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Cahoon v. Canal Insurance Co.11/21/2000
Appeal by defendant and third-party plaintiff Canal Insurance Company, and third-party defendants Agency Services, Inc., and Agency Premium Services, Inc., from judgment entered 9 July 1999 by Judge Richard B. Allsbrook in Martin County Superior Court. Heard in the Court of Appeals 21 September 2000.
At all times relevant hereto, Carlton Joedy Cahoon (plaintiff) owned a 1987 Kenworth tractor-trailer. On 4 September 1996, plaintiff obtained automobile liability insurance coverage (the policy) in the amount of $1,000,000.00 for the Kenworth vehicle through Piedmont Transportation Underwriters, Inc. (Piedmont), the licensed North Carolina agent for defendant Canal Insurance Company (Canal). Piedmont arranged financing for plaintiff's insurance premiums through defendant Agency Services, Inc. and Agency Premium Services, Inc. For the sake of clarity, we refer to both of these entities herein as "Agency." Plaintiff executed a power of attorney to Agency, authorizing Agency to request Canal to cancel plaintiff's policy if plaintiff failed to pay the premiums when due.
On 5 December 1996, plaintiff failed to make a scheduled premium payment. Agency mailed a "Notice of Intent to Cancel" the policy to plaintiff on 12 December 1996. The Notice of Intent to Cancel stated that the effective cancellation date would be 30 December 1996 unless plaintiff paid the past-due premiums. On 26 December 1996, Agency mailed a "Notice of Cancellation" to plaintiff Cahoon, which Notice stated that 30 December 1996 was the effective date of cancellation. On 30 December 1996, Agency mailed a copy of the Notice of Cancellation to Piedmont; the Notice was received by Piedmont on 2 January 1997.
On 8 January 1997, the Kenworth tractor-trailer owned by plaintiff and driven by Henry Snell, his employee, was involved in an accident. Snell was operating the Kenworth vehicle in the course and scope of his employment with plaintiff when he collided with a 1985 Pontiac driven by Christy Ange. Ms. Ange sustained injuries in the accident and asserted a personal injury claim against both plaintiff Cahoon and Snell. Five days after the accident, on 13 January 1997, Cahoon unsuccessfully attempted to pay the full amount of the past-due premium. Canal denied coverage and plaintiff filed this request for a declaratory judgment, seeking a declaration that the Canal automobile policy provided him coverage. Canal also moved for summary judgment. The trial court found that the purported cancellation of the Canal policy was ineffective, and granted summary judgment for plaintiff. Canal and Agency appealed.
Appellants contend that they complied with the provisions of N.C. Gen. Stat. § 58-35-85 in canceling the policy issued to plaintiff Cahoon, and argue that the trial court erred in ruling otherwise. We agree, and grant summary judgment in favor of the appellants, Agency and Canal.
N.C. Gen. Stat. § 58-35-85 sets out the procedure for cancellation of an insurance policy by an insurance premium finance company:
When an insurance premium finance agreement contains a power of attorney or other authority enabling the insurance premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be cancelled unless the cancellation is effectuated in accordance with the following provisions:
(1) Not less than 10 days' written notice is sent by personal delivery, first-class mail, electronic mail, or facsimile transmission to the last known address of the insured or insureds shown on the insurance premium finance agreement of the intent of the insurance premium finance company to cancel his or their insurance
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