Union Ins. Co. v. Bailey

• Decision Date: 26 January 1990
• Docket Number: No. 88-193,88-193
• Citation: 450 N.W.2d 661,234 Neb. 257
• Court: Nebraska Supreme Court
• Parties: UNION INSURANCE COMPANY, Appellee, Cross-Appellee, and Cross-Appellant, v. Daniel BAILEY and Earleen Bailey, Husband and Wife, Appellees and Cross-Appellees; Tower Financial, Inc., Appellee, Cross-Appellee, and Cross-Appellant; Valley Restoration and Construction, Inc., Appellant.

Page 661

450 N.W.2d 661

234 Neb. 257

UNION INSURANCE COMPANY, Appellee, Cross-Appellee, and Cross-Appellant, v. Daniel BAILEY and Earleen Bailey, Husband and Wife, Appellees and Cross-Appellees Tower Financial, Inc., Appellee, Cross-Appellee, and Cross-Appellant Valley Restoration and Construction, Inc., Appellant.

No. 88-193.

Supreme Court of Nebraska.

Jan. 26, 1990.

Syllabus by the Court

1. Declaratory Judgments. An action for declaratory judgment under the provisions of Neb.Rev.Stat. §§ 25-21,149 et seq. (Reissue 1985) is sui generis. Whether such an action is to be treated as one at law or one in equity is to be determined by the nature of the dispute.

2. Contracts. If the essence of the dispute sounds in contract, the action is to be treated as one at law.

3. Declaratory Judgments: Contracts: Appeal and Error. The Nebraska Supreme Court treats the determination of factual issues in a declaratory judgment action sounding in contract and which is tried without a jury in the same manner as any other action at law; accordingly, the findings of the trial court have the effect of a verdict and will not be set aside unless clearly wrong.

4. Judgments: Appeal and Error. In reviewing the trial court's judgment in an action at law tried to the court, the Nebraska Supreme Court does not reweigh the evidence but, instead, considers the judgment in the light most favorable to the successful party and resolves conflicts in favor of the successful party, who is entitled to the benefit of every inference which can reasonably be deduced from the evidence.

5. Trial: Evidence: Witnesses: Appeal and Error. In a bench trial, the judge sitting as the trier of fact is the sole judge of the credibility of the witnesses and the weight to be given their testimony, and we do not reweigh the evidence on appeal.

6. Construction Contracts. In the absence of a contract to pay a definite sum, the contractor is entitled to recover only the reasonable market value for material and labor.

7. Construction Contracts. When a cost estimate is furnished, the contractor is entitled to the reasonable value of the services provided.

8. Damages: Trial: Evidence. The amount of damages to be awarded is one solely for the fact finder, and its action in this respect will not be disturbed on appeal if it is supported by evidence and bears a reasonable relationship to the elements of the damages proved.

9. Prejudgment Interest: Claims. When reasonable controversy exists concerning the claimant's right to recover or the amount of such recovery, the claim is unliquidated, and prejudgment interest is not allowed.

10. Insurance: Attorney Fees. In all cases when the beneficiary or other person entitled thereto brings an action upon any type of insurance policy against any company doing business in this state, the court, upon rendering judgment against such company, shall allow the plaintiff a reasonable sum as an attorney fee in addition to the amount of his or her recovery, to be taxed as part of the costs.

11. Insurance: Attorney Fees. A beneficiary or other person entitled to bring an action upon an insurance policy at the time suit is commenced is a person who may collect attorney fees under Neb.Rev.Stat. § 44-359 (Reissue 1988).

12. Insurance: Attorney Fees. Attorney fees may be awarded under Neb.Rev.Stat. § 44-359 (Reissue 1988) in declaratory judgment actions even if it is the insurer who institutes the action.

13. Insurance: Attorney Fees. In actions brought upon certain types of insurance policies, Neb.Rev.Stat. § 44-359 (Reissue 1988) requires that the court, upon rendering judgment against such company, shall allow the successful party a reasonable sum as an attorney fee in addition to the amount of his or her recovery, to be taxed as part of the costs.

George A. Sommer for appellant.

Joy Shiffermiller, of Atkins Ferguson Zimmerman Carney, P.C., for appellee Tower Financial.

Robert G. Simmons, Jr., of Simmons, Raymond, Olsen, Ediger, Selzer & Ballew, P.C., for appellee Union Insurance.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

FAHRNBRUCH, Justice.

Valley Restoration and Construction, Inc. (Valley), claiming that it is entitled to $42,375.60 for repairing a house damaged by water from a broken pipe, appeals a declaratory judgment awarding Valley only $31,250 for its restoration work.

The judgment was rendered by the district court for Scotts Bluff County in a lawsuit brought by Union Insurance Company (Union).

Arrangements to repair the house were made between Union and Valley. After Valley made the repairs, Union filed a declaratory judgment action against Valley; the owners of the house, Daniel and Earleen Bailey; and Tower Financial, Inc., now known as CFS Mortgage Corporation (Tower), as mortgage holder, to determine the amount of money owed for the restoration work and to whom it should be paid. By the time of trial, Tower had become the owner of the house involved and the Baileys had assigned their rights under a Union policy of insurance to Tower. Although Greg Tuttle was named as a defendant in the lawsuit as "Greg Tuttle d/b/a Valley Restoration," it was agreed by Union and Tuttle that he was not a party to the transaction between Union and Valley. No judgment was entered in favor of or against Tuttle, and he is not a party to any appeal or cross-appeal and will not be considered further as a party. Union's policy insured against loss due to accidental discharge or overflow of water or steam from within a plumbing, heating, or air-conditioning system or from within a household appliance.

In consideration of Tower's claims, issues were framed during pretrial conferences as to whether the Bailey house had been totally destroyed, whether it had been completely repaired, and whether Union was liable up to the $65,000 face value of its policy. Both Tower and the Baileys claimed they were entitled to attorney fees.

Following trial, the district court found that Valley, pursuant to contract, repaired the damage caused by water from a broken water pipe, that under the contract the fair and reasonable value of the repairs was $31,250, and that Union had advanced to Valley $15,000. Judgment in the sum of $16,250 was entered in favor of Valley and against Union. Valley's request for attorney fees was denied. The trial court further found that since the repairs had been completed and the cost was to be paid by Union, neither the Baileys nor Tower was damaged, but that each was entitled to attorney fees. Tower was awarded $2,000 in attorney fees and the Baileys $1,250, all to be paid by Union. Motions for a new trial were denied. Valley appealed to this court and Tower cross-appealed. Union also cross-appealed, claiming that attorney fees should not have been awarded Tower or the Baileys.

We affirm the trial court's $16,250 judgment in favor of Valley and the denial of attorney fees to Valley. We reverse the award of attorney fees to Tower and the Baileys.

The essence of the dispute before us sounds in contract. Therefore, our review of the case is guided by our holding in Donaldson v. Farm Bureau Life Ins. Co., 232 Neb. 140, 144-45, 440 N.W.2d 187, 189-90 (1989):

An action for declaratory judgment under the provisions of Neb.Rev.Stat. §§ 25-21,149 et seq. (Reissue 1985) is sui generis, Buhrmann v. Buhrmann, 231 Neb. 831, 438 N.W.2d 481 (1989), and Caeli Assoc. v. Firestone Tire & Rubber Co., 226 Neb. 752, 415 N.W.2d 116 (1987); whether such an action is to be treated as one at law or one in equity is to be determined by the nature of the dispute, Boren v. State Farm Mut. Auto. Ins. Co., 225 Neb. 503, 406 N.W.2d 640 (1987). The essence of the dispute before us sounds in contract. That being so, the action is to be treated as one at law. Fisbeck v. Scherbarth, Inc., 229 Neb. 453, 428 N.W.2d 141 (1988). See, also, Hemenway v. MFA Life Ins. Co., 211 Neb. 193, 318 N.W.2d 70 (1982). This court treats the determination of factual issues in such a declaratory judgment action which was tried without a jury in the same manner as any other action at law; accordingly, the findings of the trial court have the effect of a verdict and will not be set aside unless clearly wrong. Jelsma v. Scottsdale Ins. Co., 231 Neb. 657, 437 N.W.2d 778 (1989); Gard v. Pelican Publishing Co., 230 Neb. 656, 433 N.W.2d 175 (1988); Beatrice Nat. Bank v. Southeast Neb. Co-op, 230 Neb. 671, 432 N.W.2d 842 (1988).

In a law action on a contract, we are also bound by a pronouncement in Corman v. Musselman, 232 Neb. 159, 166, 439 N.W.2d 781, 786-87 (1989):

In reviewing the trial court's judgment in an action at law tried to the court, we do not reweigh the evidence but, instead, consider the judgment in the light most favorable to the successful party and resolve conflicts in favor of the successful party, who is entitled to the benefit of every inference which can reasonably be deduced from the evidence.

Also, in a bench trial, the judge sitting as the trier of fact is the sole judge of the credibility of the witnesses and the weight to be given their testimony, and we do not reweigh the evidence on appeal. Stiles v. Skylark Meats, Inc., 231 Neb. 863, 438 N.W.2d 494 (1989).

Taking the view most favorable to the successful party, the record reflects the following. The Baileys' two-story house near Mitchell, Nebraska, was a converted barn, at least 40 years old, situated on a concrete slab. Around Christmas 1984, the Baileys moved from the property and leased it to tenants until shortly before March 1986. At that time, the vacant house was listed for sale at $61,400.

It is undisputed that about March 15, 1986, a waterline running under the cement slab leaked, washing away soil under the slab and causing the slab to sink. Settling of the concrete slab caused extensive damage to the interior of the house. The first story floor sloped to the west. All carpeting in the house was damp because of water...