Hansmeier v. Hansmeier

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
04/24/2018 08:08 AM CDT
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Nebraska Court of A ppeals A dvance Sheets
25 Nebraska A ppellate R eports
HANSMEIER v. HANSMEIER
Cite as 25 Neb. Ct. App. 742
Scott and K arie H ansmeier, appellants,
v. M erva H ansmeier and Western
Insurors-Platte Valley
Agency, appellees.
___ N.W.2d ___
Filed April 10, 2018. No. A-17-115.
1. Summary Judgment. Summary judgment is proper when the pleadings
and evidence admitted at the hearing disclose no genuine issue regard-
ing any material fact or 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. Summary Judgment: Appeal and Error. In reviewing a summary
judgment, an appellate court views the evidence in the light most
favorable to the party against whom the judgment is granted and gives
such party the benefit of all reasonable inferences deducible from
the evidence.
3. Negligence: Proof. To prevail in any negligence action, a plaintiff must
show a legal duty owed by the defendant to the plaintiff, a breach of
such duty, causation, and resulting damages.
4. Insurance: Agents. An insurance agent has no duty to anticipate what
coverage an insured should have.
5. ____: ____. When an insured asks an insurance agent to procure insur-
ance, the insured has a duty to advise the insurance agent as to the
desired insurance.
6. Insurance: Contracts: Breach of Contract: Negligence. Absent evi-
dence that an insurance agent has agreed to provide advice or the
insured was reasonably led by the agent to believe he would receive
advice, the failure to volunteer information does not constitute either
negligence or breach of contract for which an insurance agent must
answer in damages.
7. Insurance: Agents. It would be an unreasonable burden to impose
upon insurance agents a duty to anticipate what coverage an individual
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should have, absent the insured’s requesting coverage in at least a gen-
eral way.
8. Insurance: Agents: Brokers. If an insurance agent or broker undertakes
to advise an insured, the agent or broker must use reasonable care to
provide accurate information.
9. Insurance: Agents: Brokers: Liability: Negligence. An insurance
agent or broker may be held liable for a negligent misrepresentation
made to an insured.
10. Insurance: Agents: Liability: Negligence: Proof. In order for an insur-
ance agent to be liable for negligent misrepresentation, the client must
show that the insurance agent supplied the client with false information
upon which the client reasonably relied and that the agent failed to exer-
cise reasonable care or competence in communicating such information
to the client.
Appeal from the District Court for Keith County: R ichard
A. Birch, Judge. Affirmed.
Brock D. Wurl, of Norman, Paloucek, Herman & Wurl, for
appellants.
Sean A. Minahan and Patrick G. Vipond, of Lamson, Dugan
& Murray, L.L.P., for appellees.
Pirtle, Bishop, and A rterburn, Judges.
Bishop, Judge.
Scott and Karie Hansmeier filed a negligence claim against
Merva Hansmeier and her employer, Western Insurors-Platte
Valley Agency (Western Insurors), claiming that Merva
improperly advised them regarding the need to purchase work-
ers’ compensation insurance for their farm and ranch opera-
tion. The district court for Keith County granted Merva and
Western Insurors’ motion for summary judgment. Scott and
Karie appeal, claiming that there are genuine issues of material
fact that prevent summary judgment. We affirm.
FACTUAL BACKGROUND
Scott and his wife, Karie, live in Ogallala, Nebraska. Scott
and Karie own and operate a farm and ranch; they also
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rent farmland and pastureland. Scott and his father are each
sole proprietors of their own farming operations, but work
together and are “basically 50/50 partners.” Scott said he
does “all [of] the work,” some of the farmland is owned by
his father, they each own their own machinery but use each
other’s as needed, and they crop share. In 2012, Scott had
two full-time employees, including Mike Heble, and Scott’s
father had one full-time employee. Scott said he paid Heble,
Scott’s father paid his own employee, and they both paid
the third employee; “[t]hat’s how we get 50/50 out of the
three guys.”
Merva is Scott’s aunt and was his insurance agent in 2012,
and for several years prior. In 2012, Scott got all of his insur-
ance through Merva, including his farm policy, homeowner’s
insurance, auto insurance, and health insurance. Scott did not
provide any insurance for his employees.
On February 2, 2012, Heble injured his thumb in an auger
while loading grain out of a bin and into a truck, and his thumb
had to be “stitched . . . back on.” When Scott tried to file a
farm liability claim with his insurance company, he learned
that Heble’s injury was not covered.
In 2014, Heble filed a lawsuit against Scott, but that work-
ers’ compensation claim was eventually settled for an amount
that included medical bills and a disability payment. Scott and
his father split the costs of the settlement. The amount of the
settlement was not put into evidence at the summary judg-
ment hearing. The date of the settlement is not evident from
our record; but it appears to have been after January 23, 2015,
based on the allegations in Scott and Karie’s complaint in the
current case discussed below.
PROCEDURAL BACKGROUND
On January 23, 2015, Scott and Karie filed a complaint
against Merva and her employer, Western Insurors. Scott and
Karie alleged that Merva and Western Insurors were negligent
in advising them regarding the need to purchase workers’
compensation insurance and that as a result, Scott and Karie
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incurred costs defending a lawsuit brought by their employee,
Heble, and they might also be liable for any judgment arising
out of that lawsuit.
In their answer filed on March 24, 2015, Merva and Western
Insurors denied the allegations made by Scott and Karie. Merva
and Western Insurors asserted affirmative defenses, including
contributory negligence, assumption of risk, estoppel, laches,
waiver, and release.
On September 21, 2016, Merva and Western Insurors filed a
motion for summary judgment, alleging that there were no gen-
uine issues as to any material fact and that they were entitled to
judgment as a matter of law.
The summary judgment hearing was held on November 18,
2016. The depositions of Scott and Merva were received into
evidence at the hearing. Also received into evidence was a let-
ter dated February 28, 2012, from Farmers Mutual of Nebraska
to Scott and Karie regarding a claim under their insurance
policy for Heble’s accident. (In Scott’s deposition, he refers
to a “farm policy,” and the letter from Farmers Mutual of
Nebraska references a section of the policy related to “Farm
and Personal Liability Protection,” so references to this policy
relate to liability coverage.)
In his deposition, Scott testified to the following: In 2012
and prior, Scott met with Merva on an “as needed basis” to
discuss his insurance needs. They never talked about insurance
for his employees. He initially said he never asked her about
workers’ compensation insurance, but then said he had. Scott
knew prior to 2012 that he did not have to have workers’ com-
pensation insurance “on an agricultural person.” He could not
remember if he ever discussed with Merva that he did not have
to have any workers’ compensation insurance.
Scott testified that prior to February 2, 2012, Heble had
previously been injured on the job two times. Scott paid
Heble’s medical expenses for the first injury because Heble
did not have the money. But Scott did not pay the medical
bills the second time. He said that Heble knew he did not have
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workers’ compensation insurance and that he was on his own
for health insurance.
According to Scott, on February 2, 2012, Heble injured his
thumb in an auger while loading grain out of a bin and into a
truck, and his thumb had to be “stitched . . . back on.” When
Scott tried to file a farm liability claim with his insurance
company, Merva told him Heble’s injury was not covered. At
some point after that, Scott learned for the first time that he
was supposed to have provided his employees with notice that
he was not providing workers’ compensation insurance. Scott
said that at some point Merva told him “this is a bad deal, not
sure how it’s all going to go out, but . . . if you end up getting
sued, you’re going to turn around and end up suing me on my
errs [sic] and omissions.”
Scott testified that Heble did file a workers’ compensation
lawsuit against him, but that the claim has since settled for an
amount which included medical bills and a disability payment.
Scott could not remember the amount of the settlement, but he
and his father split the settlement costs.
Scott stated that prior to 2012, Merva had never told Scott
that the “blanket” farm policy did not cover workers’ com-
pensation; and Scott acknowledged that he had never asked
her if the liability portion of the policy covered injuries to his
employees. Scott said that he had never read his policy “[f]rom
front to back” and that he had not read the exclusion portions
of his policy.
The letter dated February 28, 2012, from Farmers Mutual
of Nebraska to Scott and Karie regarding the claim under their
policy for Heble’s accident, sets forth provisions of Neb. Rev.
Stat. § 48-106 (Reissue 2010) regarding workers’ compensa-
tion and includes the relevant provision from Scott and Karie’s
policy. The letter states that Scott and Karie had not been com-
pliant with § 48-106(7), which provides that if an employer is
exempt from the Nebraska Workers’ Compensation Act by the
subsection regarding services performed by an employee of
an agricultural operation, then the employer must provide all
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unrelated employees with written notice that the employer does
not provide workers’ compensation coverage, and the employee
must sign the notice. Further, the letter notes that § 48-106(7)
states that failure to provide the required notice subjects the
employer to inclusion in the Nebraska Workers’ Compensation
Act, which requires an employer to carry a policy of workers’
compensation. The letter then addresses the relevant provision
from Scott and Karie’s policy and the effect of their noncom-
pliance with § 48-106(7). According to the letter:
The policy states, under Section VI - Farm and Personal
Liability Protection; Exclusions Applying to Section VI:
“. . . we do not cover . . .
“9. Bodily injury to a person if an insured person
has or is required to have a policy providing workers’
compensation, nonoccupational disease or occupational
disease benefits covering the bodily injury.”
Because you did not comply with the Nebraska
Workers’ Compensation statute §48-106(7), this exclusion
for coverage may apply to this accident.
(Emphasis in original.)
In her deposition, Merva testified to the following: In 2012,
she knew about Scott’s farming and ranching operation and
that he had employees. Prior to 2012, she had multiple con-
versations with Scott about workers’ compensation insurance.
Merva told Scott they offered workers’ compensation insur-
ance and that she would be “happy” to get him a quote. When
asked if she recommended Scott purchase the insurance, Merva
said, “If the fact of telling him to protect his employees, that
he probably should think about Work Comp., that’s probably
what I told him.” And that “he, in my book, he should have
it; but I can’t tell somebody what they have to have.” Merva
said, “I did recommend that he had work — that he purchase
it; but he told me it was too expensive. He told me that he
doesn’t have to have it by law. I told him that was true.” When
asked if, prior to 2012, she told Scott that if he was not going
to carry workers’ compensation insurance, that he needed to
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have a waiver signed by his employees, Merva said, “No.”
When asked if she was aware that there was a waiver that
Scott would need to have signed, Merva said, “No.” She did
not learn about the required waiver until after Heble’s February
2012 accident.
Scott and Karie argued there were three claims: (1) They
were instructed they were not required to purchase workers’
compensation insurance, (2) they were never advised that
workers’ compensation insurance was available or necessary
to cover their employees, and (3) Merva and Western Insurors
failed to properly advise them as to their insurance needs.
“It’s basically an . . . errors and omissions against the agents
claiming it [sic] didn’t tell us we needed workers’ compensa-
tion. Or if you did tell us, you didn’t tell us anything about the
notice requirement.”
Merva and Western Insurors argued that Nebraska law is
“pretty clear” that an independent insurance agent has no duty
to advise an insured as to their insurance needs. They further
argued that even if Merva tried to encourage workers’ compen-
sation insurance, Scott did not rely on that information.
In an order filed on January 10, 2017, the district court sus-
tained Merva and Western Insurors’ motion for summary judg-
ment. The court found:
To the extent Scott and Merva have a different recol-
lection of their communications, that difference does not
affect the result in this case and therefore is not material.
There is no evidence from which it can be concluded
that [Scott and Karie] requested workers[’] compensation
insurance and the policy they obtained unambiguously
did not provide such coverage. The evidence is equally
clear that [Scott and Karie] never asked [Merva and/or
Western Insurors] for help or advice on how to exclude
their employees from such coverage.
The court said the law is clear that an insurance agent has no
duty to anticipate what coverage an insured should have. The
court also noted the law requires that in order for an insurance
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agent to be liable for negligent misrepresentation, a plaintiff
must prove the agent provided him with false information upon
which he reasonably relied and must prove the agent failed
to exercise reasonable care or competence in communicating
such information to the plaintiff. The court found that “the
evidence is uncontradicted that what Merva told Scott about
workers[’] compensation coverage was accurate.” The court
stated that “[t]he law is also clear that she does not have a
duty to provide him with unsolicited advice.” Having found no
material fact in dispute, the court granted Merva and Western
Insurors’ motion for summary judgment and dismissed Scott
and Karie’s complaint with prejudice.
Scott and Karie now appeal.
ASSIGNMENTS OF ERROR
Scott and Karie assign that the district court erred in (1)
sustaining Merva and Western Insurors’ motion for summary
judgment and dismissing Scott and Karie’s case and (2) deter-
mining that this was a case involving anticipation of coverage,
rather than a professional negligence case where an insurance
agent provided incorrect and incomplete advice to her client.
STANDARD OF REVIEW
[1,2] Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue
regarding any material fact or the ultimate inferences that may
be drawn from those facts and that the moving party is entitled
to judgment as a matter of law. Walters v. Sporer, 298 Neb.
536, 905 N.W.2d 70 (2017). In reviewing a summary judg-
ment, an appellate court views the evidence in the light most
favorable to the party against whom the judgment is granted
and gives such party the benefit of all reasonable inferences
deducible from the evidence. Id.
ANALYSIS
In Scott and Karie’s assignments of error and at oral argu-
ment, they claimed this is a professional negligence case.
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However, as noted by Merva and Western Insurors’ counsel at
oral argument, Nebraska case law has never determined that an
insurance agent is a “professional” for purposes of professional
negligence actions under Neb. Rev. Stat. § 25-222 (Reissue
2016) (2-year statute of limitations for professional negligence
actions). See Motor Club Ins. Assn. v. Fillman, 5 Neb. Ct. App.
931, 936, 568 N.W.2d 259, 263-64 (1997) (after setting forth
description of “profession,” court stated that “[i]t would seem
that insurance agents do not fall within the statutory or case
law definition of ‘professionals’ for purposes of § 25-222”;
but finding it was not necessary to decide issue in that case).
Furthermore, any professional negligence claim against Merva
and Western Insurors would be barred by the 2-year statute
of limitations set forth in § 25-222. Accordingly, Scott and
Karie’s claims against Merva and Western Insurors can only be
for general negligence or negligent misrepresentation, and we
address each below.
Scott and Karie primarily argue that there are material issues
of fact in dispute which should prevent summary judgment.
However, before considering the facts discernible from the
record, we first consider the applicable law. Relevant to this
case, § 48-106 provides:
(2) The [Nebraska Workers’ Compensation Act] shall
not apply to:
....
(d) Service performed by a worker when performed for
an employer who is engaged in an agricultural operation
and employs unrelated employees unless such service is
performed for an employer who during any calendar year
employs ten or more unrelated, full-time employees[.]
....
(6) An employer who is exempt from the act under
subsection (2) of this section may elect to bring the
employees of such employer under the act. Such election
is made by the employer obtaining a policy of workers’
compensation insurance covering such employees. . . .
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(7) Every employer exempted under subdivision (2)(d)
of this section who does not elect to provide workers’
compensation insurance under subsection (6) of this sec-
tion shall give all unrelated employees at the time of hir-
ing or at any time more than thirty calendar days prior to
the time of injury the following written notice which shall
be signed by the unrelated employee and retained by the
employer: “In this employment you will not be covered
by the Nebraska Workers’ Compensation Act and you will
not be compensated under the act if you are injured on
the job or suffer an occupational disease. You should plan
accordingly.” Failure to provide the notice required by
this subsection subjects an employer to liability under and
inclusion in the act for any unrelated employee to whom
such notice was not given.
The evidence establishes that Scott knew he was not provid-
ing workers’ compensation insurance to his employees. Scott
testified that prior to February 2, 2012, Heble had previously
been injured on the job two times. Scott paid Heble’s medical
expenses for the first injury, but he did not pay his medical
bills the second time. Scott said that Heble knew he did not
have workers’ compensation insurance and that he was on his
own for health insurance. Further, Scott initially said he never
asked Merva about workers’ compensation insurance, but he
then said he had. Also, by his own testimony, Scott knew prior
to 2012 that he did not have to have workers’ compensation
insurance “on an agricultural person.” So the issue is not about
whether he had to have workers’ compensation insurance or
should have been advised to have it; rather, this case turns on
whether an insurance agent has an affirmative duty to tell an
employer about the written notice and signature provisions
contained in § 48-106. Merva and Western Insurors argue they
had no duty to advise Scott and Karie as to the steps necessary
to exclude their employees from the workers’ compensation
requirement. Based upon the facts viewed most favorably to
Scott and Karie in this case, we agree.
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[3] To prevail in any negligence action, a plaintiff must
show a legal duty owed by the defendant to the plaintiff, a
breach of such duty, causation, and resulting damages. Lewison
v. Renner, 298 Neb. 654, 905 N.W.2d 540 (2018). In their com-
plaint and at the summary judgment hearing, Scott and Karie
alleged, in part, that Merva and Western Insurors never advised
them that workers’ compensation was available or necessary to
cover their employees.
[4,5] The Nebraska Supreme Court has stated that an insur-
ance agent has no duty to anticipate what coverage an insured
should have. Dahlke v. John F. Zimmer Ins. Agency, 245 Neb.
800, 515 N.W.2d 767 (1994). Rather, when an insured asks
an insurance agent to procure insurance, the insured has a
duty to advise the insurance agent as to the desired insur-
ance. Id.
[6,7] While it may be good business for an insurance agent
to make such suggestions, absent evidence that an insurance
agent has agreed to provide advice or the insured was rea-
sonably led by the agent to believe he would receive advice,
the failure to volunteer information does not constitute either
negligence or breach of contract for which an insurance agent
must answer in damages. Polski v. Powers, 221 Neb. 361, 377
N.W.2d 106 (1985) (although agent may have been aware that
clients had built new building and were keeping hogs in build-
ing, he had no knowledge that they wished to change their
insurance coverage or to obtain other or different coverage).
“[I]t would be an unreasonable burden to impose upon insur-
ance agents a duty to anticipate what coverage an individual
should have, absent the insured’s requesting coverage in at
least a general way.” Id. at 364, 377 N.W.2d at 108. See, also,
Flamme v. Wolf Ins. Agency, 239 Neb. 465, 476 N.W.2d 802
(1991) (no evidence that clients requested underinsured motor-
ist coverage over and above someone else’s liability insurance
or that agent agreed to obtain such coverage; therefore, agent
and his agency could not be held liable for failing to obtain
such coverage).
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As well-stated by the district court in this case:
If it is an unreasonable burden to require insurance
agents to anticipate what coverage an individual should
have absent the insured’s request, it would be an equally
unreasonable burden to require an insurance agent to
anticipate what steps the insured should take to not
have the coverage he has already told the agent he does
not want.
Because Merva had no duty to advise Scott and Karie that
workers’ compensation insurance was available or necessary,
their negligence action fails as a matter of law. Further, as
noted previously, Scott testified as to his own understanding
that workers’ compensation insurance was not required “on an
agricultural person.”
Scott and Karie also raise a negligent misrepresentation
claim, alleging that they were instructed they were not required
to purchase a workers’ compensation policy and that they
relied on that advice.
[8] A negligent misrepresentation cause of action does not
require a request to obtain certain coverage. Flamme, supra. If
an insurance agent or broker undertakes to advise an insured,
the agent or broker must use reasonable care to provide accu-
rate information. Id. The Supreme Court in Flamme cited to
Trotter v. State Farm, 297 S.C. 465, 377 S.E.2d 343 (S.C. App.
1988), for the foregoing proposition of law.
In Trotter, the client was a business owner who contacted an
insurance agent to obtain “‘full protection’” on a work truck.
297 S.C. at 469, 377 S.E.2d at 346. The client filled out an
application and explained about his business, his employees,
and how many miles the truck would be driven. The agent
wrote a commercial policy on the client’s truck and a personal
policy on his other vehicles. The commercial policy included
a standard exclusion for any injury to an “‘employee of the
insured arising out of his or her employment.’” Id. The agent
neither reviewed the policy with the client, told him about
the exclusion, discussed other types of insurance, nor asked
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whether the client needed workers’ compensation insurance.
The client, likewise, neither asked the agent to assess his insur-
ance needs nor inquired about other types of insurance. The
client did not communicate a desire for workers’ compensation
or any other insurance. Their conversation was confined to the
procurement of insurance on his vehicles.
Later, one of the client’s employees in Trotter was injured in
an accident while riding in the work truck. The insurance com-
pany wrote the client a letter denying coverage for the employ-
ee’s injuries due to the exclusion. Until the client received the
letter, he was unaware of the exclusion, as he had not read
his policy. The employee sued the client and was eventually
awarded a judgment for his injuries.
The client in Trotter then brought suit against the agent and
the insurance company, alleging, in part, that they negligently
failed to advise him of an exclusion in his motor vehicle insur-
ance policy. A jury verdict was entered for the client. The
South Carolina Court of Appeals reversed, holding that the
agent and insurance company were under no duty to advise the
client of the employee exclusion in his policy or to advise him
that he needed workers’ compensation insurance. The court
also held that the client failed to prove the agent undertook to
advise the client either expressly or impliedly. As to an implied
undertaking, there was no evidence that (1) the agent received
consideration beyond a mere payment of the premium, (2) the
insured made a clear request for advice, or (3) there is a course
of dealing over an extended period of time which would put
an objectively reasonable insurance agent on notice that his
advice is being sought and relied on.
Here, as in Trotter, supra, there is no evidence that Merva
received consideration beyond the payment of the premium.
And there was no evidence that Scott and Karie made a clear
request for advice. While there was a course of dealing over
an extended period of time in this case, and Merva stated that
she did recommend workers’ compensation insurance to Scott,
there is no evidence that Merva’s advice was being relied
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upon by Scott. In fact, Merva testified that Scott declined the
workers’ compensation insurance, because it was too expen-
sive, and told her that, by law, he did not have to have work-
ers’ compensation insurance. And Scott testified that he knew
prior to 2012 that he “didn’t have to have workers’ compensa-
tion on an agricultural person.”
[9,10] An insurance agent or broker may be held liable for
a negligent misrepresentation made to an insured. Flamme v.
Wolf Ins. Agency, 239 Neb. 465, 476 N.W.2d 802 (1991). In
order for an insurance agent to be liable for negligent misrep-
resentation, the client must show that the insurance agent sup-
plied the client with false information upon which the client
reasonably relied and that the agent failed to exercise reason-
able care or competence in communicating such information to
the client. See Hobbs v. Midwest Ins., Inc., 253 Neb. 278, 570
N.W.2d 525 (1997).
In order to be liable for negligent misrepresentation, Merva
must have given Scott and Karie false information, and there is
no indication that she did so. Scott told Merva that, by law, he
did not have to have workers’ compensation insurance, and she
told him that that was true. Her agreement that Scott’s assess-
ment of the law was true did not constitute an instruction that
he should not purchase a workers’ compensation policy. There
is no evidence that Merva provided Scott with false informa-
tion; and for that reason alone, any negligent misrepresentation
claim fails. Additionally, because Scott knew prior to 2012
that he did not have to have workers’ compensation insurance
“on an agricultural person,” he did not reasonably rely on any
information supplied by Merva; this is another reason why any
negligent misrepresentation claim fails.
Based on the record before us, even when considering the
facts most favorable to Scott and Karie, it appears the parties
discussed workers’ compensation insurance and Scott opted
to not purchase it because it was too expensive. The record
shows Scott knew he did not need to carry workers’ com-
pensation insurance; he just did not know about the notice
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and signature requirements contained in § 48-106(7). When
Merva agreed with Scott that he was not required to carry
workers’ compensation insurance, it was not her responsibility
to further inform Scott that a workers’ compensation statute
set forth specific steps to be taken when an exempt employer
chooses not to offer workers’ compensation insurance. As
aptly noted by Merva and Western Insurors’ counsel at oral
argument, the Nebraska Workers’ Compensation Act governs
employers, not insurance agents. The district court was correct
in stating that to the extent Scott and Merva have a different
recollection of their communications, that difference does not
affect the result in this case and is therefore not material. Any
claim of negligence or negligent misrepresentation fails as a
matter of law.
CONCLUSION
For the reasons stated above, we affirm the decision of the
district court granting Merva and Western Insurors’ motion for
summary judgment.
A ffirmed.