Court Opinion

ID: 9679386
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:51:34.313561+00
Date Added: 2024-06-11T13:15:34.491193
License: Public Domain

*593STEINMETZ, J.
(dissenting). I respectfully dissent from the majority decision.
While it is true there is some existing law in other jurisdictions that a binder, when issued, by reference includes all conditions and terms of the requested policy to which it relates, including notice provisions,1 the Wisconsin legislature has not provided for such a result in this state.
The Wisconsin statutes distinguish between a policy and a binder. Sec. 631.05, Stats.,2 distinguishes between the policy and a forerunner binder: “The insurer shall issue a policy as soon as reasonably possible after issuance of any binder or negotiation of an oral contract.”
The majority holds that sec. 631.36(2) (c), Stats.,3 which applies to “New policies,” requires a ten-day cancellation notice for a binder, as well as for a policy of insurance, even though the legislature in sec. 631.05 treated the issuance of a binder and the issuance of a policy as separate transactions.
I would hold that under the circumstances of this case a binder may be terminated by giving the person applying for insurance reasonable notice of cancella*594tion. Under the facts as presented and reviewed by the majority, the plaintiff had actual notice through the agent of cancellation. The following is the chronology of events regarding the binder:
(1) On December 21, 1976, Economy sent agent Mon-gin a printed application acknowledgement form, the significant language being: “Application bound 30 days from date on the application pending file clearance. [Ujnless terminated sooner or replaced by a policy.”
(2) On December 31, 1976, Economy sent a cancellation to Mongin for Barbara Terry. As to the notice it stated: "Please advise the applicant that all binder coverage we have been affording will end at 12:01 a.m. Jan. 5,1977.”
(3) Carl Mongin, of the corporate Mongin agency, testified in his deposition that he informed Barbara Terry on January 4, 1977, that Economy refused to accept her.
(4) On January 7, 1977, Carl Mongin told Barbara about applying for insurance with another company, Viking, and told her she would have to sign an application for a policy with Viking.
(5) Barbara Terry acknowledged that on January 7, 1977, Carl Mongin told her:
(a) Economy refused to cover her.
(b) Shedidnot have coverage.
(6) The accident occurred on January 8, 1977.
There is a real dispute in this case between Barbara Terry and the Mongin agency as to whether she was led to believe she had coverage in another company, but that has no influence in determining the notice period of cancellation for the binder. Neither is it necessary nor permissible herein to discuss whether Mongin is Terry’s or Economy’s agent, since that is an issue also in the cause of action against Mongin.
*595Barbara Terry acknowledged she received notice on January 7, 1977, that the Economy binder was cancelled. The accident occurred on January 8, 1977. Whether she had coverage or was led to believe by Mongin she was insured by Viking from January 7 is of no consequence in this lawsuit.
I would hold under the circumstances of this case that Barbara received actual notice of cancellation of the Economy binder before she had the accident. Economy was not required to give ten days’ notice of cancellation of the binder, since a binder is not a contract of insurance based on forms which are subject to filing and approval under secs. 631.36(1) (a) and 631.20(1), Stats.4
The majority advises Economy to go to the legislature if Economy believes it is contrary to public policy to require ten days’ notice of cancellation of binders and to make that argument there and not to the courts.5 I do not believe the legislature has established the public policy adopted by the majority applying the notice requirement to binders. The legislature has distinguished *596between binders and policies for notice purposes. The majority opinion encourages insurance companies to give up the use of binders which will be to the detriment of the vast majority of prospective purchasers of insurance policies. As long as a company must give the same ten day notice for cancelling a binder as it is required to do for a policy, there is little reason for a binder to be issued. This means the applicant will have to wait for coverage until a policy is issued. The applicant will have to refrain from driving until the policy is issued or take the risk of driving and causing injury to a third party while not having financial responsibility. Either way, this majority opinion may give extra coverage in this immediate case; however, it has interfered with the established, ordinary use of a binder.
I would reverse the court of appeals, remand to the trial court and affirm the trial court’s judgment in granting Economy’s motion for summary judgment dismissing the pleadings as to Economy Fire and Casualty Company.
I am authorized to state that Mr. Justice William G. Callow joins in this dissent.

 See, 17 Couch, Insurance 2d, sec. 67.2 at 395-96 (1967).
Contra, 12A Appleman, Insurance Law and Practice, ch. 263A, Binders, sec. 7227 (1981).

 “631.05 Oral contracts of insurance and binders. No provision of chs. 600 to 646 may be interpreted to forbid an oral contract of insurance or issuance of a written binder. The insurer shall issue a policy as soon as reasonably possible after issuance of any binder or negotiation of an oral contract.”

 Sec. 631.36(2)(c), Stats, provides:
“New policies. Paragraphs (a) and (b) do not apply to any insurance policy that has not been previously renewed if the policy has been in effect less than 60 days at the time the notice of cancellation is mailed or delivered. No cancellation under this paragraph is effective until at least 10 days after the 1st class mailing or delivery of a written notice to the policyholder. Subsections (6) and (7) do not apply to such a policy.”

 Sec. 631.36, Stats., provides:
“631.36 Termination of insurance contracts by insurers. (1) Scope op application, (a) General. Except as otherwise provided in this section or in other statutes or by rule under par. (c), this section applies to all contracts of insurance based on forms which are subject to filing and approval under s. 631.20(1).”
Sec. 631.20(1), Stats., provides:
“631.20 Filing and approval of forms. (1) Filing. No form subject to s. 631.01(1), except as exempted under s. 631.01(2) and (5), may be used unless it has been filed with and approved by the commissioner. It is deemed approved if it is not disapproved within 30 days after filing, or within a 30-day extension of that period ordered by the commissioner prior to the expiration of the first 30 days.”

 “In any event, if Economy believes that it is contrary to public policy for the legislature to require ten days’ notice of cancellation of binders, this argument should be made to the legislature, not to the courts.” (Supra at 588, 589.)