Barnes v. American Standard Ins. Co. of Wis.
297 Neb. 331
| Neb. | 2017Background
- In June 2013 Barnes purchased three vehicle policies from American Standard, including a motorcycle policy with underinsured motorist (UIM) coverage.
- American Standard prepared cancellation notices on September 18, 2013, saying policies would be canceled October 1 for nonpayment; American Standard contends notices were mailed by certified mail; Barnes says he never received them.
- On October 10, 2013, Barnes was injured by an underinsured motorist, recovered $100,000 from the tortfeasor’s carrier, and claimed additional UIM benefits from American Standard.
- American Standard denied coverage asserting the motorcycle policy had been validly canceled for nonpayment under Neb. Rev. Stat. § 44-516(1).
- The district court granted American Standard’s partial summary judgment, finding certified-mailing compliance based on Form 3877 and habit evidence, and dismissed Barnes’ complaint; Barnes appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the insurer mailed the cancellation by certified or registered mail as required by § 44-516(1) | Barnes: No direct proof of certified mailing; he never received notice; defects in Form 3877 create a factual dispute | American Standard: Form 3877, mailing procedures, tracking numbers, and habit evidence show certified mailing | Court: Reversed district court — insurer did not meet burden on summary judgment; factual issue remains for trier of fact |
| Proper allocation of burdens on summary judgment when statutory mailing requirement is implicated | Barnes: Insurer must prove compliance before summary judgment; inferences must be drawn for nonmovant | American Standard: Its evidence (Form 3877 and affidavits) sufficed to establish mailing as a matter of law | Court: Insurer bears burden; on summary judgment inferences go to nonmovant (Barnes); insurer’s evidence was insufficient to obtain judgment as a matter of law |
| Evidentiary weight of Postal Service Form 3877 and tracking numbers | Barnes: An incomplete Form 3877 (certified box unchecked, street address missing) does not prove certified mail | American Standard: Form 3877 plus habit evidence and tracking numbers support certified mailing | Court: Form 3877 without certified indication only shows mailing evidence; tracking numbers do not equate to certified service; dispute precludes summary judgment |
| Reliance on tax-case authority (e.g., Coleman) to support presumption from defective Form 3877 | Barnes: Tax cases are distinguishable and do not shift summary judgment burdens here | American Standard: Coleman and similar authorities permit inference of proper mailing despite defects | Court: Tax cases are inapt at summary judgment posture; Coleman was decided after trial and different burden allocation; not controlling here |
Key Cases Cited
- Midland Properties v. Wells Fargo, 296 Neb. 407 (standard for reviewing 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 can be established by customary mailing procedures but is for trier of fact)
- Coleman v. C.I.R., 94 T.C. 82 (tax-court treatment of defective Form 3877 after trial; limited applicability)
- United States v. Ahrens, 530 F.2d 781 (presumption of regularity for properly completed postal evidence)
- Ragan v. Columbia Mut. Ins. Co., 183 Ill. 2d 342 (interpreting insurer’s low threshold proof requirement and limits on substituting other evidence for prescribed mailing proof)