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Mcneil v. Allstate Ins. Co.

APRIL 14, 1966.




Appeal from the Circuit Court of Pulaski County; the Hon. LAN HANEY, Judge, presiding. Reversed and remanded.


Plaintiff seeks to recover for loss of his automobile and medical expenses incurred as a result of an accident occurring on July 11, 1964, from defendant, his insurer, under the provisions of a policy which insurer had issued on March 27, 1964. The policy showed the policy period to be from March 27, 1964, to March 27, 1965, and contained a provision for cancellation, the pertinent part of which is as follows:

"Allstate may cancel this policy by mailing, to the insured name on the Supplement Page at his address shown in this policy, written notice stating when not less than ten days thereafter such cancellation shall be effective. The mailing of notice shall be sufficient proof of notice and the effective date and hour of cancellation stated in the notice shall become the end of the policy period."

The original complaint set forth that plaintiff was the owner of the automobile in question, for which defendant had issued its policy insuring against, among other things, loss of the automobile as a result of collision, and a limited reimbursement for medical expenses. A copy of the policy was attached, and the complaint further alleged that while the policy was in full force and effect, plaintiff had an accident, and it also alleged compliance with all conditions of the policy, except such terms as were waived by defendant's denial of liability. Plaintiff prayed judgment for $6,200 and demanded trial by jury.

To this complaint defendant filed a motion praying dismissal of the action pursuant to paragraph 1 of section 48, and other applicable provisions of the Practice Act. One of the grounds set forth in defendant's motion was that the claim asserted in the complaint was barred due to an alleged cancellation of the policy, effective June 24, 1964, due to nonpayment of premiums. The motion was supported by the affidavit of an employee to the effect that he was in charge of preparing and mailing notices of cancellation for defendant company and that a notice of cancellation had been mailed to plaintiff at his address shown on the policy on June 12, 1964. Attached to defendant's motion was a copy of a statement taken from plaintiff on July 24, 1964, in which plaintiff had stated, among other things, that he had his insurance transferred from another car in March 1964, that he had made no premium payments since June 24, 1964, and that the last payment he could recall having made was in August 1963. In its motion defendant demanded trial by jury.

Defendant's motion to dismiss was denied with leave to amend the motion by attaching exhibits, including, but not limited to, a copy of the notice of cancellation. Defendant filed its amended motion to dismiss attaching thereto an affidavit of the supervisor of the accounting division of defendant company, with copies of the alleged cancellation notice and copies of premium notices, alleged to have been mailed to plaintiff, and incorporated the same grounds as were urged in defendant's prior motion to dismiss.

Thereupon, plaintiff filed a motion to deny and strike defendant's amended motion to dismiss, which motion was predicated upon the grounds that, (1) subsection (3) of section 48, of the Civil Practice Act, required defendant's motion to be denied, the motion raising a question of fact, for the trial of which a jury had been demanded by both parties, (2) that the amended motion and affidavits were insufficient, as a matter of law, to show the alleged cancellation, and (3) that defendant had admitted coverage under the policy in question.

This motion of plaintiff was supported by his affidavit, to the effect that his mother had taken out and paid for a policy of insurance on a 1963 Buick automobile, for the period from August, 1963, to August, 1964; that his mother died in November, 1963; that, in March, 1964, plaintiff surrendered this policy to defendant for cancellation and took out a policy on the 1964 Buick automobile, for which he had traded in the 1963 automobile; and that the prior policy was almost identical in terms to the policy in question and when plaintiff made application for the policy in question he surrendered the prior policy for cancellation and requested application of the unearned premium thereon toward payment of the premium on the policy in question, there being unearned premium on the prior policy from March 1964 to August 16, 1964. His affidavit further alleged that he never received any notice of premiums being due or of the alleged cancellation; that he gave immediate notice of the loss of July 11, 1964, and received, in response thereto, a letter from defendant, dated July 15, 1964, acknowledging coverage of the loss, requesting plaintiff's cooperation in the matter of the loss, including his execution of certain report of accident forms; that, in reliance upon the letter, he incurred hospital and medical expenses, left the matter of the salvage of his automobile up to defendant, and cooperated with defendant in every way, including, but not limited to, the furnishing of the statement, of which defendant had attached a copy to its original motion to dismiss; that defendant had retained his report of accident form; and that defendant did not unequivocally deny coverage of the loss until August 19, 1964.

Defendant thereupon moved to strike plaintiff's motion to deny and strike, on the grounds that, (1) the matters put forth in plaintiff's motion were not germane to the alleged cancellation, (2) defendant's conduct subsequent to the alleged cancellation was not in issue, and (3) the matters relating to issuance of the policy were not at issue.

The trial court consolidated all of the motions, sustaining defendant's motions and denying plaintiff's motion, and granted leave to plaintiff to file an amended complaint.

Plaintiff filed an amended complaint, setting forth therein substantially the same matters alleged in the original complaint; and, in addition, setting forth the alleged cancellation, but alleging waiver of any purported or alleged cancellation.

Defendant moved to dismiss plaintiff's amended complaint on the grounds that, (1) the court's previous ruling, that the policy had been effectively cancelled, precluded any further litigation of that matter, and (2) by reason of such ruling, the amended complaint does not state a cause of action as a matter of law. Defendant further urges that, the theory of waiver or estoppel is not available to create a contract of insurance which has been theretofore cancelled, that plaintiff was not prejudiced and defendant not unjustly enriched by any action of defendant subsequent to the alleged cancellation, that defendant's actions were reasonable in view of its business practices, and that defendant promptly advised plaintiff of a coverage question after the accident, and did, on August 19, 1964, notify plaintiff's attorney that defendant's records showed a cancellation of the policy.

Upon the hearing on defendant's motion, the court sustained the motion and dismissed the amended complaint, and entered final judgment for defendant and against plaintiff.

The question raised is as to the propriety of the court's action (rendering final judgment) under ...

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