Rickerl v. Farmers Ins. Exch.

3-503.3(a)(1), and 3-508.4(c). It is the judgment of this court
that Herzog be suspended from the practice of law for a
period of 3 months, effective immediately. Following that
suspension, Herzog shall be placed on probation for a period
of 1 year.
Herzog shall comply with Neb. Ct. R. § 3-316 and, upon fail-
ure to do so, shall be subject to a punishment for contempt of
this court. At the end of the 3-month suspension period, Herzog
may apply to be reinstated to the practice of law, provided that
she has demonstrated her compliance with § 3-316 and further
provided that the Counsel for Discipline has not notified this
court that Herzog has violated any disciplinary rule during her
suspension. We also direct Herzog to pay costs and expenses in
accordance with Neb. Rev. Stat. §§ 7-114 and 7-115 (Reissue
2007) and Neb. Ct. R. §§ 3-310(P) and 3-323(B) within 60
days after an order imposing costs and expenses, if any, is
entered by this court.
Judgment of suspension.
miller-lerman, J., not participating.
ann rickerl , appellant, v. farmers insurance exchange ,
doing business as farmers insurance group, appellee .
763 N.W.2d 86
Filed March 27, 2009. 	No. S-08-188.
1. Summary Judgment. Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose that there is 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 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. Insurance: Contracts: Appeal and Error. The interpretation of an insurance
policy is a question of law. In reviewing questions of law, an appellate court
resolves the question independently of the lower court’s conclusion.
4. Insurance: Contracts. An insurance policy is a contract, and its terms provide
the scope of the policy’s coverage.
446 	277 NeBRASkA RePoRTS
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5. ____: ____. Insurance contracts, like other contracts, are to be construed accord-
ing to the sense and meaning of the terms which the parties have used. When the
terms of a contract are clear, a court may not resort to rules of construction, and
the terms are to be accorded their plain and ordinary meaning as the ordinary or
reasonable person would understand them.
6. ____: ____. When the terms of an insurance contract are clear, it should be read
to avoid ambiguities, if possible, and the language should not be tortured to create
them. An ambiguity exists only when the policy can be interpreted to have two or
more reasonable meanings.
7. Pleadings. The issues in a given case will be limited to those which are pled.
Appeal from the District Court for Douglas County: peter
c. bataillon, Judge. Affirmed.
Michael F. Coyle and Todd C. kinney, of Fraser Stryker,
P.C., L.L.o., for appellant.
Daniel P. Chesire and Sean A. Minahan, of Lamson, Dugan
& Murray, L.L.P., for appellee.
heavican, c.J., Wright, connolly, stephan, mccormack,
and miller-lerman, JJ.
per curiam.
NATuRe oF CASe
Ann Rickerl leased a Honda Civic. As required by the lease,
Honda Lease Trust (Honda) was named as the assignee of title
to the vehicle, and Rickerl purchased an automobile insur-
ance policy for the Civic from Farmers Insurance exchange
(Farmers). Following an accident, Rickerl made a claim on the
policy, requesting that the Civic be repaired. Farmers refused,
instead paying the fair market value of the vehicle to Honda,
the loss payee. Rickerl filed this breach of contract claim. The
primary issue presented is whether the automobile insurance
contract allowed Farmers the unilateral right to choose whether
to repair or replace a vehicle.
We conclude that the loss payable provision here gives
Farmers the unilateral right to decide whether to repair or
replace the damaged Civic. Accordingly, we affirm the district
court’s judgment dismissing Rickerl’s claim.
RICkeRL v. FARMeRS INS. exCH. 	447
Cite as 277 Neb. 446

FACTS
Rickerl leased a Honda Civic. Honda was named as the
assignee of title under the lease. At the time of the lease, the
Civic was valued at $15,989.67. Rickerl was required to make
an initial payment of $1,805.92 and monthly payments of
$251.17 for 35 consecutive months. The lease also required
Rickerl to maintain automobile insurance and name Honda as
the loss payee in the insurance policy. Rickerl purchased an
automobile insurance policy from Farmers. The declarations
page named Rickerl as the policyholder and Honda as the lien-
holder. The declarations page also included a “Loss Payable
Provisions” section which stated in part:
It is agreed that any payment for loss or damage to the
vehicle described in this policy shall be made on the fol-
lowing basis:
(1) At our option, loss or damage shall be paid as inter-
est may appear to the policyholder and the lienholder
shown in the Declarations, or by repair of the dam-
aged vehicle.
Later, Rickerl was involved in a car accident. Following
the accident, a Farmers claim representative estimated that the
cost of repairing Rickerl’s Civic was approximately $8,549.40.
The fair market value of the Civic was determined to be
$12,997. Rickerl notified Farmers that she wanted the Civic
repaired. Farmers refused and declared the Civic a total loss.
Farmers then wrote a check to Honda only, in the amount of
$12,961.62 as full payment for the Civic. Honda accepted the
check, released the lien, and submitted the certificate of title to
Farmers. Farmers sold the Honda Civic for salvage for $5,000.
Farmers then issued a check to Rickerl for $321.32, Farmers’
estimation of Rickerl’s “equity” in the Civic.
Rickerl filed suit against Farmers, and both parties filed
motions for summary judgment. The district court ruled that
Farmers did not breach the insurance contract by paying Rickerl
and Honda their interests in the Civic through separate checks
and initially ruled that Rickerl was properly compensated
for her interest in the Civic. The court later ruled, however,
that Rickerl had no equity interest in the Civic and dismissed
Rickerl’s claim with prejudice. Rickerl appeals.
448 	277 NeBRASkA RePoRTS

ASSIGNMeNTS oF eRRoR
Rickerl assigns, restated, that the district court erred in (1)
finding that the loss payable provision of the Farmers insur-
ance policy gave Farmers the unilateral right to choose whether
to repair or replace a vehicle after an accident, (2) finding
that Farmers did not breach the contract when it determined
the amount of Rickerl’s damages and sent separate checks to
Rickerl and Honda, and (3) determining as a matter of law the
issue of Rickerl’s damages.
STANDARD oF ReVIeW
[1,2] Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose that there is no genu-
ine 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.1 In reviewing a sum-
mary 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 infer-
ences deducible from the evidence.2
[3] The interpretation of an insurance policy is a question of
law.3 In reviewing questions of law, an appellate court resolves
the question independently of the lower court’s conclusion.4
ANALYSIS
In support of her first assignment of error, Rickerl argues
that the loss payable provision of the insurance contract is
ambiguous and does not grant Farmers the right to choose to
repair or replace the Civic.
[4-6] An insurance policy is a contract, and its terms provide
the scope of the policy’s coverage.5 Insurance contracts, like
other contracts, are to be construed according to the sense and
1 Borrenpohl v. DaBeers Properties, 276 Neb. 426, 755 N.W.2d 39 (2008).
2 Id.
3 Sayah v. Metropolitan Prop. & Cas. Ins. Co., 273 Neb. 744, 733 N.W.2d
192 (2007).
4 Id.
5 Id.
RICkeRL v. FARMeRS INS. exCH. 	449
Cite as 277 Neb. 446

meaning of the terms which the parties have used.6 When the
terms of a contract are clear, a court may not resort to rules of
construction, and the terms are to be accorded their plain and
ordinary meaning as the ordinary or reasonable person would
understand them.7 It should be read to avoid ambiguities, if
possible, and the language should not be tortured to create
them.8 An ambiguity exists only when the policy can be inter-
preted to have two or more reasonable meanings.9
Here, the loss payable provision provides that
any payment for loss or damage to the vehicle described
in this policy shall be made on the following basis:
(1) At our option, loss or damage shall be paid as inter-
est may appear to the policyholder and the lienholder
shown in the Declarations, or by repair of the dam-
aged vehicle.
Rickerl argues that the phrase “at our option” only means that
Farmers can choose to pay a lienholder or the insured. Rickerl
suggests that the loss payable provision actually means that
“‘at our option, we [the insurance company] can pay a lien-
holder in addition to the policyholder if such lienholder has a
right to the money.’”10 Rickerl claims that this interpretation
of the loss payable provision is consistent with the purpose of
such provisions, to protect the rights of a secured creditor.
We read the loss payable provision, however, to unambig-
uously grant Farmers the option to pay the loss or damages,
or to repair the vehicle. Here, the terms of the loss payable
provision are clear, and therefore, we will accord them their
plain and ordinary meaning. The phrase “at our option” fol-
lowed by two distinct prepositional phrases joined together by
the conjunctive word “or” unambiguously establishes an option
to pay replacement value or repair the vehicle. under the terms
6 Fokken v. Steichen, 274 Neb. 743, 744 N.W.2d 34 (2008).
7 Thrower v. Anson, 276 Neb. 102, 752 N.W.2d 555 (2008); Peterson v. Ohio
Casualty Group, 272 Neb. 700, 724 N.W.2d 765 (2006).
8 Farm Bureau Ins. Co. v. Bierschenk, 250 Neb. 146, 548 N.W.2d 322
(1996).
9 Fokken, supra note 6.
10 Brief for appellant at 13.
450 	277 NeBRASkA RePoRTS

of the loss payable provision, any payment Farmers makes for
the damaged Civic “shall be paid” to Rickerl and Honda as
their interests appear on the declarations page. As an alterna-
tive, the loss payable provision also allows Farmers the option
to “repair . . . the damaged vehicle.” In other words, the phrase
“at our option” refers to the two options provided in the sen-
tence: either Farmers may pay the policyholder and lienholder,
as their interests appear on the declarations page, “or” Farmers
may repair the damaged vehicle. The loss payable provision is
not ambiguous.
In her second assignment of error, Rickerl argues that Farmers
breached the contract when it unilaterally determined Rickerl’s
damages and improperly paid Rickerl and Honda through two
separate checks. Rickerl asserts that the loss payable provision
required that both the policyholder’s and lienholder’s names
be on one check. But the provision only provides that “loss or
damage shall be paid as interest may appear to the policyholder
and the lienholder shown in the Declarations.” The terms of
the policy do not require the interests of the policyholder and
lienholder to be paid via one check; rather, the policy requires
only that both be compensated for their respective interests.
Accordingly, Farmers did not breach the contract by paying
Honda and Rickerl with two separate checks.
Finally, Rickerl argues that Farmers breached the insurance
agreement by unilaterally determining Rickerl’s interest in the
Civic was $321.32. Rickerl, however, failed to provide any
evidence that she had a monetary interest in the vehicle. In her
reply brief, Rickerl points to two affidavits which she claims
“described the money she had put into the vehicle since leasing
it.”11 The affidavits indicated that Rickerl had made a down-
payment of $1,805.92 and 20 monthly payments of $251.17.
This evidence, however, does not prove that Rickerl had a
monetary interest in the Civic. on the contrary, the record, spe-
cifically the lease agreement, indicates that Honda, not Rickerl,
had a monetary interest in the Civic. The lease agreement
expressly and repeatedly provided that Rickerl’s payments
11 Reply brief for appellant at 5.
RICkeRL v. FARMeRS INS. exCH. 	451
Cite as 277 Neb. 446

were lease payments that did not confer a proprietary interest
in the vehicle.
[7] Furthermore, the issues in a given case will be limited
to those which are pled.12 Rickerl’s operative complaint alleged
that the policy had been breached by Farmers’ refusal to repair
the vehicle, not that the insurance policy had been breached
by a failure to pay sufficient damages. even had Rickerl pro-
vided evidence that she had a monetary interest in the Civic,
that would not have been an issue of material fact, because
Rickerl’s complaint did not place that fact at issue. Because
the pleadings do not place damages in dispute, Rickerl’s final
assignment of error is without merit.
CoNCLuSIoN
For the reasons discussed above, we conclude that the dis-
trict court properly granted Farmers’ motion for summary judg-
ment. Accordingly, we affirm.
affirmed.
gerrard, J., participating on briefs.
12 Spanish Oaks v. Hy-Vee, 265 Neb. 133, 655 N.W.2d 390 (2003).
katherine leach , appellant, v. John dahm , Warden,
nebraska correctional center for
Women, et al ., appellees.
763 N.W.2d 83
Filed March 27, 2009. 	No. S-08-461.
1. Motions to Dismiss: Jurisdiction: Rules of the Supreme Court: Pleadings:
Appeal and Error. Aside from factual findings, which are reviewed for clear
error, the granting of a motion to dismiss for lack of subject matter jurisdiction
under Neb. Ct. R. Pldg. § 6-1112(b)(1) is subject to de novo review.
2. Criminal Law: States: Prisoners. Nebraska’s Interstate Corrections Compact,
Neb. Rev. Stat. § 29-3401 (Reissue 2008), provides for the transfer of prisoners
from one state to another for rehabilitation and correctional purposes, and estab-
lishes the rights and duties of the states sending and receiving prisoners.
3. ____: ____: ____. under Nebraska’s Interstate Corrections Compact, Neb. Rev.
Stat. § 29-3401 (Reissue 2008), Nebraska, as the receiving state, acts solely as
agent for a sending state.
452 	277 NeBRASkA RePoRTS