Springtown insurance lawyers need to read this Corpus Christi Court of Appeals opinion dealing with late payment on an insurance policy. The case is styled, Schrader v. Texas Farm Bureau Underwriters.
The trial court granted summary judgement in favor of Farm Bureau.
Schrader alleged in his lawsuit against Farm Bureau that two farming tractors and related equipment valued at $60,000, were stolen from him sometime between December 5 and 13, 2013. Farm Bureau had denied the claim based on its assertion that the policy was not in force for the date of loss. Schrader asserts the policy was “undeniably in force until midnight on December 6 and should have bee reinstated retroactively to November 30, 2013, as premiums were forwarded via the agent.
According to Farm Bureau, Schrader’s insurance agent John Hendrix filed an application to reissue the policy along with Schrader’s premium payment on December 16, 2013, and Farm Bureau issued a new policy effective that day. In support of its motion, Farm Bureau attached several pieces of evidence, including a past due notice sent by Farm Bureau to Schrader on November 25, 2013 which states: “The payment on your inland marine policy is past due. Please send the payment so that it will reach our office by 12-05-13. If we do not receive the amount due by the date listed above, all coverage afforded by this policy will be cancelled effective 12:01 A.M., 12-05-13.”
Schrader argued that there was no lapse in coverage because he “relied upon Hendrix’s promise on December 2, 2013 that if he just mailed a second check Hendrix would make sure coverage did not lapse even if the check was actually received after December 5, 2013.” Schrader attached deposition testimony in which he stated that he first wrote a check for the premium amount on November 15, 2013 and sent it to Farm Bureau that same day. He also provided an affidavit stating that, when he received the past due notice on December 2, he told Hendrix that he had already sent the premium payment, but Hendrix “said he never received the check and then told me to just send another check directly to his office and that he would make sure the policy was renewed so there would be no lapse in coverage. Schrader argued in his summary judgement response that Farm Bureau cannot now claim the policy lapsed after December 5, 2013, because it processed Schrader’s policy renewal premium after December 5, 2013.
Schrader contends on appeal that a fact issue exists regarding whether the policy was in effect at the time the tractors were stolen because he complied with Farm Bureau’s renewal instructions.
The appeals court could not reverse the decision based on Schrader’s argument because the issue was not raised in response to the Farm Bureau’s motion for summary judgment. Texas Rule of Civil Procedure 166a(c)
states “Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal.”
Had this issue been raised on appeal, Schrader may have had the decision reversed.