Court Opinion

ID: 5775773
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:40:45.356651+00
Date Added: 2024-06-11T08:41:52.991166
License: Public Domain

McGiveen, J. (dissenting).
Plaintiff has been the assignee of the mortgagee since February 15, 1967, and in July, 1968, the owner procured a fire insurance policy in the amount of $7,000, at an annual premium of $140, which was paid. A fire occurred on March 13, 1969, causing damages in the sum of $9,335. Plaintiff now seeks to recover from defendant $2,563, constituting defendant’s prorata share of the coverage.
The record indicates that the original insurance was increased from $7,000 to $15,000, as of October 21, 1968, at an additional premium of $119, which was not paid, and on February 25,1969, the policy was canceled for “Non-payment of Premium”, by notice to plaintiff dated February 14, 1969.
The question to be decided is whether the notice of cancellation for the stated reason of “non-payment” of premiums affects the policy to the full extent of the $15,000 or applies only to the portion of $8,000, for which the premium was not paid.
The cancellation specified ‘ ‘ non-payment ’ ’ as the basis for cancellation. Such ‘ ‘ non-payment ’ ’ could well indicate that the cancellation was intended to apply only to the additional portion of coverage, $8,000, for which the premium was not paid. The fact that the premium covered the same premises does not mandate a holding that the original contract for insurance was not “ divisible ”. In Rosenthal v. Security Mut. Ins. Co. (33 A D 2d 1041), the court in reversing a denial of summary judgment to plaintiff said: “We find that the original contract of insurance, for which the premium was fully paid, was a divisible one and not subject to cancellation for failure to pay the premium for the additional and more comprehensive coverage after the issuance of the original policy ”.
If the insurer respondent intended to cancel the entire policy, it could have done so by omitting the “ non-payment ” phrase. Having chosen to place the cancellation on that specified basis, it conveyed the idea that the cancellation pertained only to the latter $8,000 coverage. If appellant had purchased an additional $8,000 from another insurer, this defendant would clearly be liable under the $7,000 coverage. So, while the defendant had a .right to cancel the insurance policy, having specified as a reason for cancellation “ non-payment ” of premium, which could obviously apply only to the failure to pay the additional *347premium for the additional coverage, plaintiff was not unreasonably led to believe it had insurance in the sum of $7,000, in any event, thus causing it to forego the additional insurance.
Bearing in mind that the courts do not favor forfeiture, and that the policy, as well as the notice of cancellation, should be strictly construed against the insurer, the conclusion, on this record, requires a determination that the cancellation applied only to the $8,000, and that the initial $7,000 of insurance, for which premium was fully paid, remained in effect at the time of the fire. Thus, in my view, plaintiff was entitled to recover the $2,563 sought.
Accordingly, I would reverse the order appealed from, grant plaintiff’s motion and deny defendant’s cross motion.
Capozzoli and Markewich, JJ., concur with Stevens, P. J.; McGovern, J., dissents in an opinion.
Order, Supreme Court, New York County entered on April 3, 1970, affirmed. Respondent shall recover of appellant $50 costs and disbursements of this appeal.