Saif v. Atl. States Ins. Co.
| Decision Date | 02 February 2021 |
| Docket Number | No. A-19-366.,A-19-366. |
| Citation | 955 N.W.2d 6,29 Neb.App. 442 |
| Parties | Michael F. SAIF and Mary Sue Saif, appellants, v. ATLANTIC STATES INSURANCE COMPANY, successor by merger with Le Mars Insurance Company, appellee. |
| Court | Nebraska Court of Appeals |
Michael F. Saif and Mary Sue Saif appeal from an order of the Lancaster County District Court in which summary judgment was granted in favor of Atlantic States Insurance Company (Atlantic), successor by merger with Le Mars Insurance Company, on Michael's claim for underinsured motorist (UIM) benefits and Mary Sue's claim for UIM benefits on a theory of loss of consortium. The district court found that based on the undisputed material facts, (1) Michael materially breached the cooperation provisions in the policy and his refusal to cooperate prejudiced Atlantic's ability to investigate the claim without the expense and delay of litigation, (2) Atlantic did not waive the cooperation provisions, and (3) Atlantic did not breach the policy by refusing to pay UIM benefits to Mary Sue, and that therefore, Atlantic was entitled to judgment as a matter of law. Because we conclude there were material questions of fact, summary judgment was not proper in this case. For the reasons that follow, we reverse, and remand for further proceedings.
On October 1, 2014, Michael was cycling on the shoulder of Highway 43 in Lancaster County, Nebraska, when he was struck from behind by a pickup driven by Edward Vasa. At the time, Vasa was acting within the scope of his employment with Vasa Construction, which was insured by EMC
Insurance Companies (EMC ) up to a liability amount of $1 million. Michael suffered extensive injuries as a result of the collision, incurring medical expenses in excess of $350,000 and the likelihood of ongoing treatment for the rest of his life.
At the time of the accident, the Saifs owned an insurance policy with Atlantic, which included UIM coverage up to $500,000. The policy included provisions outlining the duties an insured has after an accident or loss, including that the insured would cooperate with Atlantic's investigation of the claim, submit to examination under oath at the request of Atlantic, and authorize Atlantic to obtain medical and other relevant records. The policy also required full compliance with its terms prior to bringing any legal action against Atlantic.
On November 6, 2014, counsel for the Saifs wrote Atlantic, advising it of a potential claim for medical payment and UIM benefits. In response, Atlantic opened a UIM claim file and assigned an adjuster for the file, who established an initial reserve. On April 1, 2015, Michael's counsel informed Atlantic that Michael had reached a tentative settlement with EMC, Vasa's insurance provider, for the limits of Vasa's coverage. Along with the April letter was included a signed authorization to disclose health information and a release of employment information, both of which expired after 45 days. Atlantic did not use this initial authorization, nor request an examination under oath of Michael, because a formal demand for payment of UIM benefits under the policy had not been made.
On May 9, Atlantic wrote Michael's counsel, advising that Atlantic would not substitute the policy limits tendered by EMC and authorized Michael to settle with EMC.
On February 16, 2016, Michael's counsel contacted Atlantic, reaffirming his intent to submit a UIM claim at a later date. In September, Atlantic followed up with Michael's counsel regarding whether it should still expect a UIM claim. A month later, Michael's counsel replied that Michael continued to be treated for ongoing medical issues, that he was in the process of gathering additional medical records and reports, and that a demand would be made when those records were received.
On January 31, 2017, counsel for Atlantic again reached out to Michael's counsel, questioning whether Michael intended to make a UIM claim. Michael's counsel responded by email that same day: The next day, counsel for Atlantic contacted Michael's counsel identifying the documents Atlantic was requesting along with Michael's UIM demand: "We need all medical records, bills and reports relating to this matter, including medical evaluations and documentation for lost wages and loss of earning capacity." Neither a signed medical authorization nor a signed release of information form was requested by Atlantic at that time.
On February 24, 2017, Michael's counsel made a formal demand upon Atlantic for the UIM limits under the Saifs’ policy. The demand included, inter alia, medical records related to treatment between the date of Michael's accident and September 2, 2016; tax returns from Michael's business for the years 2012 to 2015; a profit-and-loss statement of the business for 2016; an "[o]ffer of employment from Alliance Partnership" to Michael dated March 8, 2016; and a detailed description of the injuries Michael sustained from the accident. The demand did not refer to any claim for UIM benefits by Mary Sue. On March 2, 2017, counsel for Atlantic confirmed receipt of Michael's demand and requested certain additional medical records, including copies of previously provided records. Those records were provided on March 7.
On March 16, 2017, Michael's counsel attempted to contact Atlantic's counsel to inquire into the status of Atlantic's response to Michael's demand. That same date, attorney Michael Moran responded to Michael's counsel, acknowledging receipt of the demand, and informed him that the matter had been transferred to him as outside counsel. After a month, on April 17, a paralegal with Moran's office sent a letter to Michael's counsel requesting a second signed authorization for health information in order to allow Atlantic to "obtain all medical records for an evaluation of [Michael's] damage claim." No signed authorization was provided in response to this request.
On April 26, 2017, Michael's counsel left a voice mail message with Moran, advising him that since no response had been received to Michael's counsel's demand, he would be filing suit. On May 2, Moran followed up Atlantic's request for a second authorization for health information and sought to schedule an examination under oath (EUO) at some point in the future after Atlantic had received the additional medical records sought through the second authorization. The request for the EUO did not specify a date, time, or place for the examination. A representative for Atlantic later testified that it sought to examine Michael due to the size of the claim and his subjective claims of how the accident affected his quality of life.
On May 10, 2017, without having signed the second authorization for health information, or responding to the request for an EUO, the Saifs filed suit against Atlantic. The complaint alleged two causes of action: (1) Atlantic erroneously refused to pay Michael UIM benefits in breach of the terms of the Saifs’ policy with Atlantic, and (2) Mary Sue suffered a loss of Michael's society, comfort, support, and companionship, and as his spouse, she too was entitled to UIM benefits erroneously refused by Atlantic.
On June 2, 2017, Atlantic filed an answer to the Saifs’ complaint, as well as a motion for summary judgment, even though no formal discovery had taken place to date. The Saifs subsequently filed a motion for continuance on Atlantic's motion for summary judgment, alleging that Atlantic was required to show prejudice from the Saifs’ alleged failure to cooperate and that further discovery was required before the Saifs could "offer a meaningful response to [Atlantic's] Motion for Summary Judgment." That motion was sustained, and further discovery was ordered by the district court.
On December 20, 2018, Atlantic filed an amended motion for summary judgment, alleging that "no genuine issue of material fact exists as to [the Saifs’] material breach of the policy of insurance and that [Atlantic] was prejudiced at the time of the breach" insomuch as it was denied the opportunity to investigate and adjust the claims of the Saifs and was subjected to unnecessary legal expenses.
A hearing was held on Atlantic's amended motion for summary judgment on February 11, 2019. After receiving evidence and hearing the arguments of both parties, the district court sustained the motion, granting summary judgment for Atlantic on both causes of action. In its order, the district court made explicit findings that (1) Michael breached the cooperation provisions of the policy and his refusal to cooperate prejudiced Atlantic's ability to investigate the claim without the expense and delay of litigation, (2) Atlantic did not waive the cooperation provisions, and (3) Atlantic did not refuse to pay UIM benefits to Mary Sue under the policy. This appeal followed.
The Saifs assign, restated, that the district court erred in concluding there were no genuine issues of material fact and in granting Atlantic's motion for summary judgment based on its findings that (1) Michael failed to cooperate, which failure was material and prejudicial to Atlantic; (2) Atlantic did not forfeit its right to assert its affirmative defenses as a result of its unreasonable delay in investigating the Saifs’ claims and failure to respond to the Saifs’ demand in a timely manner; and (3) Mary Sue was required, and failed, to make a demand prior to filing suit.
An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law. Midland Properties v. Wells Fargo , 296 Neb. 407, 893 N.W.2d 460 (2017). In reviewing a...
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