Barnes v. American Standard Ins. Co. of Wis.
297 Neb. 331
Neb.2017Background
- Barnes purchased three vehicle policies from American Standard in June 2013, including a motorcycle policy with underinsured motorist (UIM) coverage.
- American Standard prepared cancellation notices for all three policies on September 18, 2013, alleging nonpayment; notices stated cancellation effective October 1 unless premium paid.
- American Standard produced USPS Form 3877 (Certificate of Mailing) showing three items with tracking numbers; the "Certified" box was not checked and Barnes’ street address was omitted on the form. Barnes says he never received any cancellation notice.
- Barnes was injured in a motorcycle collision on October 10, 2013, collected $100,000 from the tortfeasor’s insurer, and sought UIM benefits from American Standard, which denied coverage as the policy was allegedly cancelled before the loss.
- At a summary judgment hearing the district court found American Standard had complied with Neb. Rev. Stat. § 44-516(1) by sending certified-mail cancellation notices and granted defendant’s motion, dismissed Barnes’ complaint, and denied Barnes’ motion; Barnes appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the cancellation notice was mailed by certified or registered mail as required by § 44-516 | Barnes: No direct proof of certified mailing; he did not receive notice; Form 3877 is defective and does not show certified mail | American Standard: Form 3877 with tracking numbers plus employee affidavits and mailing habit evidence show certified mailing | Reversed: evidence did not establish certified mailing as a matter of law; genuine issue of material fact remains |
| Which party bears burden to prove statutory mailing and how to apply summary judgment standards | Barnes: Insurer bears burden to prove effective cancellation; inferences must favor nonmovant at summary judgment | American Standard: Relied on Form 3877 and habit evidence to meet burden | Court: Insurer bears burden; on summary judgment inferences must favor Barnes; insurer did not meet burden to warrant judgment as a matter of law |
| Evidentiary weight of USPS Form 3877 and tracking numbers to prove certified mail | Barnes: Form 3877 without the certified box checked and missing street address only proves mailing, not attachment of certified service; tracking numbers are insufficient | American Standard: Tracking numbers and Form 3877, plus procedural affidavits, support inference of certified mailing | Held: Form 3877 alone (especially with defects) does not prove certified mail; tracking numbers do not equate to certified service; factual dispute remains for trier of fact |
Key Cases Cited
- Daniels v. Allstate Indem. Co., 261 Neb. 671 (discusses insurer's burden to establish effective cancellation)
- Houska v. City of Wahoo, 235 Neb. 635 (proof of mailing may rest on office custom but creates question for factfinder)
- Coleman v. C.I.R., 94 T.C. 82 (Form 3877 defects discussed in tax context; presumption of regularity depends on proper completion)
- United States v. Ahrens, 530 F.2d 781 (discusses evidentiary weight of properly completed mailing certificates)
- Ragan v. Columbia Mut. Ins. Co., 183 Ill. 2d 342 (insurance cancellation statute: insurer must maintain recognized USPS proof of mailing; alternative evidence cannot subvert statutory balance)