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Century Surety Co. v. Jim Hipner, LLC

Supreme Court of Wyoming

August 17, 2016

CENTURY SURETY COMPANY, Appellant (Plaintiff),
v.
JIM HIPNER, LLC; and HUEY BROCK, Appellees (Defendants).

         W.R.A.P. 11 Certification from the United States Court of Appeals for the Eighth Circuit The Honorable Lavenski R. Smith, Judge

          Representing Appellant: Christopher C. Voigt and Nicholas T. Haderlie of Crowley Fleck PLLP, Sheridan, Wyoming; Jeffrey C. Gerish of Plunkett Cooney, Bloomfield Hills, Michigan; Bradford S. Moyer of Plunkett Cooney, Kalamazoo, Michigan. Argument by Mr. Gerish.

          Representing Appellees: Duane A. Lillehaug of Maring Williams Law Office, P.C., Fargo, North Dakota, representing Jim Hipner, LLC; Colleen M. Pratt and Michael D. Ainbinder of Ainbinder & Pratt, Long Beach, California, representing Huey Brock; Philip White Jr. of Karpan and White P.C., Cheyenne, Wyoming, representing Jim Hipner, LLC and Huey Brock. Argument by Mr. Ainbinder.

          Before BURKE, C.J., and HILL, DAVIS, FOX, and KAUTZ, JJ.

          FOX, Justice.

         [¶1] The United States Court of Appeals for the Eighth Circuit certified a question to this Court concerning the enforceability of an insurance policy notice provision. Specifically, the Eighth Circuit asked:

[W]hether, under Wyoming law, an insurer must be prejudiced before being entitled to deny coverage when the insured has failed to give notice "as soon as practicable." Many states have expressly adopted a notice-prejudice rule under which an insurer will only be able to disclaim coverage if it demonstrates it was actually prejudiced by late notice. See 46A C.J.S. Insurance § 1769. To date, Wyoming has not.

         We answer in the affirmative.

         FACTS

         [¶2] Although the parties provided a record containing various documents, we find it unnecessary to refer to that record. Where a question of law is certified to this Court pursuant to W.R.A.P. 11, we rely upon the factual determinations of the certifying court. Wexpro Co. v. Brimhall, 7 P.3d 42, 43 (Wyo. 2000); Allhusen v. State By and Through Wyo. Mental Health Professions Licensing Bd., 898 P.2d 878, 881 (Wyo. 1995). The following facts were provided in the Eighth Circuit's Order for Certification of Questions of State Law:

In 2010, [Jim Hipner, LLC ("Hipner")], a trucking company, obtained a $2 million umbrella policy ("Century Policy") from Century [Surety Company ("Century")] in order to secure a contract with a customer. In paragraph 3, the Century Policy contains the following notice provision:
b. If you notify any "underlying insurer" of an "occurrence" or an offense involving "bodily injury" or "personal and advertising injury", you must see to it that we are also notified in writing as soon as practicable.
Later, in the same paragraph, the Century Policy contains an exclusion provision that states:
Failure to notify us, as required per paragraphs 3.a. and 3.b. above, of an "occurrence" or offense as soon as practicable will result in exclusion of coverage whether we are prejudiced or not.
On March 31, 2011, one of Hipner's drivers created a road obstruction that produced an injury-generating, multi-vehicle collision ("the accident") in North Dakota. According to the North Dakota Motor Vehicle Crash Report, a passenger in a car that was rear-ended by another vehicle suffered injuries deemed minor at the time. The Motor Vehicle Crash Report indicates that the other persons involved in the accident had "non-incapacitating" injuries at the time of the accident. Jim Hipner ("Jim"), a co-owner of Hipner, learned of the accident the same day that it occurred.
Jim testified that, upon his arrival to the scene of the accident, the state patrol officer told him "there were no serious injuries." Jim also testified that the officer told him that one of the passengers had "some numbness or tingling, " but that "it was nothing to worry about" and that this "happens quite often in these cases." According to the medical records, one person, Huey Brock, arrived at Trinity Hospital on March 31 unable to move his arms or legs.
On the day of the accident, Jim called and reported the accident to representatives at Willis of Wyoming and Great West Casualty Company ("Great West"), the underlying primary insurance companies for Hipner. But, no one at Hipner notified Century. In his deposition, Jim stated that he thought notifying Willis of Wyoming satisfied his obligations to notify all of the insurance companies. On March 31, Great West set up a claim and began investigating the accident.
Brock's injuries rendered him quadriplegic. Jim testified that he did not know that Brock sustained significant injuries from the accident until May 2011. On September 20, 2011, Century was notified of the accident indirectly when Willis of Wyoming sent Century the policy renewal for Hipner. The next day, Century created an umbrella claim relating to the accident. On December 31, 2011, Great West sent its claim file, including the investigation materials, to Century. Century did not perform its own investigation of ...

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