Opinion
No. 4-771 / 04-0055
Filed February 24, 2005
Appeal from the Iowa District Court for Polk County, Gary G. Kimes, Judge.
The appellant appeals the district court ruling that insurance coverage was cancelled at the time of claim. AFFIRMED.
Michael M. Sellers of Sellers Law Office, West Des Moines, for appellant.
Douglas Haag of Patterson, Lorentzen, Duffield, Timmons, Irish, Becker Ordway, L.L.P., Des Moines, for appellee.
Heard by Sackett, C.J., and Vogel, Zimmer and Hecht, JJ., and Brown, S.J.
Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2005).
After a fire damaged the Van Natta home, the fire insurance carrier denied coverage for the loss, claiming the policy had been cancelled. In the ensuing litigation, the district court ruled coverage had been terminated prior to the fire. The insured appeals. We agree with the district court and affirm.
I. Background and proceedings.
The home at 1945 Ashworth Road, West Des Moines, Iowa had been owned by Olga K. Van Natta. She lived in the home until 1996 when she moved to a nursing home. Later, she returned to her home and lived there until her death in January 2001. Her son, Dr. Michael D. Van Natta, was her conservator prior to her death, and is the fiduciary of her estate. Dr. Van Natta lived in her residence starting in 1997. This was where he received his personal mail throughout the relevant time as well as mail addressed to his mother.
Dr. Van Natta did not secure or maintain fire insurance coverage on the residence. In 2002, as a result of applying for a loan with the home as collateral, he was advised by the lender fire insurance would be required. He contacted independent insurance agent Thomas Smith who bound coverage with defendant Foremost Insurance Company (Foremost), effective August 5, 2002. Agent Smith advised Dr. Van Natta Foremost would inspect the property as to its qualification for coverage and, if there were problems, coverage might be cancelled.
The home was inspected by Foremost. The inspector advised Dr. Van Natta there was a fire risk problem. Foremost prepared a notice of cancellation of the policy, dated September 2, 2002, and mailed it on September 4, 2002, addressed to Olga K. Van Natta at the Ashworth Road address. Agent Smith received a copy of the cancellation notice on September 9, 2002. Smith determined Foremost would insure the residence if the risk problem were eliminated, so, not having been contacted by Dr. Van Natta, he telephoned Van Natta's home and left a message to that effect on his answering machine. Smith did not hear from Dr. Van Natta until October 7, 2002, when Van Natta called advising Smith of the fire on October 5, 2002.
Olga Van Natta is the named insured on the application, signed by Dr. Van Natta, and on the policy. The address on the application and policy is the Ashworth Road address, where Dr. Van Natta lived during the relevant times, and where he acknowledged receiving all mail directed to the home. No issue is presented regarding the identity of the named insured or the address to which notices should be sent by Foremost.
Dr. Van Natta denies receiving the written cancellation notice or the telephone call from agent Smith. However, there was testimony he acknowledged having received two prior letters from Foremost, and then, about a week before the fire, one which he did not open because he assumed it was the bill for the next month and so just set it aside. After Foremost denied coverage for the fire, Dr. Van Natta commenced this action, seeking a declaration insurance coverage was still in force when the fire occurred on October 5, 2002. He contends on appeal there is not sufficient evidence supporting the district court's ruling that he received the notice of cancellation, and that the cancellation notice was inadequate as a matter of law.
II. Standard of review.
This case was tried to the court as a law action, therefore our review is for errors at law. Master Builders of Iowa, Inc., v. Polk County, 653 N.W.2d 382, 387 (Iowa 2002).
When a party challenges the sufficiency of the evidence to support the factual findings made by the district court in a bench trial, we must examine the record for substantial evidence in support of the challenged findings. `In assessing the evidence, we view the record in the light most favorable to the plaintiffs, taking into consideration all reasonable inferences that may fairly be made."
Gacke v. Pork Xtra, L.L.C., 684 N.W.2d 168, 179 (Iowa 2004) (quoting Boham v. City of Sioux City, 567 N.W.2d 431, 435 (Iowa 1997)) (internal citation omitted). If we find substantial evidence, the district court's findings are controlling on our review. Iowa R. App. P. 6.14(6)( a). However, in reviewing legal issues we reach our own conclusions as to the law. Ellefson v. Centech Corp., 606 N.W.2d 324, 330 (Iowa 2000)
III. Transmission and receipt of the notice of cancellation.
In challenging the district court's conclusion that the notice of cancellation was sent and delivered, Dr. Van Natta primarily takes issue with the credibility of agent Smith. Regardless, we find substantial evidence supports the district court's finding the notice was properly given.
Iowa Code section 515.80 (1) (2001), as amended, in relevant part states:
This statute was amended by 2002 Iowa Acts ch. 1111, section 17, effective July 1, 2002, to require thirty days notice from the date of mailing, rather than twenty days.
A policy or contract of insurance, . . . shall not be forfeited, suspended or cancelled except by notice to the insured as provided in this chapter. A notice of cancellation is not effective unless mailed or delivered by the insurer to the named insured at least thirty days before the effective date of cancellation. . . . The notice may be made in person, or by sending by mail a letter addressed to the insured at the insured's address as given in or upon the policy, anything in the policy, application, or a separate agreement to the contrary notwithstanding.
Also, the insurance policy itself required a thirty-day notice of cancellation.
In addition to the thirty-day mailing provision, Iowa law requires proof that the cancellation notice was later received by the insured. Selken v. Northland Ins. Co., 249 Iowa 1046, 1053-54, 90 N.W.2d 29, 33 (1958). There is a presumption that a properly addressed and posted letter was received by the addressee. Reserve Ins. Co. v. Johnson, 260 Iowa 740, 744, 150 N.W.2d 632, 634-35 (1967). This presumption is triggered by showing
(1) [t]he necessary evidence of the contents and execution of the paper; (2) that it was inclosed in a wrapper, or otherwise prepared for transmission through the mail; (3) there must be evidence of the correct post office address of the person to be charged with receiving it; (4) evidence that the package containing the document was properly addressed; (5) that postage was prepaid; and (6) that it was deposited in the mail for transmission.
Central Trust Co. v. City of Des Moines, 205 Iowa 742, 746, 218 N.W. 580, 582 (1928).
The evidence was uncontroverted that a representative of Foremost, following its customary business practice, prepared the notice of cancellation, placed it in a properly addressed envelope with sufficient postage affixed and delivered it to the postal service. Testimony from a postal agent established the letter was delivered to the post office with proper postage. A certificate of mailing prepared by the post office was introduced showing the notice was mailed on September 4, 2002.
This evidence created a presumption the notice of cancellation of the insurance policy was received by Dr. Van Natta. See Farmers Ins. Group v. Merryweather, 214 N.W.2d 184, 191 (Iowa 1974) (recognizing rule that proper mailing of insurance policy cancellation notice raises presumption of receipt); Selken, 249 Iowa at 1050-51, 90 N.W.2d at 31-32 (same).
Although Dr. Van Natta denied receiving the notice, he acknowledged receipt of a letter from Foremost during the applicable time period, which he did not open. One authority indicates the insured's denial of receipt of the notice does not, without more, overcome the presumption of delivery. 2 Lee R. Russ, Thomas F. Segalla, Couch on Insurance § 32:21, at 32-33 to 32-34 (3rd ed. 2000) (hereinafter Couch on Insurance). Receipt of the notice is bolstered by agent Smith's testimony that Smith received a copy of the notice and attempted to advise Dr. Van Natta by telephone as to how he might cure the problem and reinstate coverage.
Contrary to Dr. Van Natta's view, the district court found agent Smith to be credible. We have no reason to disagree with that assessment. See Grinnell Mut. Reins. Co. v. Voeltz, 431 N.W.2d 783, 785 (Iowa 1988) (stating appellate court will not weigh evidence or credibility of witnesses). However, there is substantial evidence supporting the trial court other than agent Smith's testimony. In addition to those factors we have already noted, the evidence established Dr. Van Natta's refinancing attempt, the motivation to secure and maintain insurance on the residence in the first place, had fallen through before the cancellation notice was sent or received.
We agree with the district court that Foremost mailed a written notice of cancellation to its insured on September 4, 2002, and that the notice was received by Dr. Van Natta. The loss occurred on October 5, 2002, more than thirty days after the notice was mailed. The notice requirements of Iowa Code section 515.80 regarding the transmission and delivery of the notice were met.
IV. Sufficiency of the notice.
The other issue urged by Dr. Van Natta is that the notice sent by Foremost stated the policy would be cancelled twenty days after it was sent, rather than the thirty days required by the then-effective statute and the policy itself. Since the language of the notice did not comply with the statute, he argues, it could not possibly be effective regardless of when sent or if received. Foremost responds by asserting error has not been preserved on this issue and in any event the law is contrary to Dr. Van Natta's contention.
As noted, Iowa Code section 515.80 was amended effective July 1, 2002 changing the required notice period from twenty days to thirty days. The policy took effect on August 5, 2002. A prior endorsement to the policy, which changed the notice period from thirty days to twenty days, was thus effectively cancelled by the legislative change. See In Re Estate of Brown, 205 N.W.2d 925, 927 (Iowa 1973) (holding statutory terms become a part of insurance policies, contrary policy provisions notwithstanding).
The district court expressly determined the only issue before the court was whether the notice was mailed and delivered to Dr. Van Natta's residence. Its decision was limited to that issue. Our review of the record on appeal discloses the question of the language of the notice was not raised by the appellant at the trial. "It is a fundamental doctrine of appellate review that issues must ordinarily be both raised and decided by the district court before we will decide them on appeal." Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002). Furthermore, if the trial court fails to pass on an issue that has been raised, the challenging party must seek and obtain a trial court ruling, through exercise of the provisions of Iowa Rule of Civil Procedure 1.904(2) or some comparable procedure, in order to preserve error. Id. at 539. This was not done.
Dr. Van Natta claims the issue was raised by him in a pretrial brief, and that the district court orally ruled adversely to him prior to trial. Although arguably raised in the pretrial brief, no ruling on the issue is found in the record, and we will not afford further recognition to that contention. E.g., State v. Weiland, 202 N.W.2d 67, 68 (Iowa 1972); Richardson v. Richardson, 248 Iowa 477, 481, 79 N.W.2d 769, 771 (1956). We agree error has not been preserved on this issue and thus we do not reach the merits.
Even were we to consider this issue, we find the law to be contraryto Dr. Van Natta's contention. Couch on Insurance section 32:52, at 32-69, indicates a cancellation notice which provides for less time than required by statute is nevertheless effective as long as the statutory period has actually expired.
We agree the district court was correct in concluding the insurance policy covering the fire loss to the Van Natta residence had been effectively cancelled at the time the loss was incurred. We therefore affirm the district court.