United Financial Casualty Company v. Reynolds et al

Filing 32

ORDER granting 14 Plaintiff's Motion for Summary Judgment. An appropriate Judgment shall accompany this Order. Signed by Chief Judge Brian S. Miller on 02/22/2013. (jak)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF ARKANSAS
JONESBORO DIVISION
UNITED FINANCIAL CASUALTY CO.
v.

PLAINTIFF

CASE NO. 3:12CV00192 BSM

RONALD P. REYNOLDS et al.

DEFENDANTS
ORDER

Plaintiff United Financial Casualty Company’s (“UFC”) motion for summary
judgment [Doc. No. 14] is granted.
I. FACTUAL BACKGROUND
In 2005, Carl’s Furniture Center (“Carl’s”) purchased an insurance policy from UFC
insuring a 2003 Honda Civic. The insurance application listed Carl’s address as P.O. Box
53, Paragould, Arkansas, 72450, and the policy issued by UFC contained the same address.
Over the next seven years, the policy was renewed several times, with occasional lapses in
coverage ranging from two days to fifty two days. On August 23, 2011, the policy was again
renewed with a termination date of February 23, 2012. A renewal notice was mailed on
January 21, 2012, requesting payment of the premium before the expiration date of February
23, 2012. A second notice was mailed on February 7, 2012. The second notice advised that
the policy would expire on February 23, 2012, at 12:01 a.m. unless payment was received
before that date. No payment was received and the policy expired. M.F. Block, Inc., the
local agency that sold the policy to Carl’s, then notified Carl’s by mail that its insurance
coverage had expired and that Carl’s was not insured.

On April 14, 2012, Carl’s president, Ronald Reynolds, was involved in an accident
with Victor Hickox while driving the Honda Civic. Hickox sued Reynolds in state court and
Reynolds demanded coverage under the UFC insurance policy. UFC then filed this case
against Reynolds and Hickox seeking a declaration that no coverage exists under the policy
and that it has no duty to defend or pay damages for the accident in question. On October
23, 2012, UFC moved for summary judgment asserting that there are no disputes of material
fact and that it is entitled to judgment as a matter of law.
II. LEGAL STANDARD
Summary judgment is appropriate when the record, viewed in a light most favorable
to the nonmoving party, demonstrates that there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a);
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby Inc., 477
U.S. 242, 249-50 (1986). Once the moving party demonstrates that there is no genuine
dispute of material fact, the non-moving party may not rest upon the mere allegations or
denials in his pleadings. Holden v. Hirner, 663 F.3d 336, 340 (8th Cir. 2011). Instead, the
non-moving party must produce admissible evidence demonstrating a genuine factual dispute
that must be resolved at trial. Id. Importantly, when considering a motion for summary
judgment, all reasonable inferences must be drawn in the light most favorable to the
nonmoving party. Holland v. Sam's Club, 487 F.3d 641, 643 (8th Cir. 2007). Additionally,
the evidence is not weighed, and no credibility determinations are made. Jenkins v. Winter,
540 F.3d 742, 750 (8th Cir. 2008).
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III. DISCUSSION
UFC moves for summary judgment, stating that the insurance policy expired by its
own terms when the renewal premium was not paid. In response, Reynolds states that UFC
failed to give him sixty days notice that it was not renewing the policy, which he claims was
required. He also states that he did not receive any notices from UFC because the address
listed on the policy was incorrect. Summary judgment is granted because the policy expired
when the premium went unpaid and notice was sufficient.
The parties agree that the insurance policy at issue was a commercial policy. The law
is clear that, “[e]xcept in case of nonpayment of premium, an insurer shall renew a policy
unless a written notice of nonrenewal is mailed at least sixty (60) days prior to the expiration
date of the policy....” Ark. Code. Ann. § 23-79-307(7). Although Reynolds asserts that UFC
had to provide a sixty day notice that it did not intend to renew the policy, this is not required
when a policy holder fails to pay the premium. The record is clear that Reynolds failed to
pay the premium.
To avoid summary judgment for his failure to pay the premium, Reynolds asserts that
UFC’s notices to him were insufficient because the address listed on the policy was incorrect.
The problem with this argument is that the undisputed facts indicate that the mailing address
used by UFC is the same address listed on the policy since it originated in 2005. Further, to
prove notice, even for cancellation, intent not to renew, or when notifying an insured of
grounds for cancellation, an insurer is only required to demonstrate proof of mailing to the
address listed on the policy. See Ark. Code. Ann. § 23-89-306. Summary judgment is
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therefore granted.
An appropriate judgment shall accompany this order.
IT IS SO ORDERED this 22nd day of February 2013.

________________________________
UNITED STATES DISTRICT JUDGE

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