North Star Mut. Ins. Co. v. Miller ( 2022 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
09/30/2022 08:06 AM CDT
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941North Star Mutual Insurance Company, appellee and
cross-appellant, v. Jerry Miller and David Miller,
doing business as Old Mill Bulk Foods,
appellants and cross-appellees.
___ N.W.2d ___
Filed July 8, 2022. No. S-21-505.
1. Summary Judgment. Summary judgment is proper when the plead-
ings, depositions, admissions, stipulations, and affidavits in the record
disclose that there is no genuine issue as to any material fact or as to
the ultimate inferences that may be drawn from those facts and that the
moving party is entitled to judgment as a matter of law.
2. Insurance: Contracts: Appeal and Error. The interpretation of an
insurance policy is a question of law, in connection with which an appel-
late court has an obligation to reach its own conclusions independently
of the determination made by the lower court.
3. Appeal and Error. Plain error is error plainly evident from the record
and of such a nature that to leave it uncorrected would result in damage
to the integrity, reputation, or fairness of the judicial process.
4. Insurance: Contracts: Intent. An insurance policy is a contract and is
to be construed as any other contract to give effect to the parties’ inten-
tions at the time the contract was made.
5. Insurance: Contracts: Words and Phrases. An insurance policy is
ambiguous when a word, phrase, or provision in the contract has, or is
susceptible of, at least two reasonable but conflicting interpretations or
meanings.
6. Insurance: Contracts. A court will not read an ambiguity into policy
language which is plain and unambiguous in order to construe it against
the insurer.
7. ____: ____. When interpreting the plain meaning of the terms of an
insurance policy, the natural and obvious meaning of the provisions in
a policy is to be adopted in preference to a fanciful, curious, or hidden
meaning.
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 9418. Rules of the Supreme Court: Appeal and Error. Depending on the
particulars of each case, failure to comply with the mandates of Neb.
Ct. R. App. P. § 2-109(D) (rev. 2021) may result in an appellate court
waiving the error, proceeding on a plain error review only, or declining
to conduct any review at all.
9. ____: ____. A cross-appeal must be properly designated, pursuant to
Neb. Ct. R. App. P. § 2-109(D)(4) (rev. 2021), if affirmative relief is to
be obtained.
10. ____: ____. A cross-appeal is properly designated by noting it on the
cover of the appellee brief and setting it forth in a separate division of
the brief.
11. Attorney Fees. Attorney fees and expenses may be recovered in a civil
action only where provided for by statute or when a recognized and
accepted uniform course of procedure has been to allow recovery of
attorney fees.
12. Attorney Fees: Insurance. Neb. Rev. Stat. § 44-359 (Reissue 2021) is
a fee-shifting statute which permits a successful litigant to recover attor-
ney fees as a part of the judgment in certain actions against insurance
companies.
Appeal from the District Court for Cherry County: Mark D.
Kozisek, Judge. Affirmed in part, vacated in part, and in part
reversed and remanded with directions.
Todd R. McWha and Jonathan Peiffer, of Waite & McWha
Law Firm, for appellants.
Jonathan M. Brown, of Walentine O’Toole, L.L.P., for
appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Funke, J.
INTRODUCTION
Jerry Miller and David Miller, doing business as Old
Mill Bulk Foods (Old Mill), operated a deli/grocery store
in a building it rented in Valentine, Nebraska, which was
the covered premises. On July 2, 2018, a fire destroyed the
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941covered premises, and thereafter, Old Mill elected to renovate
another building in which to relocate its business. Old Mill
had an insurance policy through North Star Mutual Insurance
Company (North Star) and sought $159,878.53, in addition
to other reimbursements, under the policy’s “Extra Expense”
provision. North Star denied coverage for the extra expenses
and filed a declaratory judgment action to determine the par-
ties’ rights and obligations under the policy. The district court
granted summary judgment, denying the extra expenses, and
Old Mill appealed. We affirm in part, vacate in part, and in part
reverse and remand with directions.
BACKGROUND
North Star issued the insurance policy to Old Mill, effective
for a 1-year period beginning on November 21, 2017, and end-
ing on November 21, 2018 (hereafter the Policy).
After the fire destroyed the deli/grocery store, which was the
covered premises, Old Mill elected not to repair or rebuild it.
As a result, Old Mill searched for a replacement property for
lease in order to resume operations. Being unable to find any-
thing suitable, Old Mill informed North Star that Miller Land
Enterprises, LLC, owned by Jerry, David, and Mary Miller,
intended to purchase a defunct movie theater in Valentine
and lease it to Old Mill. Miller Land Enterprises purchased
the replacement property on April 10, 2019, and subsequently
entered into a rental agreement with Old Mill to operate the
grocery store at the new location. The replacement property
required substantial modification and renovation to make it
suitable as a grocery store, including work to level the floors,
remove walls and relocate walls, install flooring, install light-
ing and outlets, and install sinks.
During renovations, Old Mill submitted claims for loss to
North Star under the terms of the Policy. The Policy provides
for certain areas of coverage, including “Business Personal
Property,” “Business Income,” and “Extra Expense.” Pursuant
to the terms of the Policy, North Star paid Old Mill $89,050
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311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941for business personal property coverage and $199,212 for busi-
ness income coverage.
Old Mill also sought $159,878.53 it spent in converting the
replacement property into a deli/grocery store under the “Extra
Expense” coverage. The claimed expenses included $38,600
for electrical improvements to the replacement premises,
$53,167.50 for other necessary improvements to the replace-
ment premises, $36,884.15 for materials used in the improve-
ments of the replacement premises, $19,500 for plumbing
improvements to the replacement premises, and $4,600 for a
walk-in cooler.
The “Extra Expense” provision of the Policy states, in per-
tinent part:
A. Coverage
....
5. Additional Coverages
....
g. Extra Expense
(1) We will pay necessary Extra Expense you incur
during the “period of restoration” that you would not
have incurred if there had been no direct physical loss or
damage to property at the described premises. The loss
or damage must be caused by or result from a Covered
Cause of Loss. . . .
....
(2) Extra Expense means expense incurred:
(a) To avoid or minimize the suspension of business
and to continue “operations”:
(i) At the described premises; or
(ii) At replacement premises or at temporary locations,
including relocation expenses, and costs to equip and
operate the replacement or temporary locations.
(b) To minimize the suspension of business if you can-
not continue “operations”.
(c) To:
(i) Repair or replace any property; or
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NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941(ii) Research, replace or restore the lost information on
damaged “valuable papers and records”;
to the extent it reduces the amount of loss that otherwise
would have been payable under this Additional Coverage
or Additional Coverage f. Business Income.
....
(4) . . . This Additional Coverage is not subject to the
Limits of Insurance of Section I-Property.
North Star denied Old Mill’s claim, maintaining that
expenses incurred to convert the replacement property into a
deli/grocery store are not covered under the “Extra Expense”
provision of the Policy, and subsequently filed its complaint
for declaratory judgment, arguing the same. In response, Old
Mill filed an answer and counterclaim, alleging breach of
contract, breach of the implied covenant of good faith and fair
dealing, and bad faith. Eventually, both parties moved for sum-
mary judgment.
The district court acknowledged two out-of-state cases cited
by the parties: Thompson v. Threshermen’s Mut. Ins. Co. 1
and Midwest Regional Allergy v. Cincinnati Ins. Co. 2 North
Star argued the former controlled the present case, while Old
Mill argued the latter case controlled. The court rejected both
arguments.
The court found the policy provisions were ambiguous,
determining that there are two reasonable, but conflicting inter-
pretations of the “Extra Expense” provision in the Policy:
• [I]t provides coverage for the costs associated with
starting the business at a replacement location, including
structural modifications and the mechanical, electrical and
plumbing installation/modifications to the newly acquired
premises at the replacement location, or
1
Thompson v. Threshermen’s Mut. Ins. Co., 172 Wis. 2d 275, 493 N.W.2d
734 (Wis. App. 1992).
2
Midwest Regional Allergy v. Cincinnati Ins. Co., 795 F.3d 853 (8th Cir.
2015).
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NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941• [I]t limits coverage to the costs for replacement and
relocation of personal business property necessary to
carry on business at the new location.
In light of its finding of ambiguity, the trial court proceeded
to define the phrase “to equip” as meaning to “provide some-
one or something with objects that are needed for a particular
activity or purpose.” And, further, determined that the word
“equip” refers to objects, such as refrigerators, stoves, and
coolers, and not “walls, floors and bathrooms.” In doing so,
the court found that the “[E]xtra [E]xpense” coverage was lim-
ited to expenses incurred to avoid or minimize the suspension
of business at the replacement property, including relocation
expenses and costs to equip and operate at the new location.
In other words, the coverage encompassed the continuance of
operations or business activities at the replacement premises,
but did not provide coverage for the acquisition of the replace-
ment location or improvements and/or modifications made at
the replacement location.
The court concluded that at the time the Policy was issued,
the parties did not expect or intend that North Star would insure
Old Mill against the loss of the location where it conducted its
business, and further, the parties did not agree to provide what-
ever was necessary for Old Mill to commence operations at a
new location. However, because North Star agreed to pay the
costs to relocate and equip the replacement premises, the court
found that North Star was contractually obligated to pay for
the walk-in cooler.
Accordingly, the district court granted North Star’s com-
plaint for declaratory judgment to the extent that the court
found that the Policy does not require North Star to provide
coverage to Old Mill for electrical improvements, structural
work associated with conversion of the replacement premises,
materials associated with the improvements, and plumbing
improvements. The district court also granted Old Mill’s
counterclaim to the extent that the court entered judgment
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941against North Star in the amount of $4,600 for the walk-in
cooler.
Old Mill requested attorney fees in the amount of $33,797.99.
The court determined that such request was not reasonable
because North Star had a reasonable basis for denying Old
Mill’s claim, and instead, the court found that a reasonable
attorney fee was $5,000 and awarded such to Old Mill.
ASSIGNMENTS OF ERROR
Old Mill assigns, restated, that the district court erred in
(1) finding that the “‘Extra Expense’” provision of the Policy
does not cover improvements made to convert and equip the
replacement building and (2) awarding only $5,000 of the
requested $33,797.99 in attorney fees.
On cross-appeal, North Star assigns, restated, that the dis-
trict court erred in (1) determining the Policy provisions to be
ambiguous, (2) determining that the walk-in cooler was cov-
ered under the “‘Extra Expense’” provision of the Policy, and
(3) awarding attorney fees to Old Mill.
STANDARD OF REVIEW
[1] Summary judgment is proper when the pleadings, depo-
sitions, admissions, stipulations, and affidavits in the record
disclose that there is no genuine issue as to any material fact
or as to the ultimate inferences that may be drawn from those
facts and that the moving party is entitled to judgment as a
matter of law. 3
[2] The interpretation of an insurance policy is a question
of law, in connection with which an appellate court has an
obligation to reach its own conclusions independently of the
determination made by the lower court. 4
3
American Fam. Mut. Ins. Co. v. Hadley, 264 Neb. 435, 648 N.W.2d 769(2002).
4
Id.- 948 -
Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941[3] Plain error is error plainly evident from the record and
of such a nature that to leave it uncorrected would result in
damage to the integrity, reputation, or fairness of the judi-
cial process. 5
ANALYSIS
The Policy
The parties have narrowly framed the central issue before
this court as whether the claims Old Mill has asserted against
North Star are covered under the “Extra Expense” provision
of the Policy as expenses “to equip” the replacement property.
This framing necessarily limits our analysis of the Policy to the
issue of coverage as defined by the definition of “to equip” and
omits the impact, if any, of policy exclusions and definitions
which have not been argued on appeal. These omissions do not
survive this narrow framing.
The district court found that the Policy, particularly the
definition of “to equip,” was ambiguous, but then proceeded to
construe the Policy in favor of North Star. We agree with the
district court that the Policy is ambiguous, but we disagree as
to how the Policy should be construed.
[4] An insurance policy is a contract and is to be construed
as any other contract to give effect to the parties’ intentions at
the time the contract was made. 6 When the terms of a contract
are clear, a court may not resort to rules of construction, and
the terms are to be accorded their plain and ordinary meaning
as the ordinary or reasonable person would understand them. 7
In such a case, a court shall seek to ascertain the intention of
the parties from the plain language of the policy.
5
Humphrey v. Smith, ante p. 632, 974 N.W.2d 293 (2022).
6
See American Fam. Mut. Ins. Co., supra note 3.
7
See Mahoney v. Union Pacific RR. Emp. Hosp. Assn., 238 Neb. 531, 471
N.W.2d 438 (1991) (citing Brown v. Farmers Mut. Ins. Co., 237 Neb. 855,
468 N.W.2d 105 (1991)).
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941[5-7] Whether a policy is ambiguous is a matter of law for
the court to determine. 8 An insurance policy is ambiguous
when a word, phrase, or provision in the contract has, or is
susceptible of, at least two reasonable but conflicting inter-
pretations or meanings. 9 However, we will not read an ambi-
guity into policy language which is plain and unambiguous in
order to construe it against the insurer. 10 But, when interpret-
ing the plain meaning of the terms of an insurance policy, we
have repeatedly stated that the natural and obvious meaning
of the provisions in a policy is to be adopted in preference to
a fanciful, curious, or hidden meaning. 11
Here, the Policy provides that North Star “will pay neces-
sary Extra Expense [Old Mill] incur[s] during the ‘period of
restoration’ that [it] would not have incurred if there had been
no direct physical loss or damage to property at the described
premises.” The Policy defines the term “Extra Expense” to
mean, in part, “expense incurred . . . [t]o avoid or minimize
the suspension of business and to continue ‘operations’ [at]
replacement premises or at temporary locations, including relo-
cation expenses, and costs to equip and operate the replace-
ment or temporary locations.” However, the Policy does not
provide a definition of what it means “to equip.”
Old Mill asserts that the meaning of “costs to equip” encom-
passes the costs of appliances, as well as the costs associated
with preparing a structure to house those appliances, such as
structural alterations. Despite North Star’s argument to the
contrary, we agree with Old Mill that the meaning of “costs
to equip,” as used in the Policy, is ambiguous inasmuch as “to
equip” is susceptible of at least two reasonable constructions,
8
See id.9
Poulton v. State Farm Fire & Cas. Cos., 267 Neb. 569, 675 N.W.2d 665(2004).
10
See, id.; American Fam. Mut. Ins. Co., supra note 3.
11
See Katskee v. Blue Cross/Blue Shield, 245 Neb. 808, 515 N.W.2d 645(1994).
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NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941namely, whether or not the term encompasses substantial modi-
fications made to a replacement location.
Insurance companies in drafting their policies formulate
language which may either prevent or create ambiguity. 12 In
such draftsmanship, precision provides certainty, while the
absence of articulation accounts for ambiguity. 13 An ambigu-
ous policy will be construed in favor of the insured so as to
afford coverage. 14
The Policy provides coverage for expenses incurred to
avoid or minimize the suspension of business and to continue
operations at the replacement location, including costs to
equip and operate the replacement location. Examining this
provision through the eyes of a reasonable person, the objec-
tive standard to determine the meaning of language in an
insurance policy, 15 to “equip” has a rather ordinary meaning:
“to make ready” or “to furnish for service or action by appro-
priate provisioning.” 16
North Star seems to take the position that the Policy
does not provide coverage for remodeling expenses. However,
nowhere does the Policy caution the insured that its definition
of “to equip” differs from a “plain and ordinary” definition
expressed in a standard dictionary, nor does it specifically
exclude coverage for what may be considered structural modi-
fication or remodeling expenses. Thus, reading the Policy
from the insured’s point of view, we adopt the natural and
obvious meaning of the provisions in a policy in preference to
the hidden meaning suggested by North Star 17 and hold that
12
Denis v. Woodmen Acc. & Life Co., 214 Neb. 495, 334 N.W.2d 463 (1983).
13
Id.14
See id. See, also, American Fam. Mut. Ins. Co., supra note 3.
15
See Decker v. Combined Ins. Co. of Am., 244 Neb. 281, 505 N.W.2d 719(1993).
16
“Equip,” Merriam-Webster.com, http://www.merriam-webster.com/diction­
ary/equip (last visited July 2, 2022).
17
See Katskee, supra note 11.
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941for purposes of the Policy, the word “equip” means to make
ready or to furnish for service or action by appropriate pro-
visioning and necessarily encompasses expenses incurred in
modifying a replacement premises in order to continue opera-
tions, such as costs associated with electrical improvements,
plumbing improvements, structural improvements, and mate­
rials used in those improvements.
This court is not alone in its determination. In Midwest
Regional Allergy, 18 the Eighth Circuit Court of Appeals con-
sidered whether costs to repair and relocate an MRI machine
were covered by an identical extra expense provision in an
insurance policy. The insured in Midwest Regional Allergy
operated a medical practice, which used specialized medical
equipment, including an MRI machine, as part of its normal
business operations. When a tornado destroyed the building,
the insured elected to permanently relocate his medical practice
to a different building which required substantial construction
and modification in order to house the specialty medical equip-
ment. In particular, it was necessary to reinforce the floors
with concrete and remove and replace exterior brick, as well
as install pipe, specialized heating and air conditioning equip-
ment, and copper shielding in the walls, door, and ceiling. The
insurer denied coverage for the expenses to repair and relocate
the MRI equipment. The trial court found the claimed expenses
were recoverable under the extra expense provision, and alter-
natively, the policy was ambiguous and therefore should be
read as providing coverage.
On appeal, the Eighth Circuit concluded, in part, that it was
reasonable to construe the policy to authorize coverage for
claimed expenses, including the installation expenses associ-
ated with the MRI machine as costs to relocate the business
to the replacement location. 19 The court further noted that
although the nature of the insured’s business and the extent of
18
Midwest Regional Allergy, supra note 2.
19
Id.
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941the damage necessitated substantial relocation expenses and
significant costs to equip and operate the replacement property,
this was not a factor in determining whether coverage existed
under the extra expense provision of the policy. 20
North Star directs us to the Wisconsin case of Thompson. 21
In Thompson, a case factually similar to the case presently
before us, the Wisconsin Court of Appeals considered the
meaning of the phrase “costs to equip and operate the replace-
ment locations” as used in an identical extra expense provision
in an insurance policy. The insureds in Thompson operated a
grocery store out of a rented building. When a fire destroyed
the building and the building’s owners chose not to rebuild, the
insureds built a new structure to house the grocery store. The
insureds then sought additional coverage under their policy’s
extra expense provision for expenses incurred for an insurance
premium, building permit, refrigeration equipment, furnace
installation, plumbing, electrical work, gas hookup, payroll,
refuse removal, and a new sign.
The appellate court determined that the extra expense provi-
sion was ambiguous and that such expenses were not covered
under the policy’s extra expense provision. The court then
reasoned that despite being ambiguous, the insurance policies
should be construed in accordance with what a reasonable per-
son in the position of the insured would have understood them
to mean. In doing so, the court noted that the extra expenses
were for items previously owned by the insureds or for items
that their landlord would have owned previous to the fire. The
court explained that the former items were covered by the bulk
of the policy and that neither party contemplated additional
coverage for such items under the extra expense provision of
the policy. The court further explained that the latter items were
items for which the insured was paying rent and would have
continued to pay rent. Thus, if it were to construe coverage
20
Id.21
Thompson, supra note 1.
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311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941for such items under the extra expense provision, the insured
would receive ownership of a new building as payoff from
their insurance policy, which would lead to an absurd result.
Unlike the insured in Thompson, here, Old Mill did not
construct an entirely new building. Although the nature of
the replacement premises necessitated substantial relocation
expenses and significant costs to equip and operate the replace-
ment premises, this is not a factor in determining whether
coverage exists under the “Extra Expense” provision of the
Policy. 22 Consequently, we find Thompson to be unpersuasive
under the circumstances.
Concluding that the Policy is ambiguous and therefore con-
struing it in favor of Old Mill, we determine as a matter of
law that the “Extra Expense” provision of the Policy provides
coverage for costs associated with electrical improvements,
plumbing improvements, structural improvements, and mate­
rials associated with those improvements that were done to the
replacement premises. The district court thus erred in granting
North Star’s motion for summary judgment. With regard to
this particular assignment of error, we reverse the decision of
the district court and remand the cause with directions that the
district court enter summary judgment in favor of Old Mill for
the claimed extra expenses.
Cross-Appeal
On cross-appeal, North Star argues the district court erred
in finding the cost of the walk-in cooler was covered under the
“Extra Expense” provision of the Policy. We disagree.
[8] As an initial matter, we note that generally, parties who
wish to secure appellate review of their claims must abide by
the rules of the Nebraska Supreme Court. 23 Any party who fails
22
See Midwest Regional Allergy, supra note 2.
23
Great Northern Ins. Co. v. Transit Auth. of Omaha, 308 Neb. 916, 958
N.W.2d 378 (2021), disapproved on other grounds, Clark v. Sargent Irr.
Dist., ante p. 123, 971 N.W.2d 298 (2022).
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NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941to properly identify and present its claim does so at its own
peril. 24 Depending on the particulars of each case, failure to
comply with the mandates of Neb. Ct. R. App. P. § 2-109(D)
(rev. 2021) may result in an appellate court waiving the error,
proceeding on a plain error review only, or declining to con-
duct any review at all. 25
[9,10] A cross-appeal must be properly designated, pursu-
ant to § 2-109(D)(4), if affirmative relief is to be obtained. 26
A cross-appeal is properly designated by noting it on the cover
of the appellee brief and setting it forth in a separate division
of the brief. 27 This separate section “shall be headed ‘Brief
on Cross-Appeal’ and shall be prepared in the same man-
ner and under the same rules as the brief of appellant. See
§ 2-109(D)(1)” 28 Under § 2-109(D)(1)(b) through (i), the brief
of appellant must include, in part, a (1) statement of the basis
of jurisdiction, (2) statement of the case, (3) separate assign-
ment of errors section, (4) propositions of law, (5) statement
of facts, (6) summary of the argument, and (7) the argument.
Here, North Star’s purported cross-appeal fails to fully abide
with the rules for the brief of an appellant because its brief
on cross-appeal fails to set forth a separate (1) statement of
the basis of jurisdiction on cross-appeal, (2) statement of the
case on cross-appeal, (3) assignments of error on cross-appeal,
(4) propositions of law on cross-appeal, (5) statement of facts
on cross-appeal, and (6) summary of the argument on cross-
appeal. The decisive particulars governing how we treat fail-
ures to fully abide with the rules for the brief of an appellant
depend on the nature of the noncompliance. 29 In this appeal,
we elect to proceed to review for plain error.
24
Id.
25
Id.
26
Id.
27
§ 2-109(D)(4). See Great Northern Ins. Co., supra note 23.
28
§ 2-109(D)(4).
29
See § 2-109(D)(1).
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NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941Plain error is error plainly evident from the record and
of such a nature that to leave it uncorrected would result in
damage to the integrity, reputation, or fairness of the judicial
process. 30 Here, because we have determined that the language
of the “Extra Expense” provision is ambiguous and should
accordingly be construed in favor of Old Mill, the district court
did not commit plain error when it found that the cost associ-
ated with the walk-in cooler was a cost to equip and operate
the replacement premises covered by the Policy. Thus, this
assignment of error is without merit.
Attorney Fees
[11,12] Based on its findings, the district court awarded
Old Mill $5,000 of its requested $33,797.99 in attorney fees.
Old Mill argues the court erred in failing to award it the
full amount of its requested attorney fees. As a general rule,
attorney fees and expenses may be recovered in a civil action
only where provided for by statute or when a recognized and
accepted uniform course of procedure has been to allow recov-
ery of attorney fees. 31 Neb. Rev. Stat. § 44-359 (Reissue 2021)
is a fee-shifting statute which permits a successful litigant
to recover attorney fees as a part of the judgment in certain
actions against insurance companies. 32 Section 44-359 provides
in pertinent part:
In all cases when the beneficiary or other person enti-
tled thereto brings an action upon any type of insurance
policy . . . the court, upon rendering judgment against
such company, person, or association, shall allow the
plaintiff a reasonable sum as an attorney’s fee in addition
to the amount of his or her recovery, to be taxed as part
of the costs.
30
Great Northern Ins. Co., supra note 23.
31
Simon v. City of Omaha, 267 Neb. 718, 677 N.W.2d 129 (2004).
32
Young v. Midwest Fam. Mut. Ins. Co., 276 Neb. 206, 753 N.W.2d 778(2008).
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NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941We have further explained that where an insurer brings an
action for declaratory judgment to have coverage determined
and the insured prevails, the latter is entitled to attorney fees
under § 44-359. 33
In this case, the record supports an inference that the court
denied the majority of Old Mill’s attorney fees, not because
of lack of evidence of value, but because it considered that
Old Mill, as a matter of law, was not entitled to a full award
of attorney fees under § 44-359. Because we have determined
that the district court should have construed the Policy in favor
of Old Mill and determined that Old Mill is entitled to all of
its claimed expenses under the “Extra Expense” provision of
the Policy, it is necessary to remand the cause back to the trial
court to reconsider its award of attorney fees in light of our
determination as to coverage.
To determine proper and reasonable attorney fees, it is
necessary for the court to consider the nature of the litiga-
tion, the time and labor required, the novelty and difficulty
of the questions raised, the skill required to properly conduct
the case, the responsibility assumed, the care and diligence
exhibited, the result of the suit, the character and standing of
the attorney, and the customary charges of the bar for similar
services. 34 There is no presumption of reasonableness placed
on the amount of attorney fees offered by the party requesting
fees. 35 The amount of an attorney fee awarded under § 44-359
is addressed to the discretion of the trial court, whose ruling
will not be disturbed on appeal in the absence of an abuse
of discretion. 36
33
See State Farm Mut. Auto. Ins. Co. v. Selders, 189 Neb. 334, 202 N.W.2d
625 (1972).
34
Young, supra note 32.
35
Koehler v. Farmers Alliance Mut. Ins. Co., 252 Neb. 712, 566 N.W.2d 750(1997).
36
Muller v. Tri-State Ins. Co., 252 Neb. 1, 560 N.W.2d 130 (1997).
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Nebraska Supreme Court Advance Sheets
311 Nebraska Reports
NORTH STAR MUT. INS. CO. v. MILLER
Cite as 311 Neb. 941CONCLUSION
For the reasons discussed herein, we reverse the district
court’s order granting summary judgment with respect to the
claim for electrical improvements, structural work, materials,
and plumbing improvements and remand the cause with direc-
tions to the district court to enter summary judgment in favor
of Old Mill as to the claimed extra expenses. We affirm, how-
ever, the district court’s order granting summary judgment with
respect to the claim for the walk-in cooler. As to the issue of
attorney fees, we vacate the court’s order and remand the cause
for reconsideration by the trial court.
Affirmed in part, vacated in part, and in part
reversed and remanded with directions.