Case Title: MARTIN A NOWELL V TITAN INSUR CO

Citation: 

Docket Number: 119013

State: michigan

Court: Michigan Supreme Court

Date: 2002-07-09T00:00:00Z

Document:
____________________________________________________________________________________________ 
____________________________________________________________________________________________________________________________ 
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Michigan Supreme Court 
Lansing, Michigan 48909 
C hief Justice 
Justices 
Maura D. Corrigan  
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Opinion 
Stephen J. Markman 
FILED JULY 9, 2002  
MARTIN A. NOWELL,  
Plaintiff-Appellee,  
v  
No. 119013  
TITAN INSURANCE COMPANY,  
Defendant-Appellant.  
BEFORE THE ENTIRE BENCH  
TAYLOR, J.  
Plaintiff Martin Nowell was injured in an automobile  
accident that occurred after the effective date on a notice of  
cancellation that defendant mailed to the driver of the  
vehicle in which plaintiff was a passenger.  The driver has  
indicated 
that, 
while the notice of cancellation was delivered  
to his address, he did not personally receive or learn of it  
until after the accident.  The parties dispute whether actual  
notice to the insured was necessary to make the cancellation  
of the insurance policy effective. We conclude that, actual  
 
notice to the insured is not required to effectuate the  
cancellation of an insurance policy under MCL 500.3020(1)(b).  
However, mailing of a notice of cancellation must be  
reasonably calculated to be delivered so as to arrive at the  
insured’s address at least ten days before the date specified  
for cancellation for the notice to be effective.  Accordingly,  
we reverse and remand this case to the circuit court for  
further proceedings consistent with this opinion.  
I. Factual and Procedural Background  
Defendant 
presented 
undisputed 
evidence 
that, 
on 
February  
20, 1997, it mailed a notice of cancellation to Duane Isley  
with regard to the automobile that was insured under an  
insurance policy that defendant issued to Isley. The notice  
of cancellation provided that the insurance policy would be  
canceled effective March 5, 1997 at 12:01 a.m. unless Isley  
paid $240 before that date. It is undisputed that Isley did  
not make such a payment before the effective date of the  
notice. 
 At approximately 8:30 p.m. on March 5, 1997, plaintiff  
was injured in an automobile accident while  a passenger in  
Isley’s vehicle.  
Defendant declined to provide insurance  
coverage to 
Isley for this accident, claiming that no  
coverage existed because the accident  occurred after the  
effective cancellation date stated on the notice . This led  
2  
 
 
 
  
to 
plaintiff 
bringing the present suit for insurance coverage.  
In support of his claim, plaintiff presented evidence  
that
 Isley did not personally receive 
the notice of  
cancellation until after the motor vehicle accident.1  The  
lower courts held that plaintiff was entitled to a grant of  
summary disposition on the ground that actual notice, i.e.,  
personal receipt by the insured, was necessary for a notice of  
cancellation to be effective and that there was no genuine  
issue of material fact that Isley did not receive actual  
notice before the accident. The Court of Appeals affirmed.  We  
granted defendant’s application for leave to appeal.  
II. Standard of Review  
Decisions on summary disposition motions are reviewed de  
novo. CAM Construction v Lake Edgewood Condominium Ass’n, 465  
Mich 549, 553; 640 NW2d 256 (2002).  
III. Analysis  
A  
The critical statutory provision, MCL 500.3020(1)(b),2  
1 
 Isley’s statements in this regard are somewhat  
contradictory with respect to when exactly he first saw the 
notice of cancellation.  However, for present purposes, we 
accept that Isley did not personally receive or see the notice 
of cancellation until after the accident.  
2  The pertinent language of MCL 500.3020(1) at the time 
of the events underlying this case in 1997 was identical to 
the language in the present version.  The current version  
differs 
only 
in 
that 
it includes additional language excluding 
“mortgage guaranty insurance” from its requirements. 
Of  
3  
 
states in pertinent part:  
A policy of casualty insurance . . . , 
including all classes of motor vehicle coverage, 
shall not be issued or delivered in this state by 
an insurer authorized to do business in this state  
for which a premium or advance assessment is  
charged, unless the policy contains the following 
provisions:[3]  
* * *  
(b) That the policy may be canceled at any 
time by the insurer by mailing to the insured at  
the insured’s address last known to the insurer or  
an authorized agent of the insurer, with postage 
fully prepaid, a not less than 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.  [Emphasis 
added.]  
Plaintiff contends that actual notice is necessary for a  
notice of cancellation sent pursuant to this statutory  
provision to be effective.  In contrast, defendant argues  
that, under this statutory language, a proper mailing of a  
notice of cancellation makes the notice effective regardless  
of whether it is actually received by the insured.  
We conclude that the most basic principles of statutory  
construction resolve this matter.  First, the plain and  
course, that additional language is immaterial to the present 
case.  
3  It is undisputed that the insurance policy at issue 
complied with this statute by including the pertinent 
language.  
4  
 
 
 
 
 
unambiguous language of a statute must be applied as written.4  
Second, provisions of a statute that could be in conflict  
must, if possible, be read harmoniously.5  
The plain language of MCL 500.3020(1)(b), which allows  
cancellation by a simple first-class mailing precludes a  
conclusion that an insured must receive some type of actual  
notice, i.e., be aware of the issuance of a notice of  
cancellation by the insurer, in order for an insurer’s  
cancellation of the insured’s policy to be effective.  Rather,  
the statute provides by its clear language that an insurance  
policy “may be cancelled at any time by the insurer by  
mailing” in accordance with its provisions “a not less than 10  
days’ written notice of cancellation.”6  The plain import of  
4  As we stated in Huggett v Dep’t of Natural Resources, 
464 Mich 711, 717; 629 NW2d 915 (2001):  
If the statutory language is clear and  
unambiguous, then we conclude that the Legislature 
intended the meaning it clearly and unambiguously 
expressed, and the statute is enforced as written. 
No further judicial construction is necessary or 
permitted.  
5 As we noted in Macomb Co Prosecutor v Murphy, 464 Mich  
149, 159; 627 NW2d 247 (2001), “[w]e construe an act as a 
whole to harmonize its provisions and carry out the purpose of 
the Legislature.”  
6 The statute requires that (1) the mailing be addressed 
to “the insured at the insured’s address last known to the  
insurer or an authorized agent of the insurer” and (2) the 
mailing be sent “with postage fully prepaid” in order to be 
(continued...)  
5  
 
this language is that such a mailing does not require proof of  
service or even a delivery receipt.   However, the notice that  
the insurer is required to mail must be “a not less than ten  
days’ written notice of cancellation.”  Plaintiff contends  
that this means that the insurer must show that upon delivery  
there remained ten days until cancellation  became effective.  
Yet, were this the case, it would leave the previously  
discussed 
mailing 
provision 
a 
nullity 
because 
mere  
notification by first-class mail would be insufficient to  
inform with regard to when actual delivery took place.  
In such a case of tension, or even conflict, between  
sections of a statute, it is our duty to, if reasonably  
possible, construe them both so as to give meaning to each;  
that is, to harmonize them.  Reading the statute here as a  
whole, we conclude that the first-class mailing must be done  
early enough to, with reasonable certainty, provide delivery  
to  the insured at least ten days before the cancellation  
date.  In other words, an insurer has the duty to mail far  
enough in advance of the beginning of the ten day period so as  
to reasonably ensure that the notice will arrive and provide  
an insured with the potential to have the full ten days’  
notice that the statute provides.  While the Legislature  
6(...continued) 
effective.  There is no claim of a failure to meet those  
requirements in this case.  
6  
 
 
undoubtedly expected that this should ordinarily result in  
personal receipt of the notice of cancellation by the insured  
before it became effective, the statutory language utilized  
cannot fairly be read as requiring actual notice as a  
condition for a cancellation to become effective.7  
Accordingly, we conclude that the statute should be  
construed to mean that the mailing must be reasonably  
calculated to be delivered so as to arrive at the insured’s  
address at least ten days before the date specified for  
cancellation for the notice to be effective.8  
7  The partial dissent opts to not attempt to harmonize 
the statutory provisions at issue and, instead, argues for an 
actual delivery standard rather than a reasonably-calculated­
to-arrive standard. 
This approach is flawed because it 
deprives the notice by mailing system, which is the one the 
Legislature adopted, of its intended effect.  
8  
Plaintiff 
mistakenly 
also 
places 
reliance 
on another 
provision of the statute at issue. That provision states in 
pertinent part:  
The mailing of notice is prima facie proof of 
notice. [MCL 500.3020(5).]  
Plaintiff essentially argues that this statutory language 
indicates that the mailing of a notice of cancellation is only 
“prima facie” proof that a notice of cancellation has become 
effective, reflecting that proof of a lack of actual notice 
can defeat that presumption.  Plaintiff reads the language too  
broadly.  Subsection 5 means that mailing a notice of 
cancellation should be taken as prima facie evidence that it 
actually reached the address to which it was mailed.  As  
plaintiff does not contest that the notice of cancellation at 
issue was delivered (only when it was delivered), this section 
of the statute is of no consequence to the resolution of this 
matter.  
7  
 
 
In the present case, undisputed evidence indicates that  
defendant mailed Isley the notice of cancellation at issue on  
February 20, 1997, with the provision that it would become  
effective on March 5, 1997, at 12:01 a.m. unless Isley paid  
his past due premium before that time.  Accordingly, the only  
question that needs to be resolved is whether mailing the  
notice of cancellation on February 20, 1997, was reasonably  
calculated to cause the notice to be delivered at Isley’s  
address at least ten days before the time it was specified to  
become effective. Understandably enough, this point was not  
delved into by the parties nor addressed by the lower courts  
inasmuch as Court of Appeals precedent was clear that actual  
notice was required for a notice of cancellation to be  
effective.  Because the parties may be able to provide further  
evidence regarding the number of days that would be necessary  
for the notice of cancellation at issue to have been  
reasonably calculated to arrive at Isley’s address at least  
ten days before it was specified to become effective, we  
remand to the circuit court to resolve this question.  
B  
While our analysis of the text of the statute is  
dispositive, we note that our interpretation of MCL  
500.3020(1)(b) is supported by an examination of the  
differences between the current statutory language and  
8  
 
 
 
  
 
 
predecessor 
language 
that 
imposed 
a 
stricter 
notice  
requirement.
 A predecessor statute, codified as 1948 CL  
522.34, provided that an insurance policy subject to its  
provisions9 “may be cancelled at any time by the company by  
giving to the insured a 5 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”  
(emphasis added).  
In DeHaan v Marvin, 331 Mich 231, 240-241; 49 NW2d 148  
(1951), this Court, quite appropriately, held that mailing a  
notice of cancellation did not in itself suffice to comply  
with this earlier statutory language.  Rather, cancellation  
could not have been effected under the statute then in effect  
until notice was received by the insured.  In so holding, this  
Court relied on our earlier decision in Galkin v Lincoln  
Mutual Casualty Co, 279 Mich 327; 272 NW 694 (1937).10  In  
Galkin, this Court pointedly stated that “[i]t is obvious that  
the insurer did not give notice to the insured by merely  
9  Like the current statute, the predecessor statute 
provided that it did not apply to worker’s compensation 
policies.  
10 The statutory language at issue in Galkin, from an even  
earlier predecessor statute, was substantively identical to 
the statutory language at issue in DeHaan in providing that an 
insurance policy “may be canceled at any time by the company 
by giving to the insured a five days’ written notice of  
cancellation.” Id. at 330, quoting 1929 CL 12461 (emphasis  
provided in Galkin).  
9  
 
mailing notice.” Id. at 331.  
However, the statute at issue in the present case does  
not require the “giving” of notice, but rather only the  
mailing of notice in accordance with its provisions. There is  
a significant distinction between requiring the “giving” of  
notice and requiring the “mailing” of notice.  The Galkin  
Court itself recognized this distinction by concluding that  
merely “mailing” notice does not constitute “giving” notice.  
Against the background of DeHaan and Galkin, it is all the  
more clear that the mailing of a notice of cancellation in  
compliance with the requirements of MCL 500.3020(1)(b)  
suffices to make that notice effective, even if the “mailing”  
somehow does not result in actual notice to the insured or, in  
other words, does not “give” the insured notice.  
C  
In 
reaching 
the 
opposite conclusion, the Court of Appeals  
relied on its prior statement in American States Ins Co v Auto  
Club Ins Ass’n, 193 Mich App 248, 254; 484 NW2d 1 (1992), that  
“[a]ctual notice of cancellation must be received by the  
insured before the cancellation is effective.” In support of  
this statement, the American States panel cited the earlier  
Court of Appeals opinions in Citizens Ins Co of America v  
Crenshaw, 160 Mich App 34, 37-38; 408 NW2d 100 (1987), and  
Citizens Ins Co of America v Lemaster, 99 Mich App 325, 328;  
10  
 
 
 
298 NW2d 19 (1980).  Crenshaw and Lemaster each cited Phillips  
v DAIIE, 69 Mich App 512; 245 NW2d 114 (1976), in support of  
their conclusions that actual notice is required for a notice  
of cancellation under MCL 500.3020 to be effective. Crenshaw,  
supra at 37-38; Lemaster, supra at 328.  In Phillips, supra at  
515, the panel cited Gooden v Camden Fire Ins Ass’n, 11 Mich  
App 695; 162 NW2d 147 (1968), in support of its conclusion  
that actual notice is required for a notice of cancellation  
under the statute to be effective.  Finally, Gooden, supra at  
697, relied on this Court’s decisions in DeHaan and Galkin, in  
concluding that MCL 500.3020 “requires actual receipt of  
notice of cancellation by the insured to effectuate  
cancellation 
of 
an 
insurance contract.”  However, as discussed  
above, DeHaan and Galkin involved predecessor statutes that  
required the giving of notice for cancellation to be  
effective—unlike the language of MCL 500.3020 that expressly  
provides for cancellation to be effected by merely mailing a  
notice of cancellation in accordance with the statutory  
requirements.  Thus, Gooden was wrongly decided because it  
relied on inapplicable precedent and failed to consider the  
actual language of MCL 500.3020.11  Accordingly, we overrule  
11  We note that the purpose of the change in the statute 
from requiring the “giving” of notice to requiring the 
“mailing” of the notice would, obviously, seem to be to allow 
insurers to cancel insurance policies merely by “mailing” 
(continued...)  
11  
 
Gooden and its progeny 
to the extent that they are  
inconsistent with this opinion.12  
IV. Conclusion  
In sum, we conclude that actual notice or receipt of a  
notice of cancellation under MCL 500.3020 is unnecessary for  
the notice to become effective. However, the notice must be  
mailed so as to be reasonably calculated to arrive at the  
appropriate address at least ten days before the cancellation  
date.  Accordingly, the circuit court must consider whether  
the mailing in this case complied with that standard.13  We  
11(...continued) 
written notices of cancellation. However, the lower courts’ 
interpretation of this statute does not comport with this 
purpose because it allows insureds to avoid cancellation of 
such policies by consciously avoiding knowing the content of 
their mailboxes.  Thus, it does not allow insurers to  
effectively 
cancel 
policies 
by 
mailing 
notices 
of  
cancellation.
 In other words, under the lower courts’ 
interpretation, the only practical way that an insurer could 
be certain that a policy is effectively canceled would seem to 
be to personally deliver the notice of cancellation to the 
insured, which is clearly above and beyond what the  
Legislature has expressly required.  
12We note that not all Court of Appeals panels presented 
with the question have interpreted MCL 500.3020(1)(b) in a 
manner like Gooden. 
As noted by defendant, in Raptis v  
Safeguard Ins Co, 13 Mich App 193, 199; 163 NW2d 835 (1968), 
the Court concluded, consistently with our analysis, that MCL 
500.3020 does not require actual notice for a notice of 
cancellation to be effective.  
13  In light of our analysis, we do not reach defendant’s 
alternative argument that, if actual notice is required to 
effect cancellation, there is a genuine issue of material fact 
about Isley’s credibility in denying that he personally 
(continued...)  
12  
 
 
 
 
 
reverse the judgment of the Court of Appeals and remand this  
case to the circuit court for further proceedings consistent  
with this opinion.  
CORRIGAN, C.J., and CAVANAGH, 
WEAVER, 
YOUNG, 
and MARKMAN, 
JJ.,  
concurred with TAYLOR, J.  
13(...continued) 
received the notice of cancellation before the accident.  
13  
 
___________________________________ 
v 
S T A T E O F M I C H I G A N  
SUPREME COURT  
MARTIN A. NOWELL,  
Plaintiff-Appellee,  
No. 119013  
TITAN INSURANCE COMPANY,  
Defendant-Appellant.  
KELLY, J. (concurring in part and dissenting in part).  
I agree with the majority's conclusion that MCL 500.3020  
does not require actual notice.  I also agree that the statute  
does require written notification of an insurance policy's  
cancellation reasonably calculated to arrive at the insured's  
address at least ten days before cancellation.  
I depart from the majority when it narrows the notice  
requirement of MCL 500.3020 with its interpretation of  
subsection 5. 
That subsection creates a rebuttable  
presumption that proper mailing under MCL 500.3020(1)(b)  
evidences notice.1  Because proper notice is that which  
1"The mailing of notice is prima facie proof of notice." 
MCL 500.3020(5).  
 
arrives at least ten days before the cancellation date,2 the  
presumption should be rebuttable by evidence that the notice  
did not arrive in a timely manner. The majority errs to the  
extent that it states that the presumption is rebuttable only  
with evidence that the notice did not arrive at all.  In so  
concluding, it eviscerates the requirement that notice arrive  
at least ten days before cancellation. Slip op at 7, n 8.  
Although the majority's misconstrual of subsection 5 is  
arguably 
dictum 
and 
is set forth without substantive analysis,  
lower courts are likely to rely on it.  Moreover, the error  
underlies the majority's entire analysis of MCL 500.3020,  
which runs contrary to the notion that it should be  
interpreted to benefit the insured.  The analysis brushes  
aside the statutory objective that the insured have ten days  
to act on a notice of cancellation.  See Lease Car of America,  
Inc v Rahn, 419 Mich 48, 54; 347 NW2d 444 (1984).  By failing  
to recognize that proper mailing is only prima facie proof of  
the required ten days' notice, the majority minimizes the  
statutory notice requirement to the point of obscurity.  
The 
majority 
acknowledges that proof of proper mailing is  
rebuttable 
evidence 
of 
proper 
notice. 
However, 
it  
simultaneously 
renders 
that 
proposition 
toothless 
by 
asserting  
2As described by the statute, "a not less than 10 days' 
written notice . . . ." MCL 500.3020(1)(b).  
2  
that a first-class, postage-paid mailing "inform[s] with  
regard to when actual delivery took place."  Slip op at 6.  
The majority finds that the only question here is whether  
defendant's 
mailing 
was reasonably calculated to arrive at the  
insured's address at least ten days before the date of  
cancellation.  Slip op at 8. 
This amounts to a refusal to  
give effect to the statutory mandate that proper mailing is  
prima facie proof of notice, not irrefutably presumptive  
notice.  
The majority is mistaken in limiting MCL 500.3020 to a  
mailing requirement rather than a notice requirement.  The  
statute by its language requires that written notice arrive at  
the insured's address at least ten days before cancellation.  
On remand, I would direct the trial court to determine  
(1) whether defendant's notice was reasonably calculated to  
arrive at least ten days before the cancellation date, and (2)  
if so, whether there is evidence proving that the notice did  
not in fact arrive at least ten days before the cancellation  
date.  
3