MARTIN A NOWELL V TITAN INSUR CO
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Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________
C hief Justice
Justices
Maura D. Cor rigan
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
Opinion
____________________________________________________________________________________________________________________________
FILED JULY 9, 2002
MARTIN A. NOWELL,
Plaintiff-Appellee,
v
No.
119013
TITAN INSURANCE COMPANY,
Defendant-Appellant.
____________________________________
BEFORE THE ENTIRE BENCH
TAYLOR, J.
Plaintiff Martin Nowell was injured in an automobile
accident that occurred after the effective date on a notice of
cancellation that defendant mailed to the driver of the
vehicle in which plaintiff was a passenger.
The driver has
indicated that, while the notice of cancellation was delivered
to his address, he did not personally receive or learn of it
until after the accident.
The parties dispute whether actual
notice to the insured was necessary to make the cancellation
of the insurance policy effective.
We conclude that, actual
notice to the insured is not required to effectuate the
cancellation of an insurance policy under MCL 500.3020(1)(b).
However,
mailing
of
a
notice
of
cancellation
must
be
reasonably calculated to be delivered so as to arrive at the
insured’s address at least ten days before the date specified
for cancellation for the notice to be effective. Accordingly,
we reverse and remand this case to the circuit court for
further proceedings consistent with this opinion.
I.
Factual and Procedural Background
Defendant presented undisputed evidence that, on February
20, 1997, it mailed a notice of cancellation to Duane Isley
with regard to the automobile that was insured under an
insurance policy that defendant issued to Isley.
The notice
of cancellation provided that the insurance policy would be
canceled effective March 5, 1997 at 12:01 a.m. unless Isley
paid $240 before that date.
It is undisputed that Isley did
not make such a payment before the effective date of the
notice.
At
approximately 8:30 p.m. on March 5, 1997, plaintiff
was injured in an automobile accident while
Isley’s vehicle.
coverage
to
a passenger in
Isley
Defendant declined to provide insurance
for
this
accident,
coverage existed because the accident
claiming
no
occurred after the
effective cancellation date stated on the notice .
2
that
This led
to plaintiff bringing the present suit for insurance coverage.
In support of his claim, plaintiff presented evidence
that
Isley
did
not
personally
receive
the
notice
cancellation until after the motor vehicle accident.1
of
The
lower courts held that plaintiff was entitled to a grant of
summary disposition on the ground that actual notice, i.e.,
personal receipt by the insured, was necessary for a notice of
cancellation to be effective and that there was no genuine
issue of material fact that Isley did not receive actual
notice before the accident. The Court of Appeals affirmed. We
granted defendant’s application for leave to appeal.
II.
Standard of Review
Decisions on summary disposition motions are reviewed de
novo. CAM Construction v Lake Edgewood Condominium Ass’n, 465
Mich 549, 553; 640 NW2d 256 (2002).
III.
Analysis
A
The critical statutory provision, MCL 500.3020(1)(b),2
1
Isley’s statements in this regard are somewhat
contradictory with respect to when exactly he first saw the
notice of cancellation.
However, for present purposes, we
accept that Isley did not personally receive or see the notice
of cancellation until after the accident.
2
The pertinent language of MCL 500.3020(1) at the time
of the events underlying this case in 1997 was identical to
the language in the present version.
The current version
differs only in that it includes additional language excluding
“mortgage guaranty insurance” from its requirements.
Of
3
states in pertinent part:
A policy of casualty insurance . . . ,
including all classes of motor vehicle coverage,
shall not be issued or delivered in this state by
an insurer authorized to do business in this state
for which a premium or advance assessment is
charged, unless the policy contains the following
provisions:[3]
* * *
(b) That the policy may be canceled at any
time by the insurer by mailing to the insured at
the insured’s address last known to the insurer or
an authorized agent of the insurer, with postage
fully prepaid, a not less than 10 days’ written
notice of cancellation with or without tender of
the excess of paid premium or assessment above the
pro rata premium for the expired time. [Emphasis
added.]
Plaintiff contends that actual notice is necessary for a
notice
of
cancellation
sent
provision to be effective.
pursuant
to
this
statutory
In contrast, defendant argues
that, under this statutory language, a proper mailing of a
notice of cancellation makes the notice effective regardless
of whether it is actually received by the insured.
We conclude that the most basic principles of statutory
construction resolve this matter.
First, the plain and
course, that additional language is immaterial to the present
case.
3
It is undisputed that the insurance policy at issue
complied with this statute by including the pertinent
language.
4
unambiguous language of a statute must be applied as written.4
Second, provisions of a statute that could be in conflict
must, if possible, be read harmoniously.5
The plain language of MCL 500.3020(1)(b), which allows
cancellation by a simple first-class mailing precludes a
conclusion that an insured must receive some type of actual
notice,
i.e.,
cancellation
be
by
aware
the
of
the
insurer,
in
issuance
order
of
for
a
an
notice
of
insurer’s
cancellation of the insured’s policy to be effective. Rather,
the statute provides by its clear language that an insurance
policy “may be cancelled at any time by the insurer by
mailing” in accordance with its provisions “a not less than 10
days’ written notice of cancellation.”6
The plain import of
4
As we stated in Huggett v Dep’t of Natural Resources,
464 Mich 711, 717; 629 NW2d 915 (2001):
If the statutory language is clear and
unambiguous, then we conclude that the Legislature
intended the meaning it clearly and unambiguously
expressed, and the statute is enforced as written.
No further judicial construction is necessary or
permitted.
5
As we noted in Macomb Co Prosecutor v Murphy, 464 Mich
149, 159; 627 NW2d 247 (2001), “[w]e construe an act as a
whole to harmonize its provisions and carry out the purpose of
the Legislature.”
6
The statute requires that (1) the mailing be addressed
to “the insured at the insured’s address last known to the
insurer or an authorized agent of the insurer” and (2) the
mailing be sent “with postage fully prepaid” in order to be
(continued...)
5
this language is that such a mailing does not require proof of
service or even a delivery receipt.
However, the notice that
the insurer is required to mail must be “a not less than ten
days’ written notice of cancellation.”
Plaintiff contends
that this means that the insurer must show that upon delivery
there remained ten days until cancellation
Yet,
were
discussed
this
the
mailing
case,
it
provision
would
a
became effective.
leave
nullity
the
previously
because
mere
notification by first-class mail would be insufficient to
inform with regard to when actual delivery took place.
In such a case of tension, or even conflict, between
sections of a statute, it is our duty to, if reasonably
possible, construe them both so as to give meaning to each;
that is, to harmonize them.
Reading the statute here as a
whole, we conclude that the first-class mailing must be done
early enough to, with reasonable certainty, provide delivery
to
the insured at least ten days before the cancellation
date.
In other words, an insurer has the duty to mail far
enough in advance of the beginning of the ten day period so as
to reasonably ensure that the notice will arrive and provide
an insured with the potential to have the full ten days’
notice that the statute provides.
6
While the Legislature
(...continued)
effective.
There is no claim of a failure to meet those
requirements in this case.
6
undoubtedly expected that this should ordinarily result in
personal receipt of the notice of cancellation by the insured
before it became effective, the statutory language
cannot
fairly
be
read
as
requiring
actual
utilized
notice
as
a
condition for a cancellation to become effective.7
Accordingly, we conclude that the statute should be
construed
to
mean
that
the
mailing
must
be
reasonably
calculated to be delivered so as to arrive at the insured’s
address at least ten days before the date specified for
cancellation for the notice to be effective.8
7
The partial dissent opts to not attempt to harmonize
the statutory provisions at issue and, instead, argues for an
actual delivery standard rather than a reasonably-calculated
to-arrive standard.
This approach is flawed because it
deprives the notice by mailing system, which is the one the
Legislature adopted, of its intended effect.
8
Plaintiff mistakenly also places reliance on another
provision of the statute at issue. That provision states in
pertinent part:
The mailing of notice is prima facie proof of
notice. [MCL 500.3020(5).]
Plaintiff essentially argues that this statutory language
indicates that the mailing of a notice of cancellation is only
“prima facie” proof that a notice of cancellation has become
effective, reflecting that proof of a lack of actual notice
can defeat that presumption. Plaintiff reads the language too
broadly.
Subsection 5 means that mailing a notice of
cancellation should be taken as prima facie evidence that it
actually reached the address to which it was mailed.
As
plaintiff does not contest that the notice of cancellation at
issue was delivered (only when it was delivered), this section
of the statute is of no consequence to the resolution of this
matter.
7
In the present case, undisputed evidence indicates that
defendant mailed Isley the notice of cancellation at issue on
February 20, 1997, with the provision that it would become
effective
on March 5, 1997, at 12:01 a.m. unless Isley paid
his past due premium before that time.
Accordingly, the only
question that needs to be resolved is whether mailing the
notice of cancellation on February 20, 1997, was reasonably
calculated to cause the notice to be delivered at Isley’s
address at least ten days before the time it was specified to
become effective.
Understandably enough, this point was not
delved into by the parties nor addressed by the lower courts
inasmuch as Court of Appeals precedent was clear that actual
notice
was
required
for
a
notice
of
cancellation
to
be
effective. Because the parties may be able to provide further
evidence regarding the number of days that would be necessary
for
the
notice
of
cancellation
at
issue
to
have
been
reasonably calculated to arrive at Isley’s address at least
ten days before it was specified to become effective, we
remand to the circuit court
to resolve this question.
B
While
our
dispositive,
of
note
that
we
500.3020(1)(b)
differences
analysis
is
between
the
our
supported
the
by
current
8
text
of
the
statute
interpretation
an
of
MCL
of
the
language
and
examination
statutory
is
predecessor
requirement.
language
that
imposed
a
stricter
notice
A predecessor statute, codified as 1948 CL
522.34, provided that an insurance policy subject to its
provisions9 “may be cancelled at any time by the company by
giving to the insured a 5 days’ written notice of cancellation
with or without tender of the excess of paid premium or
assessment above the pro rata premium for the expired time”
(emphasis added).
In DeHaan v Marvin, 331 Mich 231, 240-241; 49 NW2d 148
(1951), this Court, quite appropriately, held that mailing a
notice of cancellation did not in itself suffice to comply
with this earlier statutory language.
Rather, cancellation
could not have been effected under the statute then in effect
until notice was received by the insured. In so holding, this
Court relied on our earlier decision in Galkin v Lincoln
Mutual Casualty Co, 279 Mich 327; 272 NW 694 (1937).10
In
Galkin, this Court pointedly stated that “[i]t is obvious that
the insurer did not give notice to the insured by merely
9
Like the current statute, the predecessor statute
provided that it did not apply to worker’s compensation
policies.
10
The statutory language at issue in Galkin, from an even
earlier predecessor statute, was substantively identical to
the statutory language at issue in DeHaan in providing that an
insurance policy “may be canceled at any time by the company
by giving to the insured a five days’ written notice of
cancellation.” Id. at 330, quoting 1929 CL 12461 (emphasis
provided in Galkin).
9
mailing notice.”
Id. at 331.
However, the statute at issue in the present case does
not require the “giving” of notice, but rather only the
mailing of notice in accordance with its provisions. There is
a significant distinction between requiring the “giving” of
notice and requiring the “mailing” of notice.
The Galkin
Court itself recognized this distinction by concluding that
merely “mailing” notice does not constitute “giving” notice.
Against the background of DeHaan and Galkin, it is all the
more clear that the mailing of a notice of cancellation in
compliance
with
the
requirements
of
MCL
500.3020(1)(b)
suffices to make that notice effective, even if the “mailing”
somehow does not result in actual notice to the insured or, in
other words, does not “give” the insured notice.
C
In reaching the opposite conclusion, the Court of Appeals
relied on its prior statement in American States Ins Co v Auto
Club Ins Ass’n, 193 Mich App 248, 254; 484 NW2d 1 (1992), that
“[a]ctual notice of cancellation must be received by the
insured before the cancellation is effective.”
In support of
this statement, the American States panel cited the earlier
Court of Appeals opinions in Citizens Ins Co of America v
Crenshaw, 160 Mich App 34, 37-38; 408 NW2d 100 (1987), and
Citizens Ins Co of America v Lemaster, 99 Mich App 325, 328;
10
298 NW2d 19 (1980). Crenshaw and Lemaster each cited Phillips
v DAIIE, 69 Mich App 512; 245 NW2d 114 (1976), in support of
their conclusions that actual notice is required for a notice
of cancellation under MCL 500.3020 to be effective. Crenshaw,
supra at 37-38; Lemaster, supra at 328. In Phillips, supra at
515, the panel cited Gooden v Camden Fire Ins Ass’n, 11 Mich
App 695; 162 NW2d 147 (1968), in support of its conclusion
that actual notice is required for a notice of cancellation
under the statute to be effective.
Finally, Gooden, supra at
697, relied on this Court’s decisions in DeHaan and Galkin, in
concluding that MCL 500.3020 “requires actual receipt of
notice
of
cancellation
by
the
insured
to
effectuate
cancellation of an insurance contract.” However, as discussed
above, DeHaan and Galkin involved predecessor statutes that
required
the
giving
of
notice
for
cancellation
to
be
effective—unlike the language of MCL 500.3020 that expressly
provides for cancellation to be effected by merely mailing a
notice
of
cancellation
requirements.
in
accordance
with
the
statutory
Thus, Gooden was wrongly decided because it
relied on inapplicable precedent and failed to consider the
actual language of MCL 500.3020.11
11
Accordingly, we overrule
We note that the purpose of the change in the statute
from requiring the “giving” of notice to requiring the
“mailing” of the notice would, obviously, seem to be to allow
insurers to cancel insurance policies merely by “mailing”
(continued...)
11
Gooden
and
its
progeny
to
the
extent
that
they
are
inconsistent with this opinion.12
IV.
Conclusion
In sum, we conclude that actual notice or receipt of a
notice of cancellation under MCL 500.3020 is unnecessary for
the notice to become effective.
However, the notice must be
mailed so as to be reasonably calculated to arrive at the
appropriate address at least ten days before the cancellation
date.
Accordingly, the circuit court must consider whether
the mailing in this case complied with that standard.13
We
11
(...continued)
written notices of cancellation. However, the lower courts’
interpretation of this statute does not comport with this
purpose because it allows insureds to avoid cancellation of
such policies by consciously avoiding knowing the content of
their mailboxes.
Thus, it does not allow insurers to
effectively
cancel
policies
by
mailing
notices
of
cancellation.
In other words, under the lower courts’
interpretation, the only practical way that an insurer could
be certain that a policy is effectively canceled would seem to
be to personally deliver the notice of cancellation to the
insured, which is clearly above and beyond what the
Legislature has expressly required.
12
We note that not all Court of Appeals panels presented
with the question have interpreted MCL 500.3020(1)(b) in a
manner like Gooden.
As noted by defendant, in Raptis v
Safeguard Ins Co, 13 Mich App 193, 199; 163 NW2d 835 (1968),
the Court concluded, consistently with our analysis, that MCL
500.3020 does not require actual notice for a notice of
cancellation to be effective.
13
In light of our analysis, we do not reach defendant’s
alternative argument that, if actual notice is required to
effect cancellation, there is a genuine issue of material fact
about Isley’s credibility in denying that he personally
(continued...)
12
reverse the judgment of the Court of Appeals and remand this
case to the circuit court for further proceedings consistent
with this opinion.
CORRIGAN , C.J., and CAVANAGH , WEAVER , YOUNG , and MARKMAN , JJ.,
concurred with TAYLOR , J.
13
(...continued)
received the notice of cancellation before the accident.
13
S T A T E
O F
M I C H I G A N
SUPREME COURT
MARTIN A. NOWELL,
Plaintiff-Appellee,
v
No. 119013
TITAN INSURANCE COMPANY,
Defendant-Appellant.
___________________________________
KELLY, J. (concurring in part and dissenting in part).
I agree with the majority's conclusion that MCL 500.3020
does not require actual notice. I also agree that the statute
does require written notification of an insurance policy's
cancellation reasonably calculated to arrive at the insured's
address at least ten days before cancellation.
I depart from the majority when it narrows the notice
requirement
of
MCL
500.3020
subsection
5.
That
presumption
that
proper
evidences
1
notice.1
with
subsection
mailing
Because
its
creates
under
proper
interpretation
MCL
notice
a
of
rebuttable
500.3020(1)(b)
is
that
which
"The mailing of notice is prima facie proof of notice."
MCL 500.3020(5).
arrives at least ten days before the cancellation date,2 the
presumption should be rebuttable by evidence that the notice
did not arrive in a timely manner.
The majority errs to the
extent that it states that the presumption is rebuttable only
with evidence that the notice did not arrive at all.
In so
concluding, it eviscerates the requirement that notice arrive
at least ten days before cancellation.
Slip op at 7, n 8.
Although the majority's misconstrual of subsection 5 is
arguably dictum and is set forth without substantive analysis,
lower courts are likely to rely on it.
Moreover, the error
underlies the majority's entire analysis of MCL 500.3020,
which
runs
contrary
to
the
notion
interpreted to benefit the insured.
that
it
should
be
The analysis brushes
aside the statutory objective that the insured have ten days
to act on a notice of cancellation.
See Lease Car of America,
Inc v Rahn, 419 Mich 48, 54; 347 NW2d 444 (1984).
By failing
to recognize that proper mailing is only prima facie proof of
the required ten days' notice, the majority minimizes the
statutory notice requirement to the point of obscurity.
The majority acknowledges that proof of proper mailing is
rebuttable
evidence
of
proper
notice.
However,
it
simultaneously renders that proposition toothless by asserting
2
As described by the statute, "a not less than 10 days'
written notice . . . ." MCL 500.3020(1)(b).
2
that
a
first-class,
postage-paid
mailing
"inform[s]
regard to when actual delivery took place."
with
Slip op at 6.
The majority finds that the only question here is whether
defendant's mailing was reasonably calculated to arrive at the
insured's
address
cancellation.
at
least
Slip op at 8.
ten
days
before
the
date
of
This amounts to a refusal to
give effect to the statutory mandate that proper mailing is
prima facie proof of notice, not irrefutably presumptive
notice.
The majority is mistaken in limiting MCL 500.3020 to a
mailing requirement rather than a notice requirement.
The
statute by its language requires that written notice arrive at
the insured's address at least ten days before cancellation.
On remand, I would direct the trial court to determine
(1) whether defendant's notice was reasonably calculated to
arrive at least ten days before the cancellation date, and (2)
if so, whether there is evidence proving that the notice did
not in fact arrive at least ten days before the cancellation
date.
3
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