Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co. , 312 Neb. 629 ( 2022 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
10/21/2022 01:05 AM CDT
- 629 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629Millard Gutter Company, a corporation
doing business as Millard Roofing and
Gutter, appellant, v. Farm Bureau
Property & Casualty Insurance
Company, appellee.
___ N.W.2d ___
Filed October 14, 2022. No. S-19-1089.
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 mat-
ters 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 dis-
miss 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.
- 630 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 6297. 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 estab-
lish 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 respon-
sive 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.
- 631 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 62917. 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 insur-
ance 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 fail-
ing 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
- 632 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629court 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 pur-
chased 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 sus-
tained 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 assign-
ments were alleged.
According to the complaint, Farm Bureau was given cop-
ies 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
1
Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co., 29 Neb. App.
678, 958 N.W.2d 440 (2021).
2
Millard Gutter Co. v. Shelter Mut. Ins. Co., ante p. 606, ___ N.W.2d ___
(2022).
- 633 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629[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 prejudg-
ment interest.
Farm Bureau responded to the complaint by filing several
preanswer motions, none of which were included in the appel-
late 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 com-
plaint, 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 occur-
ring 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 nec-
essary 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 on Farm Bureau’s preanswer motions. As
such, the arguments advanced by the parties can be discerned
only to the extent they are referenced in the court’s written
- 634 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629order ruling on the motions. That order does not reference any
evidence adduced at the hearing, so we necessarily assume the
court confined its analysis to the face of the amended com-
plaint. We limit our review accordingly.
(a) Standing to Assert First‑Party
Bad Faith Claims
Farm Bureau moved to dismiss the first‑party bad faith
claims for lack of standing. According to the written order,
Farm Bureau argued that Millard Gutter lacked standing to
assert first‑party bad faith claims because (1) only policyhold-
ers have standing to assert first‑party bad faith claims under
Nebraska law and (2) the assignments did not create standing
to assert claims of first‑party bad faith because, even if such
claims could be validly assigned, the complaint contained
no factual allegations suggesting the assignments from Farm
Bureau’s policyholders included a present interest in such
claims. Farm Bureau also argued the complaint contained
insufficient factual allegations to state claims for first‑party
bad faith.
The district court’s order addressed only the standing argu-
ments. First, it recited the rule from Braesch v. Union Ins. Co. 3
that only policyholders have standing to assert a first‑party bad
faith claim. Because Millard Gutter had not alleged it was a
Farm Bureau policyholder, the district court concluded Millard
Gutter lacked “standing to assert a traditional first‑party bad
faith claim” under Nebraska law.
Next, the court considered whether Millard Gutter had suffi-
ciently alleged standing, as an assignee, to assert first‑party bad
faith claims against Farm Bureau. It observed that this court
“has not explicitly ruled on the assignability of bad faith claims
nor on the requirements for such an assignment,” and it also
observed the general rule that only a “‘present interest’” can
3
Braesch v. Union Ins. Co., 237 Neb. 44, 464 N.W.2d 769 (1991),
disapproved on other grounds, Wortman v. Unger, 254 Neb. 544, 578
N.W.2d 413 (1998).
- 635 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629be validly assigned. 4 It then examined the face of the amended
complaint and noted allegations that the right to “proceeds
under policies of insurance” had been assigned, but it found
no allegations suggesting that any policyholder had a present
interest in a tort action for first‑party bad faith, or had assigned
such an interest to Millard Gutter. The court therefore con-
cluded that Millard Gutter had not sufficiently alleged it had
standing to assert any first‑party bad faith claims as assignee,
and it dismissed such claims without prejudice.
(b) Motion for More Definite Statement
According to the district court’s order, Farm Bureau’s motion
to make more definite was directed only to the breach of con-
tract claims. The court granted that motion, stating:
Farm Bureau also seeks an order requiring Millard
Gutter to make a more definite and certain statement as
to the date of the alleged breaches of contract so that
Farm Bureau can assess any potential statute of limita-
tions defenses. This motion is sustained. Millard Gutter
is ordered to file [a second] amended complaint within
30 days from the date this order is filed including a more
definite statement as to when the alleged breach of con-
tract is claimed to have occurred as to each insured.
It is undisputed that Millard Gutter did not file a second
amended complaint within 30 days or at any other point during
the pendency of the case.
4. Sua Sponte Order of Dismissal
In October 2019, almost 6 months after ordering Millard
Gutter to file a second amended complaint, the court entered
4
See, Krohn v. Gardner, 248 Neb. 210, 533 N.W.2d 95 (1995) (holding
assignment must transfer present interest in debt, fund, or subject matter);
Craig v. Farmers Mut. Ins. Co., 239 Neb. 271, 273, 476 N.W.2d 529, 532
(1991) (holding transaction is assignment only when assignor intends “‘to
transfer a present interest in the debt or fund or subject matter’”). See,
also, Neb. Rev. Stat. § 25‑304 (Reissue 2016) (“[a]ssignees of choses
in action assigned for the purpose of collection may sue on any claim
assigned in writing”).
- 636 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629an order, sua sponte, dismissing the entire action without preju-
dice. In doing so, the order recited the procedural history of the
case, and it noted that Millard Gutter had been ordered to file
a second amended complaint and had failed to do so within the
time fixed by the court. 5 Millard Gutter did not move to vacate
the dismissal and reinstate the case, and instead, it timely
appealed from the order of dismissal.
5. Court of Appeals
Before the Court of Appeals, Millard Gutter assigned,
restated, that the district court erred by (1) dismissing the
first‑party bad faith claims for lack of standing, (2) granting
the motion to make more definite and ordering Millard Gutter
to file a second amended complaint alleging the dates of the
alleged breaches of contract, and (3) sua sponte dismissing the
amended complaint without notice or a hearing.
In its analysis, the Court of Appeals agreed with the district
court that because Millard Gutter was not a policyholder and
had no contractual relationship with Farm Bureau, it lacked
standing under Braesch to assert a “traditional first‑party bad
faith claim against Farm Bureau.” 6 It also agreed with the
district court that, to the extent Millard Gutter was claiming
it had standing to assert the bad faith claims by virtue of the
assignments, no Nebraska appellate court had yet “ruled on
the assignability of bad faith claims or on the requirements for
such an assignment.” 7 But the Court of Appeals determined it
was not necessary to conclusively decide the assignability issue
in this case, reasoning that under Nebraska’s liberal notice
pleading standards, Millard Gutter had stated a plausible claim
for first‑party bad faith. It ultimately determined the allegations
5
See, generally, Neb. Rev. Stat. § 25‑601 (Reissue 2016) (“action may
be dismissed without prejudice to a future action . . . by the court for
disobedience by the plaintiff of an order concerning the proceedings in the
action”).
6
Millard Gutter Co., supra note 1, 29 Neb. App. at 683, 958 N.W.2d at 445.
7
Id.
- 637 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629of the amended complaint were sufficient to withstand a motion
to dismiss, reasoning:
Upon our de novo review, accepting the allegations in
the amended complaint as true and drawing all reasonable
inferences in favor of Millard Gutter, we determine that
for the purposes of a motion to dismiss, Millard Gutter
has sufficiently pled a bad faith claim under Nebraska
law. The amended complaint specifically alleges that
Farm Bureau failed to make payments for the insureds’
losses, failed to recognize the validity of the assignments,
and failed to act in good faith. These pleadings are suf-
ficient to give Farm Bureau fair notice of the claims
asserted against it. . . .
The district court correctly ascertained that at this point
in the case, it is unclear whether the alleged assignments
to Millard Gutter specifically include any tort claims or
interest in the homeowners’ insurance policies. However,
this information can be determined during the discov-
ery process. If at some point in the future, Farm Bureau
learns that some or all of the insureds at issue did not
validly assign to Millard Gutter the right to pursue bad
faith tort claims related to their insurance policies, then an
appropriate motion may be filed at that time.
Therefore, we conclude that the district court erred in
granting Farm Bureau’s motion to dismiss the bad faith
claims. 8
The Court of Appeals also found merit in Millard Gutter’s
second assignment of error, which argued the district court
abused its discretion by requiring Millard Gutter to amend the
complaint to specify the dates on which the alleged breaches of
contract occurred. The Court of Appeals disagreed with the dis-
trict court’s conclusion that the additional detail was necessary
to allow Farm Bureau to identify potential statute of limitations
defenses when framing its responsive pleading. It noted the
8
Id. at 684, 958 N.W.2d at 445‑46.
- 638 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629limitations period for breach of contract claims is 5 years, 9 and
Millard Gutter’s operative complaint alleged the storm dam-
age occurred on April 9, 2013. Millard Gutter’s lawsuit was
filed on April 9, 2018‑‑exactly 5 years after the alleged storm
damage occurred. Reasoning that none of the alleged breaches
could possibly have occurred before the storm, the Court of
Appeals concluded that no breach would “fall outside the stat-
ute of limitations period.” 10 It thus determined the district court
had abused its discretion in granting the motion to make more
definite and requiring Millard Gutter to file an amended com-
plaint identifying the dates on which Farm Bureau breached the
insurance agreements.
Because of its disposition on Millard Gutter’s first two
assignments of error, the Court of Appeals deemed it unnec-
essary to consider the final assignment of error. It therefore
reversed the district court’s order and remanded the matter for
further proceedings consistent with its opinion.
We granted Farm Bureau’s petition for further review and
ordered supplemental briefing at the discretion of the parties.
Only Farm Bureau filed a supplemental brief.
II. ASSIGNMENTS OF ERROR
On further review, Farm Bureau assigns, restated, that the
Court of Appeals erred in (1) reversing the district court’s dis-
missal of Millard Gutter’s bad faith claims for lack of stand-
ing and (2) finding it was an abuse of discretion to grant the
motion for a more definite statement regarding the dates of the
alleged breaches of the insurance contracts.
III. STANDARD OF REVIEW
[1] 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
9
See Neb. Rev. Stat. § 25‑205 (Reissue 2016).
10
Millard Gutter Co., supra note 1, 29 Neb. App. at 686, 958 N.W.2d at 446.
- 639 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629reasonable inferences of law and fact in favor of the nonmov-
ing party. 11
[2] Whether a party who commences an action has standing
and is therefore the real party in interest presents a jurisdic-
tional issue. 12 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 inde-
pendent from the trial court. 13
[3,4] 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. 14 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. 15
IV. ANALYSIS
1. Standing to Assert Claim
of First‑Party Bad Faith
When reviewing the district court’s dismissal of the
first‑party bad faith claims, the Court of Appeals focused on
whether Millard Gutter’s amended complaint alleged a plau-
sible claim of first‑party bad faith under Nebraska’s liberal
notice pleading rules. But we begin our analysis by focusing on
whether Millard Gutter is the real party in interest with stand-
ing to assert such a claim.
11
SID No. 67 v. State, 309 Neb. 600, 961 N.W.2d 796 (2021).
12
See Valley Boys v. American Family Ins. Co., 306 Neb. 928, 947 N.W.2d
856 (2020).
13
Id.14
See Christianson v. Educational Serv. Unit No. 16, 243 Neb. 553, 501
N.W.2d 281 (1993).
15
George Clift Enters. v. Oshkosh Feedyard Corp., 306 Neb. 775, 947
N.W.2d 510 (2020).
- 640 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629[5,6] Standing is a jurisdictional component of a party’s
case, and courts must address it as a threshold matter. 16 When a
motion to dismiss raises both lack of subject matter jurisdiction
and failure to state a claim as grounds for dismissal, the court
should consider the jurisdictional grounds first and should con-
sider whether the complaint states a claim for relief only if it
has determined that it has subject matter jurisdiction. 17 In other
words, before considering whether Millard Gutter sufficiently
pled claims of first‑party bad faith, we must first determine
whether Millard Gutter is the proper party to assert such claims
under the substantive law. 18
[7,8] As noted, Farm Bureau’s challenge to Millard Gutter’s
standing was raised and resolved at the pleading stage. When
standing is challenged at the pleadings stage, before an evi-
dentiary hearing and before any evidence outside of the plead-
ings is admitted, it is deemed a “‘facial challenge.’” 19 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. 20
When the Court of Appeals issued its opinion in this case,
it did not have the benefit of our recent decision in Shelter. 21
In that case, as in this one, Millard Gutter obtained assignments
of the right to insurance proceeds from various policyholders,
and then it filed suit against the insurer in its own name, as
16
See, Continental Resources v. Fair, 311 Neb. 184, 971 N.W.2d 313 (2022);
In re Guardianship of Nicholas H., 309 Neb. 1, 958 N.W.2d 661 (2021);
Egan v. County of Lancaster, 308 Neb. 48, 952 N.W.2d 664 (2020).
17
See, SID No. 67, supra note 11; Anderson v. Wells Fargo Fin. Accept., 269
Neb. 595, 694 N.W.2d 625 (2005).
18
See Egan, supra note 16. See, also, Neb. Ct. R. Pldg. § 6‑1109(a) (rev.
2008) (“[i]t is not necessary to aver the capacity . . . or the authority of a
party to sue . . . except to the extent required to show the jurisdiction of
the court”).
19
SID No. 67, supra note 11, 309 Neb. at 606, 961 N.W.2d at 802.
20
Id.
21
Shelter, supra note 2.
- 641 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629assignee, seeking to recover damages for breaches of the insur-
ance contracts and for first‑party bad faith in failing to settle
the insurance claims. The district court in Shelter dismissed
the bad faith claims for lack of standing, and we affirmed that
dismissal on appeal.
[9] In Shelter, we noted that under Nebraska case law, only
a policyholder has standing to bring a first‑party bad faith
claim. 22 Millard Gutter did not claim to be a policyholder;
instead, it asserted that it had standing to bring the first‑party
bad faith claims by virtue of the postloss assignments from the
policyholders. We thus framed the issue in Shelter as whether a
policyholder could validly assign, to a policyholder, a cause of
action for the tort of first‑party bad faith. To answer that ques-
tion, we turned to our case law governing the assignability of
tort claims generally.
[10,11] Shelter explained that under the rule announced in
Mutual of Omaha Bank v. Kassebaum, 23 the proceeds from per-
sonal injury tort actions may be validly assigned, but the right
to control such an action cannot. Applying this rule in Shelter,
we held that even assuming without deciding that the proceeds
from a cause of action for first‑party bad faith could be validly
assigned, the right to prosecute such an action could not. 24 As
such, the policyholders in Shelter remained the real parties
in interest under the substantive law and were the only ones
with standing to assert claims of first‑party bad faith against
the insurer.
Here, just as in Shelter, regardless of their validity for other
purposes, the assignments from Farm Bureau’s policyholders
could not, as a matter of law, give Millard Gutter standing
to prosecute any tort actions for first‑party bad faith against
Farm Bureau. We thus agree with the district court that Millard
22
See Braesch, supra note 3.
23
Mutual of Omaha Bank v. Kassebaum, 283 Neb. 952, 814 N.W.2d 731(2012).
24
Shelter, supra note 2.
- 642 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629Gutter’s amended complaint did not contain sufficient factual
allegations to establish that it was the real party in interest with
standing to assert the first‑party bad faith claims. We reverse
the Court of Appeals’ decision on this issue and remand the
matter with directions to affirm the district court’s dismissal of
the first‑party bad faith claims for lack of standing.
2. More Definite Statement on
Breach of Contract Claims
On further review, Farm Bureau also argues the Court of
Appeals erred when it found the district court abused its dis-
cretion by sustaining the motion for a more definite statement.
Motions for a more definite statement are governed by Neb. Ct.
R. Pldg. § 6‑1112(e), which states:
If a pleading to which a responsive pleading is permitted
is so vague or ambiguous that a party cannot reasonably
be required to frame a responsive pleading, the party
may move for a more definite statement before interpos-
ing a responsive pleading. The motion shall point out
the defects complained of and the details desired. If the
motion is granted and the order of the court is not obeyed
within 10 days or within such time as the court may fix,
the court may strike the pleading or make such order as
it deems just.
[12,13] The purpose of a motion for a more definite state-
ment is to enable movants to obtain the information reason-
ably needed to frame a responsive pleading. 25 Motions for a
more definite statement 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 provid-
ing it in response to a motion for a more definite statement,
25
See, 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1376 (3d ed. 2004 & Supp. 2022); John P. Lenich, Nebraska
Civil Procedure § 11:10 (2022).
- 643 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629so long as the detail is reasonably needed to frame a respon-
sive pleading. 26
[14,15] One moving for a more definite statement 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. 27 These
requirements are designed to enable the trial court to test the
propriety of the motion so that an order can be entered consist­
ent with the limited purpose of such motions. 28 Motions for
more definite statements are addressed to the sound discretion
of the trial court. 29
As noted, Farm Bureau’s motion for a more definite state-
ment was not included in our appellate transcript and no party
requested preparation of a bill of exceptions. All we have avail-
able to review is the district court’s written order, which recited
that Farm Bureau’s motion sought “a more definite and certain
statement as to the date of the alleged breaches of contract so
that Farm Bureau can assess any potential statute of limitations
defenses.” To the extent Farm Bureau may have identified
other deficiencies in its motion, or offered other reasons during
the hearing for why it needed to know the dates of the alleged
breaches to frame a responsive pleading, such matters are out-
side the limited record presented for our review.
On this record, the Court of Appeals concluded the district
court abused its discretion by ordering Farm Bureau to amend
the complaint within 30 days to provide “a more definite state-
ment as to when the alleged breach of contract is claimed to
have occurred as to each insured.” It reasoned that even with-
out the additional detail requested, Farm Bureau could assess
any potential statute of limitations defenses because the earli-
est date that any of the breach of contract claims could have
26
See, id.27
See 5C Wright & Miller, supra note 25, § 1378.
28
Id.
29
Vodehnal v. Grand Island Daily Independent, 191 Neb. 836, 218 N.W.2d
220 (1974).
- 644 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629accrued was the date of the storm that caused the property
damage (alleged to be April 9, 2013, as to each policyholder),
and suit was filed within 5 years of that date. As such, the
Court of Appeals concluded that even though Millard Gutter’s
breach of contract claims may span a period of several years,
none of those claims could have accrued more than 5 years
before suit was commenced.
We agree with the Court of Appeals that the allegations of
the amended complaint were sufficient to allow Farm Bureau
to assess whether it had a statute of limitations defense to the
breach of contract claims. Our record on appeal does not con-
tain any other rationale advanced for requiring Millard Gutter
to file a second amended complaint specifying the dates of the
alleged breaches. We thus agree it was an abuse of discretion to
sustain the motion for a more definite statement on the grounds
the additional detail was necessary for Farm Bureau to frame a
responsive pleading. Farm Bureau’s arguments to the contrary
are without merit.
3. Millard Gutter’s Remaining
Assignment of Error
Before the Court of Appeals, Millard Gutter assigned error
to the district court’s sua sponte dismissal of the entire action.
The Court of Appeals declined to consider this assignment,
reasoning that its disposition of the other assignments of error
made it unnecessary.
On further review, we have discretion to consider, as we
deem appropriate, some or all of the assignments of error the
Court of Appeals did not reach. 30 We think it is appropriate to
briefly address the dismissal order and to reverse it in part to
facilitate further proceedings on remand.
As we read the sua sponte dismissal order, it was premised
exclusively on Millard Gutter’s failure to obey the order to
make more definite within the time fixed by the court, and it
dismissed the entire action on that basis. To the extent Millard
30
See Signal 88 v. Lyconic, 310 Neb. 824, 969 N.W.2d 651 (2022).
- 645 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629Gutter argues on appeal that trial courts lack the authority
to sua sponte dismiss a case under such circumstances, it
is incorrect.
[16‑18] 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 § 25‑601(5). 31 We have stated
that 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, too. 32 And in addition to the
statutory authority under § 25‑601, we have long recognized
that courts have inherent authority to dismiss an action for vio-
lation of a court order. 33 Moreover, § 6‑1112(e) of the pleading
rules authorizes a trial court to “strike the pleading or make
such order as it deems just” if an order to make more definite
is not obeyed within the time fixed by the court. Dismissal is
generally considered an available sanction under such a provi-
sion and is reviewed for an abuse of discretion. 34
The available sanctions for failing to comply with an order
to make more definite are well established and well known
to the practicing bar. A party who ignores such an order and
takes no further action in the case, allowing it to languish on
the court’s docket, risks the possibility that such conduct may
result in sua sponte dismissal of the case as a sanction for the
31
See Bert Cattle Co. v. Warren, 238 Neb. 638, 471 N.W.2d 764 (1991).
32
Id.33
Id. at 641‑42, 471 N.W.2d at 767 (internal quotation marks omitted)
(“[i]t has almost universally been held or recognized that courts have the
inherent power to dismiss an action for disobedience of a court order. . . .
Without this right, a court could not control its dockets; business before
it would become congested; its functions would be impaired; and speedy
justice to litigants would largely be denied”).
34
See, Shelter, supra note 2. See, also, Nystrom v. Melcher, 262 Mont. 151,
864 P.2d 754 (1993); Clay v. City of Margate, 546 So. 2d 434 (Fla. App.
1989); Medved v. Baird, 58 Wis. 2d 563, 207 N.W.2d 70 (1973). Accord,
5C Wright & Miller, supra note 25, § 1379 (noting when complaint is
stricken as sanction for failure to obey order to make more definite, it has
effect of dismissing action).
- 646 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
MILLARD GUTTER CO. V. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 312 Neb. 629failure to obey a court order or for the failure to prosecute
the action. 35
But on this record, we have determined it was an abuse
of discretion to sustain the motion for a more definite state-
ment in the first instance. So, although we do not condone or
excuse Millard Gutter’s conduct in ignoring the court’s order
for nearly 6 months rather than timely advising the court and
opposing counsel that it was electing to stand on its amended
complaint, we are persuaded it is appropriate under the cir-
cumstances to reverse the order of dismissal to the extent it
was imposed as a sanction for failing to obey the order to
make more definite. This reversal impacts only the breach
of contract claims alleged in the amended complaint and
facilitates remand of those claims for further proceedings. For
the reasons stated earlier, the district court’s dismissal of the
first‑party bad faith claims for lack of standing was correct and
should be affirmed.
V. CONCLUSION
Because Millard Gutter lacks standing to assert first‑party
bad faith claims against Farm Bureau, we reverse the Court of
Appeals’ decision in that regard and remand the matter to the
Court of Appeals with directions to affirm the district court’s
dismissal of such claims based on lack of standing. We further
direct the Court of Appeals to reverse the district court’s dis-
missal as to the breach of contract claims only. We otherwise
affirm the Court of Appeals’ decision.
Affirmed in part, and in part reversed
and remanded with directions.
35
See, e.g., Link v. Wabash Railroad Co., 370 U.S. 626, 633, 82 S. Ct.
1386, 8 L. Ed. 2d 734 (1962) (noting state and federal courts have long
recognized trial courts’ inherent authority to sua sponte dismiss complaints
for failure to prosecute, and under appropriate circumstances court “may
dismiss a complaint for failure to prosecute even without affording notice
of its intention to do so or providing an adversary hearing before acting.
Whether such an order can stand on appeal depends not on power but on
whether it was within the permissible range of the court’s discretion”).