Cornhusker Casualty v. Samples

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CORNHUSKER CASUALTY INSURANCE 
COMPANY,
Plaintiff-Appellee, No. 06-35106
v. D.C. No.
CV-05-05026-RBL
CHRIS KACHMAN,
Defendant,  ORDER
AMENDING
and
OPINION AND
BROOKS SAMPLES, individually and AMENDED
as Personal Representative of the OPINION
Estate of Leanne Samples,
Defendant-Appellant.

Appeal from the United States District Court
for the Western District of Washington
Ronald B. Leighton, District Judge, Presiding
Argued and Submitted
October 19, 2007—Seattle, Washington
Filed January 30, 2008
Amended January 13, 2009
Before: Ronald M. Gould and Richard A. Paez,
Circuit Judges, and Lyle E. Strom,* District Judge.
Opinion by Judge Gould
*The Honorable Lyle E. Strom, Senior United States District Judge for
the District of Nebraska, sitting by designation.
463
466 CORNHUSKER CASUALTY INS. v. SAMPLES
COUNSEL
Kevin Coluccio, Garth L. Jones, Paul L. Stritmatter, Stritmat-
ter Kessler Whelan Withey Coluccio, Hoquiam, Washington,
for defendant-appellant Brooks Samples.
Irene M. Hecht, Maureen M. Falecki, Keller Rohrback L.L.P.,
Seattle, Washington, for plaintiff-appellee Cornhusker Casu-
alty Insurance Company.
ORDER
In an order filed on January 30, 2008, we certified the fol-
lowing question to the Washington Supreme Court:
Does sending notice of cancellation by certified mail
satisfy the “mailed” requirement of RCW
§ 48.18.290 (1997) and give sufficient notice of can-
cellation to comply with RCW § 48.18.290, even if
there is no proof that the cancellation letter was
received by the insured?
Cornhusker Cas. Ins. Co. v. Kachman, 514 F.3d 982, 988-89
(9th Cir. 2008). On December 18, 2008, the Washington
Supreme Court answered the question in the negative.
Accordingly, the opinion filed on January 30, 2008 is
AMENDED as follows.
First, the last sentence before section I, originally:
Thus, to resolve this question of statutory interpreta-
tion, in a separate order filed concurrently with this
CORNHUSKER CASUALTY INS. v. SAMPLES 467
opinion we certify to the Washington State Supreme
Court the sole dispositive issue of whether notice
sent by certified mail qualifies as “mailed” under
RCW § 48.18.290 and therefore satisfies the statu-
tory notice requirement even if the letter is never
received by the insured.
shall be replaced by the following:
Thus, to resolve this question of statutory interpreta-
tion, we certified to the Washington State Supreme
Court the sole dispositive issue of whether notice
sent by certified mail qualifies as “mailed” under
RCW § 48.18.290 and therefore satisfies the statu-
tory notice requirement even if the letter is never
received by the insured. On December 18, 2008, the
Washington State Supreme Court determined that a
certified letter must be delivered to the last known
address of the insured to constitute effective notice.
Specifically, the Washington State Supreme Court
concluded: “Sending notice of cancellation by certi-
fied mail does not satisfy the ‘mailed’ requirement of
RCW 48.18.290. In order for certified mail to meet
the statutory notice requirement, the notice must be
‘actually delivered.’ ” Cornhusker Cas. Ins. Co. v.
Kachman, 81160-1, 2008 Wash. LEXIS 1226, at *13
(Wash. Sup. Ct. Dec. 18, 2008). Therefore, we hold
that because Rockeries did not receive delivery of
the cancellation letter, Cornhusker did not provide
effective cancellation notice. We reverse the district
court’s grant of summary judgment to Cornhusker,
and instruct the district court to grant summary judg-
ment to Samples.
Second, the section titled V, originally:
Finally, Samples argues that the district court erred
in determining that notice sent by certified mail sat-
468 CORNHUSKER CASUALTY INS. v. SAMPLES
isfies the “mailed” requirement of RCW § 48.18.290
and that a letter of cancellation sent via certified mail
provides sufficient notice of cancellation to comply
with RCW § 48.18.290 even if the cancellation letter
was never received by the insured. Because our
review of the district court’s legal determination
rests entirely upon an unsettled question of Washing-
ton state law, we have certified this legal issue to the
Washington State Supreme Court. We stay further
proceedings pending resolution of our certified ques-
tion to the Washington State Supreme Court of what
constitutes “mailed” under RCW § 48.18.290.
FURTHER PROCEEDINGS STAYED
shall be replaced with:
Finally, Samples argues that the district court erred
in determining that notice sent by certified mail sat-
isfies the “mailed” requirement of RCW § 48.18.290
and that a letter of cancellation sent via certified mail
provides sufficient notice of cancellation to comply
with RCW § 48.18.290 even if the cancellation letter
was never received by the insured. We certified this
legal issue to the Washington State Supreme Court,
and the court has agreed with Samples’s interpreta-
tion of the statute. For that reason, Cornhusker did
not provide effective cancellation notice and there-
fore they must insure Rockeries for the accident that
occurred on October 22, 2004.
We REVERSE the order of the district court grant-
ing summary judgment to Cornhusker, we instruct
the district court to grant Samples’ cross-motion for
summary judgment, and we REMAND for a deter-
mination of damages.
REVERSED and REMANDED with instructions.
CORNHUSKER CASUALTY INS. v. SAMPLES 469
It is so ordered.
OPINION
GOULD, Circuit Judge:
Brooks Samples (“Samples”) appeals the district court’s
grant of summary judgment in favor of Cornhusker Casualty
Insurance Company (“Cornhusker”) and denial of Samples’
cross-motion for summary judgment in Cornhusker’s declara-
tory judgment action. The district court held that Cornhusker,
before the accident that resulted in the death of Samples’
wife, effectively cancelled its policy insuring the company
responsible for her fatal injuries. The crux of the district
court’s holding is its determination that certified mail satisfies
the notice requirement for cancellation of an insurance policy
under the Revised Code of Washington (“RCW”)
§ 48.18.290. Samples challenges this conclusion and also
argues that Cornhusker, because it informed the insured that
it would collect the premium in a quarterly payment plan, is
estopped from denying coverage under its insurance policy
when the insured paid its last installment less than three
months after the previous payment. Cornhusker, in addition to
endorsing the district court’s statutory interpretation, contends
that Samples waived his right to argue that certified mail,
unlike regular mail, must actually be delivered in order to sat-
isfy the notice requirement of RCW § 48.18.290 because he
did not raise the issue before the district court. We have juris-
diction under 28 U.S.C. § 1291. We hold that the issue of stat-
utory interpretation raised by Samples has not been waived,
and we further hold that Cornhusker is not equitably estopped
from asserting its contrary theory of statutory interpretation.
Thus, to resolve this question of statutory interpretation, we
certified to the Washington State Supreme Court the sole dis-
positive issue of whether notice sent by certified mail quali-
fies as “mailed” under RCW § 48.18.290 and therefore
470 CORNHUSKER CASUALTY INS. v. SAMPLES
satisfies the statutory notice requirement even if the letter is
never received by the insured. On December 18, 2008, the
Washington State Supreme Court determined that a certified
letter must be delivered to the last known address of the
insured to constitute effective notice. Specifically, the Wash-
ington State Supreme Court concluded: “Sending notice of
cancellation by certified mail does not satisfy the ‘mailed’
requirement of RCW 48.18.290. In order for certified mail to
meet the statutory notice requirement, the notice must be
‘actually delivered.’ ” Cornhusker Cas. Ins. Co. v. Kachman,
81160-1, 2008 Wash. LEXIS 1226, at *13 (Wash. Sup. Ct.
Dec. 18, 2008). Therefore, we hold that because Rockeries
did not receive delivery of the cancellation letter, Cornhusker
did not provide effective cancellation notice. We reverse the
district court’s grant of summary judgment to Cornhusker,
and instruct the district court to grant summary judgment to
Samples.
I
Beginning on June 28, 2000, Cornhusker, a Nebraska com-
pany, provided commercial auto insurance for Rockeries, Inc.
(“Rockeries”), a Washington landscaping company. The pol-
icy renewed annually with a “quarterly” payment plan under
which, after the first year, the total annual premium was billed
in four equal installments throughout the year as specified on
each installment notice. On eleven separate occasions during
the more than four years that Cornhusker insured Rockeries,
Rockeries did not pay a premium installment on time. After
each payment deadline passed, Cornhusker sent a letter noti-
fying Rockeries of the date the policy would be cancelled if
Cornhusker did not receive Rockeries’ payment. On all but
two of these occasions, Rockeries paid the amount due before
the cancellation date and Cornhusker sent Rockeries a notice
that Rockeries’ policy would be reinstated with no lapse in
coverage. Rockeries did not pay by the cancellation date in
January of 2001, but Cornhusker did not cancel Rockeries’
policy because the envelope containing the payment was post-
CORNHUSKER CASUALTY INS. v. SAMPLES 471
marked before the cancellation date and the payment was
received within five days of the cancellation date.
After Rockeries did not pay the premium installment due
on September 2, 2004, Cornhusker, on September 29, 2004,
sent via certified mail a letter notifying Rockeries that the pol-
icy would be cancelled if the payment was not received by
October 19, 2004. Rockeries did not pay by the cancellation
date for the second time and Cornhusker cancelled Rockeries’
policy on October 19. On October 22, 2004, Leanne Samples
was fatally injured in an automobile accident with a Rockeries
employee. Rockeries notified its insurance broker of the acci-
dent on October 25, 2004, and Cornhusker received a check
from Rockeries for the past-due premium installment on
October 28, 2004. Rockeries never received the cancellation
letter that Cornhusker sent by certified mail on September 29,
and the letter was returned to Cornhusker on November 1,
2004.
Brooks Samples, Leanne’s husband and the administrator
of her estate, brought a wrongful death action against Rocke-
ries and its owners in Washington state court. Cornhusker
then brought this action against Rockeries and Samples seek-
ing a declaratory judgment that it had effectively cancelled its
policy insuring Rockeries due to nonpayment of premiums
prior to the accident and that it therefore had no obligation to
provide Rockeries with a defense or assume any liability in
the wrongful death action.
Cornhusker filed a motion for summary judgment. Samples
filed a cross-motion for summary judgment in which he
asserted that Cornhusker never cancelled the policy because
it had sent the cancellation notice to Rockeries by certified
mail. Samples argued that because certified mail requires a
signature for delivery and because the letter was returned to
Cornhusker, the cancellation letter was never delivered. Sam-
ples contended that the failed delivery deprived Rockeries of
the notice of cancellation mandated by RCW § 48.18.290.
472 CORNHUSKER CASUALTY INS. v. SAMPLES
Samples also argued that Cornhusker was estopped from
denying Rockeries coverage because (1) Cornhusker had on
one occasion accepted late payments from Rockeries in the
past and (2) the policy stated that Rockeries had to pay the
premium on a quarterly basis and Cornhusker had received
Rockeries’ payment less than three months after Cornhusker
received Rockeries’ previous installment payment.
The district court granted Cornhusker’s motion for sum-
mary judgment and denied Samples’ cross-motion for sum-
mary judgment, holding that as a matter of law notice sent by
certified mail is “mailed” under RCW § 48.18.290 and that a
letter of cancellation sent via certified mail provides sufficient
notice of cancellation to comply with the statute even if, as in
this case, the cancellation letter was never actually received
by the insured. The district court rejected both of Samples’
estoppel arguments, holding (1) that under Washington law
one instance will not establish a course of conduct that will
support estoppel and (2) that the course of conduct and the
written premium notices called for Rockeries to make pre-
mium payments in July, late August or early September,
November, and February, and not every three months. Sam-
ples timely appealed the district court’s judgment.
II
We review de novo the district court’s grant of summary
judgment. Buono v. Norton, 371 F.3d 543, 545 (9th Cir.
2004). We must determine, viewing the evidence in the light
most favorable to Samples, if, on any ground supported by the
record, there exists a genuine issue of material fact that should
go to trial. See Summers v. A. Teichert & Son, Inc., 127 F.3d
1150, 1152 (9th Cir. 1997). We also review de novo the dis-
trict court’s interpretation of state law. United States v. David-
son, 246 F.3d 1240, 1246 (9th Cir. 2001).
III
Preliminarily, Cornhusker contends that Samples waived
his right to argue that certified mail, unlike regular mail, can-
CORNHUSKER CASUALTY INS. v. SAMPLES 473
not merely be mailed but must actually be delivered to satisfy
the statutory notice requirement of RCW § 48.18.290 because
he raises the issue for the first time on appeal. Cornhusker
claims that before the district court Samples instead argued
that Cornhusker’s mailing of the notice of cancellation by cer-
tified mail did not effectively cancel the policy because RCW
§ 48.18.290 does not authorize the use of certified mail to
provide notice of cancellation.
[1] Ordinarily, “an appellate court will not hear an issue
raised for the first time on appeal.” Broad v. Sealaska Corp.,
85 F.3d 422, 430 (9th Cir. 1996) (citing Singleton v. Wulff,
428 U.S. 106, 120, 49 L. Ed. 2d 826, 96 S. Ct. 2868 (1976)).
However, we will not consider an issue waived or forfeited if
it has been “raised sufficiently for the trial court to rule on it.”
In re E.R. Fegert, Inc., 887 F.2d 955, 957 (9th Cir. 1989).
[2] Before the district court, Samples argued against allow-
ing notice sent by certified mail to qualify as “mailed” under
RCW § 48.18.290 by contending in his Memorandum in
Opposition to Plaintiff’s Motion for Summary Judgment that
“ ‘mailed’ must be interpreted to mean ‘regular mail,’ and to
exclude the use of certified mail, which, like personal deliv-
ery, requires that someone be present to accept delivery.”
Because the district court was sufficiently apprised of the “ac-
tually delivered” issue when it ruled that RCW § 48.18.290
allows for notification by certified mail, we reject Corn-
husker’s waiver argument and proceed to analyze Samples’
appeal on its merits.
IV
[3] Samples contends that Cornhusker is equitably estopped
from denying coverage because under the ordinary meaning
of the term “quarterly,” the payment Rockeries made on Octo-
ber 28, 2004 was timely.1 To establish equitable estoppel
1
Samples does not press on appeal the argument he made before the dis-
trict court that Cornhusker is equitably estopped from denying coverage
because it accepted late payment from Rockeries on an earlier occasion.
474 CORNHUSKER CASUALTY INS. v. SAMPLES
under Washington law, Samples must show (1) that Corn-
husker’s prior conduct was inconsistent with the claim it later
asserted, (2) that Rockeries acted in reasonable reliance on
that conduct, and (3) that Rockeries would suffer an injury
from allowing Cornhusker to contradict or repudiate its prior
conduct. See Saunders v. Lloyd’s of London, 779 P.2d 249,
255 (Wash. 1989). We conclude that Samples does not meet
this standard.
[4] Samples contends that Cornhusker is estopped from
cancelling Rockeries’ policy because Cornhusker received the
final payment less than three months after Cornhusker
received Rockeries’ prior payment, thereby satisfying the
requirements of the quarterly payment plan. While the Corn-
husker policy specified that Rockeries would be billed on a
quarterly payment plan, Cornhusker explicitly had specified
which “quarters” of the year it expected payments by sending
Rockeries installment notices that listed the due dates for all
payments. Moreover, with the exception of the first policy
year, Rockeries had always been required to make equal
installment payments in July, late August or early September,
November, and February. Cornhusker’s requirement that
Rockeries pay a premium installment on September 2, 2004
was consistent with the installment notices and Cornhusker’s
actions during the three previous years it collected premiums
from Rockeries, thus preventing Samples from proving the
first prong of the estoppel standard. Cornhusker is not equita-
bly estopped from cancelling Rockeries’ insurance policy.
V
[5] Finally, Samples argues that the district court erred in
determining that notice sent by certified mail satisfies the
“mailed” requirement of RCW § 48.18.290 and that a letter of
cancellation sent via certified mail provides sufficient notice
of cancellation to comply with RCW § 48.18.290 even if the
cancellation letter was never received by the insured. We cer-
tified this legal issue to the Washington State Supreme Court,
CORNHUSKER CASUALTY INS. v. SAMPLES 475
and the court has agreed with Samples’s interpretation of the
statute. For that reason, Cornhusker did not provide effective
cancellation notice and therefore they must insure Rockeries
for the accident that occurred on October 22, 2004.
We REVERSE the order of the district court granting sum-
mary judgment to Cornhusker, we instruct the district court to
grant Samples’ cross-motion for summary judgment, and we
REMAND for a determination of damages.
REVERSED and REMANDED with instructions.