Opinion
No. 78-950
Decided January 25, 1979. Rehearing denied February 8, 1979. Certiorari granted May 14, 1979.
Trial court entered summary judgment for insurance company relative to third-party complaint of wrongful death action defendants, and they appealed.
Affirmed
1. INSURANCE — Notice of Cancellation — Mailing Sufficient — Actual Receipt — Not — Condition Precedent. Where the insurance contract provides that mailing of a notice of cancellation is sufficient, actual receipt of the notice by the insured is not a condition precedent to cancellation.
2. Notice of Cancellation — Defective — Effective Date — Not Inoperative — Cancellation Postponed — Expiration — Time Fixed by Policy. A notice of cancellation which purports to cancel an insurance policy at a time earlier than that fixed by the policy is not inoperative; it merely postpones cancellation until the time fixed by the policy has expired.
Appeal from the District Court of the County of Adams, Honorable Abraham Bowling, Judge.
Sandra I. Rothenberg, for defendants-appellants.
Long Jaudon, P.C., David B. Higgins, for third-party defendant-appellee.
On January 11, 1976, Guadalupe Mancillas and Marie Weekes died in the Hi-U Motel in Commerce City, apparently as a result of asphyxiation. Mr. Mancillas' widow and children and Miss Weekes' parents brought an action against John D. and Ken Campbell, the motel owners, claiming that they were responsible for the deaths. Contending that a liability insurance policy was in effect on January 11, the Campbells filed a third-party complaint against The Home Insurance Company claiming that it wrongfully refused to provide coverage and a defense to them pursuant to that policy.
The insurance company moved for summary judgment on the ground that the policy was cancelled prior to the January 11 asphyxiations. The motion was granted, and a C.R.C.P. 54(b) judgment order was entered. The Campbells appeal, and we affirm.
The policy contained the following clause:
"This policy may be cancelled by the company by mailing to the named insured at the address shown in this policy, written notice stating when not less than 10 days thereafter such cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice."
On November 21, 1975, because of non-payment of premium, the insurance company mailed a notice of policy cancellation to the last known address of the Campbells. The notice stated that the cancellation would become effective at 12:01 a.m., on December 1, 1975. The Campbells claim that they did not receive this notice.
The Campbells contend that the notice of cancellation was wholly ineffective because it failed to give the required 10 day notice and because it was not actually received by the insured. We disagree.
[1] Where the insurance contract provides that mailing of the notice of cancellation is sufficient, then actual receipt of the notice by the insured is not a condition precedent to cancellation. Jorgensen v. St. Paul Fire Marine Insurance Co., 158 Colo. 466, 408 P.2d 66 (1965). In the present case, the insurance company complied with its contract by mailing the notice.
As to the effect of a notice which purports to cancel an insurance policy at a time earlier than that fixed by the policy:
"While a contrary view obtains in some jurisdictions, most courts are agreed that a notice, otherwise sufficient in form and content, which purports to cancel an insurance or fidelity contract at a time earlier than that permitted under the pertinent cancellation provisions of the contract is not wholly ineffective but serves to cancel the contract and the coverage afforded by it at the expiration of the permitted time." Annot., 96 A.L.R.2d 286.
[2] The majority rule is the better reasoned, and we choose to follow it. The only purpose of the provision for notice of cancellation is to afford the insured an opportunity to secure other insurance. Therefore, notice defective as to effective date of cancellation is not inoperative; it merely postpones cancellation until the full ten day period has expired. American Fidelity Casualty Co. v. Knox, 164 F. Supp. 3 (D. La. 1958). In the present case, the notice became effective and the policy was cancelled on December 2, 1975, over a month before the deaths of Mancillas and Weekes. Thus, the trial court properly entered summary judgment in favor of the third-party defendant insurance company.
As against the contention that it is unjust to apply the rule where the notice was never received, we quote with approval the statement in Farber v. Great American Insurance Co., 406 F.2d 1228 (1969):
"'It is manifest that a notice which fully complies with the time interval in the policy, if mailed but not received, furnishes no greater actual notice to the insured than a notice defective in point of time, and it is equally clear that a defective notice, if received and construed to take effect only after the lapse of the full time, gives precisely the same protection as a notice which is correct in its contents. The insured has agreed to accept delivery to the post office as delivery to himself, and he runs the same risk and has the same advantage whether the notice is perfect in form or is one which, though defective, will be so construed by the courts as to give him the advance notice of cancellation which the company has promised.'"
Judgment affirmed.
JUDGE ENOCH concurs.
JUDGE BERMAN specially concurs.