Carlson v. Allianz Versicherungs-Aktiengesellschaft

287 Neb. 628

844 N.W.2d 264

Carolyn Carlson and Richard Carlson, appellants,

v.Allianz Versicherungs–Aktiengesellschaft and Does 1 through 50, inclusive, appellees.

No. S–13–492

Supreme Court of Nebraska.

Filed March 7, 2014

Appeal from the District Court for Lancaster County: Robert R. Otte, Judge. Affirmed.

Thomas G. Sundvold, of Sundvold Law Firm, P.C., L.L.O., and Raymond D. McElfish, of McElfish Law Firm, P.C., L.L.O., West Hollywood, for appellants.

Kyle Wallor and Sarah F. Macdissi, Omaha, of Lamson, Dugan & Murray, L.L.P., Omaha, for appellee Allianz Versicherungs–Aktiengesellschaft.

Heavican, C.J., Wright, Connolly, Stephan, McCormack, and Cassel, JJ.

Syllabus of the Court

1. Motions to Dismiss: Appeal and Error. A district court's grant of a motion to dismiss is reviewed de novo.

2. Appeal and Error. To be considered by an appellate court, an alleged error must be both specifically assigned and specifically argued in the brief of the party asserting the error.

3. Declaratory Judgments: Courts: Jurisdiction: Parties: Waiver. The presence of necessary parties in declaratory judgment actions is jurisdictional and cannot be waived, and if such persons are not made parties, then the district court has no jurisdiction to determine the controversy.

4. Jurisdiction. It is fundamental that a court has the power to determine whether it has jurisdiction over the matter before it.

5. Actions: Parties. A dismissal based upon a failure to join a necessary party is a dismissal of the action without prejudice.

6. Courts: Jurisdiction. In civil cases, a court of general jurisdiction has inherent power to vacate or modify its own judgment at any time during the term in which the court issued it.

7. Courts: Motions to Vacate: Time.Neb.Rev.Stat. § 25–2001(1) (Reissue 2008) provides for the exercise of the inherent power to vacate after the end of the term upon a motion filed within 6 months after the entry of the judgment.

8. Actions: Motions to Vacate: Service of Process. A proceeding to vacate a judgment on grounds contained in Neb.Rev.Stat. § 25–2001(4) (Reissue 2008) shall be by complaint, and on such complaint, a summons shall issue and be served as in the commencement of an action.

9. Service of Process. The methods of service prescribed by the Hague Convention are mandatory where service abroad to a person in a signatory country is required.

10. Service of Process: Waiver. Under Neb.Rev.Stat. § 25–516.01 (Reissue 2008), a voluntary appearance is the equivalent to service that waives a defense of insufficient service or process if the party requests general relief from the court on an issue other than sufficiency of service or process, or personal jurisdiction.

11. Rules of the Supreme Court: Pleadings: Waiver. Neb. Ct. R. Pldg. § 6–1112(b) explicitly provides that no defense or objection is waived by being joined with one or more other defenses or objections in a responsive pleading or motion.

12. Motions to Dismiss: Jurisdiction: Rules of the Supreme Court: Pleadings. When a motion to dismiss raises a defense under Neb. Ct. R. Pldg. § 6–1112(b)(6) and any combination of § 6–1112(b)(2), (4), and (5), the court should consider dismissal under § 6–1112(b)(2), (4), and (5) first and should consider dismissal under § 6–1112(b)(6) only if it determines that it has jurisdiction and that process and service of process were sufficient.

13. Equity. Equitable remedies are generally not available where there exists an adequate remedy at law.

14. Appeal and Error. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.

15. Appeal and Error. An appellate court will not consider an issue on appeal that was not presented to or passed upon by the trial court.

I. INTRODUCTION

Twenty months after the district court dismissed the appellants' declaratory judgment action against an insurance company for failure to join a necessary party, the appellants filed a complaint to vacate the judgment. The district court sustained the insurance company's motion to dismiss the complaint. Because we conclude that (1) the time for exercise of the district court's inherent power to vacate its judgment had expired, (2) the court lacked jurisdiction to vacate its judgment under Neb.Rev.Stat. § 25–2001(4) (Reissue 2008) due to insufficient service of process on the insurance company, and (3) the court did not err in declining to exercise its equitable power to vacate where the appellants had an adequate remedy at law, we affirm.

II. BACKGROUND

1. Underlying Lawsuit and Bankruptcy Stay

In February 2005, the appellants, Carolyn Carlson and Richard Carlson, were involved in a rollover collision while driving their Chrysler PT Cruiser. The back of Carolyn's seat collapsed during the rollover, and she suffered a cervical fracture and paralysis from the neck down. The Carlsons filed a products liability action against Daimler–Chrysler Corporation in the district court for Lancaster County, Nebraska.

In April 2009, prior to the scheduled trial date, Chrysler LLC sought chapter 11 bankruptcy protection. The bankruptcy court imposed an automatic stay, which stayed the Carlsons' suit.

In May 2009, the Carlsons sought the bankruptcy court's relief from the automatic stay. In their motion, they alleged that the state court proceeding was not connected to and would not interfere with the bankruptcy case and that litigation in the Nebraska state court would not prejudice the interests of other creditors and interested parties. Old Carco LLC and its affiliated debtors and debtors in possession filed an objection. (Daimler–Chrysler Corporation and Old Carco LLC, formerly known as Chrysler LLC, will be referred to as “Chrysler” in this opinion.) They alleged, among other things, that they did not have “ ‘first-dollar’ insurance coverage with respect to costs incurred defending against [the Carlsons'] specific claim” and that Chrysler's estate would be depleted by the litigation of the lawsuit. The bankruptcy court denied the Carlsons' motion.

2. Suit Against Allianz

Allianz Versicherungs–Aktiengesellschaft (Allianz), a foreign insurance company, provided insurance to Chrysler. On February 22, 2010, the Carlsons filed a complaint for declaratory relief against Allianz. This suit was also filed in the district court for Lancaster County, Nebraska. The Carlsons alleged that Allianz was an excess insurer obligated to “drop down” and provide “first dollar coverage” to Chrysler because Chrysler, which was partially self-insured, had become insolvent. The Carlsons alleged that Allianz had an immediate duty to defend Chrysler in the underlying products liability action. They requested judicial determination of the duties and obligations of Allianz. The Carlsons filed a praecipe directing the clerk of the court to issue summons for service of process on Allianz in Munich, Germany. Because Allianz is a German entity, the district court entered an order authorizing a service company to effect service of process on Allianz in Germany. Allianz was thereafter served in Germany.

Allianz filed a motion to dismiss pursuant to Neb. Ct. R. Pldg. § 6–1112(b)(6) (failure to state claim) and (7) (failure to join necessary party). Allianz argued that Chrysler was a necessary party, but the Carlsons disagreed. The district court overruled the motion. The court reasoned that it could not, as a matter of law, exclude the possibility that the insurance policy contained terms and conditions whereby Chrysler would not be a necessary party to the underlying accident.

3. Bankruptcy Confirmation Order and Plan Injunction

On April 23, 2010, the bankruptcy court entered an order confirming a second amended joint plan of liquidation of debtors and debtors in possession, as modified. The confirmation order, which had an effective date of April 30, stated in part:

30. ... In addition, as of the Effective Date, the injunction imposed by Section III.E.4 of the Plan (the “ Plan Injunction ”)will be deemed modified solely to the extent necessary to (a) permit Tort Claimants to commence, pursue or continue litigation to pursue applicable insurance, including litigation against the Debtors' insurers, if any (“ Insurance Litigation ”); and (b) in connection therewith, to name one or more of the Debtors as nominal defendants, with the naming of such nominal defendants and such Insurance Litigation being solely for the purpose of pursuing claims against and collection of payment of proceeds under any such insurance, if any....

31. Except as described in this paragraph and in paragraph 30 above, the modification of the Plan Injunction in the foregoing paragraph 30 shall not: (a) expand, limit or otherwise impact in any way any rights of any Tort Claimant, the applicable insurer, if any, the Debtors, the Liquidation Trust, the Liquidation Trustee or any other party with respect to any matter; (b) authorize, or be deemed or construed to authorize, any Tort Claimant, the applicable insurer or any other party to seek further relief against the Debtors or the Liquidation Trust or the Liquidation Trustee in any forum outside of the Bankruptcy Court with respect to the Tort Claim; (c) be deemed to modify the Plan Injunction to allow any party to pursue any action, or attempt to enforce any right, against the Debtors, the Liquidation Trust or the Liquidation Trustee (including, but not limited to, seeking (i) reimbursement of any amount, including any deductible amount, defense costs or expenses from the Debtors, the Liquidation Trust or the Liquidation Trustee, (ii) any discovery from the Debtors, the Liquidation Trust or the Liquidation Trustee with respect to the Debtors' records, personnel, assets and other information related thereto, (iii) to compel the appearance or testimony of any of the Liquidation Trust's employees, officers, managers, agents or other Representatives (in their capacities as such) in the Insurance...