The Supreme Court of Nebraska has affirmed a district court’s decision to grant summary judgment to Tracy Jenson, a former member of the University of Nebraska’s Spirit Squad, who suffered a crippling injury while attempting a tumbling maneuver during a cheerleading practice.
On the losing end of the decision was the North American Specialty Insurance Company (NASIC), which issues policies to the NCAA for the benefit of student-athletes attending NCAA member institutions. It had claimed that it was entitled to subrogation or reimbursement based on the settlement that Jenson reached with the Board of Regents.
After the injury on December 4, 1996, Jensen was initially paralyzed from the neck down. But during her rehabilitation, she regained limited use of all four limbs. Nevertheless, she continues to experience significant physical and psychological difficulties as a result of her accident, and her condition is not expected to improve in the future.
Her accident put three insurance policies in play: NASIC, TIG Insurance Company (thru the University of Nebraska) and Celtic Insurance Company (thru Jensen’s parents)
The NASIC policy was an excess policy, meaning that “If an Insured Person is entitled to Other Insurance for a benefit category of a Covered Loss for which he or she has been paid benefits under this Policy, the Insured Person will reimburse the Company (NASIC) to the extent of such benefits paid under this Policy, not to exceed the amount of Other Insurance received.”
The NASIC sought to equate “Other Insurance” to the funds that Jenson received as part of a $2.1 million settlement with the Board of Regents of the University of Nebraska (Board of Regents). Jenson sought a declaration that countered that contention.
One of the key factors in making such a determination is whether the insured “has been fully compensated.” NASIC argued that Jenson has been fully compensated. The court was not “persuaded.”
It took special note of NASIC’s argument that “the mere fact that Jensen reached a settlement with the university indicates that she was fully compensated for her injuries; otherwise, she would not have accepted the settlement agreement.
“NASIC is no doubt aware of the risks involved in litigation and the benefits of sometimes settling disputes prior to trial. To say as a matter of law that any party who accepts a settlement is necessarily fully compensated is folly. For all of these reasons, it is apparent as a matter of law that Jensen has not come close to being fully compensated for her loss.”
Turning the argument that the settlement funds Jensen received from the university are “Other Insurance” under section III of the NASIC policy, the court labeled the NASIC’s policy, particularly its definition of “Other Insurance,” as ambiguous and thus construed that term in favor of Jensen. Tracy Jensen v. Board of Regents of the University of Nebraska et al. and North American Specialty Insurance Company; S.Ct.Neb.; No. S-02-1459. 8/6/04
Attorneys of Record: (for appellant) Robert T. Grimit and Randall L. Goyette, of Baylor, Evnen, Curtiss, Grimit & Witt, L.L.P., and Gregory D. Seeley and Eric D. Baker, of Seeley, Savidge & Ebert Co., L.P.A. (for appellee) Maren Lynn Chaloupka, of Chaloupka, Holyoke, Hofmeister, Snyder & Chaloupka.