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Jamison v. Depositors Insurance Co.

United States District Court, D. Nebraska

August 18, 2016

NELLE JAMISON and JOHN PAUL JAMISON, Plaintiffs,
v.
DEPOSITORS INSURANCE COMPANY, Defendant.

          MEMORANDUM AND ORDER

          John M. Gerrard, United States District Judge.

         This matter is before the Court on defendant Depositors Insurance Company's objection (filing 178) to the Magistrate Judge's pretrial order (filing 164). The objection relates to whether the plaintiffs, Nelle and John Paul Jamison, breached a promissory warranty, and whether the defense of a breach of promissory warranty is an issue remaining for trial. The Magistrate Judge found it was not. The Magistrate Judge was correct, and Depositors' objection will be overruled.[1]

         BACKGROUND

         The dispute is presented through two "Controverted and Unresolved Issues" submitted to the Magistrate Judge in the draft pretrial order: "1. Whether Plaintiffs Breached Promissory Warranty" and "2. Whether the defense of Promissory Warranty is an issue that exists in this case and/or remains for trial." Filing 164 at 3.[2] Depositors argued that "the plaintiff agreed to not only shut off the water, but initiate a plan to avoid water damage within the property-not through incorporation into the policy itself but as an oral or implied promissory warranty or warranty of intention apart from the language of the policy." Filing 164 at 3. The Jamisons, on the other hand, contended that issue hadn't been raised as a defense in Depositors' answer, or elsewhere, and was resolved in the Court's ruling on summary judgment (filing 136). Filing 164 at 3. The Magistrate Judge agreed with the Jamisons and sustained their objection. Filing 164 at 3.

         In ruling on summary judgment, this Court said that:

As the Court understands the Jamisons' argument . . . they are contending that while the email [containing the alleged promise] might have been a representation made in applying for renewal of the policy, it was not made part of the agreement as a condition subsequent. See, generally, D & S Realty, Inc. v. Markel Ins. Co., 789 N.W.2d 1, 10, 16-17 (Neb. 2010). As best the Court can tell, Depositors has not argued that it was. And Depositors expressly agreed with the Jamisons' factual assertion that the email "was not a part of the actual policy, but a part of the underwriting file, " stating that it "agrees the Jamisons' promise to shut off the water was not made part of the policy. Filing 88 at 5; filing 122 at 5. Accordingly, the Court will grant the Jamisons' motion [for summary judgment] on this point and find that the email "did not add a condition to the policy." Filing 126 at 2; see D & S Realty, 789 N.W.2d at 9-11, 15-17 (explaining operation of "conditions" in contracts).

Filing 136 at 12. Depositors now argues that "promissory warranties are a separate legal issue which was not addressed by or precluded by the summary judgment ruling." Filing 178 at 1.

         DISCUSSION

         Depositors contends that it

has not claimed that the Jamisons' representation that they would shut off the water to the house while it was unoccupied was a condition that was written into the four corners of the policy. Rather, it was a promissory warranty with which the objection to ¶2, ruling that Depositors' promissory warranty defense is not available. See Filing 164 at 3. Jamisons were required to comply, and the breach of which meant that liability did not arise on Depositors' part.

Filing 179 at 2. Depositors asserts that "regardless of whether this representation was made part of the four corners of the policy, it still created an implied warranty or promissory warranty."[3] So, Depositors contends,

the Summary Judgment Order only found that the representation that the Jamisons would shut off the water was not a condition of the policy. The Order did not preclude a finding that the Jamisons had made a promisorry [sic] warranty, the breach of which meant that the conditions precedent to Depositors' duty to pay were not met. It is this error to which Depositors objects and appeals to the Court for relief.

Filing 179 at 2-3.

         The problem with Depositors' argument is, that's not how contracts work. There are, in fact, two problems. First, Depositors' contention that an emailed representation made during negotiation of an insurance policy was somehow incorporated into the agreement, without being incorporated into the written text, is contradicted by basic principles of contract law. Second, even if the promise was somehow made part of the contract, ...


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