## Facts

- Theodore N. Reeder and Rosalie M. Reeder owned a house in Omaha, Nebraska, and moved to Arlington, Texas, while keeping the Omaha property.
- Theodore allowed his brother, Bernard Reeder, and Bernard’s family to live in the Omaha house temporarily and rent-free while Bernard built a new home.
- The arrangement was informal, with no written lease and no discussion that Bernard’s family would obtain separate fire insurance or reimburse the owner’s insurer for losses.
- Bernard’s family agreed to maintain the property and pay utilities; Theodore continued to pay property taxes and kept the existing homeowners insurance in force.
- The house was insured by Cornhusker Casualty Company under Theodore and Rosalie’s homeowners policy.
- A fire severely damaged the house after Dana Reeder (Bernard’s daughter and Theodore’s niece), while occupying the home with permission, allegedly negligently attempted to light a gas fireplace without opening the damper.
- Cornhusker paid the owners’ claim for the fire loss and then sued Dana (initially also suing Bernard and his wife) in the owners’ names, seeking recovery by subrogation.

## Issues

1. Whether, absent an express agreement allocating liability, a homeowner’s fire insurer may pursue subrogation against a permissive occupant/guest who negligently caused insured fire damage.
2. Whether a permissive, rent-free family occupant is treated as an implied co-insured/beneficiary for purposes of barring the insurer’s subrogation claim.

## Decision

- The Nebraska district court granted summary judgment for Dana and dismissed the subrogation claim.
- The Nebraska Supreme Court affirmed.
- The court held that, absent an express agreement to the contrary between the host and guest, the host’s fire insurer has no subrogation right against a permissive guest for negligent fire damage to the insured premises.
- Because the occupancy was permissive, rent-free, and the owner maintained insurance without any contrary allocation of risk, Dana could not be sued in subrogation for the covered loss.

## Legal Principles

- An insurer has no right of subrogation against its own insured; subrogation is limited to claims against third parties to whom the insurer owes no duty under the insurance relationship.
- Absent an express agreement to the contrary, permissive occupants/guests of insured premises are treated as within the protection contemplated by the homeowner’s fire coverage for purposes of barring subrogation.
- Summary judgment is proper when the material facts about the occupancy arrangement and insurance expectations are undisputed and the insurer’s subrogation claim fails as a matter of law.

## Conclusion

The court affirmed summary judgment for the permissive occupant, holding that a homeowner’s fire insurer cannot, without an express contrary agreement, recover by subrogation from a rent-free guest or family occupant whose negligence caused the insured fire loss.


Reeder v. Reeder, 217 Neb. 120, 348 N.W.2d 832 (Neb. 1984)