Hartford Underwriters Insurance Company v. Dave Henry Reed

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Rel 06/25/10 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . SUPREME COURT OF ALABAMA OCTOBER TERM, 2009-2010 1071605 Hartford Underwriters I n s u r a n c e Company v. Dave Henry Reed Appeal PER from M o b i l e C i r c u i t (CV-07-900307) Court CURIAM. Hartford appeals from subsequent matter Underwriters the t r i a l Insurance court's denial of Hartford's o f l a w ("JML"). Company judgment a g a i n s t motion We r e v e r s e ("Hartford") i t , and i t s f o r a judgment and remand. as a 1071605 Facts T & W insurance and Procedural Construction, LLC, History obtained workers' through the J a c k Green Insurance Agency Agency"). The insurance Green Agency procured f o r T & W through the the workers' assigned T & managed Hartford's in Hartford. Green compensation managed ("NCCI"). Travelers underwriting with policies Dave of and Henry and Insurance claims acted Reed's by NCCI through a c o n t r a c t u a l arrangement assigned-risk as with under Hartford's claim under the policy. Hartford premium to to the connection Hartford policy risk ("Travelers"), Hartford, agent W's ("the assigned-risk pool t h e N a t i o n a l C o u n s e l on C o m p e n s a t i o n I n s u r a n c e Company compensation up required front ("the conduct determine for Hartford an the audit amount portion of the policy; the remainder Financial & its W to when of annual financed compensation policy premium for through of the Green Agency s i g n e d T annual insurance reserved premium. ("American 2 estimated Hartford final Inc. an Hartford the the was pay workers' policy"). estimated Services, representative T the ended & W the paid to a Hartford American Liberty"). the right Liberty A premium-finance 1071605 agreement T & W, on b e h a l f testified agreement Green o f T & W. t h a t he was Timothy Agency to enter into the Green Agency such an agreement the monthly under the agreement the to t i m e l y pay premium-finance provided W 2004, for issued to J u l y workers' employee's i t s monthly required would, In the event installments agreement, the L i b e r t y the authority the H a r t f o r d 23, 2005. The compensation "bodily injury b o d i l y i n j u r y by a c c i d e n t The i t s behalf. and t h e Green Agency behalf. the required premium-finance to cancel Hartford policy. Hartford 23, American on installments t u r n , p a y A m e r i c a n L i b e r t y on T & W's & W failed of not aware o f t h e p r e m i u m - f i n a n c e by t h e p r e m i u m - f i n a n c e agreement, T a principal a n d t h a t he d i d n o t know i f T & W h a d a u t h o r i z e d T & W paid in Poates, p o l i c y e f f e c t i v e from Hartford policy insured liability accident," by resulting provided occurred during Hartford p o l i c y also contained from that "2. deliver Cancelation 3 an the the f o l l o w i n g c a n c e l l a t i o n [sic]. We may c a n c e l t h i s t o you not less T & the " p o l i c y p e r i o d . " provision: "D. July p o l i c y . We m u s t m a i l o r than ten days advance 1071605 written to take mailing Page w i l " 3 . The p o l i c y p e r i o d w i l l e n d on t h e d a y stated i n the cancelation [ s i c ] n o t i c e . " hour T n o t i c e s t a t i n g when t h e c a n c e l a t i o n [ s i c ] i s e f f e c t . M a i l i n g t h a t n o t i c e t o you a t your a d d r e s s shown i n I t e m 1 o f t h e Information l be s u f f i c i e n t t o p r o v e n o t i c e . & W's "mailing address Page" of t h e H a r t f o r d AL 33618." correct Poates On D e c e m b e r p o l i c y was confirmed January of December remember 5, 2005, intent 27, Information I s a b e l l a Lane, this address Mobile, was T & W's mailed d e p e n d a n t upon testified Hartford The payment policy that either notice. L i b e r t y , not having policy. the Hartford & W's the Hartford Poates T & W and f a x e d T to T & W at the notice received a notice another to T he policy of the American L i b e r t y mailed i f T & W had r e c e i v e d Hartford pertinent on i t s p r e m i u m p a y m e n t . of i n t e n t to cancel to cancel 2004. 2005, A m e r i c a n the that 1 of the 21, 2004, A m e r i c a n L i b e r t y m a i l e d past-due monthly i n s t a l l m e n t . W, "3828 2004, T & W d e f a u l t e d a d d r e s s above a n o t i c e notice i n Item address. In December on shown and & W could On J a n u a r y payment from part: 4 -- not 5, T & of c a n c e l l a t i o n of of c a n c e l l a t i o n s t a t e d , "**NOTICE OF CANCELLATION PREMIUM F I N A N C E D P O L I C Y * * on NONPAYMENT OF in 1071605 " T h i s p o l i c y has b e e n f i n a n c e d by [American L i b e r t y ] . [ A m e r i c a n L i b e r t y ] has e x e r c i s e d i t s r i g h t t o c a n c e l t h i s p o l i c y as p r o v i d e d i n i t s a g r e e m e n t with [T & W], due t o [T & W's] d e l i n q u e n t payment status. fl " P L E A S E NOTE: [ H a r t f o r d ] i s u n d e r no o b l i g a t i o n to r e i n s t a t e t h i s p o l i c y i n the event [American Liberty] should rescind t h e i r cancellation request." Poates of testified the that he not of cancellation did recall the Hartford receiving policy the notice from American cancellation request, Liberty. Upon r e c e i p t Travelers, Agency a on of dated intent 21, Sue behalf notice Hartford's January of A m e r i c a n L i b e r t y ' s to Hartford, January mailed 6, cancel of & W and 2005, policy the notifying Hartford the supervisor T Green them of effective 2005. Flurry, underwriters a for Travelers, automated method for notices. Flurry testified computer generated, envelope, which has group testified producing that folded, the a and account-manager concerning appropriate Travelers' mailing cancellation cancellation and 5 of stuffed postage notices into are a window affixed to i t . 1071605 Flurry testified creation of that an the cancellation process "affidavit of mailing," includes which r e c i p i e n t s of the c a n c e l l a t i o n n o t i c e s , i n c l u d e s and contains the following certification lists a date by the a the stamp, Travelers employee: "[E]ach cancellation entry on this page o f the master computer list of cancellations has a c o r r e s p o n d i n g e n v e l o p e c o n t a i n i n g an o r i g i n a l n o t i c e o f c a n c e l l a t i o n s h o w i n g t h e name a n d a d d r e s s o f t h e p o l i c y h o l d e r or p a y e r i n the window of the e n v e l o p e a n d t h a t s u c h e n v e l o p e was s u b m i t t e d t o t h e U n i t e d States Postal Service." The affidavit signed. "takes Flurry mailing also [the] a f f i d a v i t were p r o d u c e d the window, the same that of i n order that envelope." The cancellation notice a of m a i l i n g and ... to v e r i f y on that Travelers was employee the envelopes the addressee the a f f i d a v i t that shows i n of has of m a i l i n g ] , been mailing Hartford policy. in which t h e c a n c e l l a t i o n n o t i c e was Flurry testified a d d r e s s a n d t h a t t h e n o t i c e was mailed not r e t u r n e d 6 affixed shows sent to the address Further, notice [on t h e c a n c e l l a t i o n n o t i c e ] postage affidavit was cancellation that the address appropriate the testified [as t h e a d d r e s s the for that [and] to T is & the W's s p e c i f i e d i n the that the included as envelope a return undeliverable. 1071605 Travelers also cancellation On mailed n o t i c e , which January 18 , American L i b e r t y . Liberty faxed policy. on On 2005, Hartford a d i d not Slip January February mailed a copy 21, 17, -- received. & T late the W made the request to a payment l a t e payment, reinstate r e i n s t a t e the 2005, In April final premium for hired an & principals, titled p o l i c y as Hartford the "policy 1/21/05." period" During of the on behalf of but, Hartford Hartford, " C a n c e l l a t i o n Change showed the "01/21/05," and audited canceled Poates "Verification Hartford Hartford policy, document T and the of Robert audit, Visit," the Poates t e s t i f i e d "eff. the Payment." determine Williams, to signed the Hartford a u d i t , w h i c h met which at t r i a l to date "Reason policy. Poates Hartford 7 & W Hartford a u d i t i n g f i r m to conduct the records. to American the " F i n a n c e C o m p a n y R e q u e s t -- Non 2005, W's Travelers, This Hartford C a n c e l l a t i o n " as the 2005. Commercial." of of Green Agency the Green Agency a document t i t l e d canc." W's the Agency s t a t e d i n i t s n o t i c e of c a n c e l l a t i o n , c a n c e l e d policy for Green Upon r e c e i p t o f Hartford as the with review a indicated T T & document that the policy was "7/23/04 to t h a t he was unsure of the 1071605 purpose o f t h e a u d i t b u t t h a t he t h o u g h t i t was [Hartford] told not that policy." the audit know t h a t The Poates was showed f o r t h e premium. mailed T Notice" & May the the notice 07/23/04 On was and showing adjustment Audit W Travelers, Green total Agency earned contained on not he d i d an a d d i t i o n a l of "Premium premium. a reference was canceled. behalf a he and t h a t T & W owed H a r t f o r d 1 8 , 2 0 0 5 , Dave H e n r y R e e d , injured within Reed f i l e d under the Hartford Hartford that Hartford, Adjustment The premium- to the " C a n c e l l a t i o n t o 01/21/05." T & W. the p o l i c y had been that amount testified a cancellation audit the Hartford audit also " t o renew t h e the l i n e a claim and scope o f h i s employment f o r worker's policy. p o l i c y had an e m p l o y e e o f T & Reed's been compensation claim canceled was with benefits denied before W, because Reed's injury occurred. As a r e s u l t o f t h e d e n i a l o f Reed's c l a i m , W f o r worker's trial court benefits. compensation benefits. awarded Reed $364,526.40 In that i n worker's Reed sued T & action, compensation In a d d i t i o n to the worker's compensation Reed a l s o r e q u e s t e d that the t r i a l 8 court the benefits, impose a g a i n s t T & W 1071605 the s t a t u t o r y p e n a l t y u n d e r § 2 5 - 5 - 8 ( e ) , A l a . Code 1975, provides, in pertinent which part: "[A]n employer r e q u i r e d t o s e c u r e the payment o f c o m p e n s a t i o n u n d e r t h i s s e c t i o n who f a i l s t o s e c u r e the c o m p e n s a t i o n s h a l l be l i a b l e f o r two t i m e s t h e amount o f c o m p e n s a t i o n w h i c h w o u l d have o t h e r w i s e b e e n p a y a b l e f o r i n j u r y o r d e a t h t o an e m p l o y e e . " The trial the amount payment c o u r t imposed of of $364,526.40 for T compensation. $729,052.80. for the s t a t u t o r y p e n a l t y against T & W i n T & W Reed's consented an a s s i g n m e n t o f T & W's & W's March rights, filed coverage 19, the under 2007, present the Hartford rights Reed, contract, bad-faith refusal same a c t i o n , of Reed a l s o total to the breach breach of as of f i d u c i a r y assignee against policy. Reed t o pay a c l a i m , sued American a motion for a summary judgment duty. summary On March for Hartford on 9 In the thus exchange of alleged T Reed's breach Agency, wantonness, bad-faith of In the alleging court W's breach 2008, H a r t f o r d trial W. seeking and t h e Green 14, & and f r a u d . Liberty, The from T & Hartford negligence, judgment. was the judgment the action contract, secure award judgment. c o n t r a c t , n e g l i g e n c e , and w a n t o n n e s s ; alleging to t o any p o t e n t i a l i n s u r a n c e c o v e r a g e , Reed a g r e e d not t o c o l l e c t On failure and filed entered a and fraud 1071605 claims, but denied Hartford's Reed's b r e a c h - o f - c o n t r a c t The moved JML on and the t r i a l defense. motions trial court for a court Reed's wantonness granted the wantonness American claim Green claim moved against The trial and the Green Agency remaining evidence, agreed the court which to submit event denied a l lclaims i t , and motion for Hartford's against them the t r i a l court the issue court JML on found for a trial JML on The JML on court Reed's against i t . Reed's breach-ofevidence. motion. motions at them. the a filed of a l l the i t at the close filed the j u r y The t r i a l for a the denied, also against L i b e r t y ' s motion also claims at judicial-estoppel the Green Agency against Agency's again on Hartford claim and b r e a c h - o f - f i d u c i a r y - d u t y c l a i m s Hartford contract struck Hartford's concerning granted a jury. breach-of-contract L i b e r t y and JML before H a r t f o r d ' s m o t i o n f o r a JML was also American to t r i a l Reed's c l o s e o f Reed's case. motion claim. a c t i o n proceeded for a summary-judgment American f o r a JML Liberty on Reed's the close of a l l the granted. Reed and Hartford to the t r i a l court i n o f damages f o r Reed. submitted the case 10 to the j u r y on Reed's 1071605 breach-of-contract a verdict in claim against favor of Reed, judgment against Hartford entering judgment i n favor Hartford. and for the The j u r y trial $729,052.80. of Reed, the t r i a l court In court returned entered i t s order stated: "The j u r y a f t e r d e l i b e r a t i o n a n d v e r d i c t h a v i n g found i n favor of the p l a i n t i f f , Dave R e e d and against the defendant Hartford Underwriters I n s u r a n c e Company, t h e C o u r t h e r e b y r e n d e r s j u d g m e n t in favor of plaintiff Dave Reed and against defendant Hartford Underwriters I n s u r a n c e Company. B a s e d upon t h e e v i d e n c e i n t h i s case and t h e j u r y ' s verdict, the Court f i n d s therefore that Hartford Underwriters I n s u r a n c e Company's p o l i c y o f w o r k e r s ' c o m p e n s a t i o n i n s u r a n c e was i n e f f e c t a t t h e t i m e o f D a v e R e e d ' s i n j u r y on May 1 8 , 2 0 0 5 . See I n s t i t u t e o f L o n d o n C o m p a n i e s v . V a l l e y E q u i p m e n t , 660 S o . 2 d 1000 ( A l a . C i v . A p p . 1 9 9 5 ) . " P r i o r to the submission of t h i s case to the jury, the p a r t i e s agreed to submit the i s s u e of damages t o t h e C o u r t f o r r e s o l u t i o n i n t h e e v e n t o f a v e r d i c t f o r the p l a i n t i f f . Hartford contends that i f i t i s l i a b l e a t a l l , i t s damages s h o u l d o n l y be t h e amount o f t h e p e r m a n e n t and t o t a l i n j u r y a w a r d in Dave R e e d ' s w o r k e r s ' c o m p e n s a t i o n c a s e , i . e . , $ 3 2 8 , 9 2 6 . 4 0 [ ] . P l a i n t i f f Reed, f o r h i s p a r t argues t h a t as t h e a s s i g n e e of H a r t f o r d ' s i n s u r e d , T & W C o n s t r u c t i o n L . L . C . , he i s e n t i t l e d t o r e c e i v e t o t a l compensation b e n e f i t s plus the penalty assessed by t h e C i r c u i t C o u r t f o r T & W's f a i l u r e t o s e c u r e t h e payment o f c o m p e n s a t i o n u n d e r § 2 5 - 5 - 8 ( e ) , Code o f 1 The $328,926.40 amount does not i n c l u d e "[a]ccrued b e n e f i t s o f 89 w e e k s [ a t ] comp. r a t e o f $400 w e e k , " w h i c h total $35,600. I t includes only the "[present value] of remaining 2434.64 weeks (822.316) x $400.00/week." The addition o f t h e $35,600 would b r i n g the t o t a l award t o $364,526.40. 1 11 1071605 Alabama, 1975. " A f t e r c o n s i d e r i n g t h e b r i e f s and a r g u m e n t s o f the p a r t i e s , the Court f i n d s that a fundamental p r i n c i p l e o f c o n t r a c t l a w i s t h a t 'damages f o r t h e b r e a c h o f c o n t r a c t i s t h a t sum w h i c h w o u l d p l a c e t h e i n j u r e d p a r t y i n t h e same c o n d i t i o n he w o u l d h a v e o c c u p i e d i f t h e c o n t r a c t h a d n o t b e e n b r e a c h e d . ' See B r e n d l e F i r e E q u i p m e n t I n c . v. E l e c t r o n i c E n g i n e e r s , I n c . , 454 So. 2d 1032 ( A l a . C i v . App. 1 9 8 4 ) . B u t f o r t h e b r e a c h o f c o n t r a c t by H a r t f o r d , T & W Inc., would not have suffered the additional penalty i m p o s e d by t h e C i r c u i t C o u r t . Accordingly, this C o u r t r e n d e r s j u d g m e n t i n f a v o r o f Dave R e e d and against defendant Hartford Underwriters Insurance Company i n t h e amount o f $ 7 2 9 , 0 5 2 . 8 0 . A d d i t i o n a l l y , the Court f i n d s t h a t H a r t f o r d i s l i a b l e f o r past and future medical benefits, as well as vocational b e n e f i t s u n d e r t h e A l a b a m a W o r k e r ' s C o m p e n s a t i o n Law for i n j u r e s s u s t a i n e d b y D a v e R e e d on o r a b o u t May 18, 2 0 0 5 . " Hartford then alternative, Hartford filed for a a new renewed trial, which So. 2d for the a JML trial or, court in the denied. appealed. Standard In motion American 1362 National (Ala. 1993), applies to appellate motion for a of Fire this review Review Insurance Court of a Co. stated trial v. the court's Hughes, standard ruling JML: "The standard of review a p p l i c a b l e to a r u l i n g on a motion for JNOV [now referred to as a p o s t v e r d i c t JML] i s i d e n t i c a l to the standard used by t h e t r i a l c o u r t i n g r a n t i n g o r d e n y i n g a m o t i o n 12 624 that on a 1071605 for d i r e c t e d v e r d i c t [now r e f e r r e d t o as a JML]. T h u s , i n r e v i e w i n g t h e t r i a l c o u r t ' s r u l i n g on the m o t i o n , we review the evidence in a light most f a v o r a b l e t o t h e n o n m o v a n t , a n d we d e t e r m i n e w h e t h e r the p a r t y w i t h the burden of p r o o f has produced sufficient evidence to require a jury determination." 624 So. 2d The rule requires defense at on a properly "the insurer evidence So. to 2d the 220 setting the that burden the 1330, 1331 up of Ins. insurance proving v. 1979) by as a clear and cancellation of was Great (citing Co., policy cancellation Currie (Ala. Cas. an notice insured." A l a b a m a Farm B u r e a u Mut. 2d omitted). c a n c e l l a t i o n of p o l i c y has mailed 374 (citations regarding that convincing Co., 1366 287 Cent. Ins. Harrell A l a . 259, 251 v. So. (1971)). Discussion H a r t f o r d a r g u e s , among o t h e r erred i n denying that the was canceled Institute 1000 Code i t s motion undisputed Reed o f L o n d o n Co. (Ala. Civ. 1975, App. f o r a JML evidence before v. shows was b a s e d on that the injured. V a l l e y Equipment, 1995), "contains t h i n g s , t h a t the and argues specific 13 that its trial court contention Hartford policy Reed relies on Inc., 660 2d So. § 27-40-11, requirements Ala. regarding 1071605 c a n c e l l a t i o n by like of or at the [American [§ Liberty]. 27-40-11], cancellation strictly the as a Reed's argument reason the of Hartford is well matter parties of or Ins. "[T]he an the at the policy. 39-40.) i f the i s the of canceled in regardless Hartford policy, policy Therefore, with § only request be Hartford compliance right The company i n t h a t under the of 27-40-11] argues that, cancel insurer's contract Co. the that must company in Hartford 27-40-11 is agree. concerning a cancellation Life Liberty's settled: to canceled terms of we policy Hartford alleging [§ (Reed's b r i e f , policy request of assumption the interpretation finance requirements the company insurer the company, the inconsequential; law prove the Liberty's American The the is canceling effectively argues, on § 27-40-11. accordance with to proper on is a l l the i s based premium-finance American the a cancellation." insurer accordance with Under burden with effecting ... defense complied before a r e q u e s t of a premium f i n a n c e vel right non question behalf a policy cancellation the motive contract." Strange, 14 of cancel is of i s i m m a t e r i a l when t h e r e terms of the C a l i f o r n i a v. of to 226 Ala. Pacific 98, 100, a the is Mut. 145 1071605 So. 4 2 5 , 426 (1932). Further, " [ i ] t i s w e l l s e t t l e d i n Alabama t h a t ' i n an a c t i o n on a n i n s u r a n c e p o l i c y when t h e i n s u r e r s e t s up c a n c e l l a t i o n a s a d e f e n s e , t h e i n s u r e r h a s t h e burden of proving the p o l i c y was canceled.' M i d - S t a t e Homes, I n c . v . C h e r o k e e I n s . C o . , 51 A l a . App. 2 4 7 , 2 4 8 , 284 S o . 2 d 2 7 4 , 2 7 5 ( 1 9 7 3 ) . H o w e v e r , it i s 'equally true that i n the absence of a r e s t r i c t i v e s t a t u t o r y p r o v i s i o n , t h e p a r t i e s t o an insurance c o n t r a c t may s p e c i f y t h e m e t h o d b y w h i c h it may b e c a n c e l e d and t h e p a r t i e s a r e t h e r e b y b o u n d . P u t a n o t h e r way, a n i n s u r a n c e p o l i c y may b e canceled according t o i t s t e r m s . ' 51 A l a . A p p . a t 2 4 9 , 284 S o . 2 d a t 2 7 6 . ( C i t a t i o n o m i t t e d ) . " American (Ala. Co. Interstate C i v . App. 2 0 0 0 ) . of Alabama, "[i]t i s well insurer and I n s . Co. v . K e l l e y , s e t t l e d i n Alabama to cancel an i n s u r a n c e imposed is whether indicating not that law that the r i g h t i s strictly i t with o f c a n c e l l a t i o n must be s t r i c t l y Hartford respect that i n e f f e c t at the time sufficient construed to before giving this Court at trial evidence p o l i c y had been c a n c e l e d o f Reed's i t produced s u f f i c i e n t of the motives or reasons f o r canceling produced the Hartford that performed"). p o l i c y , the d i s p o s i t i v e issue Hartford Fire Ins. ( A l a . 1981) ( h o l d i n g policy upon Regardless of Hartford's the Green v. S t a n d a r d 398 S o . 2 d 6 7 1 , 675 the condition notice See a l s o 797 S o . 2 d 4 7 9 , 482 injury. evidence that 15 Hartford a n d was argues i thad canceled the 1071605 Hartford policy according to i t s terms. terms of the H a r t f o r d p o l i c y , H a r t f o r d by "mail[ing] or d e l i v e r [ i n g ] to According could [T & W] cancel to the the p o l i c y not less than t e n d a y s a d v a n c e w r i t t e n n o t i c e s t a t i n g when t h e c a n c e l a t i o n [ s i c ] is to take e f f e c t . " limit Hartford's Hartford that right to cancel argues i t had mailed proper address Hartford The H a r t f o r d p o l i c y d o e s n o t c o n d i t i o n o r relies that i t presented the notice and t h a t t h e p o l i c y i n a n y way. evidence of c a n c e l l a t i o n T & W failed to rebut indicating to said T & W's evidence. on " t h e common-law p r i n c i p l e g e n e r a l l y r e f e r r e d t o as the ' m a i l b o x r u l e ' o r t h e ' l e t t e r p r e s u m p t i o n . ' As a r t i c u l a t e d by t h i s C o u r t i n C o r i n t h Bank & T r u s t Co. v . C o c h r a n , 2 1 9 A l a . 8 1 , 8 3 , 121 S o . 6 6 , 67 (1929), t h i s p r i n c i p l e stands f o r the p r o p o s i t i o n that "'[a] l e t t e r p r o p e r l y addressed, stamped, and mailed i s presumed t o have been r e c e i v e d i n due c o u r s e . E v i d e n c e d e n y i n g the r e c e i p t o f t h e l e t t e r does n o t r e n d e r the evidence of t h e m a i l i n g inadmissible. N e i t h e r i s i t c o n c l u s i v e . W h e t h e r i t was s o mailed and received becomes a jury question.'" Sullivan (Ala. v. E a s t e r n Health S y s . , I n c . , 953 S o . 2 d 3 5 5 , 360 2006). Sue Flurry's testimony and 16 the e x h i b i t s presented by 1071605 Hartford that at trial Hartford constitute "properly cancellation notice arises T that & W presumption could received receipt W's the of to clear addressed, T & W. received the a by testified as result, T & W's evidence mailed" a Rather, notice. The denial that i t Poates, as follows: "Q [ R e e d ' s a t t o r n e y ] : I show y o u a d o c u m e n t t h a t is exhibit 23-A. Are you f a m i l i a r with this document, Mr. Poates? It says, 'Notice of C a n c e l l a t i o n Nonpayment of Premium F i n a n c e P o l i c y . ' "A [ P o a t e s ] : I know I h a v e s e e n know, t h e l a w s u i t s a n d everything. "Q: A l l right. Do n o t i c e of c a n c e l l a t i o n m a i l b e f o r e J a n u a r y 21, "A: That I can i t since, you you recall receiving the from the H a r t f o r d i n t h a t 2005? r e m e m b e r , no, sir. "Q: I t s a y s t h e d a t e t h a t i t was m a i l e d , d a t e o f i s s u e i s J a n u a r y 6 t h o f '05. So t h a t w o u l d h a v e b e e n o b v i o u s l y e a r l y i n t h e y e a r o f '05. A n y t h i n g a b o u t that j a r your r e c o l l e c t i o n ? to "A: No, say t h a t s i r . T h a t I can remember, no, i t d i d n ' t come i n . s i r ; not "Q: R i g h t . A n d Mr. T h u r b e r [ H a r t f o r d ' s attorney] took your d e p o s i t i o n and a s k e d you a series of questions a b o u t t h a t . How s t r o n g , how weak, j u s t t e l l us y o u r r e c o l l e c t i o n o f w h e t h e r o r n o t y o u d i d , 17 the presumption However, T & W d i d not cancellation notice. representative, and cancellation have been r e b u t t e d cancellation notice. convincing stamped, As the and deny T & 1071605 as best you can, whether "[Hartford's a n s w e r e d . He s a i d "THE "A or you received attorney]: Judge, t h r e e t i m e s he d i d COURT: O v e r r u l e d . [Poates]: not I don't You can that? I asked and not remember. cross-examine. remember. fl "Q [Hartford's attorney]: This is a letter d a t e d , w h i c h we h a v e a l r e a d y s e e n b e f o r e , J a n u a r y 6. That i s the l e t t e r we have t a l k e d about before, correct? "A [Poates]: Yes, sir. "Q: It i s addressed to T & W Construction C o m p a n y . You s a i d y o u do n o t r e m e m b e r r e c e i v i n g t h a t n o t i c e of c a n c e l l a t i o n ? "A: Correct. I don't remember. "Q: Was t h a t T & W's m a i l i n g address at that t i m e , 3828 I s a b e l l a L a n e , M o b i l e , A l a b a m a 3 6 6 1 8 ? "A: Yes, "Q: So "A: Yes, sir. that mailing address is correct? sir. fl "Q: [Hartford's] that letter? "A: Exhibit It is a notice 22. Do you of c a n c e l l a t i o n . fl 18 recognize 1071605 "Q: Did you receive "A: Not that that I can letter? recall. fl "Q [ R e e d ' s a t t o r n e y ] : You a r e n o t d e n y i n g t h a t you received these letters, particularly this l e t t e r , Notice o f C a n c e l l a t i o n , t h e one that was j u s t up t h e r e , my e x h i b i t 22? You a r e n o t denying t h a t , are you? "A Reed f a i l s T & W [Poates]: to p o i n t denies I can't deny to anything having i t nor i n the received the confirm record it." i n d i c a t i n g that cancellation notice from Hartford. H a r t f o r d met evidence that of the i t s b u r d e n by p r o v i d i n g c l e a r and i t canceled policy and Therefore, the motion for a and the that H a r t f o r d p o l i c y under the that JML on the Reed argues t h a t of Hartford, i t is court's cancellation judgment was denying terms proper. reverse i t . we trial convincing breach-of-contract i n order necessary for this to claim Hartford's was Court to r u l e i n overrule Valley value. and our In d e c i s i o n t o d a y does not Valley Equipment, an 19 favor Equipment. However, V a l l e y Equipment i s d i s t i n g u i s h a b l e from the case, error, present effect i t s precedential insured procured "physical 1071605 damage i n s u r a n c e " through a t h r o u g h an i n s u r e r premium-finance premium-finance company. company agreement, which contained premium-finance defaulted the the policy; the request. trial company failed to of attorney, enabling The the the the comply Court argument c a n c e l e d under company, premium-finance filed a claim, cancellation sued t o r e c o v e r under that the with § Civil that the the terms The and insurer Appeals, the insurance of the premium-finance 27-40-11 motion. of and cancel found court the insured requested that the insurer with the insured summary-judgment Before and premium-finance d e n i e d b a s e d upon t h e p r i o r The properly a the p o l i c y . complied The the premium insured Subsequently, the insured policy. raised a power company insurance policy. insured's into to cancel insurer which the i n s u r e r the The on i t s p a y m e n t s t o t h e p r e m i u m - f i n a n c e premium-finance company's entered company and f i n a n c e d granted appealed. insurer policy of the p o l i c y . the had never been Rather, the i n s u r e r a r g u e d t h a t t h e p o l i c y was p r o p e r l y c a n c e l e d u n d e r t h e p r o v i s i o n s of § 27-40-11. the The C o u r t o f C i v i l A p p e a l s trial court's judgment, h o l d i n g company's failure to adhere that the affirmed premium-finance t o t h e r e q u i r e m e n t s o f § 27-40-11 20 1071605 rendered i t s attempt to cancel the insurance from Valley policy ineffective. This case because, argued terms unlike before properly i s the insurer the t r i a l canceled of distinguishable i n Valley court and b e f o r e the Hartford the Hartford Equipment, this policy. Therefore, Hartford Court p o l i c y i n accordance issue here i s whether H a r t f o r d canceled accordance with Equipment that i t with the the d i s p o s i t i v e the Hartford p o l i c y i n the terms of the p o l i c y . We h o l d that i tdid. Conclusion Based court's on the foregoing, judgment consistent with and this R E V E R S E D AND this remands Court this reverses case for the trial proceedings opinion. REMANDED. Cobb, C . J . , and W o o d a l l , Smith, concur. 21 Parker, a n d Shaw, J J . ,

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