Hudson v. State Security Ins. Co., 38156

• Decision Date: 16 August 1977
• Docket Number: No. 38156,38156
• Citation: 555 S.W.2d 859
• Parties: Mary HUDSON, Plaintiff-Appellant, v. STATE SECURITY INSURANCE COMPANY, Defendant-Respondent. . Louis District, Division One
• Court: Missouri Court of Appeals

Page 859

555 S.W.2d 859

Mary HUDSON, Plaintiff-Appellant, v. STATE SECURITY INSURANCE COMPANY, Defendant-Respondent.

No. 38156.

Missouri Court of Appeals, St. Louis District, Division One.

Aug. 16, 1977.

David L. Rapp, Clayton, for plaintiff-appellant.

Edward K. Fehlig, Ziercher, Hocker, Tzinberg, Human & Michenfelder, Clayton David L. Pentland, St. Louis, for defendant-respondent.

DOWD, Judge.

This is an appeal from a summary judgment entered in favor of defendant. Plaintiff brought this action for damages, alleging that automobile insurance coverage issued by defendant was in effect at the time plaintiff's automobile sustained damage in an accident, and that defendant has refused to reimburse plaintiff according to the terms of the contract.

The undisputed facts are that on May 10, 1974, defendant issued to plaintiff a Combined Private Passenger Automobile, Bodily Injury, Property Damage and Collision Policy. On July 2, 1974, 53 days later, defendant mailed plaintiff a notice of cancellation, received by plaintiff on July 7, 1974. The effective date of cancellation indicated in the notice was July 14, 1974, 65 days after issuance of the coverage. On July 20, 1974, plaintiff sustained damage to her automobile in the amount of $900, for which she sought recovery under the contract.

The trial judge granted defendant's motion for summary judgment, finding that the contract for insurance was not in force on the date of the accident. Plaintiff appeals. We affirm.

Whether the policy was in effect on the date of the accident depends upon the application of § 379.110(3) and § 379.114 RSMo Supp. 1974, which states in part:

"379.110. Definitions

As used in sections 379.110 to 379.120 the following words and terms mean:

(3) 'Policy' means an automobile policy providing automobile liability coverage . . . or automobile physical damage coverage insuring a private passenger automobile owned by an individual or partnership which has been in effect for more than 60 days or has been renewed. . . .

"379.114. Reasons for Cancellation

1. Except as provided in sections 379.110 to 379.120, no insurer shall exercise its right to cancel a policy except for the following reasons:

(1) Nonpayment of premium; or

(2) The driver's license of the named insured has been under suspension or revocation at any time during the policy period. . . . " (Emphasis added).

The issue in this case is whether these sections require that the effective date of cancellation be within the first 60 days of coverage, thus prohibiting respondent from cancelling its insurance contract because of its failure to comply with the time requirements of said statute. Or whether it is sufficient that the company exercise its right to cancel by the mailing of the notice within the initial 60 days, when the effective date of cancellation is beyond the 60 day period. We agree with the latter construction of these statutes.

These sections have not yet been construed by the courts. The definition of "policy" in § 379.110(3), stated in the terms of the number of days it is in effect, appears to prohibit a cancellation whose effective date is beyond that restrictive number, except for the reasons listed in § 379.114.1. Plaintiff advocates this construction. However, the use of the phrase "exercise its rights to cancel" in § 379.114.1 seems to focus upon the initiation of the cancellation process rather than its conclusion on the effective date. Defendant argues that this section's (379.114) reference to § 379.110, "except as provided in sections 379.110 to 379.120 . . .," implies that the insurer may exercise its right to cancel coverage which has not yet matured, by the passage of 60 days, into a policy.

The separate provisions of a statute are to be construed together and harmonized as parts of a whole, State v. Paul, 437 S.W.2d 98, 103 (Mo.App.1969), and every word, clause, and sentence must, if possible, be given effect. Stewart v. Johnson, 398 S.W.2d 850, 853 (Mo.1966). The legislature's choice, in § 379.114.1, of the phrase "exercise its right to cancel" instead of a mere "cancel" or "effect cancellation" is significant, and its explicit reference to other sections, point to defendant's construction. Further, C.J.S. discussion of notice of cancellation in 45 C.J.S. Insurance § 450b(1), states "The notice must clearly and unequivocally show a present cancellation, which will take effect at the expiration of the period of notice prescribed by the policy or statute; and the statement of a mere intent or desire to cancel at some time in the future . . . is not sufficient."

This statement is consistent with the principle that the issuing of a notice of cancellation is the exercise of an insurer's right to cancel.

Appellant's second argument is that the ten day notice of cancellation provision in the insurance contract causes an ambiguity, and that an ambiguous insurance contract should be construed in favor of the insured. We disagree that the insurance contract is ambiguous. It simply provides a 10 day notice for cancellation. The 10 day notice of cancellation in the insurance contract is for the benefit of the insured, in order to allow him time to obtain coverage from another company. Plaintiff is simply using the contract provision to support her construction of the statute, by implying that the statute becomes difficult to apply when such a contract provision exists. This argument would warrant consideration only if the statute required a notice provision. The statute does not require a notice provision in order to cancel during the 60 day period.

Neither party disputes the fact that §§ 379.110 to 379.120 are remedial in nature in that they limit the cases in which an insurer may cancel or refuse to write a policy. These statutes require notice and specific requirements for cancellation. See sections 379.118 and 379.120.

When a statute is remedial and...