Opinion ID: 2028139
Heading Depth: 1
Heading Rank: 6

Heading: mitigation expenses

Text: Defendant's other assignments of error concern whether plaintiff should be reimbursed for those expenses incurred in fulfilling its contractual duty to protect the property from further damage. With respect to the insured's duties after a loss, the insurance policy provides, in pertinent part, the following: 3. WHAT YOU MUST DO AFTER A LOSS. In the event of a loss to which this insurance may apply you shall see that the following duties are performed: .... b. PROTECT THE PROPERTY FROM FURTHER DAMAGE. This includes making reasonable and necessary repairs to protect the property, and keeping accurate records of repair expenses. It is clear that under the terms of the insurance contract, plaintiff had a duty to mitigate the damage. Although the language quoted above requiring the insured to keep accurate records of repair expenses suggests the insurer must reimburse the insured for those expenses, the contract does not expressly state whether the insurer is liable for the mitigation expenses. Notwithstanding the lack of an express statement, we have previously held that a trial court properly refused to instruct a jury that mitigation expenses were not recoverable as damages in an action on an insurance policy. Hoagland & Co. v. Insurance Co., 131 Neb. 105, 267 N.W. 239 (1936). In Hoagland & Co., a windstorm destroyed the insured's lumber shed and part of the lumber stored therein. After the storm, the insured went to the expense of sorting, removing, and repiling the salvageable lumber in another shed. The insurer denied liability for these expenses and contended that the jury should be instructed that these expenses were not recoverable as damages. This court stated: It was necessary to assort the lumber to ascertain and separate the damaged from the undamaged portions. It was also essential that the lumber not damaged should be removed and repiled in another shed to preserve it from damage from the elements. This was made necessary as a direct result of the windstorm, and we think it was a recoverable element of damage. 131 Neb. at 111-12, 267 N.W. at 242. Implicit in our decision rejecting the proposed instruction is the rule that expenses necessarily incurred in the course of mitigating damages are recoverable by an insured. See, also, Slay Warehousing Co., Inc. v. Reliance Ins. Co., 471 F.2d 1364 (8th Cir.1973); Travelers Indemnity Co. v. Pollard Friendly Ford Co., 512 S.W.2d 375 (Tex. Civ.App.1974); and City Coal & Supply Co. v. American Automobile Ins. Co., 99 Ohio App. 368, 133 N.E.2d 415 (1954) (all holding that the insurer must reimburse the insured for expenses necessarily incurred in the course of mitigating damages). The expenses to which defendant objects are the veterinarian fees expended to prevent the death of the swine and the refunds made by plaintiff to purchasers of infected swine. With respect to the veterinarian fees, defendant contends that since the policy provides that losses shall be settled at actual cash value at the time of loss, the veterinarian fees are not recoverable. Defendant's argument merely begs the question of whether the veterinarian fees are a covered loss. As explained above, if the fees were necessarily incurred to mitigate the amount of damages, they are recoverable. The only evidence is that without treatment the animals would have died and the insurer would have been required to cover a greater loss. We therefore conclude that the veterinarian fees were necessarily incurred to mitigate damages. The district court properly included the veterinarian fees when calculating the damages. Defendant contends the district court erred in including as damages the refunds plaintiff paid to purchasers of plaintiff's infected swine. Defendant submits that plaintiff is attempting to recover under the liability coverage of the insurance contract and that since the policy expressly excludes goods sold from coverage by the insured, there is no coverage. Defendant does not dispute that in losing the breeding value of the swine, plaintiff sustained a physical loss. Defendant does not dispute that the swine which were subsequently sold had been owned by plaintiff on the date of the windstorm. As explained above, defendant is liable under the property coverage of the insurance contract for the physical loss plaintiff sustained due to the windstorm. That plaintiff did not financially realize the loss until a later date does not affect the policy coverage or the nature of the loss. Since defendant stipulated to the amount plaintiff refunded purchasers for the loss in value of the swine sold, and since defendant is liable under the insurance policy for the loss in value, the district court properly included the refunds made to purchasers of the infected swine when computing the damages in this case. Also before us is plaintiff's motion for attorney fees. Pursuant to Neb.Rev.Stat. § 44-359 (Reissue 1993), plaintiff is awarded attorney fees in the amount of $8,373. AFFIRMED.