TONYA EDWARDS, AS ASSIGNEE OF DOUGLAS COUNTY, NEBRASKA, A POLITICAL SUBDIVISION, APPELLANT, V. ESTATE OF KENNETH CLARK AND MARK MALOUSEK, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF KENNETH CLARK, APPELLEE. JENNIFER EDWARDS, AS ASSIGNEE OF DOUGLAS COUNTY, NEBRASKA, A POLITICAL SUBDIVISION, APPELLANT, V. ESTATE OF KENNETH CLARK AND MARK MALOUSEK, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF KENNETH CLARK, APPELLEE.
Nos. S-21-790, S-21-791
Nebraska Supreme Court
December 23, 2022
313 Neb. 94
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg,
- Motions to Dismiss: Appeal and Error. A district court‘s grant of a motion to dismiss is reviewed de novo.
- Motions to Dismiss: Pleadings: Appeal and Error. When reviewing an order dismissing a complaint, the appellate court accepts as true all facts which are well pled and the proper and reasonable inferences of law and fact which may be drawn therefrom, but not the plaintiff‘s conclusion.
- Actions: Pleadings: Notice. Civil actions are controlled by a liberal pleading regime; a party is only required to set forth a short and plain statement of the claim showing the pleader‘s entitlement to relief and is not required to plead legal theories or cite appropriate statutes so long as the pleading gives fair notice of the claims asserted.
- ____: ____: ____. The rationale for a liberal notice pleading standard in civil actions is that when parties have a valid claim, they should recover on it regardless of failing to perceive the true basis of the claim at the pleading stage.
- Motions to Dismiss: Pleadings. To prevail against a motion to dismiss for failure to state a claim, a plaintiff must allege sufficient facts, accepted as true,
to state a claim to relief that is plausible on its face. In cases in which a plaintiff does not or cannot allege specific facts showing a necessary element, the factual allegations, taken as true, are nonetheless plausible if they suggest the existence of the element and raise a reasonable expectation that discovery will reveal evidence of the element or claim. - Judgments: Appeal and Error. An appellate court may affirm a lower court‘s ruling that reaches the correct result, albeit based on different reasoning.
- Contribution: Words and Phrases. Contribution is defined as a sharing of the cost of an injury as opposed to a complete shifting of the cost from one to another, which is indemnification.
- Subrogation: Words and Phrases. Subrogation is the substitution of one person in the place of another with reference to a lawful claim, demand, or right, so that the one who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or securities.
- Subrogation. Generally, subrogation is unavailable until the debt owed to a subrogor has been paid in full.
- Appeal and Error. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.
Appeals from the District Court for Douglas County: JAMES M. MASTELLER, Judge. Affirmed.
Theodore R. Boecker, Jr., of Boecker Law, P.C., L.L.O., for appellants.
Jon J. Puk, of Woodke & Gibbons, P.C., L.L.O., for appellee.
HEAVICAN, C.J., MILLER-LERMAN, CASSEL, STACY, FUNKE, PAPIK, and FREUDENBERG, JJ.
FUNKE, J.
INTRODUCTION
Tonya Edwards and Jennifer Edwards (collectively the Edwardses) appeal the order of the district court for Douglas County, Nebraska, dismissing their complaints against the estate of Kenneth Clark (Clark‘s estate). The Edwardses, as assignees of Douglas County, sought to recover expenses that the county incurred in defending and settling the lawsuits that the Edwardses brought against it for its alleged negligence in responding to acts of assault and battery committed by Clark. The district court found that the Edwardses failed to state a claim for contribution or indemnity, because the county is immune from claims arising out of battery under the Political Subdivisions Tort Claims Act (PSTCA) and thus does not have a common liability with Clark‘s estate. The district court also denied the Edwardses’ claim for subrogation. We affirm.
BACKGROUND
Our earlier decision in Edwards v. Douglas County1 sets forth the egregious events underlying the present appeal. We will not fully recite these events here. Instead, we note only that Tonya‘s husband, Jason Edwards, and Jennifer‘s husband, John Edwards, were fatally shot by Clark as they helped their sister, Julie Edwards, move out of the residence she shared with Clark. Clark then held Julie hostage and sexually assaulted her before killing himself. The Douglas County 911 call center received several calls from John during these events.
Douglas County responded by bringing third-party complaints against Clark‘s estate, alleging that the Edwardses’ damages were “solely caused by [Clark‘s] intentional acts” and that to the extent the county is found liable to the Edwardses, the estate is liable to the county for contribution or indemnification.
Clark‘s estate answered, denying these allegations and asserting, as an affirmative defense, that the county failed to state a claim upon which relief can be granted.
Subsequently, Douglas County settled with the Edwardses, paying $300,000 to Jennifer and $50,000 to Tonya. It also assigned “any claim of contribution, subrogation, and/or indemnity” that it may have against Clark‘s estate to them. The settlements are not part of the record on appeal.
The Edwardses then sued Clark‘s estate, seeking “judgment as assignee[s] on all claims upon which Douglas County could have recovered.” They asserted a right to contribution, indemnity, or subrogation, because Clark‘s actions forced the county to “suffer loss and incur expenses in defense of the suit[s]” they brought.
Clark‘s estate moved to dismiss the Edwardses’ complaints for failure to state a claim. At a hearing on this motion, the estate asserted that the Edwardses’ claims were no different than Julie‘s claims against the county, which the Nebraska Supreme Court found arose out of assault and thus were barred by sovereign immunity. The estate argued that the Edwardses took the assignment subject to the county‘s defense of immunity. It also argued that the Edwardses must prove that the county is liable before they could recover damages and that they cannot do this, because the county is immune under the
The Edwardses disagreed. They argued that their claims were different because the county caused emotional distress to John and Tonya and that as a result, the court decision regarding Julie‘s claims is “not necessarily dispositive.” They also argued that they made a sufficient showing to survive a motion to dismiss. Specifically, they argued that they do not need to prove that the county is liable in order to recover in equity; instead, they need only prove that the settlement was reasonable. They also argued that Clark‘s estate‘s decision to answer the third-party complaint, rather than move to dismiss it for failure to state a claim, proves that “it‘s a plausible, cognizable claim.”
The district court ruled in favor of Clark‘s estate. It found that the claim for contribution failed, because contribution requires a common liability and the county is immune from liability under the
The Edwardses appealed to the Nebraska Court of Appeals, and we moved the matter to our docket.
ASSIGNMENTS OF ERROR
The Edwardses assign, restated, that the district court erred in (1) granting the motion to dismiss; (2) finding that their claims for contribution, indemnification, and subrogation could not be maintained, because the county is immune from liability for claims arising out of assault and battery; and (3) failing to recognize the county had liability from which it is not immune.
STANDARD OF REVIEW
[1,2] A district court‘s grant of a motion to dismiss is reviewed de novo.2 When reviewing an order dismissing a complaint, the appellate court accepts as true all facts which are well pled and the proper and reasonable inferences of law and fact which may be drawn therefrom, but not the plaintiff‘s conclusion.3
ANALYSIS
DISMISSAL FOR FAILURE TO STATE CLAIM
The Edwardses argue that the district court erred in disposing of their complaints upon a motion to dismiss. They maintain that as assignees of Douglas County, they stated a facially plausible claim to contribution, indemnification, or subrogation by showing that the county “incurred legal fees and expenses as a consequence of the original lawsuit[s] brought against it” and that “Clark‘s estate should equitably bear responsibility for such costs because Clark‘s conduct placed [the county] in a position that made it necessary for [the county] to incur expenses to protect its interests and defend itself.”4 We disagree.
[3,4] Civil actions in Nebraska are controlled by a liberal pleading regime; a party is only required to set forth a short and plain statement of the claim showing the pleader‘s entitlement to relief and is not required to plead legal theories or cite appropriate statutes so long as the pleading gives fair notice of the claims asserted.5 The rationale for this pleading standard is that when parties have a valid claim, they should recover on it regardless of failing to perceive the true basis of the claim at the pleading stage.6
[5] Accordingly, to prevail against a motion to dismiss for failure to state a claim, a plaintiff must allege sufficient facts, accepted as true, to state a claim to relief that is plausible on its face.7 In cases where a plaintiff does not or cannot allege specific facts showing a necessary element, the factual allegations, taken as true, are nonetheless plausible if they suggest the existence of the element and raise a reasonable expectation that discovery will reveal evidence of the element or
[6] We agree with the district court that the Edwardses failed to allege facts showing a necessary element as to their claims for contribution, indemnification, and subrogation. However, unlike the district court, we base this finding solely on the fact that nothing in the pleadings or the record on appeal indicates that the county‘s settlement with the Edwardses extinguished Clark‘s estate‘s liability or that the county paid the debt owed by the estate. The district court relied upon this fact when finding that the Edwardses failed to state a claim for subrogation, but it based its findings as to contribution and indemnity upon its conclusion that the county and the estate do not have a common liability to the Edwardses. An appellate court may affirm a lower court‘s ruling that reaches the correct result, albeit based on different reasoning.9
[7,8] We have recognized contribution, indemnification, and subrogation as equitable remedies when one party pays damages or debts that in justice another party ought to pay.10 Although related, each remedy is distinct. Contribution is defined as a sharing of the cost of an injury as opposed to a complete shifting of the cost from one to another, which is indemnification.11 Subrogation, in turn, is the substitution of one person in the place of another with reference to a lawful claim, demand, or right, so that the one who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or securities.12
All three remedies are alike, however, in requiring a party seeking recovery to show it has discharged the liability or paid the debt of the party from which it seeks to recover, as we explain below. Because the Edwardses discussed all three remedies, in the alternative, we consider each of them below, ultimately finding that none apply given the facts and circumstances of this case. We take no position on whether the county‘s claims for contribution, indemnification, or subrogation could be assigned.
In Estate of Powell v. Montange,13 we expressly held that as one element of its claim, a party seeking contribution among joint tort-feasors must prove that it extinguished the liability of the parties from whom contribution is sought. Other elements that must be proved include: (1) a common liability among the party seeking contribution and the parties from whom contribution is sought, (2) the party seeking contribution paid more than its pro rata share of the common liability, and (3) if such liability was extinguished by settlement, the amount paid in settlement was reasonable.14
In Estate of Powell, the driver and owners of a vehicle whose passenger was fatally injured in a traffic accident were sued
We have similarly found that liability for indemnity exists when the party seeking indemnity (the indemnitee) is ““free of fault and has discharged a debt that should be paid wholly by“” the party from whom indemnity is sought (the indemnitor).20 We take this to mean, as other jurisdictions have expressly found, that the debt paid is the same debt owed by the indemnitee, or what is sometimes described as a “common” or “coextensive” obligation.21 The courts that have taken this approach have generally based it upon the fact that a claim for noncontractual indemnity requires that the indemnitor and indemnitee shared a “common” or “single” duty and the indemnitee assumed the indemnitor‘s liability to a third party by virtue of some legal relationship between the indemnitor and the indemnitee.22
As such, this approach is consistent with our case law, which generally recognizes a right to noncontractual indemnity only where there is a ““single joint wrong“”23 and actual fault is attributable to one party, while the other party is technically or constructively at fault.24 For example, we have found a right to indemnity where the indemnitee was constructively liable for the indemnitor‘s wrongdoing as the result of a statute and where the indemnitee merely failed to discover or remedy the indemnitor‘s negligence, but not where the putative indemnitee was
Standard legal treatises take a similar approach, while also highlighting the role that respective burdens and benefits play in recovery here. Prosser and Keeton on the Law of Torts defines the word “indemnify” as “requiring another to reimburse in full one who has discharged a common liability.”27 The Corpus Juris Secundum likewise states that indemnity applies “only where there is an identical duty” owed by one party and discharged by another.28 The Restatement (Third) of Torts further notes that it has identified no case where noncontractual indemnity was allowed against a party that remains liable to the plaintiff.29 As the Restatement explains, it would be unfair under the basic principles of restitution to make a party pay indemnity in such situations, because it is the benefit provided to the indemnitor by the discharge of the burden of liability that entitles the indemnitee to recovery.30 Absent such discharge, it would be “unfair . . . to make a person pay noncontractual indemnity while . . . still liable to the plaintiff.”31
[9] Likewise, as to subrogation, in multiple opinions dating back over a century, we have ruled that, generally, subrogation is unavailable until the debt owed to a subrogor has been paid in full.32 In one such opinion, Shelter Ins. Cos. v. Frohlich,33 we reversed the grant of summary judgment to an insurer on its subrogation claim, because the record failed to show whether the injured party had been fully compensated as a result of the settlement of her personal injury claims. This case involved a contract providing for subrogation.34 However, we looked to the equitable principles underlying subrogation, in particular the unfair benefit that subrogors would receive if they recovered double payment, when rejecting the plaintiff‘s argument that full compensation is unnecessary for the right of subrogation.35 We took a similar approach in Skinkle v. Huffman,36 a case involving a claim for subrogation that arose from the payment of an installment due on a mortgage, recognizing “payment in full of the debt as a condition precedent to the right of subrogation.”
There are, in contrast, multiple references to the burdens the county incurred by being “forced to defend itself due to events that . . . Clark put in motion.”39 However, as our decisions make clear, it is the sharing of burdens and benefits that forms the rationale for recovery of contribution, indemnity, and subrogation. Moreover, as to indemnity specifically, it appears that the settlement may have discharged the county‘s liability for conduct the Edwardses characterize as “wholly distinct” and “wholly independent” of Clark‘s actions in shooting Jason and John.40 Any such discharge could be seen to involve a debt owed solely by the county, and not by Clark‘s estate.41
The Edwardses cite the federal court decision in Native American Arts, Inc. v. Duck House, Inc.42 for the proposition that “[o]n the settlement of assigned indemnity claims, a party only has to show [that] the settlement was ‘reasonable’ and that the settling party . . . ‘settled under a reasonable apprehension of liability.‘”43 However, this decision involved an express agreement to indemnify, and the court there indicated that to prevail on a so-called settlement-indemnity claim, the plaintiff must first show that the contract‘s indemnity clause covered the settled claim.44 As such, the decision has no application to the facts of this case, where Clark‘s estate is not alleged to have agreed to indemnify the county.
The remaining cases from other jurisdictions cited by the Edwardses state only that “the fact that a party against whom a legal liability is asserted made a fair settlement in good faith without a judgment having been entered against him does not prevent his seeking to enforce a claim” for contribution or indemnification.45
In Rawson v. City of Omaha,46 we did rule that a driver who settled two lawsuits for damages for which a city was subsequently found to be solely liable was entitled to subrogation. However, nothing in Rawson suggests that the general requirement that the party seeking subrogation must have paid the full debt of the party from whom subrogation is sought is inapplicable in such cases. To the contrary, our decision relied, in part, on an opinion from another jurisdiction which reiterated this general requirement when finding that two parties who settled and subsequently were found not to be negligent were entitled to subrogation.47 The parties in that case had entered a settlement that released all defendants, including the nonsettling defendant from whom subrogation was later sought.48 The court relied upon this factor, as well as the general principle that “[w]here property of one person is used in discharging an obligation owed by another . . . under such circumstances that the other would be unjustly enriched by the retention of the benefit thus conferred, the former is entitled to be subrogated,” in reaching the conclusion that subrogation was warranted.49
The Edwardses’ argument that dismissal was improper because no determination could be made, at the pleadings stage, regarding whether the settlement was reasonable or whether the county paid more than its proportionate share is similarly unavailing. The resolution of these questions is immaterial given the Edwardses’ failure to show that the settlement discharged Clark‘s estate‘s liability or that the estate‘s debt was paid. Nor is this a case where dismissal is improper because there is a reasonable expectation that discovery will reveal the necessary elements. The Edwardses cite Tryon v. City of North Platte50 in support of this proposition. However, as parties to the settlement which assigned the county‘s claims to them, the Edwardses do not need discovery to determine the scope or terms of the settlement.
REMAINING ASSIGNMENTS OF ERROR
[10] The Edwardses also allege that the district court erred in finding that their claims could not be maintained, because the county is immune from liability for claims arising out of assault and battery, and in failing to realize that the county had liability from which it is not immune. We need not resolve these questions
CONCLUSION
The Edwardses’ claims that the district court erred in dismissing their complaint are without merit. Accordingly, the judgment of the district court is affirmed.
AFFIRMED.
FUNKE, J.