Court Opinion

ID: 9576071
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:20:34.177507+00
Date Added: 2024-06-11T12:57:24.741288
License: Public Domain

CARLEY, Presiding Justice,
dissenting.
By failing to give full effect to longstanding precedent of this state and relying on inapplicable foreign authority, the majority erroneously holds that the purported notice of cancellation sent by Infinity was effective. Every time that a Georgia appellate court has considered the issue, it has declined to give effect to a notice which, like the one here, states that an insurance policy will be cancelled on a particular date unless premiums due are paid prior to that date. Because the notice in this case was conditional and equivocal, it *97could not constitute a valid notice of cancellation.
As the majority acknowledges, citing North Carolina Mut. Life Ins. Co. v. Bailey, 185 Ga. App. 191, 193 (2) (363 SE2d 586) (1987), a notice of cancellation sent by an insurer must “positively and unequivocally state that the cancellation is taking place. [Cit.] It must be a clear and unambiguous statement to the insured that coverage is being terminated. [Cit.]” (Majority opinion, p. 91) Indeed, the majority articulates the issue as whether the notice “clearly, unambiguously, and unequivocally puts the insured on notice that the insurance coverage at issue is ending.” (Majority opinion, p. 91) However, the majority disregards the fact that, for over 125 years, this Court has required that the notice of cancellation also be unconditional: “the notice of the purpose or determination of the [insurer] to cancel must be made or given unconditionally . . . .” Petersburg Savings and Ins. Co. v. Manhattan Fire Ins. Co., 66 Ga. 446, 465 (8) (1881). See also 2 Lee R. Russ, Couch on Ins. § 32:32.
Furthermore, the notice is insufficient “ ‘if it. . . merely states a desire or intention to cancel.’ [Cit.]” Chambers v. Washington Nat. Ins. Co., 66 Ga. App. 509 (17 SE2d 899) (1941). See also Petersburg Savings and Ins. Co. v. Manhattan Fire Ins. Co., supra (“ ‘[A] mere expression of a desire upon the part of the [insurer] that the policy should be cancelled would not destroy the policy.’ ”). The cancellation notice must positively and unequivocally inform “ ‘the insured that it is the intention of the [insurer] that the policy shall cease to be binding as such upon the expiration of the stipulated number of days from the time when its intention is made known to the insured.’ ” Chambers v. Washington Nat. Ins. Co., supra. See also Reserve Life Ins. Co. v. Peavy, 95 Ga. App. 195 (2) (97 SE2d 542) (1957). A “mere expression of a purpose or intention to cancel in the future is not sufficient; that is, [the notice] must be one of actual cancellation, not of future conditional cancellation... .” 2 Russ, supra at § 32:31.
These well-settled principles are consistent with the holding of the Georgia Court of Appeals that “[a] notice of cancellation which states that a policy will be cancelled on a specified date unless premiums due are paid prior to that date, is not a notice of cancellation, but merely a demand for payment. [Cits.]” Pennsylvania Nat. Mut. Cas. Ins. Co. v. Person, 164 Ga. App. 488, 489 (1) (297 SE2d 80) (1982). See also State Farm Mut. Auto. Ins. Co. v. Drury, 222 Ga. App. 196, 200 (4) (474 SE2d 64) (1996). Compare Daniels v. Allstate Ins. Co., 162 Ga. App. 758 (293 SE2d 39) (1982) (short opinion neither quoting from the cancellation notice nor addressing this issue). This principle obviously controls where, as in Person and Drury, nonpayment of the premium by the due date, which is the very event which triggers the cancellation, has not even occurred. *98Conversely, the principle does not apply when “the declared reason for cancellation was a fait accompli prior to the notice of cancellation” and “the notice of cancellation left open the possibility of reinstatement of the policy.” (Emphasis supplied.) Southern Ins. Co. v. Walker, 184 Ga. App. 369, 370 (361 SE2d 502) (1987).
In the case at bar, the declared reason for cancellation was nonpayment of premiums and was a “fait accompli.” However, the notice here, unlike that in Walker, did far more than merely leave open the possibility of reinstatement. Thus, I note that, contrary to the last paragraph of the majority opinion, disapproval of Infinity’s cancellation notice would not preclude the inclusion of a reinstatement option in future notices. As set forth in the majority opinion, the notice in this case provided only that the insurance would cease “unless” payment is received before the cancellation date, or “if” the premium amount listed is not received. By this conditional language, the notice treated cancellation as a future occurrence which was explicitly conditioned on nonpayment of the premium. Thus, the notice states a mere intention to cancel and fails to meet the requirement of positively, unequivocally, and unconditionally stating that coverage is being terminated.
Two of the four foreign cases upon which the majority relies on page 93 of its opinion involve notices which merely leave open the possibility of reinstatement and, thus, are clearly distinguishable in the same manner as Walker. Metropolitan Group Prop. and Cas. Ins. Co. v. Lopes, 826 A2d 87 (R.I. 2003); Norman v. State Farm Mut. Auto. Ins. Co., 33 P3d 530 (Ariz. App. 2001). The wording of the notices in the other two foreign cases, Johnson v. Williams, 828 S2d 90 (La. App. 2002) and Motors Ins. Corp. v. Woodcock, 394 S2d 485 (Fla. App. 1981), indicates a present and unequivocal cancellation, as well as the equivalent of an opportunity for reinstatement, even though the word “reinstatement” is not used. In fact, these foreign cases undermine the majority opinion in certain respects. The Rhode Island court observed that “[cjourts have held that a notice must ‘clearly and unequivocally show a present cancellation.’ [Cits.]” (Emphasis in original.) Metropolitan Group Prop, and Cas. Ins. Co. v. Lopes, supra at 90. The Arizona court “hasten[ed] to explain that inclusion of a premium payment option in a notice of cancellation may still create an ambiguity that could vitiate an attempted cancellation.” Norman v. State Farm Mut. Auto. Ins. Co., supra at 536 (II).
More important for Georgia, the Florida court dealt with the very precedent upon which this state’s Court of Appeals relied in Person. Woodcock distinguished Travelers Ins. Co. v. Jenkins, 285 S2d 839 (La. App. 1973) (notice given after premium due), which Person cited for the proposition quoted above that the language “will *99be cancelled ... unless premiums due are paid” is not sufficient for a notice of cancellation. The Florida court also distinguished the case relied on in Jenkins, Ellzey v. Hardware Mut. Ins. Co. of Minn., 40 S2d 24 (La. App. 1949) (notice given after premium due), on the specific basis that it involved “notice that ‘the policy will be cancelled unless.’ ” Motors Ins. Corp. v. Woodcock, supra at 487. This wording is nearly identical to the language in the case now before us. The notice of cancellation here “does not purport to cancel the policy. It merely states that unless the premium be paid by a certain date, [the ‘insurance will cease’]. Such a notice is not, in itself, a cancellation ([cit.])...” McNellis v. Aetna Ins. Co., 176 Ill. App. 575 (1913) (notice given after premium due). See also Fisher v. Associated Underwriters, 13 NE2d 809, 811 (Ill. App. 1938) (notice given after premium due).
Decided March 15, 2010
Reconsideration denied April 9, 2010.
Ben C. Brodhead III, for appellant.
Swift, Currie, McGhee & Hiers, Stephen L. Cotter, Yoon J. Ettinger, for appellee.
Georgia should continue to adhere to the general rule that “a notice of cancellation is not effective as such and is really a demand for payment where it recites that the policy will be canceled if the premium is not paid by a certain date. [Cits.]” 1 Schermer and Schermer, Auto. Liability Ins. 4th § 8:9. Because the notice sent by the insurer in this case simply did not constitute a present, unequivocal, and unconditional cancellation of the policy, I respectfully dissent to the judgment answering the certified question of the United States Court of Appeals for the Eleventh Circuit.
I am authorized to state that Chief Justice Hunstein and Justice Benham join in this dissent.