Pacific Automobile Insurance v. Wolff

Opinion

SCOTT, J.

Paul Wolff appeals from summary judgment granted to Pacific Automobile Insurance Company (Pacific). Pacific by its complaint sought a declaration that an assigned risk policy of automobile liability insurance issued to Wolff had been properly cancelled at the request of Central Bank, N.A. (Coast Program) pursuant to the provisions of Insurance Code section 673.

On or about June 3, 1974, appellant’s wife contacted their insurance agency (Bailey, Bowers & Elson) for the purpose of obtaining an assigned risk policy of automobile liability insurance for her husband through the California Automobile Assigned Risk Plan. She requested that the premium be financed. On the same date, an application was made to the California Automobile Assigned Risk Plan to obtain

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automobile insurance for appellant. An “Insurance Premium Financing Installment Note, Security Agreement and Disclosure Statement” (Agreement) was prepared for the purpose of financing the premium through Coast Program, a division of Central Bank, N.A. The Agreement bears the signature of Wolff, but was in fact signed by an employee of the insurance company.

It is acknowledged that the agency was authorized by Wolff’s wife to obtain insurance for him. The Agreement provided that as security for the loan the borrower, i.e., Wolff, assigned the insurance policy to the bank, “including, without limitation, all rights to cancel said policy.” In addition, the borrower appointed the bank as his attomey-in-fact to execute any documents for cancellation of the policy. It was further agreed that any default in payment of the installments would be deemed to be an election by the borrower for cancellation of the policy, and that in such event the bank was authorized to transmit to the insurer notice of this election.

Thereafter, the California Automobile Assigned Risk Plan assigned the risk to respondent Pacific, and Pacific issued to appellant Wolff an assigned risk policy of automobile liability insurance for the period June 6, 1974, to June 6, 1975. Appellant failed to pay the installment due on August 5, 1974, and on August 12, 1974, Coast Program sent a “Notice of Exercise of Right to Cancel,” stating that if payment was not received by August 24, 1974, the insurance carrier would be instructed to cancel the policy. On August 25 or 26, 1974, Coast Program mailed a “Confirmation of Cancellation” to Pacific, instructing Pacific to cancel the policy of insurance on the date specified, i.e., August 24, 1974.