Cleaver-Brooks, Inc. v. Twin City Fire Ins. Co.
291 Neb. 278
| Neb. | 2015Background
- James Risor worked at a single boiler plant (commonly called "Nebraska Boiler") from 1973–2004 and developed permanent hearing loss; he filed a workers’ compensation claim in 2004.
- Ownership of the plant changed over time: National Dynamics owned it when the injury occurred (1993); Aqua-Chem/Cleaver-Brooks acquired the plant in 1998.
- Twin City insured National Dynamics for workers’ compensation for the period 1992–1998 (covering the 1993 injury); American (Fireman’s Fund) insured Cleaver-Brooks for later periods but not for 1993.
- The compensation court (single judge) found the injury date was October 19, 1993 and awarded benefits beginning at Risor’s retirement; the review panel and this court later held payments should begin in 1993.
- American’s counsel mistakenly told the compensation court that American had insured the plant in 1993; Twin City received notice only after the award and attempted intervention postaward but was denied.
- Cleaver-Brooks filed a declaratory-judgment action to determine which insurer was liable; the district court held Twin City (the insurer at the time of injury) solely liable and dismissed Twin City’s counterclaims and equitable defenses. Twin City appealed; the Supreme Court of Nebraska affirmed.
Issues
| Issue | Plaintiff's Argument (Cleaver-Brooks) | Defendant's Argument (Twin City) | Held |
|---|---|---|---|
| Which insurer is liable for Risor’s award? | The award should be borne by the insurer covering the employer at the time of injury; Risor sued the employer (Nebraska Boiler), and liability follows the time-of-injury insurer. | Risor sued the employer as owned by Cleaver-Brooks and alleged injuries occurring while Cleaver-Brooks owned the plant, so Twin City should not be liable. | Twin City insured the plant in 1993; Twin City is liable for the award. |
| Judicial estoppel — can Cleaver-Brooks/American assert Twin City’s liability after earlier statements? | The earlier misstatement was a mistake by counsel; no bad faith and correction occurred once discovered, so judicial estoppel should not apply. | American’s prior statement that it insured the plant in 1993 is an inconsistent judicial position that should estop Cleaver-Brooks/American from blaming Twin City. | Judicial estoppel not applied: must show bad faith; mistake/ inadvertence here, so estoppel rejected. |
| Laches — does delay in notifying Twin City bar recovery? | Notice occurred promptly after the compensation court fixed the 1993 date; delay was excusable and Twin City was not prejudiced (and had opportunity to participate on appeal). | Cleaver-Brooks/American unreasonably delayed notifying Twin City, prejudicing Twin City. | Laches rejected: no inexcusable neglect and no demonstrable prejudice; Twin City had opportunity to participate but did not. |
| Negligence/duty to notify insurers | No duty existed as a matter of law for Cleaver-Brooks/American to notify a prior insurer about a claim when the complaint alleged later injury dates; absent duty, negligence claim fails. | Cleaver-Brooks and American breached a duty to notify Twin City, causing damages. | Rejected: no legal duty to notify another insurer under these facts; negligence claims dismissed. |
Key Cases Cited
- Risor v. Nebraska Boiler, 274 Neb. 906 (affirming that Twin City lacked postaward intervention right but shared defense interests) (Neb. 2008)
- Risor v. Nebraska Boiler, 277 Neb. 679 (affirming review panel’s determination that payments should commence from injury date) (Neb. 2009)
- DMK Biodiesel v. McCoy, 290 Neb. 287 (summary judgment standards) (Neb. 2015)
- TFF, Inc. v. SID No. 59, 280 Neb. 767 (standards for judicial-estoppel review) (Neb. 2010)
- Jackson v. Morris Communications Corp., 265 Neb. 423 (liberal construction of Workers’ Compensation Act) (Neb. 2003)
- Estate of Teague v. Crossroads Co-op Assn., 286 Neb. 1 (purposes of Workers’ Compensation Act: speed and simplicity) (Neb. 2013)