Wynn v. Farmers Ins. Group

• Decision Date: 04 June 1980
• Docket Number: Docket No. 43742
• Citation: Wynn v. Farmers Ins. Group, 296 N.W.2d 197, 98 Mich.App. 93 (Mich. App. 1980)
• Parties: Donnie WYNN, Plaintiff-Appellant, v. FARMERS INSURANCE GROUP, Defendant-Appellee.
• Court: Court of Appeal of Michigan

Page 197

296 N.W.2d 197

98 Mich.App. 93

Donnie WYNN, Plaintiff-Appellant, v.FARMERS INSURANCE GROUP, Defendant-Appellee.

Docket No. 43742.

Court of Appeals of Michigan.

June 4, 1980.

Released for Publication Sept. 24, 1980.

Michael A. Gagleard, Detroit, for plaintiff-appellant.

Gary A. Maximiuk, Detroit, for defendant-appellee.

Before CAVANAGH, P. J., and MAHER and WALSH, JJ.

PER CURIAM.

The plaintiff appeals as of right from an order issued February 1, 1979, by the Wayne County Circuit Court granting summary judgment to the defendant in the plaintiff's suit to determine whether there was an insurance policy in effect on the date of the automobile accident in question.

The plaintiff owned an automobile which was covered by an insurance policy issued by the defendant.On or about April 9, 1977, the plaintiff received a notice that his policy would expire at 12 p. m. on April 9, 1977.In addition to the language, printed in large letters at the top of the form saying, "Your policy is out of force", this notice contained the following provision:

"May we suggest that you send you premium now?If received in one of our Company offices or directly by an authorized Sales Representative of the Company within 60 days from the expiration date, shown, your protection will again be in force from and after the date payment is received.You may pay one half now plus a small service charge and the balance within 60 days."

No payment was sent within the 60-day period after the April 9, expiration date.However, on June 20, 1977, or approximately 70 days after his policy had expired, the plaintiff did mail to the defendant a check in the amount of $163.50, which represented the full amount of the premium.The defendant cashed and deposited the plaintiff's check.On July 6, 1977, the defendant sent a refund check for $163.50 to the plaintiff together with a document entitled "Notice of Cancellation".This document indicated that "a new application is required to place your policy back in force".

On August 5, 1977, the plaintiff was involved in an automobile accident.The defendant refused to pay no-fault benefits, contending that there was no policy in effect.The plaintiff filed a complaint seeking declaratory judgment on the existence of a policy.Both parties filed motions for summary judgment, the defendant claiming that there was no genuine issue of material fact.At the oral arguments on these motions, the trial judge ruled in favor of the defendant, finding that the insurance policy had not been reinstated when the defendant cashed the plaintiff's check.

On appeal, we are asked to decide whether the notice of April 9, 1977, entitled "Your policy is out of force" which was sent by the defendant to the plaintiff was required to comply with the requirements of M.C.L. § 500.3020;M.S.A. § 24.13020.

At the time the notice in question was sent, M.C.L. 500.3020;M.S.A. § 24.13020 provided as follows:

"No policy of casualty insurance, excepting workmen's compensation, but including all classes of motor vehicle coverage, shall be issued or delivered in this state by any insurer authorized to do business in this state for which a premium or advance assessment is charged, unless there shall be contained within such policy a provision whereby the policy may be canceled at any time at the request of the insured, in which case the insurer shall, upon demand and surrender of the policy, refund the excess of paid premium or assessment above the customary short rates for the expired time; and whereby the policy may be canceled at any time by the insurer by mailing to the insured at his address last known to the insurer or its authorized agent, with postage fully prepaid, a 10 days' written notice of cancellation with or without tender of the excess of paid premium or assessment above the pro rata premium for the expired time, which excess, if not tendered, shall be refunded on demand and the notice of cancellation shall state that the excess premium, if not tendered, will be refunded on demand.The cancellation shall be without prejudice to any claim originating prior thereto.The mailing of notice shall be prima facie proof of notice.Delivery of such written notice shall be equivalent to mailing.A notice of cancellation including a cancellation notice under section 3224, shall be accompanied by a statement that the insured must not operate or permit the operation of the vehicle to which notice of cancellation is applicable, or operate any other vehicle, unless the fees required by the motor vehicle accident claims act have been paid with respect to such vehicle."(Emphasis added.)

In Bek v. Zimmerman, 285 Mich. 224, 280 N.W. 741(1938), the Michigan Supreme Court declared that a statute requiring a written 5-day notice of cancellation was inapplicable to an insurance policy whose term had expired, for the following reason:

"The quoted statute applies where either the insurer or the insured seeks to terminate the insurance by cancellation; it cannot be stretched to cover a situation where, as here, liability under the contract has become automatically suspended by reason of the precise terms of the insurance agreement.

"The statute covers those situations where termination of the policy is not automatic but is optional with the insurer and, therefore, cannot be anticipated and provided against by the insured...