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Triple H Debris Removal, Inc v. Companion Property and Casualty Insurance Company

August 2, 2011

TRIPLE H DEBRIS REMOVAL, INC., PLAINTIFF-APPELLANT,
v.
COMPANION PROPERTY AND CASUALTY INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Western District of Arkansas.

The opinion of the court was delivered by: Melloy, Circuit Judge.

Submitted: April 14, 2011

Before WOLLMAN, GILMAN*fn1 and MELLOY, Circuit Judges.

This is the second time this case has come before this Court.*fn2 This case involves a dispute between Companion Property and Casualty Insurance Company and Triple H Debris Removal, Inc. over the cancellation of a workers' compensation insurance policy based on an unpaid premium. This case was tried to a jury and the jury returned a verdict in favor of Companion. On appeal, Triple H claims (1) the district court*fn3 erred in denying Triple H's motion to take judicial notice of an agency relationship, (2) the district court erred in denying Triple H's motion for a directed verdict, (3) the district court erred in instructing the jury, and (4) the jury's verdict and the district court's order in favor of Companion were not supported by sufficient evidence. We affirm.

I. BACKGROUND

Companion issued an initial workers' compensation insurance policy to Triple H, covering the period April 21, 2005 through April 21, 2006 ("Policy One"). Because the premium for the workers' compensation insurance was based on actual payroll, the initial premium was an estimate of Triple H's projected payroll. As a result, Policy One allowed Companion to conduct periodic audits of Triple H to adjust the insurance premium.

After the first audit in this case, Companion discovered that Triple H's work consisted of different tasks than what Companion had originally understood. Therefore, Triple H's classification code changed, which resulted in an increased premium rate. With the new rate, Companion recalculated the Policy One estimated premium, issued an endorsement to the insurance policy, and sent an invoice to Triple H for the additional premium owed.

Triple H does not now dispute the increased premium rate. However, Triple H did not pay the additional premium; therefore, Companion sent a cancellation notice to Triple H on Policy One. As a result, Companion cancelled Policy One, effective as of August 21, 2005.

Even though Policy One was cancelled, Triple H issued a check to Companion for the outstanding premium amount owed on Policy One. As a result, Companion agreed to issue a second insurance policy to Triple H, covering the period September 15, 2005 through April 21, 2006 ("Policy Two").

Additionally, Companion hired a vendor to conduct a final premium audit on Policy One. Based on the final audit results, Companion sent Triple H a final audit calculation for Policy One on December 7, 2005. The final audit premium for Policy One resulted in an invoice to Triple H of $1,853.00. Companion included a copy of Companion's "Requirements for Filing Premium Disputes on Audits and Endorsements Based on Audits" ("Dispute Resolution Protocol") with the invoice. Companion's Dispute Resolution Protocol required Triple H to raise a "bona fide dispute" to avoid a breach and continue Triple H's workers' compensation insurance coverage whenever Triple H disputed the audit premium.*fn4

Triple H did not agree with Companion's $1,853.00 outstanding premium calculation. Therefore, on December 29, 2005, Triple H provided Janice Watkins, a local insurance agent at Steve Standridge Insurance Agency, with information to dispute the $1,853.00 premium owed. Watkins then sent Companion a fax with Triple H's information to dispute the $1,853.00 outstanding premium.

On January 3, 2006, Companion sent Triple H a notice of cancellation of Policy Two, effective January 15, 2006. Companion's stated reason for cancellation of Policy Two was "uncollectible audit" on Policy One. Companion did not have proof of the mailing date of this notice; however, the return receipt showed that Triple H signed for the notice of cancellation on January 7, 2006.

On February 7, 2006, Companion conducted its first review of Watkins's fax regarding Triple H's dispute. On February 10, 2006, Companion and Watkins had a telephone conversation about the audit dispute, and Companion confirmed the contents of this discussion in a fax to Watkins. In Companion's fax, Companion maintained that Policy Two terminated as of January 15, 2006.

On February 16, 2006, a Triple H employee suffered a serious work-related injury. Triple H gave notice of the injury to Companion on February 22, 2006, but Companion denied coverage for the injury on the basis that Policy Two terminated as of January 15, 2006.

On March 9, 2006, Triple H paid the disputed $1,853.00 audit premium for Policy One, and Triple H filed this lawsuit the same day.

Shortly after the lawsuit began, Companion moved for summary judgment, and the district court granted Companion's motion. Triple H timely appealed the summary judgment. Viewing the evidence in the light most favorable to Triple H, we determined there existed a genuine issue of material fact as to whether Triple H was in substantial compliance with the Dispute Resolution Protocol and, as a result, whether Policy Two was properly cancelled. Therefore, we reversed and remanded the case to the district court.

Prior to trial, Triple H filed a motion for partial summary judgment, which the district court denied. Triple H also filed a pretrial motion to take judicial notice of a statement that Companion's counsel had made in front of this Court during oral arguments in the first appeal. Specifically, Companion's counsel stated that Watkins was an agent of Companion and "could serve as a conduit" ...


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