APPEAL from the Circuit Court of Winnebago County; the Hon.
JOHN S. GHENT, Judge, presiding.
MR. JUSTICE VAN DEUSEN DELIVERED THE OPINION OF THE COURT:
This appeal arises from a garnishment action brought in the circuit court of Winnebago County by plaintiff, William Conley, against National Mutual Insurance Company of Celina, Ohio (National Mutual), as garnishee, to recover $1,678.41 plus costs on an insurance policy allegedly issued to defendant, Mary Ratayzcak. Suit was commenced when plaintiff filed a nonwage garnishment affidavit and summons after entry of judgment against the defendant pursuant to his action for property damages arising out of an automobile collision which occurred on January 27, 1978. The trial court found in favor of the garnishee, National Mutual, and entered an order that plaintiff take nothing by his nonwage affidavit for garnishment. The decisive question on appeal is whether defendant's policy, issued by National Mutual, was in force at the time of the accident.
There is no dispute as to any of the material facts. National Mutual issued an automobile insurance policy to Mary Ratayzcak on July 12, 1977. The policy period was a 3-month term from July 12, 1977, to October 12, 1977 (Policy No. 3667437-0). The policy was renewed for a 3-month period extending the term of the policy from October 12, 1977, to 12:01 a.m. on January 12, 1978 (Policy No. 3667437-1). A renewal declaration statement, designated as Policy No. 3667437-2 and which was sent to the defendant in December 1977, would have been for a policy period effective from 12:01 a.m. on January 12, 1978, until April 12, 1978.
Defendant did not pay the renewal premium by January 12, 1978, and on that date she received a printed form designated "Automobile Expiration Notice." The form was dated January 12, and spaces were provided for information to be typed in following the printed portions. Typed information indicated the name of the insurance company, the name of the agent, the name and address of the insured, the policy number (3667437-2), that the policy expired on 1-12-78, a "due date" of January 12, 1978, and that "payment pays to 4-12-78." In the lower right hand corner, in small print, the form stated:
THIS POLICY WILL BE REINSTATED, WITHOUT INTERRUPTION OF PROTECTION, IF THE PREMIUM DUE IS RECEIVED AT THE HOME OFFICE, IN CELINA, OHIO, WITHIN 15 DAYS AFTER THE EXPIRATION DATE. EXCEPTIONS CANNOT BE MADE."
Also in similar print at the bottom of the form was the statement:
"PLEASE DISREGARD THIS NOTICE IF YOU HAVE MADE PAYMENT."
In addition, the following statement was typed, in capital letters, across the top of the form and just below the name and address of the insurance company:
"THIS POLICY IS CANCELLED 01/27/78 FOR NON-PAYMENT OF PREMIUM."
The accident in question occurred at 6:45 p.m. on January 27, 1978, and on the following day defendant mailed her premium to National Mutual. Plaintiff filed an action on October 31, 1978, to recover for property damage to his motor vehicle and obtained a judgment against the defendant. National Mutual did not defend that lawsuit, nor did it pay defendant's claim for collision coverage or the claim made by plaintiff.
The trial court found that the notice was an expiration notice, not a cancellation notice; that the insurance policy expired on January 12; and that the expiration was completed when defendant did not pay her insurance by January 27. Accordingly, the court entered judgment in favor of the garnishee on November 1, 1979, from which judgment plaintiff appeals.
The threshold inquiry is whether the "AUTOMOBILE EXPIRATION NOTICE" is an expiration notice, as it purports to be, or is, in fact, a cancellation notice. There is no doubt that, without the addition of the typed statement "THIS POLICY IS CANCELLED 01/27/78 FOR NON-PAYMENT OF PREMIUM" across the face of the notice, the notice was, in fact, an expiration notice. National Mutual contends that the instant case does not involve a cancellation of the policy at all, but rather was a non-renewal within the meaning of section 143.13(c) of the Illinois Insurance Code (Ill. Rev. Stat. 1977, ch. 73, par. 755.13(c)). The argument is made that defendant's policy expired on January 12, 1978, and was not renewed because the past due premium was not received in Celina, Ohio, within 15 days. In support of its argument that the policy was not cancelled but expired, National Mutual relies greatly on Shiaras v. Chupp (1975), 61 Ill.2d 164.
The present case, in our view, is readily distinguishable from Shiaras v. Chupp (1975), 61 Ill.2d 164. Shiaras v. Chupp was a declaratory judgment suit brought to determine which of two insurers was responsible to defend and provide coverage with respect to an accident which occurred when Shiaras was driving a pickup truck, owned by Chupp, that collided with a motorcycle. State Farm originally issued an insurance policy to Chupp on June 8, 1968. The policy was for a six-month term, and Chupp had continuously renewed by paying his premium at the end of the policy period. His payment on December 8, 1970, made coverage effective until 12:01 a.m. on June 8, 1971. On May 6, 1971, State Farm mailed Chupp a notice advising him that the next renewal premium was due on or before June 8, 1971. Chupp did not pay the premium by that date, so State Farm sent another notice on June 11, 1971, three days after the expiration date. The notice provided that if payment was made within 10 days after the policy due date, the insured would have continuous protection. Chupp nevertheless failed to make payment within 10 days of the due date. The accident occurred at 7:48 p.m. on June 18, 1971. After the accident, Chupp mailed his premium to State Farm in an envelope postmarked June 21, 1971. State Farm reinstated his policy effective June 22, 1971, to December 8, 1971. The supreme court agreed with State Farm that the policy was not cancelled but expired because it was not renewed. The court distinguished a "cancellation" from a "non-renewal" by stating that a cancellation refers to a unilateral termination by an ...