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Doe v. Fireman's Fund Ins. Co.

Supreme Court of Nebraska

February 21, 2014

Jane Doe, appellant and cross-appellee,
v.
Fireman's Fund Insurance Company, appellee and cross-appellant.

Page 640

Appeal from the District Court for Red Willow County: DAVID URBOM, Judge. Affirmed.

Vincent M. Powers, of Vincent M. Powers & Associates, for appellant.

Patrick Q. Hustead and Christopher J. Shannon, of Hustead Law Firm, P.C., and Stephen L. Ahl and Krista M. Carlson, of Wolfe, Snowden, Hurd, Luers & Ahl, L.L.P., for appellee.

Page 641

Heavican, C.J., Wright, Connolly, Stephan, McCormack, Miller-Lerman, and Cassel, JJ.

Syllabus by the Court

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 inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law.

2. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted, and gives that party the benefit of all reasonable inferences deducible from the evidence.

3. Bankruptcy: Judgments: Appeal and Error. Whether the automatic stay provisions of 11 U.S.C. § 362(a) (2006 & Supp. III 2009) have been violated is a question of law. An appellate court reaches a conclusion regarding questions of law independently of the trial court's conclusion.

4. Judgments: Final Orders. To constitute a judgment under Neb. Rev. Stat. § 25-1301 (Reissue 2008), a judge's decision must be both rendered and entered.

Heavican, C.J.

[287 Neb. 487] INTRODUCTION

Under federal law, the filing of a petition in bankruptcy operates as an automatic stay of the commencement or continuation of any action or proceedings against the debtor or the recovery of a claim against the debtor which arose prior to the filing of bankruptcy.[1] This appeal asks us to determine whether the entry of a default judgment announced prior to the filing of bankruptcy, but signed and file stamped after, was stayed under federal law. We conclude that it was and, accordingly, affirm the Red Willow County District Court's order granting the motion for summary judgment of Fireman's Fund Insurance Company (Fireman's).

FACTUAL BACKGROUND

The plaintiff, Jane Doe, allegedly was sexually assaulted on August 31, 2004. The perpetrator was employed by Red Willow Dairy, L.L.C., which was owned and operated by Jim Huffman and Ann Huffman. On October 23, 2009, Doe sued Red Willow Dairy and the Huffmans in Lancaster County District Court, alleging that they failed to investigate the background of Doe's assaulter and failed to properly supervise him. Doe's amended complaint was filed on October 28. Red Willow Dairy and the Huffmans did not respond to the lawsuit in the district court, and a motion for default judgment was filed on December 14, 2009.

A hearing on the motion for default judgment was held on December 18, 2009. The judges' notes for the case were included in one of the exhibits in the instant case. The notes show that at the December 18 hearing, the court sustained the motion for default judgment and directed Doe's attorney to [287 Neb. 488] submit a proposed order within 7 days. Although the subsequent signed order does not show on its face when it was signed by the court, the judges' notes show an entry on December 22, stating, " For order on default judgment see file. (default)." The signed order granting the default judgment was file stamped by the Lancaster County clerk of the district court on December 22. The day before, on December 21, Red Willow Dairy and the Huffmans had filed for chapter 7 bankruptcy.

During the bankruptcy proceedings, Doe was listed as a creditor to Red Willow Dairy and the Huffmans. Doe eventually settled her claim in return for an assignment of all rights to any and all causes of action that Red Willow Dairy and the Huffmans might have against Fireman's for its action or inaction with respect to the Lancaster County District Court lawsuit.

Doe then filed this action against Fireman's in Red Willow County District Court. Doe alleged that Fireman's had a duty to defend Red Willow Dairy and the Huffmans and had breached that duty.

Fireman's first filed a motion to dismiss, which was denied. Fireman's then filed a motion for partial summary judgment on the issue of coverage, which the district court granted, concluding that the operative insurance policy excluded claims for sexual molestation.

Doe then filed her own motion for summary judgment, and Fireman's filed two more motions— one arguing that the entry of the default judgment order violated the bankruptcy stay and another arguing that

Page 642

because there was no coverage under the policy, there was no duty to defend. The district court later granted summary judgment to Fireman's, reasoning that the default judgment entry violated the automatic bankruptcy stay. The ...


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