Hiott v. Guaranty Nat. Ins. Co.

• Citation: 329 S.C. 522,496 S.E.2d 417
• Decision Date: 06 November 1997
• Docket Number: No. 2774,2774
• Parties: David HIOTT, Respondent, v. GUARANTY NATIONAL INSURANCE COMPANY, Appellant. . Heard
• Court: South Carolina Court of Appeals

Page 417

496 S.E.2d 417

329 S.C. 522

David HIOTT, Respondent, v. GUARANTY NATIONAL INSURANCE COMPANY, Appellant.

No. 2774.

Court of Appeals of South Carolina.

Heard Nov. 6, 1997.

Decided Dec. 22, 1997.

Sean K. Trundy and Jon L. Austen, both of Pratt-Thomas, Pearce, Epting & Walker, Charleston, for appellant.

Darrell T. Johnson, Jr., Hardeeville, for respondent.

CURETON, Judge:

This action was brought by Respondent David Hiott, individually and d/b/a/ Waste Haulers (Hiott), against Guaranty National Insurance Company (GNIC) for a declaration that GNIC was liable for damages arising from an accident in which his vehicle was involved on September 16, 1994. From a non-jury verdict in favor of Hiott, GNIC appeals. We reverse.

Facts

Marion D. Jones (Jones), manager of The Marion D. Jones Agency (Agency), is an "independent agent" and a broker of personal and commercial insurance. Hiott has been a client of the Agency for several years, with Jones acting as his broker.

The policy in question was placed by the Agency through The Kimbrell Company (Kimbrell), which is a managing general agent for GNIC. Hiott purchased the policy by making a down payment of $625 and financing the balance of the premium through Premium Service Corporation of Columbia (PSC). Hiott's agreement with PSC appoints PSC as Hiott's attorney-in-fact, with full authority to cancel the policy in the event of default in premium payments, subject to ten (10) days prior notice of PSC's intent to cancel. The policy provides that the insured may cancel the policy by "advance written notice of cancellation."

On March 1, 1994, the Agency requested an endorsement to the policy. An additional premium of $962 was charged. Hiott informed Jones that he would pay when the endorsement "came in." When the endorsement "came in," the Agency billed Hiott but was not paid. Hiott had been a customer of the Agency for many years, and although he was habitually late in making his premium payments, he always paid them. When the Agency did not receive Hiott's payment, they paid it for him. ¹ It appears Hiott never repaid the Agency for the additional premium. The payment of the additional premium is not an issue here but does support Jones's assertion that the Agency "bent over backwards" to keep Hiott's insurance in force.

Jones, whose deposition is the only testimony in the record, testified the Agency gets a list every Monday from PSC of past-due accounts and as a convenience to its customers attempts to contact these insureds. The Agency warns the insured that payment must be made by a certain date or "cancellation will be issued." There is a 15 day "lag time," during which the Agency can usually postpone cancellation if the insured makes the payment. Even after cancellation, the Agency is able to reinstate the policy if payments can be caught up within 30 days of the cancellation date.

On July 14, 1994, PSC mailed to Hiott the following notice:

PLEASE TAKE NOTICE THAT BECAUSE OF YOUR FAILURE TO MAKE PAYMENT UNDER YOUR PREMIUM SERVICE AGREEMENT WITH THIS COMPANY, WE SHALL EFFECT CANCELLATION OF THE POLICY, PURSUANT TO THE POWER OF ATTORNEY EXECUTED BY YOU, UNLESS WITHIN 10 DAYS FROM THE DATE HEREOF, THE AMOUNT DUE SHOWN HEREIN IS RECEIVED IN OUR OFFICE.

-NO FURTHER NOTICE WILL BE SENT TO YOU-

CANCELLATION WILL BE REQUESTED

8/01/94

On August 5, 1994, Kimbrell faxed to the Agency the following message:

WE RECEIVED A NOTICE OF CANCELLATION FROM THE FINANCE COMPANY. PLEASE ADVISE TODAY IF YOU HAVE RECEIVED A REINSTATEMENT, OR IF THE INSURED IS GOING TO PAY ACCOUNT. I WILL HOLD UNTIL TOMORROW AND IF I HAVEN'T HEARD FROM YOU I WILL PROCESS CANCELLATION.

On August 8, 1994, the Agency received from PSC a copy of the August 4, 1994 Notice which provided in pertinent part:

NOTICE TO INSURER

PLEASE CANCEL THE ABOVE POLICY PURSUANT TO POWER OF ATTORNEY HELD BY US. SAID POWER BEING HEREBY EXERCISED BY REASON OF INSUREDS FAILURE TO PAY WHEN DUE INSTALLMENT UNDER PREMIUM SERVICE AGREEMENT WITH THIS COMPANY EXECUTED PURSUANT TO TITLE 39 CHAP. 27, CODE OF LAWS OF SOUTH CAROLINA, 1976,

CANCEL AS OF 08/05/94 OR AS SOON THEREAFTER AS STATUTORY, REGULATORY OR CONTRACTUAL RESTRICTIONS PERMIT, SENDING THE UNEARNED PREMIUM TO THIS COMPANY AT THE ABOVE ADDRESS FOR DISTRIBUTION AS PROVIDED BY LAW.

WARRANTED, THAT NOT LESS THAN 10 DAYS WRITTEN NOTICE HAS BEEN MAILED TO INSURED OF INTENT TO CANCEL THE POLICY, THAT COPY HEREOF IS BEING MAILED TO INSURED AS NOTICE OF CANCELLATION AT INSUREDS LAST ADDRESS AS SET FORTH IN THIS COMPANYS RECORDS, AND THAT THE LICENSE NUMBERED ABOVE IS VALID AND SUBSISTING AS OF THE DATE HEREOF.

NOTICE TO INSURED ²

THIS NOTICE SHALL BE VOID AND INEFFECTIVE IF PAYMENT OF YOUR INDEBTEDNESS HAS BEEN MADE TO US ON OR BEFORE THE OTHERWISE EFFECTIVE DATE OF CANCELLATION.

On August 9, 1994, Hiott paid PSC the July premium. The record does not reveal any further communication from PSC to the Agency or any communication from GNIC to Hiott. Jones called Hiott at least weekly seeking payment.

On August 22, 1994, Kimbrell sent another fax to the Agency reading:

TO DATE WE HAVE NOT RECEIVED THE REINSTATEMENT FOR THE ABOVE INSURED. PER OUR PHONE CONVERSATION 8/5/94, THE INSURED HAD MADE PAYMENT AND REINSTATEMENT WOULD BE FORTHCOMING. IF I DON'T RECEIVE THIS WEEK I WILL HAVE TO CANCEL POLICY. PLEASE CONTACT THE FINANCE COMPANY AND ASK THEM TO FAX US A COPY OF THE REINSTATEMENT.

Jones called Hiott the same day and warned him that if all past due payments were not received by Friday, August 26, 1994, the policy would be canceled.

Finally, on September 6, 1994, Kimbrell notified the Agency by fax that it had received a second cancellation request from PSC and that it would "have to honor their cancellation date." On September 9, 1994, the Agency sent a document entitled "NOTICE OF CANCELLATION" to Hiott stating in part:

YOU ARE HEREBY NOTIFIED THAT THE ABOVE POLICY IS HEREBY CANCELED IN ACCORDANCE WITH THE CONDITIONS OF THE POLICY. SAID CANCELLATION TO BE EFFECTIVE ON AND AFTER THE HOUR AND DATE MENTIONED ABOVE.

The date "mentioned above" is September 18, 1994. Jones testified that the Agency had "no legal standing" to send this Notice, and that it was "an attention getter" sent in an attempt to garner payment from Hiott.

Hiott tendered payment to PSC by check dated September 15, 1994, to cover the August, September and October payments. The record is unclear, but it appears from Jones's deposition that the check was deposited in PSC's bank account on September 22, 1994 and returned by the bank to PSC for insufficient funds on September 24, 1994.

Issue On Appeal

The sole issue posited for our review is whether there is any evidence in the record to support the trial court's decision that the insurance contract was not canceled until September 18, 1994, the date specified in the Agency's September 9, 1994 correspondence to Hiott.

Standard Of Review

The parties agree this is an action at law. In a non-jury action at law, the judge's findings of fact will not be disturbed on appeal unless they are without evidentiary support. Rickborn v. Liberty Life Ins. Co., 321 S.C. 291, 468 S.E.2d 292 (1996). The trial court's findings of fact have the same force and effect as a jury verdict unless it committed some error of law leading to an erroneous conclusion or unless the evidence is reasonably susceptible of the opposite conclusion only. Noisette v. Ismail, 299 S.C. 243, 384 S.E.2d 310 (Ct.App.1989), rev'd on other grounds, 304 S.C. 56, 403 S.E.2d 122 (1991). We must affirm the trial court if there is any evidence that reasonably supports its decision. Id. In reviewing the findings, we must view the evidence and all its reasonable inferences in the light least favorable to the losing party below. Id.

GNIC argues that there is no evidence to support the trial court's finding that the Agency was its agent; and that the only evidence presented establishes that the Agency was Hiott's agent. Hiott responds that the Agency is clearly GNIC's agent under both statutory and case law. He points to PSC's August 4, 1994 Notice of Cancellation which was sent to GNIC and identifies the Agency as "agent."

South Carolina Code Ann. § 38-43-10 (1989) (entitled: "Persons Considered Agents of Insurers") provides a person is an agent who:

(a) solicits insurance in behalf of an insurer,

(b) takes or transmits other than for himself an application for insurance or a policy of insurance to or from an insurer,

(c) advertises or otherwise gives notice that he will receive or transmit insurance applications or policies,

(d) receives or delivers a policy of insurance of an insurer,

(e) receives, collects, or transmits any premium of insurance, or

(f) performs any other act in the making of an insurance contract for or with an insurer, other than for himself,

whether these acts are done by an employee of an insurer or at the instance or request of an insurer, must be a licensed agent of the insurer for which the act is done or the risk is taken unless provided otherwise in Section 38-43-20.

In the interpretation of statutes, this court must determine and give effect to the intention of the legislature. Republic Textile Equip. Co. v. Aetna Ins. Co., 293 S.C. 381, 360 S.E.2d 540 (Ct.App.1987). The purpose of statutes such as § 38-43-10 is to protect the insuring public. Id. The statute encompasses two classes of persons: insurance company employees and those acting "at the instance or request of" an insurer. Id. at 386, 360 S.E.2d at 543.

If one becomes an agent of an insurance company by reason of the operation of this statute, the extent of the authority of the statutory agent must still be determined. Allstate Ins. Co. v. Smoak, 256 S.C. 382, 182 S.E.2d 749 (1971). Every statutory agent coming into being by reason of the statute cannot be said to be a general or unlimited agent. Id. The extent of such agent's authority is a question of fact for the factfinder. Id.

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