Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co.

• Decision Date: 14 October 2022
• Docket Number: S-19-1089
• Citation: 312 Neb. 629
• Parties: Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter, appellant, v. Farm Bureau Property & Casualty Insurance Company, appellee.
• Court: Nebraska Supreme Court

312 Neb. 629

Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter, appellant, v. Farm Bureau Property & Casualty Insurance Company, appellee.

No. S-19-1089

Supreme Court of Nebraska

October 14, 2022

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: Appeal and Error. An order of the district court requiring a complaint to be made more definite will be sustained on appeal unless it clearly appears that the court abused its discretion.

4. Judges: Words and Phrases. 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.

5. Standing: Jurisdiction: Parties. Standing is a jurisdictional component of a party's case, and courts must address it as a threshold matter.

6. Motions to Dismiss: Jurisdiction: Pleadings. When a motion to dismiss raises both subject matter jurisdiction and failure to state a claim as grounds for dismissal, the court should consider the jurisdictional grounds first and should consider whether the complaint states a claim for relief only if it has determined that it has subject matter jurisdiction.

7. 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.

8. 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.

9. Insurance: Parties: Standing. Only a policyholder has standing to bring a first-party bad faith claim against an insurer.

10. Torts: Assignments. The proceeds from personal injury tort actions may be validly assigned, but the right to prosecute the tort action cannot.

11. ___:___. The right to prosecute a tort action for first-party bad faith cannot be validly assigned.

12. Pleadings: Rules of the Supreme Court. The purpose of a motion for a more definite statement under Neb Ct. R. Pldg. § 6-1112(e) is to enable movants to obtain the information reasonably needed to frame a responsive pleading.

13. Pleadings: Rules of the Supreme Court: Pretrial Procedure. Motions for a more definite statement under Neb. Ct. R. Pldg. § 6-1112(e) should not be used as a substitute for discovery; but if additional detail is needed to make a vague complaint intelligible, or to enable the movant to determine the availability of an affirmative defense, the fact that such detail can be obtained through discovery should not preclude providing it in response to a motion for a more definite statement, so long as the detail is reasonably needed to frame a responsive pleading.

14. Pleadings: Rules of the Supreme Court. One moving for a more definite statement under Neb. Ct. R. Pldg. § 6-1112(e) must identify the alleged deficiencies in the pleading, specify the details being requested, and assert the inability to prepare a responsive pleading without the requested details. These requirements are designed to enable the trial court to test the propriety of the motion so that an order can be entered consistent with the limited purpose of such motions.

15. ___: ___. Motions for more definite statements under Neb. Ct R. Pldg. § 6-1112(e) are addressed to the sound discretion of the trial court.

16. Pleadings: Dismissal and Nonsuit: Time. The 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). Not only may a court sua sponte dismiss an action without prejudice under § 25-601(5), but a defendant may file a motion to dismiss under that subsection.

17. Courts: Dismissal and Nonsuit. In addition to the statutory authority under Neb. Rev. Stat. § 25-601 (Reissue 2016), trial courts have the inherent authority to dismiss an action for violation of a court order.

18. Pleadings: Rules of the Supreme Court: Dismissal and Nonsuit: Time. When an order to make more definite is not obeyed within the time fixed by the court, Neb. Ct. R. Pldg. § 6-1112(e) authorizes a trial court to strike the pleading or make such order as it deems just. Dismissal is an available sanction under such a provision and is reviewed for an abuse of discretion.

Petition for further review from the Court of Appeals, Pirtle, Chief Judge, and Moore and Riedmann, Judges, on appeal thereto from the District Court for Douglas County, Kimberly Miller Pankonin, Judge. Judgment of Court of Appeals affirmed in part, and in part reversed and remanded with directions.

Theodore R. Boecker, Jr., of Boecker Law, P.C., L.L.O., for appellant.

Michael T. Gibbons and Raymond E. Walden, of Woodke & Gibbons, P.C., L.L.O., for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

STACY J.

In connection with a 2013 storm, Millard Gutter Company (Millard Gutter) obtained assignments of the right to insurance proceeds due under policies issued by Farm Bureau Property & Casualty Insurance Company (Farm Bureau). Millard Gutter then filed suit against Farm Bureau 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 insurance claims. In response to preanswer motions, the district court dismissed the claims of first-party bad faith for lack of standing and ordered Millard Gutter to file an amended complaint providing additional detail on the remaining claims. When no amended complaint was filed, the court sua sponte entered an order dismissing the entire action without prejudice.

Millard Gutter appealed, and the Nebraska Court of Appeals reversed.^[1] We granted Farm Bureau's petition for further review. Consistent with our opinion released today in Millard Gutter Co. v. Shelter Mut. Ins. Co. (Shelter), ^[2] we now in part reverse the Court of Appeals' decision and remand the matter to the Court of Appeals with directions to affirm the district court's dismissal of the first-party bad faith claims for lack of standing. We otherwise affirm the decision of the Court of Appeals.

I. BACKGROUND

1. Original Complaint and Preanswer Motions

On April 9, 2018, Millard Gutter filed a complaint against Farm Bureau in the district court for Douglas County. The complaint alleged that Millard Gutter was bringing the action as "the assignee of various insured property owners, who purchased insurance from [Farm Bureau]." Without identifying the policyholders or the policies, the complaint alleged that "due to a storm occurring in 2013," various property owners sustained property loss that was covered under the Farm Bureau policies. It alleged that the property owners "assigned their right to any proceeds under policies of insurance" to Millard Gutter. The assignments were not attached to the complaint, and neither the date of the storm nor the dates of the assignments were alleged.

According to the complaint, Farm Bureau was given copies of the assignments, and claims were made for insurance proceeds owed under the policies. The complaint alleged that Farm Bureau "breached the policies by failing to pay Millard [Gutter] all benefits due and owing under the policies." It also alleged that Farm Bureau "wrongfully retained money due to Millard [Gutter] and engaged in an unreasonable delay of payment" and that "[a]s a direct and proximate result of the bad faith conduct of Farm Bureau," Millard Gutter sustained harm. The complaint sought general and special damages in an unspecified amount, as well as attorney fees and prejudgment interest.

Farm Bureau responded to the complaint by filing several preanswer motions, none of which were included in the appellate record. However, as relevant to the issues on appeal, other portions of the record indicate that Farm Bureau filed (1) a motion to dismiss the bad faith claims for lack of standing and (2) a motion for a more definite statement regarding the breach of contract claims.

2. Amended Complaint

On the same day the hearing was held on Farm Bureau's preanswer motions, Millard Gutter filed an amended complaint. Our record indicates that all of Farm Bureau's preanswer motions were deemed to relate to the amended complaint. The amended complaint was nearly identical to the original complaint, except it identified, by name and street address, 20 Farm Bureau policyholders in Omaha, Nebraska. It alleged these policyholders suffered property damage in a hailstorm occurring on April 9, 2013, after which they "assigned their right to any proceeds under policies of insurance" to Millard Gutter "in consideration for [Millard Gutter's] agreeing to perform necessary repair work, which was accomplished . . . thereafter." None of the assignments were attached.

3. Hearing and Order on Preanswer Motions

Our appellate record does not include the bill of exceptions from the hearing held...