# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 6- 26 32

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McS ha ne Co ns tru ct io n C om pa ny, L LC

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Got ha m Ins ur an ce Co m

pa ny

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

__ __ __ __ __ __
App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of Ne br as ka - Om ah a

__ __ __ __ __ __

Su bm it te d: May 10, 2 01 7
Fil ed : Au gu st 11 , 20 17

__ __ __ __ __ __

Befo re RI LEY, BEAM, and SHEPHERD, Circ ui t J ud ge s.

__ __ __ __ __ __

SHEPHERD, Cir cu it Ju dg e.

McS ha ne Co ns tru ct io n, LLC (Mc Sh an e), a ge ne ral co nt ract or , su ed G o t ha m

In su ran ce Co m

pa ny (Go th am ) di rect ly fo r fai li ng to pa y it s in su ran ce cl ai m rel at ed

to th e al le ge d im

pr op er in st al la ti on of a fir e pr ot ect io n an d su pp res si on syste m by on e

of McS ha ne ’s s u b co nt ract or s, Mal lo ry Fi re Pro te ct io n Serv ic es (Ma ll or y )—wh omMcS ha ne ha s su e d se pa rat el y in Neb ras ka st at e co ur t. The di st ric t co ur t gr an te d 1

Got ha m ’s Fed eral Ru le of C iv il Pro ced ur e 12 (b )(6 ) m ot io n to di sm is s fo r fai lu re t o

st at e a cl ai m

up on whi ch rel ie f can be gra nt ed , and McSh an e n ow ap pe al s. Havin g juri sd ic ti on un de r 28 U.S.C. § 1 29 1, we af fir m

.

I. Ba ck gr ou nd

In 20 12

, McS ha ne be ga n gen eral co nt ract wor k on th e co ns tru ct io n of a 19 6-

un it

, $1 5 m il li on ap art m en t co m pl ex (Pro ject) in Om ah a, Neb ras ka

. McS ha ne hi red

Mal lo ry as a su bc on tra ct or to de si gn an d in st al l a fir e su pp re s s i o n a n d pr ot ect io n
syste m for th e Pro

ject.

McS ha ne an d Mal lo ry ex ecu te d a su bc on tra ct on Ju ne 8, 20 12 , t ha t in cl ud ed

a pr ov is io n req ui rin g Mal lo ry to ob ta in in su ran ce po li ci es an d to li st McS ha ne as an
Add it io na l In su red on th e Co m m erci al Ge n e r al Liab il it y (CGL) in su ran ce po li cy

. Mal lo ry su bs eq ue nt ly pu rch as ed an d Got ha m is su ed on Sep te m be r 15

, 20 12

, Got ha m

Po li cy No. GL20 12 F S C 0 0 4 5 1( Po li cy ) to fu lfi ll th is req ui rem en t. The “ Add it io na l

I n s u red ” en do rs em en t m od ifi ed th e in su ran ce pr ov id ed un de r th e “ Co m m erci al

Gen eral Liab il it y Co ve rag e Part .” It li st ed “Bl a nk et whe re req ui red by writ te n

co nt ract ”—wh ic h in cl ud es M c S h an e si nc e it co nt ract ed wit h Mal lo ry —as th e
Add it io na l In su red

, an d Got ha m pr ov id ed McS ha ne wit h a Cert ifi cat e of Li a b i l it y

In su ran ce v eri fy in g M cSh an e as an Add it io na l In su red

.

The Hon or ab le Jo hn M. Gerra rd

, Uni te d St at es Dis tri ct Ju dg e fo r th e Dis tri ct 1

of Nebr as ka

.

-2

-Und er it s su bc on tra ct wit h McS ha ne , Mal lo ry de si gn ed an d in st al le d a fir e

su pp res si on an d pr ot ect io n syste m , whi ch McS ha ne de te rm i n ed was fau lt y

. To

re p l a ce th e fau lt y syste m , McS ha ne rem ov ed pr ev io us ly in st al le d dr y wall an d

in st al la ti on le ad in g to da m ag es an d lo ss es th at McS ha ne al le ge s ex ceed $6 14 ,29 1.1 7.

Mal lo ry an d McS ha ne each fil ed in de pe nd en t cl ai m s wit h Got ha m to co ve r th e
da m ag es an d lo ss es

. Got ha m ev en tu al ly co m bi ne d th e two cl ai m s in to a si ng le cl ai m
wit h Mal lo ry li st ed as th e in su red

. Afte r a co m pr eh en si ve ad

jus tm en t pr oc es s

in cl ud in g McS ha ne , Got ha m ’s pr im ary ad jus te r fo r th is cl ai m se nt a fin a l rep or t

r e c o mm e nd in g pa y m en t of $4 99 ,45 3.5 7 “ fo r pa y m en t of th e cl ai m rel at in g to th e

im pr op er in st al la ti on o f th e fir e sp rin kl er syste m .” Got ha m su bs eq ue nt ly st op pe d

co m m un ic at in g wit h McS ha ne ot he r th an th ro ug h an at to rn ey an d ul ti m at el y refu se d

to pro vi de McSh an e wit h a for m al co ve rag e d et erm in at io n.

McS h a n e f

i l e d th is la wsu it on Decem be r 23

, 20 14

, as se rti ng ei gh t cau se s of

act io n in cl ud in g (in th e or de r as se rte d by McS ha ne ) vi ol at io n of th e Neb ras ka Unf ai r

In su ran ce Trad e Prac ti ces Act (Co un t 1)

, vi ol at io n of th e Neb ras ka Unf ai r In su ran ce
Cl ai m s Set tl em en t Prac ti ces Act (Co un t 2)

, vi ol at io n of th e im pl ie d co ve na nt of go od

fai th an d fai r de al in g (Co un t 3)

, a cl ai m fo r at to rn ey ’s fees un de r Neb

. R e v

. St at

. § 44 -3 59 (Co un t 4) , b reac h of co nt ract (Co un t 5)

, waiv er an d es to pp el (Co un t 6) , a
cl ai m un de r th e res cu e d oc tri ne (Co un t 7 ), an d d ecl arat or y rel ie f (Co un t 8 ).

On Mar ch 29

, 20 16

, th e di st ric t co ur t gr an te d Got ha m ’s m ot io n to di sm is s al l

co un ts

. McS ha ne su bs eq ue nt ly fil ed a Fed eral Ru le of Ci vi l Pro ced ur e 59 (e) m ot io n

to reco ns id er an d va cat e th e jud gm en t, whi ch th e di st r i c t co ur t de ni ed on May 9,

20 16 . McSh an e n ow ap pe al s. 2

McS ha ne ha s n ot ap pe al ed di sm is sa l o f co un ts 4 an d 8

. 2

-3

-II . Anal ys is

W e rev ie w de no vo th e di st ric t co ur t’s gr an t of a m ot io n to di sm is s, “ acce pt in g

as tru e th e co m

pl ai nt ’s f act ua l al le ga t i on s an d gr an ti ng al l reas on ab le in fere nc es to

th e no n- m ov in g pa rty.” Brad en v. W al -Ma rt St or es , In c., 58 8 F.3 d 58 5, 59 1 (8 th Ci r.

20 09 ).

To su rv iv e a 12 (b )(6 ) m ot io n to di sm is s, “ a co m pl ai nt m us t co nt ai n su ffi ci en t

fact ua l m at te r, acce pt ed as tru e, to st at e a cl ai m to rel ie f th at is pl au si bl e on it s face .”

Ash cro ft v. Iq ba l, 55 6 U.S. 66 2, 67 8 (2 00 9) (in te rn al qu ot at io n m ark s om it te d)

. The

co m pl ai nt m us t pr ov id e “ m or e th an la be ls an d co nc lu si on s, an d a fo rm ul ai c reci ta ti on

of th e el em en ts of a cau se of act io n wil l no t do .” Bel l Atl

. Co rp

. v. Twom bl y , 55 0

U.S. 54 4, 55 5 (2 00 7)

. “ A cl ai m ha s faci al pl au si bi li ty whe n th e pl ai nt iff pl ead s

fact ua l co nt en t th at al lo ws th e co ur t to dr aw th e reas on ab l e i n f e ren ce th at th e
de fen da nt is li ab le fo r th e m is co nd uc t al le ge d.” Iq ba l, 55 6 U.S. at 67 8. Two wor ki ng

pr in ci pl es un de rli e th e an al y si s: (1 ) th e co ur t’s ob li ga ti on to acce pt th e no n- m ov an t’s

al le ga ti on s as tru e “ is in ap pl ic ab le to le ga l co nc lu si on s,” su c h t h a t “ [t]hr ead ba re
reci ta ls of th e el e men ts of a cau se of act io n, su pp or te d by m ere co nc lu so ry

st at em en ts

, do no t su ffi ce”; an d (2 ) “ on ly a co m pl ai nt th at st at es a pl au si bl e cl ai m fo r
rel ie f su rv iv es a m ot io n to di sm is s,

. . . [an d] [d ]eterm in in g whe th er a co m pl ai nt st at es

a pl au si bl e cl ai m fo r rel ie f

. . . [is ] a co nt ex t-s pe ci fic ta sk th at req ui res th e rev ie win g

co ur t t o d raw o n i ts jud ic ia l ex pe rie nc e an d c om m on sen se .” Id . at 6 78 -7 9.

W e fin d th at th e di st ric t co ur t’s di sm is sa l of al l co un ts was pr op er. To ex pl ai n,

we wil l gr ou p McS ha ne ’s si x rem ai ni ng cau se s of act io n in to (A) st at ut or y cl ai m s, (B)

th os e p ert ai ni ng to bre ach of c on tra ct , and (C) wai ve r an d e st op pe l.

-4

-A. Sta tu to ry Cla ims

Two of McS ha ne ’s cl ai m s are ba se d up on Neb ras ka st at ut es th at pr ov id e n o

pr iv at e rig ht of act io n an d th us , are su bjec t to di sm is sa l fo r fai li ng to st at e a c l a i m

up on whi ch rel ie f can be gr an te d. In as se rti ng it s cl ai m un de r Neb ras ka ’s Unf ai r

In su r a n c e Trad e Prac ti ces Act, McS ha ne al le ge s th at Got ha m ha s “ no t be en

fo rth rig ht

, tru th fu l, or tim el y in it s adju st m en t o f . . . the [] cl ai m s,” a nd all eg es th at

Got ha m ha s act ed in ba d fai th in vi ol at io n of Neb

. Rev

. St at

. § 44 -1 52 5( 9)

. In

as se r t i n g i t s cl ai m un de r Neb ras ka ’s Unf ai r In su ran ce Cl ai m s Set tl em en t Prac ti ces Act, M c S h a n e al le ge s th at Got ha m vi ol at ed Neb

. Rev

. St at

. § 44 -1 54 0 whi ch li st s

nu m ero us act s or pr act ic es th at m ay be co ns id ered un fai r cl ai m s se tt le m en t pr act ic es

un de r Neb ras ka law.

Howev er, ne it he r of th es e st at ut es pr ov id es McS ha ne wit h a pr iv at e rig ht of

act io n. In Neb ras ka

, “ [w]het he r a st at ut e crea te s a pr iv at e rig ht of act io n de pe nd s on

th e st at ut e’s pu rp os e an d whe th er th e Leg is la tu re in te nd ed to crea te a pr iv at e rig ht of

act io n.” Pro f’l Mg m

t. Mi dwe st

, In c. v. Lun d Co

., 82 6 N.W .2d 22 5, 23 3 (Neb

. 20 12 ).

The Neb ras ka Unf

ai r In su ran ce Tr a d e P r act ic es Act “ do es no t co nt em pl at e pr iv at e

su it s, b ut in st ead ve st s p owe rs an d du ti es in th e St at e Dire ct or of In su ran ce, who is

em po wered to en

joi n an d pe na li ze cert ai n pr oh ib it ed act s.” All ie d Fi n. Serv s., In c.

v. Fo rem os t In s. Co

., 41 8 F. Su pp

. 15 7, 16 2 (D. Neb

. 19 76 ). Lik ewis e, “ [t]he pu rp os e

of th e Unf

ai r In su ran ce Cl ai m s Set tl em en t Prac ti ces Act is to se t fort h st an da rd s fo r

th e in ve st ig at io n an d di sp os it io n of cl ai m s ari si ng un de r po li ci es is su ed to res id en ts

of th is st at e,” an d no pri va te rig ht of act io n is pr ov id ed by t he Neb ras ka le gi sl at ur e

un de r th is st at ut e. Neb

. Rev

. St at

. § 44 -1 53 7. The refo re, bot h of the se cl ai m s were

pr op erl y di sm is se d be cau se ne it he r res ts up on a pr iv at e rig ht of act io n an d th us , bo th

fai l t o s ta te a cl ai m

up on whi ch rel ie f can be gra nt ed

.

-5

-B. Brea ch of Co nt ra ct an d Rel at ed

Cla ims

McS ha ne as se rts fo ur cl ai m s ari si ng fro m th e in su ran ce ag reem en ts in cl ud in g (1 ) br each of co nt ract

, (2 ) br each of th e i mp l i e d c o ve na nt of go od fai th an d fai r
de al in g, (3 ) fai lu re to reco gn iz e th ird

- p a r ty be ne fic ia ry st at us , an d (4 ) m it ig at io n.

McS ha ne arg ue s th at “ [t]he re is a n a b se nc e of a reas on ab le ba si s fo r [Go th am ’s]

fai lu re to as su m e an d pa y fo r da m ag es

. . . s u s t a i n ed by Mc Sh an e” an d al le ge s th at

Got ha m “ br each ed it s ob li ga ti on s an d du ti es [u nd er th e Po l i c y] t o McS ha ne as an
Add it io na l In su red

. . . an d/ or [as ] a Thi rd Part y Ben efi ci ary. ”

1. Br ea ch of

Co nt ra ct

In Neb ra s k a, “ [t]he m ean in g of an in su ran ce po li cy is a qu es ti on of la w, in

co nn ect io n wit h whi ch an ap pe l l a t e co ur t ha s an ob li ga ti on to reac h it s own

co nc lu si on s in de pe nd en tl y of th e de te rm in at io n m ad e by th e l o w e r co ur t.”

Aut o- Owner s In s. Co . v . Ho m e Pri de Co s., 68 4 N.W .2d 57 1, 57 5 (Neb . 20 04 ). “ In

co ns tru in g in su ran ce po li cy pr ov is io ns , a co ur t m us t de te rm in e fro m th e cl ear

la ng ua ge of th e po li cy whe th er th e in su rer in fact in su red ag ai ns t th e ris k in vo lv ed .”

Id

. “ In an ap pe ll at e rev ie w of an in su ran ce po li cy , th e co ur t co ns tru es th e po li cy as

an y ot he r co nt ract to gi ve effe ct to th e pa rti es ’ in te nt io ns at th e ti m e th e writ in g was

m ad e.” Id

. “ W he re th e te rm s o f a c o n t r a c t are cl ear, th ey are to be acco rd ed th ei r pl ai n a nd ord in ary m ean in g.” Id.

Here, McS ha ne i s l i s t ed as an “ Add it io na l In su red ” un de r th e Po li cy

. In

Neb ras ka

, “ [s ]ubjec t to res tri ct io ns in th e ad di ti on al in su red en do rs em en t, an

a d d i ti on al in su red ha s th e sa m e co ve rag e rig ht s an d ob li ga ti on s as th e pr in c i p a l

in su red un de r th e po li c y.” F e de rat ed Serv

. In s. Co

. v. All ia nc e Co ns tr., LLC, 80 5

N.W .2d 46 8, 47 6 ( Neb

. 20 11 ). Thu s, McS ha ne ha s th e sa m e li ab il it y co ve rag e as

Mal lo ry un de r th e pa rts of th e Po li cy ap pl ic ab le to McS ha ne

. The Add it io na l In su red

-6

-en do rs em en t in cl ud es McS ha ne as an A d d i t i on al In su red “ on ly wit h res pe ct to

li ab il it y fo r ‘bod il y in

jury,’ ‘pro p e r t y d a mage’ or ‘pers on al an d ad ve rti si ng in jury’

c a u s e d

. . . b y

. . . [Ma ll or y ’s] act s or om is si on s or

. . . act s or om is si on s of th os e

act in g o n [M al lo ry ’s] be ha lf.” (em ph as is ad de d)

.

The na tu re of th e Po li cy as a th ird -p a r t y li ab il it y po li cy is ev id en t in it s

la ng ua ge

. “ A ‘firs t-p art y in su ran ce’ po li cy pr ot ect s th e in su red fro m hi s or he r own
lo ss es , whi le a ‘t h i r d

- p art y ’ po li cy pr ov id es li ab il it y in su ran ce th at pr ot ect s th e

in su red fro m cl ai m s resu lt in g from th e lo ss es of ot he rs .” Met ro Ren ov at io n, Inc. v.

All ie d Grp

., In c., 38 9 F. Su pp

. 2d 11 31

, 11 32 n.2 (D. Neb

. 20 05 ) (ci ti ng Dou gl as R.

Ri ch m on d, Tru st Me: Ins ur ers Are N ot Fi du ci ari es to The ir Ins ur ed s, 88 Ky

. L.J. 1

, 2 (2 00 0) ). “ In th e th ird -p art y si tu at io n, th e in su ran ce co m pa ny wil l typic al ly ha ve th e

po wer to de fen d an d co nt ro l li ti ga ti on reg ard in g th e cl ai m s of st ran ge rs as se rte d

ag ai ns t th e in su red .” Id

. Here, th e Po li cy st a t e s , “We wil l pa y th os e su m s th at th e

in su red be co m es le

ga ll y ob li ga te d to pa

y as da m ag es be cau se of ‘bod il y in jury’ or ‘pro pe rty da m ag e’ to whi ch th is in su ran ce ap pl ie s.” (em ph as is ad de d)

. Lik ewis e, th e

“ Add it io na l In su red ” en do rs em en t sa y s th at th e ad di ti on al in su red s are co ve red “ on ly

wit h res pe ct to li ab il it

y .” (em ph as is ad de d)

. Thu s, th e po li cy co ve rs li ab il it y to th ird

pa rti es , no t fi rs t-p art y

lo ss es

.

The Neb ras ka Su pr em e Co ur t ha s de te rm in ed in a cas e in vo lv in g an in su ran ce

co nt ract wit h si m il ar la ng ua ge th at t h e i n s ur an ce co m pa ny “ [d id ] no t ha ve an
ob li ga ti on to pa y fo r al l act s co m m it te d by th e in su red ev en th ou gh th e act by th e

in su red m ay pr od uc e an in jury co ve red by th e po li cy ” be cau se “ un ti l it is de te rm in ed

th at [th e in su red ] is le ga ll y ob li ga te d to pa y

. . . , th e q u e s t i o n of [th e in su ran ce

co m pa ny’ s] ob li ga ti on is un cert ai n an d co nt in ge nt .” All st at e In s. Co

. v. Nov ak

, 31 3

N.W .2d 63 6, 63 9 (Neb

. 19 81 ). Here, McS ha ne fai ls to pl au si bl y al le ge th at an y th ird

pa rty ob ta in ed a jud gm en t de no ti ng a le ga l ob li ga ti on fo r McS ha ne to pa y

. Bec au se

McS ha ne fai le d to al le g e a l e ga l ob li ga ti on to pa y co ve red un de r th e te rm s of th e

Po li cy , th e d is tri ct co ur t p ro pe rly gran te d Go th am ’s m ot io n t o d is m is s.

-7

-2. Go od Fai th an d Fa ir

Deal in g

McS ha ne accu se s Got ha m of “ an act or se rie s of act s pe rfo rm ed in ba d fai th .”

The Neb ras ka Su pr em e Co ur t ha s s t a t e d th at “ in or de r to es ta bl is h a cl ai m fo r ba d

fai th

, a pl ai nt iff m

us t sh ow an ab se nc e of a reas on ab le ba si s fo r de nyin g th e be ne fit s

of th e in su ran ce po li cy an d th e in su rer’s kn owl ed ge or reck le ss di sr eg ard of th e la ck

of a reas on ab le ba si s fo r de nyin g th e cl ai m .” LeRet te v. Am

. Med

. Sec., In c., 70 5

N.W .2d 41

, 47 -4 8 (Neb. 20 05 ) (i nt ern al qu ot at io n m ark s o m it te d) . Here, McS ha ne

fai ls to al le ge th at Got ha m la ck ed a reas on ab le ba si s fo r de nyin g be ne fit s be cau se it

fai le d to st at e a pl au si bl e cl ai m th at McS ha ne was le ga ll y ob li ga te d to pa

y da m ag es

co ve red un de r th e Po li cy

. The refo re, McS ha ne fai le d to pl au si bl y cl ai m th e ab se nc e

of a reas on ab le ba si s fo r de nyi n g th e be ne fit s, so it s cl ai m of ba d fai th is pr op erl y
di sm is se d.

3. Th ir d- Par ty Bene fi ci ar y

In ad di ti on to it s clai m s as an Addi ti on al In su red

, McS ha ne cl ai m s th at it is a

th ird -p art y be ne fic ia ry to ot he r pa rts of th e Po li cy no t co ve red by th e Add it io na l

In su red en do rs em en t. “ In or de r fo r th os e no t na m ed as pa rti es to a co nt ract to reco ve r

th ereu nd e r a s th ird -p art y be ne fic ia rie s, it m us t ap pe ar by ex pr es s st ip ul at io n or by

r e as on ab le in te nd m en t th at th e rig ht s an d in te res ts of su ch un na m ed pa rti es wer e

co nt em pl at ed an d pr ov is io n was m ad e fo r th em .” Pro ps

. I n v

. G r p

. of Mi d- Am

. v. App li ed Co m

m c’ns

, In c., 49 5 N

. W. 2d 48 3, 48 8 (Neb

. 19 93 ). “ A th ird -p art y
be ne fic ia ry ’s rig ht s de pe nd up on , a n d are m eas ur ed by, th e te rm s of th e co nt ract

be twee n th e pr om is or an d pr om is ee.” Haak in so n & Bea ty Co

. v. In la nd In s. Co

., 34 4

N.W .2d 45 4, 45 8 (Neb

. 19 84 ) (in te rn al qu ot at io n m ark s o mi t t e d)

. “ The rig ht of a

th ird pa rty be n e f

i t t e d b y a co nt ract to su e th ereo n res ts up on th e li ab il it y of th e

pr om is or , whi ch m

us t affi rm at iv el y ap pe ar fro m th e la ng ua ge of th e in st ru m en t whe n

-8

-pr op erl y in te rp ret ed or co ns tru ed

. . . .” Osm on d S t a t e B a nk v. Ueck er Grai n, In c.,

41 9 N.W.2d 5 18 , 52 0 (Ne b. 1 98 8) (in te rn al qu ot at io n m ark s o m it te d)

.

Here, McS ha ne cl ai m s th ird -p art y be ne fic ia ry st at us un de r Part D of th e Po li cy , in whi ch Mal lo ry is th e pr om is ee an d Got ha m th e pr om is or

. Part D is an en do rs em en t

m od ifyin g th e CGL co ve rag e an d ti tl ed “ Co ve rag e D—Erro rs an d Om is si on s
Liab il it y .” Part D sa y s Got ha m wil l pa y “ th os e su m s th at th e in su red be co m es le ga ll y
ob li ga te d to pa y as da m ag es be cau se of erro rs or om is si on s co m m it te d by th e In su red

res ul ti ng fro m th e se rv ic es pr ov id ed in th e de cl arat io ns .” The “ de cl arat i o n s ” li st s

“ fir e su pp res si on ” as th e “ fo rm of b us in es s.”

Mc Sh an e fa ils to plau si bl y al le ge th at it s rig ht s an d in te res ts were co nt em pl ate d

whe n Mallor y an d Got ha m en te red in to th e po rti on of th e Po li cy ag reem en t pe rta in in g

to Mal lo ry ’s erro rs or de si gn li ab il it y

. McS ha ne al le ge s no “ ex pr es s st ip ul at io n” th at

it is in cl ud ed in Part D—ev en th ou gh McS ha ne is ex pr es sl y in cl ud ed in ot he r pa rts

of th e Po li cy

. In st ead

, th e Add it io na l In su red en do rs em en t in cl ud es McS ha ne as an
Add it io na l In su red us in g la ng ua ge th at co rres po nd s to co ve rag e pr ov id ed on ly un de r

Sect io n I, Part s A an d B of th e Po li cy —n ot Part D. The la ng ua ge do es no t m en ti on

co ve rag e fo r Mal lo ry ’s “ erro rs ,” fo r whi ch Mal lo ry ha s co ve ra g e u n de r th e “ Erro rs

an d Om is si on s Co ve rag e Ext en si on ” en do rs e men t in Part D. The refo re, McS ha ne

fai ls to pl au si bl y al le ge th at th e te rm s of th e Po li cy d e mo n s tra te a “ reas on ab le

in t e n d ment ” to in cl ud e McS ha ne in Mal lo ry ’s Erro rs an d Om is si on s co ve rag e or

al le ge th at su ch co ve rag e “ affi rm at iv el y ap pe ar[s ] fro m th e la ng ua ge of th e [Po li cy ], ”

so Got ha m ’s m ot io n to di sm is s was p ro pe rly gran te d. Id .; Ap pl ie d C om m c’ns , 49 5

N.W .2d at 4 88

.

4. Mi ti ga ti on

McS ha ne ’s m it ig at io n cl ai m was fir st fram ed u n d e r th e res cu e do ct rin e.

M c S h a n e ’s cl ai m un de r th e res cu e do ct rin e is wit ho ut m eri t be cau se th e res c u e

-9

-do ct rin e is in ap pl ic ab le to th e fact s of thi s case

. “ The res cu e do ct rin e co nt em pl at es

a vo lu nt ary act by o n e who , i n an em erg en cy an d pr om pt ed by s po nt an eo us hu m an

m ot iv es to sa ve hu m an li fe, at te m pt s a res cu e whi ch h e h a d n o d ut y to at te m pt by

vi rtu e of a le ga l ob li ga ti on or du ty fas te ne d on hi m by hi s em pl oym en t.” Bu ch an an

v. Pri ck et t & So n, In c., 2 7 9 N

. W. 2 d 8 5 5, 85 8 (Neb . 1 97 9)

. Here, no fact s al le gi ng

an “ em erg en cy

. . . pr om

pt [in g]

. . . sp on ta ne ou s hu m an m ot iv es to sa ve hu m an li fe”

were ci te d b y

McSh an e.

App aren tl y rec o g n i z i ng th at th e res cu e do ct rin e is in ap pl ic ab le

, McS ha ne

arg ue s th at it m ean t to cl ai m m it ig at io n of da m ag es an d th at th e cl ai m was m is la be le d

in th e co m

pl ai nt

. McS ha ne ci te s a cas e th at we de ci de d un de r M i s so ur i la w, Sl ay

W areh ou si ng Co . v. Rel ia nc e In su ran ce Co ., 4 71 F.2d 13 64 (8t h C ir. 1 97 3) , for th e

pr op os it io n th at it sh ou ld be co m pe ns at ed fo r m it ig at io n of da m ag es

. Howev er, Sl ay

pr ov id es no he lp to McSh an e, be cau se th e Sl ay po li cy in cl ud ed lan gu ag e ex pr es sl y

req ui rin g m it ig at io n by t h e i n s ur ed

, whi le McS ha ne fai ls to id en ti fy an y si m il ar

ex pr es s la ng ua ge in th e Got ha m Po li cy

. Id

. at 13 65

. “ Eve n as su m in g [Mc Sh an e] ha d

an im pl ie d du ty to m it ig at e or pr ev en t da m ag es , th e [Go th am ] po li cy ex pr es sl y pl aced

th e bu rd en of su ch co st s on [Mc Sh an e].” Cl ari ne t, LL C v. Ess ex In s. Co., 71 2 F.3d

12 46

, 12 50 (8 th Ci r. 20 13 ). Sp eci fic al ly, th e Po li cy ex pr es sl y st at es , “ No in su red

wil l, exce pt at t h e in su re d’

s ow n co st

, vo lu nt ari ly m ak e a pa y m en t, as su m e an
ob li ga ti on , or in cu r an y ex pe ns e , o t h e r th an fo r fir st ai d, wit ho ut ou r co ns en t.”
(em ph as is ad de d)

. Fro m a po li cy st an dp oi nt

, th is m ak es se ns e as a bu si ne ss de ci si on

of th e in su ran ce co m

pa ny t o pr ev en t th e in su red fro m un co nt ro ll ed ex pe nd it ur es in

th e n am e o f m it ig at io n wi th ou t t he in su ran ce co m pa ny’ s i np ut

.

Li ke wis e, McS ha ne ’s de ci si on to pr oc eed wit h rep ai rs pr io r t o t h e
de te rm in at io n of any le ga l o bl ig at io n o r en try of j ud gm en t was a bu si ne ss de ci si on

. Mc S ha ne m ay be rig ht th at it was req ui red to co m pl y wit h bu il di ng co de s an d

co nt ract ua ll y ob li ga te d to th e own er of th e Pro ject. Bu t McS ha ne ’s rem ed y is to su e

Mal lo ry , no t th e in su ran ce co m pa ny di rect ly. McS ha ne is pr op erl y a cl ai m an t, no t an

-1 0-in su red un de r th e Po li cy fo r Mal lo ry ’s erro rs an d om is si on s. Fu rth er, th e Po li cy do es

no t co ve r co nt ract ua l li ab il it y sa y in g, “ Thi s in su ran ce do es no t ap pl y to

. . . ‘pro pe rty

da m ag e’ fo r whi ch th e in s u r ed is ob li ga te d to pa y da m ag es by reas on of th e

as su m pt io n of li ab il it y in a c o n tra ct or ag reem en t.” McS ha ne can an d ha s su ed

Mal lo ry to reco ve r it s lo ss es

. McS ha ne ha s fai le d to st at e a ba si s fo r whi ch it s al le ge d

m it ig at io n co ul d gi ve it th e rig h t t o su cces sf ul ly su e Mal lo ry ’s in su ran ce co m pa ny
di rect ly for Ma ll or y ’s all eg ed erro rs

.

Fo r th e reas on s st at ed ab ov e, McS ha ne ha s fai le d to s t at e a cl ai m fo r whi ch

rel ie f can be gr an te d wit h reg ard to it s br each of co nt ract th eo rie s, an d we affi rm th e
di st ric t co ur t’s d is m is sa l o f th os e co un ts

.

C. W ai ver an d Es to pp el

McS ha ne al le ge s th at Got ha m w aive d de ni al of co ve rag e or sh ou ld be es to pp ed

fro m de nyin g co ve rag e to McS ha ne un de r th e Po li cy be cau se McS ha ne de tri m en ta ll y
rel ie d up on Got ha m an d th e Po li cy in it s de ci s i o n t o hi re Mal lo ry

. McS ha ne al so

arg ue s rel ia nc e be cau se Got ha m en ga ge d in a lo ng cl ai m -ad jus tm en t pr oc es s wit h

McS ha ne de la y in g it s la wsu it ag ai ns t Mal lo ry , cau se d McS ha ne to ex pe nd res ou rces
du rin g th e pr ol on ge d ad

jus tm en t, an d en ga ge d in “ ot he r rel at ed co nd uc t” in di cat in g

Got ha m di d n ot di sp ut e th e cl ai m du rin g t he ad

jus tm en t p ro ces s.

The co m pl ai nt fai ls to pl au si bl y al le ge waiv er he re. The Neb ras ka Su pr em e

Co ur t h as st at ed :

A waiv er is a vo lu nt ary an d in te nt io na l rel in qu is hm en t of a kn own rig ht

, pr iv il eg e, or cl a i m, a nd m ay be de m on st rat ed by or in ferr ed fro m a
pe rs on ’s co nd uc t. W e h a v e l o n g he ld th at an in su rer m ay waiv e an y
pr ov is io n of a po li cy th at is fo r th e in su rer’s be ne fit

, in cl ud in g va can cy
pr ov is io ns

. Ord in ari ly, to es ta bl is h a waiv er of a le ga l rig ht

, th ere m us t be a cl ea r, un eq ui vo ca l, an d de ci si ve ac t of a pa rty sh owi ng su ch a

-1 1-p u rp os e, or act s am ou nt in g to an es to pp el on hi s or he r pa rt. A pa rty

m ay waiv e a writ te n co nt ract in who le or in pa r t, ei th er di rect ly or in fere nt ia ll y

. A pa r t y may pr ov e th e waiv er by (1 ) a pa rty’ s exp re ss de cl ar at io ns m an ife st in g th e in te nt no t to cl ai m an ad va nt ag e o r (2 ) a
p a r t y ’s ne gl ect in g an d fai li ng to act so as to in du ce th e be li ef th at i t
in te nd ed to wa iv e

.

D & S Rea lt y , In c. v. Mark el In s. Co

., 78 9 N.W .2d 1, 17 -1 8 (Neb

. 20 10 ) (em ph as es
ad de d)

.

Here, McS ha ne do es no t pl au si bl y al le ge th at Got ha m waiv ed it s rig ht s un de r

th e Po li cy

. Fi rs t, th ere is no al le ga ti on of an ex pr es s de cl arat io n by Got ha m waiv in g

it s rig ht to de ny McS ha ne ’s cl ai m

. Seco nd

, whi le McS ha ne m ay ha ve be li ev ed th at

Got ha m in te nd ed to pa y fo r McS ha ne ’s da m ag es , McS ha ne al le ge s n o cl ear,

un eq ui vo cal

, an d de ci si ve act s by Got ha m in di cat in g th at it in te nd ed to waiv e it s rig ht

to de ny th e cl ai m

. To be su re, Got ha m d i d en ga ge in a co m pr eh en si ve ad

jus tm en t

pr oc es s in ve st ig at in g th e reas on ab le ne ss of McS ha ne ’s cl ai m ed co st s. Howev er,

G oth am ’ s co m

m uni ca tio ns ind ic at e th at it was de fen di ng Mal lo ry , wit h Mal lo ry be ing

na m ed as th e “ In su red ” in th e co m m un ic at io ns an d wit h th e cl ai m be in g co ns ol id at ed

in to th e cl ai m nu m

be r wit h Mal lo ry li st ed as th e “ In su red .” Fo r ex am pl e, th e “ Fi na l

R e p o r t ” le tt er th at res ul te d fro m th e ad jus tm en t pr oc es s an d reco m m en di ng $4 99 ,45 3.5 7 in pa y m en t cl earl y li st s M a l l o r y as th e “ In su red ,” no t McS ha ne

. As

an ot he r ex am

pl e, McS ha ne ’s May 20 , 20 13

, de m an d let te r to Mal lo ry sa y s Mal lo ry
sh ou ld su bm it th e co st s fo r rei m bu rs em en t on “ [Ma ll or y ’s] ge ne ral li ab il it y po li cy .”

McS ha ne th us un de rs to od th at th e ad jus tm en t pr oc es s was oc cu rri ng un de r Mal lo ry ’s

po li cy

. Fi nd in g no pl au si bl e al le ga ti on in th e co m pl ai nt of a cl ear, un eq ui vo cal

, an d

de ci si ve act b y Got ha m to jus ti fy an y as su m pt io ns McS ha ne m ay ha ve m ad e

reg ard in g Got ha m ’s in te nt to waiv e it s rig ht to de ny th e cl ai m , we affi rm th e di st ric t

co ur t’s d is m is sa l o f th e wai ve r cl ai m

.

-1 2-Lik ewis e, we fin d th at McS ha ne ha s fail ed to su ffi ci en tl y al le ge th at Got ha m

sh ou ld be es to pp ed fro m de nyin g McS ha ne ’s cl ai m

. Est op pe l in Neb ras ka is de fin ed

ge ne ral ly by si x el em en ts : (1 ) cal cu la te d fal se rep res en ta ti on or co nc eal m en t of

m at eri al fact s, (2 ) in te nt io n or ex pe c t a t i o n t h at th e ot he r pa rty wil l act up on or be

in flu en ced by th e fir st el em en t, (3 ) kn owl ed ge of th e real fact s, (4 ) la ck of kn owl ed ge (o r m ean s of kn owl ed ge ) of th e tru th as to th e real fact s, (5 ) go od fai th rel ia nc e up on

th e co nd uc t or st at em en ts of th e pa rty to be es to pp ed

, an d (6 ) res ul ti ng ch an ge in th e

po si ti on or st at us of th e pa rty cl ai m in g es to pp el

. Am

. Fam il y Mu t. In s. Co

. v. Reg en t

In s. Co

., 84 6 N.W .2d 17 0, 19 2- 93 (Neb

. 20 14 ). “ [E]sto pp el can no t be in vo ke d to

ex p a n d th e sc op e of co ve rag e of an in su ran ce co nt ract ab se nt a sh owi ng of

de tri m en ta l go od

fa it h re li an ce up on st at em en ts or co nd uc t of th e pa rty ag ai ns t who m

es to pp el is in vo ke d whi ch reas on ab ly le d a n i n s u red to be li ev e co ve rag e was

pr es en t.” Des ig n Data Co rp

. v. Md

. Cas

. Co

., 50 3 N

. W. 2 d 5 5 2

, 56 0 (Neb

. 19 93 )
(em ph as i s ad de d)

. “ As a ge ne ral ru le

, th e do ct rin e of es to pp el m ay no t be us ed to

br in g wit hi n th e co ve rag e of a po li cy ris ks no t co ve red by it s te rm s, or ris ks exp re ss ly

excl ud ed th eref ro m .” Fi rs t Uni te d Ban k of Bel le vu e v. Fi rs t Am

. Tit le In s. Co

., 49 6

N.W .2d 47 4, 48 0 (Neb

. 19 93 ) (em ph as is ad de d)

. Here, as no te d ab ov e, Part D of th e

Po li cy co ve rin g Mal lo ry ’s erro rs an d om is si on s ex pr es sl y ex cl ud ed th e pr op ert y
da m ag e cl ai m ed by McSh an e fro m co ve rag e.

“ A wi d e l y r e c o g ni zed ex cep ti on to th e ge ne ral es to pp el ru le is th at whe n an

in s u r a n c e co m

pa ny as su mes th e de

fe ns e of an ac ti on ag ai ns t it s in su red

, wit ho ut

res erv at io n of rig ht s, an d,wi th kn owl ed ge , act ua l or pr es um ed

, of fact s whi ch wou ld

ha ve pe rm it te d it to de ny co ve rag e, it m ay be es to pp ed fro m su bs eq ue nt ly rai si ng th e
de fen se of no n- co ve rag e.” Id

. (em ph as is a d d e d )

. “ The ex cep ti on to th e ge ne ral

es to pp el ru le ap pl ie s whe n an in su red is ab le t o s h o w (1 ) th at th e in su rer ha d

su ffi ci en t kn owl ed ge of fact s or ci rcu m st an ces in di cat in g no n- co ve rag e, (2 ) th at th e

in su rer as su med or co nt in ue d de fe ns e of th e in su re d

wit ho ut ob ta in in g an effe ct iv e

res erv at io n of rig ht s ag reem en t, an d (3 ) th at th e in su red su ffer ed so m e type of ha rm

or pre jud ic e.” Id . (em

ph as is ad de d)

.

-1 3-Here, McS ha ne d o es no t pl au si bl y al le ge th at Got ha m as su m ed or co nt in ue d

de fen se of an y cl ai m ag ai ns t McS ha ne

. As no te d ab ov e, Got ha m ’s co m m un ic at io ns

in te rn al ly an d wit h McS ha ne in di cat ed th at it was de fen di ng Mal lo ry

. Upo n rece ip t

of a de m an d le tt er fro m McS ha ne , Mal lo ry te nd ered de fen se of th e act io n to Got ha m
le ad in g Got ha m to op en a cl ai m fil e in to whi ch it ev en tu al ly m erg ed M c S h a ne ’s

cl ai m —i nd ic at in g th at Got ha m was tre at in g McS ha ne ’s cl ai m as on e di rect ed ag ai ns t

Mal lo ry by McS ha ne , an d no t on e co ve rin g M c S h a n e a s an Add it io na l In su red

. McS ha ne ’s May 20

, 20 13

, de m an d le tt er to Mal lo ry in st ru ct ed Mal lo ry to su bm it th e

co st s on “ [Ma ll or y ’s] ge ne r a l l ia bi li ty po li cy ”—n ot un de r McS ha ne ’s Add it io na l

In su red po li cy

. Lik ewis e, co m m un ic at io ns be twee n McS ha ne an d Got ha m di d no t

as se rt th e cl ai m ba se d up on McS ha ne ’s st at us as an Add it io na l In su red

. In st ead

, th e
de m an d le tt er cl earl y sa y s th at Mc S h a n e i s m ak in g a cl ai m ag ai ns t Mal lo ry fo r
da m ag es du e to de si gn erro rs co m m it te d by Mal lo ry a n d c o v e r e d un de r Mal lo ry ’s

ge ne ral li ab il it y po li cy

. McS ha ne fai ls to al le ge th at Got ha m as su m ed it s de fen se

qu al ifyin g fo r an ex cep ti on to th e ge ne ral es to pp el ru le

. Id

. Thu s, McS ha ne fai ls to pl au si bl y al le ge th at it rel ie d, in go od fai th

, on an y pr om is es by G o t h a m, an d is

th eref or e n ot en ti tl ed to est op pe l.

Fo r th e reas on s st at ed ab ov e, McS ha ne fai le d to st at e a cl ai m up on whi ch rel ie f

can be gr an te d ba se d up on waiv er or es to pp el

, so th os e co un t s w e r e pr op erl y
di sm is se d.

II I. Co ncl us io n

Afte r gi vi ng al l r e a s on ab le in fere nc es to McS ha ne an d acce pt in g th e fact ua l

al le ga ti on s as tru e whi le dr awin g on ou r jud ic ia l ex pe rie nc e an d co m m on se ns e, we

fin d th at McS ha ne ha s fai le d to st at e a cl ai m up on whi ch rel ie f can b e gr an te d.

The refo re, we a f

f i r m t he di st ric t co ur t’s gr an t of Got ha m ’s Fed eral Ru le of Ci vi l

Pro ced ur e 1 2( b) (6 ) m ot io n t o d is m is s.

-1 4-BEAM, Ci rcu it Ju dg e, co nc ur rin g i n t he jud gm en t.

It is m y vi ew th at M c S h a n e Co ns tru ct io n Co m pa ny, LLC, as an en do rs ed

"Ad di ti on al In su red " un de r th e Got ha m in su ran ce po li cy , en joy s su ch in su ran ce

co ve rag e as is pr ov id ed by t h e p o li cy 's "Co m m erci al Gen eral Liab il it y " pa rt. Thi s

wou ld in cl ud e, ab se nt pr es en tl y un st at ed li m it at io ns , co ve r ag e fo r an y act io na bl e
cl ai m s McS ha ne m ay ha ve ag ai ns t it s su bc on tra ct or Mal lo ry

. Thu s, wit hi n th e ti m e

fram e of an ap pl ic ab le st at ut e of li m it at io ns , McS ha ne m ay st at e a cau se of act io n

ag ai ns t M al lo ry , if an y

ex is ts . To da te , McSh an e h as no t d on e so

.

Acco rd in gl y , as th e co ur t po in ts ou t, Neb ras ka la w pr ev en ts McS ha ne f ro m

se ek in g red res s wit hi n th is li ti ga ti o n

. S e e , e

. g., All st at e In s. Co

. v. Nov ak

, 31 3

N.W .2d 63 6, 6 39 (Neb . 19 81 ).

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-1 5-