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Cleaver-Brooks, Inc. v. Twin City Fire Ins. Co.

Supreme Court of Nebraska

July 2, 2015

CLEAVER-BROOKS, INC., APPELLEE,
v.
TWIN CITY FIRE INSURANCE COMPANY, A SUBSIDIARY OF THE HARTFORD INSURANCE COMPANY, APPELLANT, AND AMERICAN INSURANCE COMPANY ET AL., APPELLEES

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Appeal from the District Court for Douglas County: GARY B. RANDALL, Judge.

Andrew T. Schlosser, of Fitzgerald, Schorr, Barmettler & Brennan, P.C., L.L.O., for appellant.

Terry R. Wittler, of Cline, Williams, Wright, Johnson & Oldfather, L.L.P., for appellees SSW, Inc., formerly known as National Dynamics Corporation, et al.

J. Scott Paul, of McGrath, North, Mullin & Kratz, P.C., L.L.O., for appellee American Insurance Company.

Tiernan T. Siems and Andrew M. Collins, of Erickson & Sederstrom, P.C., for appellee Cleaver-Brooks, Inc.

HEAVICAN, C.J., CONN OLLY, MCCORMACK, MILLER-LERMAN, and CASSEL, JJ. STEPHAN, J., participating on briefs. WRIGHT, J., not participating.

OPINION

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[291 Neb. 280] Heavican, C.J.

I. NATURE OF CASE

James E. Risor, an employee at a boiler manufacturing plant in Lincoln, Nebraska, sustained permanent hearing loss as a result of his employment. Between the time Risor was injured and the time he filed his workers' compensation claim, the plant changed ownership. Counsel representing the new owner's insurer, American Insurance Company (American), mistakenly believed American had insured the plant during the time of the injury. Twin City Fire Insurance Company (Twin City), which insured the plant for the previous owner, was not given notice of the claim until after entry of an award.

The new owner of the plant filed a declaratory judgment action against the previous owner and both insurers to determine who is liable for payment of the award. The district court determined that

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Twin City was liable. Twin City appeals. We find the district court correctly determined that Twin City was liable for the award and hence affirm.

II. BACKGROUND

The parties have entered into a stipulation, so the facts are not in dispute by any party.

[291 Neb. 281] 1. Risor's Injuries

Risor began working at a boiler manufacturing plant, colloquially referred to as " Nebraska Boiler," in Lincoln in 1973, and remained continuously employed at the plant until his retirement in 2004. During the course of Risor's employment, he suffered permanent hearing loss in both ears. Risor filed a claim against Nebraska Boiler in the Nebraska Workers' Compensation Court on January 20, 2004.

2. Nebraska Boiler

The plant has been owned by several different entities from 1973 to the present, although a company with the exact legal name of " Nebraska Boiler" has never owned the plant. In 1976, Daniel T. Scully, Roger L. Swanson, and Verlyn L. Westra purchased the plant and incorporated it as Nebraska Boiler Company, Inc. In 1989, Nebraska Boiler Company, Inc., merged with National Dynamics Corporation (National Dynamics), and after the merger, Nebraska Boiler Company, Inc., ceased to exist. Scully, Swanson, and Westra were shareholders of National Dynamics.

In 1998, Aqua-Chem, Inc., purchased various assets of National Dynamics, including the boiler manufacturing plant. Pursuant to the purchase agreement, National Dynamics agreed to indemnify Aqua-Chem for any liabilities not assumed by Aqua-Chem. No workers' compensation claims by Risor were mentioned in the agreement. After the sale, National Dynamics changed its name to SSW, Inc., and subsequently dissolved in 2003. The assets of the corporation were distributed to its three shareholders: Scully, Swanson, and Westra. In 2006, Aqua-Chem changed its name to Cleaver-Brooks, Inc. Cleaver-Brooks is the current legal owner of the boiler manufacturing plant.

3. Insurance Coverage

Several companies have provided workers' compensation insurance coverage to the boiler ...


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