Nance v. Mike Southerland

• Decision Date: 12 March 2010
• Docket Number: 2080746.
• Parties: Kenneth NANCE and Pamela Nance v. Mike SOUTHERLAND, Southerland Insurance Company, Windsor Insurance Company, and Infinity Insurance Company.
• Court: Alabama Court of Civil Appeals

79 So.3d 612

Kenneth NANCE and Pamela Nance

v.Mike SOUTHERLAND, Southerland Insurance Company, Windsor Insurance Company, and Infinity Insurance Company.

2080746.

Court of Civil Appeals of Alabama.

Jan. 29, 2010.Rehearing Denied March 12, 2010.Certiorari Quashed Sept. 9, 2011

Alabama Supreme Court 1090892.

Phillip A. Gibson, Huntsville, for appellants.

Robert V. Wood, Jr., and Nicole L. Schroer of Wilmer & Lee, P.A., Huntsville, for appellees Southerland Insurance Company and Mike Southerland.

C. Peter Bolvig of Hall, Conerly & Bolvig, P.C., Birmingham, for appellees Windsor Insurance Company and Infinity Insurance Company.MOORE, Judge.

Kenneth Nance and Pamela Nance appeal from summary judgments entered by the Madison Circuit Court in favor of Mike Southerland, Southerland Insurance Company, Windsor Insurance Company, and Infinity Insurance Company (hereinafter sometimes referred to collectively as “the defendants”).

Facts

The relevant evidence submitted by the parties in support of or in opposition to the motions for a summary judgment shows the following. In 2003, the Nances decided to procure new automobile-insurance coverage. Kenneth testified that he and Pamela discussed the matter and agreed that Pamela would obtain the insurance through Southerland Insurance Company (“Southerland”).¹ Kenneth testified that he and Pamela had previously discussed that they needed to make sure they obtained uninsured-motorist coverage of between $25,000 and $50,000 and medical-payments coverage. Kenneth stated that he had specifically instructed Pamela, before she went to Southerland's office, to get insurance in both their names.

On May 14, 2003, Pamela met with Mike Southerland and informed him that she was seeking automobile insurance on behalf of herself and Kenneth. Pamela testified that, during the meeting, she requested that Mike obtain an automobile-insurance policy designating both herself and Kenneth as named insureds and providing “full coverage”; however, Pamela did not specifically request uninsured-motorist coverage. Pamela testified that Mike agreed to her requests and that he then proceeded to fill out an application for an automobile-insurance policy. According to Pamela, as part of the application process, she told Mike all she could remember regarding her and Kenneth's driving histories, some of which was negative. Pamela testified that she then signed some documents, but she did not remember what documents or how many documents she signed. She also testified that Mike quoted her a premium price but that she did not pay anything at that time.

Pamela testified that she left Southerland's office and returned 30 or 40 minutes later, followed by Kenneth. According to Pamela, at that time, Kenneth provided Mike information regarding Kenneth's personal identification numbers as well as the motor-vehicle identification numbers of the two automobiles to be insured. Pamela testified that both she and Kenneth reiterated to Mike that they wanted full coverage in both their names. Pamela testified that Kenneth had inquired of Mike whether full coverage included uninsured-motorist and medical-payments coverage. Pamela testified that Mike had responded that those coverages would be included. Pamela testified that Mike had told them that Kenneth did not need to sign anything.

Pamela stated that the Nances tendered to Mike a check for approximately $136, which was intended as the premium for “full coverage.” Pamela did not recall Mike informing her that the premium she was paying may be subject to increase based on a review of the Nances' driving records. Kenneth testified that Pamela left to go to school immediately after they gave Mike the check. Pamela testified that Mike did not provide her any documents to take with her regarding automobile insurance. Kenneth testified that Mike provided him with temporary proof-of-insurance cards and a receipt for the premium payment. Kenneth testified that Mike then told him a policy would be mailed to the Nances. Mike testified that he had no specific recollection of his meetings with Pamela and Kenneth.

The application Mike completed sought automobile-insurance coverage from Windsor Insurance Company (“Windsor”).² The application, entitled “Windsor Auto Alabama Private Passenger Automobile Application,” consists of two pages. The first page identifies “Pamela Nance” as the only applicant and contains space for information on past moving violations and traffic accidents, which is blank. Under a section entitled “COVERAGE INFORMATION,” the application lists “Uninsured Motorists” and “Medical Payments” and provides various options. An “X” is marked in the boxes entitled “Reject” under both categories. The application indicates that the policy would be in effect for 6 months and that the total premium would be $547, with a 25% down payment of $136.75 payable immediately, followed by 4 equal quarterly payments of 18.75% of the total premium.

The second page consists of, among other things, a section entitled in bold print “UNINSURED MOTORISTS COVERAGE–ALL APPLICANTS MUST SIGN FORM IF UM IS REJECTED.” Immediately beneath that language, the application states:

“I elect to REJECT protection against Uninsured Motorists as provided in the applicable statutes which permit me to reject insurance against loss caused by uninsured motorists. The undersigned (and each of them) do(es) hereby reject such Insurance coverage, and it is hereby understood and agreed: that such coverage will not be afforded any person by this policy; that this rejection of Uninsured Motorists Coverage applies with respect to all vehicles now insured under the policy as well as any vehicle which may be covered by the policy in the future regardless of whether or not it is owned by the insured on the date of execution of this rejection instrument.

“MUST BE SIGNED. Applicant(s) signature(s):”

Pamela signed and dated that section.

The second page of the application further provided, in pertinent part:

“I understand [Windsor] will investigate my application for insurance. I authorize [Windsor]: ... to request driving records or motor vehicle reports (‘MVR’) for every driver listed herein.... I understand the purpose will be to collect information to rate and underwrite my policy.... If data in a ... MVR warrants a premium increase, I agree to pay any additional premium.

“All available coverages were explained to me. I knowingly made the selections indicated herein. Any portion of the application filled out by an agent or broker is expressly acknowledged to have been done at my request. I understand that I am entitled to receive a copy of this application at the time of application....”

Pamela signed and dated the application just below that language.

In his deposition, Kenneth denied ever seeing the application. In her deposition, Pamela testified that she did not recall seeing the application, but she indicated that she must have seen it because she had signed it. Pamela, a school teacher, stated that she was “pretty much” an educated person capable of reading and understanding the English language. After reviewing the first page of the application, Pamela testified that, without further explanation, she could not have understood that she was rejecting uninsured-motorist and medical-payments coverage. Upon reviewing the second page of the application, Pamela testified that she understood that the application indicated she was rejecting uninsured-motorist coverage. However, Pamela testified that she did not read the language rejecting uninsured-motorist coverage before signing the application. Pamela testified that she had assumed and had trusted that she was getting the coverage she requested so she had signed the application without reading it. Pamela denied that anyone had prevented her from reading the application.

On May 14, 2003, based on the information contained in the application, Windsor generated an automobile-insurance policy for the Nances (“the policy”). The declarations page for that policy listed “Pamala Nance” as the “named insured.” The declarations page did not list any coverage for uninsured-motorist insurance or medical-payments insurance. Vanessa Bray, a Windsor employee, testified that the policy, including the declarations page, should have been mailed to the Nances so they could verify that they had obtained the coverage they requested. Mike testified that, if the Nances had reviewed the policy, they could have contacted him if they perceived any problems. The Nances testified that they never received a copy of the policy.

As part of the process of generating the policy, Windsor conducted a driving-record check on the Nances, which revealed some negative information that had not been disclosed in the application. Based on that new information, Windsor increased the premium for the policy by $205, which rendered the $136.75 down payment made by the Nances insufficient. Windsor drafted an “Important Notice to the Insured” and a “Special Notice” advising Pamela of the increase in the premium and the information upon which that increase had been based. Bray testified that those notices should have been sent to Pamela as part of the policy.

On May 16, 2003, Windsor drafted a document entitled “Notice of Cancellation of Family Auto Policy” (“the notice of cancellation”). That document, which was directed to Pamela at the address stated in the application, with a copy to Southerland as Pamela's agent, stated, in pertinent part:

“YOU ARE HEREBY NOTIFIED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE ABOVE MENTIONED POLICY THAT YOUR INSURANCE WILL CEASE WITHOUT FURTHER NOTICE AT AND FROM THE HOUR AND DATE MENTIONED ABOVE (12:01 AM 5/28/03) DUE TO NONPAYMENT OF PREMIUM.

“REASON FOR CANCELLATION—NOT ENOUGH DOWNPAYMENT RECEIVED FOR POLICY PREMIUM: DEFICIENT BY $51.25

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“TO PREVENT THE CANCELLATION OF YOUR POLICY, YOUR PAYMENT MUST BE POSTMARKED ON OR BEFORE 05/27/03. YOUR...