Lewis State Bank v. Travelers Ins. Co., HH-78

• Decision Date: 05 April 1978
• Docket Number: No. HH-78,HH-78
• Parties: The LEWIS STATE BANK, a Florida Banking Corporation, Appellant, v. The TRAVELERS INSURANCE COMPANY, a Foreign Corporation, Appellee.
• Court: Florida District Court of Appeals

Page 1344

356 So.2d 1344

The LEWIS STATE BANK, a Florida Banking Corporation, Appellant, v. The TRAVELERS INSURANCE COMPANY, a Foreign Corporation, Appellee.

No. HH-78.

District Court of Appeal of Florida, First District.

April 5, 1978.

John D. Buchanan, Jr. of Henry, Buchanan, Mick & English, Tallahassee, for appellant.

J. Lewis Hall, Jr. of Hall & Booth, Tallahassee, for appellee.

BOYER, Acting Chief Judge.

By this appeal the Lewis State Bank, plaintiff in the trial court, seeks reversal of an order dismissing its second amended complaint with prejudice.

It is axiomatic that a hearing on a motion to dismiss is not a proper substitute for trial and a plaintiff is not required to prove his cause of action in his complaint. The cause of action need only be alleged. The question of the sufficiency of the evidence which the plaintiff will likely be able to produce in a hearing on the merits is wholely irrelevant and immaterial in reaching such a determination. (See Hopke v. O'Byrne, 148 So.2d 755 (Fla. 1st DCA 1963).) In acting on a motion to dismiss a trial judge may not properly go beyond the four corners of the allegations of the complaint. If the complaint alleges the necessary legal requisites of a cause of action and the allegations are sufficient to inform the defendant of the nature of the cause against him, then it must be held sufficient. (Dawson v. Blue Cross Association, 293 So.2d 90 (Fla. 1st DCA 1974)). With those principles in mind, we must examine the dismissed complaint to determine the propriety of the order here appealed.

By its second amended complaint the Bank alleged that on June 8, 1966 the defendant, the Travelers Insurance Company, insured one Symon under a specified contract of insurance requiring an annual premium of $1,609.60; that on July 16, 1971 Symon assigned said policy to the Bank as collateral security for an indebtedness owed by Symon to the Bank; that the insurance company acknowledged the assignment; that Symon thereafter died; that Symon is yet indebted to the Bank; that following Symon's death the Bank discovered that some year and a half earlier the insurance policy had been allowed to lapse for nonpayment of premium; that no notice had been given to the assignee Bank; "that the defendant by custom and usage usually notifies the assignees of said policies of a lapse of policy"; that the Bank "was supposed to be notified by virtue of the Defendant's business policy concerning this insurance contract"; that the insurer "by custom and contract would send notice of the default to the insured, Donald G. Symon and also send a notice and form for reinstatement to the insured, Donald G. Symon and that by virtue of notification of the insured, the defendant by custom and actual practice was required to notify the assignee of the default in the payments as it did the insured Donald G. Symon."

The plaintiff tendered payment of premiums required for reinstatement, prayed that the insurance be reinstated and that the insurer be required to pay to the Bank the face value of the policy less any outstanding loan.

We first consider appellant's claim that by virtue of F.S. 627.422 the appellee insurance company was required to send it, as assignee, notice of default in the payment of premiums. We find no such provision in that statute. Neither does any such requirement appear in the assignment and the parties agreed during oral argument that the policy itself contained none.

The general rule regarding an insurer's duty to notify an assignee of premiums due or of policy lapses may be found in 5 Couch on Insurance 2nd sec. 30.143, as follows:

"In the absence of any statute or contract of the insurer to the contrary or conduct of the insurer giving rise to a duty to notify the assignee, there is no duty on the insurer to notify an assignee of the policy of premiums or assessments due thereon . . ."

That principle was applied in a leading case, Sorenson v. National Life Insurance Co., 56 Wis.2d 92, 201 N.W.2d 510 (1972). The facts there were very similar to those sub judice. In the Sorenson case the insurance company issued a life insurance policy to one Stowe, who subsequently assigned the policy as collateral for liabilities owed or arising in the future to Sorenson. The assignment was filed with the insurance company on a form provided by the company. No premium notices were sent to the assignee. The assignee allowed the policy to lapse for failure to pay premiums when due. Stowe died approximately one year after the policy lapsed. The insurance company subsequently denied a claim on the policy. Sorenson attempted to recover death benefits, claiming that as the insured he was entitled to the same notice. The lower court sustained a demurrer to the action. Wisconsin's Supreme Court ruled that absent a statute or contract to the contrary, the assignee was not entitled to notice unless he was obligated to pay the premiums on the policy and that recordation of the assignment was insufficient to imply a contract requiring notice be sent to the assignee.

The general rule above quoted also allows specific courses of conduct between the insurer and the assignee to give rise to a duty to notify the assignee of premiums due or lapses. Cases on that point are collected in an excellent annotation appearing at 68 A.L.R.3d 360 (1976). Several of those cases have been referred to by the appellant.

In Elgutter v. Mutual Reserve Fund Life Association, 52 La.Ann. 1733, 28 So. 289 (1900), the assignee was held entitled to notice of premiums due before the insurance contract could be terminated for non-payment. However, the insurance contract allowed the insured to designate someone other than himself to receive notice, the insurance company had in fact notified the assignee of monthly premiums due for approximately four years prior to the termination of the insurance, the assignee was responsible for making the premium payments under the assignment, and demand for reinstatement was made only seven days after the premiums were due.

In Mutual Life Insurance Co. v. Davis, 154 S.W. 1184 (Tex.Civ.App.1913), the insurance company's actions created a right in the assignee to notice. In that case the...