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Century Surety Co. v. Jim Hipner LLC

United States Court of Appeals, Eighth Circuit

November 23, 2016

Century Surety Company Plaintiff- Appellant
v.
Jim Hipner LLC; Robert Lopez; Huey Brock; Jose Chavez; Abraham Reyes Defendants-Appellees

          Submitted: September 20, 2016

         Appeal from United States District Court for the District of North Dakota - Bismarck

          Before SMITH, BYE, and BENTON, Circuit Judges. [1]

          PER CURIAM.

         Century Surety Company ("Century") appeals from a final judgment of the district court[2] determining that Jim Hipner, LLC[3] ("Hipner") does have coverage under an umbrella policy entered into between Century and Hipner. After finding the notice provision in the policy ambiguous, the district court concluded that the governing law, the law of Wyoming, would consider Hipner's delayed notice of claim not to be untimely. Century appealed, seeking reversal of the district court's determinations that the notice provision is ambiguous and that Hipner gave timely notice. Because Wyoming law, however, had not definitively addressed whether an insurer must be prejudiced before being entitled to deny coverage when the insured has failed to give notice "as soon as practicable, " we certified the question to the Supreme Court of Wyoming. See Wyo. Stat. Ann. § 1-13-106.

         On certification, the Supreme Court of Wyoming adopted the notice-prejudice rule, holding that "prejudice to the insurer [is required] before coverage may be denied based upon a violation of a notice provision contained in the policy." Century Sur. Co. v. Jim Hipner, LLC, 377 P.3d 784, 791 (Wyo. 2016). Additionally, the court held that "an insurance clause is [not] enforceable where it excludes coverage unless the insured notifies the insurer 'as soon as practicable . . . whether [the insurer] [is] prejudiced or not.'" Id. at 792 (ellipses in original) (second and third alterations in original). After supplemental briefing to this court, we now affirm the district court.

          I. Background

         In 2010, Hipner, a trucking company, purchased a $2 million umbrella policy ("Century Policy") from Century. 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 caused a 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 that "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"), his company's primary insurers. But, no one at Hipner notified Century. In his deposition, Jim stated that he thought that notifying Willis of Wyoming satisfied his obligations to notify all of the ...


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