Court Opinion

ID: 9734836
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:47:43.303796+00
Date Added: 2024-06-11T18:26:51.561565
License: Public Domain

Mr. JUSTICE BURMAN, dissenting: It is undisputed that the policy in question was to expire on October 18, 1969. It provides that'the company “agrees with the insured * * 0 in consideration of the payment of the premium * * *It further provides: “The entire policy shall automatically and immediately lapse and become void without notice upon the expiration date of any current term if the named insured defaults in making payment of the premium herein provided for.” The majority points out that Noffsinger was told by a woman in the offices of the insurer’s agent in Omaha, during the week of October 18, 1969, not to pay the premium but to wait for another premium notice. In the same deposition where Noffsinger made that representation he also stated that he later received a correct premium in the mail about November 1,1969, and mailed back payment with a check drawn on the Omaha National Bank. In his third-party complaint he similarly alleged compliance with all premium payments which were due on his policy for it to be effective on November 17, 1989, when he was involved in the accident with the leased automobile. The records of the Omaha National Bank, however, produced by Farmers Insurance Group, conclusively show that he did not draw a check in payment of the premium. On or about September 26, 1969, Noffsinger received a renewal notice that his policy was close to ending and that a premium in the amount of $358.85 was due to be paid before October 18,1989. On or about October 29, 1969, Noffsinger received an “Avoid Lapse” notice when payment was not received which stated that the renewal date was October 18,1969, that $358.85 was due, and that “[t]his policy is now in the grace period and it may lapse. A call may save this coverage.” In addition, however, an affidavit of a Farmers Insurance executive indicates that a further “Lapse Notice” was given at that time with an indication in bold type that: “Although the renewal date has passed you can still void the lapse of your policy. Payment within 15 days after due date will renew your policy without interruption of coverage. Otiierwise your insurance will remain lapsed as of the due date.” Thus, there is evidence that about October 29, 1969, Noffsinger had again duly received notice from the company that the renewal date had passed, but that if he paid the past due premium within 15 days from the due date (which would have been November 2, 1969, well before the accident occurred) he could still void the lapse of the policy. Otherwise the policy would remain lapsed as of the due date, October 18. There is no showing of any payment. In my view, it appears that Noffsinger was not entitled to coverage simply because he failed to pay the premium, although he had ample, emphatic notice that it was due. At the time of the accident on November 17, 1969, it appears that Noffsinger had not called the company, nor paid the premium, and had thus allowed the policy to lapse and become void. Considering the documents in the record, and notwithstanding Mitchell v. Burnett, 1 Ill.App.3d 24, 272 N.E.2d 393,1 find that the notice received was not so uncertain, equivocal, and conciliatory as to extend coverage at the time of the accident. In Mitchell, the original policy issued was to be effective until August 8, 1965. Prior to that date, on April 10, 1965, an “Avoid Cancellation” notice containing a cancellation date of April 25, 1965, was sent to the insured due to premium non-payment. The accident occurred on May 7. The court thus dealt with whether an existing policy could be cancelled before the date stipulated in the original contract by means of a notice which indicated for the first time an earlier date of termination. Furthermore, there was no language contained in the “Avoid Cancellation” notice in Mitchell that would avert the connotation that the company contemplated future action to cancel the policy. In the instant case Noffsinger was aware of the lapse date of October 18 under the terms of the policy before he received the “Avoid Lapse” notice. At the very least a notice received by him on September 26 prior to receipt of the “Avoid Lapse” notice contained that date. Furthermore the language of the notice in question here is not as indicative of the need for future action as the notice in Mitchell. There is evidence that the “Avoid Lapse” notice was sent with an additional notice, in block letters, that Noffsinger could “void the lapse” by payment within 15 days and thus “renew” the policy, or otherwise the insurance would “remain lapsed” as of the due date. Such language does not connote the need for future action to terminate coverage. I am also of the opinion that the trial judge was incorrect in finding, based on the record before us, that the vehicle under lease was not a “non-owned automobile” “regularly or frequently used” by Noffsinger so as to fall outside the purview of the coverage. Although Noffsinger had possession of the car for only a few days before the accident, he had leased it for a term of 24 months. He executed that lease a full 2 months before he was involved in the accident. He never disputed that the leased automobile was meant for his frequent and regular use, and all indications are to the contrary. He in fact testified in a deposition that the car was leased “for [his] sole and exclusive use.” In State Farm Mutual Automobile Insurance Co. n. Berke 123 Ill.App.2d 455, 258 N.E.2d 838, the trial court concluded and the appellate court affirmed that an auto leased by Doctor Berke was not covered by his policy as a nonowned auto since it was furnished for his regular use and was also available for use by his wife, who was involved in an accident with it. Despite some difference in the language of the policy involved in that case, I find the gravamen of the opinion supportive of my view in the instant case. Furthermore, as tire insured himself states in his brief, under the 24-month-long lease, with an option to purchase, the insured may have been considered pro facto owner of the automobile. In that event, it appears that the auto would have to meet the conditions contained in the policy under the “Newly Acquired” automobile category to have coverage extended to it. In that regard, if the leased auto was an “additional” newly acquired automobile, I find no proof that the company “insures all automobiles owned by the named insured on the date of such acquisition” as is required under the terms of the policy for coverage to be extended. Moreover there is no proof that the leased auto “replaced” the Volkswagen described in the policy, an alternative condition that must be met in order for it to fall within the “Newly Acquired” characterization. In fact, Noffsinger testified in a deposition that he leased the car for his sole and exclusive use, and that at the time of his testimony he still owned the Volkswagen. For the above reasons, I am of the opinion that the summary judgment of the trial court, in which the insurer was ordered to defend Noffsinger and to pay fees to his attorneys, should be reversed.