Court Opinion

ID: 2814063
Source: CourtListenerOpinion
Date Created: 2015-07-02 13:10:22.987178+00
Date Added: 2024-06-11T08:50:24.926786
License: Public Domain

- 278 -
                        Nebraska A dvance Sheets
                         291 Nebraska R eports
            CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                         Cite as 291 Neb. 278

           Cleaver-Brooks, Inc., appellee, v. Twin City
              Fire Insurance Company, a subsidiary
              of The H artford I nsurance Company,
               appellant, and A merican I nsurance
                    Company et al., appellees.
                                ___ N.W.2d ___

                       Filed July 2, 2015.     No. S-14-822.

 1.	 Summary Judgment: Appeal and Error. An appellate court will
     affirm a lower court’s grant of summary judgment if the pleadings
     and admitted evidence show that there is no genuine issue as to any
     material facts or as to the ultimate inferences that may be drawn from
     those facts and that the moving party is entitled to judgment as a matter
     of law.
 2.	 ____: ____. In reviewing a summary judgment, the court views the
     evidence in the light most favorable to the party against whom the
     judgment was granted and gives such party the benefit of all reasonable
     inferences deducible from the evidence.
 3.	 Judgments: Estoppel: Appeal and Error. An appellate court reviews a
     court’s application of judicial estoppel to the facts of a case for abuse of
     discretion and reviews its underlying factual findings for clear error.
 4.	 Workers’ Compensation: Appeal and Error. In light of the beneficent
     purpose of the Nebraska Workers’ Compensation Act, the appellate
     courts give the act a liberal construction to carry out justly the spirit of
     the act.
 5.	 Workers’ Compensation. Delay, cost, and uncertainty are contrary to
     the underlying purposes of the Nebraska Workers’ Compensation Act.
 6.	 Workers’ Compensation: Legislature: Intent: Employer and
     Employee: Time. The Nebraska Workers’ Compensation Act was
     intended by the Legislature to simplify legal proceedings and to bring
     about a speedy settlement of disputes between the injured employee and
     the employer by taking the place of expensive court actions with tedious
     delays and technicalities.
                                    - 279 -
                       Nebraska A dvance Sheets
                        291 Nebraska R eports
            CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                         Cite as 291 Neb. 278

 7.	 Equity: Estoppel. Judicial estoppel is an equitable doctrine that a
      court invokes at its discretion to protect the integrity of the judi-
      cial process.
 8.	 Estoppel. The doctrine of judicial estoppel protects the integrity of the
      judicial process by preventing a party from taking a position inconsistent
      with one successfully and unequivocally asserted by the same party in a
      prior proceeding.
  9.	 ____. Judicial estoppel prevents parties from gaining an advantage by
      taking one position in a proceeding and then switching to a different
      position when convenient in a later proceeding.
10.	 ____. Judicial estoppel is to be applied with caution so as to avoid
      impinging on the truth-seeking function of the court, because the doc-
      trine precludes a contradictory position without examining the truth of
      either statement.
11.	 Laches. The defense of laches is not favored in Nebraska.
12.	 ____. Laches occurs only if a litigant has been guilty of inexcus-
      able neglect in enforcing a right and his or her adversary has suf-
      fered prejudice.
13.	 Laches: Equity. Laches does not result from the mere passage of time,
      but because during the lapse of time, circumstances changed such that to
      enforce the claim would work inequitably to the disadvantage or preju-
      dice of another.
14.	 Laches. What constitutes laches depends on the circumstances of
      the case.
15.	 Negligence. For actionable negligence to exist, there must be a legal
      duty on the part of the defendant to protect the plaintiff from injury, a
      failure to discharge that duty, and damage proximately resulting from
      such undischarged duty.
16.	 ____. Whether a legal duty exists for actionable negligence is a question
      of law dependent on the facts in a particular case.
17.	 ____. Absent a duty, a negligence claim fails.
18.	 Negligence: Insurance: Claims. When a claim arises, an insurer gener-
      ally owes a duty to the insured to exercise reasonable care in defending
      the suit.

   Appeal from the District Court for Douglas County: Gary B.
R andall, Judge. Affirmed.

  Andrew T. Schlosser, of Fitzgerald, Schorr, Barmettler &
Brennan, P.C., L.L.O., for appellant.
                             - 280 -
                   Nebraska A dvance Sheets
                    291 Nebraska R eports
         CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                      Cite as 291 Neb. 278

  Terry R. Wittler, of Cline, Williams, Wright, Johnson &
Oldfather, L.L.P., for appellees SSW, Inc., formerly known as
National Dynamics Corporation, et al.

  J. Scott Paul, of McGrath, North, Mullin & Kratz, P.C.,
L.L.O., for appellee American Insurance Company.

  Tiernan T. Siems and Andrew M. Collins, of Erickson &
Sederstrom, P.C., for appellee Cleaver-Brooks, Inc.

  Heavican, C.J., Connolly, McCormack, Miller-Lerman,
and Cassel, JJ.

  Heavican, C.J.
                     I. NATURE OF CASE
   James E. Risor, an employee at a boiler manufacturing
plant in Lincoln, Nebraska, sustained permanent hearing loss
as a result of his employment. Between the time Risor
was injured and the time he filed his workers’ compensa-
tion claim, the plant changed ownership. Counsel represent-
ing the new owner’s insurer, American Insurance Company
(American), mistakenly believed American had insured the
plant during the time of the injury. Twin City Fire Insurance
Company (Twin City), which insured the plant for the previ-
ous owner, was not given notice of the claim until after entry
of an award.
   The new owner of the plant filed a declaratory judgment
action against the previous owner and both insurers to deter-
mine who is liable for payment of the award. The district court
determined that Twin City was liable. Twin City appeals. We
find the district court correctly determined that Twin City was
liable for the award and hence affirm.
                     II. BACKGROUND
  The parties have entered into a stipulation, so the facts are
not in dispute by any party.
                             - 281 -
                  Nebraska A dvance Sheets
                   291 Nebraska R eports
         CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                      Cite as 291 Neb. 278

                       1. R isor’s Injuries
   Risor began working at a boiler manufacturing plant, col-
loquially referred to as “Nebraska Boiler,” in Lincoln in 1973,
and remained continuously employed at the plant until his
retirement in 2004. During the course of Risor’s employment,
he suffered permanent hearing loss in both ears. Risor filed
a claim against Nebraska Boiler in the Nebraska Workers’
Compensation Court on January 20, 2004.
                       2. Nebraska Boiler
   The plant has been owned by several different entities
from 1973 to the present, although a company with the exact
legal name of “Nebraska Boiler” has never owned the plant.
In 1976, Daniel T. Scully, Roger L. Swanson, and Verlyn L.
Westra purchased the plant and incorporated it as Nebraska
Boiler Company, Inc. In 1989, Nebraska Boiler Company,
Inc., merged with National Dynamics Corporation (National
Dynamics), and after the merger, Nebraska Boiler Company,
Inc., ceased to exist. Scully, Swanson, and Westra were share-
holders of National Dynamics.
   In 1998, Aqua-Chem, Inc., purchased various assets of
National Dynamics, including the boiler manufacturing plant.
Pursuant to the purchase agreement, National Dynamics agreed
to indemnify Aqua-Chem for any liabilities not assumed by
Aqua-Chem. No workers’ compensation claims by Risor were
mentioned in the agreement. After the sale, National Dynamics
changed its name to SSW, Inc., and subsequently dissolved
in 2003. The assets of the corporation were distributed to its
three shareholders: Scully, Swanson, and Westra. In 2006,
Aqua-Chem changed its name to Cleaver-Brooks, Inc. Cleaver-
Brooks is the current legal owner of the boiler manufactur-
ing plant.
                  3. Insurance Coverage
   Several companies have provided workers’ compensation
insurance coverage to the boiler manufacturing plant over
the years.
                             - 282 -
                  Nebraska A dvance Sheets
                   291 Nebraska R eports
         CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                      Cite as 291 Neb. 278

   At the time of the sale to Cleaver-Brooks, National
Dynamics entered into an agreement with Twin City to pro-
vide workers’ compensation insurance coverage to National
Dynamics for claims made by employees working at the boiler
manufacturing plant from 1992 to 1998.
   Cleaver-Brooks contracted with Fireman’s Fund Insurance
Company, later renamed American, to provide workers’ com-
pensation insurance coverage from 1992 to 2002. The cov-
erage did not extend back to claims arising from the boiler
manufacturing plant before Cleaver-Brooks acquired it in
1998.
   Liberty Mutual Group, Inc., provided workers’ compensa-
tion insurance coverage to Cleaver-Brooks from 2002 through
Risor’s trial. Liberty Mutual is not a party to this action.
                     4. Procedural History
   Nebraska Boiler was the only named defendant in Risor’s
workers’ compensation claim. The compensation court pro-
vided only Cleaver-Brooks with notice of the claim. Neither
National Dynamics nor any of the insurance companies were
given notice by the court. After Cleaver-Brooks tendered the
claim to its two insurance providers, each insurance company
retained separate counsel to defend Cleaver-Brooks against
Risor’s claims. During the course of the litigation, counsel for
American operated under the mistaken belief that American
had provided workers’ compensation insurance coverage to
Nebraska Boiler from 1992 to 2002. Instead, American had
actually provided workers’ compensation insurance coverage
to only Cleaver-Brooks and not to National Dymanics, which
actually owned Nebraska Boiler when Risor was injured.
Counsel for American represented this mistaken belief to the
compensation court.
   On April 26, 2006, a single judge of the compensation court
determined that Risor was permanently and totally disabled as
a result of the hearing loss. The judge determined the date of
the accident to be October 19, 1993. The date of the injury
was apparently a surprise to both Risor and the defendants.
                                     - 283 -
                         Nebraska A dvance Sheets
                          291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

In his complaint, Risor alleged that he had suffered injuries
only as early as 2001. Despite the determination of October
19, 1993, as the date of the accident causing the hearing loss,
the judge ordered payment from Nebraska Boiler to begin as
of the date of Risor’s retirement, February 12, 2004.
   After the filing of this order, an adjuster for American real-
ized that Cleaver-Brooks did not own the plant on the date of
Risor’s injury; therefore, American was not the plant’s insurer
at the time of the injury. Nebraska Boiler filed a motion for
continuance in order to allow “‘additional parties who may
have an exposure to liability once a final determination has
been made’ be served and given an opportunity to present
additional evidence to the court.”1 The judge denied the motion
for continuance. Both Risor and Cleaver-Brooks appealed to a
review panel of the compensation court.
   Twin City was given notice of the claim against Nebraska
Boiler on August 1, 2006, and on October 25, Twin City
filed a motion for leave to intervene to participate as a party
in the appeal to the review panel. The review panel denied
Twin City’s motion, and Twin City appealed that decision to
this court in Risor v. Nebraska Boiler (Risor I).2 In 2008, we
determined that “Twin City did not have a right to postaward
intervention in Risor’s workers’ compensation action brought
solely against his employer, Nebraska Boiler.”3 In reaching
this conclusion, we noted that American “believed . . . that
it was Nebraska Boiler’s insurer during the period in which
the court ultimately determined Risor was injured” and that
“the evidence is that Nebraska Boiler’s interests, represented
by attorneys provided by [American], were substantially the
same as Twin City’s.”4 Twin City, however, was “free to rep-
resent the interests of its insured, Nebraska Boiler, in [Risor’s

 1	
      Risor v. Nebraska Boiler, 274 Neb. 906, 908, 744 N.W.2d 693, 696 (2008).
 2	
      Id.
 3	
      Id. at 910, 744 N.W.2d at 697.
 4	
      Id. at 915, 744 N.W.2d at 700.
                                    - 284 -
                         Nebraska A dvance Sheets
                          291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

subsequent] appeal of the award to the review panel, if it so
chooses.”5 Twin City did not participate in that appeal.
   In Risor’s separate appeal of the award to the review panel,
Risor argued that the appropriate date for commencing pay-
ments was the date of the injury in 1993, rather than the date
Risor retired in 2004. In May 2008, the review panel reversed
the single judge’s decision and determined that payment should
start from the date Risor was permanently injured in 1993.
Nebraska Boiler appealed that decision to this court in Risor
v. Nebraska Boiler (Risor II).6 We affirmed the review panel’s
decision in 2009.7
   In November 2012, Cleaver-Brooks filed this action for
declaratory judgment in the district court for Douglas County
to determine which party or parties were liable for Risor’s
claim. The named defendants were Twin City; American;
SSW, Inc.; and Scully, Swanson, and Westra in their individual
capacities. All parties filed motions for summary judgment.
On June 21, 2013, the district court issued an order finding
that Twin City was solely liable for the award. The district
court determined that Twin City insured the plant at the time
of Risor’s injury and also found that the doctrines of laches
and judicial estoppel did not apply and were not a defense to
liability for Twin City. Further, the district court dismissed
Twin City’s counterclaims and cross-claims against Cleaver-
Brooks and American for negligence, equitable subrogation,
indemnification, contribution, and unjust enrichment. Finally,
the district court held that the individual shareholders had
no liability for the award, but did not address the claims by
SSW, Inc.
   Twin City appealed to this court, but the appeal was dis-
missed on the ground that the order from the district court
was not a final order because it did not address the claims

 5	
      Id. at 916, 744 N.W.2d at 700.
 6	
      Risor v. Nebraska Boiler, 277 Neb. 679, 765 N.W.2d 170 (2009).
 7	
      Id.
                                   - 285 -
                        Nebraska A dvance Sheets
                         291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

by SSW, Inc. On August 13, 2014, the district court issued a
supplemental order which incorporated its previous order and
disposed of any remaining claims related to SSW, Inc. Twin
City now properly appeals from a final order.
                III. ASSIGNMENTS OF ERROR
   Twin City assigns, consolidated and restated, that the dis-
trict court erred in (1) finding that Twin City was solely liable
for payment of the workers’ compensation award; (2) applying
Risor I to the merits of a subsequent contribution or indemnity
claim; (3) finding that the delay by Cleaver-Brooks in giv-
ing notice to Twin City and in asserting that Risor was not
its employee prior to 1998 was not inexcusable; (4) finding
that judicial estoppel did not prevent the district court from
finding that Twin City was solely liable for payment of the
claim; and (5) finding that other parties to the suit did not
breach their duty to exercise reasonable care with respect to
Twin City.
                 IV. STANDARD OF REVIEW
   [1,2] An appellate court will affirm a lower court’s grant
of summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts
or as to the ultimate inferences that may be drawn from
those facts and that the moving party is entitled to judgment
as a matter of law.8 In reviewing a summary judgment, the
court views the evidence in the light most favorable to the
party against whom the judgment was granted and gives such
party the benefit of all reasonable inferences deducible from
the evidence.9
   [3] An appellate court reviews a court’s application of judi-
cial estoppel to the facts of a case for abuse of discretion and
reviews its underlying factual findings for clear error.10

 8	
      DMK Biodiesel v. McCoy, 290 Neb. 287, 859 N.W.2d 867 (2015).
 9	
      Id.
10	
      TFF, Inc. v. SID No. 59, 280 Neb. 767, 790 N.W.2d 427 (2010).
                                     - 286 -
                         Nebraska A dvance Sheets
                          291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

                           V. ANALYSIS
                      1. Liability for Award
   Twin City assigns that the district court erred in determining
Twin City was solely liable for payment of the workers’ com-
pensation award. Twin City’s argument hinges on the facts that
Risor brought suit against Nebraska Boiler, which was owned
by Cleaver-Brooks at the time Risor filed his complaint, and
that the dates of the injuries Risor alleged in his complaint
all occurred when Cleaver-Brooks owned the plant. Twin City
argues that this indicates Risor’s intent to file a claim only
against Cleaver-Brooks.
   In Risor I, we referred to Cleaver-Brooks as Nebraska
Boiler’s “parent company.”11 The use of the term “parent com-
pany,” which suggests Cleaver-Brooks owned a controlling
interest in a separate corporation, is not an accurate description
of that relationship. Nebraska Boiler was in fact merely a trade
name used by both National Dynamics and Cleaver-Brooks to
refer to the plant. The transaction between National Dynamics
and Cleaver-Brooks, which resulted in the transfer of owner-
ship of the plant, was an asset sale and not a stock purchase. At
the time Risor filed his complaint, Cleaver-Brooks owned the
plant outright as an asset and not as a subsidiary.
   That being said, we still correctly recognized in Risor I
that Twin City could potentially face liability for the award.
In Risor I, we held that Twin City was not deprived of its
right to procedural due process when the review panel denied
Twin City’s motion to intervene in the proceedings.12 We clas-
sified Twin City as being “in privity” with Nebraska Boiler,
noting “Nebraska Boiler’s interests [in defending the suit]
were substantially the same as Twin City’s.”13 This holding,
at the very least, suggests Twin City could potentially be
liable for an award entered against Nebraska Boiler by the

11	
      Risor I, supra note 1, 274 Neb. at 909, 744 N.W.2d at 696.
12	
      Risor I, supra note 1.
13	
      Id. at 914-15, 744 N.W.2d at 700.
                                        - 287 -
                           Nebraska A dvance Sheets
                            291 Nebraska R eports
               CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                            Cite as 291 Neb. 278

compensation court. The fact that Nebraska Boiler is not a
separate legal subsidiary does not change this.
   [4-6] We note the purpose of the Nebraska Workers’
Compensation Act and the flexibility with which we have
interpreted the act: “In light of [the] beneficent purpose of
the [Nebraska Workers’ Compensation Act, the appellate
courts] have consistently given the act a liberal construction
to ‘“‘carry out justly the spirit of the [a]ct.’”’”14 “Delay, cost,
and uncertainty are contrary to the underlying purposes of the
[Nebraska Workers’ Compensation] Act.”15 “The [Nebraska
Workers’ Compensation] Act was intended by the Legislature
to simplify legal proceedings and to bring about a speedy
settlement of disputes between the injured employee and the
employer by taking the place of expensive court actions with
tedious delays and technicalities.”16
   From Risor’s perspective, he worked at the same plant
(Nebraska Boiler) for his entire career, even though owner-
ship of the plant changed several times over the course of his
employment. Although filing a complaint against Nebraska
Boiler was not technically accurate, Risor’s intent was clear:
to receive compensation for the injury incurred during his
employment at the plant, regardless of who owned the plant at
the time he suffered his injury.
   The compensation court found that Risor’s injury occurred
in 1993, which holding was affirmed by this court in Risor II.17
Further, it is undisputed that Twin City, through its policy with
National Dynamics, was the sole provider of coverage for
workers’ compensation claims for employees working at the
plant during that time period. Therefore, Twin City is liable

14	
      Jackson v. Morris Communications Corp., 265 Neb. 423, 431, 657 N.W.2d
634, 640 (2003).
15	
      Estate of Teague v. Crossroads Co-op Assn., 286 Neb. 1, 10, 834 N.W.2d 236, 245
      (2013).
16	
      Id.
17	
      Risor II, supra note 6.
                                     - 288 -
                         Nebraska A dvance Sheets
                          291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

for the award and cannot elude payment by relying on a tech-
nical inaccuracy, the designation of General Dynamics, rather
than Nebraska Boiler, as the employer in Risor’s claim. The
district court did not err in finding that Twin City was liable
for the award.
   Twin City’s assignment of error is without merit.

               2. Twin City’s Equitable Defenses
   Twin City assigns that the district court erred in finding
that it was liable for the award because the doctrine of judi-
cial estoppel precluded Cleaver-Brooks from claiming Twin
City was responsible and because Cleaver-Brooks’ claim was
barred by the doctrine of laches.

                     (a) Judicial Estoppel
   Twin City argues that because Cleaver-Brooks, through the
attorney retained by American, represented to the compensa-
tion court that American’s coverage of the plant started in
1992, the doctrine of judicial estoppel now prevents Cleaver-
Brooks and American from asserting an inconsistent position
in this proceeding.
   [7-9] Judicial estoppel is an equitable doctrine that a
court invokes at its discretion to protect the integrity of the
judicial process.18 The doctrine of judicial estoppel protects
the integrity of the judicial process by preventing a party
from taking a position inconsistent with one successfully and
unequivocally asserted by the same party in a prior proceed-
ing.19 Fundamentally, the intent behind the doctrine of judicial
estoppel is to prevent parties from gaining an advantage by
taking one position in a proceeding and then switching to a
different position when convenient in a later proceeding.20

18	
      TFF, Inc., supra note 10.
19	
      Burns v. Nielsen, 273 Neb. 724, 732 N.W.2d 640 (2007).
20	
      See, e.g., MW Erectors v. Niederhauser Ornamental, 36 Cal. 4th 412, 115
P.3d 41, 30 Cal. Rptr. 3d 755 (2005).
                                      - 289 -
                          Nebraska A dvance Sheets
                           291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

Some have described the purpose of the rule as “to prevent
parties from playing fast and loose with the courts.”21
   [10] This doctrine, however, is to be applied with caution
so as to avoid impinging on the truth-seeking function of the
court, because the doctrine precludes a contradictory position
without examining the truth of either statement.22 Many courts
require a showing of bad faith before the doctrine is invoked
and will not apply the doctrine in the case of mistake or neg-
ligence.23 We agree with these jurisdictions that bad faith or
an actual intent to mislead on the part of the party asserting
inconsistent positions must be demonstrated before the judi-
cial estoppel doctrine may be invoked. Although the judicial
admission doctrine is not applicable here,24 we note we have
held that for a judicial admission to substitute as evidence the
admission “‘must be unequivocal, deliberate, and clear, and not
the product of mistake or inadvertence.’”25
   In this case, we find no evidence of any bad faith or an
intent to mislead on the part of either Cleaver-Brooks or
American. In fact, it was in neither Cleaver-Brooks’ nor
American’s interest to initially represent to the compensation
court that Cleaver-Brooks owned the plant or that American’s
policy covered the plant in 1993. At the time American’s attor-
ney made the misrepresentation, all parties involved believed

21	
      Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 361
      (3d Cir. 1996).
22	
      Jardine v. McVey, 276 Neb. 1023, 759 N.W.2d 690 (2009).
23	
      See, e.g., New Hampshire v. Maine, 532 U.S. 742, 121 S. Ct. 1808, 149 L.
      Ed. 2d 968 (2001); King v. Herbert J. Thomas Memorial Hosp., 159 F.3d
192 (4th Cir. 1998); In re Chambers Development Co., Inc., 148 F.3d 214
      (3d Cir. 1998); Johnson v. State of Oregon, 141 F.3d 1361 (9th Cir. 1998);
      Haley v. Dow Lewis Motors, Inc., 72 Cal. App. 4th 497, 85 Cal. Rptr. 2d
352 (1999); Arkison v. Ethan Allen, Inc., 160 Wash. 2d 535, 160 P.3d 13
      (2007).
24	
      See Marting v. Nebraska Liquor Control Comm., 250 Neb. 134, 548
N.W.2d 326 (1996).
25	
      Prime Home Care v. Pathways to Compassion, 283 Neb. 77, 93, 809
N.W.2d 751, 764-65 (2012).
                                   - 290 -
                        Nebraska A dvance Sheets
                         291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

that the earliest possible date of Risor’s injury was 2001—3
years after the plant was sold. It was only after the com-
pensation court determined the date of the injury to actually
be 1993 that the attorney’s inaccurate statement gained any
significance. Further, American’s attorney sought to correct
the information once the mistake was uncovered. There is no
reason to believe that Cleaver-Brooks or American intention-
ally misrepresented the facts in order to mislead or gain some
type of advantage.
   The district court did not abuse its discretion in rejecting
this defense.
                           (b) Laches
   [11-14] Twin City argues that recovery against Twin City
should be barred by the doctrine of laches, because Cleaver-
Brooks unjustifiably delayed notifying Twin City of the claim
by Risor. The defense of laches is not favored in Nebraska.26
Laches occurs only if a litigant has been guilty of inexcusable
neglect in enforcing a right and his or her adversary has suf-
fered prejudice.27 Laches does not result from the mere passage
of time, but because during the lapse of time, circumstances
changed such that to enforce the claim would work inequitably
to the disadvantage or prejudice of another.28 What constitutes
laches depends on the circumstances of the case.29 In other
words, Twin City must prove that any delay in notification by
Cleaver-Brooks and American was inexcusable and that Twin
City was prejudiced by that delay.
   Because the original dates of the alleged injuries in Risor’s
claim were all while Cleaver-Brooks owned the company,
Cleaver-Brooks or American had no reason to notify Twin City
until the compensation court determined the date of the injury

26	
      Schellhorn v. Schmieding, 288 Neb. 647, 851 N.W.2d 67 (2014).
27	
      Farmington Woods Homeowners Assn. v. Wolf, 284 Neb. 280, 817 N.W.2d
758 (2012).
28	
      Merz v. Seeba, 271 Neb. 117, 710 N.W.2d 91 (2006).
29	
      Id.
                                     - 291 -
                         Nebraska A dvance Sheets
                          291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

to be in 1993. The facts indicate that the trial court entered
its award on April 26, 2006, and Twin City was notified of
the claim on August 1. Between those two dates the follow-
ing occurred in the case: Risor appealed the award on May 9,
Nebraska Boiler filed a cross-appeal on May 10, and Nebraska
Boiler’s motion for a continuance was denied on May 10.
We find nothing in the stipulated facts suggesting any delay
was inexcusable.
   Even if Cleaver-Brooks had some reason to know before
the trial court entered its award that there was a potential
claim for which Twin City could be liable, the evidence
still does not establish that Twin City was prejudiced by
any delay. American “vigorously defended against Risor’s
claim”30 and the outcome likely would not have differed had
Twin City participated. Further, Risor I specifically granted
Twin City the chance to participate in the appeal of the award
to the review panel, but Twin City chose not to participate.
To the extent that Twin City may have been prejudiced at
all, Twin City’s own inaction undeniably contributed to that
prejudice. The court did not abuse its discretion in rejecting
this defense.
   Twin City’s assignments of error are without merit.

                   3. Twin City’s Counterclaim /
                      Cross-Claim: Negligence
   [15] Twin City assigns that the district court erred in dis-
missing Twin City’s counterclaim and cross-claim that alleged
Cleaver-Brooks and American negligently injured Twin City
when they both failed to notify Twin City of the pending
claim. For actionable negligence to exist, there must be a legal
duty on the part of the defendant to protect the plaintiff from
injury, a failure to discharge that duty, and damage proximately
resulting from such undischarged duty.31

30	
      Risor I, supra note 1, 274 Neb. at 915, 744 N.W.2d at 700.
31	
      Brown v. Social Settlement Assn., 259 Neb. 390, 610 N.W.2d 9 (2000).
                                     - 292 -
                         Nebraska A dvance Sheets
                          291 Nebraska R eports
              CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                           Cite as 291 Neb. 278

                          (a) Duty
   [16-18] We must determine whether Cleaver-Brooks or
American owed a duty to Twin City in this situation. Whether
a legal duty exists for actionable negligence is a question
of law dependent on the facts in a particular case.32 Absent
a duty, a negligence claim fails.33 When a claim arises, an
insurer generally owes a duty to the insured to exercise rea-
sonable care in defending the suit.34 But Twin City cites to
no case law in Nebraska, or any other jurisdiction, which
has found that one insurance company owes a duty to notify
another insurance company of potential claims. There also
appears to be no case law that suggests Cleaver-Brooks,
having purchased the plant as an asset, would owe a duty to
notify Twin City of such claims. Given the facts of this case,
when presented with a workers’ compensation claim alleging
injuries that occurred no earlier than 2001, Cleaver-Brooks
and American could not have reasonably been expected to
notify Twin City, an insurer which covered claims arising
from the plant only between 1992 and 1998. As a matter of
law, we find Cleaver-Brooks and American had no duty to
notify Twin City.

                            (b) Breach
   Further, there is no evidence that either Cleaver-Brooks
or American breached any duty of care owed to Twin City if
such a duty were to exist. In this case, the parties only had
reason to believe that Twin City could potentially be exposed
to liability after a single judge from the compensation court
determined, to the surprise of all the parties, the date of the
injury to be in 1993. Twin City was informed within a reason-
able period of time after that judgment. The evidence estab-
lished that Cleaver-Brooks and American acted reasonably

32	
      Perez v. Stern, 279 Neb. 187, 777 N.W.2d 545 (2010).
33	
      Ashby v. State, 279 Neb. 509, 779 N.W.2d 343 (2010).
34	
      See, e.g., Kelly v. Iowa Mut. Ins. Co., 620 N.W.2d 637 (Iowa 2000).
                                   - 293 -
                          Nebraska A dvance Sheets
                           291 Nebraska R eports
               CLEAVER-BROOKS, INC. v. TWIN CITY FIRE INS. CO.
                            Cite as 291 Neb. 278

in protecting any interests Twin City had in the claim.35 The
district court did not err in dismissing Twin City’s negli-
gence claims.
            4. Twin City’s R emaining Counterclaims/
              Cross-Claims: Equitable Subrogation,
                  Indemnification, Contribution,
                      and Unjust Enrichment
   Pursuant to Neb. Rev. Stat. § 48-125 (Cum. Supp. 2014), the
amount of a workers’ compensation award is increased by 50
percent if payment is not made to the claimant within 30 days
of entry of the award. In order to avoid the statutory penalty,
Twin City paid the lump-sum award due to Risor and has been
making monthly payments to Risor since that time.
   All of Twin City’s remaining assignments of error essentially
allege the same thing under slightly different legal theories:
Twin City was wrongfully forced to pay the award to Risor and
either Cleaver-Brooks or American should compensate Twin
City for all or part of what Twin City has already paid to Risor.
These arguments necessarily fail, because we have found that
Twin City, as the insurer of the plant at the time Risor was
injured, is liable for payment of the award. Twin City’s remain-
ing assignments of error are without merit.
                       VI. CONCLUSION
   The district court did not err in determining Twin City was
liable for Risor’s workers’ compensation award, in rejecting
Twin City’s equitable defenses, and in dismissing Twin City’s
counterclaims.
                                                    A ffirmed.
   Stephan, J., participating on briefs.
   Wright, J., not participating.

35	
      See Risor I, supra note 1.