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Nebraska Supreme Court Advance Sheets

302 Nebraska Reports

DIAMOND v. STATE

Cite as 302 Neb. 892

Mark Diamond, appellant, v. State of Nebraska, 

Department of Insurance, appellee.

___ N.W.2d ___

Filed April 19, 2019. No. S-17-1107.

1. Administrative Law: Judgments: Appeal and Error. A judgment or 

final order rendered by a district court in a judicial review pursuant to 

the Administrative Procedure Act may be reversed, vacated, or modified 

by an appellate court for errors appearing on the record.

2. ____: ____: ____. When reviewing an order of a district court under 

the Administrative Procedure Act for errors appearing on the record, 

the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor 

unreasonable.

3. Judgments: Appeal and Error. An appellate court, in reviewing a district court’s judgment for errors appearing on the record, will not substitute its factual findings for those of the district court where competent 

evidence supports those findings.

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. Insurance: Sales. The Insurance Producers Licensing Act, Neb. Rev. 

Stat. §§ 44-4047 to 44-4069 (Reissue 2010 & Cum. Supp. 2018), authorizes disciplinary actions against licensed insurance producers.

6. Actions: Jurisdiction: Insurance: Sales: Time. Under Neb. Rev. Stat. 

§ 44-4065 (Reissue 2010), if an insurance producer fails to report a 

civil action taken against the producer in another jurisdiction, within 30 

days of the final disposition of the civil action, the producer violates the 

reporting requirement of § 44-4065(1).

7. Statutes: Appeal and Error. When statutory interpretation is one of 

first impression, the statutory language is to be given its plain and ordinary meaning, and an appellate court will not resort to interpretation 

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

06/07/2019 09:08 AM CDT
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to ascertain the meaning of statutory words which are plain, direct, 

and unambiguous.

8. Insurance: Sales: Fraud: Words and Phrases. Under Neb. Rev. Stat. 

§ 44-4059(1)(g) (Cum. Supp. 2018), “fraud” of an insurance producer 

means any act, omission, or concealment which involves a breach of 

legal or equitable duty, trust, or confidence justly reposed, and injurious 

to another or by which an undue and unconscientious advantage is taken 

of another.

9. Appeal and Error. To be considered by an appellate court, an alleged 

error must be both specifically assigned and specifically argued in the 

brief of the party asserting the error.

Appeal from the District Court for Lancaster County: Susan

I. Strong, Judge. Affirmed.

Timothy P. Sullivan, of Sullivan Law, and Arthur W. Leach, 

of Law Office of Arthur W. Leach, for appellant.

Douglas J. Peterson, Attorney General, and John L. Jelkin 

for appellee.

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

Papik, and Freudenberg, JJ.

Cassel, J.

INTRODUCTION

This appeal presents our first opportunity to consider the 

Insurance Producers Licensing Act.1 Addressing the regulatory effect of a consent judgment previously entered against 

Mark Diamond, a licensed insurance producer, the Nebraska 

Department of Insurance determined that he had violated three 

provisions of the act and imposed an administrative fine. On 

review,2 the district court upheld the department’s order. On 

appeal to this court, he contests only one violation—arguing 

1 Neb. Rev. Stat. §§ 44-4047 to 44-4069 (Reissue 2010 & Cum. Supp. 

2018).

2 See Neb. Rev. Stat. § 84-917 (Reissue 2014) (judicial review under 

Administrative Procedure Act).
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DIAMOND v. STATE

Cite as 302 Neb. 892

that his confession of liability in the consent judgment did not 

“admit[]” to “fraud” within the meaning of § 44-4059(1)(g). 

Applying settled rules of statutory interpretation, we reject 

Diamond’s argument. Accordingly, we affirm the district 

court’s judgment.

BACKGROUND

Colorado Litigation

In February 2012, the United States of America and the 

State of Colorado filed a civil action in the U.S. District 

Court for the District of Colorado against Bella Homes, LLC, 

and individuals within the company, including Diamond. The 

complaint alleged violations of Mortgage Assistance Relief 

Services (MARS)3 rules and related claims.

According to the complaint, Bella Homes intended to buy 

homes from individuals who were struggling to make their 

mortgage payments and provide a 3- to 7-year repayment 

plan. Essentially, it was expected to purchase the homeowner’s mortgage from the existing lender and enter into a 

lease with the homeowner, where the homeowner would pay 

40 to 60 percent of their mortgage payment in “rent” to Bella 

Homes. It never purchased a home loan from a mortgage 

lender. Nor did it stop any foreclosure against a homeowner. It 

did take over $3 million in “rent” from more than 450 customers nationwide.

Diamond was the chief executive officer and president of 

Bella Homes. He formed Bella Homes at the request of Daniel 

Delpiano, who developed the idea for that enterprise. Because 

Delpiano had twice been convicted of fraud, he was prohibited 

from being a fiduciary or handling another’s finances.

In March 2012, Diamond entered into a stipulated consent 

judgment and permanent injunction, wherein he “confess[ed] 

liability” to counts 6 and 7 of the complaint. Each of these 

two counts consisted of two numbered paragraphs. The first 

3 See 12 C.F.R. § 1015 (2018) (previously found at 16 C.F.R. § 322 (2012)).
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DIAMOND v. STATE

Cite as 302 Neb. 892

paragraph under each count incorporated the allegations in 

paragraphs 1 through 184 of the complaint. Those paragraphs 

described an “ongoing foreclosure-rescue scheme to defraud 

distressed homeowners nationwide,” “fraudulently obtain[ing] 

approximately $3,000,000 from over 450 homeowners,” 

“numerous material misrepresentations to convey the false 

and fraudulent impression that homeowners will be able to 

remain in their home,” and “misrepresentations to convey the 

false impression that Bella Homes will stop any foreclosure 

on the home.” The second paragraph under each count alleged 

that “[b]y virtue of the foregoing [allegations in paragraphs 1 

through 184],” Diamond and others were violating a particular 

rule in a specified manner.

Thus, the second paragraph of count 6 asserted that 

Diamond was “violating [§ 1015.3(c)] of the MARS Rule” 

and that he did so “by making a representation, expressly or 

by implication, about the benefits, performance, or efficacy 

of any mortgage assistance relief service without competent 

and reliable evidence that substantiate[d] that the representation [was] true.” The second paragraph of count 7 asserted 

that Diamond was “violating [§ 1015.5(a)] of the MARS 

Rule,” which makes it a violation to “‘Request or receive 

payment of any fee or other consideration until the consumer 

has executed a written agreement between the consumer and 

the consumer’s dwelling loan holder or servicer incorporating 

the offer of mortgage assistance relief the provider obtained 

from the consumer’s dwelling loan holder or servicer.’” In 

the consent judgment, Bella Homes admitted to the allegations in the complaint and acknowledged its role in defrauding homeowners.

Nebraska Administrative Action

In December 2016, more than 4 years after the entry of 

the consent judgment, the Department of Insurance brought 

a petition against Diamond for violations of §§ 44-4065(1) 

and 44-4059(1)(g) and (h). After a hearing, the director found 
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302 Nebraska Reports

DIAMOND v. STATE

Cite as 302 Neb. 892

that because Diamond admitted that he failed to report the 

consent order within 30 days of disposition, he violated 

§ 44-4065(1). The director reasoned that although Diamond 

may not have been complicit in the fraudulent scheme, lending his reputation and partnering with someone convicted 

of fraud showed irresponsibility in business and violated 

§ 44-4059(1)(h). The director also determined that because 

Diamond admitted to violating MARS rule § 1015.3(c), he 

admitted liability to a count that included fraud and therefore, 

had violated § 44-4059(1)(g). The director concluded that 

because several years had passed and no Nebraska insurance 

consumers had been harmed, revocation of Diamond’s license 

was not warranted. The director levied an administrative 

fine of $2,500.

Diamond appealed to the district court. In disposing of 

the appeal, the court reasoned that Diamond clearly violated 

§ 44-4065(1), because he admitted that he did not report his 

involvement in the Colorado civil action within 30 days of 

the consent judgment. The court found that in the consent 

judgment, Diamond admitted to paragraphs 1 through 184 of 

the Colorado complaint, to forming Bella Homes, to paying 

Delpiano through another company he owned, and to receiving 

plane ticket reimbursement. This, the court reasoned, provided 

credible evidence of fraud in violation of § 44-4059(1)(g) and 

(h). The court explained that it would be an abrogation of the 

department’s duty to disregard the substance of the consent 

decree and not exercise its disciplinary authority. For these 

reasons, the court affirmed the department’s order.

Diamond filed a timely appeal, which we moved to our 

docket.4

ASSIGNMENT OF ERROR

Diamond assigns that the district court erred in affirming 

the department’s decision to levy a fine against him, because 

4 See Neb. Rev. Stat. § 24-1106(3) (Reissue 2016).
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DIAMOND v. STATE

Cite as 302 Neb. 892

the decision was “predicated on a finding that [Diamond] was 

involved in fraud, which [was] incorrect as a matter of law.”

STANDARD OF REVIEW

[1-3] A judgment or final order rendered by a district court 

in a judicial review pursuant to the Administrative Procedure 

Act may be reversed, vacated, or modified by an appellate 

court for errors appearing on the record.5 When reviewing an 

order of a district court under the Administrative Procedure 

Act for errors appearing on the record, the inquiry is whether 

the decision conforms to the law, is supported by competent 

evidence, and is neither arbitrary, capricious, nor unreasonable.6

 An appellate court, in reviewing a district court’s judgment for errors appearing on the record, will not substitute its 

factual findings for those of the district court where competent 

evidence supports those findings.7

[4] 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.8

ANALYSIS

[5] The Insurance Producers Licensing Act governs the 

qualifications and procedures for the licensing of insurance 

producers.9 An insurance producer is defined as “a person 

required to be licensed under the laws of this state, including 

the Insurance Producers Licensing Act, to sell, solicit, or negotiate insurance.”10 The act is intended to “improve efficiency, 

5 Leon V. v. Nebraska Dept. of Health & Human Servs., ante p. 81, 921 

N.W.2d 584 (2019).

6 Id.

7 Id.

8 Patterson v. Metropolitan Util. Dist., ante p. 442, 923 N.W.2d 717 (2019).

9 § 44-4048(1).

10 Neb. Rev. Stat. § 44-103(10) (Reissue 2010); § 44-4049(5).
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permit the use of new technology, and reduce costs associated 

with issuing and renewing insurance licenses.”11 Diamond does 

not dispute that he is an insurance producer subject to the act 

or that the act authorizes disciplinary actions against licensed 

insurance producers.

In Diamond’s brief, he contended that the district court inappropriately predicated the determination of whether he violated 

§ 44-4065 on a finding of fraud. There, he argued that what 

both the department’s hearing officer and the district court 

“ignored” was that “there was never an admission of ‘fraud’ 

made by [Diamond] sufficient to find him in violation of 

. . . § 44-4065 (1)(g) which would have triggered the reporting 

requirements of section 1 of that statute.”12 Because § 44-4065 

does not have a subsection (1)(g), Diamond’s argument in his 

brief was difficult to follow.

At oral argument, Diamond conceded that he does not 

contest the district court’s determinations that he violated 

§§ 44-4065(1) (failing to report) and 44-4059(1)(h) (irresponsibility in business). As clarified at oral argument, his sole 

contention on appeal is that the district court erred in finding 

that in the consent judgment, he admitted to fraud within the 

meaning of § 44-4059(1)(g). We disagree.

[6] Before turning to that argument, we briefly address 

Diamond’s failure to report. Under § 44-4065(1), “An insurance producer shall report to the director any administrative action taken against the producer in another jurisdiction, . . . by another governmental agency within thirty 

days of the final disposition of the matter.” For purposes 

of § 44-4065(1), an “administrative action” includes, but is 

not limited to, “any arbitration or mediation award, disciplinary action, civil action, or sanction taken against or involving an insurance producer.”13 Diamond no longer contends 

11 § 44-4048(1).

12 Reply brief for appellant at 4.

13 § 44-4065(4).
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DIAMOND v. STATE

Cite as 302 Neb. 892

that in order to violate § 44-4065(1), the underlying action 

must be predicated on fraud. We hold that under § 44-4065, 

if an insurance producer fails to report a civil action taken 

against the producer in another jurisdiction, within 30 days 

of the final disposition of the civil action, the producer violates the reporting requirement of § 44-4065(1). It is abundantly clear from the record that Diamond failed to report 

the consent judgment within 30 days and therefore violated 

§ 44-4065(1). And at oral argument, he conceded that he had 

done so.

Now, we turn to Diamond’s remaining argument: The district 

court erred in finding that in the consent judgment, Diamond 

admitted to fraud within the meaning of § 44-4059(1)(g). 

Diamond contends that because he never specifically admitted to fraud under MARS rule § 1015.3(c), nor was the word 

“fraud” used in that count, the court could not find that he 

admitted to fraud. We reject this argument.

We recall the controlling statutory language. Under 

§ 44-4059(1):

The director may suspend, revoke, or refuse to issue or 

renew an insurance producer’s license or may levy an 

administrative fine in accordance with subsection (4) of 

this section, or any combination of actions, for any one or 

more of the following causes:

. . . .

(g) Having admitted or been found to have committed any insurance unfair trade practice, any unfair claims 

settlement practice, or fraud.

Here, resolution of Diamond’s argument requires us 

to consider two matters: the meaning of “fraud” under 

§ 44-4059(1)(g) and the scope of his “admi[ssion]” in the consent judgment.

The meaning of “fraud” in § 44-4059(1)(g) flows from the 

Nebraska act and not from another jurisdiction’s characterization of a particular violation of a law or regulation. Thus, 

the meaning of “fraud” under § 44-4059(1)(g) is purely a 
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DIAMOND v. STATE

Cite as 302 Neb. 892

question of statutory interpretation. And settled principles of 

law dictate how we interpret this statute.

[7] When statutory interpretation is one of first impression, 

the statutory language is to be given its plain and ordinary 

meaning, and an appellate court will not resort to interpretation 

to ascertain the meaning of statutory words which are plain, 

direct, and unambiguous.14 Here, we consider the meaning of 

“fraud” under § 44-4059(1)(g) for the first time. Thus, we look 

to the plain and ordinary meaning of the word “fraud” as used 

in the context of the act.

The Legislature adopted the Insurance Producers Licensing 

Act in 2001 as a response to the federal Gramm-LeachBliley Financial Services Modernization Act.15 The act was 

crafted and promulgated by the National Association of 

Insurance Commissioners as the Producer Licensing Model 

Act.16 Although neither the model act nor the Nebraska enactment expressly defined “fraud,” the meaning of the word has 

long been understood in Nebraska insurance law. Over threequarters of a century ago, we relied upon two definitions of 

“fraud” in order to determine the meaning of that word under 

another insurance statute.17 In the first definition, fraud consists of some deceitful practice or willful device, resorted to 

with intent to deprive another of his or her right, or in some 

manner to do him or her an injury, and, as distinguished 

from negligence, is always positive, intentional.18 The second 

definition noted that fraud, in the sense of a court of equity, 

properly includes all acts, omissions, and concealments which 

involve a breach of legal or equitable duty, trust, or confidence 

14 Pan v. IOC Realty Specialist, 301 Neb. 256, 918 N.W.2d 273 (2018).

15 Committee Statement, L.B. 51, Committee on Banking, Commerce and 

Insurance, 97th Leg., 1st Sess. (Jan. 23, 2001).

16 Floor Debate, 97th Leg., 1st Sess. 449 (Jan. 29, 2001).

17 See Gillan v. Equitable Life Assurance Society, 143 Neb. 647, 10 N.W.2d 

693 (1943).

18 See id.
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justly reposed, and are injurious to another, or by which an 

undue and unconscientious advantage is taken of another.19

In § 44-4059(1)(g), context matters. This subsection groups 

the word “fraud” with the phrases “any insurance unfair 

trade practice” and “any unfair claims settlement practice.”20

Significantly, the Legislature did not limit “fraud” to insurance 

fraud or claims fraud in the way that it did with the other two 

phrases. In this context, the word “fraud” works broadly and 

not in a narrow technical sense.

[8] But more important, a broad definition of “fraud” 

comports with an obvious goal of the Insurance Producers 

Licensing Act: to protect the public from the unscrupulous 

behavior of licensees. Thus, we use the broad definition to 

fulfill that goal rather than to frustrate it. We hold that under 

§ 44-4059(1)(g), “fraud” of an insurance producer means any 

act, omission, or concealment which involves a breach of legal 

or equitable duty, trust, or confidence justly reposed, and injurious to another or by which an undue and unconscientious 

advantage is taken of another.

Having defined “fraud” under § 44-4059(1)(g), we turn to 

the scope of the “admi[ssion]” made by Diamond’s confession of liability in the consent judgment. If the allegations 

of paragraphs 1 through 184 of the complaint are included 

in the scope of the admission, this is an easy call. Those 

paragraphs described an “ongoing foreclosure-rescue scheme 

to defraud distressed homeowners nationwide,” “fraudulently 

obtain[ing] approximately $3,000,000 from over 450 homeowners,” “numerous material misrepresentations to convey the 

false and fraudulent impression that homeowners will be able 

to remain in their home,” and “misrepresentations to convey 

the false impression that Bella Homes will stop any foreclosure 

on the home.” Those paragraphs described a blatantly fraudulent scheme.

19 Id.

20 § 44-4059(1)(g).
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DIAMOND v. STATE

Cite as 302 Neb. 892

But even without relying on those, Diamond’s confession 

of liability in the consent judgment admitted to fraud within 

the meaning of § 44-4059(1)(g). Under the consent judgment, 

he confessed liability under count 6 in the complaint, which 

stated, “Defendants are violating [§ 1015.3(c)] of the MARS 

Rule by making a representation, expressly or by implication, 

about the benefits, performance, or efficacy of any mortgage assistance relief service without competent and reliable 

evidence that substantiates that the representation is true.” 

Diamond does not dispute that he was one of the “defendants” 

described in count 6. We apply the meaning of the word 

“fraud” as used in § 44-4059(1)(g) to Diamond’s confession 

of liability for a violation of § 1015.3(c) of the MARS rule. 

Our conclusion is: Diamond admitted to an omission in violation of a legal duty by which an undue and unconscientious 

advantage was taken of another. Accordingly, the district court 

did not err when it determined that Diamond admitted to fraud 

in violation of § 44-4059(1)(g).

Diamond also argues that evidence produced after the consent judgment showed that Diamond was merely a “dupe” of 

Delpiano. We do not believe that Diamond may collaterally 

attack the substance of his admission in the consent judgment. 

Moreover, adopting this argument would effectively permit an 

insurance producer to blindly act as a front man for a fraudulent scheme. This calls to mind the maxim of the three wise 

monkeys who see no evil, hear no evil, and speak no evil. We 

do not believe that when the Legislature regulated insurance 

producers, it intended to condone a producer’s blind and deaf 

participation in a fraudulent scheme.

[9] We address one final matter. At least in Diamond’s brief, 

he argues that “[b]y making a finding of fraudulent conduct, 

the Department acted arbitrarily and capriciously, exceeding 

its authority under the Administrative Procedure[] Act.”21 To 

be considered by an appellate court, an alleged error must be 

21 Brief for appellant at 17.
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Cite as 302 Neb. 892

both specifically assigned and specifically argued in the brief 

of the party asserting the error.22 As this argument was not 

specifically assigned, nor was it specifically argued beyond the 

single sentence, we will not address the argument.

CONCLUSION

Because Diamond did not report the consent judgment 

taken against him in another jurisdiction within 30 days of the 

final disposition of the civil action, he violated § 44-4065(1). 

The department had the authority to levy an administrative 

fine. And within the meaning of § 44-4059(1)(g), Diamond’s 

confession of liability in the consent judgment constituted an 

admission of fraud.

The decision of the district court conformed to the law, 

was supported by competent evidence, and was neither arbitrary, capricious, nor unreasonable. Accordingly, we affirm the 

judgment of the district court.

Affirmed.

22 Chafin v. Wisconsin Province Society of Jesus, 301 Neb. 94, 917 N.W.2d 

821 (2018).