Brown v. American Standard Insurance Company of Wisconsin

          City and County of Denver District Court No. 17CV30099 Honorable Michael A. Martinez, Judge.

          McDivitt Law Firm, P.C., David E. McDivitt, Edward Lomena, Colorado Springs, Colorado, for Plaintiff-Appellant

          Campbell, Latiolais & Averbach, LLC, Colin Campbell, Phillip Khalife, Greenwood Village, Colorado, for Defendant-Appellee

          OPINION

          BERGER JUDGE

         ¶ 1 This insurance dispute arises from plaintiff Michael D. Brown's motorcycle accident, and the purported cancellation of his motorcycle insurance policy by defendant, American Standard Insurance Company of Wisconsin.

         ¶ 2 After Brown sued for benefits under the policy, the trial court granted American Standard's summary judgment motion, concluding that no coverage was in effect on the date of the accident because American Standard had previously given written notice of cancellation on the ground that Brown did not have a valid driver's license. But Brown contested that fact, and offered admissible evidence that he had a valid driver's license at the time of the cancellation and on the date of the accident.

         ¶ 3 We conclude, as a matter of first impression in Colorado, that when an insurer notifies an insured that it is cancelling an automobile insurance policy and specifies the reason for the cancellation, the validity of the cancellation turns on the accuracy of the information underlying the cancellation. Under these circumstances, a policy cancellation based on inaccurate information is no cancellation at all.

         ¶ 4 Because there is a disputed issue of material fact whether the stated reason for American Standard's cancellation of Brown's policy was true, we reverse the trial court's summary judgment.

         I. Relevant Facts and Procedural History

         ¶ 5 In March 2014, Brown purchased a motorcycle insurance policy from American Standard for his Suzuki motorcycle.^[1] On August 5, 2014, American Standard mailed a notice to Brown that it was cancelling that policy effective August 20, 2014. The stated reason for cancellation was "DOES NOT HAVE A VALID DRIVER'S LICENSE." Brown does not contest that he received the notice of cancellation and that, before the lawsuit that underlies this appeal, he took no action to dispute the cancellation.

         ¶ 6 On September 6, 2014, Brown was involved in an accident while driving the motorcycle. He allegedly sustained significant injuries. Apparently because the other driver was either uninsured or underinsured, Brown made a claim against the American Standard uninsured/underinsured motorist coverages.

         ¶ 7 Approximately a month and a half after the purported policy cancellation, Brown received a letter dated October 3, 2014, from American Family Mutual Insurance Company regarding an automobile insurance policy issued to Brown by that company.^[2]The letter stated: "Please disregard the termination notice recently sent to you. Information recently received enables us to continue this policy without interruption in coverage."

         ¶ 8 When American Standard denied coverage, Brown filed a complaint against American Standard for, among other things, breach of contract. American Standard moved for summary judgment, contending that coverage was not in force on the date of the accident because it had previously cancelled the policy.

         ¶ 9 Brown filed a written response to American Standard's summary judgment motion, supported by Brown's affidavit attesting that he had a valid Colorado driver's license both at the time of the cancellation and on the date of the accident.

         ¶ 10 The trial court concluded that there were no disputed issues of material fact and granted American Standard's summary judgment motion. Brown appeals.

         II. Standard of Review

         ¶ 11 We review a grant of summary judgment de novo. P.W. v. Children's Hosp. Colo., 2016 CO 6, ¶ 11.

         ¶ 12 "Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Id. The party requesting summary judgment has the initial burden of showing that there is no genuine issue of material fact. Gibbons v. Ludlow, 2013 CO 49, ¶ 11.

         ¶ 13 If this initial burden is met, the burden shifts to the nonmoving party to demonstrate the existence of a disputed issue of material fact. Civil Serv. Comm'n v. Pinder, 812 P.2d 645, 649 (Colo. 1991). A material fact is one that impacts the outcome of the case. Mt. Emmons Mining Co. v. Town of Crested Butte, 690 P.2d 231, 239 (Colo. 1984).

         III. There Is a Disputed Issue of Material Fact Regarding the Effectiveness of American Standard's Cancellation of the Policy

         ¶ 14 In its summary judgment motion, American Standard argued that there was no disputed issue of material fact because insurance coverage was not in effect on the date of the accident. To support this contention, American Standard submitted the written notice of cancellation.

         ¶ 15 As noted above, Brown did not contest in the trial court, and concedes on appeal, that American Standard mailed the notice of cancellation to his last known address and that he did not challenge the cancellation either before the effective date of the cancellation or at any time before the filing of the lawsuit underlying this appeal.

         ¶ 16 Thus, American Standard met its initial summary judgment burden by establishing that the policy was not in effect on the date of the accident. To avoid summary judgment, Brown was required to ...