Court Opinion

ID: 9566876
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:44:15.151349+00
Date Added: 2024-06-11T09:42:56.301534
License: Public Domain

Pannell, Judge,
concurring specially. I concur in the result reached by the majority opinion, but I do not concur in the construction of the statute (Code § 56-2430), that is, that it applies only to "cancellations,” which holding implies that the statute requiring notice of cancellation does not apply in any case where the policy has a built-in or automatic expiration, termination or cancellation clause. That construction gives too much emphasis to one word in the statute, rather than its overall purpose and intent. It is my opinion there may be many instances where an automatic expiration or termination provision in a policy would be ineffective in the absence of a notice under the statute; otherwise, an insurance company, by providing for automatic termination or expiration under various conditions, could completely evade this statute.
This court took two divergent views on the construction of this statute in Thames v. Piedmont Life Ins. Co., 128 Ga. App. 630 (197 SE2d 412), neither of which views is binding upon this court, and *810neither of which I agree with. The "majority” view held any termination of the policy is ineffective unless a notice of cancellation is given under the statute. The "minority” view was that the statute applied only to instances where the insurer had an option to terminate under the provisions of the policy and when a return of unearned premiums was required. My views are as follows:
Construction of Code § 56-2430. (a) If the broad ruling in the "majority opinion” in the Thames case is correct then it would follow that an ordinary life policy where premiums are to be paid at regular intervals can, if the insurer does not meet the requirements of "cancellation” provided by the statute, become a policy of lifetime protection without payment of premiums (the basic consideration for the protection provided by the policy), except as deductions from the amount of the death claim. It is unreasonable to believe that the legislature intended to create this condition by the enactment of the statute. The statute does not apply, nor was it intended to apply, to the termination and cancellation thereof because of the failure to pay premiums necessary to keep a policy in force according to its terms. To hold otherwise would create a lifetime "grace period” for payment of premiums, with premiums payable only at death by deductions from the death benefit, which in some instances might actually be less than the premiums.
(b) I do not agree with the concept that the use of the language "cancellation of a policy which by its terms and conditions may be cancelled by the insurer shall be accomplished as prescribed herein” makes the statute applicable, by the use of the word "may,” only where the "terms and conditions” of the policy give the insurer an option to cancel. To use this as a basis for the construction would permit any insurer, by changing its policy so as to make termination or cancellation automatic on certain conditions, to completely evade the beneficent purposes of the statute, just as the construction by the majority here. In my special concurrence in the Thames case I concurred "in principle with the construction given the statute in the dissenting opinion” that it did not apply to the situation there involved, but not for the specific reasons given.
(c) Neither do I agree that the provision in the statute for the return of unearned premiums makes it apply only to situations where there are unearned premiums to be returned. If that be a proper reason to arrive at the present result under the statute, then *811cancellation for any reason during the grace period where a premium had not been paid and no return of unearned premium would be involved, would be permissible without complying with the statute. This reason would also permit cancellations of insurance contracts during the grace period for reasons which the statute was clearly designed to cover and for which the statute surely intended that the insurer provide a notice in accordance therewith.
The Thames case: The broad ruling in the "majority opinion” in the Thames case is agreed to by three judges (Evans, J., the writer of this opinion, Deen, J., and Clark, J.). Hall, P. J., concurred in the judgment only, with no opinion. The writer concurred in the judgment of reversal, reversing a summary judgment, which was granted by the trial judge in favor of the insurer, because of the view I held that there was evidence of waiver of the automatic cancellation provision, and a jury would have been authorized to so find. I also concurred with Bell, C. J., Quillian, J., and Stolz, J., that the statute requiring notice of cancellation did not apply, making four judges of that opinion. While that amounted to a score of four to three, to those expressly holding as to the applicability or nonapplicability of the statute to all terminations and cancellations of insurance contract (and may have become the law of the case, insofar as the trial judge was concerned, Hall, P. J., giving no reason for his concurrence in the judgment of reversal of the case), the Thames case is, nevertheless, not authority binding on this court as to anything therein said or ruled for the simple reason no five judges agreed on anything said therein. For this reason, we are not primarily concerned with the Thames case, although I think this court should disapprove the broad ruling of the "majority” opinion, as well as the "minority” "dissenting” opinion.
The cases cited in support of Division 2 of the opinion would have no application here if the statute were to be construed as having application to the facts in those cases. Two of the cases cited (Kersh v. Life & Casualty Ins. Co., 109 Ga. App. 793 (2) (137 SE2d 493) and Gulf Life Ins. Co. v. Frost, 125 Ga. App. 63, 66 (186 SE2d 456)) while decided after the statute was enacted, appear to have been decided without reference thereto, and no question as to its applicability was raised or decided. The cases were decided solely on the basis of whether a waiver of the automatic termination of the policy had occurred. These physical precedents are not controlling authority on the construction of the statute in the Thames case, either by *812the "majority” or by the "dissenters.” While I agree that these decisions are applicable and controlling here, because the statute requiring notice of cancellation does not apply and the provisions of the contract control, I do not agree that they are authority for a ruling that the statute does not apply.
Conclusions. I feel that the "majority” approach in the Thames case, so as to apply the statute to all instances of expiration, termination and cancellation of insurance contracts, is unsound. I also consider the construction of the statute as applying only to cases where the insurer has an option and to cases where unearned premiums are to be refunded to be too restrictive a construction of the statute. In following either of these reasons, or methods of construction of the statute, as well as tying ourselves to the word "cancellation,” we reach conclusions which in many instances may be unsupportable. If we permit automatic terminations of insurance contracts, where the payment of premiums and the nature and purposes of the insurance contract itself are apparent, which may broadly speaking be the basic consideration and purposes of the agreement, we may be on much safer ground. For instance, where insurance for a designated term at a designated premium which is paid and term insurance which is renewable, credit insurance which may be term insurance or limited as to time or duration (the Thames case seems to be hybrid), are involved may be more equitably and properly determined on the basic consideration or purpose basis, rather than the bare word "cancellation” so that both the insured and the insurer will be protected. That is, that a policy can automatically terminate when the basic consideration and purposes no longer exist according to the terms and provisions of the contract, but that termination or cancellation for any other reason must be effected solely through the provisions of the statute by the giving of the notice therein provided. While this concept may not eliminate difficulty in applying the statute, it will eliminate the incongruous results which have been and may be later reached by other approaches to its construction, such as those espoused by the "majority” and "minority” in the Thames case, and the accent on the word "cancellation” as distinguished from termination and expiration, as is done by the majority in the present case.