U.S. Specialty Ins. Co. v. D S Avionics

- 287 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
U.S. Specialty Insurance Company, a
corporation, appellee, v. D S Avionics
Unlimited LLC, appellant.
D S Avionics Unlimited LLC, appellant, v.
U.S. Specialty Insurance Company,
a corporation, appellee.
___ N.W.3d ___
Filed November 7, 2025. 	Nos. S-24-628, S-24-630.
1. Summary Judgment: Appeal and Error. An appellate court reviews
the district court’s grant of summary judgment de novo, viewing the
record in the light most favorable to the nonmoving party and drawing
all reasonable inferences in that party’s favor.
2. ____: ____. An appellate court will affirm a lower court’s grant of sum-
mary judgment if the pleadings and admitted evidence show that there is
no genuine issue as to any material facts 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. 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.
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. In construing insurance policy provisions, a
court must determine from the clear language of the policy whether the
insurer in fact insured against the risk involved.
6. ____: ____. The language of an insurance policy should be read to avoid
ambiguities, if possible, and the language should not be tortured to cre-
ate them.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
10/18/2026 12:56 AM CDT

- 288 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
7. ____: ____. An all perils policy impliedly covers all risks except those
expressly addressed in the policy’s exclusion paragraphs.
8. Appeal and Error. An appellate court is not obligated to engage in an
analysis that is not needed to adjudicate the controversy before it.
Appeals 	from 	the 	District 	Court 	for 	Douglas 	County:
Shelly R. Stratman, Judge. Reversed and remanded for fur-
ther proceedings.
Amy M. Locher, of Locher, Pavelka, Dostal, Braddy &
Hammes, L.L.C., for appellant.
Earl G. Greene III, of Gordon & Rees, L.L.P., for appellee.
Funke, 	C.J., 	Miller-Lerman, 	Cassel, 	Stacy, 	Papik,
Freudenberg, and Bergevin, JJ.
Funke, C.J.
INTRODUCTION
D S Avionics Unlimited LLC (DSA) had an insurance
policy issued by U.S. Specialty Insurance Company (USSIC)
that covered the “direct physical loss” of DSA’s aircraft. The
question raised in these consolidated appeals is whether DSA’s
claim that it was dispossessed of the aircraft by an airport
owner, who held the aircraft pending the payment of stor-
age fees that DSA allegedly owed on the aircraft, was within
the policy’s coverage. The district court for Douglas County,
Nebraska, found that DSA’s claim was not covered and ruled in
favor of USSIC and against DSA on related matters. Because
we disagree with the district court on the question of coverage,
and for other reasons set forth below, we reverse the order of
the district court and remand the cause for further proceedings
consistent with this opinion.

- 289 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
BACKGROUND
Factual Background
This is the third time that matters related to the airport own-
er’s seizure of DSA’s aircraft have come before this court. 1 Our
prior opinions set forth the factual background in some detail.
For present purposes, we need note only the following.
DSA owned a 1964 Piper PA-30 aircraft. As is relevant
here, between June 27, 2014, and June 27, 2015, that aircraft
was covered by an insurance policy issued by USSIC. The
policy covered “direct physical loss of or damage to [the]
aircraft caused by an accident while the aircraft [was] not
in motion,” subject to specific exclusions. (Emphasis omit-
ted.) One exclusion encompassed physical loss or damage
to the aircraft resulting from the embezzlement, conversion,
or secretion of the aircraft by anyone to whom DSA relin-
quished possession of the aircraft (hereinafter referred to as
the “Conversion Exclusion”). The policy defined “[a]ccident”
to mean “a sudden event during the policy period, neither
expected nor intended by [the insured], that involves [the]
aircraft and causes physical damage to or loss of the aircraft
during the policy period.” (Emphasis omitted.) There was no
definition of “sudden event” or “direct physical loss” or any of
their component terms.
In November 2014, DSA delivered the aircraft to a mechanic
for maintenance. The mechanic operated out of a rented airport
hangar in Omaha, Nebraska. He also rented an apartment at
the airport. Shortly after the mechanic received the aircraft,
he was locked out of the hangar in a dispute with the airport
owner over allegedly overdue rent. The mechanic was even-
tually able to access the hangar and move the aircraft out-
side. DSA was not immediately able to retrieve the aircraft.
1 See, U.S. Specialty Ins. Co. v. D S Avionics, 301 Neb. 388, 918 N.W.2d 589
(2018), modified on denial of rehearing 302 Neb. 283, 923 N.W.2d 367
(2019); O’Daniel Flight Service v. Edquist, 304 Neb. xix (No. S-19-325,
Jan. 22, 2020).

- 290 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
DSA planned to retrieve the aircraft on December 12, only
to discover that a truck had been parked in front of the air-
craft, preventing it from moving. The airport owner refused
to move the truck until he was paid a sum of money in rent.
The money was not paid, and several days later, the aircraft
disappeared from view. DSA then reported the aircraft stolen
to the Douglas County sheriff’s office and USSIC. However,
the airport owner told the sheriff’s office and USSIC that he
was holding the aircraft pending the payment of fees that DSA
allegedly owed him for storing the aircraft. DSA disputed that
it owed any such fees and declined to pay.
The mechanic filed suit in the district court for Douglas
County against the airport owner and another person associ-
ated with the airport, claiming that he had been unlawfully
ousted from the property and that his personal property had
been unlawfully distrained. 2 Among the property mentioned
was DSA’s aircraft, which the mechanic claimed that he held
in bailment.
Shortly thereafter, DSA submitted a “Sworn Statement in
Proof of Loss” to USSIC alleging “[a] theft loss.” Specifically,
DSA alleged that the aircraft had been unlawfully seized,
distrained, converted, and stolen so as to “hold[] [it] ransom
to extract payment of compensation.” DSA claimed that the
amount of the loss was $50,000, or the full insured value of
the aircraft.
USSIC denied the claim on the ground that it was not cov-
ered by the policy. USSIC specifically quoted the provisions
regarding “direct physical loss,” the Conversion Exclusion,
and the definition of “[a]ccident,” discussed above. Instead,
USSIC said that DSA knew “where the plane [was], who
ha[d] it, and why they ha[d] it” but had taken no action
against the mechanic.
DSA then requested an “explicit rationale” for the denial.
In response, USSIC reiterated that DSA “ha[d] continuously
2 See O’Daniel Flight Service, supra note 1.

- 291 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
known where [the] aircraft [was]” and could not have expected
the aircraft to remain in the custody of either the mechanic
or the airport “without having to pay something for it sitting
there.” USSIC also observed that while the mechanic had sued
the airport’s owner, DSA had not joined or participated in that
lawsuit or taken action against the airport owner seeking the
aircraft’s return.
Initial Legal Proceedings
Around the time when USSIC provided the foregoing ratio-
nale to DSA, USSIC filed suit against DSA in the district
court for Douglas County, seeking a declaration that the
policy did not cover the alleged loss of the aircraft. In its
answer, DSA asserted a counterclaim alleging that USSIC had
breached the parties’ contract and acted in bad faith in denying
DSA’s claim.
DSA then intervened in the mechanic’s lawsuit against the
airport owner, alleging that the airport owner had converted
the aircraft, among other things. The airport owner filed an
answer in which he asserted a counterclaim against DSA. In
that counterclaim, the airport owner alleged that he had a pos-
sessory lien on the aircraft and was entitled to recovery pursu-
ant to that lien.
Subsequently, USSIC and DSA each moved for summary
judgment in its favor on the parties’ competing claims. After a
hearing, the district court ruled in favor of USSIC and against
DSA. The court found that DSA’s claim was not within the
policy’s coverage, because the aircraft was “being held by
[the airport owner] under demand of payment.” As such, the
court concluded that there had been no “accident.” The court
also found that the Conversion Exclusion applied and that
USSIC had not breached the insurance contract or acted in
bad faith. DSA appealed the ruling.
While DSA’s appeal was pending, the district court issued
a ruling in the mechanic’s suit against the airport owner,

- 292 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
rejecting the airport owner’s claim that he had a possessory
lien on the aircraft. As a result of that ruling, the aircraft was
finally released to DSA, nearly 3½ years after the truck had
been parked in front of it and blocked it from moving. (DSA
would subsequently allege that the aircraft was “substantially
damaged” while in the airport owner’s possession and sold
for salvage. 3) Notably, the district court did not address DSA’s
claims against the airport owner at that time.
We then issued our opinion in U.S. Specialty Ins. Co. v. D S
Avionics, 4 reversing the order of the district court ruling in
favor of USSIC and against DSA on the parties’ cross-motions
for summary judgment. In so doing, we reasoned that the
“determination of the coverage dispute turns, in large part, on
whether [the airport owner’s] possession of the aircraft is law-
ful (as USSIC claims) or whether [the airport owner] has sto-
len or converted the aircraft (as DSA claims).” 5 However, we
observed that the “civil dispute” between DSA, the mechanic,
and the airport owner over the “legality of the aircraft’s con-
tinued detention and [the airport owner’s] demand for storage
fees” remained “unresolved.” 6 As such, we concluded that the
district court’s declaration regarding the availability of insur-
ance coverage “premised on theft or conversion” was “prema-
ture and thus an abuse of discretion.” 7
Subsequent Events and Proceedings
After we issued our opinion in U.S. Specialty Ins. Co.,
DSA’s conversion claim against the airport owner was dis-
missed without prejudice, apparently pursuant to a confidential
3 Brief for appellant at 25.
4 See U.S. Specialty Ins. Co., supra note 1.
5 Id. at 398, 918 N.W.2d at 596.
6 Id. at 399, 918 N.W.2d at 596.
7 Id.

- 293 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
settlement agreement between DSA and the airport owner. In
other words, the court did not find that the airport owner had
converted the aircraft. However, at oral arguments in the pres-
ent matter, USSIC conceded that the airport owner had con-
verted the aircraft.
DSA then filed a complaint against USSIC in the district
court for Douglas County alleging breach of contract and
bad faith. That case was consolidated with the case involving
USSIC’s request for a declaration of noncoverage and DSA’s
counterclaim. Subsequently, USSIC and DSA each moved for
summary judgment or partial summary judgment in its favor in
the consolidated cases.
After a hearing, the district court ruled in favor of USSIC
and against DSA. The court reasoned that there was no “loss”
and no “accident” within the meaning of the policy, because
the airport owner held the aircraft “under demand of pay-
ment” until the court found that he had no right to a lien
on the aircraft. The court acknowledged DSA’s claim that
the airport owner’s conduct amounted to theft or conversion.
However, the court found that DSA failed to “establish[] the
intent necessary for theft or conversion.” The court also found
that the Conversion Exclusion applied because “the [a]ircraft
was secreted away due to [the mechanic’s] failure to exercise
proper care for it.” In addition, the court found that even if
coverage existed, DSA failed to provide “evidence of dam-
ages” because there was nothing to show that the “corrosion
and rot” of which DSA complained had occurred while the
insurance policy was in effect. Finally, the court found that
DSA’s breach of contract and bad faith claims failed as a mat-
ter of law because USSIC had an “arguable basis” upon which
to deny DSA’s claim.
DSA 	timely 	appealed, 	and 	we 	moved 	the 	matter 	to
our docket. 8
8 See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2024).

- 294 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
ASSIGNMENTS OF ERROR
DSA assigns, restated, that the district court erred or
invaded the province of the jury (1) in finding that USSIC
“acted in good faith” when denying its claim; (2) in finding
that no “accident” occurred during the policy period; (3) to
the extent that it required DSA to prove the loss was caused
by a specific peril; (4) in finding that DSA failed to prove
that the airport owner converted the aircraft; (5) in finding
that the airport owner lacked the requisite intent for theft; (6)
in finding that the mechanic’s alleged negligence constituted
conversion, triggering the policy’s Conversion Exclusion; (7)
in finding that DSA failed to show “damages” as a result
of the direct physical loss of its aircraft; (8) in granting
USSIC’s motion for summary judgment; and (9) in denying
DSA’s motion for partial summary judgment on the question
of coverage.
STANDARD OF REVIEW
[1,2] An appellate court reviews the district court’s grant of
summary judgment de novo, viewing the record in the light
most favorable to the nonmoving party and drawing all rea-
sonable inferences in that party’s favor. 9 An appellate court
will affirm a lower court’s grant of summary judgment if the
pleadings and admitted evidence show that there is no genuine
issue as to any material facts 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. 10
[3] 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. 11
9 Ricker v. Nebraska Methodist Health Sys., 319 Neb. 628, 24 N.W.3d 344
(2025).
10 Id.
11 North Star Mut. Ins. Co. v. Miller, 311 Neb. 941, 977 N.W.2d 195 (2022).

- 295 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
ANALYSIS
Claim Is Within Policy’s Coverage
and Conversion Exclusion Is
Conceded Not to Apply
We begin with DSA’s argument that the district court erred
in finding that DSA’s claim did not fall within the policy’s
coverage and that the Conversion Exclusion applied and, there-
fore, erred in ruling in favor of USSIC and against DSA on
the parties’ cross-motions for summary judgment or partial
summary judgment. We do so because we agree with DSA,
and our conclusion on the policy’s coverage and exclusions
encompasses, removes the need to address, or is dispositive of
DSA’s remaining claims.
[4,5] 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. 12 In construing insurance pol-
icy provisions, a court must determine from the clear language
of the policy whether the insurer in fact insured against the
risk involved. 13 A claim must fall within the policy’s coverage,
and an exclusion must not be applicable. 14
[6] A court construes insurance contracts like other con-
tracts, according to the meaning of the terms that the parties
have used. 15 When the terms of an insurance contract are
clear, a court gives them their plain and ordinary meaning as a
reasonable person in the insured’s position would understand
them. 16 The language of an insurance policy should be read
to avoid ambiguities, if possible, and the language should not
12 Id.
13 City of Lincoln v. County of Lancaster, 297 Neb. 256, 898 N.W.2d 374
(2017).
14 Id.
15 Merrick v. Fischer, Rounds & Assocs., 305 Neb. 230, 939 N.W.2d 795
(2020).
16 Id.

- 296 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
be tortured to create them. 17 We often turn to dictionaries to
ascertain a word’s plain and ordinary meaning. 18
In this case, neither party contends that the relevant provi-
sions of the insurance policy are ambiguous. Instead, the par-
ties dispute whether the claim falls within what they assert are
the policy’s unambiguous provisions regarding coverage. DSA
argues that the claim is within the policy’s coverage because
an “accident” caused the “permanent physical loss” of the
aircraft. Specifically, DSA argues that an “accident” occurred
when the airport owner “suddenly and unexpectedly used his
truck as a barricade to seize DSA’s aircraft.” 19 DSA claims
that as a result of this “accident,” it was dispossessed of the
aircraft. USSIC, in contrast, argues that any loss of the aircraft
was not due to an “accident,” because the airport owner acted
intentionally in parking or causing the truck to be parked in
front of the aircraft. USSIC also argues that there was no
“direct physical loss” of the aircraft because DSA ultimately
recovered it.
Giving the terms of the policy their plain and ordinary
meaning, we see no reason why the airport owner’s park-
ing the truck, or causing the truck to be parked, in front of
the aircraft was not an “accident” within the meaning of the
policy, as DSA argues. As was noted above, the policy defined
“[a]ccident,” in relevant part, to mean “a sudden event dur-
ing the policy period, neither expected nor intended by [the
insured].” The term “event” means “something that happens,”
an 	“occurrence.” 20 “[S]udden” 	means 	“happening 	without
17 State Farm Fire & Cas. Co. v. TFG Enters., 308 Neb. 460, 954 N.W.2d
899 (2021).
18 State v. Gilliam, 292 Neb. 770, 874 N.W.2d 48 (2016).
19 Brief for appellant at 51.
20 Webster’s Third New International Dictionary of the English Language,
Unabridged 788 (1993).

- 297 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
previous notice or with very brief notice.” 21 It is not known
exactly when the truck was parked in front of the aircraft, but
there is no suggestion that the truck was parked there gradu-
ally over a period of time or outside the policy period. Nor
does USSIC argue on appeal that DSA expected or intended
the truck to be parked in front of the aircraft.
Instead, in arguing that there was no “accident” within
the meaning of the policy, USSIC contends that the airport
owner acted intentionally “in detaining the aircraft” 22 and that
“[i]ntentional acts by definition cannot be accidents.” 23 USSIC
is correct that we have found that there was no coverage in
cases where the purported “accident” was an intentional act
and the policy either (1) defined “accident” or a related term in
such a way as to exclude any action intended by the actor or the
insured 24 or (2) was construed to that effect because it did not
define “accident.” 25 However, the policy at issue in the present
matter expressly defined “accident” to include occurrences that
were not expected or intended by the insured. USSIC acknowl-
edges this language in the policy but claims that because the
policy was “silent as to the intent of the actor,” 26 we should
21 Id. at 2284. See, also, Buell Industries v. Greater N.Y. Mut. Ins., 259
Conn. 527, 536, 791 A.2d 489, 496 (2002) (“sudden” includes “a temporal
quality, which requires that the onset of the [event] in question occurs
quickly or happens abruptly”).
22 Brief for appellee at 21. See, also, U.S. Specialty Ins. Co., supra note 1,
301 Neb. at 390, 918 N.W.2d at 591 (“[i]t is clear that parking the truck in
front of the aircraft was done intentionally to block its removal”).
23 Brief for appellee at 21 (citing City of Lincoln, supra note 13).
24 See City of Lincoln, supra note 13, 297 Neb. at 262, 898 N.W.2d at 379
(policy defined “‘accident’” to mean “‘an unintended and unexpected
harmful event’”).
25 See Austin v. State Farm Mut. Auto. Ins. Co., 261 Neb. 697, 625 N.W.2d
213 (2001) (policy did not define “accident,” and, as such, term was
construed in its ordinary sense without reference to anyone’s perspective).
26 Brief for appellee at 22.

- 298 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
read the policy to exclude coverage for acts intended by the
actor, as well as acts intended by DSA. We decline to adopt
such an approach because it is inconsistent with the policy’s
plain language.
USSIC’s argument that the occurrence of which DSA com-
plains should not be seen to come within the policy’s def-
inition of “accident,” because “it is against public policy
to insure against liability for intentional acts,” 27 is equally
unavailing. USSIC bases this argument on a statement that
we made to that effect in Austin v. State Farm Mut. Auto Ins.
Co. 28 However, the policy at issue in Austin did not define
“accident” with reference to the insured’s perspective, unlike
the policy here. Moreover, our statement in Austin was based
on a prior opinion of this court that concerned damages result-
ing from the intentional acts of the insured. 29 USSIC does not
suggest that was the case here. To the contrary, when asked at
a deposition whether the “taking” of the aircraft by the airport
owner was intended by DSA, USSIC’s designated representa-
tive admitted that he did not have any information to suggest
that it was intended.
As to whether DSA experienced the “direct physical loss” of
its aircraft as a result of the “accident,” we take a similar view.
USSIC does not dispute that DSA was physically dispossessed
of the aircraft or that such dispossession could, depending on
the circumstances, constitute a “direct physical loss” within the
meaning of the policy. Instead, USSIC argues that DSA did
not suffer the “direct physical loss” of the aircraft because it
ultimately recovered the aircraft. USSIC bases this argument
on case law from other jurisdictions that it construes to mean
27 Id.
28 Austin, supra note 25.
29 See Jones v. Norval, 203 Neb. 549, 279 N.W.2d 388 (1979).

- 299 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
that a “direct physical loss” requires that the insured be perma-
nently dispossessed of the property. 30
We are not persuaded by that argument. All the cases cited
by USSIC involved intangible or purely economic losses
allegedly arising from an inability to operate a business due
to restrictions imposed by the government during COVID-19.
There was no suggestion in those cases that the property in
question was physically in another person’s possession. Nor
was there any suggestion in those cases that one should look to
what happens after a claim arising from a party’s dispossession
of property is denied to determine whether there was coverage,
which is essentially what USSIC would have us do here. We
also note that the approach proposed by USSIC would result in
an insured potentially being found not to be entitled to cover-
age based on events that happened after its claim was denied,
while the question of whether the insurer acted in bad faith is
assessed at the time of the denial. 31
USSIC is correct that we did previously opine in U.S.
Specialty Ins. Co. that the return of the aircraft “could con-
ceivably affect the coverage analysis.” 32 However, we do not
view this statement, which was made at an earlier stage in
the litigation, to foreclose the conclusion we reach here. We
also emphasize that in reaching the conclusion that we do,
we do not view the loss of possession to be tantamount to
the loss of use. As USSIC argued before the district court,
the policy in question does exclude certain claims for loss
of use. However, we understand the term “loss of use”
30 See, WP6 Restaurant Mgmt. Group v. Zurich American Ins., 595 F. Supp.
3d 973 (D. Nev. 2022); Cordish Companies v. Affiliated FM Insurance Co.,
573 F. Supp. 3d 977 (D. Md. 2021); Till Metro Ent. v. Covington Specialty
Ins. Co., 545 F. Supp. 3d 1153 (N.D. Okla. 2021); Real Hospitality v.
Travelers Casualty Ins., 499 F. Supp. 3d 288 (S.D. Miss. 2020).
31 See, e.g., LeRette v. American Med. Security, 270 Neb. 545, 705 N.W.2d
41 (2005).
32 U.S. Specialty Ins. Co., supra note 1, 301 Neb. at 400, 918 N.W.2d at 597.

- 300 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
in the relevant provisions of the policy to refer to economic
or consequential damages arising from direct physical loss or
damage, and not the inability to exercise ownership and con-
trol over one’s property that comes from being dispossessed
of the property. 33
[7] This is not the first time that we, or another court, have
found that, based on the language of a policy, a claim was
within the policy’s coverage even though the insured knew
who had the property and could have availed itself of civil
remedies to recover the property. 34 Where there is an all perils
policy, as was the case here, that policy impliedly covers all
risks except those expressly addressed in the policy’s exclu-
sion paragraphs. 35 The only exclusion at issue here was the
Conversion Exclusion, to which we now turn.
The district court found that the policy’s Conversion
Exclusion applied, because the aircraft “was secreted away
due to [the mechanic’s] failure to exercise proper care for
it.” On appeal, DSA argues that the district court erred
in 	so 	concluding. 	However, 	at 	oral 	arguments, 	USSIC
conceded that the Conversion Exclusion does not apply,
because that exclusion encompasses physical loss or dam-
age resulting from specified acts by persons to whom DSA
33 See, e.g., Apex Solutions v. Falls Lake Ins. Mgmt., 100 Cal. App. 5th 1249,
1258, 319 Cal. Rptr. 3d 833, 840 (2024) (“[i]t is undisputed that ‘direct
physical loss’ encompasses physical displacement or loss of physical
possession”).
34 See, e.g., Endurance Am. Ins. Co. v. StoneX Commodity Solutions,
LLC, 235 A.D.3d 489, 227 N.Y.S.3d 307 (2025); Peterson v. Homesite
Indemnity Co., 287 Neb. 48, 840 N.W.2d 885 (2013); American Alternative
Ins. v. Superior Court, 135 Cal. App. 4th 1239, 37 Cal. Rptr. 3d 918
(2006); Union Planters Nat. Bank v. American Home Assurance Co.,
No. W2001-01124-COA-R3-C, 2002 WL 1308344 (Tenn. App. Mar. 18,
2002); Intermetal Mexicana v. Insurance Co. of N. America, 866 F.2d 71
(3d Cir. 1989); Security Ins. Co. v. Commercial Credit Equip., 399 So. 2d
31 (Fla. App. 1981).
35 Kaiser v. Allstate Indemnity Co., 307 Neb. 562, 949 N.W.2d 787 (2020).

- 301 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
“relinquish[es] possession of the aircraft,” and the evidence
here did not show that. We agree with that conclusion.
Remaining Arguments
[8] DSA also claims that the district court erred in other
regards. Specifically, DSA claims that the district court erred
or invaded the province of the jury (1) insofar as it required
DSA to prove the loss was caused by a specific peril, (2) in
finding that DSA failed to prove the airport owner converted
the aircraft, and (3) in finding that the airport owner lacked the
requisite intent to establish theft. DSA also claims that the dis-
trict court erred in finding that DSA failed to show “damages
proximately resulting from the direct physical loss of its air-
craft,” a claim that we understand to refer to DSA’s arguments
regarding the policy’s coverage and not the damages for its
loss. However, because we found that DSA’s claim was within
the policy’s coverage for “direct physical loss,” and because
USSIC conceded on appeal that the Conversion Exclusion
does not apply, we need not address those arguments. An
appellate court is not obligated to engage in an analysis that is
not needed to adjudicate the controversy before it. 36
All that remains is DSA’s claim that the district court
erred in finding that USSIC “acted in good faith” in deny-
ing DSA’s claim. The district court concluded that DSA’s bad
faith claim failed as a matter of law, because it found that
DSA’s claim was not within the policy’s coverage and that the
Conversion Exclusion applied. 37 However, for the reasons
set forth above, the district court erred in reaching the con-
clusions that it did regarding the policy’s coverage, and the
Conversion Exclusion is conceded not to apply. Accordingly,
we reverse the order of the district court sustaining USSIC’s
36 Henderson State Co. v. Garrelts, 319 Neb. 485, 23 N.W.3d 444 (2025).
37 See, e.g., LeRette, supra note 31 (if lawful basis for denial exists, insured’s
bad faith cause of action fails as matter of law, regardless of manner in
which investigation was or was not conducted).

- 302 -
Nebraska Supreme Court Advance Sheets
320 Nebraska Reports
U.S. SPECIALTY INS. CO. v. D S AVIONICS
Cite as 320 Neb. 287
motion for summary judgment and overruling DSA’s motion
for partial summary judgment on the question of coverage and
remand the cause for further proceedings consistent with this
opinion regarding whether USSIC acted in bad faith in deny-
ing DSA’s claim and any damages that DSA may be entitled
to under the policy.
CONCLUSION
The district court erred in concluding that DSA’s claim was
not within the policy’s coverage, and, on appeal, no exclu-
sion is alleged to apply. As such, we reverse the opinion of
the district court and remand the cause for further proceedings
consistent with this opinion.
Reversed and remanded for
further proceedings.