Opinion
NOT TO BE PUBLISHED.
APPEAL from a judgment of the Superior Court of Los Angeles County No. TC022030 Rose Hom, Judge.
Law Office of David W. Allor and David W. Allor for Plaintiff and Appellant.
Woolls & Peer, Gregory B. Scher and Jo Ann Montoya for Defendant and Respondent.
CHANEY, J.
Appellant Esther Rivera seeks insurance benefits for the death of her son. Originally, Ms. Rivera sued the property where her son was killed (the Alondra Discount Mall). After Alondra assigned its rights against its insurance carrier (respondent Valley Forge Insurance Company), to Ms. Rivera, she sued Valley Forge. That case is before us now. The parties agree that, if Alondra’s policy with Valley Forge was in effect at the time of Ms. Rivera’s son’s death, his death would be a covered occurrence under the policy.
The trial court granted Valley Forge’s motion for summary judgment and denied Ms. Rivera’s motion for summary adjudication. The trial court held Valley Forge had cancelled Alondra’s insurance policy for nonpayment of premium the day before Ms. Rivera’s son was killed. Ms. Rivera appeals, arguing Valley Forge’s notice of cancellation was defective and the trial court erred in overruling her evidentiary objections. We affirm.
Background
Unless otherwise stated, the parties stipulated to or did not dispute the following facts.
1. Negotiation and Issuance of Insurance Policy
Hi Dong Yang owns the Alondra Discount Mall in Compton. Mr. Yang retained insurance broker Dong Bang Insurance Services (“Dong Bang”) to procure liability insurance for Alondra. Acting as broker for Alondra in July 2004, Dong Bang negotiated an insurance policy with Eastern Premiere Insurance Center (“EPIC”), acting as agent for defendant Valley Forge. Dong Bang was not an agent of Valley Forge and EPIC was not an agent of Alondra.
Dong Bang initiated the process by submitting a standard ACORD application to EPIC. In response, EPIC employee Tam Duong advised Dong Bang employee Wen “Edward” Sung that, because Alondra previously had failed to pay a premium, which resulted in cancellation of its insurance policy, Valley Forge would require a “100% down payment” from Alondra. EPIC sent a Quotation Sheet to Dong Bang, which quoted a $7,228 premium. The Quotation Sheet stated that the payment method would be “direct bill, ” the payment would be annual (i.e., a one-time, full payment), and the policy would be subject to an attached Business Account Package Policy application (“BAPP application”).
Mr. Sung made some notes on his copy of the Quotation Sheet and spoke with EPIC underwriter Sylvia Lin about changing the policy from a “special form” to a “broad form” policy. Ms. Lin told Mr. Sung the premium on a broad form policy would be lower than the premium quoted for the special form. A special form policy covers more perils than the broad form and, therefore, is more expensive.
In a subsequent conversation with Ms. Lin, Mr. Sung asked whether the payment plan could be something other than a 100% down payment. According to Mr. Sung, Ms. Lin gave him another option: collect 50% of the premium, then Alondra could be placed on a quarterly payment plan. As a result of this conversation, Mr. Sung crossed out the “X” next to the “Annual” payment plan line on his copy of the Quotation Sheet.
The trial court overruled appellant’s objections on hearsay and parol evidence grounds as to Mr. Sung’s deposition testimony concerning his second conversation with Ms. Lin.
Mr. Sung then prepared and sent two proposals to Alondra—one summarizing coverage under a special form policy and one summarizing coverage under a broad form policy. Alondra signed the broad form proposal, which listed the premium as $6,366 and included a $100 broker fee, for a total of $6,466. That proposal, signed by Alondra, listed the first payment as $3,233 (i.e., 50% of the total), which was to be followed by three installments.
On July 14, 2004, Dong Bang faxed to EPIC a request to bind coverage effective August 2, 2004. The request included a BAPP application and standard ACORD application, both of which Dong Bang and Alondra signed. The fax also requested that Valley Forge issue the policy using a “broad form, ” reflected an understanding that the policy premium would be $6,366, and confirmed that Dong Bang had collected from Alondra a 50% down payment of $3,233. Dong Bang forwarded the 50% down payment to EPIC, which retained its $100 broker fee and forwarded the remaining $3,133 to Valley Forge. Ms. Duong received the request to bind coverage, to which she attached a note indicating full payment was required.
The next day, July 15, 2004, Valley Forge issued a special form policy for Alondra, with a premium of $7,228. A few days later, Dong Bang notified EPIC that the policy should have been a broad form policy and requested a revision. The same day, EPIC notified Valley Forge that the policy should be revised to a broad form policy. On August 25, 2004, Valley Forge cancelled the first Alondra policy and issued a broad form replacement policy retroactive to August 2, 2004 (the same effective date as the original policy). The premium for the replacement policy was $6,148, which was a few hundred dollars less than the original broad form quote. The policy limit was $1 million.
On September 1, 2004, Dong Bang notified Alondra that the policy had issued, that Valley Forge would invoice Alondra directly for the quarterly payments, and that Alondra was to pay Valley Forge upon receipt of the invoices.
2. Unpaid Invoices and Cancellation of Policy
On October 14, 2004, Valley Forge mailed an invoice to Alondra, requesting payment of $268.90 no later than November 2, 2004 and indicating the account balance was $3,015. Alondra did not pay and did not otherwise contact Valley Forge. On November 12, 2004, Valley Forge again mailed an invoice to Alondra, requesting payment and stating its account was past due. That invoice indicated that, if payment of the $268.90 was not received, a separate notice of cancellation would issue. Alondra did not pay and did not otherwise contact Valley Forge. Again, on November 19, 2004, Valley Forge mailed an invoice to Alondra, stating its account was past due and requesting payment of the $268.90. That invoice gave Alondra until December 10, 2004 to pay the past due amount and stated a separate notice of cancellation had already been issued.
On November 22, 2004, Valley Forge mailed the “Notice of Cancellation of Insurance” to both Alondra and EPIC. EPIC faxed the notice of cancellation to Dong Bang. In its notice of cancellation, Valley Forge explained Alondra’s policy was being cancelled because of “nonpayment of premium.” The notice also stated cancellation would take effect December 13, 2004 at 12:01 a.m. and that, if Alondra failed to pay the $268.90 before that date and time, the policy would cancel. By the time Valley Forge issued its notice of cancellation, Alondra’s policy had been in effect more than 60 days.
Although Alondra does not dispute receiving the invoices or notice of cancellation, Alondra did not pay the $268.90 prior to the cancellation date and time. Accordingly, Valley Forge cancelled the policy effective December 13, 2004 at 12:01 a.m.
3. Death of Appellant’s Son on Alondra’s Property
The next day, December 14, 2004, appellant’s son, Arthur, was shot and killed in Alondra’s parking lot. The parties stipulated that, had Alondra’s policy been in effect, Arthur’s death would have been a covered occurrence under the terms of the policy.
Three days after Arthur was killed, Alondra belatedly attempted to pay Valley Forge the $268.90. At that time, Alondra did not mention an occurrence under the policy (Arthur’s death) had occurred. In January, Valley Forge refunded $1,163.90 to Alondra for unearned premium.
4. Litigation
Two years later, in December 2006, appellant sued Alondra for the wrongful death of her son. Almost a year after that, in November 2007, Alondra tendered appellant’s lawsuit to Valley Forge. This was the first time Valley Forge received notice of the loss. Valley Forge declined to defend or indemnify Alondra because its policy was cancelled before the date of loss and Alondra failed to give timely notice of the occurrence or lawsuit. The court entered a stipulated judgment against Alondra in the amount of $1 million. In exchange for a covenant not to execute on that judgment, Alondra assigned its rights against Valley Forge to appellant, who then sued Valley Forge, alleging causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and a direct right of action against Valley Forge for satisfaction of the judgment against Alondra.
Discussion
1. Standard of Review
We review the trial court’s ruling on a motion for summary judgment de novo. (Adams v. Explorer Insurance Co. (2003) 107 Cal.App.4th 438, 445 (Adams).) Summary judgment is proper if there is no question of material fact and the issues raised by the pleadings may be decided as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) To obtain summary judgment, a moving defendant may show that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).) Once the moving defendant has met its burden, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to the cause of action or the asserted defense. (Ibid.) On appeal, this court exercises its independent judgment in determining whether there are no triable issues of material fact and the moving party is entitled to judgment as a matter of law. (Adams, supra, 107 Cal.App.4th at p. 446.)
2. Material vs. Immaterial Facts
The parties dispute what payment plan Alondra’s policy required. Relying on documents in the record and Ms. Duong’s testimony, appellant claims Alondra and Valley Forge agreed to full payment in advance. On the other hand, Valley Forge relies on Mr. Sung’s testimony and other documents in the record to argue the agreed payment plan was a percentage down payment, followed by installment payments.
Because, as explained below, we conclude the type of payment plan is immaterial, we need not and do not consider appellant’s objections based on hearsay and parol evidence to Mr. Sung’s deposition testimony.
Although the trial court held the facts on this point were not in dispute, we conclude otherwise. According to the trial court, Mr. Sung’s deposition testimony—that Alondra agreed to a down payment followed by installment payments—was undisputed. Although neither party presented testimony of, or a declaration from, EPIC’s Ms. Lin (with whom Mr. Sung said he discussed and negotiated an installment payment plan), appellant presented Ms. Duong’s deposition testimony, which disputes Mr. Sung’s payment plan testimony. Ms. Duong stated, based on documents in EPIC’s file and her experience as an EPIC employee, that the agreed payment plan required a full down payment.
However, this disputed fact is not material to determination of this case as a matter of law. In other words, whether the agreed payment plan was full payment (appellant’s position) or installments (Valley Forge’s position), the result is the same: Valley Forge properly cancelled Alondra’s policy and the trial court correctly entered summary judgment.
The following undisputed facts guide our decision in this case: (a) Valley Forge issued an insurance policy to Alondra, (b) Alondra did not pay its premium (under either a full payment plan or an installment plan), (c) Valley Forge sent a notice of cancellation, which we conclude below complied with the relevant statutes, and cancelled Alondra’s coverage effective December 13, 2004. Accordingly, there was no coverage in place on December 14, 2004, when appellant’s son was killed, and summary judgment in favor of Valley Forge was proper.
3. Cancellation of Coverage
In order to cancel insurance coverage, an insurance company must strictly comply with applicable statutes and contract provisions. Substantial compliance is not enough. (Kotlar v. Hartford Fire Insurance Co. (2000) 83 Cal.App.4th 1116, 1120-1121; Lee v. Industrial Indemnity Co. (1986) 177 Cal.App.3d 921, 924-925.) “If a cancellation is defective, the policy remains in effect even if the premiums are not paid.” (Kotlar, at p. 1121.)
Insurance Code section 676.2 (“section 676.2”) provides in relevant part that, “[a]fter a policy has been in effect for more than 60 days, ... no notice of cancellation shall be effective unless it complies with [Insurance Code] Section 677.2 and it is based on the occurrence, after the effective date of the policy, of one or more of the following: [¶] (1) Nonpayment of premium...” (§ 676.2, subd. (b).) Insurance Code section 677.2 (“section 677.2”) requires that a notice of cancellation (i) be in writing, (ii) “delivered or mailed” to the producer of record and the named insured at the mailing address shown on the policy, and (iii) include the effective date of cancellation and the reasons for cancellation. (§ 677.2, subd. (b).) When a policy is cancelled because of nonpayment of premium, section 677.2 also requires that the notice of cancellation “be given no less than 10 days prior to the effective date of the cancellation” and Code of Civil Procedure section 1013, subdivision (a) applies if the notice is mailed. (§ 677.2, subds. (b) and (c).)
The undisputed facts reveal that the November 22, 2004 notice of cancellation complied with sections 676.2 and 677.2. At the time Valley Forge issued the notice, Alondra’s policy had been in effect more than 60 days and the reason for cancellation was nonpayment of premium. The notice of cancellation was in writing, included both the effective date of cancellation and the reason for cancellation, was delivered to EPIC, Dong Bang and Alondra, and was given more than 10 days prior to the effective date of the cancellation. Moreover, assuming as appellant urges that the parties had contracted for a full down payment and not installments, it does not matter that the notice of cancellation states an incorrect amount. Neither section 676.2 nor section 677.2 requires an insurance company to set forth in its notice of cancellation for nonpayment of premiums the amount of the arrearage. “Inasmuch as an insurer need not state the amount of the arrearage, it follows that if the insurer does so, an error in the amount listed does not render the notice of cancellation ineffective.” (Adams, supra, 107 Cal.App.4th at p. 449.)
We are not persuaded by appellant’s position that Valley Forge’s notice of cancellation was ineffective for any one of six separate reasons. First, Appellant argues section 676.2 does not apply because nonpayment of the premium here occurred before the effective date of the policy and section 676.2 applies only when nonpayment of premium occurs after the effective date of the policy. (§ 676.2, subd. (b)(1).) Of course, however, Alondra failed to pay the full premium both before and after the effective date. Thus, section 676.2 applies.
Second, appellant claims the notice of cancellation was ineffective because it was not delivered to the “producer of record.” We are not persuaded. The parties stipulated that Valley Forge mailed the notice of cancellation to EPIC, who then faxed the notice to Dong Bang. Assuming appellant is correct that Dong Bang is the producer of record for purposes of section 677.2, it is clear the notice of cancellation was delivered to Dong Bang. Section 677.2 does not indicate who must deliver the notice of cancellation to the producer of record. Here, it is undisputed EPIC faxed the notice to Dong Bang and Dong Bang received the notice. Thus, even assuming the insurance company (here, Valley Forge) must deliver the notice of cancellation, this was satisfied because, as the parties stipulated, EPIC acted as the agent of Valley Forge. (See Civ. Code, § 2330.)
Third, and similarly unpersuasive, appellant contends delivery by facsimile does not satisfy section 677.2’s requirement that the notice of cancellation be “delivered.” Citing cases addressing service of process, appellant argues “delivered” means personally delivered. But, service of process cases are materially different and, thus, unhelpful here. (See Benson v. Superior Court (1963) 214 Cal.App.2d 551, 559 [noting “legislative differentiation between the formality of delivery in making service of process and the delivery of notices and papers other than process”].) We conclude there is no support for appellant’s narrow interpretation of the term “delivered” as used in section 677.2.
Fourth, appellant claims Valley Forge extended the due date for Alondra to pay its premium to December 10, 2004, making the notice of cancellation ineffective because no premium was past due when the notice was mailed in November 2004. Again, we disagree. Alondra’s first two invoices clearly stated payment was due November 2, 2004. The second invoice warned Alondra that its account was past due and, if payment was not received by November 2, 2004, “notice of cancellation for all past due policies listed on this bill will be issued. Cancellation notices are sent under separate cover. Full payment of the minimum amount due will bring your account up to date. Accepting your payment will not result in automatic reinstatement of policies that have already cancelled. A formal request, by contacting your Agent at the phone number above, must be received before reinstatement of cancelled policies will be considered.”
The third invoice, dated November 19, 2004, reminded Alondra that its account remained past due and listed the due date as December 10, 2004. That invoice stated that “[n]otice of cancellation for the past due policies listed on this bill have already been issued. Cancellation notices are sent under separate cover. One or more of your policies may already be cancelled. Full payment of the minimum amount due indicated on this invoice will bring your account up to date. Accepting your payment will not result in automatic reinstatement of policies that have already cancelled. A formal request, by contacting your Agent at the phone number above, must be received before reinstatement of cancelled policies will be considered.” Thus, the third invoice informed Alondra that a notice of cancellation had already issued and would arrive under separate cover. By giving Alondra until December 10, 2004 to pay the minimum amount due, Valley Forge did not extend the premium due date, which had passed, but rather gave Alondra an opportunity to stop the cancellation process which had already begun.
Appellant’s reliance on Mackey v. Bristol West Insurance Services of California, Inc. (2003) 105 Cal.App.4th 1247 is misplaced. There, the insurance company sent a notice of cancellation for nonpayment of premium before the premium was due. The court held the notice of cancellation was invalid because it was given at a time when there was no default in payment of the premium. (Id. at pp. 1265-1266.) In contrast, here, Valley Forge sent the notice of cancellation at a time when Alondra was in default.
Fifth, appellant argues the notice of cancellation was ineffective because Alondra was not delinquent in its payments. Appellant claims Alondra owed no payment at all because Valley Forge never invoiced the correct amount, but instead billed Alondra for thousands less than what was actually owed. Appellant states Alondra owed $3,015, which represented the remainder of its premium. But, Valley Forge invoiced Alondra for only $268.90. In appellant’s view, this discrepancy in billing eliminated Alondra’s obligation under the insurance contract to pay anything and rendered the subsequent notice of cancellation ineffective. We are unaware of any authority—and appellant cites none—permitting an insured to sit idly, pay nothing, yet enjoy the benefits of an insurance policy, until the insurer invoices the exact amount due. As we have noted in similar circumstances, if there was any confusion as to what was owed or when it was owed, “it was incumbent upon and only reasonable for [Alondra] to make the proper inquiry. [Appellant] does not dispute that [Alondra] was delinquent in [its] premium payments. [Alondra] also was well aware that [its] insurance would be cancelled if [it] did not make [its] required payments.” (Adams, supra, 107 Cal.App.4th at p. 449.)
Finally, appellant claims cancellation was ineffective because, assuming Alondra and Valley Forge had agreed to an installment plan, Valley Forge miscalculated the due date for the first payment such that no premium was due when the notice of cancellation was delivered. Appellant fails to support this argument, however, with legal or record citations. “We need not address points in appellate briefs that are unsupported by adequate factual or legal analysis.” (Placer County Local Agency Formation Commission v. Nevada County Local Agency Formation Commission (2006) 135 Cal.App.4th 793, 814.)
In summary, whether full payment was due or installments were due, “[t]he bottom line is that [Alondra] did not pay [its] premiums in a timely manner. [Valley Forge] warned [Alondra] in advance that [its] policy would be cancelled unless [it] paid a specified amount by a specified date. [Alondra] did not heed this warning. [Its] omission resulted in the cancellation” of its policy on December 13, 2004. (Adams, supra, 107 Cal.App.4th at p. 450.) Thus, the death of appellant’s son on December 14, 2004 occurred after Alondra’s policy had cancelled. Accordingly, Alondra was uninsured on the date of the occurrence and the trial court properly entered summary judgment in favor of Valley Forge.
Disposition
The judgment is affirmed.
We concur: MALLANO, P. J., JOHNSON, J.