### IN THE COURT OF APP EALS OF TENNESS EE AT JAC KSON Ja nuary 20, 200 4 S es sio n

DAVID BLURTO N AN D W IFE 

### , V IRGIN IA BL UR TON

v. GRANGE I NSURANCE & CASUALTY COMPANY

An Appeal f

romthe Chancer y Court for Haywood County No. 11255 G eorgeR. Ellis, Ch ancellor

No. W2003-01177-C OA-R3-C V - F iled Jul y 2, 2004

Th is i s a de c laratory

jud g me nt a c tio n to e sta

bli sh c ov e ra g e un de r an in su ranc e po lic y . T he plaint if fs ’ home was insure d by

a homeowne rs policy

with the defe ndant insurance company

. The insura nce company canc eled the policy for nonpay ment of the pre mium and claimed that it mailed a notice of

canc ellation to the insureds at that time. Six months later, the plaintiffs’ home was damag ed byfire, and they filed a claim on their pol icy

. The insura nce c ompany denied the c laim. The plaintiffs filed this lawsuit to recover

on the policy
, asserting that they never rec eived the c ance llation notice, and that the insuranc e compa ny did not properly

canc el th e p o l i cy

. At trial, the insuranc e compa ny repr esentative testified about the company ’s customary routine of se nding c ance llation notices, and it w a s u nd isp ute d th a t th e ins ur a nc e a g e nt a ndthe mortg a g e e s r e c e ive d n oti c e s. Th e tr ia l c ou rt he ld in favor of the plaintiffs based on, a mong othe r thing s, its determination that the insuranc e compa ny did not prove that it had mailed a canc ellation notice to the plaintiffs. The insurance company now appea ls. W e re verse , finding that the evidenc e pre ponderates in favor of a f inding that the

c a nc e llatio n n oti c e wa s ma ile d to the plaint if fs

. Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Chancer y Court is Reve rsed

H OL L Y M. K I RBY , J.
, d e li v e r e d th e o p in io n o f th e Co u r t, in w h ic h W. F RAN K C RAW FORD , P.J
., W.S
., and D AVI D R. F ARMER , J ., joined.

R o b er tO. Bi n k l ey , J r. , an d L at o s h a M as o n De x t er , J ac k s o n , T en n es s ee , fo r t h e a p p el l an t , G r an ge I nsuranc e & Casualty

Company

.

Willi a m L . H e nd ri c ks , Jr.
, Me mph is, Te nn e sse e , fo r the app e lle e s, Da vid B lurton a nd wi fe , V ir g ini a Blurton.T he r ecor ds of SI M M C O r ef

l ect t hat t he pay ment was for per s onal us e, r at her t han a bus i nes s us e. 1

-2- OP IN ION

Plaintiffs/Appellees Da vid Blurton and his wife , Virg inia Blurton ( collectively “B lurtons”), owned a hom e at 7 93 Allen Station Road in Brownsville, Te nnessee . Effe ctive June 1990, the Def endant/Appe llant Grang e I nsuranc e & CasualtyCompany (“G rang e”) provided homeow ners insurance cover ag e for

the B lurtons’ Allen S tation Road home. The Blurtons re newe d the policy for
one-y ear periods, beg inning on J une 6, 1991, 1992, 1992, and 1993. Ea ch time, the B lurtons electe d to pay the pre miums i n five installments.

I n J une 1994, the B lurtons rec eived a renewa l and pre mium noti ce f rom Gra ng e. At that time, the Blurtons ag ain chose to pay the 1994 premiums in five installments. The first installment

was due sometime in June 1994, and the others wer e due on Aug ust 5, October 4, Dec ember

3, 1994,

a n d o n F e b ru ar y 1
, 1 9 9 5

. T h e B l u r t o n s w r o t e a c h e c k f o r t h e Ju n e 1 9 9 4 i n s t a l l me nt i n atim e ly

manner , and the pay ment of that installment was ac knowledg ed by Gra ng e.

On July 11 , 199 4, Gr a ng e se nt a pr e miu m noti c e to the B lurton s f or the Au g us t 5 p a y me nt. That pre mium noti ce listed the e ntire installment schedule, indicating the due d at es o n wh i ch the thr e e re ma ini ng ins ta llm e nts wo uld be du e fo r the po lic y . G rang e se nt n o f urthe r p re miu m no tic e s.

The B lurtons wrote a

chec k for the se cond installment on August 10, 1994, che ck number 8659 from the ba nk acc ount of Southern I ndustrial Mechan i ca l M aint enanc e Company (“SIMMCO”), owne d by

the B lurtons. A copy

of the c heck was submitted as an e x hibit at trial, but 1 the che ck copie d was not sig ned. The Blurtons c laimed that the che ck wa s mailed to Grang e, but Gra ng e maintained that it never re ceive d the che ck

. T h e check ne ver c lear ed SI MMCO’s bank

acc ount. Thoug h the B lurtons were awa re of this fact, they

did not discover why

the che ck had ne ver clea red.

Gra ng e conte nds that, on Aug ust 16, 1994, it s au t omated sy stem g ener ated a canc ellation notice to the B lurtons, which was sc heduled to be mailed on Aug ust 17, 1994. The notice state d that the B lurtons’ homeowne rs policy would be cancele d for nonpay ment at 12:01 a .m. on A ug ust 29, 1994. A copy

of that notice w as sent to the B lurt o n s ’ i n suranc e ag ent, Will iam Fr eema n (“ F re e ma n” ). On Au g us t 29 , 1 99 4, Gr a ng e iss ue d a fi na l no tic e of

c a nc e llatio n to the B lurton s, stating tha t the policy

was c ance led as of 12:01 a .m. on that day . A copy of the fina l notice was se nt to Fre em an as we ll as the first and se cond mortg ag ees on the property . The B lurtons would later claim that they

did not rece ive either

of the c ance llation notices sent by Gra ng e. I t is undisput ed that Gra ng e did not send t he Burtons any more invoi ces for installment pay ments of pre miums, and that
t h e B u r t o n s i n f

a c tm a d e n o f

u r t h e r p a ym e n t s u n d e r t h e i n s t a l l m e n tp l a n f o r t h e h o m e o w n e r s p o l i c y. Ultimately , the B lurtons appar ently assumed that their June 6, 1994 policy was still in effec t, but Gra ng e conside red the policy to have be en cancele d as of Aug ust 29, 1994.-3-

On Fe bruary

25, 1995, six months afte r Grang e cancele d the B urtons’ insuranc e policy , the Blurtons’ home caug ht on fire. W h en the B lurtons called a g ent Fr eema n the following day , he inf or me d th e m th a t th e ir ho me ow ne rs po lic y ha d be e n c a nc e le d, a ndthat, c on se qu e ntl y , th e ir los s was not insured. The Blurtons c laimed that this was the first ti m e that they learned of the policy

canc ellation.

On Fe bruary

23, 1996, the B lurtons filed the instant decla ratory judgme nt action in the trial court be l o w, arg uing that they wer e entitled to re cover

for the f ire loss under the ir homeowne rs insurance policy . The B lurtons alleg ed that Gr ang e did not follow the ca ncell at i on proce dures outlined in the insurance policy an d t h at, conse quently , its attempt to cance l the policy was ineffe ctive. The orig inal complaint named the insurance a g ent Fr eema n as a d e fenda nt, claiming that Fr eema n had a duty

to notify the Blurtons of the c ance llation of their policy when he rec eived the initial noti ce of

canc ellation from Gr ang e, and that this dutywas bre ache d. Fr eema n filed a motion for summary

judgme nt, which was g rante d on November 10, 1998.

The matter

proce eded to a

bench trial on three separ ate day s: Dece mber 12, 2000, April 5, 2001, and Aug ust 1, 2001. The majority of Gra ng e’s proof at trial reg arding the ca ncellation of the Blurton’ s policy

was submitted throug h the testimony of Earl Blair ( “B lair”) , Gra ng e’s assistant vice president of

proce ss acco u n t i n g. Bla ir testified that he w as in cha rg e of r ece iving pr emiums and issuing ca ncellation notices if pr emiums were not paid. He ex plained that, if Gr ang e does not

re c e ive a pr e miu m pa y me nt on a po lic y , th e c omp a ny ’s c omp ute r s y ste m auto ma tic a lly g e ne rate s a

no tic e of c a nc e llatio n to the ins ur e d. I n pr e pa ratio n fo r his te sti mon y

re g ard ing the B lurton s, B la ir stated, he obta ined the computer rec ords for the Blurtons’ acc ount. He submitt ed the ag ent’s copy of the Aug ust 16 can ce l l at i o n n o tice and the Aug ust 29 final notice, both g ener ated throug h the automated sy stem. The first notice was sent to the Blurtons and Free man, B lair said, and the final

no tic e wa s se nt t o th e B lurton s, F re e ma n, a ndthe fi rs t a ndse c on d mortg a g e e s. Th e fi na l no tic e to the mortg ag ees inc luded a g rac e period, givi n g t h e m o rt g ag ees thirtee n day s from the date of the notice to protec t their interest.

Bla ir described the automate d proce ss in some detail. He s t at ed t hat, af ter a notice of

canc ellation is g ener ated, it is delivere d to the m ail room at nig ht. The next morning, the mail is put into inserters, which f

olds the mail, put the mail in window envel opes, and put postag e on the envelope s. The letters ar e t hen put in mail tray s, from which the postal service picks them up for

ma ili ng . B la ir

e xpla ine d th a t the c omp ute r sy ste m ke e ps tr a c k o f the nu mbe r o f n oti c e s it g e ne rate s, and that the inserters kee p trac k of how many notices ar e inserte d. I f t h e n umbers do not match, Bla ir is notified that a problem ex ists. On the day s that the notices to the B lurtons were g ener ated, B la ir wa s n ot n oti fi e d o f a

pr ob le m, s o h e a ssu me d th a t th e no tic e s w e re se nt in due c ou rs e . Bl a ir testified that the enve lopes in which the notice s are sent containe d a cor rec t r eturn addre ss, and that he re ceive d n o re turned mail intended f or the B lurtons. Blair te stified that, under G rang e’s automated sy stem, all of the notices f or one insure d are gen er ated at the same time. I n this case, B la ir state d, if a g e nt Fre e ma n a ndthe mortg a g e e s re c e ive d th e ir no tic e s, the n th e B lurton s sh ou ld also have rec eived their

notices, beca

use their proper addre ss w as on the notices. B lair admitted that the computer

sy stem could not repr oduce a copy of the B lurtons’ Au gu s t 29 final notice, but-4-

maintai n ed that the notice contained the same lang uag e as the mortg ag ees’ notices, minus the

a dd iti on a l c laus e dir e c te d s pe c if ic a lly to the mortg a g e e s.

Mrs. Blurton testified that s h e d i d n ot rec eive e ither of the notice s sent by Gra ng e. She acknow ledg ed, howe ver, that on other oc ca s i o n s she had r ece ived cor responde nce f

rom Gra ng e, incl u d ing two prior notices of c ance llation. Mrs. Blurton testified that she handled the fina ncial
asp ec ts of SI MMCO, owned by her a nd Mr. B lurton. She said that she and one of SI MMCO’s employ ees, Ma

rtha Sharp ( “Sharp” ), worke d toge ther on acc ounts pay able, a nd indicated that Shar p actua lly wrote c heck numbe r 8659 to Gra ng e for the insuranc e pre mium. The Blurtons introduce d into evidence SI MMCO’s chec k reg ister, kept in the ordina ry course of business, showing that chec k number 8659 wa s written to Gra ng e on Aug ust 10, 1994, for the insura nce pr emium. Mrs. Blurton testified that the chec k was copied befor e it wa s signe d and mailed, a nd that she did not know what happene d to the chec k.

The insurance ag ent, W illiam Fr eema n, also testified. Fr eema n said that he re ceive d copies of both the first notice of canc ellation and the final notice within thre e to five day s after they wer e issued. Fr eema n testified that, af ter the f ire, the Blurtons ca lled him asking a bout insurance

cover ag e. Upon f

urther inve stiga tion
, Fr ee m an dis cover ed that the policy had bee n canc elled for
nonpay ment, and i n fo rmed the B lurtons of that fac t. When he asked Mr . Blurton what may have happene d reg arding the payment, Mr. B lurton’s response was that “ an employ ee failed to pay it.” F re e ma n te sti fi e d th a t he wa s a wa re that Mr s. B lurton ha d h a d a dis c us sio n w ith his c o- wo rk e r, An ita Miller, indicating that Mrs. Blurton felt that she could obtain insurance somewher e else for a chea per premium. Wh e n F r e e ma n r e c e iv e d h is c o p y o f th e c a n c e ll a ti o n n o ti c e s f o r th e B lu r to n p o li c y , he

rec alled that convers at i o n, and ac cording ly he assumed that the Blurtons ha d procur ed insuranc e

e lse wh e re . Wh e n a sk e d w hy he a ssu me d th a t th e B lurton s h a d re c e ive d the ir c a nc e llatio n n oti c e s, Fr eema n responde d t h at h e knew that Gra ng e wa s obligated under the policy

to send ca ncellation notices to its insureds. Be cause he had r ece ived co p i es , an d b ecause he was a war e that all of the

no tic e s are pr od uc e d a t the sa me tim e un de r the c omp ute r s y ste m, Fre e ma n a ssu me d th e B lurton s’ notices we re a lso mailed.

On December 18, 2002, the t rial court entere d an orde r finding in favor of the B lurtons. The trial court concluded that Gra ng e had not proper ly canc eled the insurance policy , and that, ther efor e, the company

was liable to the Blu rt o n s for the stipulated a mount of damag es, $270,000 plus prejud gm en t interest. The tria l court base d its decision on its conclusion that Grang e “did not provide a ny

evidenc e that the [canc ellation] not ice wa s mailed.” The trial court found that B lair’s testimonyon the mailing w as insufficie nt, because Bla ir had no “ direc t personal knowle dg e that any of the notice s in question in this case wer e mailed to the Blurtons,” nor wa s he able to testify about
any Gra ng e employ ee w ho persona lly handled the notice s. I n d et er mining that B lair’s testimony was insuffic ient to show proof of ma iling, the tria l court re asoned:

Mr . B la ir wa s n ot e mpl oy e d b y

the Gr a ng e in the de pa

rt me nt that de a lt w ith the mailing of

notices of c ance llation, and Mr. B lair had no persona l know ledg e that
any of the involved c ance llation notices wer e mailed to the Blurtons. Mr. B lair had-5-

no ov e rs ig ht o f the ma il ro om at the Gr a ng e wh e re so me 22 ,0 00 to 3 0, 00 0 d oc ume nts come in and g o out on a daily basis. Mr. B lair could not testify as to which e mploy ee of the Gr ang e, if a ny , mail ed o ut any notice to the B lurtons. Mr. Bla ir could not
prese nt documentation and ther e is no documentation, that postag e wa s in fact plac ed

on the su pp os e d no tic e s to the B lurton s. Th e Gr a ng e ke pt no log a s to the do c ume nts sent out. The Gr ang e had no d o cu m en t ation to demonstrate who in the Grang e’s

ma il r oo m may

or ma y no t ha ve ha nd le d the do c ume nts in qu e sti on

. Mr

. B la ir c ou ld
prese nt no documentation that showed a ny rec onciliat i o n i n the mail room of the number of le tters printed in a day and the number of stamps place d on letters. Mr. B la ir ha d no dir e c t pe rs on a l kn ow le dg e that a ny of the no tic e s in qu e sti on in this c a se

we re ma ile d to the B lu rt on s. Al so , M r. B la ir te sti fi e d th a t it

wa s impo ssi ble to produce any

documentation showing that a mai ling of the supposed notices of

canc ellation went out to the B lurtons. The Aug ust 29, 1994, final notice of

canc ellati o n showed c opies to the ag ent, the mortg ag ee and the sec ond mortg ag ee, but it does not show a copy to the insured.

Mr. B lair testified that he had no dir ect pe rsonal knowledg e that the notice s

a t is su e in this c a se we re ha nd le d in the us ua l c ou rs e of bu sin e ss. I n fa c t, M r. B la ir
prese nted no tang ible evidenc e or compa ny documentation that the notice s were sent at all. Ther e wa s no evidenc e pre sented by t h e Grang e that demonstrates proper

ma ili ng or

de liv e ry of the no tic e s to the po st o ff

ic e su c h th a t th e Gr a ng e c ou ld b e ne fi t from any presumption of mailing . The undisputed proof was that the B lurtons never

re c e ive d th e no tic e s f

ro m th e Gran ge th a t are the piv ota l su bje c t matte r o f this la ws uit

.
Thus, the trial court held that the evidenc e wa s insufficient to show that Gra ng e had in fa ct mailed the ca ncellation notices. The trial court f o u n d , there fore , that Gra ng e did not proper ly canc el

c ov e ra g e pu rs ua nt t o th e te rm s o f the po lic y . In th e a lte rn a tiv e , th e tr ia l c ou rt fo un d th a t, ev e n if Gr a ng e ha d ma ile d th e no tic e s to the B lurton s, it sti ll did no t pr op e rl y c a nc e l the po lic y , b e c a us e it did not g ive the mortg ag ees te n day s notice of the c ance llation, as is required unde r the terms of the
contra ct. I n addition, the trial court made a fac tual finding that the B lurtons paid their Aug ust 1994 premium by

mailing c heck numbe r 8659 to Gra ng e. The trial court infe rre d that, beca use the
pay ment was eff

ective when mailed, Gra ng e had no ba sis on which to canc el the B lurtons’ insuranc e po lic y . F ina lly , th e tr ia l c ou rt de te rm ine d that Gr a ng e wa s e sto pp e d f ro m c a nc e lin g the B lurton s’ insurance policy , beca

use Free man had a duty to notify the Blurtons of the c ance llation and failed to do so.

On J anuary

14, 2003, Gra ng e filed a motion to alter or amend the judg ment, reque sting that the B lurtons’ Chapter 7 bankruptc y trustee be substitut ed as the plaintiff, bec ause the trustee wa s the

rea l par t y i n i n tere st based on the B lurtons’ 1999 Chapter 7 ba nkruptcy filing. G rang e further
reque sted that prejudg ment interest, if any , be limit ed to a r ate of not more than six percent (6% ) for-6-

a period of one y ear . On April 24, 2003, the court enter ed an order on Gra ng e’s motion, substitut ing the Chapter 7 trustee as the plaintiff, a nd ordering pr ejudg ment interest at a rate of ten pe rce nt (10%) fr om F e br ua ry 26 , 1 99 6, thr ou g h A ug us t 1, 20 01 . Fro m th a t or de r, Gr a ng e no w a pp e a ls.

On app eal, G ra ng e arg ue s th a t th e tr ia l c ou rt e rr e d in c on c lud ing that th e B lurton s’ ho me ow ne rs po lic y

wa s n ot p ro pe rl y

c a nc e le d. Gr a ng e ma int a ins that it s p oli c y do e s n ot r e qu ir e it
to produce a post office “proof of m ailing.” Under the t erms of the policy , it contends, ca ncellation by sending a notice in the ma il is sufficient unless a post office proof of mailing is re quired by

law. There fore , the evidenc e at trial showed, by a pre pondera nce of

the evidenc e, that Gr ang e mailed the

canc ellation notices to the B lurtons and, thus, proper ly canc eled the policy . Gra ng e ar g ues further that the trial court’s three alternative bases f or holding in favor of

the B lurtons were err oneous beca use (1) notice to the mortg ag ee is solely to pr otect the mortg ag ee’ s interest, not the intere st of the insured; (2) the evidence preponder ates ag ainst a finding t hat t he B lurtons made the Aug ust 1994
pay ment; and (3) Free man had no duty to contact the insure d when he received his copy of the

canc ellation notice fr om Grang e. I n the alternative, Gra ng e arg ues, even if the trial court’s decision

a g a ins t G ra ng e is uph e ld, pr e jud g me nt i nte re st s ho uldno t ha ve be e n a wa rd e d f or the pe ri odof

tim e betwee n the B lurtons’ bankruptc y filing ( J une 1999) a nd the time the trustee unde rtook to pursue the

c l a i m( J u n e 2 0 0 0 )
, b e c a u s e G r a n g e s h o u l d n o tb e p e n a l i z e d f o r t h e b a n kru p t c y tru s t e e ’ s d e l a y.

Be cause this case wa s decide d by the trial co u rt without a jury , we r eview the trial court’ s fi nd ings of

fac t de novo on the re cord, pr esuming those finding s to be corr ect unless the preponde ranc e of the evidenc e is otherwise

. Te nne sse e Far mers Mut. Ins . Co . v . M oo re , 958 S.W .2d 759, 763 (Tenn. Ct. App. 1997); Te nn. R. App

. P. 13(d). The tria l court’s c onclusions of la w ar e r eviewe d d e novo , with no such presumption of cor rec tness. Mo ore , 958 S.W .2d at 763; Ga nze v oo rt v . Rus se ll , 949 S.W .2d 293, 296 (Tenn. 1997)

.

I ns ur a nc e c on tr a c ts a

resu bje c t to the sa me ru le s of con str uc tio n a s a ny

oth e r c on tr a c t. Mo ore , 9 5 8 S

. W

. 2 d at7 6 3

. T h e p l ai n l an gu age o f t h e p o l i cys h o u l d b e gi v en i t s o rd i n ar y m ea n i n g, and the pa rties’ intent is para mount. Id. ; se e als o Allst ate Ins. Co. v. Wils on , 856 S.W .2d 706, 709 (T en n

. C t

. Ap p

. 1 9 9 2 ). T h e p o l i cy s h o u l d b e in t erp re t ed fa i rl y an d re as o n ab l y , gi v i n g t h e l an gu age of the policy its c ommon, or dinary meaning

. Black v. A etna Ins. C o. , 9 09 S.W. 2d1, 3 ( Te nn . Ct

. App. 1995). Any

ambig uity

in the policy should be construed ag ainst the party who draf ted it, the i n s u ra n ce company

. Mo ore , 9 5 8 S. W. 2 d a t 7 6 3

. Wh e n a n in s u r e r w is h e s to r e ly u p o n the

c a nc e llatio n o f a

po lic y by ma ili ng a no tic e of c a nc e llatio n, it m us t sh ow that “ it c omp lie d s tr ic tly with the policy ’s re quirements.” Quint ana v. Tennessee Farm ers Mut. In s. Co. , 774 S.W .2d 630, 63 3 (Ten n. Ct . A pp . 1 98 9) ; see Calve rt Fir e Ins. Co. v. Am erican Nat’l Bank & Tru st Co.
, 438 S.W. 2d 54 5, 54 6 (T e nn . 1 96 9) . Stri c t c omp lia nc e is r e qu ir e d s o th a t th e ins ur e d w ill ha ve tim e to obtain other insura nce or

protec tion. Je

ff e rso n Ins . Co. of New York v . Cur le , 771 S.W .2d 424, 425-26 (Te nn. Ct. App. 1989).-7-

I n th e ho me ow ne rs po lic y a t is su e in thi s c a se , the c a nc e llatio n p ro vis ion re a ds a s f oll ow s:

2. Cance llation

(a) Your Rig ht to Cancel Yo u may c a nc e l this pol ic y by re turnin g it to u s o r b y a dv isi ng us in writing when at a future date the c ance llation is t o be ef fec tive.

(b) Our Rig ht to Cancel or Ref use to Renew W e may canc el this policy

only for the r easons state d below by

m ailin g notice of cancellation to you

, and to any lienholder na med in the policy

at t h e address shown in the Dec lara tions, or by delivering the notice to y ou.

( 1 ) W e m a y c a n c e l t h i s p o l i c y a ta n y t i m e w i t h o n l y 1 0 d a ys notice bef ore the eff ective date of canc ellation if y ou have not
p a id th e p r e mi u m p a y ab le to u s , to o u r a g e n t o r u n der a ny financ e plan.

***

Th e ma i l i n g o f n o ti c e , o rp r o o f o f ma i l i n g w h e n r e q u i

re d b y law , will be su fficie nt proof of n otice. The policy period will end on the date a nd time stated in the notice.

(Emphasis adde d). Unde r the plain terms of the policy at issue, Gra ng e wa s entitled to canc el the polic y at issue “by

mailing notice of ca ncellation” to the B lurtons. The policy does not include a require ment that Gra ng e produc e a post off ice pr oof of mailing , such as a return rec eipt or ce rtificate
, in order to pr ove that such notice had been m ailed. Such proof was not require d by the contra ct, nor is it require d under Tenne ssee law

. See Stooksbury v. Am . Nat. Prop. & Cas. C o. , 126 S.W .3d 505, 516-17 (Tenn. Ct. App. 2003) (re cog nizi ng that Tenne ssee law does not r equire that ca ncellation notices be sent via certified mail, and st ating that such a require ment “is a matter better left to the Tenne ssee L eg islature as oppose d to the court sy stem”).

Moreove r, Gra ng e notes, it is not necessa ry that the B lurtons have a ctually rec e iv e d th en o tic e of c a nc e llatio n in ord e r fo r it to be e ff e c tiv e . In s up po rt

of its po sit ion , Grang e c ite s th e ho ldi ng in Quint ana v. Tenn. Farm ers M ut. In s. Co. , 774 S.W .2d 630 (Tenn. Ct. App. 1989). In Quinta na , the insuranc e compa ny

decide d to canc el the insureds’ property insurance due to t h e fi l i n g of multipl e cla ims. On November 10, 1986, the insurance company mailed a c ance llation notice to the insureds by

reg istered mail. Coincidentally , on the same day , the insureds l ef t h o m e for severa l

wee ks to visit their son in Texas. About six we eks later, while they wer e in Texas, their home wa s damag ed by arson. Quinta na , 774 S.W .2d at 631-32. The insureds did not rec eive the c ance llation notice sent by

the insuranc e compa ny

until they returne d from Texas after the fire , beca

use they had-8-

had their ma il held rather than forw arde d while they wer e aw ay . The insure ds filed a claim on the fire loss. The insurance company denied the c laim, asserting that the policy had bee n canc elled. The ins ur e ds sued the ins ur a nc e c omp a ny fo r c ov e ra g e un de r the po lic y a s w e ll a s b a d f

a ith da ma g e s. The trial c ourt held that the insura nce c ompany ’s attempted canc ellation of the insure ds’ policy was ineffe ctive, bec ause t h e fact that the insureds did not g et the mailed notice preve nted them from

rec ei ving a ctual notice of the policy ’s ca ncellation. Id. at 632. On appe al, this Court rever sed, concluding that “the insure d need not a ctually rec eive the notice in order f or the c ance llation to be eff ective.” Id. a t 63 2- 33 ; se e Cal v e rt , 4 3 8 S.W .2d at 545 (holding that, wher e the f act of mailing was undisputed, it is unnece ssary that notice ac tually

be re ceive d in order for the canc ellation to be eff ective)

. The policy

in the instant case, like the policy in Quinta na , does not require that the B lurtons

rec eive a ctu al n o t i ce of the c ance llation. Under Te nnessee law, it is clear that, unless the policy require s actua l notice, an insured “nee d not actua lly rec eive the notice in order f or the c ance llation
to be ef fec tive.” Quinta na , 774 S.W .2d at 633. I n the instant case , howeve r, the trial c ourt did not hold that the canc ellation of the B lurtons’ policy was inef fec tive based on the lack of actua l notice. The trial court held that all of t he evidence, when take n as a w hole, did not show that Grang e eve r

ma ile d th e c a nc e llatio n no tic e s to the B lurton s. Th e iss ue , the n, is wh e the r the e vid e nc e a s a wh ole preponde rate s in f

avor of a finding that the notice was actua lly mailed. I n Quinta na , it was undisputed that the i nsuranc e company mailed t he cance llation notice to the i nsured. The ref ore, the holding in Quinta na is not determinative of the ultimate issue in this case

.

Gra ng e ar g ues that the e vidence as a w hole pre ponderates ag ainst the t rial court’s finding that it did not m ail a cancellation notice to the Blurtons. Gra ng e arg ues the trial c ourt err ed in re jecting Bla ir’s testimony

as compe tent evidenc e of ma iling throug h the usual an d c u s to ma r y b u s in e s s routine of sending out c ance llation notices at Gra ng e, and that the trial court e rrone ously require d testimony from the pe rson ac customed to taking the mail to the post of fice to prove that the B lurtons’ notice was mailed. I t asserts that Bla ir was thoroug hly familiar with the business c ustom at Grang e, and that G ra ng e ha d f

oll ow e d th e sa me pr oc e du res f or thi rt y -f ou r y e ars . G rang e arg ue s th a t B la ir explained in detail the proce dures f ollowed on Aug ust 16 and 17, 1994, and then on Aug ust 29 and 30, 1994, that would indicate that t h e ca n ce llation notices were mailed to the B lurtons in the due

course of business. The e vidence also showed, Gr ang e points out, that all other mailings f rom Gra ng e consistently

re a c h ed the B lurtons at their Allen Station Road addre ss. Furthe rmore, Free man

rec eived c opies of the Aug ust 16 and the Aug ust 29 notices, and the mortg ag ees r ece ived copies of the Aug ust 29 notice. Both Fr eema n and Bla ir testified that the notices we re ma iled to the ag ent and the insured simultaneously

. Mrs. Blurton acknowle dg ed that Gr ang e had he r cor rec t mailing addre ss, and that from 1990 to 1994, she ha d rec eived e v er y other doc ument mailed to her f rom Gra ng e, including two prior notices of canc ellation. The only evidenc e to re but Grang e’s e vidence that th e no tic e s w e re mailed , a rg ue s G rang e , is the B lurton s’ de nia l of the ir re c e ipt of the no tic e s. Gra ng e conte nds that the Blurtons’ testimony on this issue is insuff icient to ove rcome the evidenc e of ma ili ng , b e c a us e Mr s. B lurton ’s te sti mon y wa s in c on sis te nt at be st.-9-

I n response , the Blurtons arg ue that the tria l court wa s corr ect in conc luding that the e vidence was insuffic ie nt to show that the canc ellation notice wa s proper ly mailed to them, beca

use Tenne ssee la w r e q u i r e s a n i n s u r a n c e c o m p a n y t o p r e s e n t e v i d e n c e t h a t n o t i c e w a s a c t u a l l y t ak e n t o t h e po st office

. I n support of that ar g ument, the B lurtons rely on Che ro ke e Ins . Co . v . Ha rd in
, 302 S.W .2d 817 (Tenn. 1957). I n Cherokee

, the insurance company issued an automobile insurance policy on an automobile owne d by

the insureds. Sometime in 1955, the autom o b i l e was da mag ed, and the insureds filed a

claim with the insuranc e compa ny on the policy . The insura nce c ompany informed the insureds that the a

utomobile policy

had bee n canc eled by a notice of c ance llation that was mailed to them in J une 1954. The insu reds c laimed that they did not rece ive the notice. T hey sued the insurance company

for pr ocee ds under the policy
, taking the position t hat the notice of canc ellation

was ne ver ma iled to them. Cherokee , 302 S.W .2d at 818.

At trial, the i nsuranc e company introduced into evidenc e a car bon copy of the notice that was sent to the insureds, with an official pos t office rec eipt attache d indicating that it had been r ece ived by the post office for mailing. The evidenc e showed that approximately twenty notices of a similar

c h ar a c t e r w e r e p r e p ar e d b y a n i n s u r a n c e c l e rk a n d p u ti n t h e o u t g o i n g d e s k m a i l b a s k e te a c h d a y. A porter would later pic k up the letters, c arry them to the post of

fice for de livery , and proc ure the post office officia l acknowle dg ment for eac h letter for which a rec eipt was re quested. Id. at 818-19. Despite that e vidence , t h e jury found in favor

of the insure ds, determining that the ca ncellation notice had not been mailed. The ve rdict wa s approve d by the trial court and upheld by the court of
appea ls. On appeal, t he S upreme Court of Tennessee reve rsed the judg ment enter ed on the ve rdict and found in fa vor of the insura nce c ompany . The Cherokee Court determined that, in the fa ce of the c on c lus ive po st o ff

ic e pr oo f o f m a ili ng , th e ins ur e ds ’ d e nia l of re c e ipt of the no tic e didno t “ ri se to the dignity ” of ma terial e vidence sufficie nt to support the jury verdic t. See id. at 818. The Court found the lang uag e of the policy
, stating that “[t] he mailing of notice . . . sha ll be sufficie nt proof of notice,” indicated that the dete rmining f actor was the ma iling, n o t the re ceipt of the notice. Id. at 819.

I n rea ching its conclusion, the Cherokee Court found that it was u n nece ssary for the insurance company to pr esent as a witness the person who took the mail to the post of fice , so long

a s th e r e w a s e v id e n c e th a t th e n o ti c e w a s ta k e n th e r e

. T h e Co u r t d e te r mi n e d th a t e vidence of the
reg ular routine in a

business office could satisfy that burden of proof. The Court in Cherokee quoted wi t h ap p ro v al t h e f

o l l o wi n g p as s age fr o man Ar i z o n a c as e r ega rd i n g ev i d en ce o f m ai l i n g:

I t is the ge nera l rule in matters of this kind, wher e it is the custom of a business of fice to follow a re g ular routine, that where it is affi rm at i v el y established that part of a

r o u t i n e w a s f

o l l o w e d i t i s p r e s u m e d
, i n t h e ab s e n c e o f s o m e e v i d e n c e t o t h e c o n tr ar y, that th e re st w a s a lso fo llo we d. [Citi ng c a se s] We thi nk thi s is pa rt ic ula rl y app lic able
t o m a t t e r s s u ch as t h e m ai l i n g o f r o u t i n e l et t er s i n an o ff i ce wh er e av er y

l ar ge number of suc h letters ar e customarily mailed in the due course of its business, and-10-

that proof of

the custom and the f

act that a car bon copy was found w ithout the orig inal in the place and under the circumstances w here it would have bee n found, if the orig inal had bee n mailed, is sufficient, in t h e ab s ence of e vidence to the
contra ry , to support a finding that the orig inal had bee n proper ly mailed.

Id. a t 8 1 9 (q u o t i n g Consolidated Motors v. Skou sen , 109 P.2d 41, 43 (Ariz. 1941)). Thus, in a business where a larg e number of letters are customarily mailed in a routine f

ashion, evidenc e of the

c us tom of ma ili ng , a lon g wi th a

c op y of the le tte r k e pt i n the re c or ds of the bu sin e ss, is s uf

fi c ie nt t o support a finding that the orig inal was mailed.

The B lurtons also arg ue that the instant ca se is analog ous to Sto ok sb ury v . Ame ric an N

at. P r o p. & Cas. C

o. , 126 S.W .3d 505 (Tenn. Ct. App. 2003), perm . app. denied ( Ja n

. 2 6, 20 04 ), in

w h ic h th e ju r y f

o u n d in f a v o r o f th e in s u r e d s o n s im il ar f a c ts

. I n S tooks bur

y , th e ins ur e ds ’ h ome

wa s d a ma g e d b y

fi re . Wh e n th e y

a tte mpt e d to re c ov e r f

or the re su lti ng dam age u nd e r the ir homeowner s policy
, the i nsuranc e company denied the claim, t aking the position that the insurance policy had pre viously been canc eled. The insureds sued t he ins uranc e company for c overa g e under th e p o li c y a n d f o r b a d f a ith d e n ia l o f

th e ir c laim. Sto ok

sb ury , 126 S.W .3d at 507. At trial, the in s u r an c e c o mp an y

introduced the testimonyof seve ral witnesse s to show that the canc ellation notice was mailed in due course , including testimony from the insurance ag ent, an underw riting ma nag er, a mail spec ialist, and the mail room s u p er v isor. All of those witnesses testified a s to the g ener al
p ra ct i ce s an d p ro ce d u re s fo r m ai l i n g ca n ce l l at i o n n o t i ce s , b u tn o n e o f t h em h ad p er s o n al k n o wl ed ge about the ma i l ing of

the ca ncellation notice at issue. The insuranc e ag ent testified that he ne ver

rec eived a copy

of the c ance llation notice. Id. at 509-10. I n addition, the evidenc e indicate d that the mortgage e d i d n o t rec eive the c ance llation notice. Id. a t 50 8. Th e ins ur a nc e c omp a ny a lso introduced e vidence that, when it sends cancellation notices out, it cre ates a list of the insureds whose poli cies are being canc eled, and that the m ailing list is stamped by the post office when the

no tic e s a re ma ile d. At

tr ia l, the ins ur a nc e c omp a ny ide nti fi e d a li st that in c lud e d th e plaint if fs ’
names, a nd the list contained the post offic e round date stamp for the pertinent time period.

The jury held in favor

of the insure ds, concluding that the insuranc e compa ny had not prove n by a pr e po nd e ra nc e of the e vid e nc e that the no tic e of c a nc e llatio n ha d be e n ma ile d to the ins ur e ds

. Id. a t 51 2. Th e jury a lso c on c lud e d that the ins ur a nc e c omp a ny ’s failu re to pa y fo r the ins ur e ds ’ l os s was fr audulent and dece ptive. On appe al, the insuranc e compa ny arg ued, among other thing s, that the trial court erre d in failing to gr ant it a direc ted ver dict in light of the f act that t h er e wa s no materia l evidence to support the jury ’s conc lusion that it did not mail the notice of ca ncellation. The insurance company claimed that the circ umstances wer e simil ar to the fa ct s i n Cherokee

, sup ra , wher e the Supreme Court r ever sed the jury verdic t in favor of

the insureds. Id. a t 51 6. Th e app e llate court in Sto ok

sb ury disag ree d and upheld the trial court’s de cision. The ap pellate c ourt rea soned that the “round date stamp” was inconc lusive proof of ma iling, whe rea s the rec eipt attache d to the

car bon copy of the c ance llation notice in Cherokee was c onclusive proof of m ailing. I n light of tha t d is ti n c ti o n , the S to ok

sb ury court found that, “[i] n light of the non-conc lusive eff ect of the ‘roundT he B l urto ns d o no t ch all en ge t he t i m eli ne ss o f t he f i rst no t i ce , t ha t i s, wh ethe r a no t i ce m ail ed o n A ug ust 2
17, 1994, f

el l w i t h i n t h e t en

- day pr ov i s i on of t h e pol i cy ; r at h er , t h ey c h al l en g e t h e f ac t t h at i t w as ma i l ed.

-11- date stamp’ . . . c oupled with other e vidence such as Plaintiffs’ testimony that they never

rec eived the notice of

canc ellation, we c onclude ther e is materia l evidence in the rec ord to support a ve rdict for Plaintiffs re g arding whether or not the ca ncellation notice w as mailed.” Id.

I n the case at bar, the Blurtons a rg ue that, as in Sto ok

sb ury , th e tr ia l c ou rt

be low c or

re c tly found that the e vidence did not support a finding that the cancellation noti ces at issue were mailed. They point out that Blair did not have any persona l knowledg e about the m ailing of the notices, a nd that there was no doc umentary evidenc e, from the post of fice or otherw ise, showing that the notices

wer e mailed. The y

point out that Blair admitted that it was impossibl e to pr oduce any conclusive do c ume ntatio n s ho wi ng that the no tic e s a t is su e we re a c tua lly ma ile d to the B lurton s. B la ir c ou ld
presen t n o re conciliation of the number of letter s that were printed in a da y and the a mount of postag e that wa s place d on those letters. B lair also ack n o wl ed g ed that Gr ang e kee ps no log of documents sent o u t

. T h ere fore , the B lurtons arg ue, bec ause of the lack of

competent e vidence showing that the canc ellation notices wer e mailed, in a ddition to the B lurtons’ testimony that they

never rec eived the notice s, the evidenc e preponde rate s in favor of the trial court’s conclusion that the no tic e s a t is su e we re no t ma ile d to the B lurton s.

I n this case , the policy

provision at issue states that “[t] he mailing of notice . . . w ill be sufficie nt proof of notice .” The ref ore, G rang e wa s require d to produce evidenc e that it mailed the

cance ll ati on no ti ces to th e Blu rt on s. Th e po li cy do es n ot requ ir e po st off ice pro of o f m ail in g. By 2 this standard, we must evaluate the proof of mailing at trial.

Clearly , Bla ir was c ompetent to te stify about the customary routine at Gr ang e re g arding the mailing of

canc ellation notices. Bla ir was in c harg e of the e ntire depa rtment responsible f

or sending

ou t suc h n o t i c e s , a n d h e d e m o n s tr a t e d t h a th e w a s i n t i m a t e l y f a m i l i ar w i t h t h e a u t o m a t e d p r o c e ss which had be en in place at Gra ng e for thirty -four y ear s. Bla ir explained that notice s of ca ncellation

wer e g ener ated automatically by the computer when premium pay ments went unpaid. B lair stated that a sy stem was in place to alert him as to any irreg ularities in the proc ess, and he testified that there wer e no irre g ularities on the date s on which the notice s were sent to the Blurtons. He testified about the entire canc ellation notice proc ess, conc luding with the notice being place d in a mail tray

a n d p i c k e d u p f

o r m a i l i n g

. B l a i r ’ s t e s t i m o n y r e g a r d i n g t h e s y s t e ma tG r a n g e w a s u n r e f u t e d

. In Cherokee , the Court clea

rly stated that testimony

from the person who mails the canc ellation notice is n ot n e c e ssa

ry to s ho w a ma ili ng , s o lo ng a s th e re is e vid e nc e that the no tic e wa s ta ke n to the po st office . Such proof can be supplied by establishing a

business routine, and showing that a docume nt

w a s ma il e d in th e d u e c o u r s e o f b u s ine ss. C h er okee , 302 S.W .2d at 819. As the Court acknow ledg ed in Cherokee , “ in a n o ff ic e wh e re a

ve ry larg e nu mbe r o f s uc h le tte rs are c us tom ari ly mailed in the due c ourse of its business,” proof of c ustom can be sufficient to show that a docume nt has bee n proper ly

mailed. Id. (quoting Skous en , 109 P.2d at 43). The trial court in this case f ound that Bla ir’s testimony

was insufficient beca

use he had no persona l know ledg e of the mailing of the Blurtons’ c ance llation notice. Howeve r, both Cherokee and Sto ok sb ury show that the testimony ofB l ai r t es t i f i ed t hat un der G r ang e’ s s y s t em, t he mo r t gag ees wer e n ot mai l ed copi es of t he f i r s t not i ce. 3

-12- one with per sonal knowledg e of the mailing is not nec essary to show that the ca ncellation notice w as mailed in due cour se. See J ohn P. Ludington, Annotation, Pr oo f of Ma ili ng by Ev ide nc e of B us ine ss or Office Custom , 45 A.L .R.4th 476, § 2 (1 98 6) (“ I n la rg e of fi c e s w hic h h a nd le a

vo lum e of

ma il, dir e c t pr oo f o f the ma ili ng of a pa rt ic ula r l e tte r i s impr a c tic a l – a fact th at ha s b e e n ju dic ia lly

rec og nized. I n the modern a g e of business, it is almost inconceiva ble that one pe rson would have a positive rec ollection of the mailing of a pa rticular le tter.”) . Over all, we must c onclude that Bla ir’s testimonywas c ompetent evidenc e that the notice s of ca ncellation we re ma iled.

Othe r e vid e nc e c or

ro bo rate d Bl a ir ’s te sti mon y that th e c a nc e llatio n n oti c e s w e re ma ile d to the B lurton s. B oth B la ir a nd F re e ma n tes tif ie d th a t th e a uto ma te d s y ste m g e ne rate s th e no tic e s to the ins ur a nc e a g e nt a ndthe ins ur e d s imu lta ne ou sly

. F re e ma n sta te d tha t “ [i]t c ome s o ff a t th e sa me time. The memorandum -- I mean the c ance llation goe s to any lienholder or mortga g e holder , the

a g e nt’ s c op y

a ndthe ins ur e d’ s c op y

a ll c ome of

f o f m os t sy ste ms at th e sa me tim e

. . . . ” I t is undisputed that Freema n rec eived his copie s of both of the notice s, and that the fir st and second

mo rt gage es rec eived c opies of the se cond notice. Fr om these fa cts it can be inferr ed that the 3 B lurton s’ c op y

of the no tic e s wa s mai le d alo ng wi th the no tic e s to the F re e ma ns a ndthe mortg a g e e s. F urthe rm or e , it

is u nd isp ute d th a t th e B lurton s h a d r e c e ive d o the r d oc ume nts pr e vio us ly ma ile d to them by Gra ng e, including prior canc ellation notices, to the same a ddress. B lair’s testimony that the notices g ener ated to the B lurtons included a c orre ct re turn addre ss, and t hat t he noti ces w ere never returne d to Grang e, wa s likewise unre futed. The only evidenc e to support the B lurtons’ claim that the ca ncellation notices w ere not mailed was the B lurtons’ denial of r ece ipt. Cons idering the evidenc e as a

whole, althoug h it is a close question, we must conc lude that t h e evidence preponde rate s ag ainst the trial court’s finding , and that the evidence in fac t preponde rate s in favor of a f inding that the c ance llation notices were mailed to the B lurtons.

We r e a dil y

ackn owl e dg e that th e fa c ts i n th is c a se are so me wh a t si mil ar t o th os e in S to ok sb ury , w h e r e th e ap p e ll a te c o u r t u p h e ld th e ju r y v e r d ic t in f a v o r o f th e in s u r e d s when the primary evidenc e of nonmailing was the insureds’ assertion that they did not rece ive the cancellation notice. The e vidence in Sto ok sb ury , howeve r, also indicated that ne ither the insura nce a g ent nor the

mortg a g e e re c e ivedthe c a nc e llatio n n oti c e . M or e ov e r, the sc op e of ou r r e vie w i n th is c a se is critica lly differ ent from the s tandar d applied in Sto ok sb ury . The Sto ok

sb ury c ou rt

wa s r e qu ir e d to determine whether

a jury verdic t in favor of t he ins ureds wa s supported by any materia l evidence

. Under that standard of

revie w, the appe llate court “must take the strong es t l egit imate view of the evidenc e in fa vor of the pla intiff, indulging in all rea sonable infe renc es in his favor, and disreg arding
any evidenc e to the contr ary .” Sto ok sb ury , 126 S.W .3d at 516 (quoting Wharton Transp. Cor p. v. Bridges

, 6 0 6 S

. W

. 2 d 5 2 1
, 5 2 5 (T en n

. 1 9 8 0 ) ( q u o t i n g Ce c il v. Har din , 575 S.W .2d 268, 271 (Tenn. 1978))) . The instant ca se, however, was tried before a judge sitti ng without a jury . I n such a c ase, the trial court’s fi n d i n gs o f fa ct ar e re viewed de novo on the entire rec ord, with a pre sumption of

corr ectne ss. Under that standard, we do not view the evide nce in the lig ht most favorable to the trial-13-

co u rt ’s d ec i s i o n , an d we d o n o t d i s re gar d ev i d en ce co n tra ryt o i t s co n cl u s i o n

. T h er ef o re , al t h o u gh the fa cts in Sto ok

sb ury are somewhat similar to those i n t h e ins tant case , the same r esult is not require d in light of the diff ere nt standard of

revie w.

I n v ie w of

ou r h old ing that th e tr ia l c ou rt e rr e d in fi nd ing that G rang e ha d n ot s ho wn that it mailed the notice of

canc ellation to the Blurtons, we must ad d re s s the trial court’s alternative ho ld in gs, whi ch a lso fa vo re d th e B lurton s. F ir st, the tr ia l c ou rt he ld that G rang e didno t pr op e rl y

canc el the B lurtons’ policy beca use it did not send a copy of the fir st canc ellation notice to the two lienholders as is re quired unde r the policy . As Gra ng e cor rec tly points out, howe ver, r equiring notice
to a lienholder is f

or the prote ction of the lienholder , not the insured. See Western Express, Inc. v. Interested Underwriters at Lloyd’s, London , 942 S.W .2d 542, 544 (Ten n

. C t

. App. 1996). There fore , reg ardles s o f whe ther the lienholde rs re ceive d the first notice, this does not mandate a fi nd ing in f

a vo r o f the B lurton s.

I n addition, the trial court de termined that the Blurtons mailed the ir Aug ust 1994 insurance
pay ment, and conc luded fro m t h i s t h at Gra ng e wa s not entitled to cance l the Blurtons’ insura nce policy . Sharp testified that she w rote c heck numbe r 8659 to Gra ng e in pay ment of the homeow ners premium, but Sharp also stated that she did not mail it. S harp te stified that Mrs. Blurton took the chec k to be signe d, and then she g ave it ba ck to Shar p to mail. Mrs. Blurton testified that another office worke r prepare d the check jus t befor e she quit working for the B lurtons, and that the che ck sat in a folder

for a wee k befor e any one could pa y it. Mrs. Blurto n t es t i fi ed t hat she re members having the che ck sig ned, and she produce d an invoice containing her ha ndwritten notation that she had paid the pr emium. A com p u t er re co rd from Gr ang e wa s also submitt ed to indicate that the Aug us t 1 9 9 4 premium was r ece ived on Aug ust 5, 1994, then it was debited on Aug ust 29, 1994, when the policy was cance led. The trial court concluded that this evidenc e showed that the B lurtons paid t he premium on the pol icy

. Fr om our review of the re cord, how ever , this evidence is tenuous

a t be st. Th e re c or d a lso c on ta ins a n u ns igned cop y of th e pr e miu m c he c k. Th e e vid e nc e is

un dis pu te d th a t, f

ro m th e tim e that Mr s. B lurton a lle g e dly ma ile d th e chec k in Au g us t 19 94 un til Fe bruary 1995, the premium chec k never clea red the Blurtons’ bank acc ount. The Grang e computer

rec ord is inconclusive; B lair explained in his testim ony that the allege d “payment” reflec ted on the document wa s an ac counting entry that was n ec essary

when a policy was c ance led, and it did not ind ic a te that th e pr e miu m ha d be e n pa id. I t is un dis pu te d that th e c he c k w a s n ot w ri tte n u nti l A ug us t 10, making it impos sible for Gr ang e to have rec eiv ed i t on Aug ust 5, the date on the c omputer printout upon which the B lurtons rely

. Under these circumstance s, we must find that the evidenc e preponde rate s ag ainst the trial court’s fin d i n g that the B lurtons made the Aug ust 1994 premium
p a ym e n tu n d e r

t h e p o l i c y.
Finally , the trial court held that Gra ng e was estopped from canc eling the insurance policy at issue beca

use the ag ent, Fr eema n, was obligated to notify the B lurtons of any canc ellation. The trial court found that Fr eema n assumed such a duty throug h his course of dealing with the B lurtons. At the same time, howe ver, Free man was dismissed from the la wsuit. Furthermore
, “an ag ent has no duty to inform a client o f a policy ’s ca ncellation if the c lient knew or should have known of the

canc ellation by

other mea ns.” Quinta na , 774 S.W .2d at 634. Her e, Free man knew that Grang e wa s-14-

obligated to inform t he Blurtons of a policy canc ellation, and he assumed that Gra ng e mailed a copy of the c a nc e llatio n n oti c e s to the B lurton s wh e n his we re ma ile d. F re e ma n h a d n o a g re e me nt w ith the B lurtons to contact them if Gr ang e cancele d their insura n ce p o l i cy . Moreove r, Free man’s testimonywas undisputed that the B lurtons had told him that they intended to see k less expensive insurance and he did not conta ct them i n part based on his assumption t hat the cancellation notice meant they had done so. Under these circumstance s, we must reve rse the trial court’s f inding that Fr eema n assumed a duty

to inform the B lurtons of the policy canc ellation. See id.

I n sum, we re verse the trial court’s conclusion that Grang e did n o t proper ly canc el the Blurtons’ insurance policy

. The evidenc e preponde rate s in f avor of a f inding that Gr ang e mailed the

canc ellation notices to the B lurtons, and that the B lurtons did not make the August 1994 premium
p ay ment to Grang e. I n addition, lack of suf ficient notice to the mortg ag ee doe s not protect the insured, and Grang e is not estopped from canc eling the pol icy based on Free man’s fa ilure to inform the B lurton s o f the c a nc e llatio n n oti c e

. Ou r de c isi on pr e te rm its a ll oth e r iss ue s r a ise d in thi s a pp e a l.

Th e de c isi on of

the tr ia l c ou rt is re ve rs e d. Cos ts on app e a l are to b e ta xedto A pp e lle e s D a vid Blurton a nd his wife, Virg inia Blurton, f or which e x ecution may

issue, if nec essary

.

___________________________________ HOLL Y M. KI RBY, JUDGE