Lynch v. State Farm Mut. Auto. Ins. Co.

136 	275 Nebraska reports
controls and that harley was not entitled to accrued interest
on the value of his partnership interest because the partnership
agreement precluded interest. because harley was not entitled
to profit distributions or accrued interest, the district court did
not err in applying the partnership’s distributions after January
1, 2003, to the purchase price of harley’s interest.
VI. CoNCLUsIoN
For reasons other than those stated by the district court, we
conclude that the court did not err in determining that the part-
nership was not dissolved by Don’s failure to timely pay the
buyout price for harley’s interest after harley withdrew from
the partnership. We further conclude that the district court did
not err in applying some partnership distributions to harley
toward the buyout price of his partnership interest. harley was
not entitled to profit distributions after his dissociation. the
court also did not err in failing to treat the distributions as
accrued interest when the partnership agreement specifically
provided that the partnership was not required to pay interest on
the value of a withdrawing partner’s interest.
A ffirmed .
W riGHT, J., not participating.
mAry lyn lyncH And THomAS lyncH, individuAlly And AS
rePreSenTATiveS of All oTHerS SimilArly SiTuATed ,
APPellAnTS, v . STATe fArm muTuAl A uTomobile
inSurAnce comPAny , APPellee .
745 N.W.2d 291
Filed February 22, 2008. 	No. s-06-737.
1. Summary Judgment. summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose 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. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an
appellate court views the evidence in a 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. Insurance: Contracts. an insurance policy is a contract.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:55 AM CST

4. Actions: Insurance: Breach of Contract: Damages. In assessing claims for dam-
ages in insurance contract actions, it is ordinarily necessary to assert a breach.
5. Insurance: Contracts: Intent: Appeal and Error. an appellate court reviewing
an insurance policy must construe the policy as any other contract and give effect
to the parties’ intentions at the time the contract was made.
6. Insurance: Contracts: Parties. parties to an insurance contract may contract for
any lawful coverage, and an insurer may limit its liability and impose restrictions
and conditions upon its obligations under the contract if the restrictions and con-
ditions are not inconsistent with public policy or statute.
7. Class Actions: Standing: Summary Judgment. the right of a party to sue as
representative of a class may be determined on a motion for summary judgment.
8. Class Actions. In determining whether a class action is properly brought, consid-
erable discretion is vested in the trial court.
9. ____. In order to justify class action treatment, there must exist both a question of
common or general interest and numerous parties so as to make it impracticable
to bring all the parties before the court.
appeal from the District Court for Douglas County: J. PATrick
mullen, Judge. affirmed.
Christopher 	D. 	Jerram, 	of 	kelley 	& 	Lehan, 	p.C., 	for
appellants.
Mark C. Laughlin, Joseph k. Meusey, and patrick s. Cooper,
of Fraser stryker, p.C., L.L.o., for appellee.
H eAvicAn , 	c.J., 	connolly , 	G errArd , 	STePHAn , 	and
miller -lermAn , JJ.
STePHAn , J.
this case is before us for the second time. Initiated as a class
action, the named plaintiffs alleged that with respect to “medi-
cal payments coverage” included in their automobile insurance
policies, state Farm Mutual automobile Insurance Company
(state Farm) charged a premium for indemnity coverage but
instead provided managed care coverage of lesser value. In
McGinn v. State Farm Mut. Auto. Ins. Co.,1 we held that a named
plaintiff who had not asserted a claim against state Farm under
his medical payments coverage could not state a cause of action
for breach of contract or any of his other theories of recovery.
1 McGinn v. State Farm Mut. Auto. Ins. Co., 268 Neb. 843, 689 N.W.2d 802
(2004).
LYNCh v. state FarM MUt. aUto. INs. Co. 	137
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138 	275 Nebraska reports
We affirmed an order dismissing his claims and ordering him
stricken as a party plaintiff. this appeal involves the original
plaintiffs, Mary Lyn Lynch and thomas Lynch, who appeal
from a subsequent order granting state Farm’s motion for sum-
mary judgment and dismissing the action. We affirm.
I. baCkGroUND
Mary was involved in an automobile accident on august
18, 1995, in which the vehicle she was driving was struck
from behind by a vehicle driven by rita Norman. Mary sought
medical treatment for the injuries sustained in the accident, for
which she incurred expenses.
at the time of the accident, Mary and her husband, thomas,
were insured under an automobile insurance policy issued by
state Farm. the portion of the policy designated “MeDICaL
eXpeNses,” which included an “amendatory endorsement,”
provided in pertinent part:
We will pay reasonable medical expenses incurred, for
bodily injury caused by accident, for services furnished
within three years of the date of the accident. these
expenses are for necessary medical, surgical, X-ray, den-
tal, ambulance, hospital, professional nursing and funeral
services, eyeglasses, hearing aids and prosthetic devices.
. . . .
We have the right to make or obtain a utilization
review of the medical expenses and services to deter-
mine if they are reasonable and necessary for the bodily
injury sustained.
. . . .
1. If the injured person has been paid damages for
the bodily injury by or on behalf of the liable party in
an amount:
. . . .
b. equal to or greater than the total reasonable and nec-
essary medical expenses incurred by the injured person, we
owe nothing under this coverage.
Mary submitted bills to state Farm for medical expenses in
the amount of $1,906, which she claimed to have incurred as
a result of the accident. state Farm paid $1,351 of this amount
and denied the remainder.

Mary asserted a claim for her injuries against Norman. the
claim was settled on august 24, 1999, for $6,838.67. as a part
of this settlement, Mary and thomas specifically reserved any
and all claims they had against state Farm. of the total settle-
ment amount, $500 was deposited in escrow “to fully protect
any and all alleged subrogation claims by state Farm . . . pres-
ently owed or hereafter ordered in any subsequent judicial pro-
ceeding to be paid by state Farm to Mary Lynch.”
the Lynches commenced a class action suit against state
Farm in the district court for Douglas County. they alleged
that state Farm was engaged in a scheme whereby it marketed
medical payments medical coverage “as a promise of protection
through indemnity, not as a managed care plan,” but in fact pro-
vided managed care coverage for which a lesser premium should
have been charged. they sought to represent a class defined
to include
every individual within the state of Nebraska who pur-
chased a contract of automobile insurance from [state
Farm] on or since January 1, 1990, which included medi-
cal payments coverage, and who, at the time of purchase
or renewal of said contract were not informed by [state
Farm], either in the contract itself or by other means, of
[state Farm’s] scheme.
the Lynches alleged six separate theories of recovery, des-
ignated as “causes of action,” including: breach of contract;
breach of covenant of good faith and fair dealing; violation
of the Uniform Deceptive trade practices act, Neb. rev. stat.
§ 87-301 et seq. (reissue 1999); fraud; unjust enrichment; and
violation of Nebraska’s Consumer protection act, Neb. rev.
stat. § 59-1601 et seq. (reissue 1998). they prayed for various
forms of relief, including damages measured by the difference
between the premiums actually paid for medical payments
coverage and the lesser premium which they contend was appli-
cable to the managed care coverage they received.
state Farm filed a motion for summary judgment, seeking
dismissal of the entire case or, in the alternative, partial sum-
mary judgment and dismissal of the class action allegations.
the Lynches filed a motion to approve a class notice and a
motion seeking partial summary judgment with respect to cer-
tain factual and legal issues.
LYNCh v. state FarM MUt. aUto. INs. Co. 	139
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140 	275 Nebraska reports
In an order granting state Farm’s motion for summary judg-
ment and dismissing the action, the district court determined that
the Lynches’ own claim against state Farm must fail because
they could not establish a breach of contract. specifically, the
court determined that because the Lynches received more than
the amount of their medical payment claim in the settlement
with Norman, state Farm had no liability to them under its
medical payments coverage, and thus, the Lynches “cannot be
heard to complain about an alleged scheme if they have not
been damaged by it. Further they cannot be the standard bear-
ers for all of those in a class who have submitted claims and
been denied by [state Farm].” the court determined that the
Lynches, “having been paid in full no longer share a common
interest with those in the purported class whose claims have
been denied” and, further, that individual issues with respect
to each member of the purported class would be dissimilar and
predominate over issues common to the class. Finally, the court
noted that the Lynches’ expert witnesses were “generally unfa-
miliar with [state Farm] and its policyholders in the state of
Nebraska and offer opinions derived from other cases in other
states which have little bearing on the issues in this case” and
that their opinions were therefore without sufficient foundation
and were conclusory in nature. accordingly, the court granted
state Farm’s motion for summary judgment and dismissed
the action.
the Lynches perfected a timely appeal, and we granted their
petition to bypass, in which state Farm concurred.
II. assIGNMeNts oF error
the Lynches assign, restated and consolidated, that the trial
court erred in (1) granting state Farm’s motion for summary
judgment, (2) failing to grant their motion for summary judg-
ment, (3) determining that their expert witnesses’ opinions were
conclusory and lacked foundation, and (4) concluding that the
case could not proceed as a class action.
III. staNDarD oF reVIeW
[1,2] summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose 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 In reviewing a summary judgment,
an appellate court views the evidence in a 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
IV. aNaLYsIs
1. mAry lyncH
(a) breach of Contract Claim
[3,4] an insurance policy is a contract.4 In assessing claims
for damages in insurance contract actions, it is ordinarily neces-
sary to assert a breach.5 In McGinn, we held that a state Farm
insured who had not filed a claim under the policy could not
state a cause of action for breach of contract. here, Mary filed
a claim under the medical payments coverage, which state Farm
denied in part. the first issue presented is whether the district
court erred in determining as a matter of law that the denial
did not constitute a breach of the insurance contract. Under our
standard of review, we afford Mary the benefit of all favorable
factual inferences in resolving this issue.
[5,6] We begin with the language of the policy. an appellate
court reviewing an insurance policy must construe the policy as
any other contract and give effect to the parties’ intentions at
the time the contract was made.6 parties to an insurance contract
may contract for any lawful coverage, and an insurer may limit
its liability and impose restrictions and conditions upon its obli-
gations under the contract if the restrictions and conditions are
2 Eastlick v. Lueder Constr. Co., 274 Neb. 467, 741 N.W.2d 628 (2007);
Erickson v. U-Haul Internat., 274 Neb. 236, 738 N.W.2d 453 (2007).
3 Id.
4 McGinn v. State Farm Mut. Auto. Ins. Co., supra note 1; Guerrier v. Mid-
Century Ins. Co., 266 Neb. 150, 663 N.W.2d 131 (2003).
5 McGinn v. State Farm Mut. Auto. Ins. Co., supra note 1; 16 Lee r. russ &
thomas F. segalla, Couch on Insurance 3d § 232:42 (2000).
6 Guerrier v. Mid-Century Ins. Co., supra note 4; Reisig v. Allstate Ins. Co.,
264 Neb. 74, 645 N.W.2d 544 (2002).
LYNCh v. state FarM MUt. aUto. INs. Co. 	141
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142 	275 Nebraska reports
not inconsistent with public policy or statute.7 here, the policy
unambiguously provided that if an insured receives a payment
from a third-party tort-feasor which is equal to or greater than
medical expenses incurred by the insured, state Farm would
“owe nothing” under its medical payments coverage. other
courts have held that language identical to that in the policy
before us constitutes a legitimate policy exclusion intended to
prevent double recovery of medical expenses.8
relying on Otteman v. Interstate Fire & Cas. Co., Inc.,9 Mary
argues that state Farm waived its right to rely on the exclusion
by its partial denial of her claim for medical payments benefits.
We are not persuaded by this argument. Otteman involved a
claim by an insurance agent against his errors and admissions
liability insurer. the policy provided that the insured could not
settle a liability claim asserted against him without the written
consent of the insurer. We held that the insurer’s unreason-
able delay in processing a third party’s liability claim against
its insured amounted to a denial of coverage and constituted a
waiver of any right to enforce the policy provision requiring its
consent to settlement. here, the medical payments coverage is
not liability insurance, and no claim was made against Mary.
Instead, Mary had potential claims against her insurer and a
third party for the same medical expenses. Neither the provi-
sions of the policy nor state Farm’s denial of benefits restricted
Mary from asserting a claim against the third party. the policy
simply provided that if she were successful in recovering an
amount equal to or greater than the amount of her medical
expenses, state Farm would “owe nothing.” Otteman does not
support Mary’s waiver argument in these circumstances.
7 Peterson v. Ohio Casualty Group, 272 Neb. 700, 724 N.W.2d 765 (2006);
Poulton v. State Farm Fire & Cas. Cos., 267 Neb. 569, 675 N.W.2d 665
(2004).
8 see, State Farm Mut. Auto. Ins. Co. v. Walker, 234 Ga. app. 101, 505 s.e.2d
828 (1998); State Farm Mut. Auto. Ins. Co. v. Brewer, 221 Ga. app. 745,
472 s.e.2d 529 (1996); Maynard v. State Farm Mut. Auto. Ins. Co., 902 p.2d
1328 (alaska 1995).
9 Otteman v. Interstate Fire & Cas. Co., Inc., 172 Neb. 574, 111 N.W.2d 97
(1961).

Finally, we are not persuaded by Mary’s argument that the
policy provision in question should be declared void in viola-
tion of public policy. as noted, other courts have found the
same policy provision enforceable, implicitly, and in one case
explicitly, rejecting a claim that the provision is contrary to
public policy.10 Mary has provided no authority to the con-
trary. We conclude, as other courts have, that the provision
is an enforceable contractual bar against double recovery of
medical expenses.
It is undisputed that the amount which Mary recovered from
the party responsible for her injuries exceeded the amount of
medical expenses she claimed from state Farm under her medi-
cal payments coverage. We note that she was also reimbursed
by her health insurance carrier for some of the expenses, but we
do not consider these reimbursements pertinent to our analysis.
We conclude as a matter of law that because Mary recovered
more than the amount of her medical expenses in her settle-
ment with a third party, state Farm had no contractual obliga-
tion to Mary under the plain language of its medical payments
coverage provisions.
In McGinn, we reasoned that because the plaintiff had not
filed a claim against his medical payments coverage, he could
not claim a breach of contract with respect to those policy pro-
visions. similarly here, where the undisputed facts demonstrate
that Mary has no legal entitlement to medical payments bene-
fits under the state Farm policy, she has no cognizable claim
for breach of contract.
(b) other Individual Claims
the claims asserted by Mary in this case are the same as
those asserted by the plaintiff in McGinn. We noted in that case
that each of the claims “incorporates the existence of the con-
tract for insurance and each is dependent on the viability of [the
named plaintiff’s] breach of contract claim.”11 We concluded
that because McGinn had not stated a viable claim for breach
10 see Maynard v. State Farm Mut. Auto. Ins. Co., supra note 8.
11 McGinn v. State Farm Mut. Auto. Ins. Co., supra note 1, 268 Neb. at 849,
689 N.W.2d at 806.
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144 	275 Nebraska reports
of contract, he could not state a cause of action with respect to
his remaining claims. here, we conclude that because Mary’s
breach of contract claim fails as a matter of law, so too must
the remainder of her claims.
(c) Class action Claims
[7-9] the right of a party to sue as representative of a class
may be determined on a motion for summary judgment.12 In
determining whether a class action is properly brought, con-
siderable discretion is vested in the trial court.13 Class actions
are authorized under Neb. rev. stat. § 25-319 (reissue 1995),
which provides: “When the question is one of a common or
general interest of many persons, or when the parties are very
numerous, and it may be impracticable to bring them all before
the court, one or more may sue or defend for the benefit of all.”
In order to justify class action treatment, there must exist “both
a question of common or general interest and numerous parties
so as to make it impracticable to bring all the parties before the
court.”14 Class certification may be denied even if a named plain-
tiff meets all of the technical requirements of § 25-319.15
because her breach of contract claim against state Farm is
without merit as a matter of law, Mary lacks commonality with
members of the purported class on whose behalf she sought to
litigate similar breach of contract claims. the district court did
not err in concluding that because Mary could not maintain her
individual cause of action against state Farm, she was unquali-
fied to represent the purported class.16
12 Blankenship v. Omaha P. P. Dist., 195 Neb. 170, 237 N.W.2d 86 (1976).
13 Berkshire & Andersen v. Douglas County Board of Equalization, 200 Neb.
113, 262 N.W.2d 449 (1978); Gant v. City of Lincoln, 193 Neb. 108, 225
N.W.2d 549 (1975).
14 Hoiengs v. County of Adams, 245 Neb. 877, 901, 516 N.W.2d 223, 240
(1994).
15 see Berkshire & Andersen v. Douglas County Board of Equalization, supra
note 13.
16 see McGill v. Automobile Ass’n of Michigan, 207 Mich. app. 402, 526
N.W.2d 12 (1995).

(d) expert testimony
Mary assigns error in the determination by the district court
that her expert witnesses lacked foundation for their opinions
concerning the alleged scheme by which state Farm admin-
istered and charged premiums for medical benefits coverage.
because we conclude as a matter of law that Mary had no
individual entitlement to medical payments benefits and cannot
sue as the representative of the purported class, the manner in
which state Farm may have administered such medical benefits
with respect to other policyholders is not before us, and we
need not reach this assignment of error.
2. THomAS lyncH
thomas’ personal interest in this case is somewhat unclear
from the record. he is the named insured on the state Farm
policy, but there is no indication that he has ever asserted a
medical payments claim in his own behalf. as such, his claims
would be barred by our holding in McGinn. however, at oral
argument, counsel suggested that thomas is a coclaimant with
his wife, Mary. assuming without deciding that to be so, his
assignments of error are without merit for the reasons discussed
herein with respect to Mary’s claim.
V. CoNCLUsIoN
For the reasons discussed, we conclude that the district court
did not err in granting state Farm’s motion for summary judg-
ment and dismissing this action. accordingly, we affirm.
A ffirmed .
W riGHT, J., participating on briefs.
mccormAck, J., not participating.
LYNCh v. state FarM MUt. aUto. INs. Co. 	145
Cite as 275 Neb. 136