Olson v. Hardware Dealers Mut. Fire Ins. Co., 50

• Decision Date: 03 February 1970
• Docket Number: No. 50,50
• Citation: 173 N.W.2d 599,45 Wis.2d 569
• Parties: Charles E. OLSON, Appellant, v. HARDWARE DEALERS MUTUAL FIRE INS. CO., now known as the Sentry Ins. Co., a domestic insurance copr., Respondent.
• Court: Wisconsin Supreme Court

Page 599

173 N.W.2d 599

45 Wis.2d 569

Charles E. OLSON, Appellant, v. HARDWARE DEALERS MUTUAL FIRE INS. CO., now known as the Sentry Ins. Co., a domestic insurance copr., Respondent.

No. 50.

Supreme Court of Wisconsin.

Feb. 3, 1970.

Charles E. Olson, plaintiff-appellant (hereinafter plaintiff), appeals from a judgment dismissing the complaint of the plaintiff on the merits. The trial was before the court and a jury. At the conclusion of the testimony, the defendant-respondent, The Sentry Insurance Company (hereinafter defendant), moved for dismissal on the merits, and upon granting of the motion, judgment was entered.

James C. McKenzie, La Crosse, for appellant.

Johns, Flaherty, Harman & Gillette, La Crosse, for respondent.

CONNOR T. HANSEN, Justice.

This case was previously before this court, Olson v. Sentry Ins. Co. (1968), 38 Wis.2d 175, 156 N.W.2d 429, and the facts are set forth more fully in that decision.

Defendant, which issued its automobile liability policy to plaintiff, takes the position that the policy was canceled for nonpayment of premiums, by notice of cancellation mailed May 3, 1966, and effective May 18, 1966. The plaintiff was involved in an accident, while operating a vehicle listed in his policy, on September 24, 1966. Plaintiff brought this action against defendant for damages for breach of the insurance contract. The trial court granted a directed verdict for defendant holding that the policy had been canceled by the mailing of a notice of cancellation. In support of its motion, defendant introduced into evidence a cancellation list. The list contained the name, address and policy number of the plaintiff, and included a metered postage stamp of the post office which acknowledged the mailing of the letter on the list. However, this court reversed the judgment and order and granted a new trial, holding that '(t)he proof of mailing procedure * * * is not sufficient to prove the contents of the mailing * * *' and that the evidence was susceptible to the inference that the list merely showed an intention on the part of defendant to include a cancellation notice in the letter.

On retrial, defendant introduced the testimony of Mrs. Karen Groholski, an employee in the data processing center of the defendant, on May 3, 1966, who testified that she processed the cancellation list and personally placed the notice of cancellation in the window-envelope which was sent to the plaintiff.

This appeal arises primarily because of the interpretation given the prior decision of this court by plaintiff's counsel. Plaintiff argues that proof of mailing raises only a rebuttable presumption of fact which, in the absence of proof to the contrary, may be sufficient to prove receipt. The plaintiff contends an insured should be able to prove that he did not in fact receive any cancellation, or was not aware of the cancellation prior to the accident. However, in its prior decision, this court followed the majority rule with respect to interpreting this particular portion of the automobile liability policy holding that actual receipt of notice of cancellation is not necessary.

'Plaintiff denies receipt of the cancellation notice allegedly mailed on May 3, 1966. He attempts to cast doubt upon the fact of mailing by calling attention to the fact that no mention of cancellation appeared on the account summary introduced into evidence, nor did the insurance agent with whom plaintiff customarily dealt, J. I. Murphy, notify the plaintiff of the cancellation as was allegedly his custom.

'According to the cancellation provision of the insurance policy, the insured must be notified of the cancellation for it to be effective. Proof of mailing, however, is conclusive of the notice issue. That the fact of cancellation did not appear on the account summary and that Murphy had not notified the plaintiff of the cancellation do not rebut the testimony that mailing in fact occurred, nor does the denial of receipt aid the plaintiff's case, for proof of mailing does more than merely raise a presumption of receipt, the denial of which creates a jury issue, as would be the case absent the cancellation provision. See, for example, Reeves v. Midland Casualty Co. (1920), 170 Wis. 370, 174 N.W. 475, 174 N.W.2d 959.' Olson v. Sentry Ins. Co., supra, 38 Wis.2d p. 179, 180, 156 N.W.2d at p. 431. (Emphasis added.)

'There is a great deal of confusion as to whether actual receipt of notice is required, or whether mailing alone is sufficient proof of notice. And, as to which of these requirements constitutes the majority rule. Much of this confusion can be attributed to the following situations wherein the court may require the actual receipt of notice of cancellation, and yet not prevent the parties from making an agreement that mailing alone is sufficient proof of notice:

'(a) The policy provision does not expressly provide that mailing is sufficient proof of notice.

'(b) The insurer did not strictly comply with the policy provision.

'(c) The policy provision conflicts with the applicable state statute. * * *

'Aside from the above three situations, it is probably the 'majority rule' that where the policy provision authorizes mailing as sufficient proof of notice, the agreement of the parties in the policy is valid and actual receipt of notice is not required.' Ghiardi, recent developments in the cancellation, renewal and rescission of automobile insurance policies, 51 Marquette Law Review, p. 219, 234.

In addition, this court has held that this particular clause in the automobile liability policy ¹ is not contrary to public policy. ² '* * * As far as we have discovered from a search of the authorities, the insurer has been held to a strict compliance with the policy terms of cancellation and a slight deviation invalidates the notice sent and the attempted cancellation. But we do not find from such authorities that when the policy terms are as they are here, and there is no conflicting statute, and the notice and its mailing complies with the policy provisions, the courts have refused to recognize the cancellation. In the absence of statutory declarations there appears to be no public policy removing the right to cancel in this manner from the field of contract. By sec. 204.30, Stats., the legislature has already modified the freedom of parties to contract in respect to liability insurance policies. These statutory restrictions are declarations of public policy and they do not include the principle now advocated by appellants. The provision in question is common in liability policies. We refrain from entering the legislative field to declare it void.' Putman v. Deinhamer (1955), 270 Wis. 157, 161, 70 N.W.2d 652, 654.

In his brief, counsel also states 'that the Court's majority Opinion in this case did not enter into any finding of fact that an envelope had been mailed May 3, 1966, but only some proof thereof had been admitted into evidence.' However, this court was unanimous in the opinion that a letter had in fact been sent by defendant on May 3, 1966, to plaintiff.

'* * * On the face of the cancellation list for May 3, 1966, was a metered postage stamp that was canceled. The list contained the name, address, and automobile policy number of the plaintiff, Charles Olson. We think this is sufficient to establish that a piece of mail was forwarded to him, the list functioning similarly to a receipt.' Olson v. Sentry Ins. Co., supra, 38 Wis.2d p. 181, 156 N.W.2d at p. 432.

Therefore, on remand, there was no issue as to receipt of the cancellation notice; and the only question was whether the letter that was mailed contained a cancellation notice. The answer to this question was provided by the testimony of Mrs. Groholski who testified that she had put such a notice in the letter sent to the plaintiff on May 3, 1966.

Mr. J. I. Murphy was defendant's agent who sold the policy to plaintiff. Murphy testified that he did not receive any notice of cancellation of plaintiff's policy and plaintiff now contends this goes far to establish that no notice was sent on May 3, 1966. However, this evidence relates to receipt, and whether or not either plaintiff or Murphy received notice of cancellation was not the issue in this case. In addition, this court previously held that whether or not Murphy knew of the cancellation was not of any import. It follows that whether or not Murphy knew of the cancellation is also of no consequence.

Plaintiff also argues the trial court committed error by not allowing in evidence certain testimony and exhibits during the second trial and contends such evidence was sufficient to warrant a jury determination.

Plaintiff tried to establish, through the testimony of Murphy, that (1) it was not the 'proper custom and practice' of defendant to send both an installment due notice and a notice of cancellation in one envelope, as testified to by Mrs. Groholski; and (2) there was usually a thirty day period from the time that a cancellation was initiated until the policy was terminated, rather than the fifteen days as in this case. However, Murphy's knowledge of the manner in which policies are canceled by defendant is of little relevance. The issue was whether the letter mailed...