Opinion ID: 2042766
Heading Depth: 1
Heading Rank: 4

Heading: wool incentive payments

Text: In its fourth assignment of error, Farmers, in substance, complains that the trial court erred in permitting the Browns to recover wool incentive payments which the Browns would have received had their sheep not been stolen. Brown testified that due to the reduction in the number of the Browns' sheep by theft, his wool incentive payments were decreased. As Brown explained, the federal government pays sheep owners an incentive based on the weight of an animal's wool. The source of the payments was from imports of sheep from New Zealand and Australia. The parties stipulated that if the loss was covered under the Browns' insurance policy, the amount of the loss was $1,022.62. The sum of $1,022.62 was arrived at by multiplying the number of sheep lost by the dollar amount of the incentive payments which would have been received had the sheep not been lost. The jury awarded the Browns the claimed amount for the lost wool incentive payments. Farmers argues that the Browns' policy covered only the losses of the sheep themselves. Therefore, it maintains that the damages for the lost wool incentive payments fall outside the coverage of the policy. Our analysis begins with the terms of the policy, which provided coverage for direct loss to insured farm personal property caused by theft. Apart from the question of whether the wool incentive payments were a direct loss caused by theft, Farmers asserts that the wool incentive payments are not insured farm personal property. Nowhere in the policy is insured farm personal property defined. Nonetheless, we are guided by a number of well-established rules. In order to recover under an insurance policy of limited liability, an insured must bring himself or herself within its express provisions. Ditloff v. State Farm Fire & Cas. Co., 225 Neb. 375, 406 N.W.2d 101 (1987). When the terms of an insurance policy are clear, they are to be accorded their plain and ordinary meaning. Allstate Ins. Co. v. Farmers Mut. Ins. Co., 233 Neb. 248, 444 N.W.2d 676 (1989). When a clause in an insurance contract can fairly be interpreted in more than one way, there is ambiguity to be resolved by the court as a matter of law. Polenz v. Farm Bureau Ins. Co., 227 Neb. 703, 419 N.W.2d 677 (1988). The resolution of an ambiguity in a policy of insurance turns not on what the insurer intended the language to mean, but what a reasonable person in the position of the insured would have understood it to mean at the time the contract was made. Id. In the case of ambiguity in an insurance contract, a construction favorable to the insured prevails so as to afford coverage. Id. Accord Malerbi v. Central Reserve Life, 225 Neb. 543, 407 N.W.2d 157 (1987). Under one plausible interpretation, by narrowly focusing on the words insured farm personal property, a reasonable person in the position of the insured could interpret that language as restricting coverage to losses of the sheep themselves, irrespective of the question of whether the losses were direct or not. Alternatively, the policy could fairly be interpreted as providing that so long as insured farm personal property is stolen, any loss directly attributable to that theft is also covered. Because the policy language is ambiguous, the terms are construed in favor of the Browns so that farm personal property includes wool incentive payments. The remaining issue to be decided is whether the wool incentive payments were a direct loss caused by theft. With respect to theft insurance, it has been said, The policy of insurance may limit recovery to `direct' loss, which is generally construed as meaning the proximate as opposed to a remote loss. 10A G. Couch, Cyclopedia of Insurance Law § 42:76 at 218-19 (rev. 2d ed. 1982). Nebraska is in accord with this rule. In Clause v. St. Paul Fire and Marine Ins. Co., 152 Neb. 230, 233, 40 N.W.2d 820, 823 (1950), this court held,  `Direct,' as so used, means `immediate' or `proximate,' as distinguished from `remote' or `incidental.' [Citations omitted.] We further explained: In determining the cause of a loss for the purpose of fixing insurance liability, when evidence of concurring causes of the damage appears, the proximate cause to which the loss is to be attributed is the dominant, the efficient one that sets the other causes in operation; and causes which are incidental are not proximate, though they may be nearer in time and place to the loss. [Citations omitted.] Id. at 234, 40 N.W.2d at 823. See, also, Lydick v. Insurance Co. of North America, 187 Neb. 97, 187 N.W.2d 602 (1971) (death of cattle not a direct loss caused by windstorm because the wind combined with a number of other factors to produce the loss). In this case, there is no cause for the loss of wool incentive payments other than the theft of the sheep. The theft of the sheep directly caused the reduction in wool incentive payments, as those payments correspondingly decreased by the number of sheep stolen. Farmers' fourth assignment of error is without merit. The judgment of the district court for Dawes County must be affirmed. The Browns are awarded $2,500 to apply toward their attorney fees incurred in this appeal. See, Neb.Rev.Stat. § 44-359 (Reissue 1988); Havelock Bank v. Western Surety Co., 217 Neb. 560, 352 N.W.2d 855 (1984). AFFIRMED.