Hauptman, O'Brien v. Auto-Owners Ins. Co., 310 Neb. 147

Auto-Owners paid $1,000 in medical payments to its insured, Charlyn Imes, after a car accident; Imes retained Hauptman, O’Brien, Wolf & Lathrop, P.C. on contingency to sue the tortfeasor.
The insurer’s policy/endorsement reserved a subrogation right to recover medical payments from third-party recoveries and the insurer notified the third-party carrier of its interest, denying responsibility for attorneys’ fees unless it requested assistance.
The law firm prosecuted Imes’ claim and secured a $48,200 settlement; the firm sought one-third contingency on the portion attributable to medical payments and requested Auto-Owners accept a one-third reduction of its $1,000 subrogation interest.
Auto-Owners refused; the firm sued the insurer seeking $333.33 (one-third of $1,000) under the common fund doctrine, while the insurer counterclaimed for the full $1,000 under Neb. Rev. Stat. § 44-3,128.01 and policy terms.
Lower courts (county and district) entered summary judgment for the law firm; the Court of Appeals affirmed; the Nebraska Supreme Court granted further review on whether § 44-3,128.01 preempts the common fund doctrine.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Neb. Rev. Stat. § 44-3,128.01 preempts the common fund doctrine allowing an attorney to recover a pro rata share of fees from an insurer’s subrogation avails	Statute is silent as to attorney fees; common fund doctrine applies; insurer benefited and should bear proportional fees	Statute establishes insurer’s subrogation right and thus preempts/abrogates the common fund rule so insurer keeps full $1,000	Statute does not expressly or impliedly preempt the common fund doctrine; common law survives; attorney entitled to pro rata share; judgment for firm affirmed
Whether statutory language should be construed to displace preexisting common-law rights	In derogation of common law, statute must be strictly construed and not read to strip common-law rights absent clear language	Insurer asks court to read preemption into the statute despite silence	Court applies strict construction, finds no clear legislative intent to abrogate the common fund rule, and declines to read such preemption into the statute

United Servs. Auto. Ass'n v. Hills, 172 Neb. 128 (1961) (applied common fund doctrine to insurer’s subrogation interest)
Milbank Ins. Co. v. Henry, 232 Neb. 418 (1989) (Nebraska Supreme Court upheld enforceability of medical-payments subrogation clauses)
Sprague v. Ticonic Bank, 307 U.S. 161 (1939) (historical roots of equity courts’ authority to award fees from a common fund)
Peterson v. Jacobitz, 309 Neb. 486 (2021) (appellate courts independently review questions of law, including statutory interpretation)