North Star Mut. Ins. Co. v. Stewart
311 Neb. 33
| Neb. | 2022Background
- May 21, 2020: Julie Blazer was rear-ended by Travis Stewart; Blazer insured by North Star Mutual Insurance Company (North Star).
- Aug. 25, 2020: North Star sued Stewart in county court in its own name “as subrogee of Julie Blazer,” seeking $6,710; Blazer was not joined.
- Stewart moved to dismiss for failure to join the insured and for improper claim-splitting; county court granted the motion and dismissed without prejudice.
- North Star appealed to the district court; the district court reversed based on an affidavit (filed with the clerk but not received into evidence) indicating Blazer received property-damage payment and would not pursue personal-injury claims.
- Nebraska Supreme Court held the affidavit was not part of the record, treated the challenge as facial, found the complaint lacked allegations showing North Star was the real party in interest (e.g., no allegation it fully compensated Blazer or that Blazer released the tortfeasor), and reversed the district court, directing affirmance of the county court dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether North Star may prosecute a subrogation action in its own name without joining its insured | North Star: subrogation claim is separate and may be brought in insurer’s name; insured has been compensated (per affidavit) | Stewart: insured is the real party in interest; insurer is splitting the insured’s single cause of action | Held: On the face of the complaint, North Star did not plead facts showing it is the real party in interest; rule against claim splitting bars suit in insurer’s name absent an exception; dismissal affirmed |
| Whether the lower courts properly considered Blazer’s affidavit on appeal | North Star: affidavit shows insured was fully compensated and waived further claims | Stewart: affidavit was never received into evidence or made part of bill of exceptions and thus is not in the appellate record | Held: Affidavit was not in evidence or in bill of exceptions and cannot be considered on appeal |
| Standard of review given procedural omissions on appeal | North Star: (implicitly) district court could rely on affidavit evidence | Stewart: district court limited to plain error absent statement of errors | Held: Jurisdictional standing is a question of law; appellate court will decide regardless of plain-error limitation and will treat this as a facial standing challenge because no extrinsic evidence is in the record |
| Whether any exception to the claim-splitting rule applied (e.g., full indemnity or insured’s release) | North Star: insured has been fully indemnified (per affidavit) | Stewart: no pleaded facts showing full indemnity or insured release; no record evidence | Held: Complaint lacks allegations of full compensation or insured release; no exception shown on the face of the pleadings |
Key Cases Cited
- Krause v. State Farm Mut. Auto. Ins. Co., 184 Neb. 588, 169 N.W.2d 601 (1969) (Nebraska rule: insured’s cause of action against tortfeasor is indivisible; insurer cannot split claim when it indemnifies only part of loss)
- Jelinek v. Nebraska Nat. Gas Co., 196 Neb. 488, 243 N.W.2d 778 (1976) (where insurer fully compensates insured, insurer becomes real party in interest)
- Milbank Ins. Co. v. Henry, 232 Neb. 418, 441 N.W.2d 143 (1989) (insurer may sue in its own name when insured settles with tortfeasor without protecting subrogation interest)
- Jacobs Engr. Group v. ConAgra Foods, 301 Neb. 38, 917 N.W.2d 435 (2018) (recent summary of the rule against claim splitting: insured retains right to whole loss when insurer indemnifies only part)
- T. S. McShane Co. v. Dominion Constr. Co., 203 Neb. 318, 278 N.W.2d 596 (1979) (affidavit not made part of bill of exceptions cannot be considered on appeal)