United States District Court, D. Kansas
SAUDER WEST FARMS, INC. and FARMERS STATE BANK OF ALICEVILLE, Plaintiffs,
SENTRY SELECT INSURANCE CO., Defendant.
MEMORANDUM AND ORDER
D. CRABTREE UNITED STATES DISTRICT JUDGE
Sauder West Farms, Inc. (“Sauder”) and Farmers
State Bank of Aliceville (“Farmers State Bank”)
filed this breach of contract action against defendant Sentry
Select Insurance Co. (“Sentry”). This matter
comes before the court on plaintiffs' Motion for Summary
Judgment (Doc. 26) and defendant's Motion for Summary
Judgment (Doc. 28). Plaintiffs filed a Response and
Memorandum in Opposition to defendant's motion (Doc. 30),
and defendant submitted a Reply (Doc. 32). And, defendant
submitted a Memorandum in Opposition to plaintiffs'
motion (Doc. 31). But plaintiffs never submitted a Reply. The
motions thus are fully briefed, and the court is prepared to
rule. For reasons explained below, the court grants
defendant's Motion for Summary Judgment, and the court
denies plaintiffs' Motion for Summary Judgment.
following facts are either stipulated to by the parties in
their Stipulation of the Parties (Doc. 25), or are
Select Insurance Policy
Sauder owned a John Deere 2011 Model no-Till Drill
(“drill”) and a Model 1910 cart
(“cart”) to transport the drill. Plaintiff
Farmers State Bank owned a lien on the drill and cart.
Defendant Sentry issued an insurance policy (“the
policy”) for the drill and cart. The policy insured the
drill for $90, 000 and the cart for $55, 000 for an annual
period beginning July 26, 2012 and ending July 26, 2013.
Plaintiff Sauder paid the full annual premium on this policy.
The policy's “Loss Payable Clause” identified
plaintiff Farmers State Bank as the loss payee. The insured
filed no claims on this policy from July 26, 2012 to July 26,
policy contained a cancellation provision. The cancellation
provision is titled “Common Policy Conditions.”
In relevant part, the “Common Policy Conditions”
may cancel this policy by mailing or delivering to the first
Named Insured written notice of cancellation at least:
a. 10 days before the effective date of cancellation if we
cancel for nonpayment of premium . . . .
Doc. 25-1 at 4. The “Common Policy Conditions”
was modified by an Endorsement titled KANSAS
CHANGES-CANCELLATION AND NONRENEWAL. This Endorsement
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
KANSAS CHANGES-CANCELLATION AND NONRENEWAL
A. Paragraph 2. of the Cancellation Common Policy Condition
is replaced by the following:
2a. We may cancel the policy by mailing or delivering to the
first Named Insured written notice of cancellation, stating
the reason for cancellation, at least:
(1) 10 days before the effective date of cancellation if we
cancel for nonpayment of premium . . . .
Id. at 20. The policy's Loss Payable Clause
contained the following language:
The endorsement modifies insurance provided under the
COMMERCIAL INLAND MARINE COVERAGE - CONTRACTORS EQUIPMENT
With respect to coverage provided by this endorsement, the
provisions of the Coverage Form apply unless modified by the
C. We may cancel the policy as allowed by the CANCELLATION
Common Policy Condition. Cancellation ends with this
agreement as the loss payee's interest. If we cancel the
policy, we will mail you and the loss payee the same advance
Id. at 6. The policy also included a relevant
modification in an Endorsement titled “KANSAS
CHANGES-CANCELLATION AND NONRENEWAL.” This Endorsement
1. If we decide not to renew this policy, we will mail or
deliver written notice of nonrenewal, stating the reasons for
nonrenewal, to the first Named Insured at least 60 days prior
to the expiration of the policy.
Id. at 20.
18, 2013, defendant Sentry sent plaintiff Sauder (but not
plaintiff Farmers State Bank) a letter captioned
“RENEWAL OFFER.” The letter requested that
plaintiff Sauder pay the annual premium for the renewal
policy on or before July 26, 2013. The premium amount for the
renewal policy was $798.00. The letter explained that if
defendant Sentry did not receive the annual premium payment
by the policy's expiration date, then defendant Sentry
would “assume that the renewal offer has been
rejected.” Doc. 25-2 at 2. The June 18, 2013
correspondence also provided plaintiff Sauder with a
“Billing Information” document containing a bill
due date of July 26, 2013. Near the end of the Billing
Information, the following statement appears: “Premium
payment must be received by the billing due date to prevent
cancellation of the policy for non-payment of premium.”
Id. at 8. That same documents also included
“Coverage Information” containing the following
of Policy ...