Barnes v. American Standard Ins. Co. of Wis.
297 Neb. 331
| Neb. | 2017Background
- Barnes purchased a motorcycle insurance policy from American Standard that included underinsured motorist coverage; premium withdrawals failed in September 2013.
- American Standard prepared cancellation notices dated September 18, 2013, stating policies would be canceled October 1 unless premiums were paid.
- American Standard produced USPS Form 3877 (Certificate of Mailing) showing three items on September 18, 2013; the "Certified" box was not checked and Barnes’ street address was omitted on the form.
- Barnes swore he never received a cancellation notice and made an underinsured-motorist claim after an October 10, 2013 accident; American Standard denied coverage as the policy was allegedly canceled.
- At summary judgment, the district court found the totality of evidence sufficient to show certified mailing and granted American Standard partial summary judgment, dismissed Barnes’ complaint, and denied Barnes’ cross-motion.
- The Nebraska Supreme Court reversed, holding the insurer failed to carry its burden at summary judgment and factual issues (including whether the notice was mailed by certified mail) must be resolved by the factfinder.
Issues
| Issue | Plaintiff's Argument (Barnes) | Defendant's Argument (American Standard) | Held |
|---|---|---|---|
| Whether the cancellation notice was mailed by certified or registered mail as required by Neb. Rev. Stat. § 44-516(1) | Barnes contends he never received notice and that the evidence does not prove certified mailing | American Standard says Form 3877, mailing procedures affidavits, tracking numbers and corroborating documents show certified mailing | Reversed: insurer did not prove certified mailing as a matter of law; material factual dispute remains for the trier of fact |
| Whether the district court properly resolved competing inferences on summary judgment | Barnes argues inferences must be drawn in his favor and summary judgment was improper | American Standard argues circumstantial evidence and habit evidence suffice to meet statutory proof requirement | Held for Barnes: court erred by resolving factual disputes and favoring inferences for the moving party at summary judgment |
| Whether Form 3877 and accompanying evidence create a presumption of certified mailing sufficient to satisfy statutory requirement | Barnes argues the defects (unchecked certified box, missing street address) defeat any presumption and that Form 3877 alone only proves mailing, not certified service | American Standard relies on Form 3877 plus habit evidence to establish certified mailing and cites tax and other cases recognizing evidentiary value of Form 3877 | Court held Form 3877 alone (especially with defects) does not establish certified mailing at summary judgment; alternative evidence must be weighed by factfinder |
| Proper allocation of burden on summary judgment when statutory mailing requirement is asserted | Barnes notes insurer bears burden to show effective cancellation prior to loss and thus must prove certified mailing | American Standard attempts to shift burden by relying on documentary and procedural evidence to meet its burden | Court reaffirmed insurer’s burden at summary judgment and reversed grant of summary judgment for insurer |
Key Cases Cited
- Midland Properties v. Wells Fargo, 296 Neb. 407 (standard for appellate review of summary judgment)
- Daniels v. Allstate Indemnity Co., 261 Neb. 671 (insurer bears burden to establish effective cancellation before loss)
- Houska v. City of Wahoo, 235 Neb. 635 (proof of statutory mailing may be shown by customary mailing procedure but fact issue for trier of fact)
- Sanders v. Mittlieder, 195 Neb. 232 (registered or certified mail facilitates proof of receipt)
- Ragan v. Columbia Mutual Ins. Co., 183 Ill. 2d 342 (insurer must maintain proof of mailing on recognized USPS form; statute’s balance and low threshold of proof discussed)
- Coleman v. C.I.R., 94 T.C. 82 (Form 3877 defects and evidentiary effect discussed in tax context)