Callahan v. Brant , 314 Neb. 219 ( 2023 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
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314 Nebraska Reports
CALLAHAN V. BRANT
Cite as 314 Neb. 219Mark and Michelle Callahan, husband and wife,
appellants, v. Jeb Brant, an individual,
and Shelter Mutual Insurance
Company, a Missouri insurance
company, appellees.
___ N.W.2d ___
Filed May 12, 2023. No. S-21-1006.
1. Summary Judgment: Appeal and Error. An appellate court will affirm
a lower court’s grant of summary judgment if the pleadings and admit-
ted evidence 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.
2. Statutes: Appeal and Error. Statutory interpretation presents a ques-
tion of law, which an appellate court reviews independently of the
lower court.
3. Insurance: Agents. When an insured asks an insurance agent to procure
insurance, it is the duty of the insured to advise the insurance agent as
to the desired insurance, including the limits of the policy to be issued.
4. ____: ____. An insurance agent has no duty to anticipate what coverage
an insured should have.
5. ____: ____. It would be an unreasonable burden to impose upon
insurance agents the duty to anticipate what coverage an individual
should have, absent the insured’s requesting coverage in at least a gen-
eral way.
6. Insurance: Valuation. Nebraska’s valued policy statute, Neb. Rev. Stat.
§ 44-501.02 (Reissue 2021), conclusively fixes the true value of insured
property at the valuation written in the policy, and when there is a total
loss, that sum is the measure of recovery.
7. ____: ____. Nebraska’s valued policy statute, Neb. Rev. Stat. § 44-501.02(Reissue 2021), is required to be part of every fire policy issued
in Nebraska.
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CALLAHAN V. BRANT
Cite as 314 Neb. 2198. Insurance: Valuation: Damages. Nebraska’s valued policy statute,
Neb. Rev. Stat. § 44-501.02 (Reissue 2021), fixes conclusively the worth
of the building which is the subject of insurance, and if the building is
wholly destroyed, its actual value is not to be determined by evidence,
agreement, or arbitration. The damages are liquidated, and the measure
of recovery already obtained.
9. Insurance: Valuation: Public Policy. The public policy objectives of
Nebraska’s valued policy statute, Neb. Rev. Stat. § 44-501.02 (Reissue
2021), are twofold. Before a loss, the purpose is to prevent overinsur-
ance by requiring the parties to investigate and agree upon a binding
determination of value before a policy is issued. And after a total loss,
the purpose is to foreclose disputes and litigation between insurers and
insureds over the value of the destroyed property by conclusively fixing
its true value as a matter of law and by precluding evidence of a differ-
ent value except to show fraud or a motive for arson.
10. Statutes: Legislature: Intent. When construing a statute, a court must
determine and give effect to the purpose and intent of the Legislature
as ascertained from the entire language of the statute considered in its
plain, ordinary, and popular sense.
11. Statutes: Courts. A court must reconcile different provisions of a stat-
ute so that they are consistent, harmonious, and sensible.
12. Statutes: Intent. In construing a statute, the court must look at the
statutory objective to be accomplished, the problem to be remedied,
or the purpose to be served, and then place on the statute a reasonable
construction that best achieves the purpose of the statute, rather than a
construction defeating the statutory purpose.
13. Insurance: Valuation. Neither party can evade Nebraska’s valued pol-
icy statute, Neb. Rev. Stat. § 44-501.02 (Reissue 2021), by avoiding the
duty to investigate the value of the property before agreeing to a binding
determination of value.
14. ____: ____. In actions between the insurer and insured to determine the
amounts owed by the insurer after a total loss to real property insured
against loss by fire, tornado, windstorm, lightning, or explosion, both
the insurer and the insured are bound by the conclusive determination
of true value established by Neb. Rev. Stat. § 44-501.02 (Reissue 2021),
and neither can contend the value of the total loss is something different
than was written in the policy.
15. ____: ____. It is not the type of action, but, rather, the nature of the
claim being asserted, that triggers application of Nebraska’s valued
policy statute. And the valued policy statute is implicated whenever
a suit between the insurer and the insured seeks to determine the
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CALLAHAN V. BRANT
Cite as 314 Neb. 219amount owed by the insurer for a total loss to real property insured
against loss by fire, tornado, windstorm, lightning, or explosion.
Appeal from the District Court for Adams County: Terri S.
Harder, Judge. Affirmed.
Mark R. Richardson, Timothy R. Engler, and Sami D.
Segelke, of Rembolt Ludtke, L.L.P., for appellants.
Roger G. Steele and Liana Steele, of Steele Law Office, for
appellee Jeb Brant.
Isaiah J. Frohling and Susan K. Sapp, of Cline, Williams,
Wright, Johnson & Oldfather, L.L.P., for appellee Shelter
Mutual Insurance Company.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
and Freudenberg, JJ., and Miller, District Judge.
Per Curiam.
I. INTRODUCTION
Mark and Michelle Callahan filed this negligence action
against their insurer and its agent, 1 seeking to recover dam-
ages after their home was destroyed in a fire. The district
court granted summary judgment in favor of the insurer and
its agent. Although our reasoning differs, we affirm the district
court’s judgment.
II. FACTUAL BACKGROUND
In 2011, the Callahans purchased a Shelter Mutual Insurance
Company (Shelter) homeowners insurance policy through a
licensed insurance producer, Jeb Brant. 2 Brant is a “captive”
Shelter agent and exclusively sells Shelter insurance. Before
the policy was issued, Brant used a reconstruction cost cal-
culator tool to estimate the cost of rebuilding the Callahans’
home, using information obtained from the Callahans and
1
See Neb. Rev. Stat. § 44-103(8), (9), and (10) (Reissue 2021).
2
See Neb. Rev. Stat. §§ 44-4047 to 44-4069 (Reissue 2021).
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CALLAHAN V. BRANT
Cite as 314 Neb. 219from the Clay County assessor’s website. Brant prepared a
report that estimated reconstruction costs at $250,481 and con-
tained a disclaimer stating:
Listed above is a summary of the information we used
to estimate the cost of replacing your real property for
the purpose of helping you decide the amount of cover-
age to obtain. The estimate is not a guarantee of adequate
coverage. We provide this to you only to help you decide
if your property is adequately insured. Please review this
information to verify its accuracy. If any of the informa-
tion is incorrect, please notify us.
The Callahans dispute that they received a copy of the report,
but it is undisputed that they subsequently purchased a replace-
ment cost policy insuring their home for $250,481.
The Callahans thereafter renewed their Shelter policy annu-
ally from 2012 to 2018. Pursuant to a provision in the policy,
the coverage amount was automatically increased for inflation
during this time. In 2018, the applicable policy limit on the
home had increased to $260,600, and the policy premiums
increased accordingly.
In anticipation of the policy’s 2019 renewal, Michelle met
with Brant to discuss the details of the policy. The parties dis-
pute what was said during this meeting. The Callahans claim
that Michelle expressed concern about whether the policy limit
was sufficient to replace their home in the event of a total
loss and that Brant assured Michelle they were “more than
adequately covered.” Brant denies making any such assurance.
After this meeting, the Callahans renewed the Shelter policy
for 2019 with a policy limit of $267,400 on their home.
After the Callahans renewed the policy, Mark and Brant
happened to see each other. At this unscheduled meeting,
the Callahans claim that Mark expressed concern to Brant
regarding the sufficiency of the policy limit on their home.
According to the Callahans, Brant assured Mark that the
existing policy limit would be sufficient to rebuild the home
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CALLAHAN V. BRANT
Cite as 314 Neb. 219in the event of a total loss. Brant disputes making any
such statement.
In May 2019, the parties agree the Callahans’ home was
totally destroyed by an electrical fire. The Callahans sub-
mitted a claim on the policy with Brant’s assistance, and it
is undisputed that Shelter subsequently paid the Callahans
all amounts due and owing under the policy. The Callahans
allege that when they subsequently obtained a quote for the
cost of rebuilding their home, they learned “the cost to rebuild
was substantially higher than the amount of insurance cover-
age.” The quoted amount to rebuild the home is not reflected
in our record, and the accuracy of the quote is disputed by
the parties.
In April 2020, the Callahans filed a complaint against Shelter
and Brant, styled as claims for breach of contract, negligence,
and negligent misrepresentation. The Callahans later stipulated
to the dismissal of their breach of contract claim. Their remain-
ing claims generally allege that Brant negligently advised them
on the estimated replacement value of their home and negli-
gently misrepresented the adequacy of their policy limits in the
event of a total loss. The Callahans contend they reasonably
relied on Brant’s statements and, as a result, sustained damages
“in an amount to be proven at trial.” And they alleged Shelter
was liable for Brant’s misrepresentations under a theory of
respondeat superior. Brandt and Shelter denied the allegations
of negligence and negligent misrepresentation, and alleged the
Callahans’ complaint failed to state a claim upon which relief
could be granted.
Shelter and Brant each moved for summary judgment, argu-
ing they were entitled to judgment as a matter of law on the
Callahans’ remaining claims. At the hearing on the motion,
the court received multiple exhibits, including depositions of
the parties and a copy of the applicable Shelter policy. As
relevant to the issues on appeal, that policy contains a special
endorsement stating:
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CALLAHAN V. BRANT
Cite as 314 Neb. 219TO OUR CUSTOMERS—PLEASE NOTE
Please read this policy carefully. If you have ques-
tions, contact your Shelter agent for answers. No agent
can know your exact coverage needs or budget consider-
ations, so it is your responsibility to examine the policy
and make sure it provides the types of coverage you need
in the amounts you requested.
The declarations page of the policy states the Callahans’
home was insured in the amount of $267,400, and the policy
contains the following “Valued Policy” provision:
When this policy is written to insure any real property
in this state against loss by fire, tornado, windstorm,
lightning or explosion and the property insured shall be
wholly destroyed, without criminal fault on the part of the
insured or his assignee, the amount of insurance written
on such real property shall be taken conclusively to be the
true value of the property insured and the true amount of
loss and measure of damages.
Shelter and Brant generally relied on the language of the
policy, as well as on Nebraska case law regarding the duty
of insureds and insurance agents, to argue that it was the
Callahans’ duty to know the value of the property they were
insuring and to request the amount of insurance coverage they
desired. Shelter and Brant argued that the policy limit on the
home was unambiguously stated in the policy and represented
the full measure of the Callahans’ damages in the event of a
total loss.
In opposing summary judgment, the Callahans conceded
that they understood the nature and the amount of the coverage
they had purchased from Shelter and that they never requested
higher policy limits. But they argued that the amount of cover-
age they purchased was based on Brant’s negligent advice as
to the replacement value of their home and on his negligent
misrepresentation that the policy limit they had purchased
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CALLAHAN V. BRANT
Cite as 314 Neb. 219would be sufficient to cover the cost of rebuilding their home
in the event of a total loss.
In a written opinion, the district court granted summary
judgment in favor of Shelter and Brant. The court understood
the Callahans’ remaining negligence claims to rest on a theory
of negligent misrepresentation, and it correctly recited that
for an insured to recover against an insurance agent for neg-
ligent misrepresentation under Nebraska law, the insured must
show that the agent supplied false information upon which the
insured reasonably relied and that the agent failed to exercise
reasonable care or competence in communicating such infor-
mation to the insured. 3
The district court ultimately concluded the Callahans could
not prevail on such a claim. It reasoned that even accepting as
true the Callahans’ claims that Brant provided false informa-
tion regarding the replacement value of their property and the
adequacy of their policy limit, the Callahans could not have
reasonably relied on such information because, under the terms
of the policy and under Nebraska law, it was the Callahans’
duty and responsibility to know their coverage needs and to
request the amount of coverage they wanted. The court also
found the evidence was undisputed that the Callahans never
asked Brant to provide them with a higher amount of coverage
on their home or to procure any supplemental coverage.
Based on this reasoning, the district court granted summary
judgment in favor of Shelter and Brant. The Callahans timely
appealed, and we moved this appeal to our docket on our
own motion.
III. ASSIGNMENTS OF ERROR
The Callahans assign, consolidated and restated, that the
district court erred in granting summary judgment because
3
See, Hobbs v. Midwest Ins., Inc., 253 Neb. 278, 570 N.W.2d 525 (1997);
Hansmeier v. Hansmeier, 25 Neb. App. 742, 912 N.W.2d 268 (2018).
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CALLAHAN V. BRANT
Cite as 314 Neb. 219(1) there were genuine disputes of material fact regard-
ing whether Brant supplied false information, whether the
Callahans reasonably relied on such information, and whether
Brant exercised reasonable care in advising them about the
adequacy of their insurance coverage, and (2) the court failed
to address whether Brant “had a duty to advise and obtain
appropriate insurance coverage for the Callahans.”
IV. STANDARD OF REVIEW
[1] 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 inferences that may be drawn from the facts
and that the moving party is entitled to judgment as a matter
of law. 4
[2] Statutory interpretation presents a question of law, which
an appellate court reviews independently of the lower court. 5
V. ANALYSIS
[3-5] Before the district court, and again on appeal, the
parties focus much of their argument on whether Brant owed
the Callahans a legal duty to advise them on the value of
their property and the sufficiency of the policy limit insuring
their home. Nebraska law on this issue is well settled. When
an insured asks an insurance agent to procure insurance, it
is the duty of the insured to advise the insurance agent as to
the desired insurance, including the limits of the policy to be
issued. 6 An insurance agent has no duty to anticipate what
4
Kozal v. Snyder, 312 Neb. 208, 978 N.W.2d 174 (2022).
5
Echo Group v. Tradesman Internat., 312 Neb. 729, 980 N.W.2d 869(2022).
6
See, Merrick v. Fischer, Rounds & Assocs., 305 Neb. 230, 939 N.W.2d 795(2020); Dahlke v. John F. Zimmer Ins. Agency, 245 Neb. 800, 515 N.W.2d
767 (1994); Polski v. Powers, 221 Neb. 361, 377 N.W.2d 106 (1985);
Manzer v. Pentico, 209 Neb. 364, 307 N.W.2d 812 (1981).
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CALLAHAN V. BRANT
Cite as 314 Neb. 219coverage an insured should have. 7 Because of this, we have
recognized it would be an unreasonable burden to impose upon
insurance agents the duty to anticipate what coverage an indi-
vidual should have, absent the insured’s requesting coverage in
at least a general way. 8
Here, the Callahans concede they never asked Brant to
procure coverage in a higher amount on their home. Instead,
they contend that when they asked him if their existing policy
limit was adequate, Brant “explicitly and impliedly undertook
to advise the Callahans that the amount of coverage they had
would be sufficient to rebuild their home in the event of a total
loss.” 9 The Callahans contend that these representations were
false, that they reasonably relied upon them, and that they
“suffered financial harm” 10 as a result. They specifically argue
they “would have increased their policy limits if Brant would
have advised them that they needed more coverage to replace
their home in the event of a total loss.” 11
We have not directly addressed whether insureds can cre-
ate a legal duty to provide correct advice about the value of
insured property or the amount of insurance coverage needed
merely by asking an insurance agent, “Is my current coverage
adequate?” But it is not necessary, in this case, to answer that
question. Because regardless of the duty issues, to prevail on
the negligent misrepresentation claims they assert here, the
Callahans must prove, among other things, that Brant supplied
them with false information about the value of their insured
property and that they reasonably relied on that informa-
tion. In other words, they must establish that the true value
of their home was actually higher than the amount for which
7
See, Merrick, supra note 6; Dahlke, supra note 6; Polski, supra note 6.
8
Polski, supra note 6.
9
Brief for appellants at 8.
10
Id. at 7.
11
Id.
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Cite as 314 Neb. 219it was insured. And as we will explain, Nebraska’s valued
policy statute conclusively establishes the true value of the
Callahans’ loss in the event the property is wholly destroyed,
and it precludes them from offering evidence that the true
value was something other than the amount for which the
home was insured.
1. Nebraska’s Valued Policy Statute
Nebraska’s valued policy statute is currently codified at
Neb. Rev. Stat. § 44-501.02 (Reissue 2021), and it provides:
Whenever any policy of insurance is written to insure
any real property in this state against loss by fire, tor-
nado, windstorm, lightning, or explosion and the property
insured is wholly destroyed without criminal fault on the
part of the insured or his or her assignee, the amount of
the insurance written in such policy shall be taken conclu-
sively to be the true value of the property insured and the
true amount of loss and measure of damages.
[6,7] We have long held that the valued policy statute con-
clusively fixes the true value of insured property at the valua­
tion written in the policy, and when there is a total loss, that
sum is the measure of recovery. 12 The valued policy statute is
required to be part of every fire policy issued in this state, 13
and the statutory language was expressly incorporated into the
Shelter policy issued to the Callahans.
[8] More than a century ago, we described the impact of
the valued policy statute as “fix[ing] conclusively the worth
12
See, e.g., Leisy v. Farmers Mutual Home Ins. Co., 128 Neb. 278, 258 N.W.
481 (1935); Fadanelli v. National Security Fire Ins. Co., 113 Neb. 830,
205 N.W. 642 (1925); Lancashire Ins. Co. v. Bush, 60 Neb. 116, 82 N.W.
313 (1900); Aetna Ins. Co. v. Simmons, 49 Neb. 811, 69 N.W. 125 (1896).
13
See Neb. Rev. Stat. § 44-501(10) (Reissue 2021) (requiring all fire policies
to provide that total loss claims “shall be paid in accordance with section
44-501.02”). See, also, Lancashire Ins. Co., supra note 12.
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Cite as 314 Neb. 219of the building which is the subject of insurance” and when
“the property is wholly destroyed, its actual value is not to
be determined by evidence, agreement or arbitration. The
damages are liquidated and the measure of recovery already
ascertained.” 14
We discussed the public policy rationale behind the val-
ued policy statute in Heady v. Farmers Mut. Ins. Co. 15 There,
we stated:
“It is a well-known fact that it has been the practice
of some fire insurance companies to insure property at
any value the insured cared to put thereon without any
investigation as to such value. The natural impulse of
the insured was toward amply sufficient or even over
valuation. The higher the valuation, the greater the pre-
mium. If there were no loss, the insurance company
profited through the high valuation. If loss occurred, the
insurer would contest the value or amount of recovery
and the insured might recover less than the value stipu-
lated in the policy, although he had honestly estimated
the value at the time the insurance was taken and had
paid premiums on the basis of such estimated value.
This situation produced dissatisfaction and litigation.
It was to correct this condition, that [the valued policy
statute] was enacted. . . . Also, overvaluation was a
temptation to commit arson, which might endanger lives
or other property. The statute is not merely for the pro-
tection of the insured but ‘rests on considerations of
public policy, and it is probable that the insured could
not, even by express contract, relinquish the benefit of
its provisions.’ . . .
“The method of the [valued policy statute] is to have
the value liquidated in the policy by the parties to the
14
Lancashire Ins. Co., supra note 12, 60 Neb. at 121, 82 N.W. at 313-14.
15
Heady v. Farmers Mut. Ins. Co., 217 Neb. 172, 349 N.W.2d 366 (1984).
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Cite as 314 Neb. 219contract and removed from dispute and determination ‘by
evidence, agreement or arbitration.’ . . . The statute is
confined to real property because values thereof are rela-
tively fixed and certain. . . . The result of this method of
making the policy valuation binding was to place on the
insurer the duty to make its own investigation and bind-
ing determination of value before such is agreed upon
and placed in the contract. . . . Neither party can evade
the statute by avoiding this duty. If the insurer performs
its full duty, in this respect, it is bound by its estimate of
value based thereon unless conditions (reducing value),
not ascertainable by a reasonably careful inspection and
known to the insured, are withheld by the insured. But
the insurer cannot close its eyes, make no reasonable
investigation, take the bare word of the insured as to
value and thereafter challenge such value. To permit this
would be to nullify the good effect intended by the stat-
ute. It would reinstate the very situation and condition
which the statute sought to destroy and prevent. It would
encourage conscious overvaluation and, possibly, result-
ing arson.” 16
In Heady, the insurance agent issued a fire policy binder
insuring property for $60,000. After a fire rendered the prop-
erty a total loss, the insured sued to recover the $60,000 policy
limit, and the insurer defended by alleging the insured had
fraudulently misrepresented that the property had a value of
$60,000 when he had recently purchased the property for just
$5,000. We held that the valued policy statute conclusively
established the true value of the property at the amount for
which it was insured and necessarily precluded the insurer
from offering evidence of a different value to establish its
claim that the insured had misrepresented the property’s
16
Id. at 178-80, 349 N.W.2d at 370 (emphasis supplied), quoting United
States Fire Ins. Co. v. Sullivan, 25 F.2d 40 (8th Cir. 1928).
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Cite as 314 Neb. 219value when procuring the coverage. Heady expressly held that
“the valued policy statute precludes [the insurer] from asserting
as a defense to liability on its fire insurance contract the fact
that its insured either affirmatively misrepresented or failed to
disclose the actual value of the subject property.” 17 Heady did,
however, allow the insurer to offer evidence of a lower value
for the limited purpose of showing the insured had a motive to
commit arson, because such use was consistent with the valued
policy statute.
[9] Heady teaches that the objectives of the valued policy
statute are twofold. Before a loss, the purpose is to prevent
overinsurance by requiring the parties to investigate and agree
upon a binding determination of value before a policy is issued.
And after a total loss, the purpose is to foreclose disputes and
litigation between insurers and insureds over the value of the
destroyed property by conclusively fixing its true value as a
matter of law and by precluding evidence of a different value
except to show fraud or a motive for arson. 18
Nebraska’s valued policy statute is supported by related
statutes that both prohibit and penalize overinsuring property.
Neb. Rev. Stat. § 44-601 (Reissue 2021) prohibits insurers
from knowingly issuing fire insurance for more than the fair
value of a property. And Neb. Rev. Stat. § 44-602 (Reissue
2021) imposes a similar prohibition on property owners, mak-
ing it unlawful to procure a fire policy for an amount that
exceeds the fair value of the property. Moreover, Neb. Rev.
Stat. § 44-603 (Reissue 2021) provides that insurers who
17
Id. at 180, 349 N.W.2d at 370.
18
See Heady, supra note 15. Accord Springfield Fire and Marine Ins. Co.
v. Boswell, 167 So. 2d 780, 784 (Fla. App. 1964) (“[u]ndoubtedly an
important object of the [valued policy] statute is also to simplify and
facilitate prompt settlement of insurance claims when a total loss occurs.
It serves to remove what would otherwise be a very troublesome and
difficult issue to resolve either between the parties by negotiation or by the
courts in litigation”).
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Cite as 314 Neb. 219issue fire policies, and insureds who procure fire policies, are
“presumed to know the insurable value of such building.” This
statute also establishes penalties for “[a]ny agent who know-
ingly effects insurance on a building . . . in excess of the insur-
able value thereof . . . .” 19
After oral argument in this case, we requested supplemen-
tal briefing from the parties addressing, among other things,
whether Nebraska’s valued policy statute applies to the cir-
cumstances presented here. All parties submitted supplemental
briefs, and we have carefully considered them.
Brant argues that the valued policy statute applies to the
Callahans’ action against Shelter and Brant, reasoning gen-
erally that after a total loss, both the statute and the terms
of Shelter’s policy conclusively fix the policy limit as the
true value of the loss and the proper measure of damages in
an action on the loss. Brant also argues that, to the extent
the Callahans’ misrepresentation claim asserts they reasonably
relied on Brant’s representation of value because they did not
know the real insurable value of their home, their position is
contrary to the provisions of § 44-603, which create a pre-
sumption that the insurer, the procuring agent, and the insured
all know the insurable value of an insured building at the time
the policy goes into effect.
Similarly, Shelter argues the valued policy statute “unam-
biguously and conclusively establishes $267,400 as the value
of [the Callahans’] loss” 20 and because the Callahans have been
paid that sum, they have received their full measure of dam-
ages. Shelter contends the Callahans are using this negligent
misrepresentation action to, in effect, obtain additional insur-
ance coverage on their home without paying any associated
premium and without having requested a higher policy limit.
19
§ 44-603.
20
Supplemental brief for appellee Shelter at 12.
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Cite as 314 Neb. 219Shelter describes this as “contrary to the spirit of the underly-
ing purpose of § 44-501.02.” 21
The Callahans contend the valued policy statute has no
application here, and they advance two reasons why. First,
they argue the valued policy statute was enacted to address the
evils of overinsurance and their claim involves “the perils of
being underinsured.” 22 In other words, they contend the valued
policy statute precludes an insurer from challenging that the
real value of the property is less than the amount for which it
was insured, but it does not preclude an insured from challeng-
ing that the real value was more than the amount for which
it was insured. Second, they argue that although Nebraska
has had a valued policy statute for more than a century, no
Nebraska case has “found the language of . . . § 44-501.02 to
have any effect on a claim of negligent misrepresentation.” 23
We understand this to be an argument that the valued policy
statute applies in breach of contract actions, but not in negli-
gent misrepresentation actions.
[10-12] Before addressing these arguments, we set out the
settled principles of statutory construction that guide our anal-
ysis of whether the valued policy statute applies to this case.
When construing a statute, a court must determine and give
effect to the purpose and intent of the Legislature as ascer-
tained from the entire language of the statute considered in its
plain, ordinary, and popular sense. 24 A court must reconcile
different provisions of a statute so that they are consistent,
harmonious, and sensible. 25 And in construing a statute, the
court must look at the statutory objective to be accomplished,
the problem to be remedied, or the purpose to be served,
21
Id. at 15.
22
Supplemental brief for appellants at 13.
23
Id. at 11.
24
Ag Valley Co-op v. Servinsky Engr., 311 Neb. 665, 974 N.W.2d 324 (2022).
25
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Cite as 314 Neb. 219and then place on the statute a reasonable construction that
best achieves the purpose of the statute, rather than a con-
struction defeating the statutory purpose. 26
(a) Duties Imposed by Valued Policy Statute
Apply to Insurers and Insureds
[13] We said in Heady that “‘[n]either party’” 27 could evade
the valued policy statute by avoiding the duty to investigate
the value of the property before agreeing to a binding determi-
nation of value. This mutual duty encourages both the insurer
and the insured to conduct a thorough and independent inves-
tigation into the value of the property to be insured before
agreeing on a binding amount of coverage to be written into
the policy, because in the event of a total loss, that policy limit
becomes the conclusive measure of damages.
The Callahans do not appear to dispute that in Nebraska,
they too have a duty under the valued policy statute to inves-
tigate and know the value of their property, nor could they.
While some state legislatures have adopted valued policy stat-
utes that require only the insurer to investigate value before
coverage is issued, Nebraska’s statute has no such language.
And for almost a century, courts have said that “[n]either
party” can evade Nebraska’s valued policy statute by avoid-
ing the duty to investigate value. 28 Moreover, in connection
with fire insurance policies, Nebraska law presumes that both
insurers and insureds know the insurable value of the build-
ings they seek to insure, 29 and it imposes an affirmative duty
on insureds to advise any procuring insurance agent as to
the desired insurance, including the limits of the policy to
26
Id.27
Heady, supra note 15, 217 Neb. at 179, 349 N.W.2d at 370.
28
See Sullivan, supra note 16, 25 F.2d at 42; Heady, supra note 15.
29
See § 44-603.
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Cite as 314 Neb. 219be issued. 30 The preloss duties related to Nebraska’s valued
policy statute apply to both insurers and insureds.
(b) Conclusive Determination of True Value
Applies to Insurers and Insureds
We understand the Callahans to argue that the conclusive
determination of coverage under § 44-501.02 applies only to
insurers, and not to insureds. We see no such limitation in the
plain language of the statute.
In Heady, we held that after a total loss, the valued policy
statute precludes the insurer from challenging the conclusive
determination of value by asserting, or by offering evidence,
that “its insured either affirmatively misrepresented or failed
to disclose the actual value of the subject property.” 31 So, to
the extent the Callahans argue that we have not previously
applied the valued policy statute to preclude a claim of mis-
representation in connection with procuring the policy, both
Heady and an earlier case 32 demonstrate that we have. But the
Callahans are correct that, until now, we have not considered a
case where the claim of misrepresentation was directed at the
insurer rather than the insured. We are not persuaded it makes
a difference under the valued policy statute.
Neither the language of the valued policy statute, nor the
public policy objectives underpinning that statute, provide
a principled basis to restrict application of the conclusive
determination of true value only to circumstances when an
insurer seeks to pay less than the policy limits because of a
misrepresentation, and not to circumstances when an insured
seeks to recover more than the policy limits because of a
30
See, Merrick, supra note 6; Dahlke, supra note 6; Polski, supra note 6.
31
Heady, supra note 15, 217 Neb. at 180, 349 N.W.2d at 370. Accord Malm
v. State Farmers Ins. Co., 125 Neb. 594, 251 N.W. 260 (1933) (after total
loss, insurer could not avoid paying policy limits by claiming insured
falsely misrepresented actual value of insured building).
32
See Malm, supra note 31.
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Cite as 314 Neb. 219misrepresentation. Under either scenario, after a total loss, the
valued policy statute conclusively fixes the true value of the
insured property at the amount stated in the policy. It does so
to protect the interest of both parties in the binding determina-
tion of value established in the policy and to liquidate damages
in the event of a total loss and remove that issue from dispute
and litigation. 33
[14] Consequently, in actions between the insurer and
insured to determine amounts owed by the insurer after a
total loss to real property insured against loss by fire, tornado,
windstorm, lightning, or explosion, we hold that both the
insurer and the insured are bound by the conclusive determi-
nation of true value established by § 44-501.02, and neither
can contend the value of the total loss is something different
than what was written in the policy. 34 This binding determina-
tion necessarily precludes not only claims that the value of the
destroyed property was lower than the amount stated in the
policy, but also claims that it was higher. We find no merit in
the Callahans’ contention that the valued policy statute applies
to preclude evidence that the destroyed property was overin-
sured, but not that it was underinsured.
(c) Valued Policy Statute Applies Here
This leaves only the Callahans’ argument that the valued
policy statute does not apply because of the nature of their
action. The Callahans describe the nature of their action as a
common law “action for negligent misrepresentation against
their insurer,” 35 and they suggest the valued policy statute only
applies to actions claiming a breach of the insurance policy.
We pause to note that even our dissenting colleagues
appear to agree that if the Callahans had not dismissed their
33
See Heady, supra note 15.
34
See Boswell, supra note 18, 167 So. 2d at 784 (pursuant to valued policy
statute “neither [insurer nor insured] can contend the value of the destroyed
property is any different from what they had previously specified”).
35
Supplemental brief for appellants at 16.
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Cite as 314 Neb. 219breach of contract claim against Shelter and Brant, the valued
policy statute would apply to preclude them from asserting
that the true value of their home was something other than
the amount for which it was insured. But we also note the
Callahans’ breach of contract claim sought precisely the same
relief as their negligent misrepresentation claims—money
damages for the cost of rebuilding their home after the total
loss. And as we will explain, we are not persuaded that the
applicability of the valued policy statute can be reliably deter-
mined by looking only at the nature of the action.
A suit on the policy after a total loss can take many forms—
a declaratory judgment action, a breach of contract action, an
action for specific performance, a suit in equity to reform the
policy, a suit alleging the intentional tort of insurer bad faith,
or any combination of such actions, just to list a few. And
neither the plain language of the valued policy statute, nor
any of its public policy objectives, confines its application to
a single type of legal action between the insurer and insured.
Construing the valued policy statute in a way that restricts its
application exclusively to breach of contract actions would
require us to read language into the statute that is not there,
would undermine the statutory objectives, and would not place
on the statute a reasonable construction that best achieves its
recognized purpose.
[15] We thus decline the Callahans’ invitation to adopt a
construction that restricts Nebraska’s valued policy statute to
only certain actions. It is not the type of action, but, rather,
the nature of the claim being asserted, that triggers applica-
tion of the valued policy statute. Simply put, the valued policy
statute is implicated whenever a suit between the insurer and
the insured seeks to determine the amount owed by the insurer
for a total loss to real property insured “against loss by fire,
tornado, windstorm, lightning, or explosion.” 36
36
§ 44-501.02.
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Cite as 314 Neb. 219The Callahans have brought such an action. They seek
money damages from Shelter and its agent related to the
total loss of their insured home, alleging they are entitled to
more than the policy limits because the procuring agent negli-
gently misrepresented that the limits they purchased would be
adequate to cover the true value of their loss. But Nebraska’s
valued policy statute has already conclusively determined the
true value of their loss as a matter of law, and it is the value
stated in the policy.
As stated, one of the objectives of the valued policy stat-
ute is to liquidate the true value of insured property after a
total loss, and to thereby remove that issue from dispute and
litigation. 37 To achieve this purpose, neither the insurer nor the
insured are permitted, after a total loss, to challenge that the
true value of the property is something other than the amount
stated in the policy. In this way, the valued policy statute works
to encourage both the insurer and the insured to conduct a
thorough and independent investigation into the value of the
property to be insured, before agreeing on a binding amount of
coverage to be written into the policy, because in the event of
a total loss, that agreed upon amount becomes the conclusive
measure of damages as a matter of law.
For the same reasons the valued policy statute precluded the
insurer in Heady from offering evidence that the insured mis-
represented the true value of the insured property, we conclude
the statute precludes the Callahans from offering evidence that
the insurer’s agent misrepresented the true value of the insured
property. We emphasize the limited nature of this holding. We
are not suggesting that the valued policy statute will apply
to preclude every claim of negligent misrepresentation by an
insured against an insurer. But when the alleged misrepresenta-
tion pertains to the true value of the insured loss, the valued
policy statute is plainly implicated.
37
See Heady, supra note 15.
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Cite as 314 Neb. 219We hold that the valued policy statute applies to the
Callahans’ misrepresentation claim against Shelter and Brant,
and it conclusively establishes that the true value of the
Callahans’ home is $267,400—the amount for which it was
insured. Moreover, it precludes the Callahans from offering
evidence that the true value of their home was something other
than the amount for which it was insured. And without such
evidence, the Callahans cannot prevail on their negligence or
negligent misrepresentation claims.
The Callahans purchased and paid premiums on $267,400
worth of insurance coverage on their home; after experienc-
ing a total loss, they were paid the full amount of coverage
owed under the policy. They now attempt an end run around
the valued policy statute by suing the insurer in tort to recover
damages for the same loss by claiming the true value of their
home was actually higher than the coverage they purchased.
But the valued policy statute applies to such a claim, and it
necessarily precludes the Callahans from claiming, and from
offering evidence, that the true value of their loss is anything
other than the amount stated in the insurance policy.
Because the failure of proof on this essential element of
the Callahans’ claims necessarily rendered all other facts
immaterial, 38 we agree with the district court’s conclusion that
Shelter and Brant were entitled to summary judgment as a mat-
ter of law. And although the district court did not expressly rely
on the valued policy statute in granting summary judgment,
a proper result will not be reversed merely because it was
reached for a different reason. 39
38
See Roskop Dairy v. GEA Farm Tech., 292 Neb. 148, 871 N.W.2d 776(2015) (failure of proof concerning essential element of case necessarily
renders all other facts immaterial), disapproved on other grounds, Weyh v.
Gottsch, 303 Neb. 280, 929 N.W.2d 40 (2019).
39
See Childs v. Frakes, 312 Neb. 925, 981 N.W.2d 598 (2022).
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Cite as 314 Neb. 219VI. CONCLUSION
The Callahans’ claims of negligent misrepresentation are
necessarily premised on proof that their home had a higher
value than the amount for which it was insured. But such
claims fail as a matter of law, because in the event of a total
loss, Nebraska’s valued policy statute conclusively determines
that the true value of the insured property is the amount written
in the policy. The district court did not err in granting sum-
mary judgment in favor of Shelter and Brant, and the judgment
is affirmed.
Affirmed.
Papik, J., not participating.
Heavican, C.J., dissenting.
I respectfully dissent. I disagree with the majority that the
valued policy statute 1 precludes the Callahans’ tort claims. In
my view, interpreting the valued policy statute to foreclose an
injured insured from bringing claims that sound in tort leads to
an absurd result. To the extent the valued policy statute applies
to the Callahans’ claims, it establishes that Brant owed a duty
of reasonable care when he invited the Callahans to rely on his
valuation in setting the policy’s limit.
Ultimately, I would resolve this appeal by applying our
precedent governing claims of an insurance producer’s negli-
gence and negligent misrepresentation, as the parties argued to
the trial court and initially on appeal. On that basis, I would
reverse the district court’s grant of summary judgment and
remand the matter for further proceedings.
VALUED POLICY STATUTE
In my view, to determine the effect of the valued policy
statute on the Callahans’ claims, the inquiry is controlled
by different canons of statutory interpretation than those
relied upon by the majority. The fundamental objective of
1
See Neb. Rev. Stat. § 44-501.02 (Reissue 2021).
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Cite as 314 Neb. 219statutory interpretation is to ascertain and carry out the
Legislature’s intent. 2 In construing a statute, the court must
look at the statutory objective to be accomplished, the problem
to be remedied, or the purpose to be served, and then place
on the statute a reasonable construction which best achieves
the purpose of the statute, rather than a construction defeating
the statutory purpose. 3 Components of a series or collection of
statutes pertaining to a certain subject matter are in pari mate-
ria and should be conjunctively considered and construed to
determine the intent of the Legislature, so that different provi-
sions are consistent, harmonious, and sensible. 4
When judicial interpretation of a statute has not evoked a
legislative amendment, it is presumed that the Legislature has
acquiesced in the court’s interpretation. 5 The court’s inter-
pretation will stand absent specific statutory language which
compels it. 6 It is not within the province of the courts to read
a meaning into a statute that is not there. 7 The construction of
a statute which restricts or removes a common-law right should
not be adopted unless the plain words of the statute compel it. 8
It is impermissible to follow a literal reading that engenders
absurd consequences where there is an alternative interpreta-
tion that reasonably effects the statute’s purpose. 9
2
In re William R. Zutavern Revocable Trust, 309 Neb. 542, 961 N.W.2d 807(2021).
3
Florence Lake Investments v. Berg, 312 Neb. 183, 978 N.W.2d 308 (2022).
4
County of Webster v. Nebraska Tax Equal. & Rev. Comm., 296 Neb. 751,
896 N.W.2d 887 (2017).
5
Lenz v. Central Parking System of Neb., 288 Neb. 453, 848 N.W.2d 623(2014).
6
See In re 2007 Appropriations of Niobrara River Waters, 283 Neb. 629,
820 N.W.2d 44 (2012).
7
Hauptman, O’Brien v. Auto-Owners Ins. Co., 310 Neb. 147, 964 N.W.2d
264 (2021).
8
Id.9
Wisner v. Vandelay Investments, 300 Neb. 825, 916 N.W.2d 698 (2018).
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Cite as 314 Neb. 219We have recognized that there is a “significant public inter-
est in a well-regulated insurance industry.” 10 Yet, the major-
ity overlooks our precedent and the remedial purpose of the
valued policy statute. In my view, the majority’s construction
reads meaning into the statute to free insurers from liability for
harms they may have caused, which defeats the valued policy
statute’s purpose.
The valued policy statute was first enacted in Nebraska in
1889. 11 Other than expanding its applicability to losses due to
windstorms and explosions, the Legislature has not amended
its language. 12 As a result, our prior interpretations of the stat-
ute must stand.
The valued policy statute is a part of every contract for
insurance of real property in this state, 13 and it is a controlling
provision. 14 Early in its history, the statute expressly governed
“[a]ll domestic insurance companies, and [every] insurance
agent, solicitor, broker, surveyor or adjuster doing business in
this state . . . .” 15 As a response to business practices of insur-
ers, the statute precludes insurers from avoiding payment after
an insured suffers a loss:
It is a matter of common knowledge that corporations
engaged in the business of insuring real estate, have been
long accustomed to vexatiously and oppressively resist-
ing payment of claims arising under their policies. The
10
CenTra, Inc. v. Chandler Ins. Co., 248 Neb. 844, 855, 540 N.W.2d 318,
328 (1995). See Neb. Rev. Stat. § 44-101 (Reissue 2021).
11
See German Ins. Co. v. Eddy, 36 Neb. 461, 54 N.W. 856, 857 (1893).
12
Compare 1913 Neb. Laws, ch. 154, § 74, p. 424, with § 44-501.02.
13
Lancashire Ins. Co. v. Bush, 60 Neb. 116, 82 N.W. 313 (1900). See Heady
v. Farmers Mut. Ins. Co., 217 Neb. 172, 349 N.W.2d 366 (1984).
14
German Ins. Co. v. Eddy, supra note 11. See Neb. Rev. Stat. § 44-501(10)
(Reissue 2021). See, also, Comp. Stat. § 7766 et seq. (1922); Rev. Stat. ch.
31, art. III (1913); Comp. Stat. ch. 43, §§ 44 and 45 (1893).
15
Comp. Stat. § 7771 (1922); Rev. Stat. § 3171 (1913). See German Ins. Co.
v. Eddy, supra note 11. See, also, 1989 Neb. Laws, L.B. 92, § 120.
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Cite as 314 Neb. 219reports of this court bear abundant evidence to the fact
that no other class of litigants has so persistently endeav-
ored to escape liability from their contract obligations
by interposing technical and unconscionable defenses to
actions instituted against them. 16
Under the statute, there is no bargain the insurer can make “by
which, in the event of a total loss of the insured property, it
could escape from its obligation to pay the full amount of the
indemnity for which the policy was written.” 17
The valued policy statute acts as a liquidated damages
contract provision, removing the insured’s need to prove the
actual value of the property after it is wholly destroyed. 18 The
rationale for doing so is readily apparent: The evidence that an
insured would need in order to claim the lost value on a policy
is destroyed with the property.
For the purposes of the Callahans’ insurance claim, the value
of the Callahans’ home was conclusively fixed by the policy,
and the Callahans were entitled to be paid the amount of the
policy’s limit. Yet, although the value of the Callahans’ loss is
a conclusively fixed value by the statute, it does not preclude
the Callahans from proving the value of the alleged harm
Shelter and Brant caused. 19 The actual value of the Callahans’
property when it was destroyed in May 2019 has no bearing
on what a reasonable replacement cost value of their home
was in December 2018. 20 The Callahans allege that had Brant
16
Lancashire Ins. Co. v. Bush, supra note 13, 60 Neb. at 124, 82 N.W. at
315.
17
Id. at 121, 82 N.W. at 314.
18
See id.
19
See Neb. Rev. Stat. §§ 44-358 (Reissue 2021) (providing misrepresentation
or warranty by insured may void policy when insurer was deceived to
its injury) and 44-501.02 (relieving insurer’s liability when property is
destroyed due to criminal fault of insured).
20
See Kearney Conv’n Center v. Anderson-Divan-Cottrell Ins., 220 Neb.
319, 370 N.W.2d 86 (1985).
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Cite as 314 Neb. 219exercised reasonable care, they would have known this value
and obtained greater insurance coverage.
Fundamentally, the valued policy statute serves as a con-
sumer protection law governing contracts for insurance. 21 The
valued policy statute is remedial in character, and it should be
construed beyond its plain language “in accord with the mani-
fest spirit of the enactment,” 22 and in its application, the stat-
ute should be interpreted to include cases “‘within the same
mischief.’” 23 We have long recognized that the reason for the
adoption of the valued policy statute by the Legislature was
clear. It “was designed to repress an evil practice, to advance
public interests and promote justice.” 24 That evil practice was
the profiteering of insurers by the methods they used to carry
on their business.
These methods were not apparently actuated by good
faith, and practices were followed which were charac-
terized by deception and deceit, and which resulted in
the companies participating therein in securing premiums
on the basis of a valuation fixed by the company itself,
continued as long as possible, but which was promptly
repudiated in the event of total loss. 25
To combat this form of profiteering, the valued policy stat-
ute placed a binding duty on the insurer to inspect and value
the property before setting the policy limit. 26 If the property
21
Compare §§ 44-501(10) and 44-501.02 with Neb. Rev. Stat. §§ 44-601 and
44-602 (Reissue 2021).
22
Calnon v. Fidelity-Phenix Fire Ins. Co., 114 Neb. 194, 201, 206 N.W. 765,
767 (1925).
23
Id. at 198, 206 N.W. at 766 (quoting Buckmaster v. McElroy, 20 Neb. 557,
31 N.W. 76 (1887)).
24
Lancashire Ins. Co. v. Bush, supra note 13, 60 Neb. at 124, 82 N.W. at
315.
25
Calnon v. Fidelity-Phenix Fire Ins. Co., supra note 22, 114 Neb. at 199,
206 N.W. at 766.
26
See, id.; Fadanelli v. National Security Fire Ins. Co., 113 Neb. 830, 205
N.W. 642 (1925).
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Cite as 314 Neb. 219is wholly destroyed, the insurer is obligated to pay the full
limit of the policy. 27 Any provision of a policy which limits
the amount of the loss at less than the written sum in the
policy is invalid under the valued policy statute and will not be
enforced. 28 In this way, the valued policy statute protects the
contract rights of insureds.
Under the statute, an insurer’s risk “‘can only come from
the failure to observe care—that care which it might be sup-
posed, without any prompting from the law, underwriters
would observe, and which if observed would make their poli-
cies true contracts of assurance, not seemingly so, but really
so.’” 29 It is only equitable that “after due inspection by the
insurer, the amount which should be paid, in the event of total
loss, is the amount stated in the policy.” 30 It is only logical
that insurers must exercise reasonable care in fulfillment of
that duty.
In imposing a duty on insurers to value real property, the
valued policy statute has made valuation a part of the insur-
ance business and has implicitly mandated that insurers pos-
sess an expertise in real property valuation. When consider-
ing other forms of insurance, such as for personal property,
inventory, or for business interruption, the insured is in a
better position than the insurer to know the value at risk in
the event of loss. The same cannot be said for insurance of
real property, where the ordinary insured lacks the requi-
site knowledge to know the replacement cost value of the
27
See id.28
Fadanelli v. National Security Fire Ins. Co., supra note 26.
29
Id., 113 Neb. at 835-36, 205 N.W. at 644 (quoting Orient Insurance
Company v. Daggs, 172 U.S. 557, 19 S. Ct. 281, 43 L. Ed. 552 (1899)).
30
Calnon v. Fidelity-Phenix Fire Ins. Co., supra note 22, 114 Neb. at 199,
206 N.W. at 766-67. See, also, McGlone v. Midwestern Group, 61 Ohio
St. 3d 113, 573 N.E.2d 92 (1991); Insurance Co. v. Barron, 91 Miss. 722,
45 So. 875 (1908); Insurance Company v. Leslie, 47 Ohio St. 409, 24 N.E.
1072 (1890).
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Cite as 314 Neb. 219property. We have consistently held that homeowners are not
competent to testify as to cost valuations of real property and
that an expert is required to prove cost value. 31 Hence, in my
view, the Callahans, who were incompetent in the cost valua-
tion of their property, could turn to Brant’s expertise in setting
the homeowners policy’s limit.
As the Callahans’ claims show, arguably, “the evil practices
are still present” in the insurance industry. 32 Legal commen-
tators have noted that today, instead of profiteering through
high premiums as a result of overvaluations, insurers of real
property can profit through undervaluations. 33 Homeowners
31
See, e.g., Betty L. Green Living Trust v. Morrill Cty. Bd. of Equal.,
299 Neb. 933, 911 N.W.2d 551 (2018); American Central City v. Joint
Antelope Valley Auth., 281 Neb. 742, 807 N.W.2d 170 (2011); Brenner
v. Banner Cty. Bd. of Equal., 276 Neb. 275, 753 N.W.2d 802 (2008);
Westgate Rec. Assn. v. Papio-Missouri River NRD, 250 Neb. 10, 547
N.W.2d 484 (1996); Airport Inn v. County Bd. of Equalization, 215 Neb.
659, 340 N.W.2d 378 (1983); First Baptist Church v. State, 178 Neb. 831,
135 N.W.2d 756 (1965); Graceland Park Cemetery Co. v. City of Omaha,
173 Neb. 608, 114 N.W.2d 29 (1962).
32
Fadanelli v. National Security Fire Ins. Co., supra note 26, 113 Neb. at
835, 205 N.W. at 644.
33
See, generally, Kenneth S. Klein, Minding the Protection Gap: Resolving
Unintended, Pervasive, Profound Homeowner Underinsurance, 25
Conn. Ins. L.J. 34 (2018); Peter Molk, Playing with Fire? Testing
Moral Hazard in Homeowners Insurance Valued Policies, 2018 Utah
L. Rev. 347 (2018); Kenneth S. Klein, When Enough Is Not Enough:
Correcting Market Inefficiencies in the Purchase and Sale of Residential
Property Insurance, 18 Va. J. Soc. Policy & L. 345 (2011); Peter
Molk, Is There Any Value? Reevaluating Homeowners Insurance
Valued Policy Laws, Yale Law School (2011), http://hdl.handle.net/
20.500.13051/17819.
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Cite as 314 Neb. 219insurance policies are materially price elastic, and insureds
base their buying decision primarily on premium price, argu-
ably, driven in large part because of the vast number of captive
customers. 34 Insurers’ profits are no longer driven by high pre-
miums resulting from overvaluation, but by the number of poli-
cies sold. 35 Through undervaluation, insurers can increase their
market share, and because insureds rarely experience a total
loss, the insureds are unaware of the risk they are assuming. 36
This practice is evidenced in Brant’s bonus structure, which is
primarily based on the number of policies he has sold, rather
than the amount of premiums collected, and is precisely what
the Callahans allege caused them harm.
By precluding the Callahans’ claims, the majority fore-
closes all remedies, including torts, for harm caused by
insurers of real property to their insureds, while those insur-
ers continue to enjoy remedies if they are harmed by their
insureds. 37 It appears no other court has interpreted the val-
ued policy statute to preclude tort actions against insurers
34
See, generally, id.35
See, generally, id.36
See, generally, id.37
See §§ 44-358 (providing misrepresentation or warranty by insured may
void policy when insurer was deceived to its injury) and 44-501.02
(relieving insurer’s liability when property is destroyed due to criminal
fault of insured).
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Cite as 314 Neb. 219of real property when the insurers’ actions have caused
them harm. 38 Nor does it appear that any other court has
38
See, e.g., Nelson v. American Family Mut. Ins. Co., 262 F. Supp. 3d
835 (D. Minn. 2017) (recognizing Minnesota’s valued policy statute
controls damages in contract actions, but not for claim of negligent
misrepresentation), affirmed 899 F.3d 475 (8th Cir. 2018); White v.
Allstate Ins. Co., 513 F. Supp. 2d 674 (E.D. La. 2007) (recognizing
plaintiffs sufficiently pled claims for recovery under Louisiana’s
valued policy law, as well as theories of negligence and negligent
misrepresentation); Conestoga Chemical Corp. v. F. H. Simonton, Inc.,
269 A.2d 237 (Del. 1970) (recognizing general rule that insurance
producers are liable to insureds for amount which insured would have
received had coverage been properly procured); Mississippi Farm Bureau
Mut. Ins. Co. v. Todd, 492 So. 2d 919 (Miss. 1986) (holding insurer’s bad
faith warranted punitive damages); Britton v. Farmers Ins. Group, 221
Mont. 67, 721 P.2d 303 (1986) (recognizing harm under insurance policy
separate from harm caused by insurer’s breach of good faith); Rumpza
v. Donalar Enterprises, Inc., 581 N.W.2d 517 (S.D. 1998) (recognizing
valued policy statute does not defeat claim of insurer’s bad faith); Free
v. Republic Ins. Co., 8 Cal. App. 4th 1726, 11 Cal. Rptr. 2d 296 (1992)
(stating once insurance producer elected to respond to insured’s inquiries,
special duty arose requiring producer to use reasonable care); Daso v.
Creston Ins. Center, LLC, 2018 Ohio 5312, 118 N.E.3d 501 (Ohio App.
2018) (holding even if valued policy statute applies in negligence cases,
it cannot be used to demonstrate negligence per se unless alleged harm
was specific harm statute designed to prevent); Munn v. Rudy Stapleton
& Son, No. F-02-030 2003 WL 22390109 (Ohio App. Oct. 17, 2003)
(holding valued policy statute is not applicable in negligence action
brought by insured).
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Cite as 314 Neb. 219interpreted a valued policy statute to protect insurers. 39 Yet,
other courts have held that plaintiffs may recover both con-
tract damages and tort damages because, as the Callahans
allege here, separate wrongs result in separate harms. 40
Moreover, the majority’s reading of the valued policy stat-
ute suggests that had the Callahans hired an independent
39
See, e.g., Hartford Live Stock Ins. Co. v. Gibson, 256 Ky. 338, 76 S.W.2d
17 (1934) (holding valued policy statute is restrictive on insurer and
protective of insured); Horn v. Atlas Assurance Society, 241 Ky. 226, 43
S.W.2d 675 (1931) (stating that presumably, insurance company knows
what it is doing and fixes value by inspection); Landry v. Louisiana
Citizens Property Ins., 983 So. 2d 66 (La. 2008) (stating valued policy
statute provides that insurer is not permitted to question value); Nathan
v. St. Paul Mutual Insurance Co., 243 Minn. 430, 68 N.W.2d 385 (1955)
(holding purpose of valued policy statute includes valuation of property
by insurer with reasonable accuracy); Filiatreau v. Allstate Ins. Co., 178
W. Va. 268, 358 S.E.2d 829 (1987) (holding legislature contemplated
that insured would receive windfall in certain cases and that threat of
this windfall would correct insurance companies’ behavior); Farmers-
Merchants Bank v. St. Katherine, 693 So. 2d 876 (La. App. 1997) (holding
valued policy law refuses to let insurers raise various defenses and should
be interpreted liberally in favor of insured); Community Title v. Safeco Ins.
Co., 795 S.W.2d 453 (Mo. App. 1990) (holding valued policy statute does
not apply to insureds).
40
See, e.g., Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th
979, 102 P.3d 268, 22 Cal. Rptr. 352 (2004) (holding fraud and
misrepresentation claims not barred when tortious conduct separate from
breach of contract); Williams Ford v. Hartford Courant Co., 232 Conn.
559, 657 A.2d 212 (1995) (remedy on contract is independent of remedy
for negligent misrepresentation); U.S. Bank, N.A. v. Integrity Land Title,
929 N.E.2d 742 (Ind. 2010) (recognizing duty might lie in tort, as well as
in contract); Presnell Const. Managers v. EH Const., 134 S.W.3d 575 (Ky.
2004) (holding tort duties are independent of contractual duties); Jacques
v. First Nat’l Bank, 307 Md. 527, 515 A.2d 756 (1986) (recognizing tort
duty separate from contractual duty); Romo v. Shirley, 411 Mont. 111, 522
P.3d 401 (2022) (long recognizing breaches of separate duties support
separate claims); Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 271
N.W.2d 368 (1978) (holding tort of bad faith is not for breach of contract;
it is separate tort).
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Cite as 314 Neb. 219licensed appraiser and relied on the appraiser’s replacement
cost valuation in setting their homeowners insurance pol-
icy limit, they would be precluded from bringing their tort
claims against the appraiser in the event the property was
wholly destroyed.
In my view, the plain language of the statute does not sup-
port construing the valued policy statute beyond its effect on
insurance contracts. Nor does it support such a derogation of
our common-law tort principles. I cannot read the plain lan-
guage of the statute to preclude the Callahans’ tort actions and
would not prevent them from proving how a reasonable insur-
ance producer would have responded to their concerns.
Because of the valued policy statute’s remedial purpose,
the statute should be read to “avoid the gross inequities which
may occur when an honest but unwitting insured” 41 is harmed
by the business practices of an insurer. In accordance with
the manifest spirit of the statute, instead of precluding the
Callahans from recovery, I would interpret their allegations to
be within the same mischief that the valued policy statute was
enacted to prevent: profiteering by insurers at the expense of
their insureds. To read it otherwise allows “the evil intended to
be remedied [to] still prevail, and without any good reason to
support it.” 42
TORT CLAIMS
As noted above, I would apply our existing precedent
concerning claims of an insurance producer’s negligence
and negligent misrepresentation to resolve this appeal. We
have stated that when a duty is imposed by or arises out of
the circumstances surrounding or attending a transaction, the
41
Kent v. Insurance Co. of North America, 189 Neb. 769, 775, 205 N.W.2d
532, 536 (1973).
42
Calnon v. Fidelity-Phenix Fire Ins. Co., supra note 22, 114 Neb. at 201,
206 N.W. at 767 (quoting Orient Ins. Co. v. Parlin & Orendorff Co., 14
Tex. Civ. App. 512, 38 S.W. 60 (1896)).
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Cite as 314 Neb. 219breach of the duty is a tort. 43 In such a case, the tortious act,
and not a breach of the contract, is the gravamen of the action
because the contract merely created the state of things that
furnished the occasion for the tort. 44
The Callahans do not dispute that Shelter paid the policy’s
limit in accordance with the terms of the policy and the
valued policy statute. The Callahans do not allege Shelter
and Brant breached a contractual obligation under the home-
owners insurance policy. While the homeowners insurance
policy is undoubtedly the result of the Callahans’ interactions
with Brant, the true legal dispute of the Callahans’ claims
only concern Brant’s conduct surrounding and attending the
transaction: specifically, Brant’s gathering of information and
calculation of a replacement cost value of the Callahans’
home to serve as the policy’s limit for 2019, as well as his
alleged misrepresentation of the sufficiency of his valuation to
the Callahans.
Additional Background
Before turning to the Callahans’ claims, it is necessary to
review some additional background to the Callahans’ suit.
When the Callahans first obtained a Shelter homeowners policy
in 2011, the policy’s limit was determined by a cost valua-
tion conducted by Brant. The policy was a replacement cost
policy, meaning it was designed to cover the cost of replac-
ing or rebuilding any lost property, in the same kind and
quality as the property before the loss, up to the policy’s
limits. Following Shelter’s procedures for its agents, Brant
collected data about the Callahans’ home from the county
assessor’s website and from the Callahans directly. Also con-
sistent with Shelter’s procedures, Brant visited the Callahans’
home and took photographs of the home’s exterior. Shelter’s
43
See Zawaideh v. Nebraska Dept. of Health & Human Servs., 285 Neb. 48,
825 N.W.2d 204 (2013).
44
See id.- 252 -
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Cite as 314 Neb. 219procedure does not require agents to enter and inspect the inte-
rior of homes, and in accordance, Brant did not do so.
As required by Shelter, Brant inputted the collected data
into Shelter’s “Construction Cost Estimator.” The estimator is
a computer program that analyzes the inputted data, applies
a formula, and calculates the estimated cost of rebuilding
the home. The estimator’s formula is updated quarterly with
building materials and labor market prices. In February 2011,
based on Brant’s inputted data, the estimator calculated the
Callahans’ home’s reconstruction cost, with debris removal,
to be $250,481 as of November 2010. Per the estimator’s cal-
culation, the limit of the 2011 homeowners insurance policy
offered to the Callahans was set at $250,481.
The homeowners insurance policy that the Callahans pur-
chased in 2011 had a term of 1 year, but the policy auto-
matically renewed annually upon the continued payment of
premiums. Each year, the policy limit was subject to an
adjustment according to an automated inflation guard. Brant
testified that the inflation guard was based on inflation and
generally resulted in approximately a 2-percent increase annu-
ally. Brant’s testimony does not specify whether the inflation
increases are based on increased market prices of building
materials and labor or the rate of monetary inflation. After
2011, Brant never recalculated the replacement cost of the
Callahans’ home.
From 2011 through 2018, the Callahans renewed the home-
owners insurance policy each year. During this period, Brant
periodically met with the Callahans to conduct reviews of the
policy. The record on appeal does not contain detailed accounts
of these intermediary meetings. Still, the record indicates
that the Callahans occasionally provided Brant with updated
information about their home, such as when they remodeled
the kitchen and finished the basement. Brant testified that
updating a kitchen or remodeling a basement is not “a big
enough change to make a difference” in the replacement cost
of a home.
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Cite as 314 Neb. 219Brant testified that when he met with Michelle in anticipa-
tion of the policy’s renewal for 2019, he was concerned that
the Callahans would relinquish their policy with Shelter. The
facts of the separate meetings Brant had with Michelle and
Mark were disputed by the parties. But on summary judg-
ment, the evidence must be viewed in the light most favorable
to the Callahans. In that light, Michelle specifically asked
Brant whether the Callahans had enough coverage to rebuild
their home if it was wholly destroyed, and Brant expressly
assured her that the policy’s limit was sufficient. Additionally,
in that light, Mark told Brant that the Callahans’ primary con-
sideration was the amount of coverage provided in the event
of a total loss and not the price of the premiums that the
Callahans would have to pay. Brant again expressly assured
Mark that the home was sufficiently covered in the event it
was wholly destroyed.
It is undisputed that neither Michelle nor Mark told Brant
a specific dollar amount of requested coverage or what they
believed to be the replacement cost value of their home.
Negligence
The issue on appeal as to the Callahans’ negligence claim is
whether Shelter and Brant owed a legal duty to the Callahans
to exercise reasonable care for Brant’s role in setting the 2019
homeowners insurance policy limit. Whether a legal duty
exists for actionable negligence is a question of law depen-
dent on the facts in a particular situation. 45 On the contrary,
what conduct the standard of care requires and whether a
party deviated from the standard of care are questions of fact
based on the particular circumstances presented by the evi-
dence. 46 The scope of the duty in any negligence case is to
45
Porter v. Knife River, Inc., 310 Neb. 946, 970 N.W.2d 104 (2022).
46
See Cerny v. Cedar Bluffs Jr./Sr. Pub. Sch., 262 Neb. 66, 628 N.W.2d 697(2001).
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Cite as 314 Neb. 219conform to the legal standard of reasonable conduct in light
of the apparent risk. 47 A negligence cause of action, like all
tort actions arising from a breach of duty imposed by law,
protects a plaintiff’s interest or right to be free from another’s
conduct that causes damage or loss to the plaintiff’s person
or property. 48
We have long recognized that an insurance producer owes
a duty of reasonable care to an insured in securing the insur-
ance requested by the insured and in advising an insured. 49 On
the other hand, an insurance producer does not have a duty to
anticipate what coverage an individual should have absent the
insured’s requesting coverage “in at least a general way.” 50 Nor
does an insurance producer have an affirmative duty to volun-
tarily advise the insured. 51 Ultimately, the insured has a duty to
advise the producer as to the desired insurance, including the
limits of the policy to be issued. 52 Thus, our precedent recog-
nizes that Brant owed a duty of reasonable care either if the
Callahans’ request for coverage in the amount of the replace-
ment cost value of their home constituted a request “in at least
a general way” or if Brant advised the Callahans regarding the
policy’s limit.
Our precedent instructs that an insured’s request is suffi-
ciently “in at least a general way” for the purpose of imposing
a duty to procure insurance when the insured provides a point
of reference, even when the insured does not request a speci-
fied amount or type of coverage. 53 I note that the Nebraska
47
See Gaytan v. Wal-Mart, 289 Neb. 49, 853 N.W.2d 181 (2014).
48
See Henriksen v. Gleason, 263 Neb. 840, 643 N.W.2d 652 (2002).
49
See Merrick v. Fischer, Rounds & Assocs., 305 Neb. 230, 939 N.W.2d 795(2020).
50
Polski v. Powers, 221 Neb. 361, 364, 377 N.W.2d 106, 108 (1985).
51
See id.52
See Merrick v. Fischer, Rounds & Assocs., supra note 49.
53
See Kenyon & Larsen v. Deyle, 205 Neb. 209, 216, 286 N.W.2d 759, 764
(1980) (holding request for insurance to be “‘changed over’” sufficient).
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Cite as 314 Neb. 219Court of Appeals has similarly concluded that an insurance
producer’s selection of a policy’s limit when the insured did
not provide a specific valuation or any other input to the pro-
ducer constituted advising the insured. 54 In my view, the rea-
sonings of these cases should resolve this appeal.
The record shows that Brant testified that as an insurance
producer, he conducts his due diligence “to try and insure” his
clients for what he “think[s] they need to be adequately insured
for.” Accordingly, when selling homeowners insurance, he
completes “a Construction Cost Estimator, and that estimator
will determine the value of what the going rate is on building
a home.” Brant stated that he updates the estimator when an
addition is made or “some type of extensive remodel; other-
wise, the policy has an inflation guard in it that’s supposed to
keep up with the rate of inflation.”
The Callahans routinely provided Brant with updated infor-
mation on their home to adjust the replacement cost calcula-
tion. Yet, Brant testified that updating a kitchen or remodeling
a basement is not “a big enough change to make a difference”
in the replacement cost of a home, unless “they added on to
the basement” or “took out walls or went back with [a] big-
ger kitchen.” Despite receiving updated information from the
Callahans about their home, despite their request for coverage
in an amount to rebuild their home in the event of a total loss,
and despite knowing that the Callahans’ primary concern was
the amount of insurance coverage, Brant did not recalculate
the replacement cost value of the Callahans’ home and no
change was made to the policy limit.
Although the Callahans never requested coverage in a spe-
cific amount and did not provide Brant with their own valu-
ation of their home, they requested a policy limit defined
by the fixed reference point of the replacement cost value
of their home. The 2019 homeowners policy limit was
54
See Custom Auto Body Co. v. Prososki, No. A-96-880, 1999 WL 14492(Neb. App. Jan. 12, 1999) (not designated for permanent publication).
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Cite as 314 Neb. 219selected exclusively by Brant, based on his replacement cost
valuation of their home initially calculated in 2011, which
he then held out to be in the amount that the Callahans
requested—the replacement cost value of their home. In my
view, the Callahans’ request was “in at least a general way,”
and Brant advised the Callahans as to their policy’s limit.
Because the Callahans requested that Brant secure insurance
coverage in an amount equal to the replacement cost value
of their home, and Brant responded to that request with the
policy’s limit, I would conclude that Brant owed a duty of rea-
sonable care to the Callahans in preparing and calculating the
replacement cost valuation of their home and in selecting the
policy’s limit. Whether he failed to reasonably conduct him-
self in light of the risk to the Callahans is a question of fact,
which, based on the circumstances presented by the evidence,
must be determined by a fact finder.
There is no merit to Shelter and Brant’s contention that the
policy’s plain language insulates Brant from a duty to exer-
cise reasonable care in calculating the replacement cost value
of the Callahans’ home as a matter of law. Shelter and Brant’s
argument seems to suggest that Brant’s conduct “merged”
into the contract and that the policy somehow derogated any
duties Brant owed to the Callahans in tort. As noted above,
while the homeowners insurance policy is undoubtedly the
result of the Callahans’ interactions with Brant, the true
legal dispute of the Callahans’ negligence claim concerns
only Brant’s conduct surrounding and attending the transac-
tion—gathering information and calculating a replacement
cost valuation of the Callahans’ home to serve as the policy’s
limit for 2019.
Shelter and Brant overlook that Brant’s alleged negligence
limited the ability of the Callahans to enter into a true con-
tract of assurance. Brant held out that he was qualified to
value the replacement cost of the Callahans’ home, that the
related policy limit was sufficient to cover the costs associated
with rebuilding their home, and that they could rely on his
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Cite as 314 Neb. 219valuation. 55 While the homeowners insurance policy created
the state of things that furnished the occasion, it was Brant’s
alleged tortious acts, and not a breach of the parties’ contract,
that is the gravamen of this action.
In my view, our precedent correctly holds that when an
insured asks an insurance producer to procure insurance, it
is the insured’s duty to advise the producer as to the desired
insurance, including the limits of the policy to be issued. Yet,
I would conclude that in conducting their business, insurance
producers are under a legal duty to conduct that business with
reasonable care. When I view the evidence in the light most
favorable to the Callahans, Brant owed a duty of reasonable
care to the Callahans and the district court erred in granting
summary judgment on this claim.
Negligent Misrepresentation
The issue on appeal as to the Callahans’ negligent misrep-
resentation claim is whether they could reasonably rely on
Brant’s assurances and representations that their homeown-
ers insurance policy limit was sufficient to cover the cost of
rebuilding their home in the event of a total loss. It is well
established that an insurance producer may be held liable
for a negligent misrepresentation made to an insured. 56 We
have adopted the definition of the negligent misrepresenta-
tion cause of action contained in the Restatement (Second)
of Torts:
“One who, in the course of his business, profession or
employment, or in any other transaction in which he
has a pecuniary interest, supplies false information for
the guidance of others in their business transactions, is
subject to liability for pecuniary loss caused to them
by their justifiable reliance upon the information, if he
55
See, Kent v. Insurance Co. of North America, supra note 41; Fidelity
Mutual Fire Ins. Co. v. Lowe, 4 Neb. (Unoff.) 159, 93 N.W. 749 (1903).
56
Flamme v. Wolf Ins. Agency, 239 Neb. 465, 476 N.W.2d 802 (1991).
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Cite as 314 Neb. 219fails to exercise reasonable care or competence in obtain-
ing or communicating the information.” 57
In sum, negligent misrepresentation is the breach of the
duty to use due care in obtaining and communicating informa-
tion upon which that party may reasonably be expected to rely
in the conduct of his or her economic affairs. 58 Liability for
negligent misrepresentation is based upon the failure of the
actor to exercise reasonable care or competence in supplying
correct information. 59 The duty of care to be observed in sup-
plying information for use in commercial transactions implies
an undertaking to observe a relative standard, which may be
defined only in terms of the use to which the information
will be put, weighed against the magnitude and probability
of loss that might attend that use if the information proves
to be incorrect. 60 Whether a plaintiff reasonably relied on a
representation is a question of fact based on the totality of
the circumstances. 61
Shelter and Brant concede that material facts remain dis-
puted as to whether Brant’s representations were false and
whether he failed to exercise reasonable care. Yet, Shelter and
Brant argue that they were entitled to judgment as a matter
of law because the Callahans could not have justifiably relied
on Brant’s representations as a matter of law when the home-
owners insurance policy clearly and unambiguously stated
the policy’s limit and when “Special Coverage Form 3” of
the policy stated: “No agent can know your exact coverage
needs or budget considerations, so it is your responsibility
57
Gibb v. Citicorp Mortgage, Inc., 246 Neb. 355, 370, 518 N.W.2d 910, 921
(1994) (quoting Restatement (Second) of Torts § 552 (1977)).
58
Jill B. & Travis B. v. State, 297 Neb. 57, 899 N.W.2d 241 (2017); Stonacek
v. City of Lincoln, 279 Neb. 869, 782 N.W.2d 900 (2010).
59
Gibb v. Citicorp Mortgage, Inc., supra note 57.
60
Id.
61
See, Dietzel Enters. v. J. A. Wever Constr., 312 Neb. 426, 979 N.W.2d 517(2022); Gibb v. Citicorp Mortgage, Inc., supra note 57.
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Cite as 314 Neb. 219to examine the policy and make sure it provides the types of
coverage you need in the amounts you requested.”
In support of their argument, Shelter and Brant rely upon
a proposition that this court has invoked only twice: “‘An
insured has no right to rely upon an agent’s patently absurd
interpretation of a policy. He ordinarily may rightfully rely,
however, upon an agent’s interpretation that is plausible and
not in patent conflict with the printed policy although legally
untenable. . . .’” 62 We found the proposition to be inapplicable
in both cases.
In Bayer v. Lutheran Mut. Life Ins. Co., 63 this court con-
cluded that the proposition did not apply because the insurance
producer’s statements were promissory, rather than illustra-
tive, and held that an insured can rightfully rely on promis-
sory statements made by an insurance producer. Likewise, in
Flamme v. Wolf Ins. Agency, 64 this court concluded that the
proposition did not apply because, based on the facts of that
case, it was unlikely that a reasonable reading of the policy
would have disclosed the falsity of the producer’s alleged mis-
representation. To the extent Shelter and Brant rely on Dahlke
v. John F. Zimmer Ins. Agency, 65 that case is inapplicable to the
Callahans’ negligent misrepresentation claims, as the cause of
action in Dahlke was negligence and the proposition was only
referenced analogously.
I would conclude that the patent conflict proposition is
inapplicable to the instant case. First, Brant’s assurances
were promissory as to the policy limit based on the replace-
ment cost valuation he conducted, and not illustrative of the
62
Flamme v. Wolf Ins. Agency, supra note 56, 239 Neb. at 472, 476 N.W.2d
at 807 (quoting Bayer v. Lutheran Mut. Life Ins. Co., 184 Neb. 826, 172
N.W.2d 400 (1969)).
63
Bayer v. Lutheran Mut. Life Ins. Co., supra note 62.
64
Flamme v. Wolf Ins. Agency, supra note 56.
65
Dahlke v. John F. Zimmer Ins. Agency, 245 Neb. 800, 515 N.W.2d 767(1994).
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Cite as 314 Neb. 219terms of the homeowners insurance policy. Even if they were
somehow illustrative of the policy’s limit, the case on which
we relied in Bayer strenuously rejected the insurer’s argument
that an unambiguous contract provision would bar an insured’s
recovery. 66 Rightfully, an insured may ordinarily rely on a
producer’s interpretation, so long as that interpretation is not
in patent conflict with the policy. A patent conflict is an irrec-
oncilable conflict, differing essentially from the express lan-
guage of the policy. 67 The presence of unambiguous language
does not equate to the existence of a patent conflict such that
an insured’s reliance is unjustifiable as a matter of law. 68 Our
case law demonstrates that an insured may ordinarily rely on
a producer’s interpretation even if that interpretation is legally
untenable, so long as that interpretation is not obviously
incompatible with the printed policy. The rule would be sub-
sumed if any conflict with unambiguous language constituted
a patent conflict.
Additionally, a reasonable reading of the policy was unlikely
to have disclosed any falsity in Brant’s representations that
the policy limit amount was reasonably equal to the replace-
ment cost value of their home. Viewing the evidence in the
light most favorable to the Callahans, we find they informed
Brant that their exact coverage need was the replacement cost
value of their home and that their primary budget consider-
ation was obtaining that amount of coverage, not the price
of the premium. Considering that Brant allegedly knew this
66
See Mutual Ben. Life Ins. Co. v. Bailey, 55 Del. 215, 190 A.2d 757 (1963).
67
Bayer v. Lutheran Mut. Life Ins. Co., supra note 62. See, Stivers v.
National American Insurance Company, 247 F.2d 921 (9th Cir. 1957);
Mutual Ben. Life Ins. Co. v. Bailey, supra note 66. See, also, Chase
v. National Indemnity Co., 129 Cal. App. 2d 853, 278 P.2d 68 (1954);
Mayfield v. Fidelity & Casualty Co., 16 Cal. App. 2d 611, 61 P.2d 83(1936).
68
See id. See, also, Employers’ Liab. Assur. Corp. v. Madric, 54 Del. 593,
183 A.2d 182 (1962) (recognizing distinction between confusion and
misrepresentation).
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Cite as 314 Neb. 219information when he assured the Callahans that the policy
limit was sufficient in amount, his express assurances could
not have been in patent conflict with the express language of
the policy.
Shelter and Brant also argue that the policy language fore-
closes all possibility that the Callahans could reasonably rely
on Brant’s alleged misrepresentations as a matter of law. They
point to the provision that states it was the Callahans’ “respon-
sibility to examine the policy and make sure it provides the
types of coverage you need in the amounts you requested.” In
essence, Shelter and Brant argue that this provision operated as
a disclaimer. In my view, it does not.
Shelter and Brant overlook the preceding sentence in the
policy: “If you have questions, contact your Shelter Agent for
answers.” The Callahans had a question, they contacted Brant
for an answer, and Brant answered that their policy limit was
in an amount sufficient to replace their home. It cannot be
said that the Callahans were foolish to rely on Brant’s answer
as a matter of law. 69 The Callahans were not bound to assume
that Brant was dishonest. 70 Brant was a licensed insurance
producer who had been contracted with Shelter for over 15
years and had been active in the field of insurance since
2001. Both Michelle and Mark testified that Brant, equipped
with his expertise, represented that their homeowners insur-
ance policy limit was in an amount reasonably equal to the
replacement cost value of their home. Whether their reliance
on Brant’s representations was reasonable is a question of
fact based on the totality of the circumstances, which pre-
cludes the entry of summary judgment. Accordingly, in my
69
See, State Farm Fire & Cas. Ins. v. Lynn, 516 So. 2d 1373 (Ala. 1987);
Harr v. Allstate Insurance Co., 54 N.J. 287, 255 A.2d 208 (1969); Kelly v.
S.C. Farm Bureau Mut. Ins. Co., 316 S.C. 319, 450 S.E.2d 59 (S.C. App.
1994); Free v. Republic Ins. Co., 8 Cal. App. 4th 1726, 11 Cal. Rptr. 2d
296 (1992). See, also, Anderson v. Knox, 297 F.2d 702 (9th Cir. 1961)
(applying Hawaii law).
70
See Fidelity Mutual Fire Ins. Co. v. Lowe, supra note 55.
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Cite as 314 Neb. 219view, the district court erred in granting summary judgment
on this claim.
Insofar as Brant contends for the first time on appeal that
the Callahans had a duty to exercise ordinary prudence and that
the Callahans’ alleged failure to do so forecloses their ability
to rely on his representations, we do not generally consider
arguments and theories raised for the first time on appeal. 71
However, I note that in Lucky 7 v. THT Realty, 72 which Brant
cites in support of his argument, we held that ordinary pru-
dence is a factor in determining whether a plaintiff’s reliance
was reasonable, which is a question of fact based on the total-
ity of the circumstances. That case lends no support that Brant
is entitled to judgment as a matter of law.
CONCLUSION
I disagree with the majority as to the applicability and
effect of the valued policy statute on the Callahans’ claims.
I would conclude that Brant owed a duty of reasonable care
to the Callahans with respect to both of their claims and that
the Callahans were entitled to reasonably rely upon Brant’s
representations as to the sufficiency of their homeowners pol-
icy limit. Accordingly, I would reverse the district court’s
grant of summary judgment and remand the matter for fur-
ther proceedings.
Miller-Lerman and Freudenberg, JJ., join in this dissent.
71
See Simons v. Simons, 312 Neb. 136, 978 N.W.2d 121 (2022).
72
Lucky 7 v. THT Realty, 278 Neb. 997, 775 N.W.2d 671 (2009).