Neeman v. Otoe County

• Decision Date: 29 January 1971
• Docket Number: Nos. 37631--37634,s. 37631--37634
• Citation: 186 Neb. 370,183 N.W.2d 269
• Parties: Irene L. NEEMAN, Appellee, v. OTOE COUNTY and Hawkeye-Security Insurance Company, Appellees, Impleaded with Aetna Insurance Company, a corporation, Appellant. Maurice V. KARSPECK, Appellee, v. OTOE COUNTY and Hawkeye-Security Insurance Company, Appellees, Impleaded with Aetna Insurance Company, a Corporation, Appellant. Ruth M. WILLIAMS, Appellee, v. OTOE COUNTY and Hawkeye-Security Insurance Company, Appellees, Impleaded with Aetna Insurance Company, a corporation, Appellant. Loretta H. BASSINGER, Appellee, v. OTOE COUNTY and Hawkeye-Security Insurance Company, Appellees, Impleaded with Aetna Insurance Company, a corporation, Appellant.
• Court: Nebraska Supreme Court

Page 269

183 N.W.2d 269

186 Neb. 370

Irene L. NEEMAN, Appellee, v. OTOE COUNTY and Hawkeye-Security Insurance Company, Appellees, Impleaded with Aetna Insurance Company, a corporation, Appellant.

Maurice V. KARSPECK, Appellee, v. OTOE COUNTY and Hawkeye-Security Insurance Company, Appellees, Impleaded with Aetna Insurance Company, a Corporation, Appellant.

Ruth M. WILLIAMS, Appellee, v. OTOE COUNTY and Hawkeye-Security Insurance Company, Appellees, Impleaded with Aetna Insurance Company, a corporation, Appellant.

Loretta H. BASSINGER, Appellee, v. OTOE COUNTY and Hawkeye-Security Insurance Company, Appellees, Impleaded with Aetna Insurance Company, a corporation, Appellant.

Nos. 37631--37634.

Supreme Court of Nebraska.

Jan. 29, 1971.

Syllabus by the Court

1. Rule XI of the Rules of Procedure of the Nebraska Workmen's Compensation Court requiring that notice of cancellation of compensation insurance by filed within 10 days after cancellation of the policy is primarily for the protection of claimants entitled to compensation.

2. Where a workmen's compensation insurance policy is canceled and is replaced by a new policy issued and certified by another insurance company and effective on the date of cancellation of the old policy, a failure to file notice of cancellation with the Nebraska Workmen's Compensation Court within the time specified by Rule XI does not in and of itself invalidate the cancellation.

3. A new compensation insurance carrier has no standing to complain of a delay by the former carrier in complying with Rule XI. The new carrier should be held solely responsible for payment of workmen's compensation liability arising on or after the effective date of its policy and after the date of cancellation of the replaced policy.

4. A workmen's compensation insurance carrier for an employer should be deemed to be an 'employer' within the meaning of section 48--125, R.R.S.1943.

Haney, Wintroub & Haney, Omaha, for appellant.

Vantine A. James, Nebraska City, for Neeman, Williams and Bassinger.

Maurice V. Karspeck, pro se.

Bernard M. Spencer, County Atty., Nebraska City, Gross, Welch, Vinardi, Kauffman, Schatz & Day, Omaha, for Otoe County and others.

Heard before WHITE, C.J., and CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN and NEWTON, JJ.

McCOWN, Justice.

These are workmen's compensation cases. Aetna Insurance Company has appealed from judgments of the district court holding Aetna solely liable for payment of four separate workmen's compensation awards arising out of an accident which occurred April 24, 1968. Aetna contends that Hawkeye Security Insurance Company also covered the risk, and that Aetna and Hawkeye should each be responsible for one-half of the awards.

There is no dispute as to the plaintiffs' right to compensation benefits nor as to the amount of benefits. Prior to 1968, Otoe County had carried its workmen's compensation insurance with Hawkeye. It was written through Rowe Insurance Agency, an independent insurance agent. The certificate of compensation insurance filed by Hawkeye with the workmen's compensation court on March 14, 1967, covered the one-year policy period from April 30, 1967, to April 30, 1968.

In the spring of 1968, the manager of Rowe Insurance Agency negotiated with the county commissioners for a package insurance policy combining and replacing some 40 to 50 separate coverages, including the workmen's compensation coverage. The new package policy was to be placed with Aetna. The county commissioners accepted the proposal on March 29, 1968, to be effective on April 15, 1968. The agent (who was the agent for both Hawkeye and Aetna) and the county commissioners agreed that April 15, 1968, would be the effective date of cancellation of all other policies.

On March 29, 1968, Aetna was informed that its insurance policy was in effect as of April 15, 1968. On April 5, 1968, Aetna filed its certificate of compensation insurance with the Nebraska Workmen's Compensation Court certifying that Aetna insured Otoe County for workmen's compensation liability under a policy effective April 15, 1968, and expiring April 15, 1969. On or before April 10, 1968, Hawkeye was notified that its workmen's compensation policy was cancelled as of April 15, 1968. The independent agent specifically testified that there was no agreement as to any dual coverage.

Sometime between April 15 and April 20, 1968, the payroll auditor for Hawkeye was requested by his superiors to audit the Otoe County payroll for the period from April 30, 1967, to April 15, 1968. That audit was done in the usual course of business early in May and the workmen's compensation insurance premium to Hawkeye was predicated and paid on the period ending April 15, 1968.

A notice of cancellation of the Hawkeye insurance policy was received and filed by the workmen's compensation court on April 29, 1968. That notice showed the policy had been cancelled effective April 15, 1968. Rule XI of the Nebraska Workmen's Compensation Court required the notice of cancellation to be filed 'within ten days after cancellation of the policy.' The accident out of which plaintiffs' claims arose occurred April 24, 1968.

It was stipulated that Aetna had paid 50 percent of the benefits due under the Enbraska Workmen's Compensation Act to each of the plaintiffs and that Hawkeye had paid no compensation benefits. Both insurance companies were joined with Otoe County, the employer, as defendants in the workmen's compensation court and in the district court. The one-judge Nebraska Workmen's Compensation Court found that Hawkeye had failed to prove that its policy was canceled prior to the accident of April 24, 1968, and entered judgment against both insurance companies jointly and severally. Hawkeye appealed directly to the district court for Otoe County. The district court affirmed all awards as against Aetna Insurance Company and adjudged Hawkeye to have no liability. It also ordered the addition of the statutory 50 percent penalty for delinquent payments as provided by section 48--125, R.R.S.1943, and also assessed against Aetna an attorney's fee of $300 for each individual plaintiff represented by counsel.

Aetna concedes that it was the workmen's compensation carrier for Otoe County on the date of the accident, April 24, 1968, but contends that because Hawkeye's notice of cancellation to the workmen's compensation court was not filed within the 10-day period required by Rule XI, Hawkeye's policy was also in effect and there was dual coverage and joint liability.

The issue is one of first impression in Nebraska. It has been considered in various aspects and in varying contexts by many courts. In some states, compensation statutes provide that cancellation of a workmen's compensation insurance policy does not become effective in absence of notice to the compensation commission. Sometimes statutes require either the approval of the commission or the lapse of a specified interval of time in which provision may be made for replacement of the insurance. Some states deal with the issue by regulation or rule. Such rules also vary. Occasionally, statutes, rules, or regulations make exceptions where the employer has procured other insurance within the time limit or provide that the effective date of the new policy shall be the cancellation date of the old policy. It is, therefore, difficult to compare cases dealing with so many variables.

In Nebraska, by statute, any workmen's compensation policy is required to cover all of the employer's liability and all compensation awarded under the act. Ss. 48--146 and 48--145, R.R.S.1943. The form of policy approved by the insurance department provides that it may be canceled by the insured by surrender thereof to the company or any of its authorized agents, or by mailing written notice to the company stating when thereafter the cancellation is to be effective. No statute requires the filing of any notice of cancellation of the workmen's compensation insurance policy.

Rule XI does not provide...