MARSH AL: HEAR YE.HEAR YE.HEAR YE.THE SUPREME COURT OF FLORIDAIS NOW IN SESSION. ALL WHO HA VE CAUSE TO PL EA, DRAW NEAR, GIVE ATTENTIONAND YOU SHALL BE HEAR D. GOD S AVE THESE UNITED ST ATES , THE GREAT STATE OF FLORIDA AND THIS HONORA BLE COURT. THE COURT WILL CALL THE NEXT CASE FOR THIS MORNING, WHICH IS MILLER VER SUS SCOTTS DALE INSUR ANCE COMPANY. PARTIES READY?
YES, YOUR HO NOR . YES. MAY IT PLEASE THE COURT.MY NAME IS CHARLES SCHRO , AND I AM REPRESENTING THE PELL APARTMENTS THE MILL ERS. THIS CASE -- THE AELLANT S, THE MILLERS. THIS CASE IS IN FRONT OF THE COURT A CERTIFIED QUE STION FROM THE PRESIDENT LEFT CIRCUIT WHETHER 627.848 FLORIDA STATUTES CONTEMPLATES A SIN GLE DATE CANCELLATION FOR THE INSURANCE CONTRA CT AS A WHOLE OR WHETHER THE CONTRACT CAN BE CANCELLED AS TO DIFFERENT INSUR EDS AT DIFFERENT TIMES, DEPENDINGON A STATUTORILY REQU IRED NOTICE GIVEN TO THAT INSURED.NOW, THE MILLER S SUBMIT THAT THE STATUTE CLE ARLY CONTEMPLATES A SINGLE DATE OF CANCELLA TION. IN FACT FIRST IT IS IN THE PLAIN LANGUAGE OF THE STATUTE ITSELF. IF YOU LOOK AT THE MAIN B ODY OF THE STATUTE, I T T ALKSABOUT IN THE FI NAL STATEMENT, THE INSU RANCE CONTRACT S HALL NOT BE CANCE LED , UN LESS CANCELLATION IS IN ACCORDANCE WITH THE FOLLOWING PROVISIONS . THE INSURANCE CONTRACT. ONE OF THE FOLLOWING PROVISIONS IS SUBSECTION D. IT IS THE ONE THAT DEALS WITH THIRD PARTY NOT ICES , WHICH IS WHAT IS INVOLVED IN THIS CASE. AND THAT SA YS THAT ALL STATUTORY REGULA TORY AND CONTRACTUAL RESTRICTIONS PROVIDING THAT EITHER THE INSURE OR OR THE INSURED HAS -- THE SH ERER OR INSURED HAS TO G IV E NOTICE TO SOME THIRD PARTY, IN CLUDING GOV ERNMENT AGENTS, INSURANCE CAR RIERS , MORTGAGE GEESE OR P ERSONS DESIGNATED TO RE CEIVE NOT ICE SHALL ALY. IT, THEN, GO ES ON TO SAY THAT THE INSURANCE COMPANY HAS TO GI VE THE NOTICE UNDER THOSE CIRCUMSTANCES , O N BEHALF OF EITHER ITS ELF OR THE INSURED, DEPENDING ON WHO WOULD BE REQUIRED BY THE CONTRACT, AND IT SHALL GIVE THAT NOTICE. FINALLY, IT SAYS , AND WHEN THERE IS A THIRD PARTY NOTICE, IT SHALL DETERMINE AND CALCULATE THE EFFECTIVE DATE OF CANCEL LATION FROM THE DAY IT RECEI VES THE CO PY OF THE NOTICE OF CANCELLATION FROM THE PREMIUM FINANCE COMPANY. IN OTHER WORDS , WHEN THERE IS A THIRD PARTY NOTICE REQUIREMENT, THE INSURANCE COMPANY HAS TO COMPLY WITH IT, HAS T O SATISFY IT BEFORE THE POLI CY IS CANCELLED , A NDBECAUSE IT CAN'T COMPLY WITH IT UNTIL IT FINDS OUT FR OM THE PREMIUM FINANCE COMPANY THAT THE POLICY IS TO BE CANCELLED, YOU SET A N EWDATE. HERE IT IS UNDIS PUTED THAT THE INSURANCE COMPANY GOT NOTICE FROM THE PREM IUM FINANCE COMPANY ON JAN UARY 9.
CLEA RLY THIS STATUTE IS FOR THE PROTECTION OF THOSE ENTITIES THAT HAVE A N INSURABLE INTE REST AT THE TIME THAT THE CONTRACT IS CANCELLED . CORRECT? I MEAN , GIVEN NOTICE.
YEAH, IN THIS CASE.
OKAY, AND THAT , IN T HIS CASE, THE , THE STATUTE IS FOR THE BENE FIT OF THE PREMIUM O R FOR THE MORTGAGE GEE . -- MORTGAGEE.
YES AND THE INSU RED.
THE INSURED CANCELLED THE CONTRACT.
ACTUALLY THE PREMIUM FINANCE COMPANY AS ITS AGENT , CANCELLED THE CONTRACT. THE INSURED HAS IT , AND IF THE COURT WILL REC ALL, THERE IS AL SO A THIRD E NTITY HERE THAT WAS ENTITLED T O NOTICE , ACCOMPANY CALLED SAIL A WAY PRODUCTIONS THAT HAD LIABILITY INSURANCE AS A N INSURED BY ENDORSEM ENT. SO --
ARE THEY MAKING A C L AIM HERE?
THE ONLY PERSON M AKING A CLAIM HERE IS THE INSURED.
RIGHT, BU T IS THE INSUREDMAKING A CLAIM, I MEAN, H OWDOES THAT EN TITY , IF - -
WELL, IT IS THE S AME POSITION AS THE MORTGAGE GEE . IN OTHER WORDS SCOTTSDALE HAS CONCEDED .
BUT WHERE DO THEY FIT IN?
NEITHER THE MORTGAGEE NOR THE INSURED IS MAKING A CLAIM. WHAT THE IN SURED IS SAYING IS BECAUSE THE STATUTE SAYS THAT THE POLICY WASN 'T CANCELED UNTIL AT LE AST JANUARY 19 AND THE ACCI DENT OCCURRED ON JAN UARY 1 3 , THAT IT HAS CO VERAGE . IN OTHER WORDS, IT IS, YOU KNOW, SOMEONE SLIED ON THE PREMISE, YOU KN OWS , THE INSURED'S PREMISE.
YOUR OONENT 'S BRIEF ARGUES THAT THERE , REALLY THEY AG REE WITH THE STATUTE , I THINK , BUT THEY ARE SAYING THERE ARE TWO DIFFERENT POLICIES HERE, THE LIABILITY POLICY AND THERE IS T HEWHATEVER THE OTHE R --
THEY SAY JUST A POLICY FOR THE BENEFIT OF THE MORTGAGEE AND THE PROPERTY POLICY.
THE PROP ERTY POLICY.
LET ME INTERJECT THAT BECAUSE FIRST THING IS VERY INTERESTING, BECAUSE IT IS TELLING AS TO WHAT THE STATUTE SAYS. THEY TAKE THIS POSI TION FOR THE VERY FIRST TIM E IN THIS COURT. THE REASON THE LEFT CIRCUIT CERTIFIED THE QU ESTION THE WAY IT DID IS BECAUSETHROUGHOUT THE FEDERAL COU RTPROCEEDINGS, THEY TOOK THEPOSITION THAT THEY WERE PIECEMEAL CANCELLATION ANSWER WE TOOK IT WAS A SINGLE DATE CANCELLA TION. THE FIRST TIME THEY RAISED THIS NEW AR GUMENT IS IN T HIS COURT WHICH IS ANOTHERREASON WHY OUR RE PLY BR IEF IS IMPORTANT , SPECIFICALLY BECAUSE WE HAD THE ONLY OORTUNITY TO ADDRESS THIS BUT LET ME SAY THAT MOST THEORIES ARE CREATED AFTER THE FACT TO WORK BACKWARD TO THE RESULT AND THERE ARE REALLY SERIOUS HO LES IN THAT THEORY. THE FIRST IS IT SI MPLY IGNORES THE RELEVANT STATUTORY LANGUAGE. THE CANCELLATION PROVISIONTHAT THEY SAY ALIES ONLY TO PROPERTY COV ERAGE AND ONLY TO NORTHSIDE, THIS IS WHAT IT TH RILL SAYS T SAYS , IF WE, THAT IS SCOTTSDALE , CANCEL THIS POLICY , WE WILL GIVE WRITTEN NOTICE TO THE MORTGAGE HO LDER AT LEAST TEN DAYS BEFORE THE EFFE CTIVE DATE CANCELLATION , IF WE CANCEL FOR YOUR NONPAYMENT OF PREMIUM OR 30 DAYS BEFORE THE EFFECTIVE DATE OF CANCELLATION, IF WE CANCEL FOR ANY OTHER REASON.
WHO CANCEL ED THE POLICY ?
IN THIS CASE , THE PREMIUM FINANCE COMPANY AND THEN SCOTTSDALE.
AND THEN SCOTTSDALE?
YES. SCOTTSDALE HAS CONC EDED IN ITS BRI EF THAT IT T REATED IT AS A CANCELLATION FOR NONPAYMENT OF PREMIUM. IN OTHER WORDS BY SCOTTSDALE. WHEN IT RECEIVED THE PREMIUM FINANCE COMPANY'S NOTICE.
BUT WAS IT CANCELLEDBECAUSE OF A NONPAYMENT OF PREMIUM, OR WAS IT NO LONGER IN EFFECT BECAUSE IT WAS CANCELLED BY THE INSURED?
WELL , IT WAS CANCELLED , YOU KNOW, IT WAS CANCELLEDBY THE PREMIUM FINANCECOMPANY, UNDER ITS POWER O F ATTORNEY, BUT IT WAS CANCELLED FOR FA ILURE , ALLEGED FAI LURE TO PAY A PREMIUM.
I GUESS MY FUNDAMENTALQUESTION IS, THIS PROVISION THAT YOU JUST READ FROM IN THE POLICY, SPEAKS AS TO THE INSURANCE COMPANY AFFIRMATIVELY CANCELING THE POLICY BECAUSE OF NONP AYMENT OF PREMIUM OR SOME OTHER EVENT AND IN A 30-DAY DIFFERENTIAL.
RATE.
BUT IN THIS CASE WE HAVE THE INSURED CANCELING THE POLICY .
I UNDERSTAND AND WHAT I AM SAYING TO YOU IS YOU ARE ABSOLUTELY CORRECT BUT SCOTTSDALE HAS CONCEDED IN ITS BRIEF THAT IT TR EATED THIS AS A CONSOL ATION LIE SCOTTSDALE FOR NONPAYMENT OF PREMIUM AND GAVE THE NOTICES AND IT HAS CONCEDE ALSO T HAT THE POLICY WAS NOT CANCELLEDAS TO EITHER NOR THSIDE O R SAIL AWAY , UN TIL AFTER THE INCIDENT, AND IF YOU WA NT I CAN FIND YOU --
NO.
-- THAT. IT IS IN A FOOT NOTE I N THEIR ANSWER BRIEF. BUT WHAT I AM SAYING IS IF YOU READ THAT CANCE LLATION PROVISION, IT DOESN'T SAY ANYTHING ABOUT NORTHSIDE OR ABOUT THE PROPERTY COVE RAGE PART. IT MAKES A SPE CIFIC REFERENCE TO THE POLICY , WHICH , OF COUR SE, OBVIOUSLYIS THE POLICY AS A WH OLE.
IS POLICY DEF INED ANYWHERE IN THE POLICY?
WELL, YOUR HO NOR, THIS WAS A SINGLE DO CUMENT IS SUED UNDER A SINGLE POL ICY NUMBER. I MEAN I RESPECTFULLY --
PART ONE AND PART TWO?
THERE ARE DIFFERENT COVERAGE PARTS , UM AND LIABILITY AND SO ON. BUT YOU HAVE ONE POLICY ISSUED UNDER ONE THI NG, A ND I WOULD SAY THAT EVEN IF YOU FIND THE POLICY AMBI GUOUS , REMEMBER WE ARE ENTITLED TO THE BENEFI T OF THE AMBI GUITY , AND I WOULD RESPECTFULLY SUBMIT THAT SOMETHING ISS UED UNDER ONE POLICY NUMB ER, YOU KNOW, INSURED IS REASONABLY CONSIDERED TO BE ONE POLICY. SECONDLY --
THERE WAS ONE POLICY NUMBER HERE?
YES FOR THE ENTIRE POLICY COVERAGE FOR BOTH PROPERTY AND COMPREHE NSIVE GE NERAL LIABILITY.ALSO IF YOU NOTICE THERE IS A REFERENCE IN THE CANCELLATION PA YMENT TO "YOUR" NONPAYMENT , WHI CH OBVIOUSLY REFERS TO THE C UBAN CLUB , SO THAT THIS ALIES ONLY TO NORTHSIDE IS SIMPLY WRONG. THE SECOND THING THAT I POINTED OUT IS THAT , THIS FAILS BECAUSE THERE, A LSO , IS ANOTHER THIRD PARTY WHO WAS ENTITLE ODD TO NOTICE AT SAIL AWAY . IN OTHER WORDS -- ENTITLED TO NOTICE AT SAIL AWAY . IN OTHER WORDS THE ARG UMENT OF THE PROPERTY POLICY HAS NO RELEVANCE TO SAIL AWAY AND THE GENERAL LIABI LITY COVERAGE WHICH WAS AT ISSUE HERE AND WHO THEY, ALSO , CONCEDE WASN'T CANCELED UNTIL AFTER THE ACCIDE NT, SO THAT WHOLE THING EVAPORATES , AND THEN I FINALLY POINTED OUT THAT, IF YOU LOOK AT THE CASE LAW THAT THEY CITE , IT INVOLVES SITUATIONS IN WHICH ONE POLICY WAS CANCELLED B UTWITH A PURPOSE OF REPL ACING IT IMMEDIATELY WITH ANOTHER POLICY, AND WHAT THEY HELD IN TH OSE CASES WAS THAT THE SEC OND INSURANCE COMPANY COULDN'T TAKE ADVANTAGE OF THE TEN-DAY PROVISION TO BASICALLY GET CONTRIBUTION FOR COVERAGE THAT IT WAS BEING PAID TO PROVIDE. AND YOU KNOW , THERE IS NO RELEVANCE HERE, AND I ACTUALLY TRACED IT BA CK TO A CASE CALLED MORGAN THAT IS ALMOST IDENTICAL TO THE ALFRED CASE THAT INTERPRETS 628.848 BUT COMES TO A DIFFERENT RESULT, BEC AUSE IN THE ONE CASE YOU ARE TA LKING ABOUT REPLA CING THE POLICY , AND IN ANO THER YOU A RETALKING ABOUT CANCELING IT UNDER THE STATUTE.
LE T ME AS K, IF THERE WERE NO PREMIUM FINANCE COMPANY INVOLVED AND THE INSURED WANTED TO CANCEL THE POLICY , AND CANCEL ED IT ON JANUARY 9 , WHAT IS THE OFFIC IAL DATE OF CANCELLAT ION?IS IT WHEN THE INSURED CANCELED IT OR WHEN THE , WHEN SCOTTSDALE GAVE NOTE OTHERWISE JANUARY 1 9 THAT THE INSURED HAD CANCELLED IT?
OK AY. WELL, THAT IS A INTERESTING QUESTION. IT IS NOT THEIR FACTS OF THIS CASE. UNDER THE C ULLEN CASE , EVEN IF THE INSURANCE COMPANY , EVEN IF THE INSURED GAVE NOTICE ON DECE MBER 30 , FI RST INNING IT WAS A CASE H ERE WITH A PREMIUM FINANCE COMPANY WANTED TO CANCEL A POLICY. IT COULDN'T BE CANCELLED UNTIL THE INSURANCE COMPANY GOT NOTICE , BECAUSE OF THE ADVANCED WRITTEN NOTICE O F CANCELLATION PROVISION. I POINTED OUT THAT WHAT THE CASE LAW HOLDS IS THAT THE INSURANCE, THE INSURER HIMSELF, CAN'T CANCEL HIS POLICY WITHOUT COMPLYINGWITH THE STATUTE. NOW , IN THIS CASE , IF THERE WERE --
ZOO THE IN SURED HAS TO GIVE NOTICE - - S O T HEINSURED HAS TO GIVE NOTICE TO THE MORTGA GEE OR WHO WOULD DO THAT?
JUSTICE CANTERO , I G UESSIF THE INSURED CANCELED IT IT WOULDN'T BE FOR NONPAYMENT OF PREMIUM. THERE MIGHT NOT BE A THIRD PARTY NOTICE PROVISION UNDER THOSE CIRCUMSTANCES, SO T HAT IT WOULD REQUIRE ADDI TIONAL TIME, BUT IF THERE WERE A REQUIREMENT FOR A THIRD PARTY NOTICE TO SOMEBO DY , EVEN WHEN THE INSURED CANCELED HIS OWN POLICY, IT WOULDN'T BE CANCELED UNTIL THAT THIRD PARTY NOTICE REQUIREMENT HAD BEEN FULFILLED.
BECAUSE I THINK I T IS A MISNOMER TO SAY THIS IS A CANCELLATION FOR NONPAYMENT OF PREMIUM , BECAUSE SCOTTSDALE RECEIVED ALL ITS PREMIUMS UP FRONT.IT IS THE PREMIUM FINANCE COMPANY THAT DI DN'T RECE IV E ITS , IT IS NOT PREMIUM , I T IS A MONT HLY PAY MENT THAT THEY DIDN'T RECEIVE, SO T HEY WERE CANCELING ON BEHAL F OF THE INSURED.
I AG REE . AND AS I SAY , SCOTTSDALE HAS CONCEDED THAT IT TR EATED THIS AS A CANCELLATION FOR NONPAYMENT OF PREMIUM , THAT IT REQUIRED IT TO GIVE THESE THIRD PARTY NOTICES , AND A S I SAY IT IS CONCEDED IN SO MANY WORDS THAT THE POLICY WASN'T CANCELED AS TO MORTGAGEE OR SAIL AWAY , UNTIL AFTER THE AC CIDENT OCCURRED, SO THE ISSUE THEN BECOMES WHETHER IT IS THERE , BUT I THINK YOU MADE A VERY GOOD POINT WITH THE PREMIUM , SON OF THE ARGUMENT S THAT THEY MAKE IS YOU -- IS, O NEOF THE ARGUMENTS THAT THEY MAKE IS YOU OUGHT TO HAVE THESE THINGS CANCELLED SOONER BECAUSE OTHERWISEPEOPLE ARE GETTING STUF F THAT THEY DIDN'T PAY F OR. THAT ISN'T TR UE BECAUSE THE INSURANCE COMPANY GETS I TSFULL PREMIUM UP FRON T AND I T IS A MA TTER OF RETURN, BUT HERE IN THIS CASE THEY CHARGED THE MINIMUM PREMIUM OF 25 PERCENT BECAUSE OF SHORT-TERM CANCELLATION , WHICH WOULD CA RRY THE COVERAGE THROUGH JANUARY 27 , WHICH IS 14 DAYS A FTER THE ACCIDENT. SO IN OTHER WORDS WE HAVE A SITUATION HERE WHERE WE ACTUALLY PAID FOR SOMETHING WE DIDN'T GET .
THE JUDGE'S ORDER SAYS NO PARTY DISPUTES THAT A V ALID CANCELLATION OF THE C U BAN CLUB'S COVERAGE WOULD HAVE OCCURRED ON JANUARY 9 , THE DATE SCOTTSDALE RECEIVED THE NOTICE OF CANCELLATION WHERE THE CUBAN CLUB , THE ONLY ENTITY ENTITLED TO NOTICE OF CANCELLATION. IS THAT NOT CORRECT?
THAT IS CORRECT, AND ITHINK THAT ACT UALLY WAS MY RESPONSE TO JUDGE CANT ER O 'S QUESTION, JUSTICE WE LLS, IS I SA ID, YOU KNOW , IN OTHERWORDS, IF THE CUBAN CLUB HAD CANCELLED THE POLICY IT WOULDN'T HAVE BEEN FOR NONPAYMENT, AND IF T HEREWERE NO OTHER THIRD PARTY NOTICE PROVISION THAT IS ARE ALICABLE, YOU KNO W, THEREWOULDN'T BE AN YTHING TO DEFEHR CANCELLATION , BUT HERE WE DO HAVE TWO THIRDPARTY NOTICES THAT WERE REQUIRED AND WERE IN FACT , GIVEN , IF YOU L OOK AT DE - 11 PAGE 13 0, YOU SEAL THAT THEY GAVE NOTICE TO SAIL AWAY AND NORTHSIDE, I THINK BY REGISTERED MA IL OR CERTIFIED MAIL, AND --
WERE THOSE NOTICES O NLY REQUIRED FOR NONPAYMENT OF PREMIUM?IS THAT THE ONLY CIRCUMSTANCES UNDER WHICH THOSE THIRD PARTIES WERE REQUIRED TO NOTICE?
NO. ACTUALLY NOT. IN FACT , IT WOULD BE 30 DAYS , IF I, THE PROVISION THAT I JUST READ , IF IT WERE FOR ANY OTHER REASON THAN NONPAYMENT OF PREMIUM. IN OTHER WORDS, THE REASON IT WAS TEN R ATHER THAN 30, IS BECAUSE IT WAS F ORNONPAYMENT OF PREMIUM . YOU REMEMBER I READ THE CANCELLATION PROVISION FORTHE PROPERTY COVERAGE PART IN RESPONSE TO AN EARLIER QUESTION, AND IT SAYS THAT THE MORTGAGEE AL WAYS HAS TO GET NOTICE , AND I GUES S THAT ANSWERS THE QUESTION , Y OUR QUESTION, ALSO, JUSTICE WELLS, IN THIS POLICY , IF THE CUBAN CLUB HAD J UST WRITTEN AND SAID WE WANT TO CANCEL OUR POLICY, YOU KNOW, IT WOULDN'T HAVE BEEN CANCELLED FOR 30 DAYS BECAUSE THERE IS A 30 -DAY THIRD PARTY CANCELLATION PROVISION IN THE POLICY. HERE AS I SAID , ALL THAT NONPAYMENT DOES IS RED UCE I T FROM 30 TO TEN . NOW , THE OTHER THING THAT I POINTED OUT IS THAT EV ERY FLORIDA DECI SION THAT HAS CONSTRUED SE CTION OF 27.848, HAS HE LD THAT THE POLICY -- 627.848 HAS HELD THAT THE POLICY HAS NOT BEEN CANCELLED UNTIL THE REQUIREMENT THAT WAS BEFORE IT IN THE CASE HAD BEEN SATISFIED. THE CULLEN CASE AS I PREVIOUSLY TALKED ABOUT,SAYS THAT YOU CAN'T EVEN , THE INSURED HIMSELF , CAN'T CANCEL THE POLICY , WITHOUT COMPLYING WITH THE STATUTE , AND THE A L FRED CASE THAT I CITED INVOLVED A THIRD PARTY NOTICE PROVISION. THAT WAS ONE WHERE IT WAS A TELLING POLICY, THAT YOU HAD TO GIVE NOTICE TO THE CONSUMER AFFA IRS DIVISION BEFORE YOU CAN CANCEL IT, AND THE COURT HELD THAT, BECAUSE NOTICE HADN'T B EEN GIVEN THE POLICY HADN'T BEEN CANCELLED , WHICH IS EXACTLYWHAT THIS THING SAYS, WHICH THIS STATUTE SAYS. IT SAYS THE INSURANCE CONTRACT SHALL NOT BE CANCELLED , UNLE SS CANCELLATION I S INACCORDANCE WITH THE FOLLOWING PROVISIONS , AND THAT WAS ESSENT IALLY AN IDENTICAL, A SIMI LAR PROVISION TO THE PROVISION AT ISSUE IN THIS CASE . IF THE COURT DOESN'T HAVE ANY FURTHER QUESTIONS, I W ILL RESE RVE THE BAL ANCE OF MY TIME FOR REBUTTAL , IF I MAY.
CHIEF JUSTICE: THANK Y OUVERY M UCH.MR. RUSSO.
MAY IT PLEASE THE COURT. MY NAME IS ANTH ONY RUSS O. I REPRESENT SCOTTSDALE INSURANCE COMPANY. IT IS CLEAR THAT A QUESTION HAS DEVELOPED IN THE MIND OF THE COURT ABOUT WHO CANCELLED THE POLICY AND UNDER WHAT CONTRACTUAL PROVISION THAT OCCURRED. SO LE T ME , FI RST , ADD RESS THAT QUESTION. IT JUST TAKES A MINUTE. THE POLICY CONT AINS TWO CANCELLATION CLAUSE THAT MAY COME INTO PLAY HERE. THE FIRST ONE IS THE GENERAL CANCELLATION PROVISION. THAT IS FOUND IN THE POLICY WHICH IS ATTA CHED AS AN EXHIBIT TO DE -1 1. IT IS 0 71. THAT IS THE GEN ERAL FLORIDA CANCELLATION PROVISION, AND IT SAYS IF THE NAMED INSURED , CUBAN CLUB , W ANTS T O CANCEL THE POLICY IN ITS ENTIRE TY, IT MAY DO SO WITH AD VANCE WRITTEN NOTICE, WHICH ARE THE SAME WORDS THAT ARE U SED IN THE CULLEN CASE. THAT IMPOSES A D UTY ON THE CUBAN CLUB , TO GIVE WRITTEN NOTICE TO THE INSURED THAT IT INTENDS TO CANCEL , S O THAT IT CAN'T RETROACTIVELY CANCEL AND GET ITS PREMIUM BACK AFTER COVERAGE HAS ALREADY BEEN PROVI DED. NO FU RTHER NOTIFI CATION RIGHTS ARE REQUIRED TO GO OUT FROM THE INSURER T O ANYONE UNDER THAT PROVISION , INCLUDING THE MORTGAGEE OR ANY ADDIT IONAL INSURED.
LET ME MAKE SURE I UNDERSTAND. YOUR PO SITION IS THAT THIRD PARTIES SUCH AS MORTGAGE HOLDERS AND LIENHOLDERS AND ALL OF THOSE , ARE NOT OTHERWISE UNDER THESE STANDARD POLICIES , ENTITLED TO NOTICE , IF THE POLICY IS CANCELLED?
THAT PARTIC ULAR PROVISION , THE GENE RAL CANCELLATION PROVISION, STANDING AL ONE, DOES NOT RE QUIRE IT.
IS THERE NOT ANOTHER PROVISION THOUGH IN THE POLICY, THAT READ S TO THAT?
YES. THANK YOU. A GREAT SE GUE , BECAUSE IN THE SAME POLICY AT BA ITS , 065 IS THE MORTGAGEE PROVISION, AND THAT MORTGAGEE PROVISION SAYS IF WE, SCOTTSDALE , CANCEL THIS POLICY FOR NONPAYMENT, W E WILL GIVE YOU , MORTGAGEE , TEN DAYS' NOTICE OF THAT CANCELLATION . WE DID NOT CANCEL THAT POLICY. IT WAS THE CUBAN CLUB , THROUGH ITS --
IS THERE ANOTHER PERIOD OF TIME THAT SAYS IF T HEINSURED CANCEL S IT , WE WILL GIVE YOU NOTE IS?
THAT IS THE P UNCH LI NE. THE PUNCHLINE IS THE FI RS T --
IS OR IS THERE NOT A?
YES.
THERE IS.
THE FIRST STATE CASE , THIS COURT'S DECISION IN FIRST STATE, LOOKED AT THE SAME SET OF CIRCUMSTAN CES WITH IDEN TICAL POL ICY LANGUAGE AND RULED ON THE SAME SET OF FACT S THAT THE MORTGAGE CLAUSE, THE ONE WE JUST DISCUSSED, QUOTE , OPERATED AS AN INDEPE NDENT CONTRACT OF INSURANCE BETWEEN THE MORTGAGEE AND THE INSURANCE COMPANY AND MADE NOTICE TO THE MORTGAGEE A PREREQUISITE TO CANCELLATION, W HEN THE INSURED CANCELED THE POLICY .
SO YOU ARE TA KING THE POSITION THAT THERE IS A CONTRACT WITHIN, WITH REGA RD TO THE NOTICE , NOT TWO SEPARATE INSURANCECONTRACTS. THAT IS HOW YOU ARE USING THE CONCEPT OF MULTIPLE CONTRACTS .
BOTH WAYS. FIRST OF ALL --
THE FIRST WAY WITH REG ARD TO POLICIES AL WAYS HAVE MULTIPLE KIND S OF COVERAGES.
RIGHT.
ARE WE TO SAY THAT EVE RY POLICY, EVERY SI NGLE CONTRACT THAT HAS MULTIPLE PARTS, CONSTITU TES F IVE SEPARATE CONTRACTS? THAT IS REALLY NOT FLORIDALAW.
WELL , I THINK FLORIDA LAW RECOGNIZES THAT THERE ARE SEPARATE, THERE ARE CERTAINLY SEPARATE CONTRACTUAL OBLIGATION THATIS RUN FROM SCOTTSDALE TO THE NAMED INSURED --
THEY ARE ALL WITHIN ONE CONTRACT THOUGH.
I WOULD SAY THEY ARE SEPARATE CONTRACTUAL OBLIGATIONS.
I WOULD LI KE TO GO TO YOUR SEPARATE ARGUMENT, THOUGH, ON THE MOR TGAGEE, THAT THAT IS A SE PARATE NOTICE CONTRACT. COULD YOU ELA BORATE ON THA T ONE.
YES.
I HAVE SOME INTEREST ES IN THAT.
THE , STA NDING ALONE , THE GENERAL PROVISION DO ES NOT REQUIRE SCOTTSDALE TO G IVE NOTICE TO THE MORTGAGEE. STANDING ALONE , THE MORTGAGEE CANCELLATION CLAUSE, DOES NOT REQ UIRE SCOTTSDALE TO GIVE NOTICE TO ANYONE, BUT THIS COURT'S DECISION IN FIRST STATE , CREATED AND IMP OSED U PON INSURERS IN THIS STATE , AN OBLIGATION, A SEPARATE CONTRACTUAL OBLIGATION, TO GIVE MORTGAGEES TEN DAYS' NOTICE FOR THEIR SEPARATE CONTRACTURAL INTEREST, AND THAT IS WHERE , THAT IS THE ORIGIN OF THIS TEN -DAY , THIS TEN-DAY NOTICE THAT SCOTTSDALE SENT OUT. THIS, JUSTICE ANSTEAD, YOU WERE ON THE COURT THEN AND JUSTICE WELLS, YOU WERE ON THE COURT AT THAT TIME THAT TIME. JUSTICE ANSTEAD, I THINK YOU RECUSED YOURSELF BECAUSE YOU SAT ON THE CASE IN THE FOURTH DCA. JUSTICE SHAW WROTE THE OPINION, AND THAT OP INION CHANGED THE WAY INSURANCE COMPANIES CANCEL , AND IT IS A BENEFICIAL COMMERCIAL PURPOSE. A MORTGAGEE HAS GO T TO KNOW WHEN THEIR POLICY IS CANCELLED BECAUSE OTHERWISE THERE IS NOTHING IN THE CONTRACT THAT WOULD GIVETHEM THAT NOTICE, SO I T SERVES A GO OD COMMER CIAL PURPOSE THAT EX ISTS FOR THIS WHOLE BENEFIT OF THE MORTGAGEE.THIS COURT SAID IT IS A SEPARATE CONTRACT.IT IS A SEPARATE CONTRACT, AND I NEED TO POINT OUT THAT THIS IS CERTAINLY NOT RAISED FOR THE FIRST TIME ON AEAL. IF THE COURT WILL LOOK IN OUR RESPONSIVE PAPERS TO THE MOTION FOR SUMMARY JUDGMENT AND THE DISTRICT COURT, WHICH IS DE -1 6, IF YOU LOOK AT OUR MEMORANDUM IN OOSITION AT PAGE 9 AND PAGES 4-TO-6 , ALL OF IT IS LAID OUT. IF YOU GO TO THE TRANSCRIPT OF THE HE ARING , PAGES 19-TO-20 AND 26-TO-27 , YOU WILL SEE IT ARGUED EXTENSIVELY BE LOW.
YOU TALKED ABOUT THE TERMS OF THE POLICY , AND YOU TALKED ABOUT THE CASE LAW TO SOME E X TENT . ARE YOU GO ING TO ADD RESS THE STATUTE?
YES.
IN OTHER WORDS YOU DON'T DENY THAT IT I S THIS V ERY STATUTE THAT COUNSEL HAS PUT UP THERE IN OUR FACES SO TO SPEAK.
RI GHT.
THAT ALIES HERE. IS THAT COR RECT?
YES . JUSTICE ANST EAD --
HELP ME. HOW ABOUT TUR NING TO THE STATUTE. THAT IS AN AC CURATE REPRESENTATION OF THE STATUTE , IS IT NOT?
PART OF IT. AND --
WELL , AND , HOW ABOUT ADDRESSING HEAD ON, O KAY , THE ARGUMENT --
SU RE.
-- THAT IS MADE BY YOUR OONENT, THAT IT IS A VERY STRAIGHTFORWARD SITUATION,THAT IS THAT THIS IS THE PROVISION OF THE STATUTE THAT A P PLIES . THAT IS THIS IS WHAT HAENED HERE. A PREMIUM FINANCE COMPANY , IS IT NOT , ATTEM PTED THE CANCELLATION HERE.
YES.
AND THAT THE STATUTORY SCHEME SI MPLY HAS COND ITIONS PRECEDENT BE FORE THE POLICY CAN BE CANCELLED , THAT MUST BE FULFI LLED , AND ALL OF THOSE WERE NOT FUL FILLED , IN THIS CASE, BEFORE THE EVENT OCCURRED. SO I A M , IF I UNDERSTAND THE ARGUMENT OF YOUR OP PONENT, IT IS A VERY STRAIGHTFORWARD ONE. THE STATUTE SAYS HERE ARE TEN COND ITIONS PRE CEDENT , AND NOT ALL OF THOSE CONDITIONS PREC EDENT OCCURRED, IN THIS CASE. AND SO HOW COU LD THE POLICY BE CANCELLE D?
WELL , THE , IF THERE IS ONE POINT I HOPE THE COURT TAKES FROM MY PRESENTATION THIS MORNING, IT IS THIS. THAT STATUTE, THE PREMIUM FINANCE STATUTE, REGULATES THE RELATIONSHIP BETWEEN THE PREMIUM FINA NCE COMPANY AND THE INSURED ENTIT Y. IT DOES NOT REGU LATE ANY ASPECT OF THE RELATION SHIP BETWEEN THE INSURED ENTITY AND THE INSURANCE COMPANY. THAT SE COND RELATIONSH IP I S CONTROLLED BY THE CONTRACT , BY OTHER STATUTES.
SURELY IT MUST. IT IS BEFORE US. IT TALKS IN T ERMS OF NOTICE TO GOVERNMENTAL AGE NCIES , INSURANCE CARRIERS T TALKS IN TERMS OF MORTGAGEE S , AGENCIES, PERS ONS THAT ARE ENTITLED TO NOT ICE.
YES.
THIS STATUTE MUST PROVIDE NOTICE .
1 -D, ALL STATUTORY REGULATORY CONTRACTUAL RESTRICTIONS ALY. I AGREE.IF THE CONT RACT, IF A STATUTE, IF A REGULATION , ANY WHERE REQUIR ES US TO GIVE NOTICE, LIKE THE FIRST STATE CASE REQUIRES US TO GIVE TEN DAYS' NOTICE, WE WILL ABIDE. THIS STATUTE IS NOT AN INDEPENDENT WELL SPRING OF NOTICE RIGHTS THAT EXIST WHEN YOU FINANCE A POLICY. YOU CAN'T HAVE TWO SETS OF RULES GOV ERNING CANCELLATION NOTICES, ONE THAT ALIES WHEN YOU FINANCE YOUR PREMIUM AND ANOTHER SET THAT ALIES WHEN YOU DON'T. THIS STATUTE SAYS --
WHY COULD YOU NOT? BECAUSE I MEAN, CERTAINLY THAT OCCURS. THOSE ARE TWO DIFFERENT CIRCUMSTANCES.IF YOU GIVE THE INSURANCE COMPANY AND YOU PA Y IT UP FRONT AND IT IS ALL PAID TO THEM, THAT IS ONE CIRCUMSTANCE, BUT IF YOU ARE GENERALLY THESE OPERATE OUTOF THE AG ENCY THEMSELVES, WHERE THE POLICIES ARE SOLD , AND THEY ENTER IS THEY ENTER INTO THIS CONTRACT AND SO IT IS A CONTRACT THAT CONTROLS THE RELATIONSHIP OF ALL OF THE PARTIES. WHY IS THAT NOT THE CASE ?
THIS STATUTE CONT AI NS , IN THIS PROVISION IN THE PARTICULAR SUBSECTION 1-D, AN IM POSITION , WELL , A COMMAND THAT THE STATUTORY AND CONTRACTUAL AND REGULATORY REQUIREMENTS BEOBSERVE D.BUT THEY WOULD BE OB SERVED ANYWAY. WHAT IS MISSING FROM THIS , TO PUT IT IN CONT EXT , IS 1-C , WHICH STATES THAT, WHEN THE PREMIUM FINANCE COMPANY SENDS TO THE INSURED ENTITY OR RATHER TO THE INSURANCE COMPANY, A NOTICE OF CANCELLATION, IT IS RECEIVED WITH THE SAME FORCE AND EFFECT AS IF THE INSURED , HIMSELF, HAD SENT IT . 1-C SAYS --
WELL , AG AIN, EVEN THE INSURED CANNOT CANCEL IT , IF NOTICE IS TO BE GIVEN TO OTHER CER TAIN PERSONS WHO ARE INTERESTED. EVEN IF THE INSURED WERE PAYING THIS DIRECT LY, I M EAN, YOU CAN'T CANCEL THAT , UNLESS, UNTI L THE NOTE C YST TAKEN CARE OF FOR MORTGAGE HOLDERS. IF THERE IS A CONTRACTUAL OBLIGATION THAT THE INSURED IS UNDER AND THEY ARE LIS TED ON THE POLICY , CAN YOU?
INSUREDS COM E AND GO FROM POLICIES ALL THE TIME.
WA IT. CAN YOU? IF THE INSURANCE COMPANY, ONITS FACE , LISTS CERTAIN INT EREST HOLDERS , CERTAIN INTERESTED CERTIF ICATES O F INSURANCE THAT WON'T BE CANCELLED, THAT EVEN T HEINSURED CANNOT CANCEL IT UNTIL THOSE ARE SATISFIED , ISN'T THAT CORRECT?
THAT IS NOT CORRECT.
THAT IS NOT COR RE CT. YOU CAN CANCEL IT CONTRARY TO CERTIFICATE OF INSURANCE, LISTED MORTGAGE HOL DERS , AN INSURANCE COMPANY OR THE INSURED CAN UNILATERALLY CANCEL IT , AND IF IS EFFECTIVE WI THOUT NOTICE -- AND IT IS EFFE CTIVE WIT HOUT NOTICE.
THAT IS WHAT THE CONTRACT SAYS. THIS COURT MOD TIED TO PROTECT MORTGAGE -- MOD IFIED TO PRO TECT MORTGAGEES , SO THERE IS ADDITIONAL REQUIREMENT OF A MORTGAGEE , BUT ADDI TIONAL INSUREDS , LIENHOLDERS, LOSS PAYESE CANCELLED WITHOUT NOTICE. THAT'S RIGHT -- LOSS PAYEE S , CANCELLED WITHOUT NOTICE.THAT'S RIGHT.
DOESN'T THIS STATUTE REQUIRE NOTICE TO MORTGAGEES? YOU SE EM TO BE SAYING , I AM CONCERNED ABOUT, THAT THE WAY THI NGS WENT HERE OR WHATEVER, THAT THE CANCELLATION SHOULD BEEFFECTIVE EAR LIER, BUT HYPOTHETICALLY AREN'T THERE JUST A MY RIAD OF SITUATIONTHAT IS WE CAN IMAG INE , WHERE FOR INSTANCE A MORTGAGEE DOES GET NOTICE , AND THE WHOLE PURPOSE O F HAVING THIS IN A STA TUTORYSCHEME OR WHATEVER, THAT THE MORTGAGEE , AND THE MORTGAGEE HAS GOT A , NOT JUST A 90 PERCENT INVESTMENT IN THE PROPERTY OR A 9 9 PERCENT ON TODAY'S MARKET, MA YBE HE HAS 110 PERC ENT.
RIGHT .
NOW , I N OTHER WORDS WHERE HE REALLY HAS ALL OF THE INTEREST, AND MERE LY SAYS , AS SOON AS THEY GET NOTICE OF THIS THING, W ELL , W AIT A MINUTE . YOU KNOW , THE PAY MENT THAT HAD TO G O TO THE FINANCE COMPANY WAS $1,0 00 OR SOMETHING.MY GOSH , OUR RI SK IN THIS THING IS SO H IGH , WE SENT OVER A CHECK RIGHT A WAY TO COVER THAT , AND WE WILL DO THAT, EVEN THOUGH WE HAVEN'T EVEN HAD A FULL OORTUN ITY TO EVALUATE YET WHETHER W E ARE GOING TO CONT INUE TO DO THAT, BU T AT LEAS T FOR THE RIGHT NOW , WE ARE ARE GOING TO COVER OUR -- WE ARE GOING TO COVER OUR SITUAT ION HERE WITH THIS B ROAD INSURANCETHAT IS WRITTEN . NOW , W HY , SO IF THAT DOESN'T HAEN, IN OTHER WORDS IF THEY DON'T GET THAT NOTICE , AND THEY DON'T GET THAT OORTUNITY TO DO THAT , THEN ONE OF THOSE COND ITIONS PRECEDENT THAT I S SET OUT IN THIS STATUTORY SC HEME, HAS NOT OCCURRED, AND SO I AM HAVING, AGA IN, I A M HAVING DIFFICULTY WITH SORT OF CREATING THAT IS OUTSIDE OF THIS STATUTORY SCHEME.
WELL, LET ME ANSWE R TWO POINTS. FIRST , THEY DID RECEIVE NOTICE. THEY DID GET THEIR TEN DAYS' NOTICE, AND THE POLICY COVERAGE AS TO THE MORTGAGEE WAS PROTECTED UNTIL THEY HAD THEIR NOTICE AND THEY HAD AN OORTUNITY, THERE IS A CONTRACTUAL, IN THE MORTGAGEE CLAUSE, ALSO PROVIDES AN OORTUNITY FORTHE MORTGAGEE TO REINSTATE THE MORTGAGE FOR ITS O WN BENEFIT.
BUT THE INSURED WOULD STILL HAVE BEEN ONE OF THE PERSONS PROTECTED, NOT JUST MORTGAGEE.IF THE MORTGAGEE HAD ACTED, IS THAT NOT CORRECT?
THAT'S NOT CO RRECT , BECAUSE THE MORTGAGEE HAS A SEPARATE CONTRACT.
SO IF THE MORTGAGEE HAD GONE AHEAD AND PAID THE $1,000 F EE THAT I AM TAL KINGABOUT, THAT WOULD NOT HAVE IN URD TO THE BE NEFIT - - INURED TO THE BENE FIT OF THE OWNER INSURED.
I BE LIEVE THE MORTGAGE CLAUSE ITSELF SAYS YOU MAY REIN STATE THIS INSURANCE FOR YOUR SOLE BENEFIT.
WE ARE NOT TALKING ABOUT REINSTATEMENT.WE ARE TALKING ABOUT CANCELLATION AT THE OUTS ET , ARE WE NOT? ARE YOU TAL KING ABOUT REINSTATEMENT?
REMEMBER THE MORTGAGEE CLAUSE SPEAKS IN TERMS OF WHEN WE THE INSURANCE COMPANY, CANCELS THE POLICY FOR NONPAYMENT, WE WILL G IVE YOU, MORTGAGEE , TEN DAYS' NOTICE.
DOES THIS STATUTE SP EAK TO REINST ATEMENT , OR DOES IT SPEAK TO CONDITIONS PRECEDENT TO CANCELLATION ?
THE STATUTE , THE CONTRACT SPEAKS TO REINSTATEMENT. THE STATUTE SAYS WHAT EVER CONTRACT PROVISIONS EXIST AS TO CANCELLATION , PER CYST ANIMUS BE EN FORCED - - PERSISTS AN IMUS BE ENF ORCED .
ANSWER MY QUEST ION ON THAT. THE FIRST PART OF THE STATUTE SE CTION D , S PEAKS TO STATUTORY REGULATORY OR CONTRACTUAL CONDITIONS ON THE INSURED.
RIGHT.
CANCELING.
YES.
WHAT SU CH CONTRACTUAL RESTRICTION INS THIS POLICY ARE THERE ON THE INSURED CANCELING THE POLICY WITHOUT GIVING NOTICE TO THE MORTGAGEE ?
I DON'T BELIEVE THERE ARE ANY. I DON'T --
THEN IF I READ T HESTATUTE THERE, THEN IT SAYS SUBJECT TO THAT, THEN , THE INSURED, IN ACCORDANCE WITH SUCH PRESCRIBED NOTICE , IS REQUIRED TO GIVE SUCH NOTICE TO THE MORTGAGEE .
WE LL, IF THE INSURED IS NOT REQUIRED BY THIS INSURANCE CONTRACT, THEN YOU CAN'T FIND ANY DUTY THERE. YOU MAY FIND ONE IN THE MORTGAGE AGREEMENT OR SOME OTHER DOCUMENT WE ARE NOT LOOKING AT. THIS STATUTE, I BELI EVE, A LSO REQUIRES THE INSURED TO GIVE WHATEVER NOTICE IT IS REQUIRED TO GIVE , UNDER THE CONTRACT AS WELL. AND I THINK THIS COURT'S DECISION IN FIRST STATE, IMPOSED THAT DUTY ON MY CLIENT, A DIET WH ICH MY CLIENT EXEC UTED , AND W E -- A DUTY WHICH M Y CL IENT EXECUTED AND WE HELD OPEN AN ADDITIONAL TEN DAYS T O PROTECT THE MORTGAGEE.
CHIEF JUSTIC E: JUSTICE QUINCE HAS A QUES TION.
I N EED YOU TO EXKLAIN PLAIN IF THE -- EXPL AIN IF THE MORTGAGEE GETS NOTICE AND DECIDES TO PAY THE PREMIUM OR PAY THE PREMIUM FINANCE PERSON, SO THAT THE POLICY IS NOT CANCEL ED , W HAT IS BEING INSURED ?
THE MORTGAGEE 'S INTE RE STIN THE PROPER TY. IF THERE IS A M ILLION DOLLAR PROPERTY AND THEY HAVE A $500,000 MORTGAGE, IT IS THEIR INSURA BLE INTEREST .
SO THE OTHER PA RT , B UTTHE POLICY ITSE LF , SO , AS A PREMISE POLICY , CO RRECT, THAT IS NO LO NGER BEING COVERED, IF IN FACT , THE MORTGAGEE COMES IN AND PAYS THE PREMIUM OR PAYS THE PREMIUM FINANCE COMPANY?
PAYS , WELL , YES . THAT'S CORRECT. ONLY IT WOULD PAY A PREMIUMTO HAVE ITS MORTGAGEE INTEREST PROTECTED.
SO IT CANNOT COME IN AND PAY WHATEVER THE OUTSTANDING MONEY IS TO THE PREMIUM FINANCE COMPANY. IF IT COME S IN AND PAYS THAT , DON'T YOU HAVE THE ENTIRE COVERAGE, THEN , TO CONTINUE?
I THINK THE INSURANCE COMPANY WOULD BE HA Y TO TAKE THE ENTIRE PREMIUM AND REINSTATE THE COVERAGE , BUT THAT SEPARATE CONTRACTUAL ARRANGEMENT COULD BE REAC HED , I AM SURE.
AGAIN ARE WE ONLY TALKING ABOUT REINSTATING THE COVERAGE, OR ARE WE T ALKING ABOUT NOT CANCELING THE COVERAGE?
WELL , LE T'S LOOK AT THE EXACT LANGUAGE OF THE PROVISION, WHICH IS AT 065 , SAYS IF WE D ENY , WELL , ACTUALLY SUBSECTION D SAYS IF WE DENY YOUR CLAIM , MEANING THE INSURED'S CLAIM , BECAUSE OF YOUR ACTS , SAY ARSON IN A FIRE SIT UATION , OR BECAUSE YOU FAIL TO COMPLY WITH TERM S OF THIS PART, THE MORTGAGE HOL DE R WILL STILL HAVE THE RIGHT TO RECEIVE LOSS FAMENT, IF THE MORTGAGE -- LOSS PAY MENT, IF THE MORTGAGE HOLDER PAYS ANY PREMIUM DU E.
THAT IS ANOTHER CL AUSE. YOU ARE PULLING THING S OUT OF, THAT IS A CLAUSE ON A DEFAULT BY AN INSURED UNDER AN INSURANCE CONTRACT, AND IT IS A NO-HARM KIND OF CLAUSE. SO GO B ACK AND ANSWER THE QUESTION WITH REGARD TO THE PAYMENT OF THE PREMIUM . THAT IS WHAT S HE IS AS KING.
IF THE MORTGAGEE PAYS THE PREMIUM, THE PREMIUM WHICH COVERS ALL WHAT I S BEING INSURED , THEN YOU STILL HAVE PREMISE LIABILITY INSURANCE, CORRECT ?
IN THAT HYPOTHETICAL SITUATION, I THINK IF THE MORTGAGE HOLDER WA NTED TO PAY THE ENTIRE PREMIUM AND IT WANTED TO DO THAT , IT HA S NO INTEREST IN IT, I GUESS IT COULD HAVE REINST ATED , IF THE POLICY WAS CANCELLED, IT COULD BE REINSTATED. IF IT WAS IN THE TEN-DAY NOTICE SECTION OF T IME WHERE IT COULD CONTINUE THE COVERAGE , AND IT WOULD NOT CANCEL. THAT IS THE BEST WAY I KNOW HOW TO AN SWER YOUR QUESTION , JUSTICE.
ISN'T, YOU SEEM TO B E MOVING AROU ND ON THIS, BECAUSE CERTAINLY THE MORTGAGE HOLDER S REQUIRE LIABILITY INSURANCE AS WELL , AND THERE IS A INTEREST BECAUSE THERE IS A CLAIM AGAINST THE PROPERTY IF IT IS NOT INSURED. THE INSURED HAS NOTHING THERE.THEY OWN THE PROPERTY AND THERE IS A CLAIM. THEN IT BECO MES AN ADDITIONAL LIEN ON THE PROPERTY THAT THE MORTGAGE HOLDER HAS TO D EAL WITH, SO IT SEEMS LIKE WE ARE MAKING IT UP AS WE GO ALONG. WE REALLY NE ED TO STIC K TO THE STATUTE AND WHATEVER THE CONTRACT IS PROVIDING , AND THAT IS THE QUES TIONS, AND JUSTICE BELL'S QUESTION IS GOING TO THOSE KIN DS O F AREAS, SO COULD WE GO BAC K TO WHAT DOES THIS CONTRACT PROVIDE AND WHAT IS T HESTATUTE?HOW DO THEY RELATE?
HERE IS HO W THEY RELATE. THAT CONTRACT, THAT STATUTE SAYS TO ALL THE PARTIES INVOLVED, THAT THE EXISTING STATUTORY REGULATORY AND CONTRACTUAL RESTRI CTIONS THAT EXI ST AS TO CANCELLATION, STILL A LY. LOOK TO THE CONTRACT , AND THIS IS THE KEY T O THE ELEVENTH CIRCUIT'S QUESTION. LOOK TO THE CONTRACT FOR THOSE REQUIREMENTS. YOU LOOK TO THE STATUTE OR WRATH TO RT CONTRACT, A NDWHAT YOU FIND IS -- RATHER TO THE CONTRACT , AND WHAT YOU FIND IS THE GENE RAL CANCELLATION CLAUSE WHICH ALLOWS THE NAMED INSURED TO CANCEL THIS WITH AD VANCE WRITTEN NOTICE. THAT IS JANUARY 9. DONE AND OVER. OR TO THE MORTGAGEE CLAUSE AS INTERPRETED BY THIS COURT IN FIRST STATE, WHICH PERMITS OR WHICH IMPO SES , RATHER, O N MY CL IENT AN OBLIGATION TO GIVE THE MORTGAGEE TEN DAYS' NOTICE WHICH WE DID, FOR THAT SEPARATE CONTRACTUAL RIGHT. THAT SEPARATE CON TRACTUALRIGHT WAS NOT SET BY THI S COURT IN FIRST STATE , TO INCLUDE THE NA MED INSURED , WHO , AFTER ALL , ELECTED NOT TO PAY THE PREMIUM THR OUGH ITS AGENT , SENT A NOTICE OF CANCELLATION TO THE INSURANCE COMPANY , MY CLIENT , AND UNDER THE CONTRACT , IS PERMITTED TO CANCEL THE ENTIRE CONTRACT WITH THAT WRITTEN NOTICE , AND THERE IS A STATUTE 1 -C NOT UP HERE , THAT SAYS WHE N THAT NOTICE OF CANCELLATION IS RECEIVED , IT IS EFFECTIVE THE SAME AS IF IT HAD COME F ROM THE INSURED HIMSELF. I MEAN, WHAT ELSE DOES IT TAKE TO CANCEL THE POLICY TO THE NAMED INSURED? THERE IS --
IN OR DER TO R ULE IN YOUR FAVOR , WE WOULD HAVE TO SAY THAT THERE ARE T WO CONTRACTS HERE, THAT THE REQUIREMENT THAT INSURER PROVIDE TEN DAYS' NOTICE TO THE MORTGAGEE IS A SEPARATE CONTRACT?
I THINK THE KEY TO THE LEFT CIRCUIT'S QUESTION IS THIS, YOUR HONO R. IT IS -- TO THE LEFT CIRCUIT'S QUESTION IS THIS,YOUR HONOR. THEY HAVE ASKED WHETHER THIS STATUTE IMPOSES A SI NGLE CANCELLATION DATE, AND T HEANSWER IS NO. THE PLAIN TERMS OF THIS STATUTE 1-D , REQUIRE THE COURT TO LOOK TO EXIS TING STATUTORY CONTRACTUAL REQUIREMENTS. THAT IS STEP ONE. STEP TWO I S THE CONTRACT HERE PER MITS DIFFERENT CANCELLATION DATES, BECAUSE UNDER FIRST STATE , THERE IS A SEPARATE CONTRACTUAL INTEREST THAT GETS AN EX TRA TEN DAYS.
CHIEF JUSTICE: I WANT TO REMIND YOU YOUR TI ME HAS EXPIRED.DO YOU HAVE ANY OTHER? AARENTLY WE HAVE A NEW SYSTEM, AND IT IS NOT SHOWING FOR THE JUSTICES THEIR LIGHTS. GO AHEAD. I JUST WANTED TO --
THE I S SUE THAT COUNSEL HAS PRESENTED WITH REGA RD TO THE PREMIUM , IS THAT REALL Y AN ISSUE THAT IS PROPERLY BEFORE US?
WHICH QU ESTION ?
THE ARGU MENT THAT HAS BEEN MA DE IS THAT THERE IS A MINIMUM PREMIUM FOR CANCELLATION. IS THAT AN ISSUE THAT IS REALLY BEFORE US? AS I UNDERSTAND HIS ARGUMENT IS THAT , NO MA TTER WHAT , T HAT YOU HAVE COVERA GE FOR A CERTAIN " X" PER IOD OF T IME BECAUSE THERE IS A MINI MUM PREMIUM THAT IS CHARGED B Y THE CARRIER FOR THIS. IS THAT PROPERLY BE FORE US TO EVEN DISCUSS?
NO, IT IS NOT BECA USE IT WAS NEVER ARGUED BELOW , AND , TWO , THE RECORD SHOWS THAT THE POLICY PREMIUM WAS REFUNDED AS OF JAN UARY 1 , WHICH THAT IS WHAT IS IN T HERECORD. THERE IS A PREMIUM CANCELLATION TICKET W HICHSHOWS THAT.
BUT THEY DI DN'T CHAR GE THE MINI MUM PREMIUM THOU GH?
MY CLIENT ATE THE CO STS FOR ALL COVER AGE BE YOND JANUARY 1 FOR ALL PARTIE S.
SO THEY DIDN'T FO LLOW T HECONTRACT ON THAT CANCELLATION THEN, HUH?
THEY ARE TRYING TO BE GOOD GUYS.THANK YOU, YOUR HONOR. THANK YOU.
CHIEF JUSTICE: THANK YOU .
AN SWER MY SPECIFIC --
CHIEF JUSTICE: LET'S LET HIM GET BACK UP. GET THE --
ANSWER MY SPECIFIC QUESTION. THE FIRST PART OF T HESTATUTE , SUBSECTION D , SPEAKS TO CONTRACTUAL RESTRICTIONS ON THE INSURED NOT BEING ABLE TO CANCEL AND THUS GIVING NOTICE TO IN THIS CASE THE MORTGAGEE. POINT TO ME A PROVIS ION IN THIS POLICY , WHERE THERE IS A CONTRACTUAL LIMITATI ON ON THE INSURED , GIVING SPECIFIC NUMBER OF DAYS' NOTICE TO THE MORTGAGEE BEF ORE CANCELING, THE INSURED CANCELING THE POLICY.
OK AY. THE ANSWER IS, IF YOU H AVE TO READ ON, IT SAYS CANCEL THE CONTRACT M UST SE E THAT THE INSURER SATISFIES RESTRICTIONS. SO IF THE PREMIUM FINANCE AGENCY IS THE ONE THAT CANCELS, I BELIEVE THAT THE STATUTE ALSO ALIES TO RESTRICTIONS ON THE INSURER. IN OTHER WORDS THAT ARE IN THE POLICY BY ITS PLAIN LANGUAGE.
BUT AS FAR AS THE F IRSTPROVISION, YOU AG REE THERE IS NOTHING THIS POLICY THAT RESTRICTS THE INSURED , C U BAN OR AS I GO K NEE FOR -- ARE A AN ASSIGNEE , THE FINANCE AGENCY CANCELING THE POLICY UPON WRITTEN NOTICE , SE NDING A LETTER SAYING THE POLICY IS CANCELLED AS O F THIS DATE .
THERE IS NOTHING SPECIFIC. AS I SAID WHAT I THINK IS IMPORTANT , REMEMBER I MENTIONED ABOUT THEIR ANSWER BRIEF, THE SPECIFIC REFERENCE IS FOOTNOTE 4 ON PAGE 11 , WHERE SCOTTSDALE SAYS THAT , EVEN THOUGH THE INSURED, THRO UGH ITS FINANCE AGENCY TECHNICALLY CANCELLED, IT HAS TR EATED IT AS A CANCELLATION BY SCOTTS DALE FOR NONPA YMENT OF PREMIUM , FOR PURPOSES OF THESE PROCEEDINGS, SO I THINK THAT WHAT WE ARE REALLY DEA LINGWITH HERE, YOU KNOW , BY THEIR CONCESSION , IS YOU KNOW , A CANCELLATION BY T HEINSURANCE COMPANY FOR NONPAYMENT OF PREMIUM. THAT HAS BEEN THE WA Y ALL OF THE WAY THROUGH.
I THOUGHT THAT , G OINGBACK TO THAT QUE STION , HE IS RAISING THE QUESTION , IF THE INSURED , LET'S ASSUM E THAT THEY PA ID THE POLL SA NE THE INSURED HAS MAD E, INITIALLY PAID FOR THE WH OLE Y EAR AND THEY WANT TO CANCEL IT. DOES, IS THERE ANY THING IN THIS POLICY THAT PROVIDES THE NOTICE THAT IS G OING TO GO TO A MORTGAGEE? HAVE YOU READ TO US THAT THERE WAS? A TEN DAY AND A 30-DAY.
I BELI EVE THE ANSWER IS THE MORTGAGEE CLAUSE, IF WE SCOTTSDALE, CANCELS THIS POLICY, BUT THEN IT G OES BACK AND TALKS ABOUT IT WILL CANCEL AT THE REQUEST OF THE NAMED INSURED, SO I THINK THAT TO ME THEY W O RK TOGETHER, AND THAT YOU WOULD NEED 30 DAYS' NOTICE. I THINK THAT IS WHAT I ARGUED ON THE FIRST ONE.
THAT IS WHAT YOU ARGUED.
BUT WH AT I AM SAYI NG, THERE IS NOTHING THAT SAYS IN SO MANY WOR DS THAT THE INSURED CAN'T WRITE A LETTER AND SAY IT CANCELS ITS POLICY, BUT I THINK WHEN YOU ADD THE TWO AND READ THE TWO TOGETHER IN PARI MATERIA , THAT YOU WOULD HAVE A 30 -DAY PROVISION FOR CANCELLATION, BECAUSE OTHERWISE THE MORTGAGEE WOULD BE OUT OF LUCK JUST LIKE THAT .
THAT WOULD BECOME IMPORTANT, AS FAR AS ANY REFUND OF PREMIUM IS CONCERNED , CORRECT? WOULD THEY REFU ND THE PREMIUM?
THE REFUND OF PREMIUM, I POINTED OUT HERE A T HAT BECAUSE OF THE CIRCUMSTANCE THE MIN IMUM PREMIUM , W E ACT UALLY PAID THROUGH T HEDATE THE ACCIDENT , BUT THE POINT I MADE PRINCI PLY IN THE BRIEF, IS WHEN YOU ARE INTENTING THE STATUTE, IF YOU SAY THAT YOU HAVE PIECEMEAL CANCELLATIONS AS INDIVIDUAL INSUREDS GET NOTICE THERE, IS NO WAY I N MOST CASES THAT YOU CAN CALCULATE A RET URN PREMIUM. INSURANCE POLICIES INCLUDING THIS ONE ONLY HAVE CALCULATIONS FOR CANCELING THE ENTIRE POLICY , AND H ERE YOU ARE TALKING ABOUT THE PROPERTY COVERAGE WOULD ONLY ALY UP TO THE E X TENT OF THE MORTGAGE, WHICH WAS LESS THAN IT, YOU KNOW , I M E AN, SO THAT HOW IN THE WOR LD DO YOU EVER