In response, Lynch contends that Mount Vernon's objections are without merit. Lynch identifies United States Fidelity & Guaranty Co. v. Security Fire & Indemnity Co., 248 S.C. 307, 149 S.E.2d 647 (1966) ("USF&G"), to argue that South Carolina precedent supports the proposition that Lynch is entitled to collect the full amount of the judgment. ECF No. 9 at 3.
The parties do not identify, and the Court is unable to find, any South Carolina decisions interpreting Section 103-176. Plaintiff relies on U.S. Fid. & Guar. Co. v. Sec. Fire & Indem. Co., 149 S.E.2d 647 (S.C. 1966), a case in which the South Carolina Supreme Court considered an insurance cancellation provision in the South Carolina Motor Vehicle Safety Responsibility Act (the "Act"). The provision at issue in U.S. Fid. stated:
Messrs. Singleton and Singleton, of Conway, and Cooper,Gary, Nexsen and Pruet, of Columbia, for Appellant, cite: As to the South Carolina Motor Vehicle Safety ResponsibilityAct's not requiring certified policy to provide coveragewith respect to other automobiles: 248 S.C. 307, 149 S.E.2d 647; Safety Responsibility Act, Sec. 46-702, et seq., 1962 Code of Laws (1962); 253 S.C. 91, 169 S.E.2d 282; Article 4, Chapter 8 of Title 46 of the South Carolina Code (1962); Sections 46-747 and 748 of the South Carolina Code of Laws (1962); 238 S.C. 533, 121 S.E.2d 10. As to the South Carolina State Highway Department'sbeing charged by statute with the responsibility for administeringthe South Carolina Safety Responsibility Act andCanal Insurance Company was entitled to rely upon itsofficial notices and to act accordingly: Sec. 46-702(7) (h), and Sec. 46-748 or 46-749, S.C. Code of 1962; Sec. 46-747 of the South Carolina Code of 1962; South Carolina Motor Vehicle Safety Responsibility Act. Sec. 46-715. Messrs. Burroughs Green, and Rankin Johnson, of Conway, for Respondents, cite: As to a policy certified underthe South Carolina Motor Vehicle Responsibility Actproviding liability insurance coverage with respect to theinsured named in the SR-22 while driving a vehicle otherthan that sp
and party actingas insured's agent: 8 S.E.2d 511, 193 S.C. 299; 185 S.E. 541, 180 S.C. 177; 137 S.E.2d 412, 244 S.C. 411; 134 S.E. 428, 136 S.C. 458. As to suit papers beingforwarded to Appellant on instructions of insured and notat discretion of insurance agent: 122 S.C. 532, 115 S.E. 808. As to a third party having no higher rights under apolicy of insurance than the insured would have: 235 S.C. 452, 112 S.E.2d 241. As to there being no provision inpolicy, issued by Appellant, extending coverage to the 1965Ford after December 20, 1965: 258 N.C. 672, 129 S.E.2d 297; 242 S.C. 322, 130 S.E.2d 913; 250 N.C. 45, 108 S.E.2d 49; 235 S.C. 178, 110 S.E.2d 255. As to Appellant's policy affording no coverage here, neitherunder the omnibus clause nor under the Statute: 203 Va. 337, 124 S.E.2d 203; 36 Ill. App.2d 272, 183 N.E.2d 22; (Colo.) 419 P.2d 663; 121 S.E.2d 10, 238 S.C. 533. As to there being no statutory requirementthat Appellant file a change of endorsement with the HighwayDepartment: 149 S.E.2d 647, 248 S.C. 307; (S.C. ) 158 S.E.2d 774; 258 N.C. 672, 129 S.E.2d 297. As to an insurer not being bound by a default judgmentagainst its insured where it was not notified of the action: 145 S.E.2d 523, 247 S.C. 82. As to failure to forwardSummons and Complaint to insurer relieving insurer ofduty to defend, and of liability: 137 S.E.2d 608, 244 S.C. 425. As to in order for a waiver to be effective itmust be made with full knowledge of the right which is tobe waived: (S.C.) 155 S.E.2d 902; 11 S.E.2d 438, 195 S.C. 397. As to the plaintiff bringing suit againstthe wrong insurer: 147 S.E.2d 250, 247 S.C. 310; 275 Wis. 586, 82 N.W.2d 915; (Wash.) 403 P.2d 889. As to the presumption of ownership, evidenced by thecertificate of title, being overcome by evidence that the trueowner of the vehicle is other than the one in whose name thevehicle is registered: 244 S.C. 552, 137 S.E.2d 785 at 786.
"While both terms refer to the end of coverage under the policy, Cancellation refers to the termination of the policy prior to the end of the policy period, and Termination refers to the expiration of the policy by the lapse of the policy period." United States Fidelity Guar. Co. v. See Security Fire Indem.Co., 248 S.C. 307, 314, 149 S.E.2d 647, 650 (1966). Section 56-10-240 provides in pertinent part:
"`Cancellation' means termination of the policy prior to expiration of the policy period by act of one of the parties to the agreement: `termination' refers to the expiration of the policy by lapse under its own terms. Minnesota Mut. Life Ins. Co. v. Cost, 72 F.2d 519 (10th Cir. 1934); Johnson v. Metropolitan Life Ins. Co., 107 Mont. 133, 83 P.2d 922 (1938); Peterson v. Truck Ins. Exchange, 65 Wis.2d 542, 223 N.W.2d 579 (1974); U.S. F. G. Co. v. Security F. I. Co., 248 S.C. 307, 149 S.E.2d 647 (1966)." (Record, p. 145, conclusion VII).
Plaintiff, in its brief, treats the terms "cancellation" and "termination" as synonymous, but they are not. "Cancellation," as used in insurance law, means termination of a policy prior to the expiration of the policy period by act of one or all of the parties; "termination" refers to the expiration of the policy by lapse of the policy period. Beha v. Breger, 130 Misc 235, 223 N.Y.S. 726, 731[7] (1927); U.S.F. G. Co. v. Security F. I. Co., 248 S.C. 307, 149 S.E.2d 647, 650[8] (1966). In this case, the policy "terminated" or "expired" by lapse of the policy period.
shall be effective unless mailed" at least ten days prior to the effective date was unambiguous and an "invalid effective date of cancellation voided the cancellation"); Pedersen v. United Life Ins. Co. of Kan., 33 P.2d 297, 299 (Kan. 1934) (construing a statute's mandate that "[a]ny attempt on the part of such insurance company * * * to cancel or forfeit any such policy without the notice herein provided shall be null and void" strictly against insurers); Me. Bonding Cas. Co. v. Knowlton, 598 A.2d 749, 750 (Me. 1991) (noting that "[t]he legislature's use of the word `unless' is indicative of its intent to require that insurers comply strictly with the statute's terms in order to effect a policy cancellation"); Pearson v. Nationwide Mut. Ins. Co., 382 S.E.2d 745, 747-48 (N.C. 1989) (concluding that insurers must strictly comply with statute stating "[n]o cancellation * * * shall be effective unless" the insured is given fifteen days' notice, or the cancellation will be ineffective); U.S. Fid. Guar. Co. v. Sec. Fire Indem. Co., 149 S.E.2d 647, 649, 651 (S.C. 1966) (holding that "the coverage of the policy does not end until after the notice requirements are met" when the statute specified that insurance "shall not be cancelled or terminated until at least ten days after a notice of cancellation"). See also Carroll v. State Farm Mut. Auto. Ins. Co., 419 So.2d 57, 59 (La.Ct.App. 1982) ("Because the notice of cancellation in this case was not mailed 10 days prior to the effective date of cancellation and the date of the accident, the purported cancellation was ineffective and the insurance policy remained in effect through the date of the accident.").
2 Lee R. Russ Thomas F. Segalla, Couch on Insurance ยง 31:19 (3d ed. 1997). See, also, e.g, American Cas. Reading Pa. v. Nordic Leasing, Inc., 42 F.3d 725 (2d Cir. 1994) (applying Vermont law); Aplin v. American Sec. Ins. Co., 568 So.2d 757 (Ala. 1990); Transamerica Ins. Co. v. Tab Transp., Inc., 12 Cal.4th 389, 906 P.2d 1341, 48 Cal.Rptr.2d 159 (1995); Georgia Farm Bureau Mutual Insurance Company v. Phillips, 251 Ga. 244, 304 S.E.2d 725 (1983); Govern. Emp. Ins. v. Concord Gen. Mut. Ins., 458 A.2d 1205 (Me. 1983); Great West Cas. Co. v. Christenson, 450 N.W.2d 153 (Minn.App. 1990); Liberty Mut. Ins. Co. v. Bethel, 207 A.D.2d 449, 615 N.Y.S.2d 462 (1994); Brisker v. Ibrahim, 29 Ohio App.3d 16, 502 N.E.2d 679 (1985); Vrabel v. Scholler, 372 Pa. 578, 94 A.2d 748 (1953); U.S. F. and G. Co. v. Security F. and I. Co., 248 S.C. 307, 149 S.E.2d 647 (1966); Lang v. Kurtz, 100 Wis.2d 40, 301 N.W.2d 262 (Wis. App. 1980). The purpose of such a statute is to protect the public by allowing the DMV to prevent operation of a motor vehicle by the insured without providing proof of continued financial responsibility.
In accord with the majority of courts that have considered this issue, we conclude that where a statute provides a mandatory method for cancelling an insurance policy that has been certified under the financial responsibility law, and an insurer fails to comply with the statutory method of cancellation, the insurer is precluded from asserting that the policy has been cancelled. See, e.g., Oregon Automobile Insurance Company v. Thorbeck, 283 Or. 271, 275, 583 P.2d 543, 545 (1978); Vrabel v. Scholler, 372 Pa. 578, 583, 94 A.2d 748, 750 (1953); United States Fidelity Guaranty Company v. Security Fire and Indemnity Company, 248 S.C. 307, 315, 149 S.E.2d 647, 651 (1966); Government Employees Insurance Company v. Mizell, 36 A.D.2d 452, 455, 320 N.Y.S.2d 936, 939 (N.Y.App. Div. 1971); Lang v. Kurtz, 100 Wis.2d 40, 47, 301 N.W.2d 262, 266 (Wis.Ct.App. 1980). See generally Annot., 34 A.L.R.2d 1297 (1954).