Bank of Toccoa v. Cotton States Mut. Ins. Co.
| Decision Date | 29 November 1993 |
| Docket Number | No. A93A1256,A93A1256 |
| Citation | 211 Ga.App. 389,439 S.E.2d 60 |
| Parties | BANK OF TOCCOA v. COTTON STATES MUTUAL INSURANCE COMPANY. |
| Court | Georgia Court of Appeals |
Adams, Clifton & Sanders, Janney E. Sanders, Toccoa, for appellant.
McClure, Ramsay & Dickerson, John A. Dickerson, Toccoa, for appellee.
Plaintiff Bank of Toccoa was the loss payee on a policy of automobile insurance issued by defendant Cotton States Mutual Insurance Company. The bank filed this action seeking to recover under the policy. Cotton States answered and alleged that it had cancelled the policy prior to the loss. The bank moved for partial summary judgment on the issue of coverage under the policy, contending the purported cancellation was ineffective. The trial court denied the bank's motion, and this appeal followed.
The undisputed material facts show that the bank required its borrower to maintain an insurance policy on her vehicle. Cotton States issued a policy for the term of April 9, 1990 to October 9, 1990, naming the bank as the loss payee.
A Cotton States employee, according to her affidavit, received a newspaper article from an agent in Toccoa reporting that the insured borrower had been arrested on a federal counterfeiting charge. On the basis of that article she initiated cancellation of the policy. Cotton States concluded that "this information sufficiently established that [the insured] did not meet Cotton States eligibility requirements and that her policy would be cancelled because of that criminal activity." On this basis, Cotton States prepared a "Notice of Cancellation" stating in part, "REASON FOR CANCELLATION: THIS RISK DOES NOT MEET OUR ELIGIBILITY REQUIREMENTS."
According to another employee's affidavit, Cotton States mailed this notice to both the insured borrower and the bank on June 8, 1990. The notice had an effective date of June 22, 1990. The bank, however, denies receiving it. Cotton States acknowledges that it did not send a notice of nonrenewal either to the insured borrower or to the bank. On December 23, 1990, the vehicle was destroyed by fire.
1. The statutory requirements for notice of cancellation of an automobile insurance policy are governed by OCGA § 33-24-45. Pennsylvania, etc., Ins. Co. v. Person, 164 Ga.App. 488, 490(1), 297 S.E.2d 80 (1982). In this case, the attempted notice of cancellation by Cotton States did not conform to the relevant statutes or to its own policy language for two reasons, either of which will suffice to render the cancellation ineffective.
First, OCGA § 33-24-44(b) requires: "[w]ritten notice stating the time when the cancellation will be effective, which shall not be less than 30 days from the date of mailing or delivery...." The policy itself likewise requires "at least 30 days notice," not 20 days as contended by Cotton States. The purported notice on its face provided only 14 days' notice. It therefore complies with neither the statute nor the relevant policy provision.
Cotton States contends that its attempted notice should be construed as actually stating the appropriate time period and that the policy should be "deemed" to be cancelled 30 days after the notice date. This contention has been decided adversely to Cotton States in Holcomb v. Southern Guar. Ins. Co., 143 Ga.App. 788, 240 S.E.2d 128 (1977). In that case, a workers' compensation insurer provided 11 days' notice of cancellation to the insured. Relying upon a predecessor statute to OCGA § 33-24-44 requiring 15 days' notice, this court held that the purported notice did not meet the plainly stated requirements of the statute, and "thus the policy was never canceled." 143 Ga.App. at 788, 240 S.E.2d 128. Failure to provide the 30 days' notice mandated by the statute is apparent on the face of the purported notice, and results in noncancellation of the policy.
Second, OCGA § 33-24-45(c) provides: "No notice of cancellation of a policy issued for delivery in this state shall be mailed or delivered by an insurer ... except for one or more of the following reasons...." It then lists eight reasons for cancellation, none of which appears on the notice of cancellation in this case. The policy itself provides that after it is in effect for 60 days, cancellation will occur only for nonpayment of premium, suspension or revocation of a driver's license, or a material misrepresentation in obtaining the policy.
"This risk does not meet our eligibility requirements" is a mere conclusory statement and not a valid reason for cancellation under OCGA § 33-24-45(c) or the relevant policy language. Cotton States attempted to cure this inadequate notice by means of its contentions in this litigation. In those contentions, it asserted for the first time that it actually had cancelled the policy on the basis of "reasonable suspicion of criminal activity." Contentions in the trial court, however, cannot amend or alter the stated reason Cotton States gave on the notice required by OCGA § 33-24-45(d). Moreover, OCGA § 33-24-45(c)(7)(C) provides for cancellation where the insured or other operator has "a conviction record, criminal or traffic ... which is such that his operation of an automobile might endanger the public safety." Even assuming that a bona fide conviction for counterfeiting satisfies the requirements of OCGA § 33-24-45(c), "suspicion" or accusation of criminal activity by word of mouth or a newspaper article is not a "conviction record" and does not satisfy those requirements.
Cotton States further contends that because OCGA § 33-24-45(c) requires a notice of cancellation to be given "as required by Chapter 39 of this title," the language found in one section of that title may be engrafted onto OCGA § 33-24-45(c) to provide additional reasons for cancellation. However, "a reasonable suspicion ... [of] criminal activity" is mentioned only in OCGA § 33-39-11, a provision regarding disclosure of adverse underwriting decisions. This language is applicable only when the insurer has advised the insured that it will provide the reason or reasons for an adverse underwriting decision upon request...
To continue reading
Request your trial
-
Massey v. Allstate Ins. Co.
...non-renewal notice provisions, the policy and its coverages are automatically renewed. See Bank of Toccoa v. Cotton States Mut. Ins. Co. , 211 Ga.App. 389, 393 (2), 439 S.E.2d 60 (1993) (where no non-renewal notice is provided under OCGA § 33–24–45 (e), a policy renews under the same terms)......
-
Tippins Bank & Trust Co. v. Southern General Ins. Co.
...failure to give the requisite notice of nonrenewal results in the automatic renewal thereof. See Bank of Toccoa v. Cotton States Mut. Ins. Co., 211 Ga.App. 389, 393(2), 439 S.E.2d 60 (1993) and Georgia Mut. Ins. Co. v. Mims, 187 Ga.App. 783, 784(2), 371 S.E.2d 426 (1988) (construing the ide......
-
Sauder W. Farms, Inc. v. Sentry Select Ins. Co.
...expired merely because defendant delivered an offer for a renewal policy.Plaintiff Sauder cites Bank of Toccoa v. Cotton States Mutual Insurance Co. , 211 Ga.App. 389, 439 S.E.2d 60, 65 (1993), to support its assertion that the policy remained in effect even though it never paid the premium......
-
Colony Bank v. Hanover Ins. Co.
...contexts, failure to provide notice of cancellation "results in noncancellation of the policy." Bank of Toccoa v. Cotton States Mut. Ins. Co., 211 Ga. App. 389, 391, 439 S.E.2d 60, 62 (1993) (construing notice requirement of O.C.G.A. § 33-24-44(b) and O.C.G.A. § 33-24-45(d) when bank sought......
-
Insurance - Maximilian A. Pock
...Accord Bundrage v. Standard Guaranty Ins. Co., 211 Ga. App. 288, 439 S.E.2d 92 (1993). 31. 209 Ga. App. at 884, 434 S.E.2d at 822. 32. 211 Ga. App. 389, 439 S.E.2d 60 (1993). 33. Id. at 390, 439 S.E.2d at 62 (quoting O.C.G.A. Sec. 33-24-44(b) (1990)). 34. Id. (quoting the policy). 35. Id. a......
-
The Employer's/insurance Carrier's Right to Subrogation Under the Georgia Workers' Compensation Act (o.c.g.a. Section 34-9-11.1): How Long Will it Last? - Gregory T. Talley
...Id. at 306, 147 S.E.2d at 861. 40. Id. at 307, 147 S.E.2d at 861. 41. Id. 42. 211 Ga. App. 374, 439 S.E.2d 59 (1993). 43. Id. at 375, 439 S.E.2d at 60. 44. Id. 45. See Shook v. Pilot Life Ins. Co., 188 Ga. App. 714, 373 S.E.2d 813 (1988). 46. 188 Ga. App. 714, 373 S.E.2d 813 (1988). 47. Id.......