The opinion of the court was delivered by: Perry, District Judge.
This cause comes on upon the cross motions of plaintiff and
defendants for summary judgment. The parties have filed briefs
and affidavits in support of their respective positions.
This is an action by an owner (GARCY) of a complex of buildings
against six insurance companies each of whom issued an insurance
policy in the amount of $50,000.00. The policies in question
covered the loss of the buildings by fire.
On July 6, 1970 a fire occurred at the insured location
resulting in the complete loss of the buildings. Garcy is
claiming the full amount of the policies, $300,000.00, in this
suit. It is a series of events which occurred prior to the fire
which give rise to the issues of this case.
On May 5, 1970 Garcy and a wrecking company, 3 Oaks Wrecking
and Lumber Co., entered into a contract that the complex of
buildings was to be demolished and the land leveled. The contract
provided that all salvage from the wrecked buildings would belong
to the wrecking company.
By a letter dated June 25, 1970 an agent of the plaintiff
notified the plaintiff's insurance broker of the commencement of
the demolition and the plaintiff's desire to cancel the fire
insurance effective immediately. The defendants claim that this
letter was directed not only to the plaintiff's broker but also
to the defendants' agent. At any rate prior to the actual
delivery of the insurance policies the plaintiff, on the advice
of counsel, attempted to revoke this notice of cancellation and
instructed his broker to take no steps to effectuate the
On July 6, 1970 while the wrecking operation was going on in
the building complex, a fire broke out which completely destroyed
the complex including the largest building thereon, a seven story
building. It is contended by the plaintiff and not denied by the
defendant, that the wrecking operations on this building had not
commenced. Although the complaint is phrased in terms which would
seem to encompass a claim for damage to the entire complex,
plaintiff has in the present motions for summary
judgment limited its claim to damage to the seven story building.
The defendants raise three points in their argument for summary
judgment, any one of which they claim, should impel the entry of
a summary judgment in their favor. Concisely the defendants'
arguments are (1) the policies were cancelled by the plaintiff
prior to the fire; (2) the wrecking contract and the work done
thereunder constituted an increased hazard which suspended the
policies; (3) after the commencement of the wrecking operation
none of the buildings had any value to the insured and the
insured no longer possessed any insurable interest therein. Each
of these arguments will be considered separately.
The defendants support their position on this issue with a
letter dated June 25, 1970 from Larry Kurtzon of Garcy
Corporation addressed as follows:
Mr. E.K. Eichengreen
Rollins Burdick Hunter Co.
231 South LaSalle Street
Chicago, Illinois 60604
The defendants contend that the letter constituted not only
notice to the plaintiff's agent, Mr. Eichengreen, but also to the
defendants' agent, Rollins Burdick Hunter Co. Aside from the
letter itself the only evidence that the defendants offer that
the defendants' agent was notified is a statement in an affidavit
by Dorothy McNeill, Mr. Eichengreen's secretary, that "Mr. E.K.
Eichengreen and Rollins Burdick Hunter Co. were notified by a
letter dated June 25, 1970". The plaintiff does not dispute the
defendants' authorities which hold that a request for
cancellation communicated by an insured to an insurer is fully
effective absent delivery of the policies and that such
cancellation cannot be unilaterally revoked by the insured prior
to the delivery of the policies. De La Perriere v. American Home
Assurance Ins. Co., 106 Ga. App. 516, 127 S.E.2d 478 (1962);
Waller v. Door County Mut. Ins. Co., 256 Wis. 323, 41 N.W.2d 211
(1950). The plaintiff relies on cases which hold that a
cancellation of insurance is not effective until notice is
actually received by the insurer or its agent. Ross Togs Inc. v.
Fidelity-Phenix Ins. Co., 36 A.D.2d 706, 319 N.Y.S.2d 1 (1971);
Louisiana Public Utilities Co. v. Atlas Assurance Co.,
238 App. Div. 474, 264 N.Y.S. 603 (1933). The plaintiff contends that
the letter of Mr. Kurtzon was directed to the plaintiff's agent
and did not have the effect of notifying the defendants' agent.