Opinion
No. 78-857
Decided November 8, 1979.
In action by insured asserting claims against his insurer and its local agent, the trial court found that policy in question had been cancelled by virtue of insured's failure to pay the balance of his insurance premium before quarterly due date, and accordingly, entered summary judgment for defendants. Plaintiff appealed.
Affirmed in Part Reversed in Part.
1. INSURANCE — Local Agent — No Duty — Advise Insured — Possible Cancellation of Policy — No Liability. Where there was no showing of a duty by local insurance agent to advise insured of the possible cancellation of his policy because of the insured's failure to pay quarterly premium by due date, where the policy lacked any promise that the local agent would notify the insured of the expiration of the policy, and where there was no course of dealing established between the parties which might lead the insured to believe that notice would be sent by the agent, the trial court properly entered summary judgment in favor of that local agent in action by the insured which was premised on the agent's failure to notify insured of the expiration of the policy.
2. Statute and Regulation — Constitute — State Policy — Quarterly Payments Acceptable — Payment Made — Accepted By Insurer — Policy Not Cancellable. Statute and regulation concerning the quarterly payment of insurance premiums by persons required to purchase no fault automobile insurance coverage constitutes a declaration of policy by the state that insurance payments can be made in quarterly installments, and insurer may not violate this public policy; therefore, since insured had routinely paid his premium quarterly, and since the insurer accepted and deposited the quarterly payment in issue which insured had mailed to it, insured was not in default at the end of the first month of the policy period, and the policy could not be cancelled at that time for nonpayment of the premium.
Appeal from the District Court of Pitkin County, Honorable Gavin D. Litwiller, Judge.
Robert A. Francis, P.C., for plaintiff-appellant.
Pryor, Carney and Johnson, Irving G. Johnson, for defendant-appellee Hartford Accident and Indemnity Company.
Montgomery, Little, Young, Campbell McGrew, P.C., Richard O. Campbell, for defendant-appellee William C. Stapleton Agency, Inc.
Plaintiff appeals from the entry of a summary judgment in favor of defendants on plaintiff's claims made by him against defendant Hartford Accident and Indemnity Company and its local agent under his policy of insurance issued by that company. We reverse the judgment in favor of Hartford Accident and Indemnity Company and affirm the judgment entered in favor of William C. Stapleton Agency, Inc.
Plaintiff had been insured by an automobile insurance policy with Hartford written through the Stapleton Agency for a number of years. This policy included "no fault" and uninsured motorists insurance. Billings to plaintiff had always been through the Stapleton Agency, and by arrangement with that agency, plaintiff always paid his premiums in quarterly installments.
On about January 1, 1977, Hartford instituted a policy of direct billing to the insurance customers of Stapleton agency who were being provided with Hartford policies. Plaintiff received a billing and notice direct from Hartford that the new policy period was from February 2, 1977, to August 2, 1977, with a premium for the period of $290.
Plaintiff mailed a check for $145 directly to Hartford with a notation attached to check that he had always made his insurance payments on a quarterly basis and advised Hartford that if this was not satisfactory to notify him. Hartford deposited the check in its general fund and sent a second notice to plaintiff dated February 10, which stated that if the full amount of the premium due under the policy was not paid by March 1, the policy would be cancelled as of that time.
Plaintiff sent no further funds to the company. He was involved in an accident on March 9, and filed claims under the policy.
Hartford denied the coverage contending that its policy had been cancelled on March 1 when plaintiff failed to pay the balance of his insurance premium before that date. This action followed, and the trial court granted summary judgment to both defendants.
The trial court, in ruling on defendants' motions for summary judgment, held that the insurance policy had been effectively cancelled as of March 1, 1977, and that Stapleton had no duty to further notify plaintiff that the policy might be cancelled.
[1] We agree that there was no showing of a duty by Stapleton to advise plaintiff of the possible cancellation of his policy.
"No duty rests upon the insurer to notify the insured of the time when a premium falls due, unless such notice be required by statutory enactment or by agreement of the parties or unless, according to some courts, the insurer has by custom or course of dealing with the particular insured led him to believe that a notice of premium due will be sent." W. Vance B. Anderson, Handbook on The Law of Insurance § 55 (3rd ed. 1951) (emphasis added).
The policy lacked any promise that the agent would notify the insured of the expiration of the policy, nor was there any course of dealing established between the parties which might lead the insured to believe that notice would be sent by the agent. Where there is no duty, there can be no liability. Arapahoe Land Title, Inc. v. Contract Financing, Ltd., 28 Colo. App. 393, 472 P.2d 754 (1970). Therefore, the judgment in favor of Stapleton is affirmed.
However, additional duties are imposed upon the insurer. Section 10-4-718, C.R.S. 1973, provides:
"The commissioner [of insurance] shall issue rules and regulations establishing quarterly, semiannual, and annual premium payments for persons who are required to purchase insurance under this part 7. [the "no-fault" act]"
[2] Insurance Department Regulation 74-20, promulgated by the Commissioner of Insurance in reference to § 10-4-718, C.R.S. 1973, requires each insurer doing business in Colorado to file rate schedules that provide for quarterly payment of insurance premiums by persons required to purchase "no fault" coverage. Plaintiff was one of those persons required to purchase "no-fault" insurance coverage under § 10-4-705, C.R.S. 1973, and thus, was entitled to pay his insurance premium on a quarterly basis. This statute constitutes a declaration of policy by the state that insurance payments can be paid in quarterly installments. See Newton v. Nationwide Mutual Fire Insurance Co., 197 Colo. 462, 594 P.2d 1042 (1979). Hartford may not violate this policy.
[3] Accordingly, since plaintiff had routinely paid his premium quarterly, and since the insurer accepted and deposited the quarterly payment, we hold that plaintiff was not in default on March 1, 1977, and that his policy of insurance could not be cancelled for non-payment of premium.
In accordance with defendant's motions, we strike that part of the record attempted to be made a part of the record in this court which was not part of the record in the trial court.
The summary judgment in favor of defendant Stapleton is affirmed; the summary judgment in favor of defendant Hartford is reversed; and the cause is remanded for further proceedings.
JUDGE PIERCE and JUDGE BERMAN concur.