Applied Underwriters v. S.E.B. Servs. of New York
297 Neb. 246
| Neb. | 2017Background
- Applied Underwriters, Inc. (Applied) and Applied Risk Services, Inc. (ARS) (plaintiffs) are Nebraska entities; S.E.B. Services of New York, Inc. (S.E.B.) is a New York corporation providing security services.
- S.E.B. entered into a Reinsurance Participation Agreement (RPA) with AUCRAC (not a party here); ARS is identified in the RPA as AUCRAC’s “billing agent.”
- Plaintiffs sued S.E.B. in Nebraska state court: Count I alleged breach of a promissory note (Applied) for $8,144.27; Count II alleged ARS breached the RPA and sought ~$752,927.
- After suit was filed, the promissory note was paid in full (December 2015). S.E.B. moved to dismiss for lack of personal jurisdiction and on forum non conveniens grounds; the district court dismissed for lack of personal jurisdiction (alternatively inconvenient forum).
- On appeal, the Nebraska Supreme Court ordered supplemental briefing on mootness of count I (note paid) and whether Applied/ARS had standing to bring count II (neither is a signatory to the RPA).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mootness of Count I (promissory note) | Count I not moot because debt existed when suit was filed | Note was paid after filing, so claim is moot | Moot: note paid before adjudication; count I dismissed as moot |
| Standing of Applied to sue on RPA (count II) | Applied argues subject matter interest via affiliation | Applied is not a party or agent under the RPA | No standing: Applied not a party/agent; cannot sue for RPA breach |
| Standing of ARS to sue on RPA (count II) | ARS claims RPA designation as AUCRAC’s billing agent creates agency and standing | S.E.B. argues no contractual authorization or power of attorney to sue on AUCRAC’s behalf | No standing: RPA contains no express authorization or power of attorney permitting ARS to enforce the RPA; RPA limits enforcement to AUCRAC/S.E.B. |
| Proper basis for dismissal (jurisdictional vs. subject-matter) | Plaintiffs contest district court’s personal jurisdiction conclusion | S.E.B. relied on lack of personal jurisdiction and forum non conveniens | Affirmed dismissal on different grounds: count I moot and count II lacks subject-matter jurisdiction (standing) |
Key Cases Cited
- Blakely v. Lancaster County, 284 Neb. 659 (discusses mootness doctrine and when claims are subject to summary dismissal)
- Deutsche Bank Nat. Trust Co. v. Siegel, 279 Neb. 174 (agent standing where contract grants express authority and power of attorney to sue)
- Marten v. Staab, 249 Neb. 299 (general rule: nonparty to contract has no rights to enforce it)
- Field Club v. Zoning Bd. of Appeals of Omaha, 283 Neb. 847 (standing standards at pleading stage)
- Citizens Opposing Indus. Livestock v. Jefferson Cty., 274 Neb. 386 (defect of standing is a subject-matter jurisdictional defect)