Millard Gutter Co. v. Shelter Mut. Ins. Co.
| Decision Date | 14 October 2022 |
| Docket Number | S-20-907 |
| Citation | 312 Neb. 606 |
| Parties | Millard Gutter Company, a corporation doing business as mlllard roofing and Gutter, appellant, v. Shelter Mutual Insurance Company, appellee. |
| Court | Nebraska Supreme Court |
1. Motions to Dismiss: Pleadings: Appeal and Error. A district court's grant of a motion to dismiss on the pleadings is reviewed de novo by an appellate court, accepting the factual allegations in the complaint as true and drawing all reasonable inferences of law and fact in favor of the nonmoving party.
2. Actions: Parties: Standing: Judgments: Jurisdiction Appeal and Error. Whether a party who commences an action has standing and is therefore the real party in interest presents a jurisdictional issue. When a jurisdictional question does not involve a factual dispute determination of the issue is a matter of law which requires an appellate court to reach a conclusion independent from the trial court.
3. Pleadings: Judges: Words and Phrases: Appeal and Error. An order of the district court requiring a complaint to be made more definite and certain will be sustained on appeal unless it clearly appears that the court abused its discretion. A judicial abuse of discretion exists when the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.
4. Actions: Parties: Standing. Whether a party who commences an action has standing, and is therefore the real party in interest, presents a jurisdictional issue.
5. Actions: Parties. The purpose of Nebraska's real party in interest statute, Neb. Rev Stat. § 25-301 (Reissue 2016), is to prevent the prosecution of actions by persons who have no right, title or interest in the cause.
6. Actions: Parties: Standing. The focus of the real party in interest inquiry is whether the party has standing to sue due to some real interest in the cause of action, or a legal or equitable right, title, or interest in the subject matter of controversy.
7. Standing. The focus of a court's standing inquiry is not on whether the claim being advanced has merit; it is on whether the plaintiff is the proper party to assert the claim.
8. Assignments: Parties. Generally, if there has been a valid and complete assignment of rights, then the assignee is the real party in interest, but if the assignment is invalid, then the purported assignor remains the real party in interest.
9. Assignments: Words and Phrases. An assignment is the transfer of some identifiable property, claim, or right from the assignor to the assignee.
10. Assignments. Fundamental to the law of assignments is the concept that an assignee takes nothing more by an assignment than the assignor had; an assignor cannot assign any rights greater than that which he or she held.
11. Assignments: Intent. The intention of the assignor must be to transfer a present interest in a debt or fund or subject matter.
12. Insurance: Breach of Contract: Assignments: Standing. In the absence of a statute to the contrary, an insured may validly assign a postloss breach of contract claim for insurance proceeds due under a homeowner's policy, and the assignee of such a claim has standing to bring the breach of contract claim in its own name.
13. Standing: Pleadings: Evidence: Words and Phrases. When standing is challenged at the pleadings stage, before an evidentiary hearing and before any evidence outside of the pleadings is admitted, it is deemed a facial challenge.
14. Standing: Pleadings: Proof. When considering a facial challenge to standing, the trial court will typically review only the pleadings to determine whether the plaintiff has alleged sufficient facts to establish standing.
15. Torts: Insurance: Contracts. The general theory underlying the tort of bad faith is that the law implies a covenant of good faith and fair dealing as a result of the contractual relationship between the insurer and the insured.
16. Torts: Insurance: Claims: Proof. To establish a claim of first-party bad faith, a policyholder must show both an absence of a reasonable basis for denying benefits of the insurance policy and the insurer's knowledge or reckless disregard of the lack of a reasonable basis for denying the claim.
17. Torts: Intent. An action for first-party bad faith is an intentional tort.
18. Actions: Insurance: Contracts. A cause of action for insurer bad faith is separate from, and not dependent on, a cause of action for breach of the insurance policy, although the two may share facts in common.
19. Claims: Torts: Insurance: Damages: Proximate Cause. Because claims of bad faith are grounded in tort, traditional tort damages, including damages for mental distress and for economic loss, are recoverable when they are proximately caused by the insurer's tortious bad faith conduct.
20. Torts: Insurance: Claims. Only (1) an injured policyholder who is also a covered person or (2) a policyholder who is also a beneficiary may bring a cause of action in tort against the policyholder's insurer for failure to settle the policyholder's insurance claim.
21. Torts: Claims: Assignments: Death: Abatement, Survival, and Revival. The common-law rule is that a right of action is not assignable where the tort causes a strictly personal injury and does not survive the death of the person injured.
22. Torts: Assignments: Statutes. Where only the proceeds of personal injury tort litigation, and not control of the litigation, have been assigned, such assignments are valid and enforceable under Nebraska law unless there is a statute prohibiting such assignment.
23. Torts: Insurance: Claims: Assignments. A policyholder cannot validly assign the right to prosecute or control a tort action for first-party bad faith.
24. Torts: Insurance: Assignments. A policyholder's postloss assignment of insurance proceeds neither increases nor changes the insurer's obligations under the insurance policy.
25. Pleadings. Motions to make more definite and certain are addressed to the sound discretion of the trial court.
26. Pleadings: Time: Dismissal and Nonsuit. A plaintiff's failure to file an amended pleading within the time specified by the court's order is a basis for dismissing the action without prejudice under Neb. Rev. Stat. §25-601(5) (Reissue 2016).
27. Courts: Dismissal and Nonsuit. In addition to the statutory authority under Neb. Rev. Stat. § 25-601 (Reissue 2016), courts have inherent authority to dismiss an action for violation of a court order. And pursuant to their inherent authority, courts can dismiss the action with or without prejudice.
Appeal from the District Court for Douglas County: Shelly R. Stratman, Judge. Affirmed.
Theodore R. Boecker, Jr., of Boecker Law, P.C., L.L.O., for appellant.
Michael T. Gibbons, Raymond E. Walden, and Christopher D. Jerram, of Woodke & Gibbons, P.C., L.L.O., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.
In connection with a 2013 storm, Millard Gutter Company (Millard Gutter) obtained assignments from various policyholders of Shelter Mutual Insurance Company (Shelter). Millard Gutter then filed suit against Shelter in its own name, as assignee, seeking to recover damages for breach of the insurance contracts and for first-party bad faith in failing to settle the claims. The district court dismissed the action, and Millard Gutter appeals. The primary question on appeal is whether Millard Gutter has standing to assert first-party bad faith claims against Shelter. We affirm the judgment of the district court.
On April 9, 2018, Millard Gutter filed a complaint against Shelter in the district court for Douglas County. Millard Gutter brought the action in its own name as "the assignee of various insured property owners" who purchased insurance from Shelter and whose property "sustained loss due to a storm occurring in 2013." The assignments were not attached to the complaint, but were described therein as "valid assignments of the right to proceeds under an insurance policy issued by Shelter."
The complaint alleged that Millard Gutter provided Shelter with copies of the assignments and made claims for storm damage to the insured properties. The complaint broadly alleged that all of the Shelter policies were in full force and effect, the storm damage was covered, and all conditions precedent under the policies had been met. The complaint did not identify the addresses or locations of the insured properties, the dates of the alleged storm damage, or the dates the assignments were made. Millard Gutter alleged that Shelter breached the policies when it "failed to make direct payment to [Millard Gutter]" and failed to include Millard Gutter "as a payee on any checks or other payments for the loss." The complaint also alleged that Shelter's failure to pay Millard Gutter amounted to "bad faith and constitutes a separate violation of the implied covenant of good faith and fair dealing owed under the insurance contracts." The complaint prayed for unspecified general and special damages in an amount to be determined at trial.
Shelter moved to dismiss the bad faith claims pursuant to Neb. Ct. R. Pldg. § 6-1112(b)(6), arguing the complaint failed to state a claim because Millard Gutter lacked standing to assert a first-party bad faith claim. Additionally, Shelter moved for a more definite statement under § 6-1112(e) arguing that without more detail identifying the insured properties and the nature and scope of the alleged assignments, Shelter could not reasonably form a responsive pleading. More specifically, Shelter argued that it could not discern, from the allegations of the...
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