21st Century North American Ins. Co. v. Perez
173 A.3d 64
| Conn. App. Ct. | 2017Background
- Insureds purchased a six-month auto liability policy with monthly installments ($62.24) and a $5 installment fee; they renewed in May 2012 and missed the June installment due before June 11, 2012.
- On June 19, 2012 the insurer sent a certified cancellation notice stating coverage would cease at 12:01 a.m. on July 4, 2012 for nonpayment and that payment of $124.48 by that date would avert cancellation (the insurer’s system required two installments to restore "regular installment billing").
- The insureds made a partial payment of $62 on June 26, 2012 and no further payment by July 4; the insurer cancelled the policy effective July 4, refunded $5.01, and later returned a July 18 payment because the policy had been cancelled.
- A fatal accident involving an insured vehicle occurred on July 28, 2012; insurer sought declaratory judgment (filed May 15, 2014) that it had validly cancelled the policy and had no duty to defend or indemnify.
- Trial court found (1) only $62.24 was actually due to avert cancellation, (2) insureds’ $62 partial payment amounted to substantial compliance and thus coverage remained; insurer appealed. Appellate court reversed and directed judgment for insurer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether amount listed on cancellation notice ($124.48) was the amount actually due to avert cancellation | The cancellation notice correctly required $124.48 (past-due June installment + next installment) to restore regular billing; insurer’s business practice justified amount | Only the single missed installment ($62.24) was truly due; $124.48 was inaccurate and misleading | Court: Trial finding that $62.24 was the amount actually due was clearly erroneous; record supports $124.48 requirement |
| Whether partial payment (~$62) constituted substantial compliance excusing nonpayment | Insurer: doctrine of substantial compliance does not apply to installment premium payments; payment of money and time are of the essence | Defendants: partial payment showed substantial compliance and equity warrants coverage | Court: Substantial compliance/substantial performance not applicable to payment obligations where timely full payment is material; insureds’ partial payment cannot excuse default |
| Whether insurer complied with statutory/policy notice requirements for cancellation | Insurer: notice complied with §38a-343 (certified mailing, required notice period, stated reason, DMV warning) and with policy terms | Defendants: notice was misleading/inaccurate (excessive amount) and thus fatally defective | Court: Statutory and policy notice requirements were met; notice was definite and certain; no evidence insureds were misled |
| Whether unraised statutory (CUIPA/CUTPA/CCPA) claims can be considered on appeal | N/A | Administrator raised those on appeal | Court: Claims unpreserved and not raised/decided below; appellate court declined to consider them |
Key Cases Cited
- Engelman v. Connecticut Gen. Life Ins. Co., 240 Conn. 287 (Conn. 1997) (recognized and described narrow origins of substantial compliance doctrine in beneficiary-change context)
- Pack 2000, Inc. v. Cushman, 311 Conn. 662 (Conn. 2014) (substantial compliance/substantial performance requires breach be nonmaterial)
- Fidelity Bank v. Krenisky, 72 Conn. App. 700 (Conn. App. 2002) (doctrine of substantial performance does not apply to mortgagor’s payment obligations)
- National Grange Mut. Ins. Co. v. Santaniello, 290 Conn. 81 (Conn. 2009) (appellate review of trial court factual findings in insurance coverage matters governed by clearly erroneous standard)
- Majernicek v. Hartford Cas. Ins. Co., 240 Conn. 86 (Conn. 1997) (where written notice of cancellation is required, insurer must comply strictly with policy and statutory mandates)
- Panizzi v. State Farm Mut. Auto. Ins. Co., 386 F.2d 600 (3d Cir. 1967) (payment of premium is the agreed exchange for insurer’s promise; timely payment is essential)