Great Plains Livestock v. Midwest Ins. Exch.

979 N.W.2d 113, 312 Neb. 367
CourtNebraska Supreme Court
DecidedSeptember 2, 2022
DocketS-21-722
StatusPublished
Cited by5 cases

This text of 979 N.W.2d 113 (Great Plains Livestock v. Midwest Ins. Exch.) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Great Plains Livestock v. Midwest Ins. Exch., 979 N.W.2d 113, 312 Neb. 367 (Neb. 2022).

Opinion

Nebraska Supreme Court Online Library www.nebraska.gov/apps-courts-epub/ 11/25/2022 01:05 AM CST

- 367 - Nebraska Supreme Court Advance Sheets 312 Nebraska Reports GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH. Cite as 312 Neb. 367

Great Plains Livestock Consulting, Inc., and Ki Fanning, appellants, v. Midwest Insurance Exchange, Inc., et al., appellees. ___ N.W. ___

Filed September 2, 2022. No. S-21-722.

1. Standing: Jurisdiction: Pleadings: Evidence: Appeal and Error. If a motion challenging a court’s subject matter jurisdiction is filed after the pleadings stage, and the court holds an evidentiary hearing and reviews evidence outside the pleadings, it is considered a “factual challenge.” Where the trial court’s decision to dismiss for lack of subject matter jurisdiction is based on a factual challenge, the court’s factual findings are reviewed under the clearly erroneous standard. 2. Jurisdiction: Appeal and Error. Aside from any factual findings, the trial court’s ruling on subject matter jurisdiction is reviewed de novo, because it presents a question of law. 3. Appeal and Error. The grant or denial of a stay of proceedings is reviewed for an abuse of discretion. 4. Jurisdiction: Words and Phrases. Subject matter jurisdiction is the power of a tribunal to hear and determine a case in the general class or category to which the proceedings in question belong and to deal with the general subject matter involved. 5. Jurisdiction: Courts. Ripeness is one component of subject matter jurisdiction; its fundamental principle is that courts should avoid entan- gling themselves, through premature adjudication, in abstract disagree- ments based on contingent future events that may not occur at all or may not occur as anticipated. 6. ____: ____. A determination with regard to ripeness depends upon the circumstances in a given case and is a matter of degree. 7. Actions: Jurisdiction: Appeal and Error. An appellate court uses a two-part inquiry to determine ripeness: (1) the fitness of the issues for - 368 - Nebraska Supreme Court Advance Sheets 312 Nebraska Reports GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH. Cite as 312 Neb. 367

judicial decision and (2) the hardship to the parties of withholding court consideration. 8. Negligence: Proof. To prevail in a negligence action, a plaintiff must prove the defendant’s duty not to injure the plaintiff, breach of duty, proximate causation, and damages. 9. Courts: Actions. Courts inherently possess the power to stay proceed- ings when required by the interests of justice.

Appeal from the District Court for Cass County: Michael A. Smith, Judge. Reversed and remanded for further proceedings. Andrew D. Weeks, of Baylor Evnen, L.L.P., for appellants. Brien M. Welch and David A. Blagg, of Cassem, Tierney, Adams, Gotch & Douglas, for appellee Midwest Insurance Exchange, Inc. Sean A. Minahan and Patrick G. Vipond, of Lamson, Dugan & Murray, L.L.P., for appellees UNICO Group, Inc., and Sean Krueger. Heavican, C.J., Miller-Lerman, Cassel, Funke, Papik, and Freudenberg, JJ., and Kozisek, District Judge. Funke, J. INTRODUCTION Great Plains Livestock Consulting, Inc., and its president, Ki Fanning (collectively Great Plains), appeal the order of the district court for Cass County, Nebraska, which dismissed its complaint for lack of subject matter jurisdiction. Great Plains alleged that Midwest Insurance Exchange, Inc. (Midwest), as well as UNICO Group, Inc., and agent Sean Krueger (col- lectively UNICO), negligently failed to transfer or procure an errors and omissions insurance policy, which, had it been in place, would have covered the costs of defense and settle- ment or judgment for two lawsuits filed against Great Plains in another state. The district court found that Great Plains’ complaint is not ripe because Midwest’s and UNICO’s liabil- ity and Great Plains’ damages are currently unknown and - 369 - Nebraska Supreme Court Advance Sheets 312 Nebraska Reports GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH. Cite as 312 Neb. 367

because Great Plains may never be found liable in the lawsuits against it. Great Plains appeals. We reverse, and remand for further proceedings.

BACKGROUND In early 2018, Great Plains had an errors and omissions policy underwritten by Capitol Specialty Insurance Corporation (Cap Specialty) through Midwest when it approached UNICO for assistance in procuring various insurance coverages. The record on appeal does not disclose what, if any, agreements the parties reached regarding coverage at that time, but Great Plains notified Midwest on April 18, 2018, that it was mov- ing its errors and omissions policy. Great Plains subsequently obtained an errors and omissions policy underwritten by Lloyd’s London Syndicate 2987 (Lloyd’s) through UNICO on or about November 11, 2019. This policy was renewed on or about November 11, 2020. In late 2020, Great Plains was named a third-party defend­ ant in two lawsuits filed in the Iowa district court for Emmet County based on consulting work it had performed for Spencer Ag Center, LLC (Spencer Ag). The parties to the two lawsuits were different, but both lawsuits complained of negligence and breach of implied warranty of fitness by Spencer Ag customers. These customers named Spencer Ag a third-party defendant, and Spencer Ag, in turn, asserted third-party claims against Great Plains, alleging Great Plains had provided the feed ration formulas and feed products to the customers. As of this appeal, the Iowa lawsuits are pending. Between early December 2020 and the end of February 2021, Great Plains submitted claims and requests for a tender of defense and indemnification related to the Iowa lawsuits to Midwest, UNICO, Cap Specialty, and Lloyd’s. All claims and requests were denied. Subsequently, on March 24, 2021, Great Plains brought a declaratory judgment action against Midwest, UNICO, Cap Specialty, and Lloyd’s to ascertain whether any policy effective - 370 - Nebraska Supreme Court Advance Sheets 312 Nebraska Reports GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH. Cite as 312 Neb. 367

between Great Plains and the insurers covered the events under- lying the Iowa lawsuits. It also sought recovery of the costs of the Iowa lawsuits and of its declaratory judgment action. Great Plains filed a separate negligence lawsuit against Midwest and UNICO alleging they had a duty to transfer or procure an errors and omissions policy for it and breached this duty by failing to ensure the requested policy was in place. Great Plains further alleged that Midwest’s and UNICO’s breach of duty had “caused” and “will continue to cause” it damages because it had to retain counsel at its own expense to defend the Iowa lawsuits; it will also have to pay any judgment entered against it in the lawsuits. Great Plains asserted these costs would have been covered under the requested errors and omissions policy. UNICO moved to dismiss Great Plains’ negligence com- plaint for failure to state a claim under Neb. Ct. R. Pldg. § 6-1112(b)(6). UNICO based this motion primarily on the fact that “[Great Plains] currently do[es] not and cannot provide . . . the amount of defense cost or potential judgments against [Great Plains] in the two Iowa lawsuits.” As such, UNICO argued, Great Plains’ “alleged damages are speculative” and its complaint is not ripe. Great Plains filed a statement of disputed facts in opposition to UNICO’s motion to dismiss, asserting that it had already incurred attorney fees of approximately $4,000 in the Iowa lawsuits and $16,000 in its declaratory judgment and negli- gence actions. Great Plains also moved to stay proceedings on its negligence complaint pending the resolution of the Iowa lawsuits.

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979 N.W.2d 113, 312 Neb. 367, Counsel Stack Legal Research, https://law.counselstack.com/opinion/great-plains-livestock-v-midwest-ins-exch-neb-2022.