R.J. Kolencik v. The Stratford Insurance Co.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
AUGUST 28, 2006
No. 06-12136
THOMAS K. KAHN
Non-Argument Calendar
CLERK
________________________
D. C. Docket No. 05-00007-CV-GET-1
R. J. KOLENCIK, Individually and as Administrator
of the Estate of Melissa Kolencik,
Plaintiff-Appellant,
versus
THE STRATFORD INSURANCE COMPANY,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(August 28, 2006)
Before BLACK, CARNES and PRYOR, Circuit Judges.
PER CURIAM:
R. J. Kolencik appeals the district court’s grant of summary judgment in
favor of the Stratford Insurance Company (Stratford). Kolencik’s wife was killed
in an accident involving two commercial dump trucks owned and operated by
Jerry Yarbrough, d/b/a J&J Trucking and Excavation, and Kolencik obtained a
judgment in state court against Yarbrough. In this action, Kolencik seeks to
recover on the judgment against Stratford, Yarbrough’s insurance carrier. The
district court granted summary judgment for Stratford because AI Credit
Corporation (AI), the company through which Yarbrough financed his insurance
premiums, cancelled Yarbrough’s insurance policy five months prior to the
accident. We affirm.
We review a district court’s grant of summary judgment de novo, viewing
the evidence in the light most favorable to the non-moving party. See Arrington v.
Cobb County, 139 F.3d. 865, 871 (11th Cir. 1998). “Summary judgment is only
appropriate where there are no genuine issues of material fact and the moving
party is entitled to judgment as a matter of law.” Id.Although Kolencik concedes Yarbrough’s policy was cancelled, he argues
the cancellation was legally ineffective for two reasons. He first contends
Stratford violated Georgia Public Service Commission (PSC) rules by failing to
notify the state of the cancellation. In Georgia, a motor carrier for hire must
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register with the state and obtain a permit before being allowed to operate
commercially. Id. § 46-7-3. Before the state will issue a permit, a certificate of
insurance must be on file. Id. § 46-7-12(2). “The insurer shall file such
certificate.” Id. Under PSC rules, “[c]ertificates of insurance evidencing coverage
shall be continuous and shall not be canceled or withdrawn until after thirty (30)
days’ notice in writing by the insurance company . . . has first been given to the
[PSC].” Transp. Rule of Ga. PSC, Rule 7-2.6(b). Accordingly, when a certificate
of insurance is on file and the policy lapses, the policy remains in effect for the
benefit of the public until the state is notified of the cancellation. Progressive
Preferred Ins. Co. v. Ramirez, 588 S.E.2d 751, 753-54 (Ga. 2003) (answering
certified question from this Court).
Because Stratford never notified the PSC of the cancellation of Yarbrough’s
policy, Kolencik contends it was in effect at the time of the accident. He points to
O.C.G.A. § 46-7-12(a), which provides “[t]he failure to file any form required by
the [PSC] shall not diminish the rights of any person to pursue an action directly
against a motor carrier’s insurer.” It is undisputed, however, that Yarbrough never
registered with the state, and Stratford was aware of this fact when it issued
Yarbrough’s policy. It is also undisputed that the state will only accept insurance-
related filings on behalf of registered motor carriers. Thus, had Stratford
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attempted to file a certificate of insurance on Yarbrough’s behalf, it would have
been rejected and returned to Stratford. Likewise, had Stratford attempted to file a
notice of cancellation with the state, it would have been rejected and returned.
Stratford thus cannot be held liable for its failure to file a notice of cancellation.
Furthermore, Rule 7-2.6(b) plainly says “certificates of insurance” shall not be
canceled unless notice is given to the state; here, no certificate of insurance was or
could have been filed, so no such certificate existed to be cancelled. We agree
with the district court that the law cannot require an impossible act and,
accordingly, reject Kolencik’s first argument.
Kolencik next argues Stratford could not rely on AI’s notice of cancellation
because it was legally ineffective under Georgia’s premium finance statute,
O.C.G.A. § 33-22-13(b). Where, as here, a premium finance company cancels an
insurance policy pursuant to a power of attorney, the company must adhere to the
requirements of Georgia’s premium finance statute. The statute provides “[n]ot
less than ten days’ written notice shall be delivered to the insured . . . of the intent
of the premium finance company to cancel the insurance contract unless the
default is cured within such ten-day period. A copy of said notice shall also be
sent to the insurance agent . . . .” O.C.G.A. § 33-22-13(b). After expiration of the
ten-day period, the premium finance company may, in the name of the insured,
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cancel the insurance contract by mailing to the insurer a notice of cancellation. Id.
§ 33-22-13(c)(1). The receipt of the notice of cancellation by the insurer creates a
“conclusive presumption” that the premium finance company has fully complied
with the statute, that the insurer is entitled to rely on such presumption, and that
the cancellation of the insurance contract is authorized by the insured. Id. § 33-
22-13(c)(2).
Stratford received AI’s notice of cancellation on March 26, 2005, creating a
conclusive presumption that AI had fully complied with the premium finance
statute’s requirements. Thus, regardless of whether Yarbrough was in default at
the time Stratford received the notice, the premium finance statute insulates
Stratford from liability. See id. (“No liability of any nature whatsoever shall be
imposed upon the insurer as a result of the failure . . . of the insurance premium
finance company to comply with any of the requirements of this Code section.”).
Further, Kolencik’s reliance on O.C.G.A. § 33-22-13(d) is misplaced. The section
provides “[a]ll statutory, regulatory, and contractual restrictions providing that the
insurance contract may not be canceled unless notice is given to a governmental
agency . . . shall apply where cancellation is effected under this Code section.” As
explained above, it would have been futile for Stratford to attempt to file a notice
of cancellation with the state because Yarbrough was unregistered and, therefore,
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the state would have rejected any insurance-related filings on his behalf. We
accordingly affirm the district court’s decision.
AFFIRMED.
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