Barnes v. American Standard Ins. Co. of Wis.
297 Neb. 331
| Neb. | 2017Background
- Barnes bought a motorcycle policy (with underinsured motorist coverage) from American Standard in June 2013.
- American Standard prepared cancellation notices dated September 18, 2013, alleging nonpayment, stating policies would cancel October 1 if premiums were not paid.
- American Standard produced Form 3877 (Certificate of Mailing) and employee affidavits; the Form 3877 did not have the "Certified" box checked and lacked Barnes’ street address; Barnes testified he did not receive any cancellation notice.
- Barnes was injured by an underinsured motorist on October 10, 2013, sought underinsured coverage, and American Standard denied the claim asserting the policy had been effectively canceled.
- On cross-motions for partial summary judgment the district court found the balance of evidence showed certified mailing and granted the insurer summary judgment; the Nebraska Supreme Court reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the cancellation notice was mailed by registered or certified mail as required by Neb. Rev. Stat. § 44-516(1) | Barnes: He never received notice; Form 3877 is defective; creates a genuine issue of material fact | American Standard: Form 3877, tracking numbers, and routine mailing affidavits show certified mailing occurred | Reversed district court: no direct proof of certified mailing; evidence insufficient for summary judgment; fact question for trier of fact |
| Which party bears the burden to prove statutory cancellation before loss | Barnes: Insurer must prove compliance; insurer failed its burden | American Standard: Presented evidence of mailing procedures and Form 3877 to satisfy burden | Court: Burden is on insurer; here insurer did not meet its burden as a matter of law on summary judgment |
| Evidentiary significance of Form 3877, tracking numbers, and missing certified checkbox | Barnes: A bare Form 3877 without the certified box checked and missing street address does not prove certified mailing | American Standard: Form 3877 plus habit evidence and tracking numbers support inference of certified mailing | Court: Form 3877 without required markings is at best evidence of mailing only; cannot be resolved in insurer’s favor on summary judgment |
| Appropriateness of relying on tax cases (e.g., Coleman) to supply presumption of mailing | Barnes: Tax-case authority is inapposite given different burdens and procedures | American Standard: Tax cases allow Form 3877 to support mailing presumption even with defects | Court: Tax authorities are distinguishable; summary judgment posture requires inferences for nonmovant, so those cases do not justify ruling for insurer here |
Key Cases Cited
- 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 mailing may be shown by customary mailing procedures but creates a jury question)
- Coleman v. C.I.R., 94 T.C. 82 (Form 3877 can support mailing presumption after trial; not dispositive on summary judgment)
- Ragan v. Columbia Mutual Ins. Co., 183 Ill. 2d 342 (insurer must show proof of mailing on recognized USPS form; statute balances insured protection and low proof threshold for insurers)