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Millard Gutter Co. v. American Family Insurance Co.

Supreme Court of Nebraska

July 13, 2018

Millard Gutter Company, a Corporation Doing Business as Millard Roofing and Gutter, Appellant,
v.
American Family Insurance Company, Appellee.

         1. Jurisdiction: Appeal and Error. The question of jurisdiction is a question of law, upon which an appellate court reaches a conclusion independent of the trial court.

         2. Costs: Appeal and Error. The decision of a trial court regarding taxing of costs is reviewed for an abuse of discretion.

         3. Judgments: Words and Phrases. A judicial abuse of discretion exists when the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.

         4. Statutes: Appeal and Error. Statutory interpretation presents a question of law, for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.

         5. Dismissal and Nonsuit. Generally speaking, under Neb. Rev. Stat. §§ 25-601 and 25-602 (Reissue 2016), a plaintiff has the right to dismiss an action without prejudice any time before final submission of the case, so long as no counterclaim or setoff has been filed by an opposing party.

         6. __ . The statutory right to voluntary dismissal under Neb. Rev. Stat. §§ 25-601 and 25-602 (Reissue 2016) is not a matter of judicial grace or discretion, but neither is it absolute or without limitation.

         7. __ . Under certain circumstances, a district court has the authority to deny a voluntary dismissal pursuant to Neb. Rev. Stat. §§ 25-601 and 25-602 (Reissue 2016) and may attach conditions to the dismissal where justice and equitable principles so require.

         8. Summary Judgment: Dismissal and Nonsuit. A motion for summary judgment can be a final submission that will prevent voluntary dismissal under Neb. Rev. Stat. § 25-601 (Reissue 2016).

         [300 Neb. 467] 9. Dismissal and Nonsuit: Costs. Neb. Rev. Stat. § 25-602 (Reissue 2016) gives plaintiffs in district court the right to dismiss their action without prejudice, upon payment of costs, when no counterclaim or setoff has been filed by the opposing party.

         10. Costs. Litigation expenses are not recoverable unless provided for by statute or a uniform course of procedure.

         11. Costs: Legislature. It is within the province of the Legislature to designate specific items of litigation expense which may be taxed as costs.

         12. Trial: Evidence: Costs. The electronic presentation of evidence is not a taxable cost.

         13. Juries: Costs. Under Neb. Rev. Stat. § 33-138(3) (Reissue 2016), the payment of jurors for service in the district and county courts shall be made by the county.

          Appeal from the District Court for Douglas County: Horacio J. Wheelock, Judge. Affirmed in part, and in part reversed.

          Theodore R. Boecker, Jr., of Boecker Law Office, PC, L.L.O., for appellant. Joel D. Nelson and Joel Bacon, of Keating, O'Gara, Nedved & Peter, L.L.O., for appellee.

          Donald W. Kleine, Douglas County Attorney, and Cortney M. Wiresinger for amicus curiae Douglas County, Nebraska.

          Heavican, C.J., Miller-Lerman, Cassel, Stacy, and Funke, JJ.

          Stacy, J.

         Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter (Millard Gutter), filed this civil action against American Family Insurance Company (American Family) in the Douglas County District Court. Just prior to jury selection, Millard Gutter filed a voluntary dismissal without prejudice. The district court held a hearing, after which it entered a judgment of dismissal and taxed costs to Millard Gutter, including expenses incurred by American Family in setting up courtroom technology and expenses incurred by Douglas County in compensating prospective [300 Neb. 468] jurors. Millard Gutter appeals, arguing that once it filed a voluntary dismissal, the district court lacked authority to make any further rulings. Alternatively, Millard Gutter argues the district court erred in taxing technology expenses and jury expenses as costs.

         We conclude, on the facts of this case, that Millard Gutter's voluntary dismissal had no effect on the district court's authority to make further rulings. But we find the court erred in taxing technology expenses and jury expenses as costs. We therefore reverse that portion of the judgment, and in all other respects we affirm.

         I. BACKGROUND

         After a 2013 hailstorm, Millard Gutter performed roof repairs for approximately 48 homeowners in the Omaha area, all of whom were insured with American Family. In connection with those repairs, Millard Gutter took assignments of any right the homeowners had to insurance proceeds due under their homeowners' policies. The validity of the assignments is not at issue in this appeal.

         In 2015, Millard Gutter filed suit, as assignee of the homeowners, against American Family. Millard Gutter's complaint alleged claims for (1) breach of contract, (2) bad faith, (3) violations of the Unfair Insurance Trade Practices Act, [1] and (4) violations of the Unfair Insurance Claims Settlement Practices Act.[2]

         American Family's answer admitted that it issued insurance policies to the Omaha homeowners and had an obligation to pay for covered losses caused by the hailstorm, but denied that Millard Gutter had valid assignments. American Family raised several affirmative defenses, including that it was entitled to a credit or setoff for payments previously made to the homeowners under the insurance policies. American Family's [300 Neb. 469] answer also alleged that Millard Gutter's claims were frivolous and requested an award of costs and attorney fees under Neb. Rev. Stat. § 25-824 (Reissue 2016).

         1. American Family Moves for Partial Summary Judgment

         American Family moved for partial summary judgment on three of Millard Gutter's four claims for relief. The court granted the motion and entered summary judgment in favor of American Family on the claims alleging (1) bad faith, (2) violations of the Unfair Insurance Trade Practices Act, and (3) violations of the Unfair Insurance Claims Settlement Practices Act. Neither party asked the court to direct the entry of a final judgment under Neb. Rev. Stat. § 25-1315 (Reissue 2016), and the court did not do so.

         The only claims to survive summary judgment were Millard Gutter's claims for breach of contract, which were set for trial on January 23, 2017. The parties were given a special jury setting to minimize the risk that trial would need to be continued to accommodate other cases on the court's docket. Trial was expected to last 5 days.

         2. Millard Gutter Files Voluntary Dismissal

         During its final trial preparations, Millard Gutter discovered "underfilling issues" on some of the roof repairs, and decided to dismiss its breach of contract claims without prejudice rather than proceed to trial; it planned to refile the action later and seek additional damages. Thus, on the morning of January 23, 2017, just minutes before trial was set to begin, Millard Gutter filed a voluntary dismissal without prejudice pursuant to Neb. Rev. Stat. § 25-601 (Reissue 2016).

         3. Court Holds Hearing on Voluntary Dismissal and Costs

         Immediately after learning Millard Gutter had filed a voluntary dismissal, the district court held a hearing on the record [300 Neb. 470] to discuss the effect of the filing and to address taxable costs. When asked what effect the voluntary dismissal should have on the claims previously resolved on summary judgment. Millard Gutter replied, "Our position is all we're voluntarily dismissing without prejudice are the claims that have not already been dismissed, so the remaining claims are what we are dismissing."

         When addressing costs, the hearing focused on the expenses incurred by American Family in setting up courtroom technology for use during the scheduled trial and the expenses incurred by Douglas County to bring in prospective jurors.

         (a) Courtroom Technology Expenses

         American Family hired a court reporting firm to equip the courtroom with electronics and display screens for use during the 5-day trial. It was undisputed that the firm spent several hours over 2 days setting up the technology at a cost of $1, 650. American Family asked that this expense be taxed to Millard Gutter. Millard Gutter stipulated to the reasonableness of the charges, but took the position that courtroom technology expenses were not properly taxable as costs. American Family made no request for other costs or attorney fees and did not ask for a determination of frivolousness under § 25-824.

         (b) Jury Expenses

         With the parties' knowledge, the court summoned 40 prospective jurors, rather than the usual 25, out of concern that potential juror conflicts might exist with American Family. These prospective jurors were called exclusively for this case and were waiting at the courthouse when the voluntary dismissal was filed.

         During the hearing on costs, the court remarked, "It cost the taxpayers approximately $2, 000 to have 40 jurors ready to go this morning, and that includes the . . . $35 fee for each juror and then approximately $15 in mileage for each juror . . . ." The court suggested an evidentiary hearing be held later in the [300 Neb. 471] day to permit the clerk of the Douglas County District Court to testify and "get it down to the penny." Millard Gutter declined an evidentiary hearing on the issue and stipulated that juror fees and mileage totaled $2, 000, but argued such expenses were not properly taxable as costs.

         4. Order of Dismissal and Taxation of Costs

         The court announced its ruling from the bench. It held the prior summary judgments in favor of American Family would "remain in place" on the claims of bad faith, violations of the Unfair Insurance Trade Practices Act, and violations of the Unfair Insurance Claims Settlement Practices Act. It further held it would dismiss "the remaining breach of contract" claims without prejudice, pursuant to the voluntary dismissal. The court taxed costs to Millard Gutter, including $1, 650 for technology expenses incurred by American Family and $2, 000 "to be paid to the Douglas County District Court clerk's office for the 40 jurors that were specifically assigned to this case."

         Subsequently, the court entered a judgment of dismissal, styled as an order, consistent with its ruling from the bench. In addition to taxing technology costs and jury costs, the judgment taxed "all court costs" to Millard Gutter. The judgment also imposed certain procedural conditions in the event Millard Gutter refiled the action against American Family, but because neither party has assigned error to such conditions, we do not address them further.

         5. Millard Gutter's Motion to Alter or Amend

         Millard Gutter filed a timely motion to alter or amend. It argued the district court had no authority to rule on any issue after the voluntary dismissal was filed. In the alternative, Millard Gutter argued that neither jury expenses nor technology expenses were properly taxable as costs. The district court overruled the motion to alter or amend in all respects. Millard [300 Neb. 472] Gutter timely appealed, and we moved the appeal to our docket on our own motion.[3]

         II. ASSIGNMENTS OF ERROR

         Millard Gutter assigns, restated and consolidated, that the district court erred in (1) making any rulings after the voluntary dismissal was filed, (2) determining technology expenses and jury expenses were ...


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