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United Financial Casualty Co. v. Pearson

United States District Court, E.D. Arkansas, Western Division

September 16, 2016



          Kristine G. Baker United States District Judge

         On April 3, 2015, plaintiff United Financial Casualty Company (“UFCC”) filed this action for declaratory judgment against defendants pursuant to Federal Rule of Civil procedure 57 and 28 U.S.C. § 2201 et seq. (Dkt. No. 16, ¶ 30). UFCC is the underwriting company that issued two insurance policies at issue in this matter. UFCC is affiliated with the more commonly known Progressive Group of Insurance Companies (“Progressive”) (Id., at 2, FN 1). UFCC seeks a declaration of the rights and other legal relations of the parties pursuant to policies of insurance issued by UFCC to defendant Don Allen Pearson.

         Before the Court are UFCC's motion to voluntarily dismiss separate defendants (Dkt. No. 64), UFCC's motion for summary judgment (Dkt. No. 65), and UFCC's motion for default judgment (Dkt. No. 70). No defendant has responded to any of the pending motions.

         For the reasons set forth below, the Court grants UFCC's motion for summary judgment (Dkt. No. 65). All other pending motion are denied as moot (Dkt. Nos. 64, 70).

         I. Factual Background

         Unless otherwise noted by citation, the following facts are taken from UFCC's statement of undisputed facts in support of its motion for summary judgment (Dkt. No. 67), to which none of the defendants have responded. Local Rule 56.1(b) of the United States District Court for the Eastern and Western Districts of Arkansas requires a non-moving party to supply the Court with a statement of material facts “as to which it contends a genuine issue exists to be tried.” See Jackson v. United Parcel Serv., Inc., 643 F.3d 1081, 1088 (8th Cir. 2011). Federal Rule of Civil Procedure 56(e) states that “[i]f a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c), the court may:

(1) give an opportunity to properly support or address the fact;
(2) consider the fact undisputed for purposes of the motion;
(3) grant summary judgment if the motion and supporting materials - including the facts considered undisputed - show that the movant is entitled to it; or
(4) issue any other appropriate order.”

         Because no defendant has responded, the Court will consider the following facts undisputed for the purposes of this motion pursuant to Rule 56(e)(2).

         UFCC issued a commercial auto policy, Policy Number 02474899-0, to Mr. Pearson for the policy period of November 4, 2013, through November 4, 2014 (Dkt. No. 67, Ex. A). Because of Mr. Pearson's failure to make his payments, UFCC/Progressive mailed to Mr. Pearson a cancellation notice on March 13, 2014, regarding UFCC Policy Number 02474899-0 (Id., Ex. C). The cancellation notice read, in pertinent part: “Unfortunately, we didn't receive your payment and, as a result, your policy will be canceled at 12:01 a.m. on March 25, 2014. Please know that this means you will no longer have insurance coverage.” (Id.). The cancellation notice stated, however, that Mr. Pearson could avoid a lapse in coverage by making his payment prior to the March 25, 2014, cancellation deadline.

         On March 26, 2014, UFCC/Progressive mailed to Mr. Pearson a final bill regarding UFCC Policy Number 02474899-0, which explicitly stated that Mr. Pearson no longer had insurance under the UFCC policy, effective March 25, 2014 (Id., ¶ 3; Ex. D). On April 15, 2014, UFCC/Progressive mailed to Mr. Pearson a second final bill regarding UFCC Policy Number 02474899-0, which similarly read, in pertinent part, as follows: “Please note that you no longer have insurance with us, effective March 25, 2014.” (Id., ¶ 4; Ex. E). UFCC contends that Progressive's cancellation of Mr. Pearson's policy was effective and that Progressive fully complied with Arkansas law and the Cancellation and Nonrenewal Endorsement included in UFCC Policy Number 02474899-0. Ark. Code Ann. § 23-66-206(9); (Id., ¶ 20).

         At around 3:11 p.m. CST, on June 2, 2014, a 1993 Peterbilt tractor-trailer either owned or leased by Mr. Pearson and being driven by Jerry Hickman was involved in an accident on U.S. Highway 65 near its intersection with Arkansas Highway 16 East in Van Buren County, Arkansas. Mr. Hickman was transporting logs, which spilled from the trailer after a tire blew out on the tractor-trailer, causing injuries to several people and killing at least two others. At the time the accident occurred, Mr. Hickman was not an employee of Mr. Pearson, did not have Mr. Pearson's permission to operate the tractor-trailer, and was not acting at the behest of Mr. Pearson (See Dkt. No. 67, Ex. G).

         At 6:08 p.m. EST, on June 2, 2014, Sherry Ragland, on behalf of Mr. Pearson, called Progressive and attempted to reinstate UFCC Policy Number 02474899-0 (Dkt. No. 67, Ex. H). The Progressive representative informed Ms. Ragland and Mr. Pearson, who could allegedly be heard in the background, that the policy could not be reinstated. The Progressive representative said that Mr. Pearson had to pay the balance owed on Policy Number 02474899-0, which had been cancelled for nonpayment, and pay a down payment on a new policy before UFCC would issue a new policy to Mr. Pearson. During their conversations with the Progressive/UFCC representative on June 2, 2014, neither Ms. Ragland nor Mr. Pearson mentioned the aforementioned accident, which had occurred just a few hours earlier.

         Mr. Pearson made the necessary payments, and UFCC issued to Mr. Pearson a new commercial auto policy, UFCC Policy Number 03150888-0, with an effective date and time of June 2, 2014, at 7:26 p.m. EST (Id., ¶ 8; Ex. J). The declarations page for UFCC Policy Number 03150888-0 provides as follows: “Your coverage began the later of June 2, 2014, at 12:01 a.m. or at the time your application is executed on the first day of the policy period.” (Id., ¶ 11). The application for insurance that UFCC sent to Mr. Pearson for his signature shows the effective date and time for UFCC Policy Number 03150888-0 as June 2, 2014, at 7:26 p.m. EST. The declarations page of UFCC Policy Number 03150888-0 lists only Mr. Pearson and Brandon Wells as rated drivers (Dkt. No. 67, Ex. K).

         UFCC Policy Number 03150888-0 provides the following pertinent definitions:

A. When used in Part I - Liability To Others, insured means:
1. You with respect to an insured auto.
2. Any person while using, with your permission, and within the scope of that permission, an insured auto you own, hire, or borrow except:
(a) A person while he or she is working in a business of selling, leasing, repairing, parking, storing, servicing, delivering or testing autos, unless that business is yours ...

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