92 A.D.2d 238 | N.Y. App. Div. | 1983
OPINION OF THE COURT
In this action, plaintiffs, Peter and Betty Anzalone, seek a declaration that the automobile liability policy issued to defendant Ellen Steed by defendant Insurance Company of North America (INA), was in effect on July 18, 1979 when
To avoid liability under its policy, INA had the burden of proving cancellation in strict compliance with section 576 of the Banking Law (see Savino v Merchants Mut. Ins. Co., 44 NY2d 625; Viuker v Allstate Ins. Co., 70 AD2d 295). A premium finance company has the right to cancel the policy it has financed but only if the right is contained in the finance agreement (Matter of Sweers v Malloy, 28 AD2d 955). On this record — and in the absence of any denial from Steed or any contrary evidence (see Welde v Wolfson, 32 AD2d 973; Fisch, New York Evidence [2d ed], § 103) — the authenticity of Steed’s signature on the finance agreement may be reasonably inferred from the fact that she paid at least five premium installments (see People v Manganaro, 218 NY 9; People v Dunbar Contr. Co., 215 NY 416; People v Winley, 105 Misc 2d 474; 7 Wigmore, Evidence [Chadbourn rev, 1978], § 2131; Richardson, Evidence [Prince, 10th ed], § 636).
Proof that the cancellation notice was mailed to Steed was insufficient, however. Bernadette Sudenko, an officer of the Bank in charge of the financing of insurance premiums, testified that the Bank’s cancellation notices are produced by computer and placed in envelopes by a clerk who later delivers groups of envelopes to the post office and returns with a mailing sheet stamped by the post office. A
Proof that Steed was in default in the payment of any premium installment also was deficient. Sudenko testified that the Bank’s computer automatically generates a cancellation notice when there is a default in payment, but she produced no record of Steed’s payment history. This failure violates the best evidence rule which requires the production of the original writing or that its absence be satisfactorily accounted for (see Mahaney v Carr, 175 NY 454; Butler v Mail & Express Pub. Co., 171 NY 208; Richardson, Evidence [Prince, 10th ed], § 568). Moreover, even though computer printouts of Steed’s payment record might have been admissible in evidence under the business entry exception of the hearsay rule had a proper foundation been laid (see CPLR 4518; Guth Realty v Gingold, 34 NY2d 440, 451), here, no record was offered. Sudenko’s testimony concerning Steed’s default was inadmissible hearsay.
Although the- Bank apparently overcharged Steed in violation of subdivision 4 of section 568 of the Banking Law — a fact which might require a forfeiture of all charges under the premium finance agreement — plaintiffs have not demonstrated that the overcharge was committed knowingly (see Banking Law, § 563). As explained by the Bank, the error occurred because its computation formula did not account for the fact that, in Steed’s case, the finance agreement related to insurance coverage which
In sum, the failure to establish cancellation and premium default mandates reversal and a declaration that the policy issued by INA was in full force and effect on the date of the accident.
Lazer, J. P., Gibbons, Niehoff and Boyers, JJ., concur.
Judgment of the Supreme Court, Queens County, dated July 31, 1981, reversed, on the law, with costs, and it is declared that the policy of insurance issued to defendant Ellen Steed by defendant Insurance Company of North America was in full force and effect on July 18, 1979.