Shelter Mut. Ins. Co. v. Flint

• Decision Date: 14 July 1992
• Docket Number: No. WD,WD
• Citation: 837 S.W.2d 524
• Parties: SHELTER MUTUAL INSURANCE CO., Respondent, v. Steven FLINT and Connie Flint, Appellants. 45182.
• Court: Missouri Court of Appeals

Page 524

837 S.W.2d 524

SHELTER MUTUAL INSURANCE CO., Respondent, v. Steven FLINT and Connie Flint, Appellants.

No. WD 45182.

Missouri Court of Appeals,

Western District.

July 14, 1992.

Motion for Rehearing and/or Transfer to

Supreme Court Denied

Sept. 1, 1992.

Application to Transfer Denied Oct. 27, 1992.

Andrew J. Gelbach, Warrensburg, for appellants.

James C. Johns, Clinton, for respondent.

Before SHANGLER, P.J., and KENNEDY and SMART, JJ.

SHANGLER, Judge.

This appeal is from a summary judgment entered in favor of Shelter Mutual Insurance Co. on its petition for declaratory judgment that the insurance policy issued to Connie and Steven Flint was not in force on January 4, 1990.

On that date, Connie Flint was operating a 1985 Ford Tempo she owned with Steven Flint and collided with an Isuzu owned by Christine McCreary and operated by William Pennington. Jake McCreary was a passenger in the Isuzu and Sue Johnson was a passenger in the Tempo. The Flints made demand for payment of property damage to the Tempo and for other benefits of coverage under the policy with Shelter Mutual. Shelter brought an action for declaratory judgment and joined as defendants the Flints, Sue Johnson, Jake McCreary, Christine McCreary and William Pennington. The defendants Flint moved to add as a necessary party Citizens-Jackson County Bank, lienholder and loss payee on the Shelter policy. The motion for summary judgment of insurer Shelter was sustained. The motion of defendant Flint to add Citizens as a necessary party was denied. The Flints appeal from the order of summary judgment.

The record on summary judgment viewed most favorably to the Flints, against whom judgment was rendered, discloses these facts. On June 2, 1989, Steven and Connie Flint applied for automobile insurance coverage with Shelter through its agent, James Martin. The agent bound coverage for thirty days. A premium of $109.60 was computed for a three month term with liability coverage in limits of $50,000/$100,000 and separate collision and other coverages. Citizens-Jackson County Bank was shown on the application and binder as the loss payee. Shelter asserted by affidavit that Shelter policy No. 24-1-4181046-1 was issued to the Flints with coverage on the 1985 Tempo for a period from 2:15 p.m. on June 2, 1989, to 12:01 a.m. on September 2, 1989. The Flints assert by deposition and affidavit that they never received the policy. They acknowledge nevertheless that they knew they were purchasing a policy of insurance from Shelter and that the terms of their coverage were governed by the policy.

The policy required renewal every three months. The first renewal premium notice was received and paid by the Flints before September 2, 1989. The coverage was thereby continued for another three month term ending on December 2, 1989. The second renewal premium notice was sent by Shelter before December 2, 1989 and indicated that a renewal premium was due on that date.

The premium notice showed a due date of December 2, 1989, at 12:01 a.m. to renew the policy for an additional three month term. The Flints received the premium notice some time before December 2, 1989. The Flints did not pay or attempt to pay the renewal premium on the policy prior to the collision with Pennington on January 4, 1990. On December 15, 1989, Haddie Gabbert, a secretary at the local Shelter Mutual office, called Connie Flint as to why the renewal premium had not been paid. Flint explained that they were financially unable to pay the premium. On December 18, 1989, Robert Maupin, Shelter vice-president wrote the Flints about the non-payment of the premium. The letter stated that the insurance policy would be reinstated on the date the company received payment. On January 6, 1990, two days after the collision, Steven Flint remitted the $109.64 premium to Shelter Mutual.

Shelter vice-president Dysart sent a letter to Citizens-Jackson County Bank on December 28, 1989. The letter informed the bank that the insurance coverage as to its interest would be terminated and canceled on January 7, 1990 for non-payment of premium. The letter also indicated that the premium could be paid by the bank.

The summary judgment to Shelter Mutual expressly determined that under the evidence presented on the motion, there was a lapse of insurance coverage from December 2, 1989 to January 6, 1990, for want of payment of premium. Accordingly, "there was no automobile insurance coverage for the defendant Flints, issued by plaintiff [Shelter Mutual Insurance Company] on January 4th, 1990, the date of the accident with defendants McCreary, Pennington and Johnson," and that no issue of material fact remained to be adjudicated under the petition for declaratory judgment.

The Flints contend that the summary judgment was erroneous because issues of material fact were in controversy and were not precluded as a matter of law. They argue that questions remain as to (1) whether the insurance policy was ever delivered to the Flints or received by them prior to the date of the collision (2) whether Shelter Mutual misled the Flints to believe that they had until January 7, 1990 to pay the premium (3) whether Shelter Mutual misled the Flints to believe that they had insurance coverage from December 2, 1990 until March 2, 1990.

The party who moves for summary judgment bears the burden to show that no genuine issue of fact remains, and so is entitled to judgment as a matter of law. Rule 74.04(c); American Family Mut. Ins. Co. v. Lacy, 825 S.W.2d 306, 308[1, 2] (Mo.App.1991). On appeal, we view the record in the light most favorable to the party against whom the motion was filed. Gast v. Ebert, 739 S.W.2d 545, 546 (Mo. banc 1987).

The Flints contend that whether Shelter Mutual ever delivered an insurance policy to the Flints or was received by them prior to the date of the collision remained in dispute as an issue of material fact and so precluded summary judgment. In their affidavit and deposition, the Flints declare that they never received the insurance policy from Shelter. The motion by Shelter for summary judgment was supported by the affidavit of James Kunze, manager of Policy Administration Systems for the company. The affidavit recites that policy of insurance No. 24-1-4181046-1 was mailed to the Flints on or about June 12, 1989. The policy was on the same form as the exhibit attached to the summary judgment motion.

A letter duly mailed is attended by the presumption of receipt by the addressee. Miller v. John Hancock Mut. Life Ins. Co., 155 S.W.2d 324, 328 (Mo.App.1941). A letter is duly mailed when it is placed in an envelope with the correct address of the recipient, stamped with sufficient postage, and deposited in the mail. Hills v. McComas Rentals, Inc., 779 S.W.2d 297, 299 (Mo.App.1989). When the customary volume of mail is large, so that direct proof that a particular letter was mailed is not feasible, "evidence of the settled custom and usage of the sender in the regular and systematic transaction of its business is sufficient" to give rise to the presumption of receipt by the addressee. Id. The Kunze affidavit recites that not only were all mailings of insurance policies in his charge, but also the premium notices. In such case, the settled custom of the sender in the regular transaction of its business suffices to establish the presumption of receipt. Lake St. Louis Community Ass'n v. Ringwald, 652 S.W.2d 158, 160-61[5, 6] (Mo.App.1983). The regularity of the Shelter mailings was confirmed by the acknowledgments of the Flints that the two premium notices mailed to them were received and paid. The response of the Flints, simply, that they did not receive the policy, to this evidence of mailing by Shelter on summary judgment did not dispel the presumption of receipt that attends that proof.

The Flints argue insistently nevertheless that prior to the collision of January 4, 1990, they had no opportunity to read or even see the policy. They argue that the binder did not advise them of the "conditions or terms for termination, cancellation, or nonrenewal [of the policy] for late payment of the premium." In the absence of the insurance policy, therefore, they could not be bound by the terms of "nonrenewal or cancellation for late payment of premium."

Were we to agree that the issue of the delivery and receipt of the policy remained open, the order of summary judgment remains valid. The binder contained within the automobile insurance application binds the insurance applied for "in accordance with the form in current use." The Flints argue, rather, that the application and binder constituted the complete insurance agreement between them and Shelter, hence those are the only terms that bound them. They cite § 303.190, RSMo 1986, for that thesis. Thus, the policy provisions for "nonrenewal or cancellation for late payment of premium," provisions not within the insurance agreement, do not affect them.

The argument misreads the statute and is otherwise tendentious. It is tendentious because the issue is not that of "nonrenewal or cancellation for late payment of premium," but of lapse of coverage for nonpayment of premium. Nor do the statutory components, § 303.190.6(4) and § 303.190.11, that the Flints cite aid the argument. Section 303.190.6(4) provides that the policy, the written application and any rider or endorsement which does not conflict "shall constitute the entire contract between the parties." That simply integrates the various papers of a motor vehicle liability policy transaction into one contract. Section 303.190.11 provides that "[a]ny binder issued pending the issuance of a motor vehicle liability policy shall be deemed to fulfill the requirement for such a policy." That accords to a binder the efficacy of the terms and provisions of the policy applied for pending the issuance of the policy. See Z. COUCH ON INSURANCE 2d, § 14:37 (Rev. ed. 1984). Neither provision supports the contention...