Sent v. Received: Insurer Defeats Bad Faith Claim by Demonstrating That it Mailed Notice of Cancellation

After a fire damaged their home, Robert and Janet Fuller submitted a claim under their homeowners policy with Safeco Insurance Company. Safeco denied the Fullers’ claim on the basis that it had cancelled the policy for nonpayment of premium prior to the fire. The Fullers sued for breach of contract and bad faith; Safeco moved for summary judgment … twice. 

In its first motion for summary judgment, Safeco argued that its pre-loss cancellation of the Fullers’ policy precluded the Fullers’ claims.  The district court granted Safeco’s motion based upon testimony from a Safeco employee regarding the mailing process for cancellation notices.  However, the Fullers appealed to the Ninth Circuit, which reversed the district court, holding that the employee could not credibly testify as to the mailing because he was not “on shift” when the cancellation notice was sent and thus did not adequately “supervise” the mailing.  Safeco therefore did not, in the Ninth Circuit’s view, provide prima facie evidence of the mailing and because the Fullers maintained they never received the cancellation notice, a genuine issue of material fact precluded summary judgment.

On remand, Safeco again moved for summary judgment, this time relying on the declaration of an employee who was “on shift” in the mailroom at the time of the mailing. In the declaration, this second employee explained that, as documented by quality control operators, an envelope addressed to the Fullers was printed, stamped, and delivered to an authorized agent for the U.S. Postal Service for delivery to the post office.  That authorized agent verified that all envelopes, including the one addressed to the Fullers, were accounted for before it provided the mailings to the Postal Service. Safeco argued that the employee’s testimony, and the documentary evidence he cited, addressed the gaps in evidence identified by the Ninth Circuit and were sufficient to make a prima facie showing that the Fullers’ cancellation notice was mailed in accordance with Washington state law and therefore effective.  

The Fullers responded that the new testimony was not sufficient to make a prima facie showing because the employee could not testify that the notice was actually placed at the post office for delivery and therefore could not testify that he “supervised” the mailing. The Fullers also argued that even if Safeco had established a prima facie case, it was not entitled to summary judgment in light of the fact that the Fullers said they never received the notice.

The district court, even while expressing reluctance to grant summary judgment after a reversal, again sided with Safeco and held that there was “nothing for the jury to decide”; the only issue on summary judgment, and under Washington law, was whether Safeco adequately demonstrated that it mailed the notice and it had.  Fuller v. Safeco Ins. Co. of Oregon, 2019 WL 130302 (W.D. Wash. Jan. 8, 2019). Absent a showing by the Fullers that the Safeco employee was lying or that they had paid the premium, there were no material facts in dispute.