North Star Mut. Ins. Co. v. Stewart
311 Neb. 33
| Neb. | 2022Background
- On May 21, 2020, Julie Blazer was struck by a pickup driven by Travis Stewart; Blazer was insured by North Star Mutual Insurance Company.
- North Star filed a negligence/subrogation suit in county court in its own name as "subrogee of Julie Blazer," seeking $6,710, but did not join Blazer.
- Stewart moved to dismiss for failure to join the insured and for impermissible claim splitting; at the hearing no evidence was admitted.
- Blazer later filed an affidavit with the clerk stating she did not intend to sue for personal injury and that North Star paid property-damage proceeds, but the affidavit was not admitted into evidence or included in the bill of exceptions.
- The county court dismissed North Star’s complaint without prejudice for lack of standing under Nebraska’s rule against claim splitting; the district court reversed (reviewing for plain error) relying on the affidavit.
- The Nebraska Supreme Court reversed the district court and remanded with directions to affirm the county court, holding North Star’s pleadings did not show it was the real party in interest.
Issues
| Issue | Plaintiff's Argument (North Star) | Defendant's Argument (Stewart) | Held |
|---|---|---|---|
| Whether North Star had standing/was the real party in interest to sue in its own name on a claimed subrogation interest | North Star asserted it had a subrogation right and was entitled to sue in its own name (claimed property-damage subrogation and that Blazer would not assert personal-injury claims) | Blazer (via Stewart) is the real party in interest; insurer cannot split the insured’s single cause of action unless an exception applies | Held: On the pleadings North Star failed to allege it was the real party in interest; claim-splitting rule bars suit in insurer’s name absent pleaded exception |
| Whether the county court and appellate courts could consider Blazer’s affidavit | North Star relied on the affidavit to show full compensation and no insured claim | Stewart argued the affidavit was not in the appellate record/evidence and thus cannot be considered | Held: Affidavit was not offered into evidence or in the bill of exceptions and cannot be considered on appeal; appellate review is therefore facial |
| Whether any exception to the claim-splitting rule applied (insurer fully compensated insured or insured settled without protecting subrogation) | North Star argued Blazer was fully compensated and would not pursue claims | Stewart argued no pleaded facts show full compensation or a settlement protecting subrogation | Held: Complaint contained no allegations invoking exceptions (full compensation or protected settlement); claim-splitting rule applies |
| Whether dismissal procedure was proper (dismissal without affording time to join/ substitute real party) | North Star did not assign error to procedure but argued indirectly via merits | Stewart relied on dismissal for lack of standing | Held: Dismissal without prejudice was permissible but better practice would be to allow reasonable time to join/substitute real party before dismissal |
Key Cases Cited
- Krause v. State Farm Mut. Auto. Ins. Co., 184 Neb. 588 (1969) (insurer may not split insured’s indivisible cause of action; insured remains real party in interest when insurer pays only part of loss)
- Jelinek v. Nebraska Nat. Gas. Co., 196 Neb. 488 (1976) (where insurer fully compensates insured for entire loss, insurer may be real party in interest)
- Milbank Ins. Co. v. Henry, 232 Neb. 418 (1989) (insurer’s subrogation claim survives where insured settled with tortfeasor with notice and did not protect subrogation)
- Jacobs Engr. Group v. ConAgra Foods, 301 Neb. 38 (2018) (summarizes Nebraska rule against claim splitting; insured retains right to whole loss when insurer indemnifies only part)
- Shiman Bros. & Co. v. Nebraska Nat. Hotel Co., 143 Neb. 404 (1943) (under real-party statute, insured must sue when insurer’s payment covers only part of loss)
- T. S. McShane Co. v. Dominion Constr. Co., 203 Neb. 318 (1979) (affidavit not preserved in bill of exceptions cannot be considered on appeal)