Lena C de Baca (C de Baca) appeals an order of the District Court granting a deelaratory
FACTS
In December 1988, C de Baсa bought a 1982 Plymouth Reliant. On February 2, 1989, C de Baca called the Department of Motor Vehicles and asked what she needed to do to register her car. She was told that she needed to have “proof of insurance.” When C de Baca contacted the Albert Gallegos Agency (Agency) in order to obtain car insurance, she got a quote of $31.00, to insure her vehicle. On February 2, 1989, she purchased and mailed a postal money order in the amount of $31.00 payable to Guaranty National. The money order was received by the Agency on February 3,1989. On February 4, 1989, C de Baca received the application signed by a representative of the Agency. She signed the application on February 5, 1989, and mailed it back to the Agency on February 6, 1989. This application clearly stated that the effective dates of coverage would be from February 3, 1989 to March 3, 1989. C de Baca acknowledged at trial that she knew if she failed to pay her insurance premium on time she would not have any insurance coverage.
On February 9,1989, C de Baca received a “Dear Customer” letter from the Agency. This letter advised her to review a list of items concerning her auto insurance policy. C de Baca also registered her car on this date. On or about February 12, 1989, C de Baca received her first renewal notice that her premium was due for the next month. The renewal notice said thеre was no grace period and payment was due on March 3, 1989. Before the accident, C de Baca had notice that her insurance would expire at 12:01 a.m. March 3, 1989, unless the second month’s premium was paid prior to March 3, 1989.
At her deposition, C de Baca testified unequivocally that she purchased and mailed the second postal money order on March 4, 1989. However, the envelope in which she ■mailed the payment to Guaranty was postmarked March 8, 1989, and the money order she sent to Guaranty was dated March 8, 1989. On March 7, 1989, C de Baca was involved in the accident with Mario Serna, and Mr. Serna died as a result of the accident.
His estate filed a wrongful death action agаinst C de Baca and Guaranty on April 11, 1990, seeking damages and declaratory relief regarding Guaranty’s duty to provide C de Baca with liability coverage. On May 10, 1990, Guaranty filed its Answer denying coverage but admitting that a “genuine controversy” existed on the issue of coverage. In August of 1990, Guaranty successfully moved to be dismissed from the wrongful death action. In February of 1991, Mr. Sеrna’s estate offered to settle its wrongful death claim against C de Baca for $250,000.00 in exchange for providing C de Baca with a release from all future liability under the judgment, provided that C de Baca assign all rights she might have under the policy at issue in this case. On March 11,1991, Guaranty filed its declaratory judgment complaint in this case. Subsequently, judgment was entered against C de Baca in the wrongful death action pursuant to the settlement agreement noted above.
Effective Date of Insurance Coverage
C de Baca advances four points concerning why she had insurance coverage at the time of the accident: (1) that the trial court erred in finding that her insurance coverage began
“Unless clearly erroneous or deficient, findings of the trial court will be construed so as to uphold a judgment rather than to reverse it.” Herrera v. Rоman Catholic Church,
Our Supreme Court has recognized that coverage would normally be expected to commence upon receipt of a premium by an agent. See Ellingwood v. N.N. Investors Life Ins. Co.,
Where an insurance company has authorized the agent to accept payment, the agent may well appear to have the authority to effect immediate coverage. We believe a typical customer would have a reasonable belief that in return for a payment of cash, and an authorization for subsequent automаtic payments, he has purchased some immediate benefit in return, especially where the consumer questions the agent and is assured that this is the case.
Id. The trial court found that Guaranty was at risk as of February 3, 1989, and on that same day, C de Baca could have expected her insurance coverage to commence. The trial cоurt also found that, at the time of the accident, C de Baca did not have insurance coverage. The trial court further found that C de Baca knew at the time of the accident she had no liability insurance and that she attempted to reinstate coverage by purchasing the money order after the accident.
We believe that the triаl court’s findings of fact and conclusions of law concerning February 3, 1989, as the effective date of insurance coverage, are supported by substantial evidence for several reasons. First, C de Baca received many documents clearly showing that coverage began on February 3, 1989, including a renewal notice, a car pоlicy, a “Dear Customer” letter, and a signed insurance application. All of these documents are substantial evidence in support of the trial court’s finding that coverage began on February 3.
Second, to the extent C de Baca argues the Agency lacked authority to bind coverage on February 3, 1989, Guaranty persuasively argues that it ratifiеd the agent’s binder, thus making the effective date of coverage February 3, 1989. See Jessen v. National Excess Ins. Co.,
Third, it does not appear that C de Baca ever objected to the coverage date commencing on February 3, 1989, or asked for a different date of coverage. Moreover, the “Dear Customer” letter specifically advised C de Baca to review if “the beginning date and time” of the policy application was correct. C de Baca’s claims might have been more persuasive if it truly appeared that she was confused or somehow misled into believing that her coverage would begin later than February 3 or end later than March 3. But the fact that C de Baca never objected to coverage beginning on February 3, despite clear indications that it would, further supports the trial court’s finding that coverage commenced on February 3.
Moreover, the evidence strongly suppоrts the trial court’s determination that coverage ended on March 3. Indeed, the evidence showed that C de Baca knew at the time of the accident that she was not insured. As stated above, the money order she sent to Guaranty was dated March 8, 1989. Nevertheless, C de Baca erroneously testified in her deposition that she purchased аnd mailed a money order on March 4, 1989. The foregoing strongly suggests that C de Baca knew her coverage ended on March 3 and now claims otherwise, despite the fact that she had received notice that the term of coverage would expire on March 3, 1989, and had not objected. Although language in the application may have injеcted ambiguity into the contract between C de Baca and Guaranty, the other evidence at trial resolved that ambiguity. See Ellingwood. Accordingly, based on the foregoing evidence, we affirm the trial court’s findings and conclusions to the effect that C de Baca was insured by Guaranty from February 3 to March 3, and uninsured at the time of the accident оn March 7. See Herrera,
Duty to Defend
Aside from whether insurance coverage actually existed at the time of the accident, C de Baca maintains that Guaranty failed to prove it had no duty to defend her in the wrongful death action brought by the estate of Mario Serna. Thus, C de Baca argues the trial court erred in ruling that Guaranty had no duty to defend. The trial court found that because C de Baca’s insurance coverage had lapsed prior to the date of the accident and was not reinstated until two days after the accident, Guaranty had no duty to defend C de Baca.
Our Supreme Court has recognized that when an insured is sued, the insurer has no duty to defend if the allegations in the complaint clearly fall outside the policy’s provisions. See Bernalillo County Deputy Sheriffs Ass’n v. County of Bernalillo,
C de Baca points out that when Guaranty initially answered the wrongful death complaint it admitted that a genuine controversy existed regarding whether C de Baca had insurance coverage at the time of the accident. Relying on Illinois case law, C de Baca suggests that Guaranty was either obligated to defend her under a reservation of rights or immediately pursue a declaratory judgment action tо determine whether C de Baca had insurance coverage. See, e.g., LaRotunda v. Royal Globe Ins. Co.,
Ten-Day Notice of Cancellation
C de Baca next argues that Section 59A-18-29(A) required Guaranty to give her a ten-day notice of canceUation of her insurance coverage for nonpayment of the renewal premium. She further contends that her insurance should have continued for at least ten days past the termination date until at least March 13, 1989, because of the lack of notice. We disagree.
Section 59A-18-29(A) provides that:
An insurer or agent may at any time cancel a poUcy for nonpayment of premium thereon when due, whether the premium is payable directly to the insurer оr agent or indirectly under any premium financing plan or extension of credit. The insurer or agent shaU give the named insured written notice of such canceUation not less than ten (10) days prior to the effective date of the canceUation.
The trial court found that there was a lapse in coverage, rather than a canceUation of coverage between March 3 and March 9, 1989. Thus, the trial court concluded that the provisions of Section 59A-18-29(A) did not apply in this case. We beUeve the trial court properly found that there was a “lapse” and not a “canceUation.”
“The term ‘canceUation’ refers to a unilateral act of the insurer terminating coverage during the poUcy term.” See Safeco Ins. Co. v. Irish,
CONCLUSION
In summary, we affirm. The trial court did not err in ruling that Guaranty had no duty to defend, that C de Baca had no insurance coverage at the time of her accident, and that Guaranty was not bound by the ten-day notice of cancellation requirements of Section 59A-18-29(A).
IT IS SO ORDERED.