Government Emp. Ins. Co. v. Superior Court, In and For Santa Cruz County

• Decision Date: 11 August 1976
• Docket Number: No. 2,CA-CIV,2
• Citation: Government Emp. Ins. Co. v. Superior Court, In and For Santa Cruz County, 553 P.2d 672, 27 Ariz.App. 219 (Ariz. App. 1976)
• Parties: GOVERNMENT EMPLOYEES INSURANCE COMPANY, a corporation, Petitioner, v. SUPERIOR COURT of the State of Arizona, IN AND FOR the COUNTY OF SANTA CRUZ, Honorable Lloyd Fernandez, Judge thereof by assignment pursuant to Rule 42(f), Arizona Rules of Civil Procedure, Manuel M. Montoya and Jane Doe Montoya, husband and wife, Carmen Y. Montoya, Frank Montoya and Lucy Montoya, husband and wife, Tony Jimenez and Brenda Jimenez, husband and wife, Tony Jimenez, Guardian ad Litem of Joseph Jimenez, Tony Jimenez, Guardian ad Litem of Norma Jimenez, John Does 1 through X, Jane Does 1 through X, real parties in interest, Respondents. 2242.
• Court: Arizona Court of Appeals

Page 672

553 P.2d 672

27 Ariz.App. 219

GOVERNMENT EMPLOYEES INSURANCE COMPANY, a corporation, Petitioner, v. SUPERIOR COURT of the State of Arizona, IN AND FOR the COUNTY OF SANTA CRUZ, Honorable Lloyd Fernandez, Judge thereof by assignment pursuant to Rule 42(f), Arizona Rules of Civil Procedure, Manuel M. Montoya and Jane Doe Montoya, husband and wife, Carmen Y. Montoya, Frank Montoya and Lucy Montoya, husband and wife, Tony Jimenez and Brenda Jimenez, husband and wife, Tony Jimenez, Guardian ad Litem of Joseph Jimenez, Tony Jimenez, Guardian ad Litem of Norma Jimenez, John Does 1 through X, Jane Does 1 through X, real parties in interest, Respondents.

No. 2 CA-CIV 2242.

Court of Appeals of Arizona, Division 2.

Aug. 11, 1976.

Holesapple, Conner, Jones & Johnson by William W. Edwards, Tucson, for petitioner.

Solsberry & McDonald by John R. Perry, Jr., Nogales, for real parties in interest Manuel M. Montoya, Carmen Montoya and Carmen Montoya Estrada.

E. Leigh Larson, Nogales, for real party in interest Lucy Montoya.

OPINION

KRUCKER, Judge.

Was an insurance policy effectively cancelled when notice of cancellation had been given as required by the insurance policy provisions, although the insureds had not received notice of cancellation? Petitioner-insurer instituted a declaratory judgment action seeking an affirmative answer to this question and then moved for summary judgment in its favor on the basis of supporting documents and affidavits. Respondents opposed the motion supported by an affidavit of the insured that the notice of cancellation had not been received. The respondents' position was that receipt of the notice was a prerequisite to cancellation. The motion for summary judgment was denied and this ruling is the subject of this special action.

We assume jurisdiction since appellate intervention via special action procedure is appropriate under certain circumstances when summary judgment is erroneously denied. Allison Steel Manufacturing Co. v. Superior Court, 22 Ariz.App. 76, 523 P.2d 803 (1974). The insurance policy issued by petitioner to respondent Montoya provides for cancellation as follows:

'This policy may be cancelled by the company by mailing to the insured named in the declarations at the address shown in this policy, written notice stating when not less than thirty days thereafter such cancellation shall be effective: provided that

1. If the named insured fails to discharge when due any of his obligations in connection with the payment of premium for this policy or any installment thereof, whether payable directly to the company or its agent or indirectly under any premium finance plan or extension of credit, or

2. If this policy has been in effect less than sixty days at the time notice of cancellation is mailed and this is not a renewal policy, this policy may be cancelled by the company by mailing to such insured written notice stating when not less than ten days thereafter such cancellation shall be effective.

The mailing of notice as aforesaid shall be sufficient proof of notice. The effective date and hour of cancellation stated in the notice shall become the end of the policy period. Delivery of such written notice either by such insured or by the company shall be equivalent to mailing.'

Another condition entitled 'Cancellation by Company Limited' also provides, in part:

'This policy may be cancelled by the company within sixty days of the effective date by mailing to the insured notice stating when not less than ten days thereafter such cancellation shall be effective. After the policy has been in effect for sixty days or more it shall not be terminated by cancellation except for nonpayment of premium unless the insurer mails or delivers to the named insured at the address shown in the policy, post office receipt secured, a notice in writing at least ten days prior to the effective date of cancellation of the intent of the insurer to cancel the insured's policy.'

It is undisputed that non-payment of premium was the reason for cancellation, that the insurer mailed a notice in writing at least ten days prior to the effective date of cancellation to the address shown in the policy, and secured a post office receipt which established that the notice of cancellation had been mailed to the insured at such address in compliance with the time requirement of the policy.

The above-quoted policy provision is called the 'Standard Cancellation Provision'. A perusal of cases from other jurisdictions discloses an almost unanimity of view that mailing of the cancellation notice is sufficient and that receipt is not required. Robbins v. Southern General Insurance Company, 243 A.2d 686 (D.C.App.1968); Allstate Insurance Company v. Dougherty, 197 So.2d 563 (Fla.App.1967); Harang v. Sparacino, 257 So.2d 785 (La.App.1972); Jensen v. Traders & General Insurance Company, 52 Cal.2d 786, 345 P.2d 1 (1959); Hartsfield v. Carolina Casualty Insurance Co., 411 P.2d 396 (Alas. 1966); Annot. 64 A.L.R.2d 982, Sec. 15 (1959).

Initially we would point out that the cases of Farmers Insurance Group v. Merryweather, 214 N.W.2d 184 (Iowa 1974) and Gooden v. Camden Fire Insurance Association, 11 Mich.App. 695, 162 N.W.2d 147 (1968), holding that actual receipt is required, are not apposite since they are concerned with interpretation of statutory language. Nor do we have a situation as in Hartsfield v. Carolina Casualty Insurance Co., supra, wherein it was held that the denial of receipt of the notice of cancellation raised a genuine issue as to a material fact which precluded the granting of summary judgment. The court held that the denial of receipt rebuts a prima facie case of mailing and creates an issue of fact for resolution by the trier of fact. See...