Matter of Travelers Ins. Co. v Mermelstein

[*1] Matter of Travelers Ins. Co. v Mermelstein 2009 NY Slip Op 50144(U) [22 Misc 3d 1115(A)] Decided on January 27, 2009 Supreme Court, Westchester County Giacomo, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 27, 2009
Supreme Court, Westchester County

In the Matter of the Application of Travelers Insurance Company, Petitioner,

against

Steven Mermelstein, Respondent, -and- INFINITY INSURANCE COMPANY and SADALIO RODRIGUEZ, Proposed Additional Respondents.



13891/2008



Andre Del Re, Esq.

Law Offices of Karen C. Dodson

Attorneys for TRAVELERS INSURANCE COMPANY

485 Lexington Avenue, 7th Floor

New York, New York 10017

Kenneth A. Bernstein, Esq.

Torino & Bernstein, P.C.

Attorneys for INFINITY INSURANCE COMPANY

200 Old Country Road

Mineola, New York 11501

William J. Giacomo, J.

In this CPLR §7503[c] proceeding the petitioner Travelers Insurance Company (the "Petitioner") seeks to permanently stay an arbitration for uninsured motorist (UM) benefits demanded by respondent Steven Mermelstein (the "Respondent") on the ground that the proposed additional respondent, Sadalio Rodriguez ("Rodriguez") was insured under a policy of insurance issued by Infinity Insurance Company ("Infinity") under a contract for insurance issued in the State of Connecticut (the "Policy") and thus the UM benefits afforded by Travelers are not implicated. Infinity claims that it properly cancelled the Policy pursuant to the laws of the State of Connecticut prior to the subject automobile accident and thus it is not obligated to cover Rodriguez's vehicle.

The parties agree that this Court must apply Connecticut law to the issue at hand because that is the State with the most significant contacts with the subject policy of insurance. See, Chubb Group of Ins. Carriers v. DePalma, 31 AD3d 443, 818 NYS2d 541 (2nd Dept., 2006)

The sole issue to be determined at bar is whether pursuant to Connecticut General Statute §38a-343 (hereinafter CGS §38a-343), Infinity was obligated to give Rodriguez ten (10) days notice that it was cancelling the Policy, as contended by Infinity, or forty-five (45) days plus an additional ten (10) days as contended by the [*2]Petitioner [FN1].

"The purpose of § 38a-343 is to assure that before an automobile insurance policy is canceled the insured has a clear and unambiguous notice of the cancellation." Kane v. American Ins. Co., 52 Conn.App. 497, 502, 725 A.2d 1000 (1999) (Internal quotation marks omitted), affirmed, 252 Conn. 113, 743 A.2d 612 (2000). "[I]n enacting § 38a-343(a), the legislature appears to have intended to eliminate the potentially harsh consequences to an insured of driving without knowing that his or her policy was inoperative." Majernicek v. Hartford Casualty Ins. Co., 240 Conn. 86, 93 (1997). See also, Chubb Group of Ins. Carriers v. DePalma, supra .

"[W]hen written notice of cancellation is required, an insurer must comply strictly with policy provisions and statutory mandates". Majernicek v. Hartford Cas. Ins. Co., supra , 240 Conn. at 95. "Strict compliance with the statutory mandates and policy provisions as to notice is essential to effect a cancellation through such notice." Travelers Ins. Co. v. Hendrickson, 1 Conn.App. 409, 412, 472 A.2d 356 (1984).

The statute at issue, CGS §38a-343, provides in pertinent part:

(a) No notice of cancellation of a policy to which section 38a-342 applies may be effective unless sent, by registered or certified mail or by mail evidenced by a certificate of mailing, or delivered by the insurer to the named insured, and any third party designated pursuant to section 38a-323a, at least forty-five days before the effective date of cancellation, except that (1) where cancellation is for nonpayment of the first premium on a new policy, at least fifteen days' notice of cancellation accompanied by the reason for cancellation shall be given, and (2) where cancellation is for nonpayment of any other premium, at least ten days' notice of cancellation accompanied by the reason for cancellation shall be given. No notice of cancellation of a policy which has been in effect for less than sixty days may be effective unless mailed or delivered by the insurer to the insured and any third party designee at least forty-five days before the effective date of cancellation, provided (A) at least fifteen days' notice shall be given where cancellation is for nonpayment of the first premium on a new policy, and (B) at least ten days' notice shall be given where cancellation is for nonpayment of any other premium or material misrepresentation. The notice of cancellation shall state or be accompanied by a statement specifying the reason for such cancellation. Any notice of cancellation for nonpayment of the first premium on a new policy may be retroactive to the effective date of such policy, provided at least fifteen days' notice has been given to the insured and any third party designee and payment of such premium has not been received during such notice period.

In order to determine whether the insurer strictly complied with the statute, this Court must of course construe the statute. As in New York, in Connecticut

"it is a basic tenet of statutory construction that the legislature [does] not intend to enact meaningless provisions.... [I]n construing statutes, we presume that there is a purpose [*3]behind every sentence, clause, or phrase used in an act and that no part of a statute is superfluous." (Internal quotation marks omitted.) Kuehl v. Z-Loda Systems Engineering, Inc., 265 Conn. 525, 536-37, 829 A.2d 818 (2003).

See also, Echavarria v. National Grange Mut. Ins. Co., 275 Conn. 408, 415, 880 A.2d 882, 887 (2005). The Connecticut Supreme Court has recognized that the "use of different words [or the absence of repeatedly used words in the context of] the same [subject matter] must indicate a difference in legislative intention." Plourde v. Liburdi, 207 Conn. 412, 416, 540 A.2d, 1054 (1988) (citation omitted). The statute at bar utilizes different words with regard to existing as opposed to new policies.

To wit, CGS §38a-343 provides:

(a) No notice of cancellation of a policy to which section 38a-342 applies may be effective unless sent, by registered or certified mail or by mail evidenced by a certificate of mailing, or delivered by the insurer to the named insured, and any third party designated pursuant to section 38a-323a, at least forty-five days before the effective date of cancellation, except that (1) where cancellation is for nonpayment of the first premium on a new policy, at least fifteen days' notice of cancellation accompanied by the reason for cancellation shall be given, and (2) where cancellation is for nonpayment of any other premium, at least ten days' notice of cancellation accompanied by the reason for cancellation shall be given. CGS §38a-343(a) (Emphasis supplied.)[This portion of the statute shall be referred to as "Existing Policies Procedure"]

The statute nonetheless differentiates the notice provisions between existing policies and policies that have only been effect for less than sixty (60) days. Subsection (a) of CGS §38a-343 also provides that:

No notice of cancellation of a policy which has been in effect for less than sixty days may be effective unless mailed or delivered by the insurer to the insured and any third party designee at least forty-five days before the effective date of cancellation, provided (A) at least fifteen days' notice shall be given where cancellation is for nonpayment of the first premium on a new policy, and (B) at least ten days' notice shall be given where cancellation is for nonpayment of any other premium or material misrepresentation. CGS §38a-343(a) (Emphasis supplied.)[This portion of the statute shall be referred to as "New Policies Procedure"]

Comparing the Existing Policies Procedure with the New Policies Procedure it is quite evident that the Connecticut legislature used different words and thus intended different procedures. Plourde v. Liburdi, supra . In construing this statute, the Court is cognizant of the fact that the only differences between the two procedures delineated is the use of the word "except" with regard to Existing Policies Procedure as compared to "provided" with regard to New Policies Procedure. The method of service is also different, i.e. with regard to the Existing Policies Procedure the notice must be "sent, by registered or certified mail or by mail evidenced by a certificate of mailing, or delivered by the insurer to the named insured" while with regard to New Policies Procedure the [*4]notice may be mailed or delivered by the insurer to the insured. Accordingly, this Court must apply the language used by the legislature and ensure that no part of the statute is left superfluous. Echavarria v. National Grange Mut. Ins. Co., supra .

Here the Policy was in effect less than sixty (60) days when Rodriguez defaulted in paying his premium. Therefore the New Policies Procedure governs. Strict compliance by an insurer with the statutory mandates and policy provisions as to notice of cancellation is mandatory. Travelers Ins. Co. v. Hendrickson, 1 Conn.App. 409, 412, 472 A.2d 356 (1984).

This Court construes the New Policies Procedure to mean that an insurer must first give an insured "at least ten days' notice" before mailing or delivering a notice of cancellation at least forty-five days before the effective date of cancellation. This application comports with intention, as acknowledged in Majernicek v. Hartford Cas. Ins. Co., supra , that "in enacting 38a-343(a), the legislature appears to have intended to eliminate the potentially harsh consequences to an insured of driving without knowing that his or her policy was inoperative". The Connecticut Appellate Court has found that "[t]he purpose of General Statutes § 38a-343(a) ... is to assure that before an automobile insurance policy is cancelled the insured has a clear and unambiguous notice of the cancellation." Johnston, et al. v. American Employee Insurance Company, et al., 25 Conn.App. 95 (1991). Placing the notice of cancellation in the mail on October 29, 2007, with the intention of cancelling the policy on November 11, 2007, as done in the instant matter, does not give the insured adequate opportunity to avoid the "harsh consequences" the statute was intended to avoid [FN2].

On account of the foregoing, this Court holds that the Policy was not properly cancelled and therefore in effect on the date of the accident.

Accordingly, petitioner application to permanently stay the arbitration is GRANTED.

Dated: White Plains, New York

January 27, 2009

[*5]

Hon. William J. Giacomo, J.S.C.

cc:

Footnotes

Footnote 1:The following papers were read by this Court in determining the instant application: Petitioner's Memorandum of Law with Exhibits A-E; Memorandum of Law submitted by Infinity Insurance Company with Exhibits A-D.

Footnote 2:Of interest to this Court, and an issue which neither party raised, was whether use of the word "given" within the statute when referring to the ten days' notice for non-payment of premium, implies necessity of actual receipt of the notice by the insured [see, Atwood v. Progessive Insurance Co., 1997 WL 583638 (Conn.Super., 1997); Schneider v. Brown, 2003 WL 22290993, 6 (Conn.Super., 2003)] in contrast with the language relating to the 45 day notice which becomes effective when "sent" [see, Echavarria v. National Grange Mutual Ins. Co., supra ]. Indeed, one Connecticut Court recently held that"if the purpose behind §38a-343 is to provide the insured with an opportunity to purchase other insurance when his or her policy has been cancelled, then this purpose would be thwarted by a requirement that actual notice is not necessary." Rios v. Old Republic Ins. Co., 2005 WL 3594580, 3(Conn.Super., 2005). Nonetheless since neither party raises this issue, the Court will not address it.