958 N.W.2d 428
Neb. Ct. App.2021Background
- Insured Charlyn Imes was paid $1,000 by Auto-Owners under her policy’s medical payments coverage after a car accident.
- Imes’s counsel (Hauptman, O’Brien, Wolf & Lathrop) obtained a $48,200 settlement from the tort-feasor’s insurer after about 9 months of work.
- Auto-Owners asserted a $1,000 subrogation interest by letter but did not actively participate; the tort-feasor’s insurer issued the $1,000 to the law firm.
- The law firm claimed the common fund doctrine entitled it to a one-third contingency fee ($333.33) from the insurer’s $1,000 subrogation recovery; Auto-Owners refused and counterclaimed under Neb. Rev. Stat. § 44-3,128.01 for full reimbursement.
- The county court granted summary judgment to the law firm for $333.33; the district court affirmed after granting Auto-Owners a discretionary extension to file its statement of errors.
- Auto-Owners appealed, arguing § 44-3,128.01 preempts the common fund doctrine; the law firm cross-appealed the extension ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court abused its discretion in granting Auto-Owners an extension to file its statement of errors | Law firm: extension should be denied because Auto-Owners’ late filing resulted from its own negligence (Houser controls) | Auto-Owners: court has discretion to extend time; limited issues on appeal and no prejudice to law firm | No abuse of discretion — extension granted; appellate review not limited to plain error |
| Whether Neb. Rev. Stat. § 44-3,128.01 preempts or abolishes the common fund doctrine so insurer is entitled to full reimbursement without reduction for insured’s attorney fees | Law firm: statute is silent as to attorney fees and does not preempt equitable common fund rights; law firm’s services substantially benefited insurer | Auto-Owners: statute occupies the field of medical-payments subrogation and requires full reimbursement, which conflicts with and preempts the common fund doctrine | Statute does not preempt the common fund doctrine; law firm entitled to recover a customary one-third fee from the insurer’s $1,000 subrogation recovery; summary judgment for law firm affirmed |
Key Cases Cited
- Houser v. American Paving Asphalt, 299 Neb. 1 (discretion to extend filing deadlines; abuse-of-discretion standard)
- Schaefer Shapiro v. Ball, 305 Neb. 669 (appeals from county court reviewed for error appearing on the record)
- Simon v. City of Omaha, 267 Neb. 718 (application of common fund doctrine is a question of law)
- In re Estate of Stull, 8 Neb. App. 301 (common fund doctrine recognized in Nebraska)
- Walentine, O’Toole v. Midwest Neurosurgery, 285 Neb. 80 (common fund doctrine and equitable allowance of attorneys’ fees)
- Blue Cross and Blue Shield v. Dailey, 268 Neb. 733 (insurer subrogation limited where insured not made whole)
- Ploen v. Union Ins. Co., 253 Neb. 867 (constitutionality and enforceability of § 44-3,128.01)
- Hauptman, O’Brien v. Milwaukee Guardian, 7 Neb. App. 60 (common fund application to subrogation interests)
- In re Estate of Adelung, 306 Neb. 646 (statutory interpretation: do not consult legislative history when statute is unambiguous)