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Fox v. State Farm Mutual Automobile Ins. Co.

United States District Court, D. Minnesota

January 30, 2015

Daniel A. Fox, Plaintiff,
v.
State Farm Mutual Automobile Insurance Company, Defendant

For Plaintiff: James M. Sherburne, Sherburne Law Offices, PA, St. Louis Park, MN.

For Defendant: C. Todd Koebele and Brent D. Kettelkamp, Murnane & Brandt, PA, St. Paul, MN.

REPORT & RECOMMENDATION

Tony N. Leung, United States Magistrate Judge.

I. INTRODUCTION

This matter is before the Court, United States Magistrate Judge Tony N. Leung, on cross motions for summary judgment, Notice of Motion and Motion for Summary Judgment by Plaintiff Daniel A. Fox (ECF No. 18) and State Farm Mutual Automobile Insurance Company's Motion for Summary Judgment (ECF No. 26). These motions have been referred to the undersigned for a report and recommendation to the district court, the Honorable Michael J. Davis, Chief District Judge of the United States District Court for the District of Minnesota, pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 72.1(b).

A hearing was held on December 2, 2014. James M. Sherburne appeared on behalf of Plaintiff Daniel A. Fox. Brent D. Kettlekamp appeared on behalf of Defendant State Farm Mutual Automobile Insurance Company (" State Farm").

Based upon the record, memoranda, and the proceedings herein, IT IS HEREBY RECOMMENDED that the Notice of Motion and Motion for Summary Judgment by Plaintiff Daniel A. Fox (ECF No. 18) be DENIED and State Farm Mutual Automobile Insurance Company's Motion for Summary Judgment (ECF No. 26) be GRANTED.

II. BACKGROUND

This is a declaratory-judgment action concerning insurance coverage for a car accident that occurred in 2010. ( See Compl . ¶ ¶ 1, 4, 6, 7, 13, ECF No. 1-1.) The parties agree that there are no issues of material fact in dispute. ( See Pl.'s Mem. in Supp. at 2, ECF No. 15; Def.'s Mem. in Opp'n at 3 n.2, ECF No. 22.)

A. Insurance Policy

Fox has been a State Farm customer since 1988. (Pl.'s Mem. in Supp. at 3.) The policy in dispute covered a six-month period between June 5 and December 5, 2010. (Def.'s Mem. in Opp'n at 3.)

On November 1, State Farm sent Fox an " Auto Renewal" letter. (Pl.'s Mem. in Supp. at 3; Ex. A to Aff. of James M. Sherburne, ECF No. 19-1.) The Auto Renewal letter notified Fox of the renewal premium amount due for the next six-month period, December 5, 2010, through June 5, 2011. (Ex. A to Sherburne Aff.) The Auto Renewal letter stated that the premium was due on December 5, 2010, and " [t]his policy expires on the date due if the premium is not paid." (Id. (emphasis added).)

Fox did not pay the premium by December 5. (Def.'s Mem. in Opp'n at 8.) On December 20, State Farm sent Fox an " Expiration Notice" letter. (Pl.'s Mem. in Supp. at 4; Def.'s Mem. in Opp'n at 8; Ex. B to Sherburne Aff, ECF No. 19-1.) The Expiration Notice informed Fox that his policy expired on December 5. Under the heading " EXPIRATION DATE, " the Expiration Notice showed " DECEMBER 5, 2010." (Ex. B to Sherburne Aff.) Further, the Expiration Notice stated: " Your POLICY expired at 12:01 A.M. Standard Time on the Expiration Date shown." (Id.) The Expiration Notice offered Fox an option to continue coverage, stating that " [p]ayment within 22 days after Expiration Date will provide coverage until June 5, 2011." (Id.) The Expiration Notice also stated:

If paid after 22 days from the Expiration Date you will be informed if we accept your payment and if so, the exact date and time coverage is again effective. There is no coverage between the date and time of expiration and the date and time of your coverage is [sic] again effective.

(Id.) In sum, according to the Expiration Notice, Fox would be covered under the policy from December 5, 2010, through June 5, 2011, if he paid the renewal premium by December 27 .

B. Accident & Premium Payment

On December 29, Fox was injured in a car accident in which another driver " pulled in front of [him]." (Pl's Mem. in Supp. at 2.) The following day, December 30, Fox paid the premium at the office of his local State Farm agent. (Id. at 4.) This payment was more than 22 days from the December 5, 2010 expiration date of Fox's policy. On January 4, 2011, State Farm sent Fox a " Declarations Page, " informing him that the new policy period was from December 30, 2010, through June 30, 2011. (Ex. I to Affidavit of Brent D. Kettelkamp, ECF No. 23-2.)

State Farm denied coverage for the December 29 accident, asserting Fox's insurance policy had expired due to his failure to pay the renewal premium and was out of force at the time of the accident. ( See Pl.'s Mem. in Supp. at 1; Def.'s Mem. in Opp'n at 11.)

C. Relevant Policy Language

The parties dispute whether Fox's policy expired on its own terms or was cancelled by State Farm. State Farm contends that the policy expired. The policy does not define the term expiration or set forth the circumstances in which expiration occurs. (Pl.'s Mem. in Supp. at 6.) Fox contends that State Farm cancelled the policy for nonpayment of the renewal premium.

In relevant part, the general terms of Fox's policy provided:

1. When Coverage Applies
The coverages provided by this policy are shown on the Declarations Page and apply to accidents and losses that occur during the policy period. The policy period is shown on the Declarations Page and is for successive periods of six months each for which the renewal premium is paid. The policy period begins and ends at 12:01 AM Standard Time at the address shown on the Declarations Page.
. . .

6. Renewal

We agree to renew this policy for the next policy period upon payment of the renewal premium when due, unless we mail or deliver a nonrenewal notice or a cancellation notice as set forth in 7. and 8. below.

7. Nonrenewal

If we decide not to renew this policy, then, at least 60 days before the end of the current policy period, we will mail or deliver a nonrenewal notice to the most recent policy address that we have on record for the named insured who is shown on the ...

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