Reginald Wiley & Lloyd Henderson VS Cornerstone National Insurance Company & Renee M. Diagre

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NOT DESIGlr FOR PUBLICATION ATED STATE OF LOUISIANA COURT OF APPEAL FIRST CTRCUIT NLTMBER 2012 CA 0909 REGINALD WILEY AND LLOYD HENDERSON VERSUS a G ORNERSTONE NATIONAL INSLJRANCE CONIPANY AND RENEE M DAIGRE Judgment Rendered APR 2 5 2013 l i r k k Appealed from the 19 7udicial District Court In and for the Parish of East Baton Rouge Louisiana Trial Court Number 590590 Honorable William Iviorvant Judge Karl J Koch Baton Rouge R Todd LA Musgrave Amanda H Aucoin New Orleans LA Attorney for Appellants Plaintiffs Reginald Wiley and Lloyd Henderson Attorneys for Appellee Defendant Cornerstone National Insurance Company BEFORE PARRO McCLENDON WELCH THERIOT AND DRAKE JJ p Od 6 a ars WELCH J Plaintiffs Reginald Wiley and I Henderson appeal a summary loyd judgment rendered in favor of defendant Cornerstone National Insurance Company Cornerstone dismissing it from this personal injury litigation We reverse BACKGROUND On May 13 2010 plaintiffs filed this lawsuit seeking damages allegedly sustained in an automobile accident occurring on May 13 2009 Named as defendants were the driver of the other vehicle involved in the collision Renee M Daigre and Cornerstone which had issued a policy of automobile insurance to Ashley S Daigre alleged to be the owner of the vehicle Renee was driving Cornerstone filed a motion for summary judgment in which it asserted that the insurance policy it issued to Ashley Daigre did not provide coverage for the accident sued upon because it had been cancelled for nonpayment on April 11 2009 prior to the date of the accident Cornerstone urged that it complied with the statutory pre notification requirements set forth cancellation in La R S D 1266 22 In support of its motion Cornerstone submitted a document entitled Premium Due Notice as evidence of the valid cancellation The top portion of the document which was to be returned with payment contains a table setting forth a notice date of March 13 2009 a payment due date of April 2 2009 a payment due now in the amount of 177 a late payment amount of 187 63 63 and a notation that if postmarked after the due date a late fee would apply but that payment must be postmarked pr to the cancellation date of April 11 2009 or or it would not be accepted The middle portion of the invoice to be kept by the insured for her records states that the tast payment was received on March 12 2009 in the amount of 187 and sets forth a payment schedule of four 63 installments due on the 2 day of April May June and July 2009 The bottom 2 portion of the Premium Due Notice contains the following language in pertinent part Notice of Intent to Cancel for Non of Premium Payment Cancellation Date 2009 11 04 at 12 am 01 Termination Cancellation Reason You are hereby notified that in accordance with the terms and conditions of your automobile policy and the provisions of section 1B 636 of the Louisiana Insurance Code that your policy is cancelled or terminated on the date and time indicated for the reason below Non Payment of Premium Cornerstone argued that the above cancellation was valid because it gave Ashley Daigre the named insured more than ten days notice of the cancellation and the notice clearly and unambiguously explained the reason for cancellation non payment of the premium Cornerstone also submitted evidence in support of its claim that it mailed notice of the cancellation to its insured on March 13 2009 In opposition to the motion for summary judgment plaintiffs objected to some of the documents offered by Cornerstone as proof of mailing They argued that even if those documents were properly befare the court Cornerstone was not entitled to summary judgment because it failed to demonstrate that Ashley Daigre failed to pay the premium or that a legally sufficient notice of cancellation had been sent to her or that Cornerstone actually cancelled the policy prior to the accident Plaintiffs pointed out that at the time Ashley Daigre received the notice of premium due from Cornerstone her payments were up to date as reflected on the premium due notice They contended that Comerstone saction in providing an anticipatory notice of cancellation with its regular billing which gave the insured notice of cancellation for nonpayment at a time when payments on the insurance poIicy were timely and not overdue did not satisfy the notice of 3 cancellation requirements set forth in La R 22 but instead represented a S 1266 clear attempt to circumvent the law In response Cornerstone submitted the supplemental affidavit of Patrick Long Cornerstone general agent in which he attested to the following Ashley s Daigre did not tender her premium payment due on April 2 2009 he is not aware of any payment made by Ashley Daigre after March 12 2009 and Cornerstone cancelled her policy on April 11 2009 at 12 a when the premium payment 01 m was not received A hearing on the motion was held during which the trial court concluded that Cornerstone submitted sufficient evidence to make out a prima facie case that the notice of cancellation was mailed to Ashley Daigre address that the notice s indicated the policy would be cancelled effective April 11 2009 for nonpayment of the premium and that tkie policy was in fact cancelled on that date when the payment was not received The court concluded that the document sent by Cornerstone to Ashley Daigre constituted a valid notice of cancellation and entered summary judgment in favor of Cornerstone Judgment in accordance with this ruling was signed on March 3 2011 This appeal challenging Cornerstone s dismissal from the litigation followed DISCUSSION Appellate courts review a trial court decision to grant a motion far s summary judgment de novo using the same criteria that govern the trial court s consideration of whether summary judgment is appropriate George S May International Company v Arrowpoint Capital Corporation 2011 La 1865 App 1 Cir 8 97 So3d 1167 1170 The motion should be granted only if 12 10 the pleadings depositions answers to intenogatories and admissions on file together with the affidavits if any show that there is no genuine issue as to 4 material fact and that the mover is e t judgment as a matter of law La atitled P C art 966 B It is well settled that where an insurer defe a claim on the ground that the rids policy has been cancelled the insurer bears the burden of establishing facts that will relieve it of liability See Accardo vo C National Insurance larendon Company 99 La App 5 Cir 1 51 So 975 97 writ denied 398 OGj 2d 0369 2000 La 4 759 So 76L The insurer must show facts consrituting 00 7 2d positive and unambiguous proof of understanding of cancellation of the policy See Direct General Insurance Company of Louisiana v Mongrue 2004 248 La App 5 Cir 8882 So 620 623 04 31 2d Louisiana Revised Statute 22 sets forth the notice requirements that 1266 must be followed by an insurance company in order to effect a cancellation of an insurance policy Prior to its amendment by 2010 La Acts No 703 lLa R S 1266 in 22 provided pertinentpart B 1 A notice of cancellation of a shall be effective policy only if it is based on one or rriore of the following reasons a Nonpayment ofpremium D 1 No notice of cancellatiora fa poiicy to vhich Subsection ofthis Section applies shall be effective unl mailed by B ss certified mail or delivered by the insurer to the named insured at least thirty days prior to the effective date of the cancellation however when cancellation is for nonpayment of premium at least ten days notice of cancellation accompanied by the reason therefor shall be given An insurer must strictly comply with the statutory provisions for a valid notice of cancellation of an insurance policy Mongrue 882 So at 622 The obvious 2d purpose of the notice requirement is to protect the insured and the public against unnoticed termination of insurance coverage Taylor v MFA Mutual Insuranee 1 La R 22 was renumbered from La R 22 by 2008 La Acts No 415 1 S 1266 S 636 1 effective January 1 2009 5 Company 334 So 402 4Q3 I 1976 The requirement is designed to 2d a tice n ensure that the insured is aware his policy i being terminated and to afford him s time to obtain other insuranc eprotection Id at 404 Cornerstone contends that its cancei rnun of the premium aciur ayanent was valid because it met La R 22 i require 1 it mailed S 1266 rc nen s Dl s notice of cancellation to its insured on March 13 009 more than 10 days prior to the effective cancellation date of April 11 2009 and 2 the notice of cancellation is clear and unambiguous because it informed the insured that the policy is cancelled if the premium is not paid by April 11 2009 In furtherance of its argument that its notice is in full compliance with La R 22 S 1226 D Cornerstone adopts the holding of a fourth circuit case Narcisse v Evans 2001 1092 La App 4 Cir 1 807 So 339 in which another appellate court 02 16 2d held that a notice similar to the one sent by Cornexstone to its insured constituted an effective cancellation In Narcisse as in this case the policy premium was to be paid in monthly installments the insurer Clarendon forwarded to its insured a Premium Due Notice for the installment payment due on July 19 1995 and the premium due notice contained a of Intent to Cancel for Non of Notice Payment Premium Narcisse 807 So at 340 Unlike the instant premium due notice 2d the premium due notice issued by Clar notified the insured that tnis was the endon only notice the insured would receive Id The Clarendon notice informed the insured that its policy will be cancelled on July 30 1995 if the premium due is not postmarked prior to thaY date and that a payment postmarked on or after the cancellation date would not be accepted Id The court concluded Yhat the notice sent to the insured was an unambiguous and unequivocal notice of cancellation clearly putting the insured on notice that his coverage would terminate on July 30 1995 if his payment was not received ar postmarked prior to that date Id at 344 6 We decline to follow Narcisse as we find that decision to be at odds with this court decisions in Travelers Insurance Company v Jenkins 285 So s 2d 839 La App 1 Cir 1973 and State Farm Mutual Automobile Insurance Company v Villneuve 98 La App l Cir 12 747 Sa2d 777 writ 421 2 99 28 0273 denied 2000 00 24 3 75 So 156 In Jenkins this court held that 2d in order for an insurer to satisfy the statutory notiee requirement the cancellation notice must express a specific intent to cancel as of the notice date effective upon such date as would afford the insured at least the prescribed statutory notiee This court observed that there is a distinct difference in language which informs the insured that a policy will be cancelled and language stating that a policy is cancelled or is hereby cancelled or stands cancelled This court explained that in the first instance there is no concurrent cancellation as of the notice date not even a conditional cancellation The notice at issue in Jenkins informed the insured that a check it had written to the insurer far a renewal premium was returned for insufficient funds the insurer would continue coverage until July 11 1969 and that if a replacement payment was not received within that time the policy will be cancelled effective th dat Id at 842 This court held that the t notice amounted only to a demazld for payment of rremiums and did not suffice as a notice of cancellation In so doing this court observed that the notice did not cancel the policy at the time of the notice effecti on a given future date but e merely informed the insured that unless premiuir due were paid the policy would s be cancelled Id at 844 see also Ellzey v Hardware Mutual Insurance Company of Minnesota 40 So 24 28 La App l Cir 1949 wherein this 2d court stated that a cancellation notice must clearly and unequivocally show a present cancellation In Villneuve this courc held that notice of cancellation eontained in a a premium due notice sent to the insured twenty days prior to the due date of an 7 installment payment which informed the insured that the policy will be cancelled for nonpayment if the premium was notpaid by the due date was not an adequate notice of cancellation Villneuve 747 So at 780 This court 2d 78L held that the notice was merely demand foxpayment specifying that the policy would be cancelled if the premium was not paid Icourt further noted that there his was no outstanding balance at the time the notice was mailed Under these circumstances this court held that the notice did not amount to the positive notice of cancellation required by statute and by Jenkins In reaching this conclusion this court left open the issue of whether a notice of cancellation for nonpayment of a premium could ever properly be issued prior to the premium due date where there was no outstanding premium balance due at the time ofthe notice Id We acknowledge that Cornerstone scancellation notice uses the language is cancelled which under other circumstances may be interpreted as unequivocal notice to the insured that a policy has been cancelled However we find that given the circumstances under which Cornerstone purported pre s cancellation notice was issued the notice is not an unconditional unequivocal notice of cancellation required by La R 22 and this court decisions in S 1226 D s Jenkins and Villneuve When cancellation of a policy is initiated by the insurer it requires that the notice prescribed by statute be given West v Clarendon National Insurance Company 1999 La App l Cir 7 767 So 1687 00 31 2d 877 88 L In this case when it sent the notice of cancellation Cornerstone was not initiating the cancellation of the policy rather it was sending its insured a bill for a payment due in the future At the time the notice was issued there was no outstanding premium due and the only statutory condition upon which Cornerstone could base its cancellation under La R 22 S 1266 nonpayment of the premium had not yet arisen Cornerstone cancellation notice merely informed the insured s that if payment was not received by the premium due date the policy would be 8 cancelled as did the notices in Jenkins and Villneuve We find that the Cornerstone notice of cancellation which is combined with a premium invoice and conditioned on the nonpayment of the premium by the due date constitutes a demand for payment and not an unequivocal notice of cancellation See State Farm Mutual Automobile Insurance Company v Norwood 2002 La 2399 App l Cir 7 unpublishec 03 wherein nother panel of this court refused to 2 follow Narcisse and held that a cancellation notice stating that the policy wi11 be cancelled if the premium payment which included an amount past due was not received before the cancellation date was not a sufficient notice of cancellation because it was conditioned on the nonpayment of premiums by the due date similar to the cancellation notices in Jenkins Ellzey and Villneuve and thus constituted a demand for payment of premiums rather than an unequivocal notice of cancellation Mareover the entire purpose of La R 22 cancellation S 1226 s D requirement is to protect the insured against the danger of losing insurance coverage through mere neglect to pay a premium by ensuring that the insured is notified that a policy is being rcerminated in sufficient time to obtain insurance coverage To conclude that an insurer can satisfy La R 22 strict S 1226 s D requirements by merely sending notices of cancellation for nonpayment in every premium invoice at a time when the policy premiums are current and there is not yet a basis for cancellation would defeat the purpose of La R 22 and S 1226 D render its protections meaningless According we find that the trial court erred y in holding that Cornerstone met its burden of proving that the policy issued to 9 Ashley Daigre had been validly cancelled prior to the accident giving rise to the instant claim CONCLUSION Based on the foregoing we reverse the summary jadgment rendered in favor of Cornerstone and remand this case for proceedings consistent with this opinion All costs of this appeal are assessed to appelles Cornerstone National Insurance Company REVERSED AND REMANDED Z Because of this holding it is unnecessary to address appellants argument regarding whether s Cornerstone insured was given notice at least ten days prior to the effective date of the cancellation 10 NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2012 CA 0909 REGINALD WILEY AND LLOYD HENDERSON VERSUS CORNERSTONE NATIONAL INSURANCE COMPANY AND RENEE M DAIGRE BEFORE PARRO MCCLENDON WELCH THERIOT AND DRAKE JJ PARRO J dissenting I disagree with the majority and would affirm the trial court March 3 2011 s judgment which granted summary judgment in favor of Cornerstone After reviewing the applicable provisions of LSA 22 it is my opinion that Cornerstone notice S R 1266 s of cancellation for nonpayment of premium to its insured Ashley Daigre constituted a valid notice of cancellation under the statute In accordance with LSA 22 a of cancellation of a policy S B R 1266 notice 1 shall be effective only if it is based on one or more of the following reasons of Nonpayment i premium Furthermore LSA 22 provides in S D R 1266 1 pertinent part hen W cancellation is for nonpayment of premium at least ten days Notice notice of cancellation accompanied by the reason shall be given of cancellation for nonpayment of premiums shall not be required to be sent by certified mail Louisiana Revised Statute 22 provides NOnpayment of premium means failure of the 6 A 1266 named insured to discharge when due any of his obligations in connection with the payment of premiums on a policy or any installment of such premium s Cornerstone March 13 2009 PREMIUM DUE NOTICE informed Ashley Daigre that her ne payment was due on April 2 2009 and that if postmarked after the due date a LATE FEE applied 00 10 payment had to be postmarked Moreover the notice also informed her that her rior to the Cancellation Date of 4 it will 9or 20 il NOT be accepted Furthermore Cornerstone Notice of Intent to Cancel for Non s Payment of Premium which was contained in the bottom portion of the same one page document referred to as the PREMIUM DUE NOTICE unequivocally informed Ms Daigre that her policy is cancelled as of April 11 2009 at 12 a for Non 01 m Payment of Premium At this point Ms Daigre had the following options pay the premium by April 2 2009 send her payment by mail postmarked prior to April 11 2009 or have her insurance policy cancelled on April 11 2009 at 12 a Ms Daigre did not pay the 01 m premium that was due on April 2 2009 nor was any payment postmarked cancellation date rior to the Accordingly because more than ten days had elapsed since the notice of cancellation for nonpayment of premium had been given to Ms Daigre her policy was cancelled as of April 11 2009 at 12 a pursuant to the terms of her 01 m contract of insurance and LSA 22 S D R 1266 1 The majority notes that a the time the notice was issued there was no t outstanding premium due and the only statutory condition upon which Cornerstone could base its cancellation under La R 22 S 1266 not yet arisen nonpayment of the premium had However LSA 22 does not require that the notice of S R 1266 cancellation be sent only when there is an outstanding premium due and only after nonpayment of that outstanding premium The statute only requires that when cancellation is for nonpayment of premium at least ten days notice of cancellation shall be given See LSA 22 Cornerstone notice of cancellation SD R 1266 s 1 indisputably given at least ten days prior to cancellation of Ms Daigre policy fully s complies with this statutory requirement The majority also concludes that Cornerstone cancellation notice merely s informed the insured that if payment was not received by the premium due date the policy would be cancelled as did the notices in enkins and Villneuve However there is a critical and decisive difference between f s ornerstone cancellation notice and those at issue in enkins and Villneuve scancellation notice clearly Cornerstone informed Ms Daigre that her policy is cancelled as of April 11 2009 at 12 a for 01 m nonpayment of premium whereas the notices in Jenkins and Villneuve both informed the insureds that their policies will be cancelled for nonpayment if the premium was not paid by a certain date As noted by the Jenkins court 285 So at 844 there is a 2d distinct difference in language which informs the insured that the policy will be cancelled and verbiage which states the policy is cancelled is hereby cancelled or stands cancelled And according to Jenkins the more equitable rule dictates an interpretation of the statute that requires expression of specific intent to cancel as of notice date effective upon such date as will afFord the insured at least the prescribed statutory notice Id s Here Cornerstone cancellation notice did exactly that it informed Ms Daigre as of the March 13 2009 notice date of its specific intent to cancel her policy for nonpayment effective April 11 2009 thereby fully complying with the prescribed statutory ten notice contained in LSA 22 day S D R 1266 1 I also note that contrary to the cancellation notice at issue in Villneuve 747 2d So at 780 Cornerstone cancellation notice did positively put Ms Daigre on s notice that the policy was going to be cancelled by stating your policy is cancelled on the date and time indicated 04 at 12 for the reason below Non 2009 11 Olam Payment of Premium see also Folds v Protective Casualty Insurance Co 26 323 La App 2nd Cir 12 647 So 1215 1216 in which the appellate court 94 7 2d 17 affirmed the trial court finding that a notice mailed to the insured was a timely s mailed and valid notice of cancellation based on language stating y car insurance policy our is cancelled effective 09 at 12 a Emphasis added 86 21 01 m For the above reasons I firmly believe Cornerstone notice of cancellation s constituted a valid notice of cancellation under LSA 22 because it gave S D R 1266 1 its insured notice of cancellation for nonpayment of premium more than ten days prior to the effective date of cancellation Further the validity of Cornerstone notice of s Z The Jenkins court interpreted LSA 22 the substance of which is now embodied in LSA S1 R636 S R 1266 22the statute at issue in this appeal cancellation is not affected by the fact that the notice was sent when there was no outstanding premium due and before nonpayment occurred because occurrence of these conditions is not required by the clear wording of LSA 22 For these S R 1266 reasons I would affirm the trial court judgment which granted summary judgment in s favor of Cornerstone Accordingly I respectfully dissent

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