Raptis v. Safeguard Insurance , 13 Mich. App. 193 ( 1968 )

Lesinsici, 0. J.

Defendant-appellant, Safeguard Insurance Company, appeals a summary judgment in favor of the plaintiff. Plaintiff cross-appeals a summary judgment granted defendant, The Buckeye Union Casualty Company.

This cause arose when plaintiff, as administrator of the estate of Constantinos Bratsis, deceased, brought a declaratory judgment action to determine his right to recover from the defendant insurance carriers for the death of the deceased. The lower court heard the cause on motion of the parties for summary judgment since there was no dispute as to any material fact. The court held as a matter of law that the Buckeye policy had been cancelled before liability attached, and that plaintiff was entitled to recover under the Safeguard policy.

The essential facts are as follows: On July 17, 1962, Buckeye mailed a notice to its policy-holder, Winifred Seals, cancelling her automobile liability insurance, effective July 28, 1962. The insurer sent the notice by registered mail, return receipt requested, properly addressed, with the postage fully prepaid. The notice was delivered to Mrs. Seals’ residence on July 24, and her husband receipted for it, but she was out of town and did not actually receive the notice until July 28. On July 31, Mrs. Seals negligently struck and killed plaintiff’s decedent while operating the automobile insured by Buckeye. Plaintiff obtained judgment against Mrs. Seals. Safeguard insured the automobile driven by the deceased and recovery is possible under the “protection against uninsured motorists coverage” provision of their policy, if the Buckeye cancellation was effective at the time of the accident.

Safeguard raises two issues on appeal concerning the notice of cancellation sent by Buckeye. First, it is claimed that the insured was entitled to 10 days’ actual notice pursuant to statute. Second, it is claimed that notice sent by registered mail is ineffective, where it is not received by the insured in time to afford 10 days’ actual notice.

The first issue concerns the meaning of the language employed by the legislature to manifest its intention. It is not necessary to our decision to consider the language in the Buckeye policy¹ since mandatory statutory provisions are read into insurance contracts containing language at variance with the statute. Galkin v. Lincoln Mutual Casualty Co. (1937), 279 Mich 327. Accordingly, we determine the legal efficacy of the notice of cancellation solely by the statute. CLS 1961, § 500.3020 (Stat Ann 1957 Rev § 24.13020), reads in part:

“No policy of casualty insurance, excepting workmen’s compensation, but including all classes of motor vehicle coverage, shall be issued or delivered in this state by any insurer authorized to do business in this state for which a premium or advance assessment is charged, unless there shall be contained within such policy a provision # * * whereby the policy may be cancelled at any time by the insurer by mailing to the insured at his address last known to the insurer or its authorised agent, with postage fully prepaid, a 10 days’ written notice of cancellation. * * * The mailing of notice as aforesaid shall be prima facie proof of notice. Delivery of such written notice shall be equivalent to mailing.”² (Emphasis supplied.)

Safeguard contends that notice to the insured begins to run 10 days after receipt, not 10 days from the date of mailing. Under this contention, we would have to interpret the words “by mailing to the insured” to mean “by receipt by the insured.”

The statute before us must be read in the light of a settled principle of statutory construction which the legislature has enacted into law. CLS 1961, § 8.3a (Stat Ann 1961 Rev § 2.212[1]), provides:

“All words and phrases shall be construed and understood according to the common and approved usage of the language; but technical words and phrases, and such as have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning.”

Consistent with this principle, we find that the word “mailing” in its ordinary and legal signification does not mean “receipt” of the mailed matter, but means that it “was properly prepared for transmission in the due course of mail, and that it was placed in the custody of the officer charged with the duty of forwarding the mail.” Texas Cas. Ins. Co. v. McDonald (Tex Civ App, 1954), 269 SW2d 456, 457; Satterfield v. Celebreeze (WD SC, 1965), 244 P Supp 190; 26 Words and Phrases, pp 55, 56. We are convinced that the statutory scheme for mailing a notice of cancellation to the insured at his last known address eliminates the requirement for giving actual notice that existed under prior law,³ and the statutory 10 days’ notice must he computed from the date of mailing. The time from which notice must be computed begins when the act of notification called for by the statute is completed by the insurer.

We are further persuaded that the time of mailing is the crucial point for computing notice for the reason that the statute presumes that notice is received by the insured from the fact of mailing.⁴ The term “prima facie proof” denotes a rebuttable presumption in the law. 33 Words and Phrases, p 557. If the insurer establishes that he mailed a notice of cancellation in compliance with the statute, prima facie proof is made that the notice was received by the insured, and the insurer is entitled to rely on this presumption of receipt until it is rebutted by competent evidence. Bolander v. Thompson (1943), 57 Cal App 2d 444 (134 P2d 924, 927). Buckeye did not rely on the presumption of receipt, having sent the notice by registered mail.

The case of Donarshi v. Lardy (1958), 251 Minn 358 (88 NW2d 7), cited by defendant-appellant, is not controlling. The case involved the interpretation of ambiguous language in a policy of insurance. The Minnesota court decided the case under the settled rule that ambiguous language in a contract of insurance be construed most strongly against the insurer. We, on the other hand, are dealing with the meaning of terms in a statute.

As to the second issue, we are not impressed by the contention that Buckeye failed to comply with the statute because it sent the notice of cancellation by registered mail, particularly when it is undisputed that the notice was delivered to the residence of the insured prior to the accident, and there is only the bald conclusion of the defendant-appellant that the use of registered mail, in and of itself, prejudiced the insured.

The cases cited by the defendant-appellant are not persuasive authority. All the cases relied on involve a situation where the insurer gave special instructions to the post office, or did some act, that actually prevented delivery of the notice of cancellation prior to the loss. See Irish v. Monitor Insurance Company of Oakland County (1933), 264 Mich 586; Werner v. Commonwealth Casualty Co. (1932), 109 NJL 119 (160 A 547); Kamille v. Home Fire & Marine Ins. Co. of California (1925), 129 Misc 536 (221 NYS 38); Columbia Casualty Company v. Wright (CA 4, 1956), 235 F2d 462, 63 ALR2d 564. Fields v. Western Millers Mut. Fire Ins. Co. (1944), 182 Misc 895 (50 NYS2d 70, appeal dismissed 268 App Div 1073), also cited by the defendant-appellant, is more persuasive of the plaintiff’s case. The court in Fields held that a notice of cancellation “mailed” to the insured in the insurance policy effected cancellation of the policy in the absence of a showing that the use of registered mail prevented the insured from receiving the notice. And in the Monitor Insurance Company Case, supra, Justice Butzbl said in his concurring opinion, p 590:

“The notice was not delivered to plaintiff, but returned to defendant by the post office prior to the fire. The record indicates that, if the notice had not teen returned as requested, plaintiff might have received it, and then at least have had the opportunity to take out neto insurance.” (Emphasis supplied.)

In the case at bar, the notice of cancellation was actually delivered to the residence of the' insured and defendant-appellant has failed to plead facts showing that the use of registered mail deprived the insured of the opportunity to obtain new insurance.

It is not necessary to consider plaintiff’s cross-appeal in view of our decision.

Affirmed.

McGregor, J., concurred with Lesinski, C. J.

1 The automobile liability policy issued by the Buckeye Union Casualty Company to Winifred Seals is alleged to contain the following provision:

“This policy may bo cancelled by the company by mailing to the insured named in Item 1 of the declarations at the address shown in this policy written notice stating when not less than ten days thereafter sueh cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice. The time of the surrender or the effective date and hour of cancellation stated in the notice shall become the end of the poliey period. Delivery of sueh written notice either by such insured or by the company shall bo equivalent to mailing.”

2 This section has boon amended by PA 1967, No 202 (Stat Ann 1968 Cum Supp §24.13020). The 1967 amendment does not affect the determination of this ease.

3 See Galkin v. Lincoln Mutual Casualty Co. (1837), 279 Mich 327.

4 Tlie presumption of receipt was recognized in DeHaan v. Marvin (1951), 331 Mich 231, a ease arising under the prior statute.