Rent-A-Roofer, Inc., v. Farm Bureau Property & Casualty Ins. Co.. Nebraska Insurance, duty to defend
In 2007, Rent-A-Roofer was sued for faulty workmanship on a job, and they submitted the claim to their insurer. It was denied, on the grounds that faulty workmanship was not a peril covered under the policy.
In 2010, they were sued by a different customer with the same legal theory. Based upon their prior experience, they didn't bother submitting it to the insurer. Instead, they defended themselves and ultimately settled the case. After settling the case, they submitted it to the insurer, which denied the claim on the grounds that the insurer had not been notified of the claim and given an opportunity to defend.
The company sued, argued that there had been no prejudice to the insurer. The district court held that prejudice is presumed in the case of failure to notify, and the company appealed to the Nebraska Supreme Court.
The supreme court affirmed. It agreed with the district court that the insurer had been prejudiced, and this did not change because of the earlier denial of a similar claim:
But, an insurer's denial of the claim must be "'express or unequivocal,'" or in an instance where "'the facts and circumstances warrant the inference that liability was . . . denied."' Where the two claims against the insured are so different as to involve different parties, different complaints, and different occurrences, the insured must give notice to its insurer of both claims. The insurer does not waive notice by denying coverage over a prior, and wholly different, claim.
291 Neb. 786 (Neb. Sept. 11, 2015).
Please see the original opinion for the court's exact language.
Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).
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