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Monteleone v. Allstate Ins. Co.11/6/1996
STONE (S. J.), P. J.
Here we hold that Allstate Insurance Company did not breach its contractual duty to its insured by refusing to defend a third party lawsuit. The accident or loss occurred during the time the policy had lapsed for nonpayment of premium.
Monte Monteleone, Cindi Monteleone, and April Monteleone appeal from a judgment entered upon grant of summary judgment in favor of respondent Allstate Insurance Company. They contend that the trial court erroneously granted summary judgment because Allstate had renewed the policy without lapse, had collected the entire premium without deduction or offset for a lapse, had waived its right to claim lapse and is estopped from so asserting, and that the loss in progress rule is inapplicable to this case. We affirm the judgment.
FACTS
Appellants were insured under an automobile liability policy issued by respondent in December 1991. The policy was renewed June 21, 1992, for an additional six months. November 16, 1992, thirty-five days before the expiration of the second six-month policy term, Allstate mailed an offer to renew for a third six-month term from December 21, 1992, to June 21, 1993. The offer stated in pertinent part: "Important . . . this is a renewal offer only. Insurance described on this document will not go into effect unless the premium is paid by the due date shown on the payment notice below. . . ." The due date on the payment notice was December 21, 1992. The notice stated a total premium due of $912 but gave the option of installment payments. The notice also stated: "Renewal coverage will not go into effect if we do not receive payment by your due date."
Appellants did not pay the premium by the due date. On December 31, 1992, appellants received a notice from Allstate which stated: "Your insurance coverages have terminated. You are eligible for reinstatement of your policy, with a short lapse in coverage. Please read the enclosed letter for more information." Mrs. Monteleone stated that the letter informed them that they were able to reinstate the policy by paying the first premium installment of $230.50 by January 7, 1993. She called her Allstate agent, Charles Bartlett, on December 31, 1992, and left a message that she wanted her daughter April added to the policy. On January 3, 1993, April drove the family vehicle and was involved in an accident which became the basis for a personal injury claim and lawsuit by Charles Nelson. On January 4, 1993, Mrs. Monteleone mailed the installment premium payment to Allstate. Allstate received the late premium payment of $230.50 on January 6, 1993, and reinstated the policy effective January 4, 1993, the date the premium was mailed and one day after the accident.
On January 7, 1993, Allstate issued an amended declarations page confirming that April had been added as an insured driver and that, with the additional driver, the premium for the full six-month policy would be $1,211. The amended declarations page and identification cards reflected a policy period of December 21, 1992, through June 21, 1993, without specifying that the policy had lapsed for a portion of the policy period. It stated that the policy was issued January 7, 1993, and showed that the policy period had been amended January 5, 1993.
Appellants received a credit of $69.30 several weeks after issuance of the amended declaration representing a reduction in premium to reflect the period from December 21, 1992, to January 4, 1993, for the period Allstate's records showed the policy was out of force. Allstate denied appellant's claim on January 11, 1993. Appellants settled the personal injury suit with Charles Nelson for $17,500 and brought suit again
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