Mortgage Express v. Tudor Ins. Co.

Mortgage express , I nc., and Jeff rothlIsberger ,
appellants , v. tudor I nsurance coMpany
et al ., appellees.
771 N.W.2d 137
Filed August 28, 2009. 	No. S-08-728.
1. Summary Judgment. Summary judgment is proper if the pleadings and admis-
sible evidence offered at the hearing 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.
2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, the
court views the evidence in the light most favorable to the party against whom the
judgment was granted and gives that party the benefit of all reasonable inferences
deducible from the evidence.
3. Declaratory Judgments: Appeal and Error. When a declaratory judgment
action presents a question of law, an appellate court has an obligation to reach its
conclusion independently of the conclusion reached by the trial court with regard
to that question.
4. Insurance: Contracts: Appeal and Error. 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.
5. Insurance: Contracts. Coverage under an insurance policy or contract is gener-
ally understood to consist of two separate and distinct obligations: the duty to
defend any suit filed against the insured party and the duty to pay, on behalf of
the insured, sums for which the insured shall become legally obligated to pay
because of injury caused to a third party by acts of the insured.
6. Insurance: Contracts: Liability. An insurer’s duty to defend is broader than its
duty to indemnify. Moreover, an insurer’s duty to defend is usually a contractual
duty, rather than one imposed by operation of law.
7. Insurance: Contracts. The nature of the duty to defend is defined by the insur-
ance policy as a contract.
8. Insurance: Pleadings. An insurer’s duty to defend an action against the insured
must, in the first instance, be measured by the allegations of the petition against
the insured.
9. Insurance: Liability. In determining its duty to defend, an insurer must not only
look to the petition or complaint filed against its insured, but must also investi-
gate and ascertain the relevant facts from all available sources.
10. ____: ____. An insurer is obligated to defend if (1) the allegations of the com-
plaint, if true, would obligate the insurer to indemnify, or (2) a reasonable inves-
tigation of the actual facts by the insurer would or does disclose facts that would
obligate the insurer to indemnify. An insurer, therefore, bears a duty to defend its
insured whenever it ascertains facts which give rise to the potential of liability
under the policy.
MorTgAge expreSS v. Tudor INS. Co. 	449
Cite as 278 Neb. 449
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:50 AM CST

11. Insurance: Contracts: Liability: Pleadings. If, according to the facts alleged in
a pleading and ascertained by an insurer, the insurer has no potential liability to
its insured under the insurance agreement, then the insurer may properly refuse to
defend its insured. And although an insurer is obligated to defend all suits against
the insured, even if groundless, false, or fraudulent, the insurer is not bound to
defend a suit based on a claim outside the coverage of the policy.
12. Insurance: Contracts. An insurance policy is a contract between the insurance
company and the insured, and as such, the insurance company has the right to
limit its liability by including those limitations in the policy definitions. If those
definitions are clearly stated and unambiguous, the insurance company is entitled
to have those terms enforced.
13. Security Interests. A security interest is an interest in personal property or fix-
tures which secures payment or performance of an obligation.
14. Insurance: Agents: Contracts: Negligence: Proximate Cause: Liability:
Damages. An insurance agent who agrees to obtain insurance for another but
negligently fails to do so is liable for the damage proximately caused by such
negligence. The measure of damages is the amount that would have been due
under the policy if it had been obtained by the agent.
Appeal from the district Court for douglas County: gregory
M. schatz, Judge. Affirmed.
Larry e. Welch, Jr., and damien J. Wright, of Welch Law
Firm, p.C., for appellants.
Thomas A. grennan and Francie C. riedmann, of gross
& Welch, p.C., L.L.o., for appellee Cincinnati Insurance
Company.
gerald L. Friedrichsen and Carla Heathershaw risko, of
Fitzgerald, Schorr, Barmettler & Brennan, p.C., L.L.o., for
appellee Tudor Insurance Company.
patrick g. Vipond and John M. Walker, of Lamson, dugan &
Murray, L.L.p., for appellee peterson Brothers Insurance, Inc.
heavIcan, 	c.J., 	WrIght, 	connolly, 	gerrard, 	stephan,
MccorMack, and MIller-lerMan, JJ.
MccorMack, J.
I. NATure oF CASe
In this declaratory judgment action, Mortgage express,
Inc., and Jeff rothlisberger, its sole shareholder (collectively
Mortgage express), seek a declaration that Mortgage express’
450 	278 NeBrASkA reporTS

liability 	insurers, 	Tudor 	Insurance 	Company 	(Tudor) 	and
Cincinnati Insurance Company (Cincinnati) are obligated to
defend Mortgage express in a suit brought against it by a third
party, Village Campground (Village). Alternatively, Mortgage
express brought a claim against its insurance broker, peterson
Brothers Insurance, Inc. (peterson), for failure to obtain ade-
quate insurance in the event the insurance policies do not pro-
vide coverage. In december 2006, the court entered summary
judgment in favor of Tudor and Cincinnati, thereby dismissing
Mortgage express’ action, and Mortgage express appealed. on
February 23, 2007, the Nebraska Court of Appeals dismissed
that appeal, case No. A-07-009, for lack of jurisdiction, because
the court’s december 2006 order did not dispose of the case as
to peterson. on April 12, 2007, the court filed another order
amending its december 2006 order to include a brief statement
intending to certify the order as a final, appealable order pur-
suant to Neb. rev. Stat. § 25-1315 (reissue 2008). Mortgage
express appealed again on April 30, 2007, and the Court of
Appeals dismissed that appeal, case No. A-07-494, on February
7, 2008, pursuant to Neb. Ct. r. App. p. § 2-107, because the
court’s order failed to properly certify the case for appeal. The
court filed another order dismissing peterson, properly certify-
ing the case as a final, appealable order, and Mortgage express
filed this appeal. We affirm.
II. BACkgrouNd
The underlying action in this case involves a dispute between
Mortgage express and Village regarding certain financial trans-
actions which affect the remaining balance of a promissory
note held by Mortgage express and are secured by real prop-
erty owned by Village. on August 20, 1998, Mortgage express
purchased and was assigned a promissory note and its collat-
eralizing liens for the sum of $252,744.38. Several time-share
receivables and multiple mortgages secured the note, but only
two of the mortgages are relevant to this case.
one of the two relevant mortgages securing the note included
certain real estate located in Washington County, Nebraska (the
Nebraska property). The Nebraska property consists of a house
and 12 acres and a separate but contiguous parcel of 38 acres.
MorTgAge expreSS v. Tudor INS. Co. 	451
Cite as 278 Neb. 449

Shortly after Mortgage express purchased the note, Mortgage
express bid on and purchased the Nebraska property at a
trustee’s sale for $195,000, subject to the first mortgage and
property taxes. The record indicates that Mortgage express
purchased the Nebraska property at the trustee’s sale, but that
almost immediately after the sale, title to the Nebraska prop-
erty was transferred to rothlisberger.
The other mortgage securing the note included certain real
estate located in Spencer County, kentucky (the kentucky
property), which consists of a campground. The kentucky
property was foreclosed upon, and Village purchased the
kentucky property from the foreclosure sale. After acquiring
the kentucky property, Village discovered that the attorney
hired to handle the foreclosure proceedings and to conduct the
title search failed to find the lien held by Mortgage express.
As such, Mortgage express was not made part of the foreclo-
sure sale.
Following this discovery, on May 14, 2001, Village initiated
a quiet title action against Mortgage express in the Spencer
County, kentucky, circuit court (the original action). The com-
plaint was later amended, asserting additional causes of action.
In the original action, Village asked the court to quiet title in
its favor, free from all liens and encumbrances that Mortgage
express holds. on July 1, 2002, the kentucky court ruled in
favor of Mortgage express in the original action, concluding
that the mortgage secured by the note was not extinguished
in the foreclosure and that the mortgage remained a valid
lien against the kentucky property. Mortgage express did not
seek a defense from either of its insurers regarding the origi-
nal action.
Thereafter, a dispute arose between Village and Mortgage
express regarding the amount due to satisfy Mortgage express’
mortgage. 	Mortgage 	express 	initially 	maintained 	that 	the
outstanding and unsatisfied balance due on the note was
$340,153.36. Village attempted to settle the outstanding bal-
ance remaining on the note because it wished to sell the
kentucky property, but Mortgage express refused. As a result
of Mortgage express’ refusal, Village claims it could not sell
the kentucky property for its fair market value. during the
452 	278 NeBrASkA reporTS

ordinary course of business, Village learned that Mortgage
express bid on and won the Nebraska property but that the
bid amount had not been credited to the outstanding note.
rothlisberger explained that he did not credit the sale of the
Nebraska property to the note because he thought that until the
property was liquidated by reselling it to a third party, he did
not have to credit the note.
After Mortgage express learned that the sale of the Nebraska
property should have been credited to the note, Mortgage
express’ counsel sent a letter to Village’s counsel regarding the
mistake. The letter indicated that after crediting the $195,000 to
the note, the remaining balance was $101,565.52. Additionally,
the letter stated:
I received your message that you are going to file suit
against my client for sanctions. I will file our response
to your suit, as well as a motion for a judgment and
order of sale. Your threatened suit for slander of title is
without merit since my client’s lien still has a sizable bal-
ance due.
It appears that we will not be able to settle this mat-
ter, and we will need to proceed through the court in
Spencer County.
This letter was sent by both u.S. mail and facsimile, and
although it appears that the letter was faxed on March 4, 2003,
the letter is undated.
The dispute over the balance of the note led to Village’s
amending its complaint in June 2003 to seek damages from
Mortgage express. In its second amended complaint, Village
claimed fraudulent misrepresentation, slander of title, and abuse
of judicial process, and it asserted a kentucky statutory claim
for failure to release its lien. Specifically, Village alleged that
Mortgage express misrepresented the balance remaining due
on the promissory note by failing to credit Mortgage express’
bid on the Nebraska property to the balance of the promissory
note. Mortgage express maintains that this error was, at worst,
a mistake and that it did not constitute fraudulent misrepresen-
tation. Through motions for summary judgment, the kentucky
court determined that the only viable claim against Mortgage
express was for fraud.
MorTgAge expreSS v. Tudor INS. Co. 	453
Cite as 278 Neb. 449

Mortgage express sought a defense to the above-mentioned
claims brought by Village under its liability insurance policies
with Tudor and Cincinnati. Tudor and Cincinnati denied that the
policies required the insurance companies to defend Mortgage
express in the Village lawsuit. Mortgage express then brought
this declaratory judgment action in douglas County district
Court seeking a determination from the court that Tudor and
Cincinnati are required to defend Mortgage express against the
claims Village alleged in its second amended complaint. In the
event that the court determined that neither insurance policy
provided coverage, Mortgage express brought an alternative
claim against peterson alleging that peterson was liable to
Mortgage express for failing to procure proper insurance.
peterson, acting on behalf of Mortgage express, obtained
quotes for the insurance policies at issue. Mortgage express
requested insurance coverage for rendering professional ser-
vices in “processing and closing mortgage loans for all types
of residential housing, in-house loan underwriting.” peterson
maintains that Mortgage express never requested insurance
coverage for transactions in which rothlisberger had a personal
financial interest as a buyer or seller of real property.
1. tudor polIcy
on March 4, 2003, Mortgage express applied for errors
and omissions insurance coverage by and through its insur-
ance broker, peterson. Consequently, Tudor issued to Mortgage
express a renewal claims-made policy referred to as “Specialty
professional Liability policy” for the period of April 20,
2003, through April 20, 2004. The Tudor policy is a claims-
made policy. A claims-made policy is defined as “[a]n agree-
ment to indemnify against all claims made during a specified
period, regardless of when the incidents that gave rise to the
claims occurred.”1 The retroactive date of the policy is April
20, 1998.
The Tudor policy contains certain conditions precedent to
coverage. The first section of the Tudor policy provides, in
pertinent part:
1 Black’s Law dictionary 821 (8th ed. 2004).
454 	278 NeBrASkA reporTS

I. INSurINg AgrEEmENtS
A. COVErAgE: CLAImS mADE CLAuSE
The Company will pay on behalf of the Insured all
sums in excess of the deductible that the Insured shall
become legally obligated to pay as damages because of
claims first made against the Insured and reported to the
Company during the policy period. This policy applies to
actual or alleged negligent acts, errors or omissions aris-
ing solely out of professional services rendered for others
as designated in Item 3 of the declarations.
For this coverage to apply, all of the following condi-
tions must be satisfied:
1. the negligent act, error or omission arising from pro-
fessional services took place subsequent to the retroactive
date stated in Item 7. [sic] of the declarations;
2. the Insured had no knowledge prior to the effective
date of this policy of such actual or alleged negligent
act, error, omission or circumstance likely to give rise to
a claim;
3. claim is first made against the Insured and reported
to the Company during the policy period.
Additionally, the Tudor policy contains limitations and exclu-
sions that preclude coverage under certain circumstances. The
policy provides that coverage is not provided for any loss aris-
ing out of or involving any dishonest, fraudulent, criminal,
or malicious act or omission of the insured. Additionally, the
policy contains “endorsement #5,” which excludes coverage
for any claim based upon or arising out of “any transaction in
which the Insured has a financial interest as a buyer or seller
or [sic] of real property.” The Tudor policy also provides that
coverage is not applicable:
in connection with or arising out of or in any way
involving:
. . . .
F. Any act, error or omission occurring prior to the
effective date of this policy if there is other insurance
applicable or the Insured at the effective date of this pol-
icy knew or could have reasonably foreseen that such act,
error or omission might be the basis for claim or suit.
MorTgAge expreSS v. Tudor INS. Co. 	455
Cite as 278 Neb. 449

Tudor denied coverage because a condition precedent to cov-
erage had not been fulfilled and based on certain exclusions
found in its policy.
2. cIncInnatI polIcy
Mortgage express also held a commercial general liability
coverage policy with Cincinnati. The Cincinnati policy became
effective on July 15, 2001, through July 15, 2004. pursuant
to 	“SECtION 	I,” 	“COVErAgE 	B. 	PErSONAL 	AND
ADVErtISINg INJury LIABILIty,” of the Cincinnati
policy, Cincinnati agreed to pay those sums that the insured
becomes legally obligated to pay as damages because of “‘per-
sonal injury’” or “‘advertising injury’” to which the insur-
ance applies.
under “Section V—Definitions,” the policy states:
“personal injury” means injury, other than “bodily injury”,
arising out of one or more of the following offenses:
. . . .
c. The wrongful eviction from, wrongful entry into,
or invasion of the right of private occupancy of a room,
dwelling or premises that a person occupies by or on
behalf of its owner, landlord or lessor;
d. oral or written publication of material that slanders
or libels a person or organization or disparages a person’s
or organization’s goods, products or services; or
e. oral or written publication of material that violates a
person’s right of privacy.
Mortgage express argues that Cincinnati’s policy definition of
personal injury, specifically subsection d., includes litigation
that amounts to slander of an organization’s goods, products,
or services. And because the claim against Mortgage express
is premised on slander of title, the claim is covered under the
Cincinnati policy. Alternatively, Mortgage express argues that
the Cincinnati policy’s definition of personal injury includes
damages stemming from the invasion of the right to private
occupancy of premises, and Mortgage express argues that its
lien is exactly that—a claim of interest in the campground
that through foreclosure would dispossess the owner from
the property.
456 	278 NeBrASkA reporTS

3. procedural hIstory of thIs declaratory
JudgMent actIon
Tudor and Cincinnati filed motions for summary judgment,
and Mortgage express filed a cross-motion for summary judg-
ment. The court held a hearing regarding the summary judgment
motions, and on december 14, 2006, the court entered an order
granting summary judgment in favor of Tudor and Cincinnati,
concluding that the insurance policies did not provide an obli-
gation to defend the claims presented in the Village lawsuit and
dismissed Tudor and Cincinnati.
The district court entered summary judgment in favor of
Tudor based on the following four conclusions: First, the court
concluded that Mortgage express was not providing a profes-
sional service for others because rothlisberger actually acted
in his own behalf in the transactions in question. Second, the
court concluded that “endorsement #5,” which provides that
the Tudor policy does not apply to any claim based upon or
arising out of “any transaction in which the Insured has a
financial interest as a buyer or seller or [sic] of real property,”
precludes coverage under the facts of this case. Third, the court
concluded that the Tudor policy does not provide coverage
because the only viable claim remaining in the Village suit is
based on fraudulent conduct. Finally, the court concluded that
Mortgage express had knowledge of the disagreement regard-
ing the amount due under the promissory note prior to the
effective date of the Tudor policy, which removes the claim
from coverage.
As to Cincinnati, the district court concluded that under the
terms of the Cincinnati policy, there was no duty to defend.
In so concluding, the court determined that Village’s claims
against Mortgage express, including slander of title, do not fit
within the policy definitions. Additionally, the court reasoned
that coverage was not provided because Village’s claim against
Mortgage express seeks damages based on fraud, which the
Cincinnati policy specifically excludes from coverage.
Subsequent 	to 	the 	district 	court’s 	order 	granting 	sum-
mary judgment in favor of Tudor and Cincinnati and against
Mortgage express, the remaining defendant, peterson, filed
a motion for summary judgment. on June 4, 2008, the court
MorTgAge expreSS v. Tudor INS. Co. 	457
Cite as 278 Neb. 449

entered summary judgment in favor of peterson and against
Mortgage express. Mortgage express appeals.
III. ASSIgNMeNTS oF error
Mortgage express alleges, restated, that the district court
erred in granting summary judgment in favor of Tudor, con-
cluding that the Tudor policy did not provide an obligation
for Tudor to defend Mortgage express in the Village lawsuit
because it found that (1) Mortgage express was not rendering
professional services for others, (2) Mortgage express had a
financial interest as the buyer and seller of the Nebraska prop-
erty, (3) Mortgage express had knowledge of the claim prior
to the effective date of the Tudor policy, and (4) the Tudor
policy excludes coverage for dishonest, fraudulent, or mali-
cious acts.
Mortgage express also alleges, restated, that the district court
erred in granting summary judgment in favor of Cincinnati,
concluding that the Cincinnati policy did not provide an obli-
gation to defend it in the Village lawsuit because the suit did
not fall within the policy definitions of bodily injury, property
damage, personal injury, or advertising injury and because the
policy excluded claims arising out of statements made by the
insured that were knowingly false when made.
Finally, Mortgage express argues that in the event this court
concludes that the Tudor policy excludes coverage because the
transaction at issue did not fall within the scope of the policy
or, in other words, that the transaction did not constitute pro-
cessing and closing mortgage loans for all types of residential
housing and in-house loan underwriting, then the district court
erred in granting summary judgment in favor of peterson by
concluding that there is no genuine issue of material fact.
IV. STANdArd oF reVIeW
[1,2] Summary judgment is proper if the pleadings and
admissible evidence offered at the hearing 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.2 In
2 Amanda C. v. Case, 275 Neb. 757, 749 N.W.2d 429 (2008).
458 	278 NeBrASkA reporTS

reviewing a summary judgment, the court views the evidence
in the light most favorable to the party against whom the judg-
ment was granted and gives that party the benefit of all reason-
able inferences deducible from the evidence.3
[3] When a declaratory judgment action presents a question
of law, an appellate court has an obligation to reach its conclu-
sion independently of the conclusion reached by the trial court
with regard to that question.4
[4] The interpretation of an insurance policy is a question of
law, in connection with which an appellate court has an obliga-
tion to reach its own conclusions independently of the determi-
nation made by the lower court.5
V. ANALYSIS
1. general prIncIples regardIng duty to
defend and I ndeMnIfy
[5-7] Coverage under an insurance policy or contract is gen-
erally understood to consist of two separate and distinct obliga-
tions: the duty to defend any suit filed against the insured party
and the duty to pay, on behalf of the insured, sums for which
the insured shall become legally obligated to pay because
of injury caused to a third party by acts of the insured.6 An
insurer’s duty to defend is broader than its duty to indemnify.7
Moreover, an insurer’s duty to defend is usually a contractual
duty, rather than one imposed by operation of law.8 The nature
3 Jardine v. McVey, 276 Neb. 1023, 759 N.W.2d 690 (2009).
4 Neff Towing Serv. v. United States Fire Ins. Co., 264 Neb. 846, 652 N.W.2d
604 (2002).
5 Hillabrand v. American Fam. Mut. Ins. Co., 271 Neb. 585, 713 N.W.2d
494 (2006); Neff Towing Serv. v. United States Fire Ins. Co., supra note
4.
6 Peterson v. Ohio Casualty Group, 272 Neb. 700, 724 N.W.2d 765 (2006);
Chief Indus. v. Great Northern Ins. Co., 268 Neb. 450, 683 N.W.2d 374
(2004).
7 Peterson v. Ohio Casualty Group, supra note 6; John Markel Ford v. Auto-
Owners Ins. Co., 249 Neb. 286, 543 N.W.2d 173 (1996).
8 Peterson v. Ohio Casualty Group, supra note 6; Chief Indus. v. Great
Northern Ins. Co., supra note 6.
MorTgAge expreSS v. Tudor INS. Co. 	459
Cite as 278 Neb. 449

of the duty to defend is defined by the insurance policy as
a contract.9
[8-10] An insurer’s duty to defend an action against the
insured must, in the first instance, be measured by the allega-
tions of the petition against the insured.10 In determining its
duty to defend, an insurer must not only look to the petition
or complaint filed against its insured, but must also investigate
and ascertain the relevant facts from all available sources.11 An
insurer is obligated to defend if (1) the allegations of the com-
plaint, if true, would obligate the insurer to indemnify, or (2) a
reasonable investigation of the actual facts by the insurer would
or does disclose facts that would obligate the insurer to indem-
nify.12 An insurer, therefore, bears a duty to defend its insured
whenever it ascertains facts which give rise to the potential of
liability under the policy.13
[11] But if, according to the facts alleged in a pleading and
ascertained by an insurer, the insurer has no potential liability
to its insured under the insurance agreement, then the insurer
may properly refuse to defend its insured.14 And although an
insurer is obligated to defend all suits against the insured, even
if groundless, false, or fraudulent, the insurer is not bound
to defend a suit based on a claim outside the coverage of
the policy.15
(a) Tudor’s duty to defend and Indemnify
We first address Mortgage express’ argument that the dis-
trict court erred in finding that the Tudor policy does not
9 Id.
10 Peterson v. Ohio Casualty Group, supra note 6; Millard Warehouse, Inc. v.
Hartford Fire Ins. Co., 204 Neb. 518, 283 N.W.2d 56 (1979).
11 See Neff Towing Serv. v. United States Fire Ins. Co., supra note 4.
12 Peterson v. Ohio Casualty Group, supra note 6; Mapes Indus. v. United
States F. & G. Co., 252 Neb. 154, 560 N.W.2d 814 (1997).
13 See Allstate Ins. Co. v. Novak, 210 Neb. 184, 313 N.W.2d 636 (1981).
14 See Allied Mut. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 243 Neb. 779,
502 N.W.2d 484 (1993).
15 Peterson v. Ohio Casualty Group, supra note 6; Neff Towing Serv. v.
United States Fire Ins. Co., supra note 4.
460 	278 NeBrASkA reporTS

provide coverage because Mortgage express had knowledge of
the negligent act giving rise to Village’s claim, as our resolu-
tion of this issue is dispositive of this appeal concerning Tudor.
Tudor alleges, among other things, that its claims-made policy
does not provide coverage because Mortgage express had
knowledge of circumstances likely to give rise to a claim prior
to the effective date of the Tudor policy.
[12] An insurance policy is a contract between the insurance
company and the insured.16 As such, the insurance company
has the right to limit its liability by including those limitations
in the policy definitions.17 If those definitions are clearly stated
and unambiguous, the insurance company is entitled to have
those terms enforced.18
Mortgage express submitted its application for renewal of
errors and omissions liability insurance on March 4, 2003.
The Tudor policy declarations page shows that the renewal
policy period became effective on April 20, 2003, through
April 20, 2004. A condition precedent to coverage under the
Tudor policy is that the insured have no knowledge prior to
the effective date of the policy of the actual or alleged negli-
gent act, error, omission, or circumstance likely to give rise to
a claim. In this case, Mortgage express clearly had knowledge
of its alleged negligent act giving rise to Village’s claims prior
to the effective date of the Tudor policy. Mortgage express
became aware of the error, at the very latest, on March 4,
2003, as evidenced by the letter from Mortgage express’
counsel to Village’s counsel. Mortgage express argues that it
did not have reason to know of the claims and that the letter
was merely “sparring between attorneys.”19 We find this argu-
ment unpersuasive.
The letter clearly and definitely expressed the intentions of
Mortgage express to settle the dispute with Village in court.
Moreover, the letter specifically acknowledged receiving notice
16 Hillabrand v. American Fam. Mut. Ins. Co., supra note 5.
17 Id.
18 Id.
19 Brief for appellants at 31.
MorTgAge expreSS v. Tudor INS. Co. 	461
Cite as 278 Neb. 449

of Village’s intent to amend its complaint, including a request
for sanctions and asserting slander of title against Mortgage
express. There is no genuine issue as to the fact Mortgage
express was unaware, prior to the effective date of the Tudor
policy, of the circumstances leading up to the claims asserted
in Village’s amended complaint. Therefore, the Tudor policy
does not provide coverage for the defense sought by Mortgage
express. Accordingly, we conclude that the district court prop-
erly entered summary judgment in favor of Tudor.
We note Mortgage express’ argument that because it was
covered under the prior Tudor policy at the time it became
aware of the claims asserted in the amended complaint, Tudor
was not prejudiced by Mortgage express’ failure to give rea-
sonable notice. This argument is misplaced because our con-
clusion is that Mortgage express failed to meet a condition
precedent to coverage—that it had no knowledge prior to the
effective date of the renewal policy of the circumstances giving
rise to the amended complaint.
our conclusion that there is no coverage under the Tudor
policy because Mortgage express was aware of its negligent
act giving rise to Village’s claim prior to the effective date
of the Tudor policy is dispositive of this appeal regarding
claims against Tudor. Therefore, we need not address Mortgage
express’ remaining assignments of error regarding coverage
under the Tudor policy.20
(b) Cincinnati’s duty to defend and Indemnify
Mortgage express argues that Cincinnati was required to
provide a defense because slander of title fits within the
definition of personal injury in subsection d. of the policy.
Subsection d. of the Cincinnati policy defines personal injury
as an “injury, other than ‘bodily injury’, arising out of one or
more of the following offenses: . . . d. oral or written publica-
tion of material that slanders or libels a person or organization
or disparages a person’s or organization’s goods, products or
services . . . .”
20 See Cass Cty. Bank v. Dana Partnership, 275 Neb. 933, 750 N.W.2d 701
(2008).
462 	278 NeBrASkA reporTS

Whether slander of title fits within the definition of personal
injury is an issue of first impression for this court. However,
other courts have considered the issue and concluded that title
to real estate is not a good, product, or service.21
In Bank One v. Breakers Development, Inc.,22 condominium
owners sued an insured for slander of title arising out of
errors in the legal description of the condominium property,
and the insured sought coverage from its commercial general
liability insurer. The court construed policy language identical
to the policy language contained in Cincinnati’s policy and
concluded that slander of title was not one of the offenses
that gave rise to “personal injury” as defined in the commer-
cial liability policy.23 The court explained that a reasonable
person would not liken a title to real estate as a “good” or
“product” and that the terms “good” or “product” referred to
tangible property.24
In another case, Acme Const. Co., Inc. v. Continental Nat.
Indem. Co.,25 an excavator filed a declaratory judgment action
against its insurer seeking a determination from the court that
its insurance contract provided coverage over a lawsuit with
a property owner. The insurance policy in Acme Const. Co.,
Inc. defined advertising injury and personal injury as “‘[o]ral
or written publication of material that slanders or libels a per-
son or organization or disparages a person’s or organization’s
goods, products or services.’”26 The court concluded that a
slander of title claim did not fall within “‘personal injury’”
or “‘advertising injury’” as defined by the policy, thus the
insurer had no duty to defend. In so concluding, the court
reasoned that “title to real estate is not a person, organization,
21 See, Nationwide Mut. Ins. Co. v. Lake Caroline, Inc., 515 F.3d 414 (5th Cir.
2008); Bank One v. Breakers Development, Inc., 208 Wis. 2d 230, 559 N.W.2d
911 (Wis. App. 1997); Acme Const. Co., Inc. v. Continental Nat. Indem. Co., No.
81402, 2003 WL 194879 (ohio App. Jan. 30, 2003) (unpublished opinion).
22 Bank One v. Breakers Development, Inc., supra note 21.
23 Id.
24 Id.
25 Acme Const. Co., Inc. v. Continental Nat. Indem. Co., supra note 21.
26 Id. at *7.
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Cite as 278 Neb. 449

good, product, or service as those terms are commonly
understood,” thus, slander of title did not fall within the
policy coverage.27
We find the reasoning of the foregoing cases persuasive
and applicable to this case. We thus reject Mortgage express’
argument that Village’s slander of title claim falls within sub-
section d. of the definition of personal injury found in the
Cincinnati policy.
Mortgage express’ remaining argument is that Cincinnati
must defend it in the underlying action because its lien is an
invasion of the right to private occupancy of the premises as
defined in subsection c. of the definition of personal injury,
which states that “[p]ersonal injury” is “[t]he wrongful eviction
from, wrongful entry into, or invasion of the right of private
occupancy of a room, dwelling or premises that a person occu-
pies by or on behalf of its owner, landlord or lessor.” Mortgage
express provides little in the way of authority to support its
contention that slander of title falls within subsection c. of the
definition of personal injury.
Although this case is not directly on point, it provides guid-
ance. In Columbia Nat. Ins. v. Pacesetter Homes,28 the devel-
oper of a housing subdivision was sued by nearby property
owners because the construction caused “noise, dust, ground
vibration, diminution in the value of their property, loss of
trees, and increased traffic volume.”29 The developer’s com-
prehensive general liability insurer brought a declaratory judg-
ment action to determine whether it had a duty to defend the
developer.30 The developer’s insurance policy defined personal
injury as “‘wrongful entry or eviction or other invasion of the
right of private occupancy.’”31 The developer contended that
this clause insured it against liability from the nuisance and
27 Id.
28 Columbia Nat. Ins. v. Pacesetter Homes, 248 Neb. 1, 532 N.W.2d 1
(1995).
29 Id. at 14, 532 N.W.2d at 9.
30 Columbia Nat. Ins. v. Pacesetter Homes, supra note 28.
31 Id. at 14, 532 N.W.2d at 9.
464 	278 NeBrASkA reporTS

trespass suits brought by the nearby property owners.32 We
held that the personal injury provisions did not create a duty
to defend and stated that “the right of private occupancy is the
legal right to occupy premises, not the right to enjoy occupying
those premises.”33
[13] Mortgage express merely asserted that it held a valid,
unsatisfied security interest against the property. A security
interest is an interest in personal property or fixtures which
secures payment or performance of an obligation.34 Mortgage
express’ security interest on Village’s property does not pro-
vide Mortgage express with either legal title or the right to
possession.35 rather, Village, as the mortgagor, retains both
legal title and the right of possession.36 Therefore, because the
security interest held by Mortgage express does not interfere
with Village’s legal right to occupy the premises, Mortgage
express’ security interest does not fit within the subsection c.
definition of personal injury. As such, Cincinnati has no duty to
defend Mortgage express and was properly granted judgment
as a matter of law.
2. peterson’s lIabIlIty
[14] Mortgage express argues that if we find that the Tudor
policy excludes coverage because the transaction at issue did
not fall within the scope of the policy or, in other words, that
the transaction did not constitute processing and closing mort-
gage loans for all types of residential housing and in-house
loan underwriting, then peterson was negligent in procuring
coverage on behalf of Mortgage express. An insurance agent
who agrees to obtain insurance for another but negligently
fails to do so is liable for the damage proximately caused by
such negligence; the measure of damages is the amount that
32 Columbia Nat. Ins. v. Pacesetter Homes, supra note 28.
33 Id. at 15, 532 N.W.2d at 9 (emphasis in original).
34 See Neb. u.C.C. § 1-201(37) (reissue 2001).
35 See 24th & Dodge Ltd. Part. v. Acceptance Ins. Co., 269 Neb. 31, 690
N.W.2d 769 (2005).
36 See id.
MorTgAge expreSS v. Tudor INS. Co. 	465
Cite as 278 Neb. 449

would have been due under the policy if it had been obtained
by the agent.37
In the present case, coverage is excluded under the Tudor
policy based on Mortgage express’ failure to satisfy the condi-
tions precedent to coverage, specifically that it must have no
knowledge of the negligent act giving rise to a claim prior to
the effective date of the policy. As such, we need not deter-
mine whether the transaction constituted “professional ser-
vices” because even if it does, coverage would still be denied.
Therefore, peterson is not liable to Mortgage express based
upon claims that it failed to obtain adequate insurance. The
district court properly entered summary judgment in favor of
peterson based on Mortgage express’ claim that peterson failed
to procure proper insurance.
We note that Mortgage express did not assign as error the
district court’s grant of summary judgment in favor of peterson
based on its failure to procure insurance under the Cincinnati
policy. As such, we do not need to address this issue.38
VI. CoNCLuSIoN
In sum, we conclude that the record discloses no genuine
issues of material facts and that Tudor, Cincinnati, and peterson
were entitled to judgment as a matter of law.
affIrMed.
37 Broad v. Randy Bauer Ins. Agency, 275 Neb. 788, 749 N.W.2d 478
(2008).
38 See Suburban Air Freight v. Aust, 262 Neb. 908, 636 N.W.2d 629 (2001).
466 	278 NeBrASkA reporTS