Court Opinion

ID: 9726410
Source: CourtListenerOpinion
Date Created: 2023-08-26 12:47:52.373868+00
Date Added: 2024-06-11T18:25:26.885540
License: Public Domain

TEIGEN, Judge
(dissenting).
I dissent on the ground that our laws recognize the communication as absolutely privileged and, as such, it is not within the rules imposing liability for defamation.
Section 26-02-33, N.D.C.C., prohibits the insurer from cancelling an automobile liability insurance policy which has been in effect for sixty or more days unless the insurer mails or delivers to the named insured a notice, in writing, at least thirty days prior to the effective date of cancellation of the intent of the insurer to cancel the insured’s policy. The statute makes it mandatory upon the insurer to contain in its notice of intent to cancel, or to accompany with the notice, a statement advising the named insured “that upon written request of the named insured mailed or delivered to the insurer not less than ten days prior to the effective date of cancellation or nonrenewal, the insurer will specify the reason or reasons for such cancellation or nonrenewal.” Section 26-02-35, N.D.C.C., grants the insurer absolute privilege when the occasion arises whereby it must specify the reason or reasons for such cancellation. This nonliability section provides :
“The specific reason for cancellation or nonrenewal which is furnished to the insured, shall not constitute grounds for any cause of action against the insurer ⅜ ⅜ ⅝
The majority in construing this section hold:
“The insurer under this statute cannot publish matter libelous to third parties unless such information is relevant, necessary, or inseparably connected with the qualified privileged communication.”
And they also hold:
“It is our view that the Legislature intended to protect an insurance company from libel actions brought on behalf of the policyholder and none other.”
They state in their opinion:
“Had the Legislature intended otherwise, the language would have been, and we think should have been, much more explicit.”
In arriving at their conclusion the majority have assumed, for the purpose of deciding the issue, that the policy contains an omnibus clause which made the plaintiff, as the husband of the named insured, an additional insured under the policy. I agree with the assumption but do not agree with the conclusion arrived at by-the majority.
The nonliability statute states that the “specific reason * * * shall not constitute grounds for any cause of action against the insurer.” [Emphasis added.] It grants an absolute privilege. The named insured made a timely request in writing asking the insu'rer to specify the reason for the cancellation. The insurer, having a statutory duty to respond, mailed to the named insured the letter in issue here. The letter names the plaintiff as the reason for the cancellation. He became an additional insured under the omnibus clause of the policy when he married the named insured. The insurer believed that he did not qualify for the coverage and, therefore, decided to cancel the insurance. Under the circumstances, it was necessary for the insurer to disclose to the named insured the identity of that person in order that the communication specifying the reason for the cancellation would comply with the requirements of the law and have value and force. Therefore, the privilege must extend to cover the statement contained in the communication even though the plaintiff’s name was stated therein.
“Where the making of a defamatory statement concerning a third person in *518an otherwise privileged communication is necessary in order that the communication may be made of value and force, the privilege has been held to extend to cover such a statement, although the third person’s name is expressly mentioned.” 50 Am.Jur.2d Libel and Slander, Sec. 281.
In support of their conclusion that the Legislature intended to protect the insurer against a libel action by the “named insured and none other,” the majority have cited Rickbeil v. Grafton Deaconess Hospital, 74 N.D. 525, 23 N.W.2d 247 (1946). They point out that the Legislature must have had in mind the type of publication that occurred in Rickbeil in enacting Section 26-02-35, N.D.C.C. I think that the construction placed upon the statute by the majority is too narrow. The language of the statute is much broader. The statute states the “specific reason” furnished shall not constitute a cause of action against the insurer. No cause of action can arise if the statutes on cancellation are followed. The resulting injury, if any, is damnum absque injuria. There is no claim that the statutes were not followed here; in fact, it is clear from the record that the procedure authorized was followed. The statute does not limit the exemption to any particular cause of action or any particular claimant. Had the Legislature intended to limit the exemption to an action brought by the named insured, it could easily have said so. It is the “specific reason” furnished which does not constitute grounds for cause of action against the insurer. It is the “specific reason” furnished to the insurer upon which the plaintiff, in this case, premises his claim of libel. The specific reason, of course, must be pertinent to the occasion. In this case, however, there is no claim that the reason given was not pertinent to the occasion, that the statutes were not followed, or that there was negligence or malice. The plaintiff’s claim is based on the fact that the reason given is false and that, therefore, the communication defamed the plaintiff.
It is my opinion that where an action for libel is brought against an insurer, based on the reason communicated for the cancellation of an automobile liability insurance policy, Section 26-02-35, N.D.C.C., permits a defense of absolute privilege to the insurer when it shows that it complied with the mandate of the statute requiring it to specify to the named insured the reason or reasons for the cancellation, which absolute privilege extends to cover the publication of such reason although a third person’s name is expressly mentioned therein and the reason is pertinent to the occasion.
I also think that the majority are in error in holding that Section 14-02-05, subsec. 2, N.D.C.C., which provides for an absolute privilege, is not available to the defendant insurer in this case. I also disagree with the majority in holding that Stafney v. Standard Oil Co., 71 N.D. 170, 299 N.W. 582, 136 A.L.R. 535, is not applicable. Paragraph number 2 of the syllabus in Stafney states:
“A communication required to be made, and made in a proceeding authorized by law, is a privileged communication.”
This paragraph of the syllabus in Stafney is based on Section 14-02-05, subsec. 2, N.D.C.C., which provides that a privileged communication is one made “in any legislative or judicial proceeding, or in any other proceeding authorized by law”. This proceeding was initiated by the named insured, under Section 26-02-33, N.D.C.C., when she submitted a written request to the insurer asking that it specify the reason for the cancellation. Under that statute the insurer was then required to answer the written request, specifying the reason or reasons for such cancellation. The majority have found that the act of writing and publishing the letter to Mrs. Emo by Mil-bank was not a proceeding within the meaning of Section 14-02-05, N.D.C.C., and “if there were any privilege it would be a qualified privileged communication.” The majority admit that the language of the statute which adds to judicial “legisla*519tive”, and “or in any other proceeding authorized by law” constitutes a broadening of the term “proceeding”, but find that even though given a liberal definition it would appear necessarily to include “some form of governmental process.” No citation is given to support this conclusion.
Section 1-02-02, N.D.C.C., provides:
“Words used in any statute are to be understood in their ordinary sense, unless a contrary intention plainly appears, but any words explained in this code are to be understood as thus explained.”
Section 1-02-03, N.D.C.C., provides:
“Words and phrases shall be construed according to the context and the rules of grammar and the approved usage of the language. * * * ”
It then makes an exception of technical words and phrases which have acquired a peculiar and appropriate meaning in law or as defined by statute. There are no such words contained in Section 14-02-05, N.D. C.C. I agree with the majority that, ordinarily, in law, a proceeding has reference to a judicial process. However, our Legislature, in adopting the statute in question, adds legislative proceedings and then broadens the word “proceeding” to include “any other proceeding authorized by law.” The Legislature has, by Section 26-02-33, N.D.C.C., provided a procedure whereby a named insured can compel the insurer to specify the reason or reasons for the cancellation of an automobile liability insurance policy. In this case the named insured initiated the procedure by a written request which made it mandatory that the insurer specify the reason or reasons for the cancellation. Section 26-07-14, N.D.C.C., cited by the majority in their opinion, authorizes the commissioner of insurance to revoke or suspend the certificates of authority granted to Milbank, a foreign insurance company, if it fails to comply with any of the provisions of the law of this state applicable to it. Further, had it failed to specify after the request was made, there would have existed the possibility that the cancellation would be ineffective and the insurer might have been subjected to liability in the event a claim arose after the termination date stated in the notice.
It is elementary that in construing the statutory provision the words are to be given their plain, ordinary and commonly understood meaning. State ex rel. Lashkowitz v. Cass County, 158 N.W.2d 687 (N.D.1968); Hill v. Schroeder, 156 N.W.2d 695-699 (N.D.1968); Verry v. Trenbeath, 148 N.W.2d 567 (N.D.1967); Cowl v. Wentz, 107 N.W.2d 697 (N.D.1961); Bronson v. Johnson, 76 N.D. 122, 33 N.W.2d 819 (1948).
“Proceeding” is a comprehensive term meaning the action of proceeding — a particular step or series of steps adopted for accomplishing something. See Webster’s Third New International Dictionary. This is the dictionary definition as well as the meaning of the term in common parlance. Thus, when the Legislature defined a privileged communication as one made in any legislative or judicial proceeding, “or in any other proceeding authorized by law,” it broadened the meaning of the term “proceeding” to include any particular step or series of steps prescribed by law for accomplishing something authorized by law. The statute has clearly set forth the steps required to cancel an automobile liability insurance policy for reasons other than the nonpayment of the premium, and the communication here in issue was written and sent to the named insured in compliance with the mandatory provisions of the statute and constituted one step in the proceedings. This, in my opinion, was a “proceeding authorized by law” and the defamatory communication comes within the definition of an absolute privilege as defined by Section 14-02-05, N.D.C.C.
For the reasons aforesaid I would reverse the judgment.
KNUDSON, J., concurs.