Michigan Court of Appeals; Docket No. 175263; Unpublished
Judges Taylor, McDonald, and Collins; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
This unanimous, unpublished per curiam Opinion deals with the issues of the propriety of cancellation of an insurance policy for non-payment of premium and the doctrine of estoppel.
The court held that where an insurance policy lapsed by its own terms if not renewed by the payment of a premium prior to the expiration date, and where the insurer offered to reinstate the policy nunc pro tunc if a premium was received by the insurer by a particular date, and where the insured mailed the premium before the deadline date but it was not received by the insurer until after the deadline date, the insured person had not effectively renewed the policy and the insurer was therefore entitled to enforce the cancellation. In so holding, the court rejected the insured's argument that mailing the renewal premium prior to the deadline date was sufficient. The court noted that the insurer required receipt of the renewal premium by a particular date. Under those circumstances, receipt only occurs when the renewal check is actually received, not upon mailing of the check.
The court further held that the insurance policy did not require the insured to issue a notice of cancellation prior to terminating the policy. Citing McCormic v Auto Club, 202 Mich App 233 (1993) [Item No. 1618], the court held that if an insurance policy expired on its own, the insurance company need not give notice of cancellation. In this case, the policy required defendant to issue a notice of cancellation only where the policy is in effect at the time of cancellation. Because plaintiff failed to renew the policy by its expiration date, the policy was no longer in effect, and no notice of cancellation was required. The fact that plaintiffs tendered a late renewal premium is irrelevant Therefore, the defendant did not breach the insurance contract 945by failing to issue a notice of cancellation.
With regard to the estoppel claim, the court held that this should be remanded for further consideration. Plaintiff argued that where the insurance company received the check on October 17 but did not issue a refund check until five days later, on October 22, the delay reasonably caused plaintiff to believe that coverage had been reinstated and there was no need for further action. The accident occurred on October 26, and plaintiff claims that he did not receive the refund check until October 30.
The Court of Appeals held that plaintiffs had asserted a claim for equitable estoppel which requires further consideration in the court below. In this regard, the court stated:
"Equitable estoppel arises where: (1) a party by representation, admissions, or silence, intentionally or negligently induces another party to believe facts; (2) the other party justifiably relies and acts on this belief; and (3) the other party will be prejudiced if the first party is permitted to deny the existence of the facts In both their complaint and on appeal, plaintiffs assert that they justifiably relied on defendant's lack of action during the days following the mailing of the premium, and that defendant's lack of action led plaintiffs to reasonably believe that their insurance had been renewed What period of time constitutes an unjustifiable delay, is not a question for this court to resolve on appeal. Therefore, we reverse and remand for consideration on the estoppel issue only."