Title: Feather v. State Farm Fire and Cas.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Feather v. State Farm Fire and Cas.1994 WY 48872 P.2d 1177Case Number: 93-133Decided: 04/26/1994Supreme Court of Wyoming
Scott 
A. FEATHER,

Appellant 
(Plaintiff),

 

v.

 

STATE 
FARM FIRE AND CASUALTY, a foreign corporation; and Max Jones, d/b/a Max Jones 
Agency,

Appellees 
(Defendants).

 

Appeal 
from the District Court, Natrona County,

Dan 
Spangler, J.

 

Representing 
Appellant:

Patrick 
Dixon, Casper.

Representing 
Appellee:

John 
I. Henley and Wendy S. Eberle of Vlastos, Brooks & Henley, P.C., 
Casper.

 

Before 
MACY, C.J., THOMAS, CARDINE and TAYLOR, JJ., and ROONEY, J. 
(Retired).

TAYLOR, 
Justice.

[¶1]      A putative 
insured contends that the district court erred in granting summary judgment in 
this dispute concerning the existence of insurance coverage. The putative 
insured claims he orally arranged for insurance coverage by informing an agent 
of a vehicle acquisition. The insurer never issued a policy for the vehicle and 
the putative insured never paid any premiums for insuring that vehicle. One year 
later, however, the putative insured sought indemnification after being involved 
in an accident. The insurer denied coverage. The district court granted summary 
judgment in favor of the insurer and the agent.

[¶2]      We 
affirm.

I. 
ISSUES

[¶3]      Appellant, the 
putative insured, Scott A. Feather, identifies these issues: 

1. 
Was the trial court in error in concluding that policy # [S]08-6996-EO8-50 had 
been effectively canceled?

2. 
Was there a genuine issue of material fact as to whether the Max Jones Agency 
bound coverage on the 1956 GMC?

3. 
What is the extent of the insured's duty to read [the insurance 
contract]?

[¶4]      Appellees, the 
insurer, State Farm Fire and Casualty, and the agent, Max Jones Agency, 
rephrase:

1. 
The trial court correctly determined that there was no genuine issue of material 
fact regarding the cancellation of policy number 
SO8-6996-EO8-50.

2. 
The trial court correctly determined that there was no genuine issue of material 
fact as to whether the Max Jones Agency bound coverage on the 1956 GMC 
pickup.

3. 
The trial court correctly determined that an insured has a duty to read and, if 
necessary, reject his policy within a reasonable time, and that Appellant's 
failure to inspect his policy properly entitled Appellees to summary 
judgment.

II. 
FACTS

[¶5]      In May of 1990, 
Scott A. Feather (Feather) and his wife insured two vehicles with State Farm 
Fire and Casualty (State Farm). Feather obtained the insurance through State 
Farm's agent, the Max Jones Agency (Jones). State Farm issued policy number SO8 
6996-EO8-50 to insure a 1965 Chevrolet pickup and policy number SO8 6997-EO8-50 
to insure a 1977 Ford Pinto sedan. The coverage provided for each vehicle was 
detailed on a separate "Declarations Page" which was to be attached by the 
insured to a "policy booklet" containing the terms of the contract of insurance. 
Each policy was effective for a six month period. Renewal notices which directed 
the payment of additional premiums to maintain coverage were mailed to Feather 
prior to the expiration of each six month period. Each renewal notice 
specifically identified the policy number, the vehicle insured by that policy, 
the type of coverage provided, and the amount of premium to be paid. Feather 
promptly paid these premiums.

[¶6]      In March of 1991, 
Feather telephoned Jones to request specific changes in insurance coverage. 
Feather had replaced the 1977 Ford Pinto with a 1985 Chevrolet Monte Carlo 
sedan. On March 19, 1991, State Farm reissued policy number SO8 6997-EO8-50B to 
insure the 1985 Chevrolet Monte Carlo. During the same conversation, Feather 
discussed canceling or suspending coverage for the 1965 Chevrolet pickup while 
he had extensive repair work completed. The agent recommended suspending 
coverage during this period so that a multiple car discount would remain in 
effect. After Feather's wife signed an authorization form, State Farm suspended 
policy number SO8 6996-EO8-50 which insured the 1965 Chevrolet pickup. The 
suspension of coverage became effective on March 20, 1991. The authorization 
form specifically notes: "Vehicle is in the body shop. Will reinstate coverage 
as soon as repairs are made."

[¶7]      Feather contends 
that in late April of 1991, he again telephoned Jones to request a change in 
insurance coverage. Feather had purchased a 1956 GMC pickup. Feather claims that 
he spoke to an unidentified employee of Jones and requested coverage for the 
1956 GMC pickup. Jones has no record of the conversation and State Farm never 
issued a policy of insurance to Feather for a 1956 GMC 
pickup.

[¶8]      Six months after 
insurance coverage for the 1965 Chevrolet pickup was suspended, State Farm 
mailed a notice to Feather that policy number SO8 6996-EO8-50 was being 
canceled. The notice stated that since Feather had not requested reinstatement 
of the policy, it was being canceled and a premium credit of $28.72 would be 
returned. Feather denies receiving the letter which was dated September 24, 
1991. The check for the premium credit, which was apparently mailed separately, 
was cashed and deposited in Feather's account on April 9, 
1992.

[¶9]      On April 1, 1992, 
Feather was involved in an accident while driving the 1956 GMC pickup. Feather 
filed a claim for indemnification with State Farm. State Farm, however, denied 
coverage because no policy had been issued for that vehicle. 

[¶10]   On September 4, 1992, Feather filed 
a complaint seeking, in part, to recover damages from State Farm and Jones. 
Feather alleged that State Farm had breached the contract of insurance by 
refusing to provide coverage for the April 1, 1992 accident. Feather also 
contended that State Farm had breached the implied covenant of good faith and 
fair dealing by failing to properly investigate its coverage responsibilities 
for the April 1, 1992 accident. Feather alleged that Jones had breached its duty 
of due care and diligence by negligently handling the application for insurance 
for the 1956 GMC pickup. Finally, Feather sought a declaratory judgment to 
determine if a contract was created to provide insurance coverage for the 1956 
GMC pickup.

[¶11]   The district court granted summary 
judgment in favor of State Farm and Jones. The district court determined that 
Feather had failed to exercise diligence in reviewing his insurance 
coverage.

III. 
DISCUSSION

[¶12]   Summary judgment is proper if we 
conclude there is no genuine issue of material fact and the moving party is 
entitled to a judgment as a matter of law. W.R.C.P. 56(c). A fact is material if 
it would establish one of the essential elements of a cause of action or defense 
asserted by either party. Moore v. Continental Ins. Co., 813 P.2d 1296, 
1299 (Wyo. 1991). Summary judgment is not appropriate to resolve factual 
conflicts; therefore, the reviewing court does not weigh evidence as a fact 
finder. Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211, 216 
(Wyo. 1994); Cordova v. Gosar, 719 P.2d 625, 637-38 n. 6 (Wyo. 1986). We 
review the record in the light most favorable to Feather as the party who 
opposed the motion, affording him all beneficial inferences which may reasonably 
be drawn from the affidavits, depositions, and exhibits presented as facts. 
Wilder, 868 P.2d  at 216; Keehn v. Town of Torrington, 834 P.2d 112, 114 (Wyo. 1992). Interpretation of an unambiguous contract presents an 
issue of law which may be appropriately determined by summary judgment. 
Doctors' Co. v. Insurance Corp. of America, 864 P.2d 1018, 1023 (Wyo. 
1993).

[¶13]   Feather asserts that coverage for 
the 1956 GMC pickup should be found under policy number SO8 6996-EO8-50 which 
insured the 1965 Chevrolet pickup. This policy provided coverage for the use of 
other cars, including a "newly acquired car * * *." The term "newly acquired 
car" was specifically defined:

Newly 
Acquired Car 
- means a car newly owned by you or your 
spouse if it:

1. 
replaces your car; or

2. 
is an added car and:

a. 
if it is a private passenger car, we insure all other 
private passenger cars, or

b. 
if it is other than a private passenger car, we insure all 
cars

owned 
by you and your spouse on the date of its delivery 
to you or your spouse;

but 
only if you or your spouse:

1. 
tell us about it within 30 days after its delivery to you or 
your spouse; and

2. 
if you or your spouse has more than one of our 
car policies, tell us which one is to apply; 
and

3. 
pay us any added amount due.

(Emphasis 
in original.)

[¶14]   The unambiguous language of this 
portion of the policy directs a conclusion that State Farm had no coverage 
obligation for the 1956 GMC pickup at the time of the accident. Even if we 
assume Feather notified Jones about the delivery of the 1956 GMC pickup within 
thirty days, and notified Jones which policy of insurance was to apply to the 
1956 GMC pickup, there is no evidence that Feather paid any premium for coverage 
of the 1956 GMC pickup during the nearly one year that he owned the vehicle 
prior to the accident. The failure to comply with all of the conditions set 
forth in the "newly acquired car" clause means that there can be no coverage for 
the 1956 GMC pickup under policy number SO8 6996-EO8-50. Wall v. Ranger Ins. 
Co., 188 Ga. App. 754, 374 S.E.2d 333, 335 (1988); Renda v. Brown, 
563 So. 2d 328, 331, 333 (La. App. 1990). See also James L. Isham, 
Annotation, Construction and Application Of "Automatic Insurance" or "Newly 
Acquired Vehicle" Clause ("Replacement," and "Blanket," or "Fleet" Provisions) 
Contained in Automobile Liability Policy, 39 A.L.R.4th 229 
(1985).

[¶15]   Furthermore, Feather does not 
dispute that he agreed to suspend policy number SO8 6996-EO8-50. The suspension 
of coverage became effective on March 20, 1991 after Feather's wife signed the 
authorization form. At the time Feather acquired the 1956 GMC pickup in late 
April of 1991, no coverage was available under policy number SO8 6996-EO8-50. 
Additionally, policy number SO8 6996-EO8-50 had been canceled when the accident 
occurred for which Feather seeks indemnification in April of 
1992.

[¶16]   Feather challenges that he was 
misled into believing that the 1956 GMC pickup was covered by the increased 
premiums shown on his renewal and premium notices. This argument is without 
merit. Each renewal notice identifies the vehicle insured by that policy. Each 
premium notice identifies the vehicle for which a premium is due. None of these 
notices made reference to coverage for a 1956 GMC pickup. Feather failed to 
fulfill his duty to read. Darlow v. Farmers Ins. Exchange, 822 P.2d 820, 
828-29 (Wyo. 1991).

[¶17]   Finally, Feather argues that the 
notice to Jones of the acquisition of the 1956 GMC pickup formed an oral 
contract in anticipation of a premium to procure insurance coverage. Feather 
relies upon this court's decision in Hursh Agency, Inc. v. Wigwam Homes, 
Inc., 664 P.2d 27 (Wyo. 1983) to support his position. In Hursh Agency, 
Inc., the putative insured telephoned a principal in the agency on a 
Saturday to obtain coverage. Id. at 30. The putative insured suffered a 
loss on the following Tuesday. Id. However, the agency had failed to get 
an acknowledgement from an insurer that coverage existed before the loss 
occurred. Id. at 34. This court affirmed an award of damages for breach 
of contract. Id. See also Hoiness-LaBar Ins. v. Julien Const. Co., 
743 P.2d 1262, 1273 (Wyo. 1987).

[¶18]   Hursh Agency, Inc. and 
Hoiness-LaBar Ins. represent one point on a continuum which reflects the 
duties of the insured and the insurer during the tenure of their relationship. 
Moore, 813 P.2d  at 1296, reflects another point in this continuum. 
Moore addressed the duty of a putative insured to mitigate his damages by 
exercising reasonable diligence and care. Id. at 1300. The putative 
insured was informed by the insurer that a homeowner's policy was being 
canceled. Id. at 1298-99. The putative insured asked an agent to 
investigate other coverage options but failed to obtain coverage. Id. at 
1299. Four months later, the home was damaged in a fire. Id. The putative 
insured sought damages for the wrongful cancellation of coverage. Id. at 
1296. This court, however, held that the putative insured could not recover 
because he had failed to act to avoid the loss. Id. at 
1301.

[¶19]   In Georgia Cas. & Sur. Co. 
v. Sanders, 168 Ga. App. 402, 309 S.E.2d 400 (1983), the court addressed the 
duty of an insured to examine the coverage obtained from an insurer. The insured 
had coverage for three vehicles with a single insurer. One of the covered 
vehicles was a 1974 Ford F600 truck. However, the insured sold the 1974 Ford 
F600 truck and replaced it with a 1975 Ford F700 truck. Id. The insured 
contended the insurer had been informed of the change but the change was not 
reflected on the insured's policy. Id. at 400-01. More than a year after 
the insured purchased the 1975 Ford F700 truck, the insured was involved in an 
accident and sought indemnification from the insurer. Id. at 400. The 
insurer denied coverage. Id. The Court of Appeals of Georgia ruled the 
insured had a duty to examine a policy of insurance and reject or correct the 
policy, if necessary, within a reasonable time. Id. at 401. The court 
held that because of the insured's failure to inspect the policy and notice the 
omission, the insurer had no coverage obligation. 
Id.

[¶20]   Feather's conduct reflects the same 
lack of reasonable diligence which prevented recovery in Moore and 
Sanders. Feather never paid a premium to insure a 1956 GMC pickup. 
Feather never had a policy of insurance from State Farm to insure a 1956 GMC 
pickup. For nearly one year, Feather failed to inquire about coverage for the 
1956 GMC pickup or provide notice to Jones or State Farm of the omission. We 
hold Feather failed to exercise reasonable diligence in determining the extent 
of the insurance coverage he had obtained from Jones and State Farm. 
Moore, 813 P.2d  at 1301; Sanders, 309 S.E.2d  at 
401.

IV. 
CONCLUSION

[¶21]   Feather's lack of reasonable 
diligence precludes recovery under any of the theories he advanced. State Farm 
and Jones are entitled to summary judgment as a matter of 
law.

[¶22]   The judgment of the district court 
is affirmed.