Rhonda Rowan v. Standard Fire Insurance Co

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 10-1854
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Rhonda Rowan, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Western District of Missouri.
Standard Fire Insurance Company, *
* [UNPUBLISHED]
Appellee. *
*
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Submitted: November 16, 2010
Filed: November 29, 2010
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Before WOLLMAN, HANSEN, and SHEPHERD, Circuit Judges.
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PER CURIAM.
Standard Fire Insurance Company (Standard) insured a dwelling owned by
Rhonda Rowan. The policy period was from March 20, 2004, through March 20,
2005. Fifty-two days after the effective date of the policy, Standard sent Rowan
notice that Standard was canceling the policy effective June 14, 2004. A fire
destroyed Rowan's home on January 19, 2005.
After Standard denied Rowan's claim under the insurance contract, Rowan sued
Standard in Missouri state court. Standard removed the claim to federal court based
on diversity of citizenship. The parties filed competing motions for summary
judgment. The district court1 held that Standard cancelled the policy in accordance
with the plain language of the insurance contract and granted summary judgment to
Standard. Rowan appeals.
Rowan argues that the insurance contract was ambiguous and should be
construed in her favor. The parties agree Missouri law governs. "Under Missouri
law, the interpretation of an insurance policy is a question of law." Brake
Landscaping & Lawncare, Inc. v. Hawkeye Sec. Ins. Co., --- F.3d ---, 2010 WL
4273244, at *2 (8th Cir. Nov.1, 2010). As such, we review de novo both the grant of
summary judgment and the interpretation of the insurance contract. Id.The language of an insurance contract "is ambiguous when there is uncertainty
in the meaning of the words used in the contract, or when the contract terms are
reasonably subject to different interpretations." Am. Home Assur. Co. v. Pope, 591
F.3d 992, 999 (8th Cir. 2010). The contract at issue here explicitly governed
cancellation. It provided that Standard "may cancel this policy for the reasons stated
in this condition by notifying you in writing of the date cancellation takes effect."
(App. at 33.) Only the second and third reasons for cancellation are relevant to this
case, and they provided, respectively, for cancellation:
(2) When this policy has been in effect for less than 60 days and is not
a renewal with us, we may cancel for any reason by notifying you at least
30 days before the date cancellation takes effect.
(3) When this policy has been in effect for 60 days or more, or at any
time if it is a renewal with us, we may cancel if there has been a material
misrepresentation of fact which if known to us would have caused us not
to issue the policy or if the risk has changed substantially since the
1
The Honorable Greg Kays, United States District Judge for the Western
District of Missouri.
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policy was issued. This can be done by notifying you at least 30 days
before the date cancellation takes effect.
(Id.)
Rowan argues that the insurance contract language is ambiguous because both
part (2) and part (3) are implicated by the facts of this case. As Rowan sees it, part (2)
is implicated because the notice of cancellation was sent within 60 days of the
effective date of the policy, and part (3) is implicated because the effective date of the
cancellation occurred after the policy had been in effect for more than 60 days.
Rowan's reading of the contract is unreasonable because such a reading ascribes two
distinct meanings to the single word "cancel." In part (2) Rowan would read "cancel"
to mean the act of cancellation (regardless of whether the contract continues to bind
the parties until some future date), while in part (3) she would have "cancel" mean the
effective date of the cancellation (i.e., the date on which the contract no longer binds
the parties).
The insurance contract plainly distinguishes between the act of cancellation and
the effective date of the act of cancellation. And importantly, the contract
unambiguously requires that the act of cancellation become effective only at a future
date (at least 30 days after the notice of cancellation under part (2) and (3)). Read as
a whole, the plain language of the contract unambiguously allows Standard to do what
it did here — "cancel" the policy for any reason when the policy has been in effect for
less than 60 days, while delaying the effective date of the cancellation until after the
policy has been in effect for 60 days (not coincidentally providing the insured time to
secure replacement coverage if desired). Thus, the insurance contract is reasonably
subject to only one interpretation. When an insurance contract is unambiguous, as the
contract was in this case, the policy will be enforced as written. See Pope, 591 F.3d
at 999.
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Accordingly, we affirm. See 8th Cir. R. 47B.
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