Barnes v. American Standard Ins. Co. of Wis.
297 Neb. 331
Neb.2017Background
- On June 7, 2013, Barnes purchased three auto policies from American Standard, including a motorcycle policy with underinsured motorist (UIM) coverage.
- American Standard prepared cancellation notices dated September 18, 2013, asserting nonpayment and claiming cancellation effective October 1 unless premiums were paid; Barnes says he never received them.
- American Standard produced USPS Form 3877 (Certificate of Mailing) showing three items with tracking numbers but did not check the "Certified" box and omitted Barnes’ street address on the form.
- Barnes was injured in a motorcycle accident on October 10, 2013, recovered $100,000 from the tortfeasor’s insurer, and claimed additional UIM benefits from American Standard, which denied coverage as the policy allegedly had been canceled.
- The district court granted American Standard’s partial summary judgment that it had mailed cancellation by certified mail and dismissed Barnes’ complaint; Barnes appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the cancellation notice was mailed by certified/registered mail as required by Neb. Rev. Stat. § 44-516(1) | Barnes: no direct proof he received certified notice; defects in Form 3877 create a genuine issue for trial | American Standard: Form 3877, printing of notices, mailing procedures and tracking numbers show certified mailing | Reversed: evidence insufficient for summary judgment; genuine issue of material fact remains whether certified mail was used |
| Who bears the burden to prove statutory mailing compliance | Barnes: insurer must prove effective cancellation; he need not prove nonreceipt at summary judgment | American Standard: relied on Form 3877 and habit evidence to meet burden | Held: burden on insurer to establish compliance; American Standard did not meet it on summary judgment |
| Evidentiary weight of Form 3877 with defects (unchecked certified box, missing street address) | Barnes: defective Form 3877 does not establish certified mailing | American Standard: Form 3877 plus habit evidence suffices to infer certified mailing | Held: defective Form 3877 standing alone does not prove certified mail; alternative evidence may be considered but creates factual issue for trier of fact |
| Proper summary judgment approach when factual inferences conflict | Barnes: inferences must be drawn for nonmoving party; district court improperly credited insurer’s inferences | American Standard: district court could infer certified mailing from the record | Held: appellate court reverses because district court improperly resolved factual disputes in favor of the moving party instead of leaving them for the jury |
Key Cases Cited
- Daniels v. Allstate Indemnity Co., 261 Neb. 671 (insurer bears burden to prove effective cancellation)
- Houska v. City of Wahoo, 235 Neb. 635 (customary mailing procedures may create an inference of compliance but leave factual question for trier of fact)
- Sanders v. Mittlieder, 195 Neb. 232 (registered/certified mail requirement facilitates proof of receipt)
- Ragan v. Columbia Mutual Insurance Co., 183 Ill. 2d 342 (insurer must maintain recognized USPS proof of mailing; statute balances insured protection and insurer burden)
- Coleman v. Commissioner, 94 T.C. 82 (defective Form 3877 does not automatically carry presumption of proper certified mailing; posture distinctions matter)