National Automobile & Casualty Insurance v. California Casualty Insurance

Opinion

WOODS, P. J. This appeal addresses the issue of the effect of an offer to renew a policy of automobile insurance, made after the death of the named insured. We have concluded that the trial court properly determined that insurance coverage existed on the date of the subject accident, and therefore affirm the judgment below.

Appellant, National Automobile and Casualty Insurance Company, issued a policy of automobile liability insurance to Melvin Gray. That policy was effective from January 26, 1979 to July 26, 1979. Melvin Gray was the named insured under the policy; however, additional insureds were identified at paragraph 16 of the policy and included “any person having proper temporary custody of an owned automobile, as an insured, ...” following the death of the named insured.

On May 31, 1979, during the policy period, Melvin Gray died. The fact of his death was unknown to appellant. Following his death, the insured automobile was properly in the possession of Roger Gray, whom appellant admits was an insured under the subject policy.

[339]On July 31, 1979, appellant sent a notice to Melvin Gray, which stated: “Notice of lapsed policy. Policy lapsed on effective date (07-26-79) due to nonpayment of premium. If you desire to continue your policy with no lapse in coverage, payment must be received by 08-12-79. You have been insured with us since January 1978, we hope you will continue with us. Thank you.”

On August 4,1979, the insured automobile, operated by Roger Gray, was involved in an automobile accident, causing injuries. On August 20, 1979, appellant sent a notice to Melvin Gray, informing him that the policy had been canceled effective July 26, 1979.

Respondent, California Casualty Insurance Company, insurance carrier for third parties injured in the August 4 accident, paid damages to its insureds under its uninsured motorist policy. In a declaratory relief action brought by appellant, respondent sought reimbursement. Following trial by court, judgment was awarded to respondent, based on the trial court’s conclusion that “the National Automobile insurance policy was in full force and effect on August 4, 1979 at the time of the accident and provided liability coverage for permissive driver and custodian, Roger Gray.”

In reaching that conclusion, the trial court determined that no effective cancellation of the policy had occurred, since appellant failed to comply with Insurance Code sections 662 and 663. We agree.