SFI Ltd. Partnership 8 v. Carroll ( 2014 )

Nebraska Advance Sheets
698 288 NEBRASKA REPORTS
the appellees had financing in place and had expressed their
ability and willingness to perform under the contract. In the
face of Benson’s repudiation, the appellees were not required
to tender the money due under the Purchase Agreement.
Such would have been a useless act. The district court deter-
mined that the appellees’ efforts were sufficient and that thus,
Benson was in breach at the time for performance. Based on
the applicable law and the district court’s findings, which are
supported by the record, we see no error. We find no merit
to Benson’s assignments of error regarding repudiation and
breach of contract.
CONCLUSION
The district court determined that Benson breached the
Purchase Agreement by refusing to sell her interest in the prop-
erty at issue and awarded damages to the appellees. For the
reasons explained above, we find no merit to Benson’s assign-
ments of error and, accordingly, affirm.
Affirmed.
SFI Ltd. Partnership 8, a Nebraska
limited partnership, appellant, v.
Michelle Carroll, appellee.
___ N.W.2d ___
Filed August 1, 2014. No. S-13-192.
1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower
court’s grant of summary judgment if the pleadings and admitted evidence show
that there is no genuine issue as to any material facts or as to the ultimate infer­
ences that may be drawn from the facts and that the moving party is entitled to
judgment as a matter of law.
2. Subrogation: Words and Phrases. Generally, subrogation is the right of one,
who has paid the obligation which another should have paid, to be indemnified
by the other.
3. Contracts: Insurance: Subrogation. Subrogation applies to an insurer’s right
to proceed against a third party responsible for a loss which the insurer has
compensated pursuant to its contractual obligation under a policy, and which
depends, inter alia, on the existence of the insured’s right to proceed against
that entity.
Nebraska Advance Sheets
SFI LTD. PARTNERSHIP 8 v. CARROLL 699
Cite as 288 Neb. 698
4. Contracts: Insurance: Subrogation: Equity: Tort-feasors. In the context of
insurance, the right to equitable subrogation is generally based on two premises:
(1) A wrongdoer should reimburse an insurer for payments that the insurer has
made to its insured, and (2) an insured should not be allowed to recover twice
from the insured’s insurer and the tort-feasor.
5. Contracts: Insurance: Subrogation. Under the antisubrogation rule, no right of
subrogation can arise in favor of an insurer against its own insured or coinsured
for a risk covered by the policy, even if the insured is a negligent wrongdoer.
6. Insurance: Subrogation. The antisubrogation rule has been extended to implied
coinsureds.
7. Contracts: Insurance: Subrogation: Presumptions: Negligence. Absent an
agreement to the contrary, the law presumes that a tenant is coinsured under a
landlord’s fire insurance policy and that therefore, a landlord’s insurer cannot
maintain a subrogation action against a tenant for damage to the insured property
that is caused by the tenant’s negligence.
8. Rules of the Supreme Court: Pleadings: Waiver: Appeal and Error. A ques-
tion concerning the waiver of an affirmative defense involves the interpretation
of Neb. Ct. R. Pldg. § 6-1108(c) and, as such, is a question of law reviewed
de novo.
9. Pleadings. The issues in a given case will be limited to those which are pled.
10. Rules of the Supreme Court: Pleadings. Under Neb. Ct. R. Pldg. § 6-1108(c),
a party pleading to a preceding pleading must set forth affirmatively matters con-
stituting an avoidance or affirmative defense.
11. ____: ____. The federal rules of pleading, which Nebraska has generally adopted,
were designed to liberalize pleading requirements.
12. Leases: Contracts: Public Policy. The interpretation of a lease, the unconscion­
ability of a contract provision, and the determination of whether a contract vio-
lates public policy are questions of law.
13. Judgments: Appeal and Error. When reviewing questions of law, an appellate
court has an obligation to resolve the questions independently of the conclusions
reached by the trial court.
14. Contracts: Insurance: Landlord and Tenant. Renter’s insurance is a contents
policy which covers tenant’s possessions, such as furniture, appliances, personal
belongings, and household goods. However, renter’s insurance does not typically
cover the structure of the leased premises.
15. Contracts: Public Policy. Courts should be cautious in holding contracts void
on the ground that the contract is contrary to public policy; to be void as against
public policy, the contract should be quite clearly repugnant to the public
conscience.
16. Words and Phrases. The term “unconscionable” means manifestly unfair
or inequitable.
17. Courts: Contracts: Leases. Where a court finds that a rental agreement or
any provision thereof was unconscionable when made, the court may refuse
to enforce the agreement, enforce the remainder of the agreement without the
unconscionable provision, or limit the application of any unconscionable provi-
sion to avoid an unconscionable result.
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18. Landlord and Tenant: Negligence: Damages. Notwithstanding the provisions of
Neb. Rev. Stat. § 76-1429 (Reissue 2009), the tenant is responsible for damage
caused by his or her negligence.
19. Statutes. To the extent there is conflict between two statutes on the same subject,
the specific statute controls over the general statute.
20. Landlord and Tenant: Leases: Negligence: Damages: Public Policy: Statutes.
Where a specific statute holds a tenant responsible for fire damages caused by his
or her negligence, a court cannot hold a lease provision doing so as void against
public policy or unconscionable.
21. Summary Judgment: Final Orders: Appeal and Error. Although the denial of
a motion for summary judgment, standing alone, is not a final, appealable order,
when adverse parties have each moved for summary judgment and the trial court
has sustained one of the motions, the reviewing court obtains jurisdiction over
both motions and may determine the controversy which is the subject of those
motions or make an order specifying the facts which appear without substantial
controversy and direct such further proceedings as it deems just.
Appeal from the District Court for Sarpy County: William
B. Zastera, Judge. Reversed and remanded for further
proceedings.
Jeffrey A. Silver for appellant.
Todd R. McWha, Angela M. Franz, and Patrick Heng, of
Waite, McWha & Heng, for appellee.
Heavican, C.J., Wright, Connolly, Stephan, McCormack,
Miller-Lerman, and Cassel, JJ.
Cassel, J.
I. INTRODUCTION
In previous cases, we have applied an antisubrogation rule
to prohibit a landlord’s insurer from seeking reimbursement
from the tenant of fire losses paid by insurance. In this appeal,
we decline to extend the antisubrogation rule to a landlord’s
uninsured losses allegedly caused by its tenant’s negligence.
We therefore reverse the district court’s summary judgment in
favor of the tenant. But because the tenant has not been deter-
mined to have been free from negligence, we decline to address
whether specific provisions in the lease are unconscionable
or void as against public policy. Accordingly, we remand the
cause to the district court for further proceedings consistent
with this opinion.
Nebraska Advance Sheets
SFI LTD. PARTNERSHIP 8 v. CARROLL 701
Cite as 288 Neb. 698
II. BACKGROUND
1. Lease
SFI Ltd. Partnership 8 (SFI) owns an apartment complex
containing approximately 200 apartments. Through its agent,
SFI leased an apartment to Michelle Carroll. SFI’s agent and
Carroll signed a residential lease agreement including various
addendums. The lease employed a standard form used for all
units in the complex. Tenants were not allowed to change any
of the provisions of the lease or addendums.
The lease included provisions requiring Carroll to pay for
repairs caused by her use of the unit and to maintain renter’s
insurance including “a personal liability coverage to a mini-
mum of $100,000.00.” We will recite the pertinent provisions
of the lease only as it becomes necessary.
2. Fire and Insurance Policies
A fire occurred in the apartment rented to Carroll. Both the
apartment and the surrounding building were damaged.
SFI had $10 million of total insurance coverage on the
apartment complex. The policy provided for a deductible of
$250,000 per occurrence unless a specific deductible applied.
However, the forms schedule attached to the policy referred
to two endorsements not included in the copies attached to
the stipulation. Thus, we cannot discern whether the policy
provided for a specific deductible attributable to the loss in
this instance.
The parties stipulated that SFI sustained damages in excess
of $100,000 resulting from the fire, which damages were not
covered by its insurance policy. But neither the total amount of
damages nor the amount of any insurance recovery by SFI was
included in the evidence.
Carroll had renter’s insurance in place at that time, and
she submitted a claim to her insurer. Carroll’s insurer paid
her $1,500, representing only her damages under “Loss of
Use Coverage.”
3. Lawsuit
SFI sued Carroll and attached a copy of the lease to the
complaint. SFI alleged that Carroll breached several provisions
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of the lease. SFI further alleged that Carroll was negligent in
failing to properly dispose of cigarettes being smoked in the
apartment and that this negligence proximately caused the
damage to the apartment and surrounding building.
Carroll filed an answer. She alleged that the fire was caused
by someone else; that SFI’s claims were barred because she
and SFI were considered coinsureds under SFI’s fire insur-
ance policy, as set forth in Tri-Par Investments v. Sousa1;
that several paragraphs of the lease were unconscionable and
void as against public policy; and that SFI failed to mitigate
any damages.
Carroll moved for summary judgment. SFI then moved for
partial summary judgment on Carroll’s claim that several para-
graphs of the lease were unconscionable and void as against
public policy.
The parties stipulated that SFI brought the claim in its
own behalf. They also stipulated that it was not a subroga-
tion claim.
4. District Court’s Decision
Following a hearing, the district court granted Carroll’s
motion for summary judgment, denied SFI’s motion for partial
summary judgment, and dismissed the complaint. The court
stated that the crux of the case revolved around paragraph 17
of the lease, which stated:
Resident’s personal property is not insured or covered
by Landlord for loss of any kind, including without limi-
tation, loss due to theft, fire, smoke, wind, rain, lightening
[sic], seismic occurrence or water damage.
Evidence of renter’s insurance is required at the time of
occupancy and Resident agrees to maintain such Renter’s
Insurance throughout its residency. The renter’s insurance
to be maintained by Resident shall include a personal
liability coverage to a minimum of $100,000.00. Resident
agrees to provide proof of such renter’s insurance from
time to time as requested by Landlord.
1
Tri-Par Investments v. Sousa, 268 Neb. 119, 680 N.W.2d 190 (2004).
Nebraska Advance Sheets
SFI LTD. PARTNERSHIP 8 v. CARROLL 703
Cite as 288 Neb. 698
The court agreed with Carroll’s contention that the lease was
“void for public policy because it is a gross economic waste to
require every tenant to insure the entire rental complex.” The
court stated:
In the instant case, this Court finds that Paragraph
17 of the Residential Lease is void for public policy
and unconscionable because [SFI] cannot require each
of its tenants to insure its building. [Carroll] lived in a
multi-unit building, where each tenant was required to
have renter’s insurance in an amount equal to at least
$100,000.00. Based on the views expressed in [Tri-Par
Investments2], this Court finds that it is not in the public
interest to require all tenants to insure the building in
which they share. As the Nebraska Supreme Court noted
in [Tri-Par Investments], the more sound approach would
be for a landlord to carry a fire insurance policy on the
complex and to pass that cost along to the tenants in the
form of higher rent.
SFI filed a timely appeal, and we granted its petition to
bypass the Nebraska Court of Appeals.
III. ASSIGNMENTS OF ERROR
SFI assigns that the district court erred as a matter of law
in (1) sustaining Carroll’s motion for summary judgment after
finding that paragraph 17 of the lease was void as against
public policy when Carroll did not allege in her answer
that paragraph 17 of the lease was unconscionable and void
as against public policy; (2) determining that SFI’s action
was barred by Tri-Par Investments3; and (3) overruling SFI’s
motion for partial summary judgment that paragraphs 10q, 15,
and 16 of the lease were not unconscionable or void as against
public policy.
IV. STANDARD OF REVIEW
[1] An appellate court will affirm a lower court’s grant of
summary judgment if the pleadings and admitted evidence
2
Id.
3
Id.
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show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts
and that the moving party is entitled to judgment as a matter
of law.4
We set forth other pertinent standards of review at appro-
priate points in the analysis.
V. ANALYSIS
1. Subrogation and Tri-Par
Investments Rule
Carroll admits that “this is not a true subrogation claim,
[but] is a claim by a landlord against a tenant for the unin-
sured portion that public policy still bars as a gross economic
waste.”5 In order to understand the parties’ arguments, we
briefly recall the concept of subrogation and the antisubroga-
tion rule.
(a) Subrogation
[2-4] Generally, subrogation is the right of one, who has
paid the obligation which another should have paid, to be
indemnified by the other.6 Subrogation applies to an insurer’s
right to proceed against a third party responsible for a loss
which the insurer has compensated pursuant to its contractual
obligation under a policy, and which depends, inter alia, on the
existence of the insured’s right to proceed against that entity.7
In the context of insurance, the right to equitable subrogation
is generally based on two premises: (1) A wrongdoer should
reimburse an insurer for payments that the insurer has made to
its insured, and (2) an insured should not be allowed to recover
twice from the insured’s insurer and the tort-feasor.8
4
Coffey v. Planet Group, 287 Neb. 834, 845 N.W.2d 255 (2014).
5
Brief for appellee at 13.
6
Buckeye State Mut. Ins. Co. v. Humlicek, 284 Neb. 463, 822 N.W.2d 351
(2012).
7
See 16 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 222:2
(2005).
8
Buckeye State Mut. Ins. Co., supra note 6.
Nebraska Advance Sheets
SFI LTD. PARTNERSHIP 8 v. CARROLL 705
Cite as 288 Neb. 698
(b) Antisubrogation Rule
[5,6] Under the antisubrogation rule, no right of subroga-
tion can arise in favor of an insurer against its own insured
or coinsured for a risk covered by the policy, even if the
insured is a negligent wrongdoer.9 The antisubrogation rule
has been extended to “implied coinsureds.”10 To allow sub-
rogation under such circumstances would permit an insurer,
in effect, to avoid the very coverage which its insured pur-
chased.11 In addition, the insurer should not be in a situation
where there exists a potential conflict of interest which could
affect the insurer’s incentive to provide its insured with a vig-
orous defense.12
(c) Tri-Par Investments
[7] In Tri-Par Investments,13 a fire damaged a house that
was being rented. After the landlord made a claim for cover-
age, its insurer initiated a subrogation action in the name of
the landlord against the tenant, alleging negligence and breach
of the lease agreement. We formally adopted the rule from
Sutton v. Jondahl14: “[A]bsent an agreement to the contrary,
the law presumes that a tenant is coinsured under a landlord’s
fire insurance policy and that therefore, a landlord’s insurer
cannot maintain a subrogation action against a tenant for
damage to the insured property that is caused by the tenant’s
negligence.”15 The Sutton court explained that the law consid-
ers the tenant to be a coinsured of the landlord based upon
“a relational reality, namely, that both landlord and tenant
have an insurable interest in the rented premises—the former
owns the fee and the latter has a possessory interest.”16 The
9
Id.
10
Id.
11
Id.
12
Id.
13
Tri-Par Investments, supra note 1.
14
Sutton v. Jondahl, 532 P.2d 478 (Okla. App. 1975).
15
Tri-Par Investments, supra note 1, 268 Neb. at 124, 680 N.W.2d at 195.
16
Sutton, supra note 14, 532 P.2d at 482.
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district court in the instant case characterized Sutton as the
“controlling case for liability of a tenant for a fire on the
leased premises.”
In Tri-Par Investments, we reasoned that the Sutton rule
“represents the better public policy”17 for several reasons. We
stated that it “prevents landlords from engaging in games-
manship when drafting leases by providing the necessary
incentive for them, if they so desire, to place express subro-
gation provisions in their leases.”18 It also “comports with the
reasonable expectations of tenants” and “accounts for modern
commercial realities by preventing the economic waste that
will undoubtedly occur if each tenant in a multiunit dwelling
or multiunit rental complex is required to insure the entire
building against his or her own negligence.”19
2. Whether Issues R egarding
Paragraph 17 Were R aised
(a) Issue
SFI first assigns that the district court erred in ruling upon
paragraph 17 of the lease, because the issue was outside the
pleadings. The district court determined that paragraph 17 of
the lease was void as against public policy and unconscionable.
Carroll responds that she specifically raised both defenses in
her answer and that paragraph 17 was incidental to the para-
graphs she specifically attacked.
(b) Standard of Review
[8] A question concerning the waiver of an affirmative
defense involves the interpretation of Neb. Ct. R. Pldg.
§ 6-1108(c) and, as such, is a question of law reviewed
de novo.20
17
Tri-Par Investments, supra note 1, 268 Neb. at 131, 680 N.W.2d at 199.
18
Id.
19
Id.
20
See Harbeson v. Parke Davis, Inc., 746 F.2d 517 (9th Cir. 1984).
Nebraska Advance Sheets
SFI LTD. PARTNERSHIP 8 v. CARROLL 707
Cite as 288 Neb. 698
(c) Additional Facts
Carroll’s answer included two allegations pertinent to our
discussion of this issue. She alleged that SFI’s claims were
barred because SFI and Carroll were considered coinsureds
under Tri-Par Investments. She also alleged that paragraphs
10q, 15, and 16 of the lease were unconscionable and void as
against public policy.
Paragraph 10q of the lease provided, in relevant part, that
Carroll agreed “[t]o hold [SFI] harmless for any loss or
liability, including attorney fees, for any personal injury or
accident sustained by [Carroll] or Others, except where said
injury results from the active and actionable gross negligence
of [SFI.]”
Paragraphs 15 and 16 of the lease addressed indemnification
and liability. These provisions stated:
15. INDEMNIFICATION:
Resident will indemnify and save Landlord harmless
from and against any and all claims, action, damages,
liability and expenses in connection with loss of life, per-
sonal injury, and/or damage to property, arising from any
act or omission of Resident or Others.
16. LIABILITY:
Resident agrees that all property kept in the Premises
shall be at the risk of Resident. Resident further agrees to
indemnify and hold Agent and Owner harmless from any
loss, lawsuit, or damages incurred as a result of any loss
or damage sustained by action of any third party; fire,
water, theft, or the elements, or for loss of any articles
from any cause from said Apartment or any other por-
tion of the Premises. Resident also indemnifies and holds
Agent and Owner harmless from any lawsuit or damages
resulting from any injury to Resident or Others entering
the Apartment building property of which the premises
is a part. Resident shall be responsible for obtaining fire,
extended coverage and liability insurance with respect to
the contents of the Apartment.
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(d) Discussion
[9-11] We acknowledge that the issues in a given case will
be limited to those which are pled.21 And we acknowledge
that under the controlling rule, a party pleading to a preced-
ing pleading must set forth affirmatively matters constitut-
ing an avoidance or affirmative defense.22 But we have also
recognized that the federal rules of pleading, which Nebraska
has generally adopted, were designed to liberalize pleading
requirements.23 Thus, our inquiry becomes whether SFI was
afforded fair notice of the nature of the defense.24
Read together, Carroll’s allegations regarding Tri-Par
Investments and the conscionability of the lease provisions
placed SFI on fair notice that the lease provisions imposing
liability on Carroll for damages resulting from fire were being
challenged. Although paragraph 17 focused on Carroll’s per-
sonal property and her obligation to provide renter’s insurance,
insurance covering Carroll’s potential liability to SFI for fire
damages caused by her negligence reasonably related to her
allegations regarding Tri-Par Investments. SFI was placed on
fair notice that paragraph 17 was material to the issues raised
by Carroll’s answer.
(e) Resolution
Paragraph 17 of the lease was fairly raised in the proceeding
by the allegations of Carroll’s answer. SFI’s first assignment of
error lacks merit.
3. Paragraph 17 in R elation
to Tri-Par Investments
(a) Issue
SFI next assigns that the district court erred in determining
that SFI’s action was barred by Tri-Par Investments.25
21
See Rickerl v. Farmers Ins. Exch., 277 Neb. 446, 763 N.W.2d 86 (2009).
22
See § 6-1108(c).
23
See Weeder v. Central Comm. College, 269 Neb. 114, 691 N.W.2d 508
(2005).
24
See id.
25
Tri-Par Investments, supra note 1.
Nebraska Advance Sheets
SFI LTD. PARTNERSHIP 8 v. CARROLL 709
Cite as 288 Neb. 698
(b) Standard of Review
[12] The interpretation of a lease,26 the unconscionability of
a contract provision,27 and the determination of whether a con-
tract violates public policy28 are questions of law.
[13] When reviewing questions of law, an appellate court
has an obligation to resolve the questions independently of the
conclusions reached by the trial court.29
(c) Discussion
SFI argues that the rule announced in Tri-Par Investments
is inapplicable to the instant case. We agree. SFI brought
this action against Carroll to recover damages which were
not covered by its insurance policy. This is not a subrogation
action brought by SFI’s insurer to recover sums the insurer
paid to SFI. And because this is not a subrogation action,
the antisubrogation rule adopted in Tri-Par Investments does
not apply. Accordingly, the district court erred to the extent
that it relied upon Tri-Par Investments and Sutton as control-
ling precedent.
But as we noted at the outset of the analysis, Carroll con-
cedes that this is not a true subrogation claim. And she argues
that the principles of Tri-Par Investments and Sutton should be
extended to the landlord’s uninsured loss. We examine para-
graph 17 in that context.
Paragraph 17 notified Carroll that (1) her personal property
was not insured or covered by SFI for loss of any kind, (2)
renter’s insurance was required, and (3) the renter’s insurance
needed to include personal liability coverage to a minimum of
$100,000. The district court stated that paragraph 17 was “[t]he
crux of the instant case” and that it was “void for public policy
and unconscionable because [SFI] cannot require each of its
tenants to insure its building.”
26
See Beveridge v. Savage, 285 Neb. 991, 830 N.W.2d 482 (2013).
27
See Myers v. Nebraska Invest. Council, 272 Neb. 669, 724 N.W.2d 776
(2006).
28
See Lexington Ins. Co. v. Entrex Comm. Servs., 275 Neb. 702, 749 N.W.2d
124 (2008).
29
Id.
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SFI does not dispute that it is not in the public interest to
require all tenants to insure the building in which they share.
But SFI asserts that paragraph 17 does not require tenants to
insure the building. We agree. Paragraph 17 provides that the
tenant’s personal property is not insured or covered by SFI’s
insurance coverage and that the resident must obtain renter’s
insurance to include personal liability coverage to a minimum
of $100,000.
[14] We discussed a similar lease provision regarding insur-
ance in Beveridge v. Savage.30 In that case, a provision of
the lease stated that “‘[t]he Tenant shall provide a liabil-
ity and renter[’]s insurance [policy] ($100,000) at Tenant’s
expense.’”31 We explained: “‘Renter’s insurance is a “contents”
policy which covers tenant’s possessions, such as furniture,
appliances, personal belongings, and household goods.’ . . .
‘However, renter’s insurance does not typically cover the struc-
ture of the leased premises.’”32 We reasoned that “[t]he lease
provision requiring the tenant to obtain renter’s insurance did
not require the tenant to insure the building against loss by
fire.”33 Similarly, although paragraph 17 required Carroll to
obtain renter’s insurance, it did not require her to insure the
entire building. The district court’s concern that paragraph 17
would require each tenant to insure the entire rental complex
is unfounded.
[15,16] Courts should be cautious in holding contracts void
on the ground that the contract is contrary to public policy; to
be void as against public policy, the contract should be quite
clearly repugnant to the public conscience.34 We find no such
repugnancy. Further, the term “unconscionable” means mani-
festly unfair or inequitable.35 Nothing in paragraph 17 strikes
us as manifestly unfair or inequitable.
30
Beveridge, supra note 26.
31
Id. at 993, 830 N.W.2d at 485.
32
Id. at 997, 830 N.W.2d at 487.
33
Id.
34
Bedrosky v. Hiner, 230 Neb. 200, 430 N.W.2d 535 (1988).
35
Myers, supra note 27.
Nebraska Advance Sheets
SFI LTD. PARTNERSHIP 8 v. CARROLL 711
Cite as 288 Neb. 698
[17-20] Moreover, the Uniform Residential Landlord and
Tenant Act36 contemplates that a court may determine a lease
provision to be unconscionable, but expressly upholds ten-
ants’ liability for negligent fire damage. Where a court finds
that a rental agreement or any provision thereof was uncon-
scionable when made, the court may refuse to enforce the
agreement, enforce the remainder of the agreement without
the unconscionable provision, or limit the application of any
unconscionable provision to avoid an unconscionable result.37
But the act treats fire damage caused by a tenant’s negli-
gence differently. Section 76-1429 regulates the landlord-
tenant relationship where the property is damaged by fire.
“Notwithstanding the provisions of this section, the tenant is
responsible for damage caused by his [or her] negligence.”38
To the extent there is conflict between two statutes on the
same subject, the specific statute controls over the general
statute.39 Where a specific statute holds a tenant responsible
for fire damages caused by his or her negligence, we cannot
hold a lease provision doing so void as against public policy
or unconscionable.
Carroll relies on a New Hampshire decision extending the
Sutton rule to uninsured fire losses. In Cambridge Mut. Fire
Ins. Co. v. Crete,40 the landlords’ insurer brought a subrogation
action against the tenant of a building that sustained extensive
fire damage for the amount paid to the landlords under a fire
insurance policy. The landlords also sought reimbursement
from the tenant for their uninsured losses. In addition to fol-
lowing the Sutton rule regarding the subrogation claim, the
New Hampshire court held that a landlord may not hold a ten-
ant liable for any uninsured losses as a result of fire damage
where the landlord did not have adequate insurance.
36
Neb. Rev. Stat. §§ 76-1401 to 76-1449 (Reissue 2009).
37
§ 76-1412(1).
38
§ 76-1429(2).
39
Jeffrey B. v. Amy L., 283 Neb. 940, 814 N.W.2d 737 (2012).
40
Cambridge Mut. Fire Ins. Co. v. Crete, 150 N.H. 673, 846 A.2d 521
(2004).
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Carroll’s reliance on the New Hampshire decision is mis-
placed. The Sutton decision did not address uninsured losses,
particularly those allegedly caused by a tenant’s negligence.
Thus, the New Hampshire court extended the rule beyond
the rationale of the Sutton decision. And the court provided
no other support for that part of its decision. At least where a
tenant negligently causes the fire damage, we cannot extend
the Sutton rule to uninsured losses where a statute expressly
declares the tenant to be responsible.41 Moreover, the Sutton
rule is premised on the idea that to allow subrogation under
such circumstances would permit an insurer, in effect, to avoid
the very coverage which its insured purchased. Where the dam-
ages are not covered by the landlord’s insurance, this ration­
ale disappears.
Of course, we are mindful that the district court’s deci-
sion was made on summary judgment focusing on an issue of
law. The question of whether the fire damage was caused by
any negligence on Carroll’s part has not been determined by
the district court, and accordingly, we express no opinion on
that issue.
(d) Resolution
Because we conclude that paragraph 17 is not void as
against public policy or unconscionable, the district court erred
in entering summary judgment for Carroll upon that basis. The
summary judgment must be reversed, and the cause remanded
for further proceedings consistent with this opinion.
4. Denial of Motion for Partial
Summary Judgment
(a) Issue
Finally, SFI assigns that the district court erred in deny-
ing its motion for partial summary judgment seeking a ruling
that paragraphs 10q, 15, and 16 of the lease were not uncon­
scionable or void as against public policy, as Carroll had
alleged in her answer. The district court denied the motion
without discussion.
41
See § 76-1429(2).
Nebraska Advance Sheets
SFI LTD. PARTNERSHIP 8 v. CARROLL 713
Cite as 288 Neb. 698
(b) Standard of Review
As we explained above, questions regarding whether the
lease was unconscionable or was void as against public policy
are questions of law, which we review de novo.
(c) Discussion
[21] We first note that we have jurisdiction of this issue.
Although the denial of a motion for summary judgment,
standing alone, is not a final, appealable order, when adverse
parties have each moved for summary judgment and the trial
court has sustained one of the motions, the reviewing court
obtains jurisdiction over both motions and may determine the
controversy which is the subject of those motions or make
an order specifying the facts which appear without substan-
tial controversy and direct such further proceedings as it
deems just.42 Because the court sustained Carroll’s motion for
summary judgment, we have jurisdiction over the denial of
SFI’s motion.
And to the extent that Carroll’s arguments regarding con-
scionability and public policy rest upon extending the Tri-Par
Investments rule to a landlord’s uninsured fire losses allegedly
caused by a tenant’s negligence, we have already rejected
them in discussing paragraph 17. The same rationale would
apply to the other paragraphs.
But the unresolved issues of fact regarding Carroll’s neg-
ligence, if any, prevent us from going any further. The litiga-
tion below has not focused on whether any of the challenged
paragraphs of the lease would impose liability upon Carroll for
damage to SFI’s property that was not attributable in any way
to Carroll’s negligence.
We encountered an analogous situation in Kuhn v. Wells
Fargo Bank of Neb.43 We agreed with a landlord that the dis-
trict court erred in sustaining a tenant’s motion for summary
judgment and concluding as a matter of law that an indemnity
clause in the lease was ambiguous and unenforceable. But
we declined to direct that the landlord’s motion for summary
42
U.S. Bank Nat. Assn. v. Peterson, 284 Neb. 820, 823 N.W.2d 460 (2012).
43
Kuhn v. Wells Fargo Bank of Neb., 278 Neb. 428, 771 N.W.2d 103 (2009).
Nebraska Advance Sheets
714 288 NEBRASKA REPORTS
judgment against the tenant be granted. There was no evi-
dence establishing that the landlord was liable to the injured
party, who fell into an elevator car stationed “‘about a foot’”
below floor level.44 We directed that the cause be remanded
for further proceedings consistent with our opinion. Although
the facts in Kuhn were considerably different, the same prin-
ciple applies to the instant case. The focus has been on the
Tri-Par Investments rule. The circumstances dictate that we
likewise remand the cause for further proceedings consistent
with this opinion.
(d) Resolution
Under the circumstances of this case, we decline to direct
entry of partial summary judgment in favor of SFI. Rather, we
remand the cause for further proceedings.
VI. CONCLUSION
The judgment of the district court granting Carroll’s motion
for summary judgment and dismissing SFI’s complaint is
reversed, and the cause is remanded to the district court for
further proceedings consistent with this opinion.
R eversed and remanded for
further proceedings.
44
Id. at 432, 771 N.W.2d at 110.
State of Nebraska, appellee, v.
Francisco C. Rodriguez, appellant.
___ N.W.2d ___
Filed August 1, 2014. No. S-13-325.
1. Jurisdiction: Appeal and Error. Subject matter jurisdiction is a question of law
for the court, which requires an appellate court to reach a conclusion independent
of the lower court’s decision.
2. Statutes: Legislature: Intent: Appeal and Error. In construing a statute, an
appellate court’s objective is to determine and give effect to the legislative intent
of the enactment.