Farmers Ins. Exchange v. Vincent
| Decision Date | 14 February 1967 |
| Court | California Court of Appeals Court of Appeals |
| Parties | FARMERS INSURANCE EXCHANGE, Plaintiff and Respondent, v. Kathryn VINCENT, Defendant and Appellant. Civ. 8174. |
Carstens & Todd and William L. Todd, Jr., San Diego, for defendant and appellant.
McInnis, Focht & Fitzgerald and William T. Fitzgerald, San Diego, for plaintiff and respondent.
Plaintiff petitioned for a declaration that plaintiff was not obligated to the insured William F. Harkins on an insurance policy on the date Jirina B. Harkins, the wife of the insured, had an accident that caused damage to Kathryn Vincent.
William and Jirina were served with process and defaulted. Only Kathryn Vincent (defendant) has appealed from the judgment taken against all defendants.
The trial court found that the policy was not in effect on the date of the accident, September 23, 1963. We have concluded that holding should be affirmed.
The following appears from the file of Farmers' Santa Ana office: An automobile liability policy was first issued to William for a six-month period commencing April 20, 1961, when he was a deputy city attorney of Burbank, California. The policy, #27--96376708, covered a 1954 Pontiac, was issued upon a partial payment of premium. On June 1, 1961, a reminder was mailed to William about the unpaid balance of premium, $27.42; on June 6 a notice was mailed to him that the policy would be cancelled effective June 23 unless the premium balance was paid by that date. Both notices were mailed to the residence address given by William in his application of April 20.
On August 3, William was quoted as inquiring why he had not been billed for the premium and as stating that he had been receiving his mail at a post office box; that his residence address was unchanged. He paid the premium.
On the same date an endorsement was issued that the policy was renewed.
On January 2, 1962, William reported a change of address to a law office in San Diego.
On January 10, 1962, a certificate was issued to William showing coverage to April 20, 1962. At the expiration of that period, the insurance was renewed to October 20, 1962.
On February 26, 1963, William made a new application for insurance on the same car. Farmers issued a policy on the same date with an expiration date of August 26, 1963.
The policies were in the form of printed booklets to which were attached separately prepared declarations showing the coverages given, the premium for each type of coverage given, and the period of time covered by the insurance.
On April 5, 1963, a reminder was mailed to William of a balance of $4.00 unpaid on the premium; another such reminder was sent on May 7.
On May 27, formal notification was given William of a revision of the expiration date to August 3, 1963, representing an adjustment to correspond on a pro rata basis to the actual amount of premium paid. The notice contained this language:
'* * * policy may be continued for successive terms of six months each thereafter by payment of sums required therefor.'
An endorsement was issued on April 26, 1963 showing the renewal date of August 3, 1963.
During May and June, efforts were made by Farmers to obtain information from William about a minor loss. A request by mail and several office calls had been unproductive before the information was obtained. Because of that situation, the underwriting department of Farmers decided not to renew the policy beyond the expiration date.
On July 16, 1963, a letter was mailed to William and received by him stating:
'Cancellation Date: August 3, 1963
'Dear Mr. Harkins:
'Although you recently received a notice of the premium needed to continue your policy for another six months, we now ask that you disregard this notice. Unfortunately, our current underwriting requirements will not permit us to continue your coverage beyond the current term, and you are hereby notified that this policy will be cancelled and all liability of the Exchange will cease at 12:01 A.M. on the cancellation date shown above without further notice.
'Any premium payment you may have already forwarded will be refunded within a few days after it reaches our office.
'Undoubtedly you will wish to place your insurance coverage elsewhere and this advance notice should allow you sufficient time to do so.'
On September 27, 1963, General Motors Acceptance Corporation (GMAC) wrote Farmers asking if there was mortgagee's coverage of a 1962 Pontiac purchased by William on September 21, 1962 as an additional automobile.
To that inquiry, someone in Farmers' office sent a 'notice of cancellation to mortgagee or other interest' to GMAC that William's policy as to the 1962 Pontiac would be cancelled at 12:01 a.m. on October 22, 1963. Under the policy, William was obligated to give notice of the acquisition of an additional automobile within 30 days thereafter.
On October 30, 1963, William signed a report of the accident of September 23, 1963 involving a pedestrian, Kay Vincent.
On February 12, 1964, there was an inter-office communication from the San Diego claims office attached to the accident report that noted the setting up of a reserve of $10,000 with regard to the accident.
On March 4, 1964, the author of the last-mentioned communication sought information from the underwriting department as to whether the policy was in effect on September 23, 1963. He stated that 'Insured denies * * * receiving any cancellation notice.'
In addition to the foregoing, there was oral testimony that the ordinary course of business in Farmers' offices when a notice of cancellation was mailed to a policy holder was to include a certain 'stuffer' which contained all the information called for by section 652, Insurance Code; that that practice was in accord with a home office directive entitled a 'procedure bulletin' dated December 5, 1961, which followed an earlier one dated September 4, 1961.
It was Farmers' practice to send out, 30 days before the expiration date of a policy, a notice that on that date the renewal premium would be due in a certain amount.
William testified that he had received and read the letter of July 16, 1963; that he had not received nor seen the stuffer; that since receiving the letter of July 16, 1963, he had not made application to Farmers or any other company for an automobile liability policy; that he had not tendered any premium for a policy premium after receiving the letter 'because the letter makes it very clear.'
The notice to GMAC had been sent by Farmers by error; there was no evidence that information was given to William that such notice had been sent.
Defendant makes these contentions:
'1. Section 652 of the Insurance Code is applicable to the policy in question.
'2. The evidence fails to show that plaintiff complied with the requirements of Insurance Code section 652.
The court found:
'That it is not true that there was any cancellation of said policy of insurance within the meaning of Sections 651 and 652 of the Insurance Code.' 1
Accordingly, no finding was made on the conflicting evidence whether the notice called for by section 652, Insurance Code, was given.
No finding was made as to any issue of estoppel against plaintiff based upon the sending of the notice to GMAC. On the other hand, no estoppel had been pleaded. The findings are specific and definite that the policy expired by its terms on August 3, 1963; that the intention of Farmers not to renew had been communicated to William by the letter of July 16, 1963, which also gave notice that the policy, by its terms, would expire on August 3, 1963; that William understood the meaning of the letter, made no effort to communicate with Farmers and made no offer to pay any premium to extend the coverage.
By this contention is meant that the termination of the policy in question was effected in such manner that the notice provided by section 652, Insurance Code, was required to be given, and that if not given the policy continued in effect beyond the period for which it was written and for which a premium had been paid.
We consider first whether the policy terminated as the result of a cancellation within the meaning of Insurance Code, section 651.
Defendant cites the following cases in support of her contention: Mong v. Allstate Ins. Co., 15 A.D.2d 257, 223 N.Y.S.2d 218, which defendant asserts is an exactly comparable case to the present case; Peterson v. Allstate Ins. Co., 164 Cal.App.2d 517, 330 P.2d 843, and three cases having to do with claimed forfeitures of life insurance policies.
The New York case of Mong v. Allstate Ins. Co., supra, points up a distinction between New York statutory law and California statutory law.
In Mong, the insured had been served with a notice that if a delinquent premium were not paid by March 12, 1957, the insurance was cancelled as of that date; at the time the notice was given, section 93--c of the Vehicle and Traffic Law provided in part:
'Every such notice of termination for any cause whatsoever sent to the insured shall include * * * a statement that proof of financial security is required to be maintained continuously throughout the registration period and that failure to maintain such proof of financial security is a misdemeanor.'; 2
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