Opinion
No. CV98 034 06 92S
September 19, 2003
MEMORANDUM OF DECISION
This case has been submitted to the Court on a Stipulation of Fact dated August 27, 2003. The court has considered that Stipulation of Fact, although it concludes that many of the facts so stipulated are not necessary or pertinent to the limited issue before this court. That issue simply is, When an insurance company, pursuant to Connecticut General Statutes § 38a-343 (a) gives notice of cancellation of a policy for nonpayment of premium must that notice be actually received by the insured to be effective.
The court will incorporate the 25 paragraphs of that Stipulation and specifically set it forth herein:
1. The Third-Party Plaintiff, Gerald Brown resides at 116 Sentry Hill Road, Monroe, Connecticut.
2. Gerald Brown is the father of Gerald Andrew Brown ("Andrew Brown").
3. In January of 1996, Gerald Brown owned a 1986 Toyota Pickup.
4. Prior to January 19, 1996, Gerald Brown's 1986 Toyota Pickup was insured by CNA Insurance Company (hereinafter, "CNA"), the Third-Party Defendant, pursuant to Policy Number 06 PCP 3 66 07 31 (hereinafter, The "Policy"). A dispute exists as to whether or not the Policy was effectively cancelled after that date.
5. A true and accurate copy of the Policy is attached hereto as Exhibit A.
6. On January 24, 1996, Andrew Brown was operating Gerald Brown's 1986 Toyota Pickup when it was involved in a motor vehicle accident with Edward and Lorrie Schneider (collectively, the "Schneiders").
7. Gerald Brown provided CNA with timely notice of the accident CT Page 10879-dn involving the Schneiders. Gerald Brown further timely advised CNA of the related lawsuit brought by the Schneiders against Andrew Brown and himself.
8. CNA refused to defend or indemnify Gerald and Andrew Brown with respect to the lawsuit on the basis that CNA had canceled the Policy prior to the accident due to a nonpayment of premium. The parties dispute whether such cancellation complies with Connecticut statute.
9. When Gerald Brown sought clarification about coverage from his insurance representative, the Litchfield Insurance Group ("Litchfield"), he was notified that the November 1995 premium payment for the Policy had not been received.
10. A true and accurate copy of the receipt related to this premium payment is attached hereto as Exhibit B.
11. On November 27, 1995, Gerald Brown executed Personal Check No. 708 payable to Continental in the amount of $461.00 in response to the Policy's November 1995 premium notice.
12. Check No. 708 was never sent to CNA due to a filing mistake by Mr. Brown.
13. A true and accurate copy of Personal Check No. 708 payable to Continental is attached hereto as Exhibit C.
14. The Defendant, CNA Insurance Company, issued a Notice of Cancellation for Nonpayment of Premium of Policy No. 06 PCP 3 66 0731, which Notice is dated 12/26/95 and a Date of Cancellation of 1/19/96 (the "Notice").
15. Attached hereto as Exhibit D is a true and accurate copy of the Notice of Cancellation for Nonpayment of Premium.
16. The Notice of Cancellation for Nonpayment of Premium was sent by certified mail, certified mail No. 169 184 465.
17. Attached hereto as Exhibit E is a true and accurate copy of certified mail, envelope No. P 169 184 465. U.S. Postal letter carrier Vincent Mancini attempted to make delivery of the certified letter No. P 169 184 465 on January 9, 1996, but was unable to do so because of snow accumulation on the walkway leading to the entrance to the Brown house at 116 Sentry Hill Road, Monroe, Connecticut 06468-3225 CT Page 10879-do
18. Gerald Brown never received a copy of the Notice.
19. Certified Mail No. P169185465 was never delivered to the addressee and was returned to the sender, CNA, on January 25, 1996. CNA did not make any additional efforts to contact Gerald Brown by way of regular mail, telephone facsimile, or otherwise to make him aware that the Policy had been cancelled.
20. Typically, the U.S. Postal Service will leave notice that a certified letter may be picked up from the Post Office in the event the letter cannot actually be delivered. Said notice does not identify the sender of the certified letter. In this case, it is expected that U.S. Postal Service letter carrier Vincent Mancini, were called to testify, would testify that he left a notice in the Browns' mailbox that certified letter No. P 169 184 465 could be picked up at the main Post Office in Monroe, but the letter was not picked up and it was returned to the sender. It is expected that Gerald Brown, Jr., and Margaret J. Brown, were they called to testify, would testify that they did not receive any notice in their mailbox that certified letter No. P 169 184 465 could be picked up at the main Post Office in Monroe.
21. As a result of CNA's denial of liability coverage, the Schneiders also filed an uninsured motorist claim against Hanford Insurance Company of the Midwest entitled Edward Schneider, et al. v. Hartford Insurance Company of the Midwest, et al., Docket No. CV 97-0344450S.
22. The liability action commenced by the Schneiders against the Browns was resolved by way of a stipulated judgment in favor of the Schneiders in the amount of $10,000 and the uninsured motorist claim commenced by the Schneiders against Hartford Insurance Company of the Midwest was resolved by way of a stipulated judgment in favor of the Schneiders in the amount of $50,000.
23. Upon resolving the uninsured motorist claim, Hartford Insurance Company of the Midwest intervened in this case as a third-party plaintiff seeking recovery of the uninsured motorist benefits from CNA.
24. The parties to this action agree that the foregoing stipulated judgments were reasonable.
25. In defending the underlying negligence action commenced by the Schneiders, Gerald Brown incurred $19,523.50 in attorneys fees.
The pertinent facts in that Stipulation are as follows: the Third Party Plaintiff, Gerald Brown, did not pay CNA the premium on Policy No. 06 PCP CT Page 10879-dp 3 66 07 31 on November 16, 1995 in the minimum amount of $461.00. Thereafter CNA issued a Notice of Cancellation for Non Payment of Premium which Notice is dated December 26, 1995 with a Date of Cancellation of January 19, 1996. That Notice of Cancellation was sent by certified mail No. P 169 184 465. The postal service worker attempted to make service of that certified letter on January 9, 1996, but was unable to do so because of snow accumulation on the walkway leading to the entrance to the Brown House at 116 Sentry Hill Road, Monroe, Connecticut. On that day the letter carrier left a notice in the Brown's mailbox that a certified letter No. P 169 184 465 could be picked up at the Post Office. That notice did not identify the sender of the certified letter. Gerald Brown never received that notice or the letter sent by CNA. CNA did not make any additional effort to contact Gerald Brown concerning the cancellation of his policy. On January 25, 1996 the Post Office returned certified mail No. P 169 184 465 to CNA, it never having been delivered to the addressee.
In January of 1996 Gerald Brown owned a 1986 Toyota pickup which prior to January 19, 1996 had been insured by CNA pursuant to policy number 06 PCP 3 66 07 31. On January 24, 1996 Andrew Brown, the son of Gerald Brown, was driving his father's 1986 Toyota pickup when it was involved in a motor vehicle accident with a vehicle owned and operated by Edward Lorrie Schneider. Brown provided CNA with timely notice of the accident and the subsequent lawsuit filed by the Schneiders against them. CNA refused to defend or indemnify Gerald and Andrew Brown on the basis that the policy had been canceled prior to the accident.
Thereafter the Schneiders filed an uninsured motorist claim against the Hartford Insurance Company of the Midwest which was resolved by a stipulated judgment in the amount of $50,000. The liability action commenced against the Browns was also resolved by a stipulated judgment in the amount of $10,000 and the Browns incurred $19,523.50 in attorneys fees in defending that action.
Several motions for Summary Judgment have been filed by all the respective parties but either because of a change in facts or reference to inapplicable statutes the parties agreed that none of the decisions therein constitute the law of the case and will rely on this court to render a decision based solely on the Stipulation of Fact as it is applicable to C.G.S. § 38a-343 (a) as it was codified at the time in question and which insofar as it is applicable to this case reads as follows:
(a) No notice of cancellation of policy to which section 38a-342 applies may be effective unless sent, by registered or certified mail or CT Page 10879-dq by mail evidenced by a certificate of mailing, or delivered by the insurer to the named insured 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 therefor shall be given, and (2) when cancellation is for nonpayment of any other premium, at least ten days notice of cancellation accompanied by the reason therefor shall be given.
The parties also agreed not to file any new briefs, but to rely on the briefs previously filed either for or in opposition to the Motions for Summary Judgment in the court file.
The Hartford and Browns argue that pursuant to General Statutes § 38a-343 (a), CNA was required to give the defendant actual notice of its cancellation of the policy since cancellation was based on nonpayment of an insurance premium. CNA counters that it complied with the statute by sending notice by certified mail and that actual notice was not required. Resolution of this issue requires an interpretation of the statute, § 38a-343 (a), governing cancellation of an automobile insurance policy for nonpayment of premium.
In State v. Courchesne, 262 Conn. ___, 537, 562, 816 A.2d 562 (2003), our Supreme Court abandoned the "plain meaning rule" of statutory interpretation and adopted the "Bender formulation." The Bender formulation provides that statutory interpretation must consist of a "reasoned search for the intention of the legislature," even if the text of the statute appears plain and unambiguous. Id. In other words, the court will always engage in "a reasoned search for `the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply.'" Id., 562-63. Courchesne did not, however, deviate from the well established principles of statutory construction that "[a] court interpreting a statute must consider all relevant sources of meaning of the language at issue — namely, the words of the statute, its legislative history and the circumstances surrounding its enactment, the legislative policy it was designed to implement, and its relationship to existing legislation and to common-law principles governing the same general subject matter." Id.
"General Statutes §§ 38a-341 through 38a-344 govern the procedures for the cancellation of an automobile insurance policy by an insurer." Majernicek v. Hartford Casualty Ins. Co., 240 Conn. 86, 92, 688 A.2d 1330 (1997). The first and most important factor used to interpret these statutes, and the starting point of any statutory analysis, is the words of the statutes themselves. Rivera v. Double A Transportation, Inc., CT Page 10879-dr 248 Conn. 21, 25, 727 A.2d 204 (1999).
No issue has been raised over the timeliness or the contents of the notice, only its mode of delivery. With respect to the mode by which notice is given, the rule is that "[s]trict compliance by an insurer 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 Third-Party Plaintiffs focus on the statutory language that provides that where a policy is cancelled for nonpayment of premium, notice must be "given." "Given" is the past participle of the verb to give, and it is also a verb. The dictionary contains well over a dozen definitions of the word "give," including proffer, deliver, provide and to cause to have or receive. Merriam Webster's Collegiate Dictionary (10th Ed., 1996).
In Rapid Motor Lines v. Cox, 134 Conn. 235, 237, 256 A.2d 519 (1947), the plaintiff brought an action under General Statutes (Rev. 1930) § 1481, now General Statutes § 13a-144, the state highway defect statute. A statutory condition precedent to bringing such an action was that notice of the injury and other particulars "shall have been given within sixty days thereafter to the highway commissioner." The issue in Cox was whether a notice mailed within the sixty-day period, but not received by the commissioner until after sixty days, satisfied the requirement of the statute. The court held that it did not.
The court in Cox stated: "One meaning of the verb `give' is `to make over or bestow. Another is `to deliver or transfer; to . . . hand over.' The idea of delivery is predominant in other meanings of the word. Webster's New International Dictionary (2d Ed.). It is obvious from the context of the statute that `give' was not used in the former sense. To accord it the latter meaning is the reasonable and natural interpretation, in view of the purpose of the provision, which, it must be held, is to fix a definite limit upon the time within which notice shall be received by the highway commissioner. Any other construction would give rise to needless and undesirable uncertainty." Rapid Motor Lines, Inc. v. Cox, supra, 134 Conn. 237-38.
The statute here employs the word "sent" in connection with the general means of cancellation in one part of the statute, and "given" with respect to cancellation for nonpayment of premium later in the statute. "Sent" is the past tense of "send," which in this context means "to cause to go . . . to dispatch by means of communication . . ." Merriam Webster's Collegiate dictionary (10th Ed., 1996). To "send" does not CT Page 10879-ds generally connote receipt. In re Inosophere Clubs Inc., 111 B.R. 436, 442-43 (S.D.N.Y. 1990) (notice was "sent" when posted with the U.S. Post Office); Sovereign Camp of Woodmen of the World v. Grandon, 64 Neb. 39, 89 N.W. 448, 449-50 (1902).
Legislative history may be another significant component of statutory construction. That history of 38a-343 (a) and its predecessors reflects that the principal purpose behind the legislature's enactment of what is now 38a-343 was to standardize the procedure by which insurers cancelled automobile insurance. Resort to that history however, is inconclusive as to the reason why in one section of the statute the word "sent" is used and within the same sentence when referring to a cancellation for nonpayment of premium the words "shall be given" is used.
Although neither the Connecticut Supreme Court or the Appellate Court have considered whether General Statute § 38a-343 (a) requires actual receipt of notice by the insured to effectuate a cancellation for non payment of premium the following Appellate Court case and Superior Court cases are instructive on this issue.
The case of Travelers Insurance Co. v. Hendrickson, supra, is arguably supportive of the position of CNA that the words "sent" and "shall be given" within § 38a-343 (a) convey the same meaning and do not impose any greater burden on the insurance company when canceling for nonpayment of premium. That case did not in any way specifically focus on the meaning and interpretation of those words. In fact the issue of that case focused on the words of the notices and found because they did not even mention the word cancellation, they could not be effective under § 38-175h (a) to effect a cancellation.
In that case at page 412 the court stated:
General Statutes § 38-175h (a) provides in relevant part that no notice of cancellation . . . may be effective unless sent . . . to the named insured at least thirty days before the effective date of cancellation provided where cancellation is for nonpayment of premium at least ten days' notice of cancellation accompanied by the reason therefore shall be given. (Emphasis added) Thus, it is clear that notice of cancellation for nonpayment of premium must be sent at least ten days before the effective date of cancellation.
Although the use by the Court of the word "sent" in the last sentence of the quotation might be urged as a finding that the word "sent" and "shall be given" convey the same meaning, that certainly was not the conclusion of the court as that issue was not even before the Court and CT Page 10879-dt it may have been an unintentional use of the word "sent."
In the case of Hernandez, et al. v. Hartford Accident Indemnity Co., et al., Superior Court, Judicial District of New Haven, Docket #277868 (February 24, 1990, Hodgson, J.) ( 1 Conn.L.Rptr. 317), the court held that notice of cancellation for nonpayment of premium of a mandatory automobile insurance policy must be actually received by the insured and that proof of mailing alone was not sufficient. Although the court also found that the defendant insurer had failed to prove mailing by any of the three methods contained in C.G.S. § 38-175h (a) the predecessor to 38a-343 (a), it went on to hold that even if proof of mailing was assumed, the policy would not have cancelled because the notice was not actually received by the insured. In that opinion Judge Hodgson stated:
Where the policy subject to cancellation is one for compulsory insurance, it has been held that proof of actual receipt of notice is required. In Merchants Mutual Casualty Co. v. Justices of the Superior Court, 197 N.E. 166 (Mass. 1935) the Supreme Judicial Court of Massachusetts construed a statute governing cancellation of automobile insurance coverage, which was compulsory in the Commonwealth. The statute required that written notice of cancellation be "given" to the insured and the court observed that "[n]otice of cancellation of insurance under these circumstances [compulsory insurance] is so important to the assured that the natural meaning of the statutory words should be given full force." Where an insurer presented proof of mailing and the insured denied receipt of the notice, the Massachusetts court ruled that the cancellation was ineffective.
While it could be argued that the working of § 38-175h (a) is such that notice of cancellation for reason other than nonpayment of premium is effective if sent at lease forty-five days before cancellation, the shift in wording of the statute to "given" in the clause relation to notice of cancellation for nonpayment of premiums must be afforded some meaning.
It is well settled that "there is a presumption of purpose behind every sentence, clause, or phrase in a legislative enactment so that in construing meaning no part is treated as insignificant and unnecessary." Zichichi v. Middlesex Memorial Hospital, 204 Conn. 399, 407, 528 A.2d 805 (1987); Peck v. Jacquemin, 196 Conn. 53, 66, 491 A.2d 1043 (1985).
If the General Assembly meant that notice was to be deemed to be effective upon mailing, it could easily have provided that in case of nonpayment cancellation would be effective if a notice were sent within ten days of the proposed cancellation. The legislature's choice of CT Page 10879-du different wording must be regarded as signifying an intention that a cancellation notice for nonpayment of premium must actually be received by the insured before the policy is cancelled.
The Connecticut Supreme Court has strictly construed cancellation procedures in statutes concerning other types of insurance. In Piscitello v. Boscarello, 113 Conn. 128, 131, 154 A. 168 (1931), where a statute required notices of cancellation of workers' compensation insurance to be filed with the board of compensation commissioners, the court stated "[n]or would the mere mailing of a notice of cancellation to the commissioner be effective to terminate the obligations of the insurer; only its receipt by them could avail."
In the case of Atwood v. Progessive Insurance Co., 1997 WL 583638 (Conn.Super.), the trial court Corradino, J., on a Summary Judgment motion dealt directly with the question of whether the insurance carrier had met the requirements of § 38a-343 (a) on giving notice of cancellation. That case involved a cancellation for nonpayment of premium, a certificate of mailing confirming that the insurance company had sent the cancellation notice to the insured's address and the insured denied receiving the notice. The defendant insurance company moved for Summary Judgment claiming that no policy of insurance was in effect on the date of the plaintiff's accident because the policy had been cancelled for nonpayment of premium. The court, Corradino, J., cited with favor the opinion of Judge Hodgson in Hernandez v. Hartford Accident and Indemnity Co., supra and quotes from it generously, which this court has also done. In denying Summary Judgment sought by the named insurer the court concluded that § 38a-343 (a) sets forth a stricter requirement for cancellation for nonpayment of premium and requires actual notice of cancellation to be received before the cancellation is effective. Again this court will quote extensively from Judge Corradino's opinion.
In our statute, there is no specific provision that mailing shall be proof of notice but the statute does set out four methods of notice: certified mail, registered mail, certificate of mailing, or direct delivery to the insured. The problem is that our statute is at cross purposes as to methods of notice two of them would guarantee that there would be a method of ensuring the notice arrived in the ten day time period, two would not. Why even allude to registered or certified mail if mere mailing or delivery to the insurer sufficient to satisfy the statutory requirement? In other words, the dichotomy of language in the statute itself which says that where cancellation is for a reason other than nonpayment of premium, notice may be sent, but where it is for nonpayment notice must be given to the insurer. CT Page 10879-dv
Thus, in Edens v. South Carolina Farm Bureau Mutual Ins. Co., 308 S.E.2d ___, 6780, 671 (S.C., 1983), presented here:
No authority has been cited which hold that the terms "mailing written notice" and "given written notice" are necessarily synonymous or substantially similar. The term "giving written notice in such a manner that the insured becomes aware of having received it. "The provision involves a physical delivery to the insured of a document of which he becomes personally aware. This cannot be accomplished by depositing a document in the mail which he (sic) may or may not receive" . . .
Cf Rocque v. Co-op Fire Ins. Assn. Of Vermont, supra, at 438 A.2d page 386: "`Giving Notice' is not the same requirement as `mailing notice' and demands more. Even where facts show that a cancellation notice was mailed to the insured, if the policy demands that notice be `given' and the notice was never received, the notice is ineffective as a valid cancellation." This analysis would apply to our statutory language and the same dichotomy exists between using the words sent and given as between mailing and given — the word sent in our statute obviously refers to the various types of authorized mailings to the insured.
This court finds itself in agreement with the opinions expressed by both Judges Hodgson and Corradino. 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); Steadwell v. Connecticut Correctional Inst., 186 Conn. 153, 164, 439 A.2d 1078 (1982) (stating that "the use of different words in the same enactment must indicate a difference in legislative intention") (emphasis added and citation omitted); Fritz v. Madow, 179 Conn. 269, 272, 426 A.2d 268 (1979) (finding that the fact that the statute being reviewed "uses `shall' three times and `may' once lends further support to the contention that the legislature intended to distinguish those words according to their ordinary meanings"); CNA seeks to have the words "sent" and "given" construed interchangeably. Not only would such a construction treat as insignificant the legislature's choice of words, but it disregards the distinct treatment the legislature sought to give cancellations premised on the nonpayment of premiums.
Here, § 38a-343 (a) provides generally that a notice of cancellation is not 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 . . . at least forty-five days before the effective date of cancellation[.]" If, however, a cancellation is CT Page 10879-dw premised on a nonpayment of premium, the statute mandates that, "at least ten days notice of cancellation accompanied by the reason" therefor "shall be given." The shift in statutory language from "sent" to "given" cannot be disregarded. Such a construction violates the well-established tenets of statutory construction.
There is further logic for a different interpretation of the words "sent" and "to be given" based on the time constraints set forth in the statute itself. In the first sentence of 38a-343 (a) there is reference to notice of cancellation to which § 38a-342 applies. That section spells out only two bases for a cancellation: 1) nonpayment of premium and 2) the revocation of the driver's license or motor vehicle registration of the named insured, another resident operator in the same household or one who customarily operates the insured vehicle.
So in the latter case the notice must be "sent" 45 days before the cancellation is effective. No reason is required to be stated for the cancellation because the insured or other authorized driver would presumably know that the license or registration was revoked. The 45 days would presumably allow them time to get re-licensed or registered.
For a cancellation for nonpayment of premium the notice requirement is only 10 days, and the statute requires that the reason for the cancellation be expressly provided. There would be little reason to require that the reason be stated for this form of cancellation and then hold that actual receipt of the cancellation notice was not required. Also the shortened time period of 10 days would offer someone who was on a two week vacation away from home when the notice was delivered no protection from becoming personally liable for damages arising from an accident while on vacation as well as a cancellation of registration and liability for arrest for operating a unregistered vehicle, all with no knowledge that his insurance had been cancelled for nonpayment.
The court therefore finds that for a cancellation of insurance for nonpayment of premium, Section 34a-343 (a) as it relates to the words "shall be given," requires actual receipt or knowledge by the insured of the notice. That did not happen in this case and therefore the policy was not canceled, but remained in effect on January 19, 1996, the date of the accident. The fact that the U.S. Postal Service rather than CNA is probably responsible for that, does not change the requirement of the statute. This conclusion is further buttressed by the comments of our Supreme and Appellate Courts. In Majernicek v. Hartford Cas. Ins. Co., 240 Conn. 86, 93, 688 A.2d . 1330 (1997) (emphases added), the Court stated that "in enacting 38a-343 (a), the legislature appears to have intended to eliminate the potentially harsh consequences to an insured of CT Page 10879-dx driving without knowing that his or her policy was inoperative" This sentiment has been echoed by our Appellate Court which as 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).
For the foregoing reasons on the Third Party Complaint of Gerald and Andrew Brown against C.N.A. judgment shall enter in the amount of $29,523.50, plus costs representing the stipulated judgment against them in the amount of $10,000 and counsel fees in the amount of $29,523.50. CNA had an obligation to both defend and indemnify which it failed to do.
On the Third Party Complaint of the Hartford against CNA judgment shall enter for the Third Party Plaintiff, the Hartford, in the amount of $50,000 plus costs representing the Stipulated Judgment in the amount of $50,000 it paid the Schneiders on the uninsured motorist coverage.
The court will award no interest.
Gormely, J.T.R.
CT Page 10880-a