United States District Court, D. Nebraska
ROSEMARY HENN, individually and on behalf of all others similarly situated; Plaintiff,
AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant.
CERTIFICATE FROM THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEBRASKA TO THE SUPREME COURT OF THE STATE OF
NEBRASKA, PURSUANT TO NEB. REV. STAT. § 24-219
F. BATAILLON SENIOR UNITED STATES DISTRICT JUDGE
Supreme Court of the State of Nebraska and the Honorable
Justices of the Court:
appears to the United States District Court for the District
of Nebraska that the above-filed case in this court involves
a question or proposition of the law of the State of Nebraska
which is determinative of the cause before the court, and
there appear to be no clear, controlling precedents on the
issue in the decisions of the Supreme Court of the State of
Nebraska. Pursuant to Neb. Rev. Stat. §
24-221, the court states as follows:
Statement of Facts
a putative class action. The plaintiff seeks to represent a
class of insureds whose payments for "actual cash
value" were reduced by American Family through
depreciation of costs for labor from June 1, 2005 through the
date of trial of this action.
defendant, American Family Mutual Insurance Company issued a
homeowners’ insurance policy, American Family’s
Nebraska Homeowners Policy Goldstar Special Deluxe Form No.
26-BE4992-01 ("the Policy") to the plaintiff,
Rosemary Henn, in 2011. The policy is a replacement cost
policy. The plaintiff reported to American Family that a hail
storm damaged portions of her home and later made a claim for
the damage under the Policy.
Policy provides, in relevant part, that an insured may
recover, following a covered loss, "the cost to repair
the damaged portion or replace the damaged building, provide
repairs to the damaged portion or replacement of the damaged
building are completed" or "if at the time of loss,
. . . the building is not repaired or replaced, we will pay
the actual cash value at the time of loss of the damaged
portion of the building up to the limit applying to the
building." The policy does not define "actual cash
value" or depreciation or describe the methods employed
to calculate "actual cash value."
relevant to the case before the court, a claims adjuster
employed by American Family met with the plaintiff at her
home and observed the damage from the storm to the roof vent
caps, guttering, siding, fascia, screens, deck, and the
home’s electric/AC. The adjuster determined that Henn
suffered a covered loss in the amount of $3, 252.60 for all
damages to the property. That amount reflected the
replacement cost value, based on common prices for labor and
materials in the area.
calculating its payment obligations under the Policy,
American Family subtracted from the adjuster’s
replacement cost estimate the $1, 000 deductible provided for
in the Policy. American Family also subtracted $276.67 in
depreciation, and paid Henn an actual cash value payment of
$1, 975.93. The depreciation amount included labor costs. At
issue herein is whether labor as well as materials can be
depreciated. The plaintiff alleges that "hundreds if not
thousands" of Nebraska insureds have been similarly
damaged by the defendant's actions.
Question of Law to be Answered
insurer, in determining the "actual cash value" of
a covered loss, depreciate the cost of labor when the terms
"actual cash value" and "depreciation"
are not defined in the policy and the policy does not
explicitly state that labor costs will be depreciated?
United States District Court for the District of Nebraska
certifies the question of law set out above to the Supreme
Court of the State of Nebraska for instructions concerning
said question of law, based on the facts recited, pursuant to
Neb. Rev. Stat. §§ 24-219 to 24-225.
Pursuant to Neb. Rev. Stat. § 24-222, the clerk of this
court is hereby directed to transmit this certification
request to the Nebraska Supreme Court under the official seal
of the United ...