Nationwide Property and Casualty Insurance Company Plaintiff- Appellee
Donald R. Faircloth, Jr. Defendant-Appellant Robert Jones; Carolyn Jones; Randall Cohea Defendants
Submitted: September 22, 2016
from United States District Court for the Eastern District of
Arkansas - Jonesboro
RILEY, Chief Judge, MURPHY and SMITH, Circuit Judges.
Faircloth purchased an automobile insurance policy online
from Nationwide Property and Casualty Insurance Company
("Nationwide"). Faircloth wrecked his car, and
Nationwide rescinded the policy. Before the district court,
Nationwide sought declaratory judgment that
it had no duty to indemnify or defend Faircloth under the
policy's coverage because Faircloth made material
misrepresentations in his online insurance application. The
district court granted summary judgment to Nationwide,
concluding that Nationwide was entitled to rescind the policy
because Faircloth misrepresented the "primary use"
of his vehicle. We affirm.
May 2013, Donald Faircloth applied online for an automobile
insurance policy from Nationwide. The application asked
Faircloth to identify the "primary use" of the
vehicle from a multiple choice list. According to
Nationwide's reproduction of the online application,
Faircloth had three choices: "Work/School (commute
to/from, errands)"; "Pleasure (recreational
driving)"; and "Business (deliveries, sales calls,
taxi)." Faircloth answered
"Work." Nationwide approved Faircloth's
application and issued a policy.
30, 2013, Faircloth hydroplaned, lost control of his vehicle,
and crashed. On July 18, 2013, Nationwide decided to rescind
Faircloth's policy because Faircloth's online
application represented that Faircloth would maintain
continuous insurance coverage until the Nationwide policy
took effect, but Faircloth's former insurance policy
allegedly lapsed before the Nationwide policy took effect.
November 4, 2013, Nationwide filed an action seeking
declaratory judgment that it had no duty to indemnify or
defend Faircloth under the policy's coverage because
Faircloth made material misrepresentations in his
application. Nationwide subsequently notified Faircloth that
it was rescinding his policy and tendered his premiums to
him; Faircloth did not accept or deposit the tender. On
September 8, 2014, Nationwide deposed Faircloth and
discovered that Faircloth used the vehicle to make
business-related deliveries, putting over 1, 200 miles a week
on the vehicle for such deliveries. Nationwide contends that
these facts establish that Faircloth also misrepresented his
"primary use" of the vehicle as "work"
instead of "business." Faircloth and Nationwide
filed competing motions for summary judgment.
district court granted Nationwide's motion for summary
judgment and denied Faircloth's motion as moot. Although
Faircloth "kind-of dispute[d] whether the online
application he filled out included the parentheticals"
that explain the three primary-use choices, the court
determined that Faircloth failed to raise a material question
of fact about how the primary-use choices appeared. Thus,
"[a] reasonable fact finder could come to only one
conclusion: the parentheticals were there." Therefore,
the court held that Faircloth misrepresented his primary use
of the vehicle because "[a] reasonable person in
Faircloth's position-a person putting 1, 200 miles a week
on his car delivering things-would have chosen business as
the primary use."
argues that the district court erred in granting
Nationwide's motion for summary judgment. First, he
argues that the district court failed to address the
"materiality" of the purported misrepresentation.
Second, Faircloth argues that even if the misrepresentation
was material, the application was ambiguous and Nationwide
"cannot rescind the policy based on misrepresentations
that it caused or induced." Additionally, Faircloth
argues that Nationwide failed to properly effectuate
rescission under Arkansas law, Nationwide is estopped from
rescinding the policy, and his third-party-liability coverage
claim is not moot.
review de novo the district court's grant of
summary judgment and may affirm the judgment on any basis
supported by the record." Hohn v. BNSF Ry. Co.,
707 F.3d 995, 1000 (8th Cir. 2013). Considering the facts in
the light most favorable to the nonmovant, "[w]e will
affirm the district court's grant of summary judgment if
'there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of
law.'" Chew v. Am. Greetings Corp., 754
F.3d 632, 635 (8th Cir. 2014) (quoting Fed.R.Civ.P. 56(a)).
"Although the burden of demonstrating the absence of any
genuine issue of material fact rests on the movant, a
nonmovant may not rest upon mere denials or allegations, but
must instead set forth specific facts sufficient to raise a
genuine issue for trial." Rohr v. Reliance
Bank, 826 F.3d 1046, 1052 (8th Cir. 2016) (quoting
Wingate v. Gage Cty. Sch. Dist., No. 34, 528 F.3d
1074, 1078-79 (8th Cir. 2008)).
burden of proof is particularly relevant when the party with
the burden of proof moves for summary judgment and the
opposing party presents evidence contesting the veracity of
the movant's evidence." United States v. 3234
Washington Ave. N., 480 F.3d 841, 845 (8th Cir. 2007).
"In this situation, if the testimony of a witness . . .
is necessary to carry the movant's burden of proof, we
look carefully at whether the witness is unbiased and
competent, and whether his testimony is positive, internally
consistent, unequivocal, and in full accord with the
documentary exhibits." U.S. Commodity Futures
Trading Comm'n v. Kratville, 796 F.3d 873, 890 (8th
Cir. 2015) (quoting 3234 Washington Ave. N., 480
F.3d at 845). "If the movant makes this showing, then
the opposing party cannot force a trial merely to
cross-examine the witness or in the hope 'that something
might turn up at the trial.'" 3234 Washington
Ave. N., 480 F.3d at 845 (quoting Lundeen v.
Cordner, 354 F.2d 401, 408 (8th Cir. 1966)). However,
summary judgment is improper when "'specific facts
are alleged that if proven would call the credibility of the
moving party's witness into doubt, ' . . . especially
when the challenged testimony 'is an essential element of
the plaintiff's case.'" Id. (quoting
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