Decisions of the Nebraska Court of Appeals

CIZEK HOMES v. COLUMBIA NAT. INS. CO. 361

Cite as 22 Neb. App. 361

require perfection of a parent when deciding whether termination of parental rights is appropriate.

We conclude that there is insufficient evidence to prove that 

termination of Deborah’s parental rights to Seth and Dinah is 

in the children’s best interests. We reverse that portion of the 

juvenile court’s order which terminated Deborah’s parental 

rights to Seth and Dinah.

VI. CONCLUSION

We find that the juvenile court erred when it found that 

the State had proven, by clear and convincing evidence, that 

terminating Deborah’s parental rights would be in Seth’s and 

Dinah’s best interests. Accordingly, we reverse that portion of 

the juvenile court’s order which terminated Deborah’s parental 

rights and remand the matter for further proceedings.

 Reversed and remanded for

further proceedings.

Cizek Homes, Inc., appellee, v. Columbia National

Insurance Company, appellant.

___ N.W.2d ___

Filed September 9, 2014. No. A-13-585.

1. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an 

appellate court views the evidence in a light most favorable to the party against 

whom the judgment is granted and gives such party the benefit of all reasonable 

inferences deducible from the evidence.

2. Summary Judgment: Final Orders: Appeal and Error. When adverse parties 

have each moved for summary judgment and the trial court has sustained one of 

the motions, the reviewing court obtains jurisdiction over both motions and may 

determine the controversy which is the subject of those motions or make an order 

specifying the facts which appear without substantial controversy and direct such 

further proceedings as the court deems just.

3. Insurance: Contracts: Appeal and Error. The interpretation of an insurance 

policy presents a question of law that an appellate court decides independently of 

the trial court.

4. Insurance: Contracts. To determine whether coverage exists under an insurance 

policy, the first determination is whether there is an initial grant of coverage 

for the claimed loss. If so, it must then be determined whether any exclusion applies.
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362 22 NEBRASKA APPELLATE REPORTS

5. Insurance: Contracts: Liability: Pleadings. Coverage under an insurance policy contains two obligations—the duty to defend and the duty to indemnify. The 

duty to defend is broader than the duty to indemnify, and in the first instance, it 

is measured by the allegations of the complaint against the insured.

6. ____: ____: ____: ____. To determine whether a duty to defend exists, an insurer 

must investigate and discover the relevant facts, in addition to looking at the allegations of the complaint. An insurer bears a duty to defend whenever it ascertains 

facts which give rise to the potential of liability under the policy.

7. Insurance: Contracts: Liability. Faulty workmanship, standing alone, is not an 

occurrence under a standard commercial general liability policy.

8. Insurance: Contracts: Pleadings. When the allegations of the complaint support 

a conclusion that no insurance coverage exists, and in the absence of any other 

facts which would support an inference of coverage, an insurer has no duty to 

defend or indemnify an insured.

9. Appeal and Error. An appellate court is not obligated to engage in an analysis 

which is not needed to adjudicate the case and controversy before it.

Appeal from the District Court for Douglas County: Peter

C. Bataillon, Judge. Reversed and remanded with directions.

John C. Brownrigg, Heather B. Veik, and Thomas J. Culhane, 

of Erickson & Sederstrom, P.C., L.L.O., for appellant.

John D. Stalnaker and Robert J. Becker, of Stalnaker, Becker 

& Buresh, P.C., for appellee.

Irwin, Moore, and Riedmann, Judges.

Riedmann, Judge.

INTRODUCTION

Columbia National Insurance Company (Columbia) appeals 

from the order of the Douglas County District Court denying 

its motion for summary judgment and entering judgment in 

favor of Cizek Homes, Inc. (Cizek). Finding that the claims 

settled did not arise out of an “occurrence” as that term is 

defined in Columbia’s commercial general liability (CGL) 

policy issued to Cizek, we reverse, and remand with directions 

to enter judgment in favor of Columbia.

BACKGROUND

Underlying Claim.

Cizek is a building contractor that has been in the home 

building business for nearly 40 years. In 1995, Cizek 
Decisions of the Nebraska Court of Appeals

CIZEK HOMES v. COLUMBIA NAT. INS. CO. 363

Cite as 22 Neb. App. 361

purchased a parcel of real estate known as Lot 75. In 2003, 

Cizek sold Lot 75 to Carl and Zoe Riekes and constructed a 

residence thereon. In 2006, the Riekeses notified Cizek that 

the soil beneath the residence was settling and causing physical damage to their residence. Cizek monitored the settling, 

and in June 2007, an engineer determined that the settling 

had ceased.

During this process, Cizek notified Columbia, its insurance 

carrier, of the claim. Columbia denied any coverage associated 

with the Riekeses’ claim for damage to the residence. When 

the Riekeses decided on a method of repairing the damage to 

their home, they presented a settlement agreement to Cizek to 

complete the repairs, and in the event Cizek did not agree to 

complete the repairs, the Riekeses presented a draft complaint 

that they intended to file against Cizek for breach of contract 

and negligence. The draft complaint contained allegations that 

negligence and faulty workmanship had purportedly caused the 

damage to the home.

Cizek reached a settlement with the Riekeses prior to the filing of the underlying complaint, and it completed the repairs to 

their home. In the settlement agreement, the parties described 

the Riekeses’ claim as one “for damages to the Residence 

due to soil conditions and/or improper construction of the 

Residence by [Cizek], which claims [Cizek] denies.” Cizek 

submitted the claim to Columbia, which again denied coverage for the cost of the repairs, claiming that the damages did 

not arise from an “occurrence” as that term was defined in the 

CGL policy.

Policy Terms.

According to the terms of the CGL policy, Columbia agreed 

to “pay those sums that [Cizek] becomes legally obligated to 

pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” The insurance applies to 

“‘bodily injury’” or “‘property damage’” only if the “‘bodily 

injury’” or “‘property damage’” is caused by an “‘occurrence’” that takes place in the “‘coverage territory.’” The 

policy defines “‘[o]ccurrence’” as “an accident, including 
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364 22 NEBRASKA APPELLATE REPORTS

continuous or repeated exposure to substantially the same general harmful conditions.”

The policy also included an exclusion entitled “Recall Of 

Products, Work Or Impaired Property.” This provision excluded 

coverage for the following:

Damages claimed for any loss, cost or expense incurred 

by you or others for the loss of use, withdrawal, recall, 

inspection, repair, replacement, adjustment, removal or 

disposal of:

(1) “Your product”;

(2) “Your work”; or

(3) “Impaired property”;

if such product, work, or property is withdrawn or recalled 

from the market or from use by any person or organization because of a known or suspected defect, deficiency, 

inadequacy or dangerous condition in it.

Under the policy, the definition of the term “your product” 

includes any goods or products, other than real property, manufactured, sold, handled, distributed, or disposed of by Cizek. 

The definition of the term “your work” includes work or operations performed by Cizek or on Cizek’s behalf.

Declaratory Judgment Action.

Based on Columbia’s denial of coverage, Cizek filed a 

declaratory judgment action in the district court. In its complaint, Cizek alleged that it constructed a residence for the 

Riekeses and that the residence sustained damage as a result 

of settling of the soil on which it was constructed. Cizek 

further alleged that “[a]s a result of the damages, [Cizek] 

became legally obligated to engage in repairs to the Reikes’s 

[sic] home, and to incur costs to do so, including costs and 

expenses to make repairs, architect costs, and costs to provide alternative housing to the Reikes’s [sic] during the 

required repairs.”

The parties moved for summary judgment on several occasions. The dispositive ruling came in the district court’s order 

entered on May 20, 2013. In that order, the district court noted 

that at a pretrial conference on January 25, the parties agreed 

that there were no disputed facts and that Columbia was not 
Decisions of the Nebraska Court of Appeals

CIZEK HOMES v. COLUMBIA NAT. INS. CO. 365

Cite as 22 Neb. App. 361

contending that Cizek was negligent in building the Riekeses’ 

house on Lot 75 as the lot was on the date of construction, nor 

was it contending that Cizek was guilty of any faulty workmanship; rather, Columbia took the position that it was not 

relevant to this issue of coverage whether or not Cizek was 

negligent. Based upon Columbia’s position, the district court 

found that there was no faulty workmanship on the part of 

Cizek and that therefore, there was an “occurrence” and an initial grant of coverage under the policy. The district court also 

determined that the “Recall” exclusion did not apply because 

Columbia never alleged that Cizek did anything wrong, was 

negligent, or was guilty of any defective or faulty workmanship. Because there was no work of Cizek that resulted in a 

loss of use, withdrawal, recall, inspection, repair, replacement, 

adjustment, removal, or disposal, the exclusion was inapplicable. As a result, the court denied Columbia’s motion for 

summary judgment and granted summary judgment in favor 

of Cizek.

Columbia subsequently filed a motion to alter or amend 

the judgment, alleging that the court erred in granting summary judgment in favor of Cizek or, in the alternative, that the 

amount of damages stipulated to by the parties was incorrectly 

reflected in the court’s order. The district court amended its 

prior order to reflect the parties’ stipulation that the amount of 

damages suffered by Cizek was $158,114.93. The court also 

granted Cizek’s motion for attorney fees and taxation of costs, 

and awarded $42,707.70 as taxable costs to Cizek. Columbia 

timely appeals to this court.

ASSIGNMENTS OF ERROR

Columbia assigns that the district court erred in (1) granting 

summary judgment in favor of Cizek, (2) denying Columbia’s 

motion for summary judgment, (3) finding that there was an 

“occurrence” as that term is defined in the insurance policy 

issued by Columbia to Cizek and finding that there was an 

initial grant of coverage for Cizek’s claim, and (4) finding that 

the “Recall Of Products, Work Or Impaired Property” exclusion in the policies at issue did not apply to preclude coverage 

for Cizek’s claim.
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366 22 NEBRASKA APPELLATE REPORTS

STANDARD OF REVIEW

[1] In reviewing a summary judgment, an appellate court 

views the evidence in a light most favorable to the party 

against whom the judgment is granted and gives such party 

the benefit of all reasonable inferences deducible from the 

evidence. Auto-Owners Ins. Co. v. Home Pride Cos., 268 Neb. 

528, 684 N.W.2d 571 (2004).

[2] When adverse parties have each moved for summary 

judgment and the trial court has sustained one of the motions, 

the reviewing court obtains jurisdiction over both motions and 

may determine the controversy which is the subject of those 

motions or make an order specifying the facts which appear 

without substantial controversy and direct such further proceedings as the court deems just. City of Columbus v. Swanson, 

270 Neb. 713, 708 N.W.2d 225 (2005).

[3] The interpretation of an insurance policy presents a 

question of law that we decide independently of the trial court. 

Federated Service Ins. Co. v. Alliance Constr., LLC, 282 Neb. 

638, 805 N.W.2d 468 (2011).

ANALYSIS

[4] To determine whether coverage exists under an insurance 

policy, we must first determine whether there is an initial grant 

of coverage for the claimed loss. If so, we must then determine 

whether any exclusion applies. See Auto-Owners Ins. Co. v. 

Home Pride Cos., supra.

Initial Grant of Coverage.

The insuring agreement of Columbia’s policy states in pertinent part: “We will pay those sums that the insured becomes 

legally obligated to pay as damages because of ‘bodily injury’ 

or ‘property damage’ to which this insurance applies.” It further 

states that the insurance only applies if the property damage is 

caused by an “‘occurrence’” that takes place in the “‘coverage 

territory.’” “‘Occurrence’” is further defined as “an accident, 

including continuous or repeated exposure to substantially the 

same general harmful conditions.”

The Riekeses alleged in their draft complaint against Cizek 

that the lot was unsuitable for construction, that the home 
Decisions of the Nebraska Court of Appeals

CIZEK HOMES v. COLUMBIA NAT. INS. CO. 367

Cite as 22 Neb. App. 361

was not constructed in accordance with the terms and conditions of the building contract, and that the residence was 

not constructed in conformance with acceptable construction 

and industry standards. In its declaratory judgment complaint 

against Columbia, Cizek alleged that the damage to the home 

was caused by the settling of the soil and admitted that it 

was legally obligated to pay for the cost of repairs to the 

Riekeses’ home.

Prior to denying coverage, Columbia investigated the 

Riekeses’ claim against Cizek and concluded that the damage 

to the home was caused by construction of the house on soil 

that later settled.

Although Cizek denies that it was negligent or that it 

engaged in faulty workmanship, the facts do not reveal a cause 

for the house settling other than its having been built on soil 

that was not properly compacted. As Columbia contends, it is 

not necessary to determine whether Cizek was in fact negligent 

or engaged in faulty workmanship in order to determine coverage; rather, given the posture of this case, coverage is determined based upon the allegations contained in the Reikeses’ 

complaint against Cizek and the facts revealed in an investigation of that claim. See Peterson v. Ohio Casualty Group, 272 

Neb. 700, 724 N.W.2d 765 (2006).

Peterson v. Ohio Casualty Group, supra, was a declaratory judgment action in which an anesthesiologist, John 

C. Peterson, sought coverage under his homeowner’s and 

umbrella policies for a defamation claim. The defamation 

claim was brought by a former coworker for statements 

Peterson allegedly made pertaining to his former coworker’s 

competence. Each insurance policy contained a business pursuit exclusion that generally precluded coverage for damages 

arising out of an insured’s business pursuits. The insurer 

denied Peterson’s request for a defense and for indemnity, citing the exclusion. Peterson filed a declaratory judgment action 

and, during the pendency of the action, settled the underlying 

defamation action.

[5,6] The Peterson court recognized that coverage under an 

insurance policy contains two obligations—the duty to defend 

and the duty to indemnify. The duty to defend is broader than 
Decisions of the Nebraska Court of Appeals

368 22 NEBRASKA APPELLATE REPORTS

the duty to indemnify, and in the first instance, it is measured 

by the allegations of the complaint against the insured. Id. 

To determine the duty to defend, an insurer must investigate 

and discover the relevant facts, in addition to looking at the 

allegations of the complaint. An insurer bears a duty to defend 

whenever it ascertains facts which give rise to the potential of 

liability under the policy. Id.

Applying these principles, the Peterson court noted that 

the record provided a complete set of facts in the underlying 

litigation and that the “record made by the parties on their 

cross-motions for summary judgment discloses no facts outside the pleadings which would bear on the issue of whether 

Ohio Casualty had a duty to defend Peterson in the now 

completed [underlying] litigation.” Id. at 710-11, 724 N.W.2d 

at 774-75.

In determining that the trial court did not err in granting summary judgment in favor of the insurer, the Nebraska 

Supreme Court analyzed the allegations of the complaint 

which included the statements that were alleged to be defamatory. The court determined that these allegations asserted a 

claim arising out of Peterson’s professional practice and that 

therefore, they fell within the business pursuit exclusion. The 

court concluded:

The allegations and claims against Peterson contained in 

the [underlying] pleadings fall squarely within the policy 

exclusions, and in the absence of any other facts which 

would support an inference of coverage, we conclude 

that Ohio Casualty had no duty to defend or indemnify 

Peterson with respect to the claims asserted against him 

in the [underlying] lawsuit.

Id. at 712, 724 N.W.2d at 775-76.

In Peterson v. Ohio Casualty Group, supra, the court looked 

to the allegations of the complaint and the facts developed 

during the insurer’s investigation to determine whether the 

insurer had a duty to defend or indemnify the insured. In the 

present action, Cizek did not seek a duty to defend, because the 

underlying claim was settled prior to the Riekeses filing a complaint. Despite this factual distinction about the duty to defend, 

we nevertheless find the Peterson framework of analysis is 
Decisions of the Nebraska Court of Appeals

CIZEK HOMES v. COLUMBIA NAT. INS. CO. 369

Cite as 22 Neb. App. 361

appropriate for us to employ to determine whether Columbia 

had a duty to indemnify Cizek in the present case.

The Riekeses alleged in their complaint that the home sustained damage because Cizek failed to construct the home in 

accordance with the terms and conditions of the contract, the 

applicable building codes and manufacturers’ recommendations, and the accepted construction and industry standards. 

They further alleged that Cizek was negligent in designing 

and constructing the home and did not take into consideration 

the nature of the land upon which it was built. The investigation undertaken by both Cizek and Columbia reveal that the 

cause of the damage was the settling of the soil upon which 

the home was built. Cizek admits this in its declaratory judgment complaint.

In essence, the Riekeses assert a claim for faulty workmanship as it relates to Cizek’s preparation of the soil, and Cizek 

admits that a problem existed in the soil upon which the home 

was built. Cizek further admits that it was legally obligated 

to pay for the cost of repairs, but denies that it was negligent. 

The evidence reveals that the damage was only to the home 

itself and that no other property was damaged. This fact is 

relevant to whether there was an “occurrence,” as further discussed below.

The issue of insurance coverage turns upon whether there 

has been an “occurrence” as that term is defined in the policy. Both parties direct us to Auto-Owners Ins. Co. v. Home 

Pride Cos., 268 Neb. 528, 684 N.W.2d 571 (2004), to resolve 

this question.

[7] In Auto-Owners Ins. Co. v. Home Pride Cos., supra, 

Auto-Owners Insurance Company (Auto-Owners) brought a 

declaratory judgment action to determine its obligations under 

a CGL policy issued to its insured, Home Pride Companies, 

Inc. (Home Pride). Home Pride had hired a subcontractor 

to roof an apartment building. After the project was completed, the owner began noticing problems with the roof. 

The owner ultimately filed suit against Home Pride, alleging 

faulty workmanship that it claimed damaged the roof structures 

and buildings. Home Pride tendered defense of the claim to 

Auto-Owners, which assumed the defense under a reservation 
Decisions of the Nebraska Court of Appeals

370 22 NEBRASKA APPELLATE REPORTS

of rights. Auto-Owners then initiated a declaratory judgment 

action. The issue on appeal was whether damage caused by 

faulty workmanship was covered under a CGL policy. The 

answer hinged on the question of whether faulty workmanship 

constituted an “occurrence” as that term was defined in the 

policy. The Nebraska Supreme Court determined as a matter of 

first impression that faulty workmanship, standing alone, is not 

an occurrence under a CGL policy. Id.

Looking to the allegations of the underlying complaint, 

the Home Pride Cos. court noted that the owners alleged that 

Home Pride, through its subcontractor, negligently installed the 

shingles, which negligence caused the shingles to fall off and, 

as a consequence, damage the roof structures and buildings. 

Because more than just Home Pride’s “work” was damaged, 

there was an “occurrence,” and Auto-Owners owed a duty to 

defend the underlying complaint. Of import, the court also 

noted that “to the extent that Home Pride may be found liable 

for the resulting damage to the roof structures and the buildings, Auto-Owners is obligated to provide coverage.” Id. at 

539, 684 N.W.2d at 580. The court did not require indemnification for the cost incurred in replacing the shingles, which is 

consistent with its holding that a CGL policy does not provide 

coverage for faulty workmanship that damages only the resulting work product.

The decision by the Home Pride Cos. court does not discuss 

whether the insured denied that it was engaged in faulty workmanship and that issue appears irrelevant to the court in making its decision. Rather, the court looked to the allegations of 

the complaint to determine whether there was a duty to defend, 

and the court required indemnification only for the damage to 

the roof structure and buildings in the event Home Pride was 

held liable for the resulting damage.

[8] From Auto-Owners Ins. Co. v. Home Pride Cos., 268 

Neb. 528, 684 N.W.2d 571 (2004), and Peterson v. Ohio 

Casualty Group, 272 Neb. 700, 724 N.W.2d 765 (2006), 

we glean that when the allegations of the complaint support 

a conclusion that no insurance coverage exists, and in the 

absence of any other facts which would support an inference 

of coverage, an insurer has no duty to defend or indemnify an 
Decisions of the Nebraska Court of Appeals

IN RE INTEREST OF ZOEY S. 371

Cite as 22 Neb. App. 371

insured. In the present action, the allegations of the complaint 

support a conclusion that the damage to the home was caused 

by faulty workmanship or a similar impropriety in Cizek’s 

performance. According to Auto-Owners Ins. Co. v. Home 

Pride Cos., supra, this does not constitute an “occurrence” 

under the terms of the policy. While Cizek denied that it was 

negligent, no facts were presented that would support an inference that the damage was caused by an occurrence. Therefore, 

the district court erred when it determined that Columbia had 

a duty to indemnify Cizek for the costs incurred in repairing 

the Riekeses’ home.

[9] Having determined that there was no occurrence, there 

can be no initial grant of coverage under the policy; therefore, 

it is unnecessary to address the application of the “Recall” 

exclusion. An appellate court is not obligated to engage in an 

analysis which is not needed to adjudicate the case and controversy before it. Hall v. County of Lancaster, 287 Neb. 969, 846 

N.W.2d 107 (2014).

CONCLUSION

Under the facts of this case, we find that the property damage was not caused by an occurrence; therefore, we reverse 

the trial court’s order of summary judgment in favor of Cizek 

and remand the cause with directions to enter an order granting summary judgment in favor of Columbia.

Reversed and remanded with directions.

In re Interest of Zoey S., a child

under 18 years of age.

State of Nebraska, appellee, 

v. Jesse S., appellant.

___ N.W.2d ___

Filed September 9, 2014. No. A-13-811.

1. Juvenile Courts: Judgments: Appeal and Error. Cases arising under the 

Nebraska Juvenile Code are reviewed de novo on the record, and an appellate 

court is required to reach a conclusion independent of the trial court’s findings. 

However, when the evidence is in conflict, the appellate court will consider and