White v. United American Insurance

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS August 26, 2005
FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 05-60133
Summary Calendar
CHARLES N. WHITE,
Plaintiff-Appellant,
versus
UNITED AMERICAN INSURANCE CO.,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Mississippi
(1:03-CV-182)
Before BARKSDALE, STEWART, and CLEMENT, Circuit Judges.
PER CURIAM:*
Charles White appeals the summary judgment awarded United
American Insurance Company (UAIC) against his claims for, inter
alia, bad faith and breach of contract in the cancellation of his
insurance policy.
In June 1997, White was issued a Medigap Plan F. policy from
UAIC. White elected to have UAIC withdraw his monthly premiums
directly from his bank; White had the sole authority to stop this
bank-draft billing. He was diagnosed with cancer in 1999.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Around March 2000, however, UAIC converted White’s account
from direct withdrawal to paper billing, without notice or White’s
authorization. White received the paper billing statements for
payment of his April premium, but did not pay them; after two
months his policy lapsed.
White filed a claim concerning the policy lapse with the
Mississippi Department of Insurance (MDOI) in October 2000. In
response to MDOI’s investigation, UAIC, inter alia, offered to
reinstate White’s policy. MDOI officials twice forwarded this
communication to White, who did not respond. Nor did White attempt
to reinstate his policy on his own.
White filed this action in state court against UAIC in April
2003, claiming, inter alia, negligence, breach of contract, and
insurance bad faith. Following removal, the parties agreed to
proceed before a magistrate judge. See 28 U.S.C. § 636(b)(2).
On the completion of discovery, UAIC moved for summary
judgment on all claims, asserting that, even if it was at fault for
cancelling White’s direct withdrawal payment, White could not show
liability because he failed to respond to the mailed premium bills
and the reinstatement offer. The court granted summary judgment
against all of White’s intentional tort and contract claims,
finding no evidence that UAIC acted willfully, intentionally,
fraudulently or outrageously in changing the billing system for
White’s policy.
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The court discussed White’s negligence claim separately,
concluding that, even in the light of error by UAIC in changing
from direct withdrawal to paper billing, White could have avoided
his damages by exercising reasonable and ordinary care – paying
“simple attention to his mail”.
A summary judgment is reviewed de novo, applying the same
legal standards as the district court. Mayo v. Hartford Life Ins.
Co., 354 F.3d 400, 403 (5th Cir. 2004). Such judgment is proper
when “there is no genuine issue as to any material fact and ...
[the movant] is entitled to a judgment as a matter of law”. FED.
R. CIV. P. 56(c); e.g., Celotex Corp. v. Catrett, 477 U.S. 317(1986). All inferences must be drawn in favor of the nonmovant,
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587-88 (1986); but, “there is no issue for trial unless there
is sufficient evidence favoring the nonmoving party for a jury to
return a verdict for that party. If the evidence is merely
colorable, or is not significantly probative, summary judgment may
be granted”, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50
(1986) (internal citations omitted).
White contends there are genuine issues of material fact for
whether: UAIC’s investigation into White’s consumer claim with the
MDOI was negligent; UAIC failed to properly communicate an offer of
reinstatement to White; UAIC improperly “transferred the burden” to
White to act to reinstate his policy; UAIC failed to correct its
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bank-draft error; and UAIC’s actions constituted breaches of
implied covenants of good faith and fair dealing. White also
contends: the district court improperly applied Mississippi’s
doctrine of avoidable consequences; and, in this regard, a genuine
issue of material fact exists for what damages were available to be
mitigated.
UAIC responds that no genuine issues of material facts exist
because White failed to exercise reasonable efforts to avoid
damages resulting from the cessation of the bank-draft billing; and
no such fact issue exists concerning his bad-faith claims.
White’s deposition testimony was: he realized the premium
payments were not withdrawn from his bank account in March 2000; he
asked the bank why this was so; he knew that, if premium payments
were not being withdrawn from his account, he needed to pay them in
order to continue coverage; he called his local insurance agent to
ask what was happening with his policy; the local agent did not
call him back, and White did not follow up; he received notices in
the mail billing him for his premiums; but, he did not mail his
payments because he did not know he had to send a check. Although
White testified he did not recall receiving the two letters from
MDOI concerning UA’s offer to reinstate his coverage, both letters
are in the summary judgment record. White verified the mailing
address was his, and the letters were not returned to sender.
Viewing all of the facts in the light most favorable to White,
and for essentially the reasons stated by the district court,
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summary judgment is proper. First, there is no genuine issue of
material fact to preclude summary judgment against White’s claims
for insurance bad faith, breaches of implied covenants of good
faith and fair dealing, or fraud. No evidence was presented that
UAIC intentionally switched White’s billing plan to cause him to
let it lapse.
Second, for White’s negligence and breach of contract claims,
the district court concluded correctly that, even if UAIC
erroneously ceased bank-draft billing, White failed to avoid the
consequences of UAIC’s error (mitigate damages) by responding
either to the paper bills for premium payment or to the
communication from MDOI of UAIC’s offer to reinstate his policy.
Such failure bars recovery. See Munn v. Algee, 924 F.2d 568, 573
n.9 (5th Cir.), cert. denied, 502 U.S. 900 (1991) (“Under
Mississippi law, an injured plaintiff may not recover for damages
that he did not take reasonable efforts to avoid.”); Pelican
Trucking Co. v. Rossetti, 167 So.2d 924, 927 (1964), overruled in
part, sustained in part, 170 So.2d 573 (1965).
AFFIRMED.
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