STATE FARM MUT. AUTO. INS. v. Allstate Ins.

684 N.W.2d 14, 268 Neb. 439
CourtNebraska Supreme Court
DecidedJuly 23, 2004
DocketS-03-443
StatusPublished
Cited by38 cases

This text of 684 N.W.2d 14 (STATE FARM MUT. AUTO. INS. v. Allstate Ins.) 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
STATE FARM MUT. AUTO. INS. v. Allstate Ins., 684 N.W.2d 14, 268 Neb. 439 (Neb. 2004).

Opinion

684 N.W.2d 14 (2004)
268 Neb. 439

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, appellee and cross-appellant, and
Paul Steenson, appellant,
v.
ALLSTATE INSURANCE COMPANY, et al., appellees and cross-appellees.

No. S-03-443.

Supreme Court of Nebraska.

July 23, 2004.

*17 Michael G. Reilly, of Reilly, Petersen, Hannan & Dreismeier, P.L.C., Council Bluffs, IA, and Diana J. Vogt for appellant.

Waldine H. Olson, of Nolan, Olson, Hansen, Fieber & Lautenbaugh, L.L.P., Omaha, for appellee Allstate Insurance Company.

Mark C. Laughlin and Timothy J. Thalken, of Fraser, Stryker, Meusey, Olson, Boyer & Bloch, P.C., Omaha, for appellee State Farm Mutual Automobile Insurance Company.

HENDRY, C.J., and CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

MILLER-LERMAN, J.

INTRODUCTION

This is an appeal from the March 19, 2003, order of the district court for Douglas County dismissing this declaratory judgment action. The action was brought by appellee and cross-appellant, State Farm Mutual Automobile Insurance Company (State Farm), against appellees Allstate Insurance Company (Allstate), H. Michael Harvey, and Gerald Campbell and appellant, Paul Steenson. Steenson was realigned with State Farm during the trial proceedings.

In its petition for declaratory relief, filed under Neb.Rev.Stat. § 25-21,149 et seq. (Reissue 1995 & Cum.Supp.2000) on November 2, 2001, State Farm sought a declaration of the rights, duties, and obligations of the parties arising from an automobile accident which occurred on July 28, 1997, in Omaha, Nebraska. It is agreed that Campbell, driving a vehicle owned by Harvey and insured by Allstate, collided with a vehicle owned by Steenson and insured by State Farm. Campbell was uninsured. Allstate denied coverage on the basis that Campbell was driving without Harvey's permission.

In a separate personal injury action (the underlying action) filed on July 26, 2001, Steenson sought damages from Campbell or alternatively from State Farm under uninsured motorist insurance provisions. State Farm was served and appeared in the underlying action. Steenson published service on Campbell on January 16, 23, and 30, 2002.

In the instant declaratory judgment case, the district court concluded that service on Campbell had not been completed within 6 months of the filing of the petition in the underlying action, as required by Neb.Rev.Stat. § 25-217 (Reissue 1995), and that the underlying action stood dismissed. The district court reasoned that because there was "no viable claim" against Campbell and because Allstate had *18 no obligation to defend or indemnify, there was no justiciable controversy involved in the instant declaratory judgment action. Based on this reasoning, the district court dismissed this declaratory judgment action. Steenson appealed, and State Farm cross-appealed.

For the reasons outlined below, we agree with the district court's legal conclusion that because Campbell was not served within 6 months of the date the petition was filed in the underlying action, the underlying action stood dismissed as to Campbell. However, given the fact of State Farm's appearance in the underlying action, we disagree with the district court's further determination that the entire underlying action stood dismissed. We disagree with the district court's reasoning that there are no justiciable issues among the parties, which reasoning was the basis for dismissal of this declaratory judgment action. In particular, whether Campbell was driving with Harvey's permission has not been adjudicated, and resolution of this issue bears on resolution of Steenson's claim for uninsured motorist coverage from State Farm, which claim remains an actual unresolved controversy. However, because the pending underlying action between Steenson and State Farm provides an equally serviceable remedy for resolution of the remaining issues between the parties, we do not find error in the district court's dismissal of this declaratory judgment action. Thus, for reasons other than those asserted by the district court, we affirm.

BACKGROUND

On July 28, 1997, Steenson was involved in an automobile accident with Campbell. At the time of the accident, Campbell was driving a vehicle owned by Harvey. Steenson's vehicle was insured by State Farm, Harvey's vehicle was insured by Allstate, and Campbell had no automobile insurance. Steenson made a claim on Allstate for the injuries he received as a result of the accident. Allstate investigated the claim and determined that Campbell was driving Harvey's vehicle without permission. Allstate denied the claim. Steenson then made a claim against State Farm, asserting that Campbell was an uninsured motorist.

On July 26, 2001, Steenson filed the underlying action against Campbell in the district court for Douglas County, seeking damages for the personal injuries he received in the July 28, 1997, automobile accident. This lawsuit is governed by a 4-year statute of limitations. See Neb.Rev.Stat. § 25-207 (Reissue 1995). The parties agree that the underlying action was later amended to include Steenson's claim against State Farm for uninsured motorist coverage, and State Farm appeared in the action.

On November 2, 2001, State Farm filed the instant declaratory judgment action against Allstate, Harvey, Campbell, and Steenson, seeking judgment in its favor declaring the following:

1. That no State Farm automobile insurance coverage exists under the uninsurance provision of the State Farm Policy for Defendant Steenson in any way relating to or arising out of the collision;
2. That State Farm is under no duty to either defend or pay any judgment in regard to the [underlying action]; and
3. That the terms of the Allstate policy obligate Allstate to indemnify and defend Campbell;
4. That Allstate wrongfully denied liability under the terms of its policy with Harvey;
5. Any other further just and equitable relief which this Court deems necessary.

*19 During the trial court proceedings, Steenson became realigned with State Farm.

On November 14, 2001, in the underlying action, Steenson filed a motion for order for substitute and constructive service of process upon Campbell, whom the parties could not locate. See Neb.Rev.Stat. § 25-519 (Cum.Supp.2000). On November 16, the district court granted the motion and authorized service on Campbell by publication. Publication occurred on January 16, 23, and 30, 2002.

The declaratory judgment action was scheduled for trial on February 10, 2003. On February 8, Allstate filed a motion seeking dismissal of the declaratory judgment action. Allstate claimed that Steenson had not obtained service of process upon Campbell within 6 months of the filing of the underlying action and that by operation of law under § 25-217, the underlying action stood dismissed.

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Bluebook (online)
684 N.W.2d 14, 268 Neb. 439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-farm-mut-auto-ins-v-allstate-ins-neb-2004.