Opinion
No. FBT CV 05 5000534 S
January 9, 2009
MEMORANDUM OF DECISION
On or about June 13, 2004, the plaintiff was involved in a motor vehicle accident with a car operated by the defendant Pistone and owned by the defendant Quinn. The plaintiff brought suit against Pistone and Quinn, in September 2005, and Allstate denied coverage and refused to provide a defense claiming that the defendant Quinn's policy, which she believed was in force and effect on the day of the accident, had been cancelled for nonpayment of the premium.
The defendants filed a third-party complaint against both Allstate and McKnight, Allstate's agent, alleging that they never received notice of the cancellation and that Allstate owed them a duty to indemnify and defend. Allstate seeks summary judgment claiming that it properly cancelled Quinn's insurance policy.
The defendants claim that Allstate is not entitled to summary judgment because: (1) under General Statutes § 38a-343, actual notice must be given to the policy holder when the cancellation is for nonpayment of premium and actual notice was not given; (2) even if actual notice is not required to be given, there is a genuine issue of material fact under the Mailbox Rule as to whether the notice of cancellation letter was received by the defendant Quinn; and (3) there is a genuine issue of material fact as to the dates for the policy period that was reinstated by Quinn on June 14, 2004, and whether there was a lapse in coverage after the reinstatement.
DELIVERY OF NOTICE OF CANCELLATION BASED ON NON-PAYMENT
Allstate claims that it mailed notice of cancellation for nonpayment of premium to Quinn and that this is sufficient in and of itself to cancel the policy. Allstate produced a certificate of mailing showing that a letter was sent to Quinn on May 6, 2004, presumably the notice of cancellation, and a copy of the envelope of the certified letter indicating "Returned to Sender" and "Unclaimed." Allstate has produced no evidence that it attempted to notify Quinn that her policy was being cancelled after the notice of cancellation letter was returned to it as unclaimed. Quinn's affidavit indicates that she never received the cancellation letter, that she only learned of the cancellation on June 14, 2004, after she was involved in the accident, and that she promptly paid her policy premium when she was advised by the Allstate agent that the policy had been cancelled.
The purpose of § 38a-343 is to assure that before an automobile policy is cancelled the insured has a clear and unambiguous notice of the cancellation. Kane v. American Ins. Co., 52 Conn.App. 497, 502, 725 A.2d 1000 (1999), aff'd, 252 Conn. 113, 743 A.2d 612 (2000), quoting Johnston v. CT American Employers Ins. Co., 25 Conn.App. 95, 97-98, 592 A.2d 975 (1991).
General Statutes § 38a-343(a) provides in relevant part:
No notice of cancellation of a policy to which section 38a-342 applies may be effective unless sent by registered or certified mail or by mail evidenced by a certificate of mailing, or delivered by the insurer to the named insured, and any third party designated pursuant to section 38a-323a, at least forty-five days before the effective date of cancellation, except that . . . (2) where cancellation is for nonpayment of any other premium, at least ten days' notice of cancellation accompanied by the reasons for cancellation shall be given. (Emphasis added.)
In a very well reasoned opinion with which this court agrees, Judge Gormley reviewed the case law and the legislative history of the relevant statutory provisions and concluded that notice of cancellation of insurance for nonpayment of premium, § 38a-343(a), as it relates to the words "shall be given," requires actual receipt or knowledge by the insured of the notice. Schneider v. Brown, Superior Court, judicial district of Fairfield, Docket No. CV 98 0340692 (September 19, 2003, Gormley, J.); see also Rios v. Old Republic Insurance Company, Superior Court, judicial district of New Haven, Docket No. CV 04 4004614 (December 5, 2005, Lopez. J.) [40 Conn. L. Rptr. 429]; Atwood v. Progressive Ins. Co., Superior Court, judicial district of Ansonia Milford, Docket No. CV 95 0051089 (September 3, 1997, Corradino, J.) [20 Conn. L. Rptr. 473]; Hernandez v. Hartford Accident Indemnity Co., Superior Court, Docket No. CV 88 0277868 (February 27, 1990, Hodgson, J.) (1 Conn. L. Rptr. 317). Contra Denitto v. Transamerica Ins., Superior Court, judicial district of Fairfield, Docket No. CV 900266438 (December 2, 1998, Lewis, J.).
In a decision on a motion for summary judgment, Judge Levin concluded there was no requirement of actual notice in the context of deciding a motion for summary judgment. After Judge Levin's decision was issued the case went to trial before Judge Gormley. Contrary to Judge Levin's earlier ruling in the same case, Judge Gormley examined the relevant case law, legislative intent and statutory construction of General Statutes § 38a-343 and concluded that actual notice was required to be given to the insured for cancellation for nonpayment of premium.
In this case, everything presented indicates that the defendants did not have actual notice. The defendant Quinn's statements in her affidavit deny that she ever received notice of cancellation until after the accident, when she reported the accident to her agent. Allstate's documentation demonstrates that the notice it sent was not received by Quinn because the envelope of the cancellation stated "Return to Sender, Unclaimed." Since Quinn was not given actual notice of the cancellation until after the accident, Allstate is not entitled to summary judgment and its motion is denied.
Even if Allstate were to claim that it complied with the statutory cancellation requirements of § 38a-343(a) by mailing such notice, the "mailbox rule" merely provides a rebuttable presumption of receipt if a properly stamped and addressed letter is placed into a mailbox or handed over to the United States Postal Service. Echavarria v. National Grange Mutual Ins., 275 Conn. 408, 418, 880 A.2d 882 (2005). Thereafter, the burden shifts to the insured to present evidence to rebut the presumption. Here, the envelope marked "Return to Sender" and "Unclaimed" together with the affidavit denials are sufficient to rebut the presumption of receipt and to create a sufficient question of material fact to deny summary judgment.
REINSTATEMENT DATE
When, after the accident on June 14, 2004, the agent told the defendant that the policy had been cancelled, the defendant gave the agent a check to have the policy reinstated, which check was accepted and deposited. Allstate claims that reinstatement was effective on June 14 and that the policy was not in effect on the day of the accident, June 13. Allstate's documents that were provided after the reinstatement contradict this position. An amended policy and declaration sent after the reinstatement recite the policy period as April 25, 2004, through October 25, 2004. Further, the "Amended Auto Policy Declarations" states "Your Policy Effective Date is April 25, 2004." The policy sent to Quinn in July of 2004 showed the same policy period without any lapse in coverage. Additionally, Quinn's affidavit indicates that the agent told her, upon her payment of the premium on June 14, that the policy was reinstated. Although this is denied in the agent's affidavit, there certainly is a genuine issue of material fact as to the issue of coverage.
For all of these reasons, the third-party defendant Allstate's motion for summary judgment is denied.