Barnes v. American Standard Ins. Co. of Wis.
297 Neb. 331
| Neb. | 2017Background
- Barnes purchased multiple vehicle policies from American Standard, including a motorcycle policy with underinsured motorist coverage.
- American Standard prepared cancellation notices on September 18, 2013, claiming nonpayment and contending notices were mailed by certified mail; Barnes says he never received them.
- A motorcycle collision occurred on October 10, 2013; Barnes recovered $100,000 from the tortfeasor and claimed underinsured benefits from American Standard, which denied the claim as the policy was allegedly canceled.
- At summary judgment, both sides submitted evidence including the USPS Form 3877 (Certificate of Mailing) with the ‘‘Certified’’ box not checked, employee affidavits describing mailing procedures, and Barnes’ affidavit denying receipt.
- The district court credited American Standard’s evidence, granted partial summary judgment for the insurer, denied Barnes’ cross-motion, and dismissed the complaint; Barnes appealed.
Issues
| Issue | Plaintiff's Argument (Barnes) | Defendant's Argument (American Standard) | Held |
|---|---|---|---|
| Was the cancellation effective because notice was mailed by registered or certified mail under Neb. Rev. Stat. § 44-516? | Barnes: No certified-mail proof; he never received notice. | American Standard: Form 3877, tracking numbers, and mailing-habit affidavits show certified mailing. | Reversed district court; material fact remains whether certified mail was used — not resolved on summary judgment. |
| Who bears the burden to prove effective cancellation? | Barnes: insurer must prove compliance. | American Standard: (argued it met burden by producing mailing records and habit evidence). | Insurer bears burden to establish effective cancellation before loss; American Standard did not meet it as a matter of law. |
| Does a defective Form 3877 plus habit evidence prove certified mailing? | Barnes: Defects (unchecked certified box; missing street address) prevent proof; creates triable issue. | American Standard: Defects are minor and corroborated by routine procedures and tracking numbers. | Court: Defects and supporting habit evidence create factual dispute; inferences must be drawn for nonmovant — summary judgment improper. |
| Do tracking numbers on Form 3877 equate to certified-mail service? | Barnes: No; tracking numbers alone do not prove certified service. | American Standard: Tracking numbers indicate certified mailing. | Court: Tracking numbers do not establish certified service; cannot be inferred in insurer’s favor at summary judgment. |
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 practices may create inference of statutory compliance but raise jury question)
- Coleman v. C.I.R., 94 T.C. 82 (Form 3877 defects and habit evidence weighed at trial; not a summary-judgment precedent for insurer’s entitlement)
- United States v. Ahrens, 530 F.2d 781 (properly completed certificates of mailing may give presumption of mailing regularity)
- Horton v. Washington Cty. Tax Claim Bureau, 623 Pa. 113 (Form 3877 is a certificate of mailing that proves mailing but not ancillary services)
- Ragan v. Columbia Mut. Ins. Co., 183 Ill. 2d 342 (statute requires proof on recognized USPS form; insurer may not substitute other evidence to meet statutory form requirement)