Redmon v. United States Fidelity & Guaranty Co.

VAUGHN, Judge.

Defendant United States Fidelity and Guaranty Company ¡contends the court erred in refusing to grant its motions for summary judgment, directed verdict and judgment notwithstanding the verdict. We disagree. Defendant bore the burden of proof on the issue of the insurance policy’s cancellation. Crisp v. Insurance Co., 256 N.C. 408, 124 S.E. 2d 149. In order to be effective, a purported cancellation must comply with the provisions of G.S. 20-309(e) and G.S. 20-310(a). Harrelson v. Insurance Co., 272 N.C. 603, 158 S.E. 2d 812; Crisp v. lnsurance Co., supra. G.S. 20-309 (e) requires an insurer to notify the Department of Motor Vehicles of a policy cancellation 15 days prior to the effective date of the cancellation. Upon receiving such notice of cancellation, the Department of Motor Vehicles must notify the owner of the cancellation. Before the 1971 amendment, which is not applicable here, G.S. 20-310 (a) provided, among other things, that an insurer could not cancel an insurance policy until fifteen (15) days after mailing a notice of termination by certificate of mailing to the named insured at the latest address filed with the insurer. G.S. 20-310 (a) also required the face of the envelope in which the notice was mailed be marked “Important Insurance Notice.” Defendant offered evidence of compliance with G.S. 30-309 (e) and G.S. 20-310 (a). The weight and credibility of such evidence was, however, for the jury.

Defendant maintains that the court committed prejudicial error in not permitting defendant, John Holcomb to answer the following question, “ . . . you would like to see Mr. Redmon recover from this insurance company, wouldn’t you?” The record discloses the witness’ answer would have been “Yes.” A witness may be cross-examined to show bias or interest in the outcome of a case, and it is error to prevent cross-examination of a witness as to facts from which bias would clearly be inferred. Holcomb’s relationship to Guaranty and his attitude toward that defendant could permit an inference of bias and interest in the outcome of the proceedings.

Defendant also objects to the court’s exclusion of an FS-4 form received by the Department of Motor Vehicles from defendant. The FS-4 form is used by an insurer to notify, as is required by G.S. 20-309 (e), the Department of Motor Vehicles of a liability insurance policy cancellation. Defendant was allowed to introduce Guaranty’s file copy of the FS-4 defendant claimed was mailed simultaneously with a notice of cancellation to the insured. G.S. 20-309 (e) must be complied with before a cancellation of an insurance policy is legally sufficient. Although the fact that the Department mailed an FS-5 form, which was introduced into evidence, to the insured suggests defendant had notified the Department, defendant should have, nevertheless, been allowed to introduce the FS-4 received by the Department. Not only did that document bear on whether the statutory procedures for a valid cancellation had been followed, but it also bore on defendant’s credibility in view of the fact Francis Hoi-comb denied receiving a cancellation notice allegedly mailed along with the FS-4.

For the reasons stated, we direct that there be a new trial.

New trial.

Judges Parker and Carson concur.