State Farm Fire & Cas. Co. v. TFG Enters., 954 N.W.2d 899

In August 2015 Barkhurst bought a house from TFG Enterprises, LLC (TFG); he later sued TFG and its principal Jeffrey Leonard alleging failure to disclose and active concealment of defects (water intrusion, mold, substandard repairs, structural issues), asserting breach of contract, negligent misrepresentation, and fraudulent concealment and seeking repair costs.
TFG had purchased the house in January 2015 and admitted the defects were not present when it bought the property; TFG used and possessed the house until the August 2015 sale.
State Farm issued TFG a Rental Dwelling Policy effective January 6, 2015; TFG sought defense and State Farm agreed under a reservation of rights and then filed for declaratory relief asserting no duty to defend or indemnify.
State Farm argued coverage did not apply because the policy requires an "occurrence" and "property damage," and asserted three exclusions: damage to property owned by an insured, to property in the insured’s care/possession/use, and to property the insured sold if damage arises out of those premises.
The district court granted summary judgment for State Farm, finding no coverage (no occurrence/property damage) and that the stated exclusions barred coverage; TFG and Leonard appealed.
The Nebraska Supreme Court affirmed, holding that even assuming an occurrence or property damage, the policy exclusions unambiguously excluded coverage and thus State Farm had no duty to defend or indemnify.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an "occurrence" under the policy existed	Defects may have resulted from an accident while TFG owned the house; factual dispute requires defense	Allegations (fraudulent concealment/misrep.) are not accidental; no occurrence	Court assumed arguendo occurrence possible but did not reach it; affirmed no duty because exclusions apply
Whether Barkhurst's suit alleges "property damage"	Repair/replacement costs for defects constitute property damage	Alleged breaches and misrepresentations do not trigger property damage under policy	Court assumed arguendo suit could be for property damage but held exclusions nonetheless bar coverage
Whether policy exclusions (owned, in care/poss., sold) bar coverage	Exclusions ambiguous and should be construed for the insured	Exclusions are clear and apply because TFG owned, possessed, and sold the house	Exclusions are plain and unambiguous; they apply and eliminate State Farm's potential liability; summary judgment affirmed

Jones v. Shelter Mut. Ins. Cos., 274 Neb. 186, 738 N.W.2d 840 (2007) (policy interpretation is a question of law)
State Farm Fire & Cas. Co. v. Dantzler, 289 Neb. 1, 852 N.W.2d 918 (2014) (standard for affirming summary judgment)
Merrick v. Fischer, Rounds & Assocs., 305 Neb. 230, 939 N.W.2d 795 (2020) (no duty to defend if insurer has no potential liability under policy)
Cincinnati Ins. Co. v. Becker Warehouse, Inc., 262 Neb. 746, 635 N.W.2d 112 (2001) (principles for construing insurance contracts)
D & S Realty v. Markel Ins. Co., 280 Neb. 567, 789 N.W.2d 1 (2010) (exclusion as a limitation of liability)
Henn v. American Family Mut. Ins. Co., 295 Neb. 859, 894 N.W.2d 179 (2017) (ambiguities in insurance contracts construed for the insured)
American Fam. Mut. Ins. Co. v. Wheeler, 287 Neb. 250, 842 N.W.2d 100 (2014) (definition and treatment of contract ambiguity)