Ex Parte Alfa Mut. General Ins. Co.
M. Clay Alspaugh and Benjamin E. Baker, Jr., of Hogan, Smith & Alspaugh, P.C., Birmingham, for respondent.
OPINION
LYONS, Justice.
Willetha Renee Spriggs sued Alfa Mutual General Insurance Company (“Alfa“) after
Spriggs appealed to the Court of Civil Appeals; that court reversed the summary judgment entered in favor of Alfa, but affirmed the summary judgment in favor of Compass Bank. Spriggs v. Compass Bank, 742 So.2d 178 (Ala.Civ.App.1997). Spriggs did not request certiorari review as to her claim against Compass Bank. Alfa petitioned for certiоrari review, and we granted its petition to determine whether the Court of Civil Appeals erred in holding that a question of fact exists as to whether Spriggs received notice of the rejection of her application for insurance.
The principles of law applicable to a motiоn for summary judgment are well settled. To grant such a motion, the trial court must determine that the evidence does not create a genuine issue of material fact and that the movant is entitled to a judgment as a matter of law.
In our review of a summary judgment, we apply the same standard as the trial court. Ex parte Lumpkin, 702 So.2d 462, 465 (Ala.1997). Our review is subject to the caveat that we must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Hanners v. Balfour Guthrie, Inc., 564 So.2d 412, 413 (Ala.1990). With that standard in mind, we review the evidence in this case.
In 1994, Cоmpass Bank lent Spriggs money to purchase her home. As a condition of that loan, Compass Bank required Spriggs to obtain insurance on the home, and Spriggs applied for insurance with Alfa. Alfa issued her an “Evidence of Insurance Form,” which she presented at the closing of the loan to satisfy the insurance requirement. At the closing, Spriggs‘s attorney gave a $350 check as payment for the first year‘s premium.
Spriggs moved into her home on March 3, 1994. It was destroyed by fire on April 30, 1994. When she went to her local Alfa office to make a claim, she was informed that Alfa had rejected her application and that she had no homeowner‘s insurance. Alfa further informed her that it had sent a letter to both her and Compass Bank notifying them of the rejection. Both Spriggs and Compass Bank denied ever having received a letter giving such notice.
Alfa, in its motion for summary judgment, claimed the defense of cancellation. It argued that it had canceled Spriggs‘s insurance coverage—the coverage temporarily provided by the “Evidence of Insurance Form“—by rejecting her application for a homeowner‘s policy; that it had rejected Spriggs‘s application before her fire loss occurred; and that it had given her timely and proper notice of that rejection and cancellation. In its motion, Alfa cited
To prove that it mailed the notice of cancellation to the address on the application, Alfa presented a copy of the letter of cancellation—which Alfa claimed it sent to Spriggs—and Spriggs‘s admission that the letter had her correct address on it. To prove that the letter was properly mailed, Alfa presented the testimony of Kim Lolley, a senior mail clerk employed by Alfa. Lolley thoroughly explained Alfa‘s standard operating procedure in handling letters of rejection and cancellation. The Court of Civil Apрeals aptly summarized her testimony:
“She stated that all such letters are prepared with an original and one copy, and that they are placed in a designated basket. The typed letters are then removed from the basket by either the supervisor of mail operations or a senior mаil clerk and the original and the copy are examined to verify that both have the same address and date. The original is then placed in an envelope addressed to the address found on the applicant‘s declaration page. The letter is then placed through a postal machine, which seals the envelope and places postage on it, and the letter is then placed in a tray supplied by the United States Postal Service. The letter is then placed on the loading dock and is picked up by the United States Postal Service. The copy of the letter is initiаled to verify that the proper procedure was followed, and the copy is placed in a ‘drawer type assembly.’ When the drawer becomes full, the copies are taken to the basement and filed by date; the copies are retained for seven years. The copy of thе cancellation letter to Spriggs was stamped with Lolley‘s name and was date-stamped ‘February 24, 1994‘—it was offered as an exhibit to Lolley‘s affidavit.”
Spriggs, 742 So.2d at 180. Alfa also produced the affidavit of one of its customerservice representatives, who stated that she returned the $350 check from Spriggs‘s attorney to that attorney‘s paralegal on March 9, 1994.
Spriggs, in her attempt to defeat Alfa‘s motion for summary judgment, relied on her denial and on Compass Bank‘s denial of receipt of notice. Alfa, again citing
Based upon the evidence and arguments summarized here, the trial court entered a summary judgment in favor of Alfa. The Court of Civil Appeals reversed that judgment. Two judges of that court stated that although Spriggs‘s denial of receipt of notice would not have been sufficient of itself to defeat the summary judgment motion, her denial and Compass Bank‘s denial of receipt, taken together, were sufficient to create a question of fact as to whether the notice of cancellation was properly mailed, i.e., as to whether Alfa had made the mailing contemplated by
We granted Alfa‘s petition for certiorari review to clarify the apparent confusion regarding proof of mailing required by
Shortly before the Legislature adopted the act that has been codified at
In Cochran, this Court stated that the common-law rule is that when the addresseе denies receiving a letter, the question whether the letter was mailed and received is a jury question. The Court stated:
“A letter properly addressed, stamped, and mailed is presumed to have been received in due course. Evidence denying the receipt of the letter does not render evidence of its mailing inadmissible. Neither is conclusive. Whether it was so mailed and received becomes a jury question.”
Cochran, 219 Ala. at 83, 121 So. at 67 (emphasis added). This common-law rule is substantially different from the rule set out in
Alfa produced evidence indicating that it properly mailed the notice of cancellation, with the proper address, and that it was not returned. However, Spriggs denied receiving the notice. Under the common-law rule, her denial created а question for the factfinder to determine. Therefore, the Court of Civil Appeals properly concluded that whether Alfa mailed its notice of rejection and whether Spriggs received that notice are questions of fact for the jury. Thus, the judgment of the Court of Civil Appeals is due to be affirmed.
AFFIRMED.
SEE, J., concurs in the result.
MADDOX, J., recuses himself.
On Application for Rehearing
LYONS, Justice.
Alfa argues that the language of the policy that it says it rejected is the same as the language of
“`A clause in a policy of insurance providing that the mere mailing of notice of canсellation is sufficient to cause cancellation of the policy is so harsh in its nature, and potentially contains such elements of possible disaster to an insured, that the proof of the mailing of such notice should be of a definite and specific character.‘”
43 Ala.App. at 209, 186 So.2d at 741.
In adopting (and clarifying) the Williams rule in Harrell, this Court applied the common-law rule that we used in the original opinion in this present case. This common-law rule was used in Harrell despite language in the insured‘s policy that is almost exactly like the language in Alfa‘s policy. Because we are required, under the doctrine of stare decisis, to apply the common-law rule as we aрplied it in the original opinion in this case, we cannot accept Alfa‘s argument.
Alfa next argues that there is no legislative history showing that
Alfa next argues that this Court has applied
Next, Alfa points out that in Montz v. Mead & Charles, Inc., 557 So.2d 1 (Ala. 1987), and Currie v. Great Cent. Ins. Co., 374 So.2d 1330 (Ala.1979), this Court affirmed judgments in favor of the insurer when the insured denied receipt of notice. Alfa argues that these cases are directly on point. However, a close reading of Montz shows that the insured did not deny receiving notice, but instead merely stated that “he [did] not recall receiving notice.” 557 So.2d at 5. That is not the same as
Finally, Alfa argues that the case from which we cited the common-law rule regarding proof of mailing, Corinth Bank & Trust Co. v. Cochran, 219 Ala. 81, 121 So. 66 (1929), was not a contract case аnd therefore has no application to the present case. However, as we noted in the original opinion, this Court embraced the Cochran rule in Harrell, an action for a declaratory judgment on the question whether the policy had been canceled. Therefore, this argument also has no merit.
The application for rehearing is overruled.
APPICATION OVERRULED.
HOOPER, C.J., аnd HOUSTON, COOK, SEE, BROWN, and JOHNSTONE, JJ., concur.
MADDOX, J., recuses himself.