JAMES KINSLOW and PAULETTE KINSLOW v. HARTFORD INSURANCE COMPANY OF THE MIDWEST
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RENDERED: June 4, 2004; 2:00 p.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-001426-MR
JAMES KINSLOW and
PAULETTE KINSLOW
APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE DENISE CLAYTON, JUDGE
ACTION NO. 01-CI-007117
v.
HARTFORD INSURANCE COMPANY
OF THE MIDWEST
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
EMBERTON, Chief Judge;1 COMBS and DYCHE, Judges.
COMBS, JUDGE.
The appellants, James and Paulette Kinslow,
appeal from a judgment of June 18, 2003 of the Jefferson Circuit
Court dismissing their complaint against Hartford Insurance
Company of the Midwest (Hartford).
They argue that the trial
court erred in granting summary judgment and by failing to find
that Hartford should be estopped from denying insurance coverage
for a fire that destroyed their home.
1
In support of the
Chief Judge Emberton concurred in this opinion prior to his retirement
effective June 2, 2004.
judgment, Hartford contends that the Kinslows’ policy was not in
force or effect at the time of the fire since it had been
cancelled more than four months before the fire for non-payment
of premiums.
After reviewing the record and finding no error,
we affirm.
In January 1999, the Kinslows obtained homeowners’
insurance coverage from Hartford for the protection of their
real property located on Vetter Avenue in Louisville, Kentucky.
On January 5, 2000, they renewed their policy with Hartford for
another year by mailing the insurer a payment of $150, a portion
of the total premium of $480.72.
On February 21, 2000, the
Kinslows made a second installment payment of $52.32.
After the
February payment, the Kinslows made no additional payments to
Hartford until October.
In April, Hartford mailed the Kinslows a bill which
gave them several options for paying the remaining balance:
a
single payment of $287.40 to be received by Hartford by April
29, 2002; two payments of $145.20 each -- the first due by April
29, 2002; or four equal payments of $74.10 with the first
installment to be paid by April 29, 2002.
On May 16, 2002,
after having received no payment since February and no response
to the April billing statement, Hartford sent the Kinslows a
notice warning them that their coverage would be cancelled
effective June 1 unless it received $74.10, the minimum
-2-
installment due by that date.
The Kinslows denied receiving
this notice of cancellation.
Paulette Kinslow testified that she was unaware that
the policy had been cancelled and that she mailed a check to
Hartford for the entire remaining balance of $287.40 on October
1, 2000.
Tragically, on October 8, 2000, the Kinslows lost
their home following a fire; they notified Hartford of their
loss the next day -- October 9, 2000.
Kinslows’ check on October 13, 2000.
Hartford received the
Because the Kinslows’
coverage had lapsed, Hartford placed the check in a pending
account while it investigated whether the policy had been
cancelled properly or whether it was eligible for reinstatement.
On October 20, 2000, Hartford notified the Kinslows that it
would not reinstate their policy.
It refunded the tendered
premium on November 3, 2000.
The Kinslows filed a lawsuit against Hartford to
enforce the policy.
In addition to their claim for breach of
contract, they alleged that Hartford violated Kentucky’s Unfair
Settlement Practices Act and the Unfair Trade Practices Act.
Both the Kinslows and Hartford moved for summary judgment on the
issue of the insurer’s liability for the fire loss.
The
Kinslows argued that the case was controlled by Howard v.
Motorists Mutual Insurance Company, Ky., 955 S.W.2d 525 (1995).
They contended that because it had negotiated their check during
-3-
the period of insurance coverage, Hartford was estopped from
denying coverage for the fire.
In its motion for summary judgment, Hartford contended
that it had complied with both the statutory and contractual
requirements in cancelling the Kinslows’ policy for non-payment
of premiums effective June 1, 2000.
Thus, it claimed that there
was no dispute that there was no coverage for the loss that
occurred more than four months after the proper cancellation of
the policy.
In its summary judgment, the trial court distinguished
the facts of this case from those in Howard.
It concluded that
unlike the situation with the Kinslows, the insurer in Howard
had a history and pattern of allowing its insured to make late
payments –- even after the policy had lapsed -– while continuing
coverage.
Finding no similar evidence to satisfy the elements
of estoppel, the trial court concluded that Howard was not
dispositive.
The court cited Troutman v. Nationwide Mutual
Insurance Co., Ky., 400 S.W.2d 215 (1966), for the principle
that “[t]he mere cashing of a premium check by the insurance
company does not create an insurance contract.”
Upon
determining that there was no insurance policy to enforce, the
trial court dismissed the remaining claims as moot.
followed.
-4-
This appeal
CR2 56.03 authorizes summary judgment:
if the pleadings, depositions, answers to
interrogatories, stipulations, and
admissions on file, together with the
affidavits, if any, show that there is not a
genuine issue as to any material fact and
that the moving party is entitled to a
judgment as a matter of law.
Summary judgment is appropriate only “where the movant shows
that the adverse party could not prevail under any
circumstances.”
Steelvest, Inc. v. Scansteel Service Center,
Inc., Ky., 807 S.W.2d 476, 480 (1991).
In ruling on a motion
for summary judgment, the circuit court must view the evidence
of record “in a light most favorable to the party opposing the
motion for summary judgment and all doubts are to be resolved in
his favor.”
Id.
We conduct a de novo review, utilizing the
same criteria set forth in Steelvest, supra.
Goldsmith v.
Allied Building Components, Inc., Ky., 833 S.W.2d 378, 381
(1992).
Our review of the record reveals that the Kinslows
renewed their homeowners’ policy with Hartford for the period
January 6, 2000, to January 6, 2001, at the cost of $480.72.
It
is undisputed that the Kinslows made two installment payments to
Hartford in January and February 2000 in the sum of $202.32 and
that they made no further payments until sometime in October
2000.
Although the Kinslows denied actual receipt of the notice
of the impending cancellation of their policy effective June 1,
2
Kentucky Rules of Civil Procedure.
-5-
2000, it is undisputed that the notice mailed by Hartford
complied with the provisions of KRS3 304.20-320(2) and with the
insurance contract.
There is no dispute that the policy was
cancelled for non-payment of premiums on June 1, 2000, and that
four months later the Kinslows suffered the devastating loss of
their home as a result of a fire of unknown origin.
Hartford
presented evidence to question the validity of the appellants’
claim that their check was sent prior to the fire.
Nonetheless,
it is undisputed that Hartford did not receive the check until
days after the fire and after the Kinslows reported the loss.
The Kinslows argue on appeal -- as they also argued in
the trial court -- that the issue is “directly controlled” by
Howard v. Motorists Mutual Insurance Company, supra, as follows:
If the Hartford wanted to avoid a claim
for coverage, it could have returned the
Kinslows’ check instead of depositing it, or
deposited the check and immediately provided
notice to the Kinslows that the deposit was
conditional. It did neither. Instead, it
deposited the money and held on to that
money, even after it had denied coverage for
this claim.
Under the plain holding of Howard, once
the Hartford unconditionally accepted the
check and deposited the money, especially
after it was on notice that the Kinslows
were making a claim, the Hartford cannot
disclaim coverage for the Kinslows.
Appellants’ brief, at pp. 3-4.
3
Kentucky Revised Statutes.
-6-
We agree with the trial court that the appellants
cannot rely on Howard.
In that highly fact-specific case, the
Supreme Court found coverage after reciting the details of an
entire “course of dealing” by the insurer of accepting late
payments and issuing retroactive coverage.
528.
Id. 955 S.W.2d at
The court held that the facts “established the required
elements of estoppel.”
Id. at 529.
The Kinslows have not
recounted the existence of a comparable custom, pattern, or
practice that would serve to estop Hartford from denying
coverage.
We have discovered no evidence in the record that
Hartford did anything that would induce the Kinslows to believe
that they would continue to have coverage in the absence of
their premium payment.
Howard specifically addressed and rejected the
Kinslows’ waiver argument as to the timing of the refund of
their tendered check:
While Motorists’ untimely refund of
Appellant’s premium might be attributable to
flawed procedures, we cannot characterize it
as the kind of intentional act that
establishes a waiver.
Hartford also cites Troutman, supra, where the insurer
negotiated a check received after the termination of the policy
and after an accident.
No coverage for the insured was found as
a matter of law:
The mailing of the premium by Mrs. Findley
on January 15 was not prompted by anything
done by the [insurance] company to indicate
-7-
that such late payment might be effective;
on the contrary it was done in the face of a
statement by the agent that the policy was
dead. The cashing of a check by the company
and its delay in notifying Mrs. Findley of
the termination of the policy and in
refunding the amount of the check did not
cause Mrs. Findley to change her position to
her detriment or in any way create any
equities in her favor. We find none of the
elements of an estoppel in the facts of this
case.
Troutman, 400 S.W.2d at 216-217.
We also note Andrus v.
Preferred Risk Life Insurance, Ky.App., 777 S.W.2d 610, 612
(1989), in which this Court affirmed a summary judgment for the
insurer, holding that accepting a late premium payment did not
constitute “a waiver by the [insurance] company of the
forfeiture provisions of the policy.”
Under all relevant
precedent, the trial court correctly determined that Hartford’s
handling of the check that it received after the loss cannot be
viewed as a waiver of its right and that it was entitled to
disclaim liability under the lapsed insurance contract.
The judgment of the Jefferson Circuit Court is
affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Bruce A. Brightwell
Louisville, Kentucky
Thomas C. Smith
R. Scott Hughes
Covington, Kentucky
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