Court Opinion

ID: 9699206
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:13:27.897012+00
Date Added: 2024-06-11T18:20:47.483546
License: Public Domain

CARTER, Justice
(dissenting).
I dissent. I believe that The Home Insurance Company’s subsidiary should be liable to indemnify Ferg’s against appellants’ dramshop claims under both contractual and estoppel theories.
Unlike the situation presented in Hill v. Johnson, 35 A.D.2d 407, 316 N.Y.S.2d 536 (1970), relied on by the majority, Home’s subsidiary did have a policy of dramshop insurance in force insuring Ferg’s. Although that policy would have expired on November 1,1984, the insurer, prior to that date, certified that it would continue in force until November 1, 1985. The insurer was aware when it did this that the premium had not been paid for the following year. Under ordinary principles of contract law, this was a voluntary relinquishment by the insurer of its right to avail itself of the policy provision specifying automatic expiration on November 1, 1984. Thereafter, any cancellation for nonpayment of premium should require notice to the insured under Iowa Code section 515.80 (1985).
In addition to the contractual obligations of the insurer, it should also be held liable on a theory of estoppel. The applicable regulations of the Iowa Beer and Liquor Control Commission provide that the effective period of dramshop liability policies must coincide with the period of the insured’s license or permit. Cancellation requires a thirty-day, written notice to the commission. 150 Iowa Admin. Code 5.8(1), 5.8(4) (1985).
Correspondence from commission officials included in the record indicates the commission relied on the continued existence of the liability coverage certified by Home’s subsidiary in continuing Ferg’s liquor license in force beyond November 1, 1984. The majority places no significance on such reliance because another insurance company had also provided the necessary certification to assure continuation of the license. I submit that under the circumstances of the present case it is impossible to conclude that one insurance company’s certification was any more instrumental in causing Ferg’s liquor license to remain in force than the certification of the other company. Indeed, if Home’s subsidiary may prevail on this argument, so, too, may the other insurance company in the event it seeks to present some policy defense notwithstanding its certification of coverage.
I would hold that both insurers are liable on the risk and that the usual rule of pro rata liability for any loss be applied. See Dairyland Ins. Co. v. Concrete Prods. Co., 203 N.W.2d 558, 564 (Iowa 1973).
HARRIS, McGIVERIN and LAVORATO, JJ., join this dissent.