International Indem. Co. v. Bakco Acceptance, Inc.
| Decision Date | 06 September 1984 |
| Docket Number | Nos. 68307,68308,s. 68307 |
| Citation | 172 Ga.App. 28,322 S.E.2d 78 |
| Parties | INTERNATIONAL INDEMNITY COMPANY v. BAKCO ACCEPTANCE, INC. BAKCO ACCEPTANCE, INC. v. ATLANTA AMERICAN INSURANCE AGENCY, INC. et al. |
| Court | Georgia Court of Appeals |
James B. Gurley, Atlanta, for appellant.
David E. Krischer, Atlanta, for appellee.
Bakco Acceptance, Inc. d/b/a Perry and Company (Perry), an insurance premium finance company, sued Alexander Underwriters General Agency, Inc. (Alexander), International Indemnity Company (International), Atlanta American Insurance Agency, Inc. (Atlanta American), and certain individual agents of Atlanta American to recover unearned insurance premiums pursuant to former OCGA § 33-22-14(a) ( Ga.L.1984, p. 1345, § 3), and under the common law theory of money had and received. Atlanta American was a local or "producing" insurance agency which approached Alexander, a general insurance agency, to place coverage for certain insureds. Alexander did so by ordering policies for these insureds with International, an insurance company. Perry financed the insurance premiums for the insureds.
The premium financing was set up under an arrangement between Perry and the local agency, Atlanta American. The insured made a down payment on the policy to Atlanta American and signed the premium finance agreement at the same time the application for insurance was signed. Atlanta American then wrote a draft to itself on Perry's account for the total amount financed and forwarded copies of the paperwork from the financing transaction to Perry.
The difficulties leading to the instant action came about when Atlanta American, after collecting money from the individual insureds for the policies and also collecting the financed premiums from Perry by means of drafts written on Perry's account, apparently absconded with the money, paying nothing to Alexander or International for the policies. Alexander, however, had advanced the premium payments to International to permit the issuance of the policies. Alexander did so by virtue of a credit arrangement it maintained with Atlanta American, called an "account current arrangement," under which Atlanta American was not required to make cash payments to Alexander for issuance of the insurance policies, but was extended credit by Alexander which billed Atlanta American monthly for all coverages placed.
During 1977, the insurance policies in question were cancelled. As a result of the cancellations, International (the insurer) returned the unearned premiums to Alexander (the agency). Alexander did not return any portion of the unearned premiums to Perry (the premium finance company), taking the position that since Alexander had never been paid any premiums by Atlanta American or Perry, there were no unearned premiums for Alexander to return and Alexander was therefore simply recouping its own funds after the cancellations.
After a nonjury trial, a verdict was returned in favor of Perry against International on the issue of liability under former OCGA § 33-22-14(a) and judgment entered against International for the amount of the unearned premiums for the policies in question. Although apparently intended, the trial court did not enter judgment in favor of Alexander as to Perry's claim under former OCGA § 33-22-14(a). Judgment was entered in favor of International and Alexander on the issue of liability for money had and received. International appeals. Perry cross-appeals.
1. Appellant contends that the trial court erred by holding that Perry's action to recover the unearned insurance premiums under former OCGA § 33-22-14(a) was not barred by Perry's failure to notify International of the existence of the premium finance agreements on the policies in question within 30 days of the signing of the agreements, pursuant to former OCGA § 33-22-12 ( Ga.L.1984, p. 1345 § 1). The version of OCGA § 33-22-12 in effect at all times relevant to the instant case provided: "Any premium finance company which enters into a premium finance agreement under this chapter shall notify the insurer whose premiums are being financed of the existence of the agreement within a reasonable period of time not to exceed 30 days after the date the agreement is signed." The uncontested evidence shows that with regard to the individual insureds in question, Perry did not send notification to International within 30 days of the signing of the premium finance agreements although it did notify International of the premium financing agreements before International undertook the processing of the returns of the unearned premiums. Perry explained its failure to meet the 30-day limit by presenting evidence to show that a notice of premium financing was of no use to International unless the notice contained the insurance policy number and that Perry initially was not provided the policy number by the agency until after the 30-day period had expired. We note that the amended version of OCGA § 33-22-12 deletes any reference to a specific time period during which notification shall be given. See Ga.L.1984, p. 1345, § 1.
Tomlinson v. Sadler, 99 Ga.App. 482, 484(2), 109 S.E.2d 84 (1959). The purpose of OCGA § 33-22-12 is to ensure the proper return of any unearned premiums due in the event of the cancellation of a financed insurance policy. By providing a method by which the insurer may be informed to whom the unearned premiums are to be returned--the insured or the premium finance company--the return of the premiums to the wrong party may thus be avoided. Accordingly, the premium finance company is made responsible for notifying the insurer of the existence of any premium financing agreement between itself and the insured.
The Insurance Premium Finance Act, OCGA § 33-22-1 et seq. sets forth no express requirement that the 30-day notification period be met as a prerequisite to the premium insurance company's entitlement to return of unearned premiums under OCGA § 33-22-14, and this court will not here create such a requirement. Were the premium finance company to fail to give the insurer any notice of the financing agreements, we would anticipate that this would afford the insurer a defense to an action by the premium finance company for return of unearned premiums. (See amended OCGA § 33-22-12; Ga.L.1984, p. 1345, § 1. However, the mere failure to provide notification within the 30-day period will not bar the premium finance company from recovery of unearned premiums where there has been notification to the insurer prior to the time the insurer processes the return of the unearned premiums.
To construe former OCGA § 33-22-12 as appellants urge would result in the forfeiture of unearned premiums by premium finance companies whenever notification occurred more than 30 days after financing agreements were signed. Forfeitures are not favored, and we will not read into a statute a forfeiture that was not clearly expressed. Moore v. Beneficial Fin. Co., 158 Ga.App. 535, 537, 281 S.E.2d 293 (1981); Balkcom v. Heptinstall, 152 Ga.App. 539, 263 S.E.2d 275 (1979). Further, Barton v. Atkinson, 228 Ga. 733, 739, 187 S.E.2d 835 (1972).
The trial court did not err in holding that Perry's late notice did not bar its statutory claim for return of unearned premiums where the evidence showed that such notice was received before the premiums were returned.
2. Appellant contends that the trial court erred by holding that there existed any unearned premiums which could be returned to Perry by appellant, pointing out that the trial court had found that no premiums financed or advanced by Perry were ever received by International. Appellant also contends that the trial court erred by holding that the misappropriation of any premiums advanced by Perry to Atlanta American was due to anything but Perry's own negligence. In this regard, the trial court, in holding that International was directly responsible for the return of the unearned premiums to Perry under former OCGA § 33-22-14(a), also noted that the misappropriation of the premiums...
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