NE Code § 44-359 (2021)
2021 Nebraska Revised Statutes|Chapter 44 - Insurance|44-359 - Policies; actions; attorney's fees.

44-359.  Policies; actions; attorney's fees.In all cases when the beneficiary or other person entitled thereto brings an action upon any type of insurance policy, except workers' compensation insurance, or upon any certificate issued by a fraternal benefit society, against any company, person, or association doing business in this state, the court, upon rendering judgment against such company, person, or association, shall allow the plaintiff a reasonable sum as an attorney's fee in addition to the amount of his or her recovery, to be taxed as part of the costs. If such cause is appealed, the appellate court shall likewise allow a reasonable sum as an attorney's fee for the appellate proceedings, except that if the plaintiff fails to obtain judgment for more than may have been offered by such company, person, or association in accordance with section 25-901, then the plaintiff shall not recover the attorney's fee provided by this section.Source   Laws 1913, c. 234, § 1, p. 738;   R.S.1913, § 3212;   Laws 1919, c. 190, tit. V, art. IV, § 46, p. 604;   C.S.1922, § 7811;   C.S.1929, § 44-346;   R.S.1943, § 44-359;   Laws 1971, LB 958, § 1;   Laws 1986, LB 811, § 17;   Laws 1987, LB 17, § 4. Annotations  1. Allowance proper 2. Allowance not proper 3. Amount of allowance 4. Allowance in federal courts 5. Miscellaneous 1. Allowance proper A plaintiff in an action on an insurance policy is entitled to recover under this section when he or she obtains a judgment against any company doing business in this state, whether or not the company is an insurance company. Webb v. American Employers Group, 268 Neb. 473, 684 N.W.2d 33 (2004). An insurance policy beneficiary who successfully sues his or her insurance company is entitled to a reasonable attorney fee at the trial level and on appeal. Rod Rehm, P.C. v. Tamarack Amer., 261 Neb. 520, 623 N.W.2d 690 (2001). Cost of expert witnesses and for photocopying may not be distinguished from other expenses necessary to a client's representation and are recoverable under this section. National Am. Ins. Co. v. Continental Western Ins. Co., 243 Neb. 766, 502 N.W.2d 817 (1993). In a successful action to enforce a policy of insurance by the insured, the court shall tax attorney fees against the insurance carrier. Control Specialists v. State Farm Mut. Auto. Ins. Co., 228 Neb. 642, 423 N.W.2d 775 (1988). Named insured and permissive driver are "beneficiaries" under policy and thus entitled to attorney fees in declaratory judgment action to enforce liability policy, but insurer of driver seeking adjustment of liability priorities is not entitled to fees under this section. Dairyland Ins. Co. v. Kammerer, 213 Neb. 108, 327 N.W.2d 618 (1982). Under the mandatory language of this section, a successful litigant is entitled to receive a reasonable attorney's fee for in-house counsel actually engaged in preparation and trial to the same extent as outside counsel. Dale Electronics, Inc. v. Federal Ins. Co., 205 Neb. 115, 286 N.W.2d 437 (1979). Under this section, reasonable attorney's fees may properly be awarded in actions upon insurance policies. Herrera v. American Standard Ins. Co., 203 Neb. 477, 279 N.W.2d 140 (1979). Where plaintiff recovers against an insurance company, court shall allow a reasonable attorney's fee in addition. Omaha Paper Stock Co. v. California Union Ins. Co., 200 Neb. 31, 262 N.W.2d 175 (1978). In action on performance bond where surety admits execution of bond but does not admit defective performance by contractor, the plaintiff may recover attorney's fee. Omaha Home for Boys v. Stitt Constr. Co., Inc., 195 Neb. 422, 238 N.W.2d 470 (1976). Attorney's fee was allowed against insurance company in garnishment action. Townley v. Whetstone, 190 Neb. 541, 209 N.W.2d 350 (1973). An insured and his judgment creditor under a policy of liability insurance are entitled to an award of attorney's fee where the insurer brings action for declaratory judgment to determine coverage and they prevail. State Farm Fire & Cas. Co. v. Muth, 190 Neb. 248, 272, 207 N.W.2d 364 (1973). Where insurer brings action for declaratory judgment to have coverage determined and insured prevails, the latter is entitled to an attorney's fee hereunder. State Farm Mut. Auto. Ins. Co. v. Selders, 189 Neb. 334, 202 N.W.2d 625 (1972). A claim for attorneys' fee after judgment for plaintiff in action on fidelity policy or bond may be presented by motion at subsequent term of court. Beshaler v. Helberg, 187 Neb. 584, 193 N.W.2d 261 (1971). Insurer liable for attorney's fees only when judgment is rendered upon a policy of insurance of insurer. Lundt v. Insurance Co. of North America, 184 Neb. 208, 166 N.W.2d 404 (1969). Attorney's fees properly allowed in a garnishment action to reach insurer under omnibus clause in a fleet automobile insurance policy. Arndt v. Davis, 183 Neb. 726, 163 N.W.2d 886 (1969). Attorney's fee allowed for services in Supreme Court in suit on accidental death insurance policy. Mustard v. St. Paul Fire & Marine Ins. Co., 183 Neb. 15, 157 N.W.2d 865 (1968). Guaranty by insurer was insurance contract. Abel v. Southwest Cas. Ins. Co., 182 Neb. 605, 156 N.W.2d 166 (1968). Recovery under uninsured motorist coverage in an insurance policy permits allowance of attorney's fees. Stephens v. Allied Mut. Ins. Co., 182 Neb. 562, 156 N.W.2d 133 (1968). An attorney's fee was properly allowed for services in Supreme Court in suit on builder's bond. School Dist. No. 65R v. Universal Surety Co., 178 Neb. 746, 135 N.W.2d 232 (1965). In suit on bond of contractor to build church, allowance of attorney's fee was proper. Reorganized Church of Jesus Christ v. Universal Surety Co., 177 Neb. 60, 128 N.W.2d 361 (1964). The allowance of a reasonable attorney's fee is unaffected by the fact that attorney has a contingent fee contract. Metcalf v. Hartford Acc. & Ind. Co., 176 Neb. 468, 126 N.W.2d 471 (1964). Attorney's fee was properly allowed in suit upon an errors and omissions policy. Otteman v. Interstate Fire & Cas. Co., Inc., 172 Neb. 574, 111 N.W.2d 97 (1961). Attorney's fee could be allowed upon recovery on statutory motor vehicle dealer's bond. Sun Ins. Co. v. Aetna Ins. Co., 169 Neb. 94, 98 N.W.2d 692 (1959). Attorney's fee was allowable in action on group life insurance policy. Exstrum v. Union Cas. & Life Ins. Co., 165 Neb. 554, 86 N.W.2d 568 (1957). Where recovery upon bond is allowed, allowance of attorney's fee is mandatory. State ex rel. School Dist. v. Ellis, 160 Neb. 400, 70 N.W.2d 320 (1955). In absence of showing that law of another state in which policy was issued differs, allowance of attorney's fees upon recovery on policy is proper. Banks v. Metropolitan Life Ins. Co., 142 Neb. 823, 8 N.W.2d 185 (1943). Where judgment is properly rendered against a surety company on official bond, a reasonable attorney's fee may be taxed as costs. Ericsson v. Streitz, 132 Neb. 692, 273 N.W. 17 (1937). Where plaintiff recovers judgment in action against an executive officer of state bank on his fidelity bond, statute permits allowance of reasonable attorney's fee to be taxed as costs. Luikart v. Flannigan, 130 Neb. 901, 267 N.W. 165 (1936). Commission merchant's bond is within operation of statute. Swisher v. Fidelity & Casualty Co., 113 Neb. 592, 204 N.W. 383 (1925). Attorney's fees taxed as costs relate to remedy, and are to be so taxed without regard to whether contract sued upon was entered into before or after enactment of this section. Central Nebraska Millwork Co. v. Olson & Johnson Co., 111 Neb. 396, 196 N.W. 707 (1923); O'Shea v. N. A. Hotel Co., 109 Neb. 317, 191 N.W. 321 (1922); Sharpe v. Grand Lodge, A. O. U. W., 108 Neb. 193, 188 N.W. 100 (1922), 189 N.W. 176 (1922); Security State Bank of Eddyville v. Aetna Ins. Co., 106 Neb. 126, 183 N.W. 92 (1921); Reed v. American Bonding Co., 102 Neb. 113, 166 N.W. 196 (1918); Ward v. Bankers Life Co., 99 Neb. 812, 157 N.W. 1017 (1916); Nye-Schneider-Fowler Co. v. Bridges, Hoye & Co., 98 Neb. 863, 155 N.W. 235 (1915). Attorney's fees are allowable in suit on fire insurance contract. Johnson v. St. Paul Fire & Marine Ins. Co., 104 Neb. 831, 178 N.W. 926 (1920). Attorney's fee may be taxed in judgments upon insurance policies in all classes of indemnity insurance not expressly exempted by law. Belk v. Capital Fire Ins. Co., 102 Neb. 702, 169 N.W. 262 (1918). 2. Allowance not proper When read in conjunction with section 25-901, this section prohibits an award of attorney fees to a plaintiff, in a suit against the plaintiff's insurer, who rejects an offer of judgment and later fails to recover more than the amount offered. Dutton-Lainson Co. v. Continental Ins. Co., 279 Neb. 365, 778 N.W.2d 433 (2010). A successful pro se litigant in an action on an insurance policy is not entitled to recover an attorney fee, even if the pro se litigant is a licensed attorney. Young v. Midwest Fam. Mut. Ins. Co., 276 Neb. 206, 753 N.W.2d 778 (2008). Expert witness fees are not taxable as court costs and are not recoverable under this section. Young v. Midwest Fam. Mut. Ins. Co., 276 Neb. 206, 753 N.W.2d 778 (2008). Read together, this section and section 25-901 prohibit an award of attorney fees to a plaintiff, in a suit against the plaintiff's insurer, who rejects an offer to allow judgment and later fails to recover more than the amount offered. Young v. Midwest Fam. Mut. Ins. Co., 272 Neb. 385, 722 N.W.2d 13 (2006). If a party is not successful on appeal in obtaining an amount of recovery, the party is not entitled to attorney fees on appeal under this section. Kirwan v. Chicago Title Ins. Co., 261 Neb. 609, 624 N.W.2d 644 (2001). A contractor who brings an action under a repair contract may not collect attorney fees under this section. Union Ins. Co. v. Bailey, 234 Neb. 257, 450 N.W.2d 661 (1990). An action to determine whether the policy is still in effect is not an action upon the policy and, therefore, in such a case, an attorney fee is not recoverable under this section. Jelsma v. Colonial Penn Ins. Co., 232 Neb. 49, 439 N.W.2d 479 (1989). A pension or long-term disability plan provided to employees by an employer which is not offered primarily for profit nor which coverage is limited to employees and not resulting from advertisement or solicitation of insurance business from the public, and which does not cause the employer to hold itself out as doing business as a commercial insurer, is neither "any type of insurance policy" nor "a certificate issued by a fraternal beneficiary association", and an employee is not entitled to attorney fees under this section in a suit on such a plan. Blue v. Champion International Corp., 211 Neb. 480, 319 N.W.2d 83 (1982). Attorney's fees not allowed where insurer confessed judgment in full on the pleadings. Wendt v. Cavalier Ins. Corp., 197 Neb. 622, 250 N.W.2d 243 (1977). Attorney's fee allowance, based on contingency percentage, rejected in determining amount of "reasonable" fee. Ruby Coop. Co. v. Farmers Elevator Mut. Ins. Co., 197 Neb. 605, 250 N.W.2d 239 (1977). Plaintiff's failure to allege and prove cause of action against contractor or its insurance carrier precluded recovery of attorney's fee. Woodmen of the World Life Ins. Soc. v. Peter Kiewit Sons' Co., 196 Neb. 158, 241 N.W.2d 674 (1976). In action on performance bond where surety admits execution of bond but does not admit defective performance by contractor, the plaintiff may recover attorney's fee. Omaha Home for Boys v. Stitt Constr. Co., Inc., 195 Neb. 422, 238 N.W.2d 470 (1976). The amount of attorney's fees allowed generally rests in the sound discretion of the court. Schmer v. Hawkeye-Security Ins. Co., 194 Neb. 94, 230 N.W.2d 216 (1975). In suit against principal and bonding company as surety where issue of liability of surety was not presented to jury and judgment was against principal, attorney's fee was not recoverable. Ritzau v. Wiebe Constr. Co., 191 Neb. 92, 214 N.W.2d 244 (1974). Conduct of attorney justified disallowance of fee. Iowa Mut. Ins. Co. v. Meckna, 180 Neb. 516, 144 N.W.2d 73 (1966). Attorney's fee is not recoverable in action on automobile insurance policy for damages resulting from a collision. Riley v. National Auto Ins. Co., 162 Neb. 658, 77 N.W.2d 241 (1956). Attorney's fee is not authorized in suits for loss of personal property by fire. Borden v. General Ins. Co., 157 Neb. 98, 59 N.W.2d 141 (1953). Attorney's fee should not be allowed to party who is not at the time entitled to maintain action at law on policy. Hawkeye Casualty Co. v. Stoker, 154 Neb. 466, 48 N.W.2d 623 (1951). In action to obtain decree that policy of insurance had not lapsed, allowance of attorney's fee was not authorized. Cunningham v. Northwestern Mutual Life Ins. Co., 148 Neb. 250, 27 N.W.2d 221 (1947). Where insured recovers on an accident insurance policy, a reasonable fee for insured's attorneys may be taxed as costs on appeal to Supreme Court where judgment is affirmed. McCleneghan v. London Guarantee & Accident Co., 132 Neb. 131, 271 N.W. 276 (1937). Attorney's fees should not be allowed where it appears that there was no reasonable necessity to resort to law to secure one's rights. Gipson v. Metropolitan Life Ins. Co., 112 Neb. 302, 199 N.W. 541 (1924). Under prior law, attorney's fee for services on appeal was not authorized. O'Shea v. N. A. Hotel Co., 111 Neb. 582, 197 N.W. 385 (1924); Kaneft v. Mutual Benefit Health & Accident Assn., 102 Neb. 87, 166 N.W. 121 (1918). Attorney's fee is not taxable in workmen's compensation cases under this section. Abel Constr. Co. v. Goodman, 105 Neb. 700, 181 N.W. 713 (1921). In action under Workmen's Compensation Act, court cannot tax attorney's fee as part of costs under this section. United States Fidelity & Guaranty Co. v. Wickline, 103 Neb. 21, 170 N.W. 193 (1918). When determining whether the plaintiff has obtained a judgment for more than was offered prior to trial, the term "judgment" shall include the amount recovered under the insurance policy and the costs of the action allowed under section 25-901, excluding attorney fees. Eledge v. Farmers Mut. Home Ins. Co. of Hooper, 6 Neb. App. 140, 571 N.W.2d 105 (1997). Excess judgment suit against insurer is not a suit on insurance policy, and attorney's fee is not allowable hereunder. Lienemann v. State Farm Mut. Auto Fire & Cas. Co., 540 F.2d 333 (8th Cir. 1976). Beneficiary, who sued for double indemnity but recovered only face of policy, which had been tendered by insurer, was not entitled to attorney's fees under Nebraska statute. McCrary v. New York Life Ins. Co., 84 F.2d 790 (8th Cir. 1936). 3. Amount of allowance An attorney fee awarded under the provisions of this section must be solely and only for services actually rendered in the preparation and trial of the litigation on the policy in question. Young v. Midwest Fam. Mut. Ins. Co., 276 Neb. 206, 753 N.W.2d 778 (2008). To determine proper and reasonable attorney fees, it is necessary for the court to consider the nature of the litigation, the time and labor required, the novelty and difficulty of the questions raised, the skill required to properly conduct the case, the responsibility assumed, the care and diligence exhibited, the result of the suit, the character and standing of the attorney, and the customary charges of the bar for similar services. Young v. Midwest Fam. Mut. Ins. Co., 276 Neb. 206, 753 N.W.2d 778 (2008). There is no presumption of reasonableness placed on the amount of attorney fees offered by the party requesting fees. Koehler v. Farmers Alliance Mut. Ins. Co., 252 Neb. 712, 566 N.W.2d 750 (1997). To determine the proper amount of attorney fees, it is necessary to consider many factors, including, but not limited to, the nature of the litigation, the skill required, and the customary charge of the bar for similar services. Koehler v. Farmers Alliance Mut. Ins. Co., 252 Neb. 712, 566 N.W.2d 750 (1997). In determining the value of legal services rendered by an attorney, it is proper to consider the amount involved, the nature of the litigation, the time and labor required, the novelty and difficulty of the questions raised, the skill required to properly conduct the case, the responsibility assumed, the care and diligence exhibited, the result of the suit, the character and standing of the attorney, and the customary charges of the bar for similar services. Muller v. Tri-State Ins. Co., 252 Neb. 1, 560 N.W.2d 130 (1997). The amount of an attorney fee awarded under this section is addressed to the discretion of the trial court, whose ruling will not be disturbed on appeal in the absence of an abuse of discretion. Muller v. Tri-State Ins. Co., 252 Neb. 1, 560 N.W.2d 130 (1997). The amount of the allowance for attorney fees under this section rests in the sound discretion of the trial court. Smith v. Union Ins. Co., 218 Neb. 797, 359 N.W.2d 113 (1984). The action contemplated herein need not be brought in any particular form. The fee awarded under this section must be based solely and only on the services actually rendered in the preparation and trial of the litigation on the policy in question. Evidence as to the amount of the potential ultimate recovery is not indispensable to the court's determination of the amount thereof. Hemenway v. MFA Life Ins. Co., 211 Neb. 193, 318 N.W.2d 70 (1982). The amount of attorney fees to be allowed under this section rests in the sound discretion of the court. Rieschick Drilling Co. v. American Cas. Co., 208 Neb. 142, 303 N.W.2d 264 (1981). Attorney's fee allowance, based on contingency percentage, rejected in determining amount of "reasonable" fee. Ruby Coop. Co. v. Farmers Elevator Mut. Ins. Co., 197 Neb. 605, 250 N.W.2d 239 (1977). The amount of attorney's fees allowed generally rests in the sound discretion of the court. Schmer v. Hawkeye-Security Ins. Co., 194 Neb. 94, 230 N.W.2d 216 (1975). Court may base allowance of attorney's fees upon observance of course of proceedings, amount involved, questions of law raised, time and labor necessary, and professional diligence and skill required. McNaught v. New York Life Ins. Co., 145 Neb. 694, 18 N.W.2d 56 (1945). Allowance of five hundred dollars attorney's fees for recovery of one hundred dollars disability benefits was not excessive when loss of greater amount was involved. Gillan v. Equitable Life Assur. Soc., 142 Neb. 497, 6 N.W.2d 782 (1942). In allowing attorney's fee in action on automobile liability insurance policy, court may consider the amount involved, responsibility assumed, questions of law raised, time and labor required, results obtained, and professional diligence and skill. Andrews v. Commercial Casualty Ins. Co., 128 Neb. 496, 259 N.W. 653 (1935). In fixing attorney's fee, court will consider nature of litigation, amount involved, result, time spent, attorney's standing, subject to exceptions and review. Allen v. Tallon, 120 Neb. 611, 234 N.W. 411 (1931). Reasonableness of attorney's fee is question of fact. First Nat. Bank of Lincoln v. Lincoln Grain Co., 116 Neb. 809, 219 N.W. 192 (1928). 4. Allowance in federal courts Attorney's fee may be recovered in federal court under Nebraska statute, but it is not costs in the ordinary sense, and not within the field of costs legislation covered by federal statutes. Henkel v. Chicago, St. P. M. & O. Ry. Co., 284 U.S. 444 (1932). In suit on insurance policy in federal court in Nebraska, attorney's fees may be properly allowed as part of costs and included in judgment. People of Sioux County v. National Surety Co., 276 U.S. 238 (1928). Attorney's fee was properly allowed on fidelity bond. Hartford Acc. & Ind. Co. v. Baldwin, 262 F.2d 202 (8th Cir. 1958). Where district court allowed substantial attorney's fees, further allowance on appeal in federal court was not justified where reasonable ground for contesting liability existed. Travelers Mut. Cas. Co. v. Rector, 138 F.2d 396 (8th Cir. 1943). Attorney's fee may be fixed by court without evidence. Globe Indemnity Co. v. Sulpho-Saline Bath Co., 299 F. 219 (8th Cir. 1924). Machinery floater policies are not within the class of policies contemplated by this section. Babcock & Wilcox Co. v. Parsons Corp., 298 F.Supp. 898 (D. Neb. 1969). Attorney's fee was allowance even though action was brought in federal court rather than state court. Baldwin v. Hartford Acc. & Ind. Co., 168 F.Supp. 86 (D. Neb. 1958). 5. Miscellaneous Attorney fees are costs awarded to prevailing parties; attorney fees are not damages, either compensatory or punitive in nature. Brodersen v. Traders Ins. Co., 246 Neb. 688, 523 N.W.2d 24 (1994). This section does not violate the equal protection clause. Farm Bureau Life Ins. Co. v. Luebbe, 218 Neb. 694, 358 N.W.2d 754 (1984). Attorney's fees taxed as costs are considered no part of the judgment recovered, and should not be included in computing amount due attorney under contingent fee agreement. Solomon v. Farney, Inc., 136 Neb. 338, 286 N.W. 254 (1939). Allowance of attorney's fees is subject to revisory action of Supreme Court in consideration of all of the facts disclosed by the record. Hemmer v. Metropolitan Life Ins. Co., 133 Neb. 470, 276 N.W. 153 (1937). Allowance of proper attorney's fee for counsel engaged in addition to regular salaried city attorney was proper. City of Scottsbluff v. Southern Surety Co., 124 Neb. 260, 246 N.W. 346 (1933). Attorney's fee taxed as costs is no part of judgment and is subject to exceptions and review in like manner as taxation of other costs. Wirtele v. Grand Lodge, A. O. U. W., 111 Neb. 302, 196 N.W. 510 (1923). This section is procedural rather than substantive and will apply even if another state's law governs the contract. City of Carter Lake v. Aetna Cas. & Sur. Co., 604 F.2d 1052 (8th Cir. 1979). Claim for attorney's fees, in suit on policy, if made in good faith, may be included as part of amount in controversy in determining jurisdiction of federal court. Mutual Ben. Health & Accident Assn. v. Bowman, 96 F.2d 7 (8th Cir. 1938).