State Farm Mut. Auto. Ins. Co. v. Matthews

• Decision Date: 17 March 1980
• Citation: 74 A.D.2d 875,426 N.Y.S.2d 30
• Parties: In the Matter of STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. Oswald C. MATTHEWS, Respondent; Jean Haskins, additional Respondent; Great American Insurance Company, additional Respondent-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 30

426 N.Y.S.2d 30

74 A.D.2d 875

In the Matter of STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. Oswald C. MATTHEWS, Respondent; Jean Haskins, additional Respondent; Great American Insurance Company additional Respondent-Respondent.

Supreme Court, Appellate Division, Second Department.

March 17, 1980.

Diamond, Rutman & Costello, New York City (Mark S. Silberglitt, New York City, of counsel), for appellant.

Fogarty, Wynne, Martini, Purcell & Byrne, Lake Success (Jennifer Pirro Hurley, Lake Success, of counsel), for additional respondent-respondent.

Before HOPKINS, J. P., and LAZER, MARGETT and WEINSTEIN, JJ.

MEMORANDUM BY THE COURT.

In a proceeding to stay arbitration, petitioner appeals from a judgment of the Supreme Court, Queens County, entered September 22, 1978, denying the application.

Judgment reversed, on the law, with $50 costs and disbursements, and application granted.

The issue is whether Great American Insurance Company's purported cancellation of Jean Haskins' insurance policy prior to June 2, 1974, the stated expiration date, was effective, and, if not, whether the insurance coverage continued up to the date of the instant accident, January 1, 1975. Special Term correctly found, after a hearing, that the Haskins policy was not effectively canceled prior to its expiration date. However, we find erroneous its further finding that the policy nevertheless expired by its terms on June 2, 1974 and that Oswald C. Matthews could compel his insurance company to arbitrate his claim under the uninsured motorist provision of his insurance policy.

We base this conclusion on the statutory requirements for cancellation outlined in section 167-a of the Insurance Law and on relevant case law construing said requirements. According to section 167-a, an insurer may cancel a policy for nonpayment of premiums by giving timely written notice to the insured, or it may refuse to renew on written notice showing specific reasons for nonrenewal. Case law demonstrates that this notice requirement is strictly construed, necessitating literal compliance on the part of the insurer, with any ambiguities being interpreted in favor of the insured (Government Employees Ins. Co. v. Mizell, 36 A.D.2d 452, 320 N.Y.S.2d 936). In Capra v. Lumbermens Mut. Cas. Co., 31 N.Y.2d 760, 338 N.Y.S.2d 437, 290 N.E.2d 438, on remand 43 A.D.2d 986, 352 N.Y.S.2d 58, a case presenting virtually identical facts to those at bar, an automobile policy was held to...