Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co. , 29 Neb. Ct. App. 678 ( 2021 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
04/06/2021 12:11 AM CDT
- 678 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678Millard Gutter Company, a corporation
doing business as Millard Roofing and
Gutter, appellant, v. Farm Bureau
Property & Casualty Insurance
Company, appellee.
___ N.W.2d ___
Filed March 30, 2021. No. A-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,
accepting the allegations in the complaint as true and drawing all rea-
sonable inferences in favor of the nonmoving party.
2. Motions to Dismiss: Pleadings. To prevail against a motion to dismiss
for failure to state a claim, a plaintiff must allege sufficient facts to state
a claim to relief that is plausible on its face. In cases in which a plaintiff
does not or cannot allege specific facts showing a necessary element, the
factual allegations, taken as true, are nonetheless plausible if they sug-
gest the existence of the element and raise a reasonable expectation that
discovery will reveal evidence of the element or claim.
3. Pleadings: Appeal and Error. An order of the district court requiring a
petition to be made more definite and certain 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. Actions: Insurance: Parties. A first-party bad faith cause of action is
based upon allegations that the insurer, in bad faith, refuses to settle
with its own policyholder insured, who thereby suffers some type of
direct loss.
6. Actions: Pleadings: Notice. Civil actions are controlled by a liberal
pleading regime; a party is only required to set forth a short and plain
statement of the claim showing that the pleader is entitled to relief and
- 679 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678is not required to plead legal theories or cite appropriate statutes so long
as the pleading gives fair notice of the claims asserted.
7. Actions: Pleadings. The rationale for a liberal notice pleading standard
in civil actions is that when a party has a valid claim, he or she should
recover on it regardless of a failure to perceive the true basis of the
claim at the pleading stage.
8. Breach of Contract: Pleadings: Proof. In a breach of contract action,
a plaintiff need only plead the existence of a promise, its breach, dam-
ages, and compliance with any conditions precedent that activate the
defendant’s duty.
9. Appeal and Error. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and controversy
before it.
Appeal from the District Court for Douglas County:
Kimberly Miller Pankonin, Judge. Reversed and remanded
for further proceedings.
Theodore R. Boecker, Jr., of Boecker Law, P.C., L.L.O., for
appellant.
Raymond E. Walden and Michael T. Gibbons, of Woodke &
Gibbons, P.C., L.L.O., for appellee.
Pirtle, Chief Judge, and Moore and Riedmann, Judges.
Pirtle, Chief Judge.
INTRODUCTION
Millard Gutter Company, a corporation doing business as
Millard Roofing and Gutter (Millard Gutter), appeals from
an order of the district court for Douglas County dismiss-
ing its amended complaint against Farm Bureau Property &
Casualty Insurance Company (Farm Bureau) without prejudice.
On appeal, Millard Gutter argues that the district court erred in
dismissing its bad faith claims against Farm Bureau, in order-
ing it to file a second amended complaint, and in dismissing
the amended complaint sua sponte when Millard Gutter failed
to file a second amended complaint. For the reasons that fol-
low, we reverse, and remand for further proceedings.
- 680 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678BACKGROUND
On April 9, 2018, Millard Gutter filed a complaint in the
district court against Farm Bureau. Millard Gutter alleged
that it was “the assignee of various insured property owners,
who purchased insurance from [Farm Bureau].” The complaint
stated only that the assignments were “associated with the
2013 storms” and did not otherwise identify the policies or the
insureds at issue. Millard Gutter alleged that Farm Bureau was
in breach of contract for failing to pay Millard Gutter pursuant
to these assignments. Further, Millard Gutter alleged bad faith
and claimed prejudgment and postjudgment interest, as well as
attorney fees.
Subsequently, Farm Bureau filed a motion to enforce
prior rulings, a motion to dismiss Millard Gutter’s bad faith
claims, a motion for a more definite statement regarding the
breach of contract claims, a motion to strike, and a motion to
sever. These motions are not contained in the record before
this court. Before the district court ruled on Farm Bureau’s
motions, Millard Gutter filed an amended complaint. The
amended complaint identified the names and addresses of 20
individuals who had assigned their rights to payment under
their insurance policies to Millard Gutter, as well as the dates
of the assignments.
Following the submission of briefs, the district court ruled
on Farm Bureau’s pending motions on April 29, 2019. As rel-
evant to this appeal, the district court granted Farm Bureau’s
motion to dismiss Millard Gutter’s bad faith claims. The court
reasoned that inchoate bad faith claims cannot be assigned
and that there were no allegations in the amended com-
plaint regarding whether “any homeowner had made a bad
faith claim against [Farm Bureau] at the time of the assign-
ment, which may have been a ‘present interest’ assigned to
[Millard Gutter].” The district court additionally sustained
Farm Bureau’s motion for a more definite statement “as to the
date of the alleged breaches of contract so that Farm Bureau
[could] assess any potential statute of limitations defenses.”
- 681 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678Millard Gutter was ordered to file a second amended complaint
within 30 days.
Millard Gutter did not file a second amended complaint,
and on October 16, 2019, the district court entered an order
dismissing the case without prejudice. This appeal followed.
ASSIGNMENTS OF ERROR
Millard Gutter assigns that the district court erred in (1) dis-
missing its bad faith claims against Farm Bureau, (2) ordering
it to file a second amended complaint, and (3) dismissing the
amended complaint.
STANDARD OF REVIEW
[1,2] A district court’s grant of a motion to dismiss on the
pleadings is reviewed de novo, accepting the allegations in
the complaint as true and drawing all reasonable inferences in
favor of the nonmoving party. Schaeffer v. Frakes, 306 Neb.
904, 947 N.W.2d 714 (2020). To prevail against a motion to
dismiss for failure to state a claim, a plaintiff must allege
sufficient facts to state a claim to relief that is plausible on
its face. Id. In cases in which a plaintiff does not or cannot
allege specific facts showing a necessary element, the factual
allegations, taken as true, are nonetheless plausible if they
suggest the existence of the element and raise a reasonable
expectation that discovery will reveal evidence of the element
or claim. Id.[3,4] An order of the district court requiring a petition to
be made more definite and certain will be sustained on appeal
unless it clearly appears that the court abused its discre-
tion. Christianson v. Educational Serv. Unit No. 16, 243 Neb.
553, 501 N.W.2d 281 (1993). 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.
George Clift Enters. v. Oshkosh Feedyard Corp., 306 Neb. 775,
947 N.W.2d 510 (2020).
- 682 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678ANALYSIS
Bad Faith Claims.
Millard Gutter argues that the district court erred in grant-
ing Farm Bureau’s motion to dismiss its bad faith claims for
failure to state a claim. The district court found that Millard
Gutter had not alleged any acts of bad faith committed by
Farm Bureau prior to the dates of the assignments, nor were
there allegations that any homeowner had made a bad faith
claim against Farm Bureau prior to the assignments. The dis-
trict court ultimately held that “an inchoate claim for bad faith
cannot be assigned.” Additionally, the court found that the
complaint alleged only that the insureds had assigned the “pro-
ceeds under policies of insurance” to Millard Gutter and that
the complaint failed to allege that the insureds had assigned
related tort claims for bad faith.
Millard Gutter argues that the district court’s analysis was
“inconsistent with the standards that should be employed in
examining a motion to dismiss.” Brief for appellant at 9.
Millard Gutter argues that at the pleadings stage of a case, a
plaintiff need only state a claim that was “‘plausible on its
face,’” and that therefore, the district court erred in concluding
Millard Gutter had failed to state a claim as a matter of law. Id.(emphasis omitted).
In support of its position, Millard Gutter claims that after
the assignments were made, it “stood in the shoes of . . . each
of the insureds” under the original contract, and that under the
contract, Farm Bureau had a continuing obligation to adjust the
insureds’ claims in good faith and to make prompt payments to
Millard Gutter as assignee. Brief for appellant at 11. Millard
Gutter further alleges that its bad faith claims, as pled in its
complaint, were sufficiently plausible and could have been fur-
ther developed with the aid of discovery.
[5] Millard Gutter correctly asserts that Nebraska courts
have recognized a first-party bad faith cause of action. The
tort of bad faith “is based upon allegations that the insurer, in
bad faith, refuses to settle with its own policyholder insured,
- 683 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678who thereby suffers some type of direct loss.” Braesch v. Union
Ins. Co., 237 Neb. 44, 54, 464 N.W.2d 769, 776 (1991), disap-
proved on other grounds, Wortman v. Unger, 254 Neb. 544,
578 N.W.2d 413 (1998). The tort of first-party bad faith “is
based on the covenant of good faith and fair dealing which, in
turn, is premised on a contractual relationship.” Id. at 56, 464
N.W.2d at 776. The court in Braesch noted that a nonpolicy­
holder generally does not have standing to assert a first-party
bad faith claim because there is not a contractual relationship
between the nonpolicyholder and the insurer.
Here, Millard Gutter is not a policyholder with Farm Bureau,
and no contractual relationship exists between Millard Gutter
and Farm Bureau. The court in Braesch held that “stran­
gers to the contract” cannot bring first-party bad faith claims
against an insurer as a policyholder and beneficiary. 237 Neb.
at 55, 464 N.W.2d at 776. The district court correctly found
that because Millard Gutter is a stranger to the contract, it
cannot assert a traditional first-party bad faith claim against
Farm Bureau.
Millard Gutter argues, however, that a bad faith claim
against an insurer may be assigned by an insured. Neither this
court nor the Nebraska Supreme Court has explicitly ruled on
the assignability of bad faith claims or on the requirements
for such an assignment. Yet, for the reasons set forth below,
it is unnecessary for us to conclusively decide that issue in
this case.
[6,7] Nebraska is a notice pleading jurisdiction. Tryon v.
City of North Platte, 295 Neb. 706, 890 N.W.2d 784 (2017).
Civil actions are controlled by a liberal pleading regime. Id.A party is only required to set forth a short and plain state-
ment of the claim showing that the pleader is entitled to relief.
Id. The party is not required to plead legal theories or cite
appropriate statutes so long as the pleading gives fair notice
of the claims asserted. Id. The rationale for this liberal notice
pleading standard is that when a party has a valid claim, he or
- 684 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678she should recover on it regardless of a failure to perceive the
true basis of the claim at the pleading stage. Id.In its amended complaint, Millard Gutter alleged that Farm
Bureau had a contractual obligation to pay the costs of repair-
ing the damages to the insureds’ homes. Millard Gutter alleged
that it was the valid assignee of the rights to proceeds under
the insureds’ policies and that Farm Bureau was sent proper
notification of the assignments. The amended complaint went
on to allege that Millard Gutter demanded payment from Farm
Bureau and that Farm Bureau refused to pay either Millard
Gutter or the insureds the amounts due under the policies.
Finally, the complaint alleged that the “bad faith conduct” of
Farm Bureau caused damage to Millard Gutter.
Upon our de novo review, accepting the allegations in the
amended complaint as true and drawing all reasonable infer-
ences 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 sufficient to give Farm Bureau fair notice
of the claims asserted against it. See Tryon v. City of North
Platte, supra.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 infor-
mation can be determined during the discovery 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 grant-
ing Farm Bureau’s motion to dismiss the bad faith claims.
- 685 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678Order for More Definite Statement.
Millard Gutter next argues that the district court abused its
discretion in requiring it to make a more definite statement
with respect to its breach of contract claims against Farm
Bureau. Millard Gutter argues that the district court and Farm
Bureau improperly treated the motion for a more definite state-
ment “as a discovery tool” and that under notice pleading rules,
its complaint sufficiently stated a cause of action for breach of
contract. Brief for appellant at 20.
In its order, the district court required Millard Gutter to file
a second amended complaint that included “a more definite
statement as to when the alleged breach of contract is claimed
to have occurred as to each insured.”
[8] As stated above, Nebraska is a notice pleading jurisdic-
tion. Tryon v. City of North Platte, 295 Neb. 706, 890 N.W.2d
784 (2017). Nebraska courts have established that in a breach
of contract action, a plaintiff need only “plead the existence
of a promise, its breach, damages, and compliance with any
conditions precedent that activate the defendant’s duty.” See
Kotrous v. Zerbe, 287 Neb. 1033, 1037, 846 N.W.2d 122, 126
(2014). The record shows that Millard Gutter’s amended com-
plaint met these minimal pleading requirements.
In addition to the above, Neb. Ct. R. Pldg. § 6-1109(f) states:
“For the purpose of testing the sufficiency of a pleading, aver-
ments of time and place are material and shall be considered
like all other averments of material matter.” Nebraska’s notice
pleading regime is modeled after the Federal Rules of Civil
Procedure, and an appellate court may look to federal deci-
sions for guidance in interpreting state rules. See, Eastermann
v. Bose, 296 Neb. 228, 892 N.W.2d 857 (2017); Kellogg v.
Nebraska Dept. of Corr. Servs., 269 Neb. 40, 690 N.W.2d 574(2005). Similarly to Nebraska’s § 6-1109(f), Fed. R. Civ. P.
9(f) states: “An allegation of time or place is material when
testing the sufficiency of a pleading.” Pursuant to this rule,
federal courts have granted motions for a more definite state-
ment when “a plaintiff’s allegations span several years, some
- 686 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678of which fall outside of the statute of limitations period.” See
Meyer v. United Airlines, Inc., 624 F. Supp. 2d 923, 932 (N.D.
Ill. 2008).
In Nebraska, a breach of contract action based on a written
agreement has a 5-year statute of limitations. See Neb. Rev.
Stat. § 25-205 (Reissue 2016). Millard Gutter’s complaint
was filed on April 9, 2018. The complaint alleged that Millard
Gutter’s claims against Farm Bureau were “associated with the
2013 storms.” The amended complaint more specifically pled
that each insured made an assignment to Millard Gutter follow-
ing “an incident occurring on April 9, 2013.” Based upon these
allegations, the earliest any of Millard Gutter’s claims against
Farm Bureau could have become ripe was April 9, 2013, which
is within 5 years of the date the complaint was filed. Although
Millard Gutter’s allegations in the complaint and amended
complaint did span several years, they did not fall outside the
statute of limitations period. Therefore, this case is not one in
which the rule articulated in Meyer v. United Airlines, Inc.,
supra, would apply.
Under the specific circumstances of this case, we conclude
that the district court abused its discretion in requiring Millard
Gutter to make a more definite statement as to its claims of
breach of contract against Farm Bureau.
Order of Dismissal.
[9] Finally, Millard Gutter argues that the district court
erred in dismissing the amended complaint in its entirety
without prior notice or hearing. However, because we have
already determined that the district court erred in granting
Farm Bureau’s motion to dismiss and abused its discretion in
requiring Millard Gutter to make a more definite statement,
we need not consider this assignment of error. An appellate
court is not obligated to engage in an analysis that is not nec-
essary to adjudicate the case and controversy before it. AVG
Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d
212 (2020).
- 687 -
Nebraska Court of Appeals Advance Sheets
29 Nebraska Appellate Reports
MILLARD GUTTER CO. v. FARM BUREAU PROP. & CAS. INS. CO.
Cite as 29 Neb. App. 678CONCLUSION
We conclude that the district court erred in granting
Farm Bureau’s motion to dismiss Millard Gutter’s bad faith
claims. We also conclude that the district court abused its
discretion in requiring Millard Gutter to make a more definite
statement and to file a second amended complaint. Accordingly,
we reverse the district court’s order and remand the cause for
further proceedings consistent with this opinion.
Reversed and remanded for
further proceedings.