Snyder v. Case

Decision Date02 June 2000
Docket NumberNo. S-99-309.,S-99-309.
Citation611 N.W.2d 409,259 Neb. 621
PartiesCarol L. SNYDER, appellee, v. Juanita CASE, appellee, and EMCASCO Insurance Co., intervenor-appellant.
CourtNebraska Supreme Court

Steven W. Olsen, of Simmons, Olsen, Ediger, Selzer, Ferguson & Carney, P.C., Scottsbluff, for intervenor-appellant.

Michael J. Javoronok, of Michael J. Javoronok Law Firm, Scottsbluff, for appellee Snyder.



EMCASCO Insurance Co. (EMC) appeals from a judgment in favor of Carol L. Snyder for underinsured motorist benefits under an insurance policy issued by EMC. The district court for Scotts Bluff County, Nebraska, concluded that Snyder's claim was not barred by the statute of limitations, and following trial, a jury awarded a verdict in favor of Snyder, upon which judgment was entered. EMC perfected this timely appeal after the district court denied its motion for new trial. We find no error and affirm.


On July 9, 1993, Snyder was injured in an accident involving a motor vehicle operated by Juanita Case. Snyder filed this action against Case on July 3, 1997, seeking damages for injuries to her neck, arm, shoulder, and back. On April 23, 1998, EMC filed a lien in the district court, claiming it had paid Snyder $5,000 pursuant to the medical payment provision under her policy and had not yet been repaid. On August 13, partial summary judgment was granted in Snyder's favor on the issue of Case's liability. In September, with the knowledge and consent of EMC, Snyder settled her claim against Case by accepting Case's liability insurance limit of $100,000. Snyder then made a demand upon EMC for underinsured motorist benefits provided by her policy. In a letter dated October 12, 1998, an EMC claims supervisor denied Snyder's claim for underinsured motorist benefits.

EMC intervened in this action on October 22, 1998, and Case was subsequently dismissed. In its petition in intervention, EMC alleged that it issued an insurance policy to Snyder which provided underinsured motorist coverage. EMC further alleged that Snyder had given notice of her claim for benefits under the underinsured motorist policy and that EMC had given its permission for Snyder to accept Case's policy limits. EMC alleged that Snyder had made demand for the policy limits under the underinsured motorist coverage, but alleged that this claim was barred by the statute of limitations and prayed for a determination that it had no liability to Snyder under its policy. In her answer and cross-petition, Snyder alleged that she had recovered Case's liability insurance policy limit of $100,000 and had made demand on EMC for underinsured motorist benefits, which EMC denied. Snyder denied that her claim was barred by the statute of limitations and prayed for judgment against EMC.

Both parties filed motions for summary judgment on the statute of limitations issue. The district court granted Snyder's motion on January 8, 1999, finding that because Snyder's underinsured motorist policy contained an "exhaustion clause," "the statute of limitations should begin to run on the date the aggrieved party had the right to institute and maintain suit for underinsured motorist insurance benefits, i.e. the date of compliance with the `exhaustion clause'." The "exhaustion clause" contained within the underinsured motorist policy EMC issued to Snyder provides as follows: "We will pay under this coverage only after the limits of liability under any applicable bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements."

At trial on the issue of damages only, both parties presented evidence regarding the accident and the nature of Snyder's injuries. Jack Greene, a vocational rehabilitation counselor, testified as an expert witness on behalf of Snyder. Greene testified without objection that in his opinion, Snyder suffered a 50-percent loss of earning capacity as a result of the injuries she sustained in the accident. Over EMC's objection on grounds of "relevance and Rule 702," Greene testified that based upon his calculations, Snyder's loss of earning capacity had a value of $353,813.

The parties stipulated to medical bills of $11,330.90. The jury was instructed to determine the amount of damages which would compensate Snyder for her injury and returned a unanimous verdict in the amount of $150,000, upon which judgment was entered. In a ruling on posttrial motions, the district court denied EMC's motion for new trial but reduced the judgment by $101,484.73, representing the amount of personal injury and property damage payments received by Snyder from Case's liability insurance carrier.


EMC contends, summarized, that the district court erred (1) in finding that the statute of limitations on Snyder's claim for underinsured motorist benefits had not expired prior to the time she made her claim against EMC and (2) in allowing testimony from Snyder's vocational rehabilitation counselor, Greene.


In connection with questions of law and statutory interpretation, an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below. Essen v. Gilmore, 259 Neb. 55, 607 N.W.2d 829 (2000); Zoucha v. Henn, 258 Neb. 611, 604 N.W.2d 828 (2000).

In proceedings where the Nebraska Evidence Rules apply, the admissibility of evidence is controlled by the Nebraska Evidence Rules; judicial discretion is a factor only when the rules make such discretion a factor in determining admissibility. Seeber v. Howlette, 255 Neb. 561, 586 N.W.2d 445 (1998); Smith v. Papio-Missouri River NRD, 254 Neb. 405, 576 N.W.2d 797 (1998). Because the exercise of judicial discretion is implicit in determinations of relevancy and admissibility under Neb.Rev.Stat. §§ 27-401 and 27-403 (Reissue 1995), the trial court's decision will not be reversed absent an abuse of discretion. Seeber v. Howlette, supra.

See State v. Kirksey, 254 Neb. 162, 575 N.W.2d 377 (1998). Similarly, our review of the trial court's admission or exclusion of expert testimony which is otherwise relevant will be for an abuse of discretion. Phillips v. Industrial Machine, 257 Neb. 256, 597 N.W.2d 377 (1999); Mahoney v. Nebraska Methodist Hosp., 251 Neb. 841, 560 N.W.2d 451 (1997).

A motion for new trial is addressed to the discretion of the trial court, whose decision will be upheld in the absence of an abuse of that discretion. Seeber v. Howlette, supra; Hartwig v. Oregon Trail Eye Clinic,

254 Neb. 777, 580 N.W.2d 86 (1998).


Underinsured motorist coverage is a contract which indemnifies an insured when a tort-feasor's insurance coverage is inadequate. Ploen v. Union Ins. Co., 253 Neb. 867, 573 N.W.2d 436 (1998). Because of this derivative nature of underinsured motorist coverage, two statutory limitations periods are arguably applicable to an insured's action against the underinsured motorist carrier. The first is Neb.Rev. Stat. § 44-6413(1)(e) (Reissue 1998), which provides that underinsured motorist coverage shall not apply to an action for "[b]odily injury, sickness, disease, or death of the insured with respect to which the applicable statute of limitations has expired on the insured's claim against the... underinsured motorist." The second is Neb.Rev.Stat. § 25-205 (Reissue 1995), which provides for a 5-year statute of limitations on written contracts.

In Kratochvil v. Motor Club Ins. Assn., 255 Neb. 977, 588 N.W.2d 565 (1999), we held that § 44-6413(1)(e) operates as a bar to an action for uninsured motorist benefits where the insured claimant did not commence an action against the tort-feasor within the applicable limitations period. However, § 44-6413(1)(e) does not apply if the injured party claiming underinsured motorist benefits commenced a timely claim against the tort-feasor. See Schrader v. Farmers Mut. Ins. Co., 259 Neb. 87, 608 N.W.2d 194 (2000). In that circumstance, the 5-year statute of limitations for actions on written contracts set forth in § 25-205 applied to the claim for underinsured motorist benefits under the policy. Schrader v. Farmers Mut. Ins. Co., supra.

In this case, it is clear that Snyder commenced her action against Case within the 4-year limitation period governing tort actions. Therefore, § 44-6413(1)(e) is inapplicable, and EMC's statute of limitations defense must be analyzed under § 25-205. In Schrader, we did not reach the issue of when a cause of action for underinsured motorist benefits accrues under § 25-205. That issue is now squarely before us. EMC argues that Snyder's claim accrued on the date of the 1993 motor vehicle accident in which she sustained injuries, and is therefore barred under the 5-year limitations period. Snyder argues that because of the exhaustion clause contained in her policy, she had no right to commence an action against EMC until after she recovered the limit of Case's liability insurance policy in 1998 and that her claim against EMC was, therefore, timely.

Generally, a cause of action accrues and the period of limitations begins to run upon the violation of a legal right, that is, when the aggrieved party has the right to institute and maintain suit. Reinke Mfg. Co. v. Hayes, 256 Neb. 442, 590 N.W.2d 380 (1999); Smith v. State, 250 Neb. 291, 549 N.W.2d 149 (1996); St. Paul Fire & Marine Ins. Co. v. Touche Ross & Co., 244 Neb. 408, 507 N.W.2d 275 (1993). A cause of action in contract accrues at the time of the breach or failure to do the thing agreed to. Hoeft v. Five Points Bank, 248 Neb. 772, 539 N.W.2d 637 (1995); Brtek v. Cihal, 245 Neb. 756, 515 N.W.2d 628 (1994); Ed Miller & Sons, Inc. v. Earl, 243 Neb. 708, 502 N.W.2d 444 (1993); L.J. Vontz Constr. Co. v. Department of Roads, 232 Neb. 241, 440 N.W.2d 664 (1989).

As noted, this court has not previously decided the issue of when an insured's cause of...

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