Van Kleek v. Farmers Ins. Exch. ( 2014 )

Nebraska Advance Sheets
730 289 NEBRASKA REPORTS
An appellate court is not obligated to engage in an analysis
that is not necessary to adjudicate the case and controversy
before it. Carey v. City of Hastings, 287 Neb. 1, 840 N.W.2d
868 (2013).
VI. CONCLUSION
The district court erred in concluding that the Florida court’s
order denying leave to amend precluded appellants’ complaint
against Ward. We reverse the judgment of the district court that
sustained Ward’s motion to dismiss, and we remand the cause
for further proceedings.
R eversed and remanded for
further proceedings.
Jennifer Van K leek, appellant, v. Farmers Insurance
Exchange, doing business as Farmers Insurance
Group, also known as “Farmers,” appellee.
___ N.W.2d ___
Filed December 19, 2014. No. S-13-1006.
1. Insurance: Contracts: Appeal and Error. The interpretation of an insurance
policy presents a question of law that an appellate court decides independently of
the trial court.
2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an
appellate court views the evidence in a light most favorable to the party against
whom the judgment was granted and gives that party the benefit of all reasonable
inferences deducible from the evidence.
3. ____: ____. An appellate court will affirm a lower court’s grant of summary
judgment if the pleadings and admitted evidence show that there is no genuine
issue as to any material facts or as to the ultimate inferences that may be drawn
from the facts and that the moving party is entitled to judgment as a matter
of law.
4. Insurance: Contracts: Appeal and Error. An insurance policy is a contract, and
an appellate court construes it like any other contract, according to the meaning
of the terms that the parties have used.
5. ____: ____: ____. An appellate court gives terms in an insurance policy that are
clear their plain and ordinary meaning as a reasonable person in the insured’s
position would understand them.
6. ____: ____: ____. An appellate court construes ambiguous terms in an insurance
policy in favor of the insured.
Nebraska Advance Sheets
VAN KLEEK v. FARMERS INS. EXCH. 731
Cite as 289 Neb. 730
7. Insurance: Contracts: Words and Phrases. A contract is ambiguous when a
word, phrase, or provision in the contract has, or is susceptible of, at least two
reasonable but conflicting meanings.
8. ____: ____: ____. In the context of homeowner’s insurance policies, coverage for
a person “legally responsible” for designated property extends to those under a
duty to use or operate the designated property properly and who would be liable
and answerable for a failure to do so.
9. Insurance: Contracts: Animals: Negligence: Liability. In addition to an own-
er’s liability under Neb. Rev. Stat. § 54-601 (Reissue 2010) and common-law
liability for known vicious propensities, the keeper of a dog can be liable to
injured third parties on a negligence theory.
10. Animals: Negligence: Liability. Once a person has possession or control of a
dog, that person owes a duty of care to prevent unreasonable risks of harm posed
by the foreseeable actions of the dog.
Appeal from the District Court for Douglas County: Shelly
R. Stratman, Judge. Affirmed.
Richard J. Rensch and Sean P. Rensch, of Rensch & Rensch
Law, P.C., L.L.O., for appellant.
Daniel P. Chesire and Anastasia Wagner, of Lamson, Dugan
& Murray, L.L.P., for appellee.
Heavican, C.J., Wright, Connolly, Stephan, McCormack,
Miller-Lerman, and Cassel, JJ.
Connolly, J.
SUMMARY
Jennifer Van Kleek agreed to watch Walter and Janet
Chapman’s dog while the Chapmans were out of town. While
Van Kleek was caring for the dog, it bit her on her lower
lip. Van Kleek filed a claim with the Chapmans’ homeown-
er’s insurer, Farmers Insurance Exchange (Farmers). Farmers
rejected the claim because Van Kleek was also an insured and
the policy excludes coverage for bodily injuries to insureds.
The policy defines “insured” to include “any person . . .
legally responsible” for covered animals. Van Kleek filed an
action for declaratory judgment against Farmers, seeking a
determination that the policy covered her claim. Farmers
moved for summary judgment, and the district court sus-
tained Farmers’ motion, reasoning that Van Kleek was “legally
responsible” for the dog because she fed and watered the dog
Nebraska Advance Sheets
732 289 NEBRASKA REPORTS
and let it out of the house while the Chapmans were away.
We affirm.
BACKGROUND
The Chapmans planned to take a trip from July 2 to 12,
2011, and asked Van Kleek, a family friend, to watch their
dog. The dog, D.J., was a “Chow” weighing about 60 pounds.
Walter Chapman testified that chows are “territorial” and that
D.J. was not allowed out in public. Unless the Chapmans were
home, they confined D.J. to the basement. When he needed to
be outside, the Chapmans let D.J. into a fenced-in area behind
their house.
Van Kleek and Walter Chapman both testified that the
Chapmans instructed Van Kleek to feed, water, and let D.J.
into the backyard while the Chapmans were gone. Van Kleek
testified that she “assume[d]” that she “would have to go find
[D.J.]” if he got loose or take him to a veterinarian if he became
ill. Van Kleek had permission to stay at the Chapmans’ house
to make caring for D.J. more convenient, but the Chapmans did
not compensate Van Kleek.
Van Kleek stayed at the Chapmans’ house from July 2,
2011, to the morning of July 5. She was the only person in
the house during this period. On July 5, Chapman let D.J. into
the enclosed backyard. After she let D.J. back into the house,
she bent over to give D.J. a biscuit, “just showing him affec-
tion.” Van Kleek testified that D.J. “lunged” or “charge[d]”
at her as she was bent over and bit her lip. The bite removed
the “fatty part” of Van Kleek’s lower lip, requiring reconstruc-
tive surgery.
The Chapmans are the named insureds on a homeowner’s
policy issued by Farmers. The policy has two sections: In
section I, “Property Coverage,” Farmers indemnifies insureds
for losses to covered real and personal property. In section
II, “Liability Coverage,” Farmers promises to “pay those
damages which an insured becomes legally obligated to pay
because of . . . bodily injury . . . or . . . property damage
resulting from an occurrence.” Farmers also promises to pay
for “necessary medical services” to a person with a bodily
injury covered under section II. In addition to the named
Nebraska Advance Sheets
VAN KLEEK v. FARMERS INS. EXCH. 733
Cite as 289 Neb. 730
insureds and certain other individuals, the policy defines
“insured”—for purposes of section II only—as
any person or organization legally responsible for ani-
mals or watercraft covered under Section II - Liability
Coverage which are owned by you, or [another insured].
Any person or organization using or having custody of
these animals or watercraft in the course of any business
or without permission of the owner is not an insured[.]
The policy also includes a number of exclusions from cover-
age under section II, including bodily injury to “any insured.”
Courts sometimes refer to exclusions withholding coverage for
bodily injury to an insured as “intra-insured exclusions.”1
Van Kleek sent a claim to Farmers for her injuries from the
bite, asserting that Walter Chapman was liable and that his
liability was covered under section II of the policy. Farmers
denied the claim because Van Kleek was “legally responsible”
for D.J. and, therefore, the intra-insured exclusion applied to
her claim. In a denial letter sent to Van Kleek, Farmers stated
that she was “clearly in a position of responsibility with regard
to the ongoing care and protection” of D.J. and that had D.J.
bitten someone else, “the injured party could have potentially
recovered for his/her damages from [Van Kleek] to the extent
of [her] negligence.”
After Farmers denied her claim, Van Kleek filed a complaint
for declaratory judgment. Van Kleek alleged that she “owed no
legal duty to any third party or third-party’s property” while
feeding and watering D.J. because D.J. was “confined in the
Chapmans’ home” and not in her custody. Van Kleek requested
a judgment declaring that she was not an insured; that section
II of the policy covered her claim against Walter Chapman; and
that, as a beneficiary of the Chapmans’ policy, she was entitled
to attorney fees and costs.
Farmers moved for summary judgment, arguing that
Van Kleek was “legally responsible” for D.J. and that the
intra-insured exclusion barred her claim. Van Kleek also
moved for summary judgment, asserting that there was no
1
See, e.g., Malik v. American Family Mut. Ins. Co., 243 Wis. 2d 27, 625
N.W.2d 640 (Wis. App. 2001).
Nebraska Advance Sheets
734 289 NEBRASKA REPORTS
genuine issue of material fact that the policy covered her
claim against Walter Chapman.
The district court granted Farmers’ motion for summary
judgment. The court concluded that “legally responsible” is
not ambiguous and framed the issue as whether Van Kleek had
“legal control” over D.J. when the dog bit her. Emphasizing
that Van Kleek was the only person responsible for feed-
ing, watering, and letting D.J. into the backyard while the
Chapmans were gone, the court determined that she was
“legally responsible” for the dog. The court concluded that
the policy did not cover her bodily injury because of the intra-
insured exclusion.
ASSIGNMENTS OF ERROR
Van Kleek assigns, restated, that the district court erred by
(1) granting Farmers’ motion for summary judgment and (2)
overruling her motion for summary judgment.
STANDARD OF REVIEW
[1] The interpretation of an insurance policy presents a ques-
tion of law that we decide independently of the trial court.2
[2,3] In reviewing a summary judgment, an appellate court
views the evidence in a light most favorable to the party
against whom the judgment was granted and gives that party
the benefit of all reasonable inferences deducible from the evi-
dence.3 We will affirm a lower court’s grant of summary judg-
ment if the pleadings and admitted evidence show that there is
no genuine issue as to any material facts or as to the ultimate
inferences that may be drawn from the facts and that the mov-
ing party is entitled to judgment as a matter of law.4
ANALYSIS
Van Kleek argues that she was not “an insured” because
she was not “legally responsible” for D.J. Initially, she asserts
2
American Family Mut. Ins. Co. v. Regent Ins. Co., 288 Neb. 25, 846
N.W.2d 170 (2014).
3
Id.
4
Id.
Nebraska Advance Sheets
VAN KLEEK v. FARMERS INS. EXCH. 735
Cite as 289 Neb. 730
that the term “‘legally responsible for’” animals is ambiguous
because it might refer to a relationship between herself and
D.J., but she admits that this is not the “most logical” reading
of the language.5 The thrust of Van Kleek’s argument is that she
is “legally responsible” only if “a third party is exposed to the
dangers of DJ while she is DJ’s handler.”6 Because she did not
let D.J. into “the public domain where third parties reside,”7
Van Kleek concludes that no third party was “exposed to the
dangers of DJ” and that therefore, she was not an insured.
Farmers responds that Van Kleek was “legally responsible” for
D.J. because “[s]he was the person responsible for maintaining
the dog’s well-being and ensuring he was fed, watered, and
allowed in the back yard to relieve himself.”8
[4-7] We begin by reciting some principles of insurance
policy interpretation. An insurance policy is a contract, and we
construe it like any other contract, according to the meaning
of the terms that the parties have used.9 We give terms that are
clear their plain and ordinary meaning as a reasonable person
in the insured’s position would understand them.10 But we con-
strue ambiguous terms in favor of the insured.11 A contract is
ambiguous when a word, phrase, or provision in the contract
has, or is susceptible of, at least two reasonable but conflict-
ing meanings.12
Courts have generally interpreted “legally responsible” to
mean a legal duty created by custody, control, or posses-
sion of the designated property.13 For example, in Security
5
Brief for appellant at 15.
6
Id. at 20.
 7
Id. at 17.
 8
Brief for appellee at 11-12.
9
American Fam. Mut. Ins. Co. v. Wheeler, 287 Neb. 250, 842 N.W.2d 100
(2014).
10
Id.
11
See id.
12
See id.
13
See, Boettger v. Early American Ins. Co., 469 So. 2d 495 (La. App. 1985);
Burglass v. U.S. Fidelity and Guar. Co., 427 So. 2d 596 (La. App. 1983).
Nebraska Advance Sheets
736 289 NEBRASKA REPORTS
National Insurance Co. v. Sequoyah Marina,14 a boat owner
asked a mechanic to repair the motor. After the mechanic
put some oil into the engine and replaced the spark plugs, he
pressed the starter button and the boat exploded. The plain-
tiffs, individuals near the boat who suffered property damage,
brought actions against the boat owner, the mechanic, and the
insurer that issued the boat owner a homeowner’s policy. The
boat owner’s policy defined “insured” as, “‘with respect to
animals and watercraft owned by an insured, any person or
organization legally responsible therefor.’”15 The boat owner’s
insurer sought a declaratory judgment that the mechanic was
not an insured.
The court reasoned that whether the mechanic was “legally
responsible” for the boat depended on whether he owed
duties or was open to liability arising from his dominion over
the craft:
We think “responsible” as here used means [that the
mechanic was] under a duty to use or operate the boat
or the power plant and equipment thereof properly and
[would be] liable and answerable for a failure so to do. It
may be implied from the physical possession of the boat
by [the mechanic] and his authority and power to act with
respect thereto.16
Under this definition, the court held that the mechanic was
“legally responsible” for the boat when it exploded. The
mechanic was “in possession, charge and control of the boat”
and was authorized to exercise his “independent judgment
with respect to what was necessary to be done.”17 Of particu-
lar importance was the mechanic’s “implied authority” to take
the boat on a test run.18 The court had “no doubt” that the
mechanic would have been liable for any accident during a test
14
Security National Insurance Co. v. Sequoyah Marina, 246 F.2d 830 (10th
Cir. 1957).
15
Id. at 832.
16
Id.
17
Id. at 832-33.
18
Id. at 833.
 Nebraska Advance Sheets
VAN KLEEK v. FARMERS INS. EXCH. 737
Cite as 289 Neb. 730
run.19 That the mechanic never had an opportunity to operate
the boat did not matter, since it was “the existence of the power
and not its exercise which determines the relationship of [the
mechanic] to the boat.”20
Similarly, a court determined that a person was “legally
responsible” for an animal because he had the power to exer-
cise control over it, even if he did not intend to exercise
control. In United Services Auto. Ass’n v. State Farm,21 a
grandfather came to his son and daughter-in-law’s house to
help babysit his grandchild. His daughter-in-law kept horses
inside a gated area in the yard. Asked whether he had received
any horse-related instructions, the grandfather testified “‘it
was just expected’” that he would look after them or call his
daughter-in-law “‘if things needed to be done or if one of the
animals was causing a ruckus.’”22 After spending some time in
the house, the grandfather opened the gate and drove his car
into the yard. A horse escaped through the opening and was
involved in a collision with a third party. The daughter-in-law
was the named insured in a homeowner’s policy issued by the
defendant insurer, which policy defined “insured” as, “‘[w]ith
respect to animals or watercraft to which this insurance applies,
the person or organization legally responsible for them.’”23
The issue on appeal was whether the grandfather was “legally
responsible” for the horse.
The insurer argued that the grandfather was not an insured
because he was on the premises to watch his grandchild, not
care for the horses. The court disagreed, reasoning that the
grandfather’s general responsibility over the premises extended
to the animals corralled outside the house:
[The grandfather] had the responsibility or the “duty” to
avoid the real possibility of a horse escaping if he opened
19
Id.
20
Id.
21
United Services Auto. Ass’n v. State Farm, 110 P.3d 570 (Okla. Civ. App.
2004).
22
Id. at 572.
23
Id. at 571 n.2.
Nebraska Advance Sheets
738 289 NEBRASKA REPORTS
the gate. He was in charge of the household during the
time he was babysitting and had the power to act to pre-
vent the escape of the horse. . . . Therefore, [the grandfa-
ther] was “legally responsible” for [his daughter-in-law’s]
horse during the time he was on the property.24
So, despite the lack of a “purpose” to exercise control over the
horse, the court held that the grandfather was “legally respon-
sible” for the animal.
In a case with facts analogous to those before us, the
Wisconsin Court of Appeals held that a person was “legally
responsible” for a dog she was caring for as a favor to vaca-
tioning friends. In Malik v. American Family Mut. Ins. Co.,25
Christina Malik brought the Matthew and Patricia Herman’s
springer spaniel to her home to care for it while the Hermans
were on vacation. The dog bit Malik and she sued the
Hermans and their homeowner’s insurer. The policy issued
to the Hermans defined “insured” to include “‘any person
or organization legally responsible for a watercraft or ani-
mal owned by [an insured] to which Section II Coverages
apply.’”26 Under the “‘Intra-insured Suits’” exclusion in
section II of the policy, “‘bodily injury to any insured’”
was not covered.27 The Hermans’ insurer refused to defend or
indemnify them from Malik’s suit on the ground that Malik
herself was an insured.
Similar to Van Kleek’s argument, Malik argued that a rea-
sonable insured would understand the “legally responsible”
language to extend coverage “so that if a person who is legally
responsible for the Hermans’ dog becomes liable to a third
person, the person responsible for the dog, as well as the
Hermans, is covered under the policy.”28 Malik contended that
a reasonable insured would not expect the expanded defini-
tion of “insured” to limit the Hermans’ coverage for injuries
24
Id. at 573.
25
Malik v. American Family Mut. Ins. Co., supra note 1.
26
Id. at 33, 625 N.W.2d at 643.
27
Id. at 34, 625 N.W.2d at 643.
28
Id. at 35, 625 N.W.2d at 644.
Nebraska Advance Sheets
VAN KLEEK v. FARMERS INS. EXCH. 739
Cite as 289 Neb. 730
caused by their dog. But the court concluded that “[b]ased
on the undisputed facts, Malik was legally responsible for an
animal owned by the Hermans at the time she was injured,”
and that therefore, she was an insured under the policy issued
to the Hermans.29 Notably, a Wisconsin statute imposed strict
liability for damages caused by a dog on “‘any person who
owns, harbors or keeps’” the dog.30 Malik did not dispute that
she was a “keeper” of the dog.31
[8-10] We conclude that Farmers is entitled to summary
judgment because there is no genuine issue that Van Kleek was
“legally responsible” for D.J. In the context of homeowner’s
insurance policies, coverage for a person “legally responsible”
for designated property extends to those “under a duty to use
or operate the designated property properly and who would be
liable and answerable for a failure to do so.”32 In addition to
an owner’s liability under Neb. Rev. Stat. § 54-601 (Reissue
2010) and common-law liability for known vicious propensi-
ties, the keeper of a dog can be liable to injured third parties
on a negligence theory.33 Once a person has possession or
control of a dog, that person owes a duty of care to prevent
unreasonable risks of harm posed by the foreseeable actions of
the dog.34
The control Van Kleek exercised over D.J. obligated her to
exercise care to prevent unreasonable risks of harm to third
parties from D.J.’s behavior. Van Kleek testified that she was
responsible for feeding, watering, and letting D.J. in and out of
the house while the Chapmans were away. She also assumed
that if D.J. got loose, she “would have to go find him,” and
29
Id. at 39, 625 N.W.2d at 646.
30
Id. at 40, 625 N.W.2d at 646.
31
Id.
32
9 Steven Plitt et al., Couch on Insurance § 126:7 at 126-23 (2008).
33
4 Am. Jur. 2d Animals § 72 (2007). See, also, Guzman v. Barth, 250
Neb. 763, 552 N.W.2d 299 (1996); Morgan v. Marquis, 50 A.3d 1 (Me.
2012); Jonathan R. Shulan, Note, Animal Law—When Dogs Bite: A Fair,
Effective, and Comprehensive Solution to the Contemporary Problem of
Dog Attacks, 32 U. Ark. Little Rock L. Rev. 259 (2010).
34
See Fields v. Hayden, 81 A.3d 367 (Me. 2013).
Nebraska Advance Sheets
740 289 NEBRASKA REPORTS
she testified that she would have sought veterinary care if D.J.
became sick. Van Kleek alone exercised control over D.J.’s
position relative to the outside world. That she did not breach
a duty of care by, for example, carelessly leaving the gate open
or bringing D.J. into “the public domain where third parties
reside,”35 does not mean that she owed no duty.
CONCLUSION
Van Kleek was an insured under the policy because she
was “legally responsible” for the Chapmans’ dog. As an
insured, the unambiguous terms of the policy exclude cover-
age of her injury. Accordingly, Farmers is entitled to sum-
mary judgment.
Affirmed.
35
Brief for appellant at 17.
Delores Shaffer, as Guardian and next friend of
Brian Shaffer, an incapacitated person, appellee, v.
Nebraska Department of Health and Human
Services and Vivianne M. Chaumont, director,
Division of Medicaid and Long-Term Care,
appellees, and Coventry H ealth Care
of Nebraska, I nc., appellant.
___ N.W.2d ___
Filed December 19, 2014. No. S-14-165.
1. Administrative Law: Final Orders: Appeal and Error. A judgment or
final order rendered by a district court in a judicial review pursuant to the
Administrative Procedure Act may be reversed, vacated, or modified by an appel-
late court for errors appearing on the record.
2. Administrative Law: Judgments: Appeal and Error. When reviewing an
order of a district court under the Administrative Procedure Act for errors
appearing on the record, the inquiry is whether the decision conforms to the
law, is supported by competent evidence, and is not arbitrary, capricious,
or unreasonable.
3. Judgments: Appeal and Error. Whether a decision conforms to law is by defi-
nition a question of law, in connection with which an appellate court reaches a
conclusion independent of that reached by the lower court.