Title: Nationwide Mutual Ins. Co. v. J-Mar Machine & Pump, Inc.
Citation: N/A
Docket Number: 1090685
State: Alabama
Issuer: Alabama Supreme Court
Date: June 17, 2011

R e l : 06/17/2011 
Notice: T h i s 
o p i n i o n i s s u b j e c t t o f o r m a l 
r e v i s i o n b e f o r e 
p u b l i c a t i o n i n 
t h e advance 
s h e e t s o f 
Southern Reporter. 
R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e 
Reporter of Decisions, 
Alabama 
A p p e l l a t e 
C o u r t s , 
300 D e x t e r Avenue, Montgomery, Alabama 36104-3741 
((334) 
2 2 9 - 0 6 4 9 ) , o f 
any t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may be made 
b e f o r e t h e 
o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
OCTOBER TERM, 2010-2011 
1090685 
Nationwide Mutual Insurance Company 
v. 
J-Mar Machine & Pump, 
Inc. 
Appeal from J e f f e r s o n C i r c u i t Court 
(CV-05-7158) 
PARKER, 
J u s t i c e . 
N a t i o n w i d e 
M u t u a l 
I n s u r a n c e 
Company 
( " N a t i o n w i d e " ) 
a p p e a l s 
f r o m t h e t r i a l 
c o u r t ' s j u d g m e n t d e n y i n g i t s " r e n e w e d 
m o t i o n f o r a j u d g m e n t 
as a 
m a t t e r 
o f l a w o r , i n 
t h e 
1090685 
a l t e r n a t i v e , 
m o t i o n 
f o r [a] j u d g m e n t 
n o t w i t h s t a n d i n g t h e 
v e r d i c t . "
1 
We r e v e r s e a n d r e n d e r a j u d g m e n t f o r N a t i o n w i d e . 
F a c t s a n d P r o c e d u r a l H i s t o r y 
I n 1 9 9 7 , J-Mar M a c h i n e & Pump, I n c . ( " J - M a r " ) , a vacuum 
and 
c e n t r i f u g a l - p u m p 
r e p a i r 
shop 
l o c a t e d 
i n B i r m i n g h a m , 
p r o c u r e d a c o m m e r c i a l 
l i a b i l i t y a n d p r o p e r t y i n s u r a n c e 
p o l i c y 
("the 
i n s u r a n c e 
p o l i c y " ) 
f r o m 
N a t i o n w i d e 
t h a t 
a f f o r d e d 
$ 1 0 0 , 0 0 0 i n 
p e r s o n a l - p r o p e r t y c o v e r a g e . 
A t i s s u e i n t h i s 
c a s e 
i s t h e c a n c e l l a t i o n o f t h e i n s u r a n c e 
p o l i c y b y 
N a t i o n w i d e . 
The 
p e r t i n e n t p o r t i o n o f t h e i n s u r a n c e p o l i c y s t a t e d : 
"A. C a n c e l l a t i o n 
" 1 . 
The 
f i r s t 
Named 
I n s u r e d 
shown 
i n t h e 
D e c l a r a t i o n s 
[ J - M a r ] 
may 
c a n c e l 
t h i s 
p o l i c y 
b y 
m a i l i n g 
o r 
d e l i v e r i n g 
t o 
[ N a t i o n w i d e ] 
a d v a n c e 
w r i t t e n n o t i c e o f c a n c e l l a t i o n . 
"2. 
[ N a t i o n w i d e ] 
may 
c a n c e l 
t h i s 
p o l i c y 
b y 
m a i l i n g o r d e l i v e r i n g t o [ J - M a r ] 
w r i t t e n n o t i c e o f 
c a n c e l l a t i o n a t l e a s t : 
" a . 
10 d a y s b e f o r e t h e e f f e c t i v e 
d a t e 
o f 
c a n c e l l a t i o n i f [ N a t i o n w i d e ] 
c a n c e l [ s ] 
f o r 
nonpayment o f p r e m i u m ; o r 
1 E f f e c t i v e O c t o b e r 1, 1995, R u l e 50, A l a . R. C i v . P., was 
amended t o rename a " m o t i o n f o r a j u d g m e n t n o t w i t h s t a n d i n g t h e 
v e r d i c t " as a r e n e w e d " m o t i o n f o r 
a j u d g m e n t as a m a t t e r o f 
l a w . " 
2 
1090685 
"b. 30 d a y s b e f o r e t h e e f f e c t i v e 
d a t e 
o f 
c a n c e l l a t i o n i f [ N a t i o n w i d e ] 
c a n c e l [ s ] 
f o r any o t h e r 
r e a s o n . 
"3. 
[ N a t i o n w i d e ] 
w i l l 
m a i l o r d e l i v e r [ i t s ] 
n o t i c e t o [ J - M a r ' s ] 
l a s t 
m a i l i n g 
a d d r e s s known t o 
[ N a t i o n w i d e ] . 
"4. 
N o t i c e 
o f 
c a n c e l l a t i o n 
w i l l 
s t a t e t h e 
e f f e c t i v e 
d a t e o f c a n c e l l a t i o n . The p o l i c y 
p e r i o d 
w i l l e n d on t h a t d a t e . 
"5. I f t h i s 
p o l i c y i s c a n c e l l e d , 
[ N a t i o n w i d e ] 
w i l l 
s e n d 
[ J - M a r ] 
any p r e m i u m 
r e f u n d 
due. I f 
[ N a t i o n w i d e ] c a n c e l [ s ] , t h e r e f u n d w i l l be p r o r a t a . 
I f 
[ J - M a r ] 
c a n c e l s , t h e r e f u n d may be l e s s t h a n p r o 
r a t a . The c a n c e l l a t i o n 
w i l l 
be 
e f f e c t i v e 
e v e n i f 
[ N a t i o n w i d e h a s ] n o t made o r o f f e r e d a r e f u n d . 
"6. I f n o t i c e i s m a i l e d , p r o o f o f m a i l i n g 
w i l l 
be 
s u f f i c i e n t p r o o f o f n o t i c e . " 
I n 
e a r l y 
2004, 
N a t i o n w i d e ' s 
u n d e r w r i t e r 
o r d e r e d 
an 
i n s p e c t i o n o f J - M a r ' s f a c i l i t i e s i n a n t i c i p a t i o n o f i t s y e a r l y 
r e n e w a l o f t h e i n s u r a n c e p o l i c y , w h i c h was up f o r 
r e n e w a l on 
M a r c h 
29, 
2004. 
The 
i n s p e c t i o n 
was 
c o n d u c t e d 
b y 
an 
i n d e p e n d e n t 
s u r v e y o r i n 
M a r c h 2004, a n d t h e i n s p e c t i o n r e p o r t 
was s e n t t o N a t i o n w i d e , w h i c h 
r e c e i v e d i t 
on M a r c h 23, 2004. 
The 
r e p o r t 
i n d i c a t e d 
t h e f o l l o w i n g 
p r o b l e m s 
w i t h 
J - M a r ' s 
f a c i l i t i e s : 
" a l u m i n u m w i r i n g " ; 
" [ s ] p a c e h e a t e r s t h a t a r e 
n o t 
p r o p e r l y 
v e n t e d " ; 
" [ f ] i r e 
e x t i n g u i s h e r s t h a t have n o t b e e n 
s e r v i c e d " ; a n d " [ h ] o u s e k e e p i n g i s p o o r , 
w i t h l a r g e pump a n d 
3 
1090685 
m a c h i n e 
p a r t s 
t h r o u g h 
t h e 
f l o o r 
a r e a 
and 
on 
t h e 
o u t s i d e 
g r o u n d s . " 
The 
i n s u r a n c e 
p o l i c y was 
r e n e w e d on M a r c h 29, 
2004. 
On 
S e p t e m b e r 30, 
2004, N a t i o n w i d e m a i l e d 
J-Mar a 
n o t i c e 
o f 
c a n c e l l a t i o n 
t h a t 
s t a t e d , 
i n 
p e r t i n e n t 
p a r t : 
" T h i s 
i s 
r e q u i r e d 
n o t i c e 
... 
t h a t y o u r p o l i c y i s t e r m i n a t e d 
a t 
12:01 
a.m. 
on 
[November 
1, 
2 0 0 4 ] . " 
The 
n o t i c e 
o f 
c a n c e l l a t i o n 
s t a t e d t h a t t h e i n s u r a n c e 
p o l i c y was 
b e i n g 
t e r m i n a t e d 
b a s e d 
on 
t h e 
" u n f a v o r a b l e 
... 
r e p o r t " 
p r e p a r e d 
by 
t h e 
i n d e p e n d e n t 
s u r v e y o r . 
J - M a r ' s p r e s i d e n t , 
G e r a l d J o n e s , t e s t i f i e d t h a t 
he 
r e c e i v e d 
t h e 
n o t i c e 
o f 
c a n c e l l a t i o n and 
t h a t 
he knew 
t h a t 
N a t i o n w i d e was 
g o i n g t o c a n c e l 
t h e i n s u r a n c e 
p o l i c y e f f e c t i v e 
November 1, 2004. 
J o n e s t h e n t e l e p h o n e d h i s l o c a l N a t i o n w i d e 
a g e n t , 
J o h n 
A l l e n Lowe, 
who 
had 
s o l d 
J-Mar 
t h e 
i n s u r a n c e 
p o l i c y and had 
s e r v i c e d i t f o r t h e d u r a t i o n o f t h e p o l i c y , 
and 
a s k e d Lowe a b o u t t h e n o t i c e o f c a n c e l l a t i o n . 
J o n e s 
t e s t i f i e d 
t h a t "[Lowe] w a s n ' t aware o f t h e 
[ n o t i c e o f c a n c e l l a t i o n ] 
and 
[Lowe] s a i d t h a t 
... 
he's 
g o t 
t o 
f i n d 
o u t 
a b o u t i t and 
h e ' d 
t a k e c a r e 
o f i t , d o n ' t w o r r y a b o u t i t , so 
I d i d n ' t . " 
I n 
h i s 
d e p o s i t i o n 
t e s t i m o n y , 
J o n e s 
t e s t i f i e d 
t h a t 
J-Mar 
n e v e r 
r e c e i v e d 
any 
document 
f r o m 
N a t i o n w i d e 
i n d i c a t i n g t h a t 
t h e 
i n s u r a n c e 
p o l i c y had b e e n r e i n s t a t e d : 
4 
1090685 
" [ N a t i o n w i d e ' s 
t r i a l 
c o u n s e l : ] D i d y o u e v e r 
r e c e i v e 
any 
l e t t e r s 
f r o m 
N a t i o n w i d e 
a f t e r t h e [ n o t i c e o f 
c a n c e l l a t i o n ] 
... t h a t 
e v e r 
s a i d 
t h a t 
y o u r 
p o l i c y 
was 
r e i n s t a t e d ? 
" [ J o n e s : ] No, ma'am. 
"Q. D i d 
y o u e v e r g e t a n o t h e r c o p y o f a p o l i c y 
f r o m 
N a t i o n w i d e s h o w i n g t h a t t h e 
p o l i c y was p u t 
b a c k i n t o 
e f f e c t ? 
"A. No, ma'am. 
"Q. D i d 
y o u e v e r g e t 
a document f r o m Mr. Lowe, a n d 
I'm 
t a l k i n g a b o u t a w r i t t e n d o c u m e n t , t h a t e v e r 
s a i d 
t h a t y o u r p o l i c y h a d b e e n 
r e i n s t a t e d ? 
"A. No, ma'am." 
J o n e s ' s 
d e p o s i t i o n 
t e s t i m o n y 
a l s o 
i n d i c a t e s 
t h a t Lowe h a d 
i n f o r m e d h i m t h a t N a t i o n w i d e w o u l d n o t 
r e i n s t a t e t h e i n s u r a n c e 
p o l i c y : 
" [ N a t i o n w i d e ' s 
t r i a l 
c o u n s e l : ] Do y o u remember e v e r 
b e i n g 
t o l d b y Mr. Lowe 
t h a t he h a d t a l k e d t o 
t h e 
u n d e r w r i t e r s a n d t h e y were n o t w i l l i n g t o r e i n s t a t e 
i t ? 
" [ J o n e s : ] 
Y e s . " 
On o r a b o u t December 19, 2004, p r o p e r t y b e l o n g i n g t o 
J -
Mar, 
w h i c h h a d b e e n 
c o v e r e d b y t h e i n s u r a n c e 
p o l i c y , was 
s t o l e n 
f r o m J - M a r ' s p r e m i s e s . 
On December 20, 2004, 
J o n e s 
t e l e p h o n e d Lowe t o n o t i f y h i m o f t h e t h e f t a n d t o i n q u i r e 
a b o u t t h e s t a t e o f t h e i n s u r a n c e p o l i c y a n d w h e t h e r i t h a d 
5 
1090685 
b e e n 
r e i n s t a t e d ; Lowe 
i n f o r m e d 
J o n e s 
t h a t 
i t h a d n o t b e e n 
r e i n s t a t e d . 
J o n e s a l s o t e s t i f i e d t h a t t h a t was n o t t h e 
f i r s t 
t i m e 
Lowe 
t o l d 
h i m 
t h e 
i n s u r a n c e 
p o l i c y 
h a d 
n o t 
b e e n 
r e i n s t a t e d b u t t h a t Lowe h a d i n f o r m e d h i m o f t h i s 
s o m e t i m e 
n e a r " t h e end o f O c t o b e r . " 
On 
December 
24, 
2004, 
J o n e s 
a t t e m p t e d 
t o 
p a y 
t h e 
q u a r t e r l y p r e m i u m f o r t h e c a n c e l e d 
i n s u r a n c e p o l i c y by s e n d i n g 
Lowe a c h e c k i n t h e amount o f $ 3 1 3 , w h i c h Lowe d e p o s i t e d . 
J -
Mar 
h a d 
n o t 
r e c e i v e d 
a 
b i l l i n g 
s t a t e m e n t 
f r o m 
N a t i o n w i d e 
i n d i c a t i n g t h a t t h e p r e m i u m was due. 
R a t h e r , J o n e s h a d 
p a i d 
t h e p r e m i u m b a s e d on a b i l l i n g s t a t e m e n t J-Mar h a d r e c e i v e d on 
May 
13, 
2004, 
b e f o r e 
t h e 
i n s u r a n c e 
p o l i c y was 
c a n c e l e d , 
n o t i f y i n g J-Mar t h a t i t s 
n e x t p r e m i u m payment w o u l d be due on 
December 29, 2004. 
N a t i o n w i d e r e f u n d e d $111 o f t h e $313 t o J -
Mar, n o t i n g t h a t t h e c a n c e l l a t i o n d a t e o f t h e i n s u r a n c e 
p o l i c y 
was November 1, 2004, and 
i n d i c a t i n g as t h e r e a s o n f o r t h e 
r e f u n d e d a m o u n t : "payment more t h a n r e q u i r e d on a 
c a n c e l l e d 
p o l i c y . " 
D e s p i t e 
J o n e s ' s k n o w l e d g e t h a t t h e i n s u r a n c e 
p o l i c y h a d 
b e e n c a n c e l e d , 
J-Mar 
f i l e d a c l a i m w i t h N a t i o n w i d e u n d e r t h e 
i n s u r a n c e 
p o l i c y f o r t h e s t o l e n p r o p e r t y . 
On J u n e 10, 2005, 
6 
1090685 
N a t i o n w i d e d e n i e d J - M a r ' s c l a i m b e c a u s e , 
N a t i o n w i d e 
s t a t e d , 
" t h e 
[ i n s u r a n c e ] p o l i c y was n o t a c t i v e f o r t h i s d a t e o f l o s s . " 
On December 2, 2005, J-Mar s u e d N a t i o n w i d e and Lowe. 
J -
Mar a l l e g e d c l a i m s o f b r e a c h o f c o n t r a c t and b a d - f a i t h 
f a i l u r e 
t o p a y an i n s u r a n c e c l a i m a g a i n s t N a t i o n w i d e and a l l e g e d 
t h a t 
Lowe 
h a d 
" n e g l i g e n t l y 
c a u s e d 
o r 
n e g l i g e n t l y 
a l l o w e d 
a 
p u r p o r t e d 
c a n c e l l a t i o n 
o f t h e [ i n s u r a n c e ] p o l i c y 
... t o go 
u n c o r r e c t e d 
" 
On December 
14, 2006, N a t i o n w i d e and Lowe 
f i l e d 
m o t i o n s f o r a summary j u d g m e n t , w h i c h t h e 
t r i a l 
c o u r t 
d e n i e d on May 18, 2009. 
On S e p t e m b e r 22, 2009, N a t i o n w i d e and 
Lowe f i l e d 
a " j o i n t m o t i o n t o r e c o n s i d e r " t h e 
t r i a l 
c o u r t ' s 
j u d g m e n t d e n y i n g 
t h e i r summary-judgment 
m o t i o n s . 
The 
t r i a l 
c o u r t 
d e n i e d N a t i o n w i d e and Lowe's 
m o t i o n 
t o r e c o n s i d e r on 
November 5, 2009. 
The 
t r i a l 
c o u r t c o n d u c t e d a j u r y 
t r i a l , 
w h i c h b e g a n on 
November 30, 2009. 
A t t h e c l o s e o f J - M a r ' s c a s e , N a t i o n w i d e 
f i l e d 
a w r i t t e n 
m o t i o n 
f o r a j u d g m e n t as a m a t t e r o f l a w , 
w h i c h t h e 
t r i a l 
c o u r t d e n i e d . 
N a t i o n w i d e 
a l s o made an 
o r a l 
m o t i o n f o r a j u d g m e n t as a m a t t e r o f l a w a t t h e c l o s e o f 
a l l 
t h e 
e v i d e n c e , w h i c h t h e t r i a l c o u r t a l s o d e n i e d . 
A l s o a t t h e 
c l o s e o f a l l 
t h e e v i d e n c e , J-Mar 
o r a l l y moved t o d i s m i s s 
i t s 
7 
1090685 
c l a i m a g a i n s t Lowe, w i t h p r e j u d i c e . 
H o w e v e r , t h e 
t r i a l 
c o u r t 
d i d 
n o t 
e n t e r 
an 
a c t u a l o r d e r , 
o r a l 
o r 
w r i t t e n , 
d i s m i s s i n g 
Lowe. 
On December 4, 2009, t h e 
t r i a l c o u r t e n t e r e d a j u d g m e n t 
on t h e j u r y ' s v e r d i c t i n f a v o r o f J-Mar and a g a i n s t N a t i o n w i d e 
f o r 
$ 4 1 6 , 4 6 6 . 8 7 . 
N a t i o n w i d e 
a p p e a l e d . 
On A u g u s t 3, 2010, 
t h i s C o u r t e n t e r e d 
an o r d e r 
r e m a n d i n g 
t h e 
c a u s e 
t o 
t h e 
t r i a l 
c o u r t , 
s t a t i n g 
t h a t 
t h e 
j u d g m e n t 
a p p e a l e d 
f r o m 
was 
n o t 
a 
f i n a l 
j u d g m e n t b e c a u s e 
t h e 
c l a i m s 
a g a i n s t Lowe h a d 
n o t b e e n 
a d j u d i c a t e d 
and 
g i v i n g t h e 
t r i a l 
c o u r t o p t i o n s , one 
o f w h i c h was 
t o d i s m i s s t h e c l a i m s 
a g a i n s t 
Lowe. 
On A u g u s t 
10, 
2010, 
t h e 
t r i a l 
c o u r t 
e n t e r e d 
an 
o r d e r 
d i s m i s s i n g , 
w i t h p r e j u d i c e , " e v e r y 
c l a i m a l l e g e d by 
[ J - M a r ] 
a g a i n s t [ L o w e ] . " 
T h i s C o u r t t h e n r e i n s t a t e d t h e 
a p p e a l . 
S t a n d a r d o f R e v i e w 
I n A.T. 
S t e p h e n s E n t e r p r i s e s , I n c . v. J o h n s , 757 
So. 
2d 
416, 
419 
( A l a . 2 0 0 0 ) , we 
h e l d : 
" I n r e v i e w i n g a r u l i n g on a m o t i o n f o r a j u d g m e n t 
as 
a m a t t e r 
o f 
l a w , 
t h i s 
C o u r t 
i s b o u n d by 
t h e 
same 
s t a n d a r d 
as t h e 
t r i a l 
c o u r t : 
"'We 
must d e t e r m i n e w h e t h e r t h e p a r t y 
w i t h 
t h e b u r d e n o f p r o o f has p r o d u c e d 
s u f f i c i e n t 
e v i d e n c e o f a c o n f l i c t w a r r a n t i n g 
a j u r y ' s 
c o n s i d e r a t i o n . 
Macon 
C o u n t y 
Comm'n 
v. 
 
S a n d e r s , 555 
So. 2d 1054, 
1056 
( A l a . 1 9 9 0 ) ; 
B u s s e y v. J o h n D e e r e Co., 
531 
So. 
2d 
860, 
8 
1090685 
862 
( A l a . 
1 9 8 8 ) . 
The 
e v i d e n c e 
must 
be 
v i e w e d i n a l i g h t most f a v o r a b l e t o ... 
t h e 
n o n m o v i n g p a r t y . T w i l l e y v. D a u b e r t C o a t e d  
P r o d u c t s , 
I n c . , 536 
So. 2d 1364, 
1367 
( A l a . 
19 8 
8 ) ; W a d s w o r t h v. Y a n c e y B r o s . 
Co., 
423 
So. 
2d 
1343, 
1345 
( A l a . 1 9 8 2 ) . ' 
" C o n t i n e n t a l 
E a g l e C o r p . 
v. 
M o k r z y c k i , 
611 
So. 
2d 
313, 
319 
( A l a . 1 9 9 2 ) . " 
D i s c u s s i o n 
N a t i o n w i d e a r g u e s t h a t t h e 
t r i a l 
c o u r t 
e r r e d 
i n d e n y i n g 
i t s 
m o t i o n 
f o r 
a j u d g m e n t 
as 
a m a t t e r 
o f 
l a w 
b a s e d 
on 
i t s 
c o n t e n t i o n 
t h a t 
t h e 
u n d i s p u t e d 
e v i d e n c e 
shows 
t h a t 
t h e 
i n s u r a n c e 
p o l i c y had 
b e e n 
c a n c e l e d 
u n d e r 
t h e 
t e r m s 
o f 
t h e 
p o l i c y b e f o r e 
J - M a r ' s c l a i m a r o s e . 
We 
a g r e e . 
T h i s 
C o u r t 
r e c e n t l y 
s e t 
f o r t h 
t h e 
l a w 
c o n c e r n i n g 
an 
i n s u r e r ' s 
r i g h t 
t o 
c a n c e l 
an 
i n s u r a n c e 
p o l i c y 
i n 
H a r t f o r d 
 
U n d e r w r i t e r s 
I n s u r a n c e Co. v. Reed, 57 So. 
3d 742 
( A l a . 2 0 1 0 ) : 
"The 
l a w c o n c e r n i n g 
an i n s u r e r ' s r i g h t t o 
c a n c e l 
a p o l i c y i s w e l l 
s e t t l e d : 
' 
[T]he 
r i g h t 
v e l non 
o f 
c a n c e l l a t i o n 
i s 
a 
m a t t e r 
o f 
c o n t r a c t 
The 
q u e s t i o n 
o f t h e m o t i v e o f t h e p a r t i e s o r company i n 
t h a t 
b e h a l f 
i s 
i m m a t e r i a l 
when 
t h e r e 
i s 
a 
c a n c e l l a t i o n 
u n d e r 
t h e 
t e r m s 
o f 
t h e 
c o n t r a c t . ' 
P a c i f i c Mut. 
L i f e I n s . Co. 
o f C a l i f o r n i a v. 
S t r a n g e , 
226 
A l a . 98, 
100, 
145 
So. 
425, 
426 
( 1 9 3 2 ) . 
F u r t h e r , 
" ' [ i ] t i s w e l l s e t t l e d i n A l a b a m a t h a t 
" i n 
an 
a c t i o n on 
an 
i n s u r a n c e 
p o l i c y when 
t h e 
i n s u r e r 
s e t s 
up 
c a n c e l l a t i o n 
as 
a 
d e f e n s e , 
t h e 
i n s u r e r 
has 
t h e 
b u r d e n 
o f 
p r o v i n g t h e p o l i c y was 
c a n c e l e d . " 
M i d - S t a t e 
9 
1090685 
Homes, I n c . v. C h e r o k e e I n s . Co., 
51 A l a . 
App. 
247, 
248, 
284 
So. 
2d 274, 
275 
( 1 9 7 3 ) . 
However, 
i t i s " e q u a l l y t r u e t h a t 
i n 
t h e 
a b s e n c e 
o f 
a 
r e s t r i c t i v e 
s t a t u t o r y 
p r o v i s i o n , 
t h e 
p a r t i e s 
t o 
an 
i n s u r a n c e 
c o n t r a c t may 
s p e c i f y t h e m e t h o d by w h i c h i t 
may 
be c a n c e l e d and t h e p a r t i e s a r e 
t h e r e b y 
b o u n d . P u t a n o t h e r way, 
an i n s u r a n c e 
p o l i c y 
may 
be c a n c e l e d a c c o r d i n g t o i t s t e r m s . " 
51 
A l a . 
App. 
a t 
249, 
284 
So. 
2d 
a t 
276. 
( C i t a t i o n 
o m i t t e d ) . ' 
" A m e r i c a n I n t e r s t a t e I n s . Co. 
v. K e l l e y , 
797 
So. 
2d 
479, 
482 
( A l a . C i v . App. 
2 0 0 0 ) . 
See 
a l s o G r e e n 
v.  
S t a n d a r d 
F i r e 
I n s . Co. 
o f A l a b a m a , 398 
So. 
2d 
671, 
675 
( A l a . 1981) 
( h o l d i n g t h a t ' [ i ] t i s w e l l 
s e t t l e d 
i n 
A l a b a m a 
l a w 
t h a t 
t h e 
r i g h t 
o f 
t h e 
i n s u r e r 
t o 
c a n c e l an i n s u r a n c e p o l i c y i s s t r i c t l y c o n s t r u e d 
and 
t h e c o n d i t i o n i m p o s e d upon i t w i t h r e s p e c t t o 
g i v i n g 
n o t i c e 
o f 
c a n c e l l a t i o n 
must 
be 
s t r i c t l y 
p e r f o r m e d ' ) . " 
H a r t f o r d , 
57 So. 
3d a t 
748. 
R e g a r d l e s s 
o f 
i t s 
m o t i v e s 
o r 
r e a s o n s , 
N a t i o n w i d e 
u n d i s p u t e d l y c a n c e l e d 
t h e 
i n s u r a n c e 
p o l i c y 
a c c o r d i n g 
t o 
t h e 
t e r m s o f t h e p o l i c y . 
I t i s u n d i s p u t e d t h a t N a t i o n w i d e 
s e n t J -
Mar 
a c a n c e l l a t i o n n o t i c e 30 d a y s b e f o r e t h e i n s u r a n c e 
p o l i c y 
was 
t o 
be 
c a n c e l e d 
and 
t h a t 
J-Mar 
r e c e i v e d 
t h e 
n o t i c e . 
T h e r e f o r e , 
t h e i n s u r a n c e p o l i c y was 
c a n c e l e d p u r s u a n t 
t o i t s 
t e r m s 
e f f e c t i v e November 1, 2004. 
F u r t h e r , J o n e s 
t e s t i f i e d 
t h a t a t t h e t i m e t h e 
t h e f t o c c u r r e d and 
a t t h e t i m e he 
f i l e d 
h i s 
c l a i m w i t h N a t i o n w i d e 
he knew t h a t t h e 
i n s u r a n c e 
p o l i c y 
10 
1090685 
had 
b e e n 
c a n c e l e d 
and 
t h a t 
i t h a d 
n o t b e e n 
r e i n s t a t e d . 
A c c o r d i n g l y , t h e t r i a l 
c o u r t ' s j u d g m e n t d e n y i n g 
N a t i o n w i d e ' s 
j u d g m e n t 
as a m a t t e r 
o f l a w on t h e b a s i s 
t h a t J-Mar 
h a d 
p r e s e n t e d 
s u f f i c i e n t 
e v i d e n c e 
o f a 
c o n f l i c t 
w a r r a n t i n g 
a 
j u r y ' s 
c o n s i d e r a t i o n c o n c e r n i n g 
i t s c l a i m s 
o f 
b r e a c h 
o f 
c o n t r a c t and b a d 
f a i t h was 
i n e r r o r and t h u s 
i s due t o be 
r e v e r s e d . 
We n o t e 
t h a t , i n i t s 
a p p e l l a t e b r i e f b e f o r e 
t h i s 
C o u r t , 
J-Mar a p p e a r s t o a r g u e t h a t N a t i o n w i d e 
h a d w a i v e d 
i t s p r i o r 
c a n c e l l a t i o n 
o f t h e i n s u r a n c e 
p o l i c y 
by 
a c c e p t i n g J - M a r ' s 
c h e c k p a y i n g t h e premiums f o r t h e c a n c e l e d i n s u r a n c e 
p o l i c y . 
However, i t 
i s u n d i s p u t e d t h a t N a t i o n w i d e 
r e f u n d e d a p r o r a t a 
amount o f t h e p r e m i u m payment c o n s i s t e n t w i t h t h e t e r m s o f t h e 
i n s u r a n c e p o l i c y . 
J-Mar does n o t make an a r g u m e n t on 
a p p e a l 
t h a t t h e r e f u n d e d amount was 
i n s u f f i c i e n t . 
T h e r e f o r e , 
t h e r e 
i s no m e r i t t o t h i s a r g u m e n t . 
J-Mar a l s o a p p e a r s t o a r g u e 
t h a t 
i t s 
" r e a s o n a b l e 
e x p e c t a t i o n s " 
b a r r e d 
N a t i o n w i d e ' s 
c a n c e l l a t i o n o f t h e i n s u r a n c e p o l i c y . 
However, J-Mar f a i l s t o 
c i t e 
any 
a p p l i c a b l e 
l e g a l 
a u t h o r i t y ; 
t h u s , 
we 
n e e d 
n o t 
c o n s i d e r 
t h i s 
c l a i m . 
See R u l e 
2 8 ( a ) ( 1 0 ) , A l a . R. App. 
P. 
M o r e o v e r , t h e r u l e o f r e a s o n a b l e 
e x p e c t a t i o n s i s a r u l e o f 
11 
1090685 
c o n s t r u c t i o n 
t h a t 
a p p l i e s t o i n t e r p r e t 
a m b i g u o u s 
i n s u r a n c e 
p o l i c i e s and h a s no a p p l i c a t i o n t o t h i s c a s e . 
See S t a t e Farm  
F i r e & C a s . Co. v . S l a d e , 747 So. 2d 293, 311 ( A l a . 1 9 9 9 ) . 
C o n c l u s i o n 
B a s e d on t h e f o r e g o i n g , t h i s 
C o u r t 
r e v e r s e s t h e 
t r i a l 
c o u r t ' s j u d g m e n t d e n y i n g N a t i o n w i d e ' s m o t i o n f o r 
a j u d g m e n t as 
a m a t t e r o f l a w and r e n d e r s a j u d g m e n t i n f a v o r o f N a t i o n w i d e . 
REVERSED AND JUDGMENT RENDERED. 
Cobb, C . J . , and S t u a r t , Shaw, and W i s e , J J . , c o n c u r . 
12