In March 2014, Michael Brown purchased a motorcycle insurance policy for his Suzuki motorcycle from American Standard Insurance Comp-any of Wisconsin. On August 5, 2014, American Standard mailed a notice to Brown that it was cancelling the policy effective August 20, 2014. The stated reason for cancellation was “DOES NOT HAVE A VALID DRIVER’S LICENSE.” Brown did not contest that he received the notice of cancellation and that, before the lawsuit that underlay this appeal, he took no action to dispute the cancellation.
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.
Approximately six weeks after the purported policy cancellation, Brown received a letter dated October 3, 2014, from American Family Mutual Insurance Company, of which American Standard is an affiliate, regarding an automobile policy issued to Brown by that company. 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.”
When American Standard denied coverage, Brown filed a complaint against the insurer 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.
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.
The court concluded that there were no disputed issues of material fact and granted American Standard’s summary judgment motion. Brown appealed.
On appeal, the court noted that the stated reason for American Standard’s cancellation of the motorcycle policy was that Brown did not have a valid driver’s license. If true, this would be an appropriate basis for the cancellation under Colorado law. Because Brown controverted that factual premise in his affidavit, the court said, a disputed issue of material fact existed as to whether Brown had a valid driver’s license at the time of the cancellation, and the trial court erred in treating the notice of cancellation as dispositive on summary judgment.
American Standard argued that it cancelled Brown’s policy not because he did not have a valid driver’s license but because he did not have a valid motorcycle endorsement on his license. The court pointed out that American Standard made no such argument in the summary judgment proceedings.
American Standard also contended that its cancellation of Brown’s policy was effective regardless of whether the reason for cancellation was factually accurate because Brown did not contest the cancellation until well after the accident and not before bringing the suit that underlay his appeal. The court stated that American Standard supplied no legal support for that proposition, and the court independently found none.
The court held that, standing alone, the uncontested fact that Brown did not challenge the cancellation before bringing suit on the policy did not constitute either a waiver of his right to sue under the policy or a ratification of the allegedly improper cancellation. The trial court’s grant of summary judgment to American Standard was reversed.
Brown v. American Standard Insurance Company of Wisconsin-Colorado Court of Appeals, Division V-January 24, 2019-No. CA2089.