Subrogation: Buckeye State Mut. Ins. Co. v. Humlicek, 284 Neb. 463 (2012)

Issue: Does a landlord’s insurer have a right to subrogation against its tenant for property damages caused by the tenant’s negligence?

For a complete summary of the factual background of the case and court’s holding, click here

Facts: The insurer of the landlords of a duplex that was damaged by fire allegedly caused by the negligence of a certain tenant brought an action against that tenant to determine the insurer’s subrogation rights. The lease signed by the tenant required the tenant to take out a rental insurance policy to cover his own personal property, and also stated that the landlords would obtain fire and all risk extended coverage insurance for the full replacement value of the improvements located on the leased premises. After a fire, the insurer paid the landlords’ claims for damages resulting from the fire to both units and sought subrogation against the tenant who allegedly caused the fire for damages caused to the unit not covered by the tenant’s rental insurance policy. The tenant brought a motion for summary judgment that was granted by the district court, which reasoned that the tenant was an implied coinsured under the insurance policy covering the duplex structure and that an insurer cannot subrogate against its own insured. The insurer appealed. On appeal, the Nebraska Supreme Court upheld the ruling of the district court and found that whether an insurer had a right to subrogation was dependent upon whether recovery by the insurer against the wrongdoer would be “in effect” recovery from the insured for the very risk that the insurer agreed to take upon payment of the premium.

Holding: Absent an express subrogation agreement to the contrary, a tenant is conclusively presumed to be an implied coinsured of the landlord’s insurance policy, and under the anti-subrogation rule, no right of subrogation can arise in favor of an insurer against its own insured or coinsured for a risk covered by the policy, even if the insured is a negligent wrongdoer and regardless of the size of the dwelling or how it is divided.

For a complete copy of the Court’s opinion, click here

Contributory Negligence: Curtis v. States Family Practice, LLC, 20 Neb.App. 234 (2012)

Issue: Whether beneficiary of estate not a party to a wrongful death action was properly included in the jury’s allocation of the percentages of contributory negligence.

Facts: Plaintiff was the mother and personal representative of decedent child. The father was not a named party in the wrongful death action filed against a medical clinic where decedent received treatment prior to his death. It was alleged Defendant breached the standard of care in failing to diagnose decedent with a serious infection in the days leading up to his death. As part of its defense, Defendant alleged the parents of decedent were contributorily negligent in failing to bring decedent to the emergency room sooner. At a jury trial the district court judge allowed a jury instruction regarding the allocation of percentages of contributory negligence that included the non-party father.

Holding: On appeal regarding the district court’s denial of Plaintiff’s Motion for New Trial, the Nebraska Court of Appeals took up the issue of the jury instruction as potential plain error. It held that under Nebraska’s wrongful death statute the father was decedent’s next of kin, and would have been awarded the avails of any judgment of damages as a beneficiary; thus, the jury could consider his degree of negligence.

For a complete copy of the Court’s opinion, click here