Steffensmeier v. Le Mars Mut. Ins. Co.

maRy a. steffensmeieR and pat steffensmeieR, wife
and husband , appellants , v . le maRs mutual
insuRance company , appellee .
752 N.W.2d 155
Filed July 11, 2008. 	No. S-07-429.
1. Summary Judgment. Summary judgment is proper when the pleadings and evi-
dence 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: Appeal and Error. The meaning 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 determination made by the
lower court.
4. Insurance: Contracts: Intent: Appeal and Error. In appellate review of an insur-
ance policy, the court construes the policy as any other contract to give effect to the
parties’ intentions at the time the writing was made. Where the terms of a contract
are clear, they are to be accorded their plain and ordinary meaning.
5. Insurance: Claims: Notice. Failure to give timely notice is not a defense to an
insurance claim unless there is evidence of collusion or it is shown that the insurer
has been prejudiced in its handling of the claim.
6. Insurance: Notice: Proof. Prejudice from an unreasonable and unexcused delay in
giving notice of a claim is established by examining whether the insurer received
notice in time to meaningfully protect its interests.
Appeal from the District Court for madison County: patRick
G. R oGeRs, Judge. Affirmed.
James 	D. 	Gotschall, 	of 	Strope 	& 	Gotschall, 	P.C., 	for
appellants.
Timothy 	A. 	Clausen, 	of 	klass 	Law 	Firm, 	L.L.P., 	for
appellee.
heavican , c.J., wRiGht , connolly , G eRRaRd , stephan , and
milleR-leRman , JJ.
milleR-leRman , J.
NATURE OF CASE
This matter has its origin in an automobile accident in
Norfolk, Nebraska, that occurred on February 16, 2001. In this
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www.nebraska.gov/apps-courts-epub/
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case, mary A. Steffensmeier and Pat Steffensmeier filed suit in
the district court for madison County to collect a claim pursu-
ant to the underinsured motorist provisions of an automobile
insurance policy issued to them by Le mars mutual Insurance
Company (Le mars). Le mars denied coverage on the basis that
the Steffensmeiers had failed to give Le mars the required notice
that the Steffensmeiers had filed an earlier suit against the other
motorist. The earlier suit resulted in a judgment against the other
motorist which exceeded the limits of the tort-feasor’s policy,
thereby implicating the underinsured provisions of the policy
issued by Le mars to the Steffensmeiers. In the present case, the
district court granted Le mars’ motion for summary judgment
and dismissed the Steffensmeiers’ complaint. The Steffensmeiers
appeal and claim that there were genuine issues of material fact
regarding whether they gave reasonable notice of their earlier
lawsuit and whether Le mars was prejudiced by any failure on
the part of the Steffensmeiers to give the required notice. We
conclude that the pleadings and evidence disclose no genuine
issue of material fact and that Le mars was entitled to judgment
as a matter of law. We affirm.
STATEmENT OF FACTS
mary Steffensmeier was involved in an automobile accident
in which her vehicle was struck by a vehicle driven by Dustin
Graham on February 16, 2001. Graham had an automobile
insurance policy with Allstate Insurance Company (Allstate) that
had a liability limit of $50,000 per person. The Steffensmeiers
had an automobile insurance policy with Le mars that included
underinsured motorist coverage of $100,000 per person. The
Steffensmeiers notified Le mars of the accident. After contact-
ing an Allstate representative and being advised that Graham’s
policy limits were adequate to cover the Steffensmeiers’ claim, a
Le mars claims representative determined that the Steffensmeiers
would not have a claim for underinsured motorist coverage.
The Steffensmeiers filed a suit against Graham on September
9, 2004. The Steffensmeiers did not give Le mars notice that
they had filed suit against Graham. The Steffensmeiers’ case
against Graham went to trial. On February 21, 2006, the court
entered judgment based on a jury verdict in favor of mary
STEFFENSmEIER v. LE mARS mUT. INS. CO. 	87
Cite as 276 Neb. 86

Steffensmeier in the amount of $175,000. Allstate subsequently
paid the $50,000 limit of Graham’s policy plus interest and
court costs.
Because the $50,000 payment from Allstate fell short of the
$175,000 judgment, on march 8, 2006, the Steffensmeiers made
demand on Le mars for the $100,000 limit of the underinsured
motorist coverage in the Le mars policy. On march 30, Le mars
denied the claim on the basis that contrary to the policy, the
Steffensmeiers had failed to give Le mars notice that they had
filed the earlier suit against Graham. Le mars relied on provi-
sions of the policy that required the insured to give reasonable
notice of the pendency of a suit and to promptly send Le mars
copies of legal papers if suit was brought.
The Steffensmeiers filed the present action against Le mars
seeking a judgment of $100,000 plus interest and costs. The
Steffensmeiers admitted that they gave no written notice to
Le mars until after the verdict was rendered and judgment
was entered, but they asserted that such failure “was in no way
prejudicial” to Le mars and was therefore not a valid reason to
deny coverage. Le mars answered and alleged as an affirmative
defense that the Steffensmeiers had failed to provide reasonable
notice of the suit as required under the policy and that Le mars
did not have a reasonable opportunity to protect its interests in
the action against Graham. In their reply to Le mars’ answer, the
Steffensmeiers asserted that they did not have a duty to notify
Le mars at the time they filed the suit against Graham because
they did not know this earlier suit would result in a judgment in
excess of Graham’s $50,000 coverage limits until after the jury
returned its verdict and that they promptly gave notice to Le mars
after the judgment was entered. In this regard, the evidence
showed that the Steffensmeiers had made a settlement demand
of $80,000 from Allstate prior to trial and that during trial, they
asked the jury to award more than $50,000 in damages.
The district court sustained Le mars’ motion for summary
judgment. The court noted that there was no dispute that the
Steffensmeiers failed to provide notice that they had filed suit
against Graham. The court cited Deprez v. Continental Western
Ins. Co., 255 Neb. 381, 584 N.W.2d 805 (1998), and Laravie v.
Battle Creek Mut. Ins. Co., No. A-04-909, 2005 WL 2007200
88 	276 NEBRASkA REPORTS

(Neb. App. Aug. 23, 2005) (not designated for permanent pub-
lication), for the proposition that under policy language similar
to that in the present case, an insurance company is deemed to
have been prejudiced as a matter of law when a policy holder
fails to notify the insurance company that the policy holder
has filed a lawsuit. The court therefore concluded that Le mars
was entitled to judgment as a matter of law and dismissed the
Steffensmeiers’ action.
The Steffensmeiers appeal.
ASSIGNmENTS OF ERROR
The Steffensmeiers generally assert that the district court
erred in sustaining Le mars’ motion for summary judgment.
They specifically argue that there were genuine issues of mate-
rial fact as to whether their duty to provide notice to Le mars
was triggered before the verdict was returned in their suit against
Graham, whether Le mars was actually prejudiced by their fail-
ure to give notice, and whether Le mars had actual notice of the
Steffensmeiers’ claim against Graham.
STANDARDS 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. See Hofferber v. City of Hastings,
275 Neb. 503, 747 N.W.2d 389 (2008). 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 deduc-
ible from the evidence. Id.
[3] The meaning 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 determina-
tion made by the lower court. Alsobrook v. Jim Earp Chrysler-
Plymouth, 274 Neb. 374, 740 N.W.2d 785 (2007).
ANALYSIS
The Steffensmeiers generally assert that summary judgment
was not proper in this case because there were genuine issues
STEFFENSmEIER v. LE mARS mUT. INS. CO. 	89
Cite as 276 Neb. 86

of material fact and Le mars was not entitled to judgment as
a matter of law. There appears to be no dispute of fact that
the Steffensmeiers filed suit against Graham on September 9,
2004, that the Steffensmeiers’ case against Graham went to
trial, that the court in the Steffensmeiers’ case against Graham
entered judgment in mary Steffensmeier’s favor in the amount
of $175,000 on February 21, 2006, and that the Steffensmeiers
did not give Le mars notice of the suit against Graham until
march 8, when they made demand on Le mars for underinsured
motorist coverage. Instead, the Steffensmeiers argue that there
were genuine issues of material fact regarding (1) whether they
gave reasonable notice to Le mars that they had filed suit against
Graham and (2) whether Le mars was prejudiced by any failure
to give reasonable notice.
We must therefore review the pleadings and evidence regard-
ing reasonable notice and prejudice. Based on such review,
we conclude that the Steffensmeiers failed to give the notice
required under the policy, that Le mars was prejudiced by such
failure, that there were no genuine issues of material fact related
to such issues, that Le mars was entitled to judgment as a matter
of law, and that the district court did not err in granting summary
judgment in favor of Le mars.
The Steffensmeiers Failed to Give Notice of Their Suit Against
Graham as Required Under the Policy Issued by Le Mars.
The Steffensmeiers assert that there were genuine issues
of material fact regarding whether they gave Le mars rea-
sonable notice of their suit against Graham. In denying the
Steffensmeiers’ 	claim 	for 	underinsured 	motorist 	coverage,
Le mars relied on a provision of the policy that stated:
No judgment for damages arising out of a suit brought
against the owner or operator of an “uninsured motor
vehicle” or “underinsured motor vehicle” is binding on us
unless we:
1. Received reasonable notice of the pendency of the
suit resulting in the judgment; and
2. had a reasonable opportunity to protect our interests
in the suit.
90 	276 NEBRASkA REPORTS

Le mars further relied on a provision that stated that “[a] person
seeking Underinsured motorists Coverage must also promptly
. . . [s]end us copies of the legal papers if suit is brought.”
The Steffensmeiers argue that the policy required them to
give only “reasonable notice” of the lawsuit and that the notice
they gave was reasonable. They assert that they did not need to
give notice to Le mars until after they knew they had a claim for
underinsured motorist coverage and that they did not know they
had such claim until they knew the amount of their judgment
against Graham exceeded the limits of Graham’s insurance pol-
icy. They argue that they gave notice to Le mars promptly after
they learned the judgment of $175,000 exceeded the $50,000
limit of Graham’s policy.
[4] We look to the language of the policy to determine what
notice was required under the policy. In appellate review of an
insurance policy, the court construes the policy as any other
contract to give effect to the parties’ intentions at the time the
writing was made. Alsobrook v. Jim Earp Chrysler-Plymouth,
274 Neb. 374, 740 N.W.2d 785 (2007). Where the terms of a
contract are clear, they are to be accorded their plain and ordi-
nary meaning. Id. The policy required the Steffensmeiers to give
“reasonable notice of the pendency of the suit” and to promptly
send copies of legal papers if suit were brought.
The Steffensmeiers argue that there is an issue of fact as to
whether the notice they gave was “reasonable.” They claim that
reasonable persons would not have given notice of a claim for
underinsured motorist coverage until after they knew with cer-
tainty that they had such a claim. To the contrary, with respect
to the underinsured feature of the policy, the policy requires
reasonable notice not of a claim for underinsured motorist cov-
erage but of “notice of the pendency of the suit resulting in the
judgment.” The policy defines what notice is reasonable where it
provides that Le mars must be given “a reasonable opportunity
to protect [its] interests in the suit” and where it further provides
that the insured must “promptly” send Le mars “copies of the
legal papers if suit is brought.” The notice provisions of the
policy taken together therefore indicate that the required reason-
able notice is prompt notice of the pendency of the suit, if suit is
STEFFENSmEIER v. LE mARS mUT. INS. CO. 	91
Cite as 276 Neb. 86

brought, prior to judgment and notice that gives the insurer the
opportunity to protect its interests in the suit.
Because the policy required the Steffensmeiers to promptly
send legal papers if suit is brought prior to judgment rather
than notice that the Steffensmeiers had a matured underinsured
motorist claim, we reject the Steffensmeiers’ argument that they
did not need to give notice until after they knew that their judg-
ment against Graham exceeded the limits of Graham’s policy.
See, also, Matter of Preferred Mut. Ins. Co., 199 A.D.2d 719,
605 N.Y.S.2d 450 (1993) (rejecting argument that notice require-
ment was not triggered until insured became aware that other
driver’s liability coverage was to be exhausted).
Although the parties on appeal rely primarily on policy
language, for completeness we refer to the Uninsured and
Underinsured motorist Insurance Coverage Act, Neb. Rev.
Stat. §§ 44-6401 to 44-6414 (Reissue 2004), and observe
that the notice provisions at issue in this case appear to be
within the parameters of the act. In this respect, we note that
§ 44-6413(1)(a) provides in part that the “uninsured and under-
insured motorist coverages provided” in the act “shall not apply
to [damages] with respect to which the insured or his or her
representative makes, without the written consent of the insurer,
any settlement with or obtains any judgment against any person
who may be legally liable for any injuries.” Because the act
effectively allows an insurer to require its written consent before
the insured obtains any judgment against another motorist, it
appears that a policy which requires notice of the pendency of
a suit would be consistent with the act and that underinsured
coverage does not apply in the absence of the written consent
of the insurer.
In the present case, because Le mars did not learn of the
suit until after a judgment had been obtained, it is clear that
the notice given by the Steffensmeiers was not “prompt” notice
they had filed suit and that such notice did not give Le mars the
opportunity to protect its interests in the suit. The Steffensmeiers
did not give notice that was reasonable under the policy, and
we reject the Steffensmeiers’ argument that there was a genuine
issue of material fact regarding whether they gave reasonable
notice of the suit against Graham.
92 	276 NEBRASkA REPORTS

Le Mars Was Prejudiced by the Steffensmeiers’ Failure
to Give Reasonable Notice Because Le Mars Was
Denied the Opportunity to Protect Its Interests
in the Suit Against Graham.
[5] The Steffensmeiers further argue that even if they failed to
give the required notice, there remains a genuine issue of mate-
rial fact as to whether Le mars was prejudiced by such failure.
The policy provides that “[n]o judgment for damages arising out
of a suit brought against . . . an . . . ‘underinsured motor vehicle’
is binding on [Le mars] unless [Le mars h]ad a reasonable
opportunity to protect [its] interests in the suit.” With respect
to notice, we have held that “[f]ailure to give timely notice is
not a defense to an insurance claim unless there is evidence of
collusion or it is shown that the insurer has been prejudiced in
its handling of the claim.” Deprez v. Continental Western Ins.
Co., 255 Neb. 381, 386, 584 N.W.2d 805, 809 (1998). Given
the foregoing, Le mars would not be entitled to summary judg-
ment in the present case unless Le mars was prejudiced by
the Steffensmeiers’ failure to give the notice required under
the policy.
[6] In the context of a liability insurance claim, we have said
that prejudice from an unreasonable and unexcused delay in
giving notice of a claim “is established by examining whether
the insurer received notice in time to meaningfully protect its
interests.” Dutton-Lainson Co. v. Continental Ins. Co., 271 Neb.
810, 828, 716 N.W.2d 87, 102 (2006). In Deprez, supra, which
was an uninsured motorist case, we concluded that “the inability
of [the insurer] to intervene was prejudicial as a matter of law.”
255 Neb. at 387, 584 N.W.2d at 809.
We similarly conclude in the present case that Le mars was
prejudiced as a matter of law because it was not given notice
of the suit against Graham in time for it to intervene in the suit
and did not have a reasonable opportunity to protect its inter-
ests. We have held that an insurer providing uninsured motorist
coverage “may intervene in an action between its insured and
the uninsured tort-feasor in order to protect itself on the issues
of liability and damages arising under the uninsured motorist’s
provisions of its insurance policy.” Heisner v. Jones, 184 Neb.
602, 611, 169 N.W.2d 606, 611-12 (1969). See, also, Eich v.
STEFFENSmEIER v. LE mARS mUT. INS. CO. 	93
Cite as 276 Neb. 86

State Farm Mut. Automobile Ins. Co., 208 Neb. 714, 305 N.W.2d
621 (1981) (interest of insurer on damages issue may properly
be protected by insurer’s intervention in action against tort-
feasor), overruled on other grounds, Lane v. State Farm Mut.
Automobile Ins. Co., 209 Neb. 396, 308 N.W.2d 503 (1981), and
Kracl v. Aetna Cas. & Surety Co., 220 Neb. 869, 374 N.W.2d 40
(1985). The reasoning in Heisner applies equally to an underin-
sured circumstance.
We have recognized that intervention by an insurer in a suit
between its insured and the tort-feasor who is arguably insuffi-
ciently covered places the insurer in “an inconvenient position,”
Heisner, 184 Neb. at 611, 169 N.W.2d at 612. Nevertheless,
under the policy and our jurisprudence, Le mars, upon reason-
able notice, could have intervened in the action between the
Steffensmeiers and Graham in order to protect itself on the
issues of liability and damages relative to the underinsured
motorist provisions of the insurance policy Le mars issued to the
Steffensmeiers. however, because the Steffensmeiers failed to
give Le mars reasonable notice of the suit as required under the
policy, Le mars did not learn of the suit until after a judgment
had been entered which exceeded the tort-feasor’s policy limits.
Le mars therefore did not have the opportunity to intervene in
the Steffensmeiers’ case against Graham in order to protect its
interests and was prejudiced as a matter of law.
The Steffensmeiers argue that Le mars had actual notice
because the Steffensmeiers notified Le mars of the accident
shortly after it occurred. We reject this argument. The notice
required by the policy relative to Le mars’ underinsured obliga-
tions was notice of the suit, not notice of the accident, and it
has been held that notice of an accident does not give notice
that a suit has been or will be filed. See Beck v. Farmers Ins.
Co. of WA., 113 Wash. App. 217, 53 P.3d 74 (2002) (knowledge
of facts of accident did not give notice of suit and did not give
insurer information necessary to determine how it might protect
its interests in suit). In the present case, notice of the accident
did not serve as “notice of the pendency of the suit resulting in
the judgment” as required by the policy.
Because Le mars was denied the opportunity to intervene to
protect its interests in the suit against Graham, it was prejudiced
94 	276 NEBRASkA REPORTS

as a matter of law by the failure to give notice. There is no gen-
uine issue of material fact with regard to prejudice to Le mars
in this matter.
CONCLUSION
We conclude that the pleadings and evidence in this case
establish that the Steffensmeiers failed to give reasonable notice
of the suit against Graham as required by the policy and that
Le mars was prejudiced by such failure. There was no genuine
issue of material fact with respect to either matter. Le mars was
entitled to judgment as a matter of law. We therefore affirm the
district court’s order granting summary judgment in favor of
Le mars and dismissing the complaint.
affiRmed .
mccoRmack , J., participating on briefs.
elizabeth a. nothnaGel , appellee , v . beveRly neth , diRectoR,
state of nebRaska , depaRtment of motoR vehicles , and
depaRtment of motoR vehicles , appellants .
752 N.W.2d 149
Filed July 11, 2008. 	No. S-07-551.
1. Administrative Law: Judgments: Appeal and Error. A judgment or final order
rendered by a district court in a judicial review pursuant to the Administrative
Procedure Act may be reversed, vacated, or modified by an appellate court for
errors appearing on the record. When reviewing an order of a district court under
the Administrative Procedure Act for errors appearing on the record, the inquiry is
whether the decision conforms to the law, is supported by competent evidence, and
is neither arbitrary, capricious, nor unreasonable.
2. Judgments: Appeal and Error. Whether a decision conforms to law is by defini-
tion a question of law, in connection with which an appellate court reaches a con-
clusion independent of that reached by the lower court.
3. Administrative Law: Motor Vehicles: Licenses and Permits: Revocation: Police
Officers and Sheriffs. The arresting officer’s sworn report triggers the administra-
tive license revocation process by establishing a prima facie basis for revocation.
4. Administrative Law: Motor Vehicles: Licenses and Permits: Revocation: Police
Officers and Sheriffs: Blood, Breath, and Urine Tests. In an administrative
license revocation proceeding, the sworn report of the arresting officer must indi-
cate (1) that the person was arrested as described in Neb. Rev. Stat. § 60-6,197(2)
(Reissue 2004) and the reasons for the arrest, (2) that the person was requested
NOThNAGEL v. NETh 	95
Cite as 276 Neb. 95