua–Chem, Inc., purchased various assets of National Dynamics, including the boiler manufacturing plant. Pursuant to the purchase agreement, National Dynamics agreed to indemnify Aqua–Chem for any liabilities not assumed by Aqua–Chem. No workers' compensation claims by Risor were mentioned in the agreement. After the sale, National Dynamics changed its name to SSW, Inc., and subsequently dissolved in 2003. The assets of the corporation were distributed to its three shareholders: Scully, Swanson, and Westra. In 2006, Aqua–Chem changed its name to Cleaver–Brooks, Inc. Cleaver–Brooks is the current legal owner of the boiler manufacturing plant.
Several companies have provided workers' compensation insurance coverage to the boiler manufacturing plant over the years.
At the time of the sale to Cleaver–Brooks, National Dynamics entered into an agreement with Twin City to provide workers' compensation insurance coverage to National Dynamics for claims made by employees working at the boiler manufacturing plant from 1992 to 1998.
Cleaver–Brooks contracted with Fireman's Fund Insurance Company, later renamed American, to provide workers' compensation insurance coverage from 1992 to 2002. The coverage did not extend back to claims arising from the boiler manufacturing plant before Cleaver–Brooks acquired it in 1998.
Liberty Mutual Group, Inc., provided workers' compensation insurance coverage to Cleaver–Brooks from 2002 through Risor's trial. Liberty Mutual is not a party to this action.
Nebraska Boiler was the only named defendant in Risor's workers' compensation claim. The compensation court provided only Cleaver–Brooks with notice of the claim. Neither National Dynamics nor any of the insurance companies were given notice by the court. After Cleaver–Brooks tendered the claim to its two insurance providers, each insurance company retained separate counsel to defend Cleaver–Brooks against Risor's claims. During the course of the litigation, counsel for American operated under the mistaken belief that American had provided workers' compensation insurance coverage to Nebraska Boiler from 1992 to 2002. Instead, American had actually provided workers' compensation insurance coverage to only Cleaver–Brooks and not to National Dynamics, which actually owned Nebraska Boiler when Risor was injured. Counsel for American represented this mistaken belief to the compensation court.
On April 26, 2006, a single judge of the compensation court determined that Risor was permanently and totally disabled as a result of the hearing loss. The judge determined the date of the accident to be October 19, 1993. The date of the injury was apparently a surprise to both Risor and the defendants.
In his complaint, Risor alleged that he had suffered injuries only as early as 2001. Despite the determination of October 19, 1993, as the date of the accident causing the hearing loss, the judge ordered payment from Nebraska Boiler to begin as of the date of Risor's retirement, February 12, 2004.
After the filing of this order, an adjuster for American realized that Cleaver–Brooks did not own the plant on the date of Risor's injury; therefore, American was not the plant's insurer at the time of the injury. Nebraska Boiler filed a motion for continuance in order to allow “ ‘additional parties who may have an exposure to liability once a final determination has been made’ be served and given an opportunity to present additional evidence to the court.”1 The judge denied the motion for continuance. Both Risor and Cleaver–Brooks appealed to a review panel of the compensation court.
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