Friday, January 29, 2010

Summary Judgment Secured in Declaratory Judgment Action On Proper Cancellation of Auto Policy for Non-Payment of Premium

I am hoping you won't mind me tooting my own horn a little on this blog of mine.

I recently secured a summary judgment decision in favor of my insurance company client in a declaratory judgment action on the issue of coverage in the case of Safe Auto Ins. Co. v. Soto, No. S-1361-2009 (Schuylkill Co., Jan. 26, 2010, Stine, J.).

This matter arose out of a motor vehicle accident that occurred on December 23, 2006 in Schuylkill County, Pennsylvania after which the Plaintiff filed a lawsuit against the Safe Auto insureds. The carrier denied coverage in light of the fact that, seven (7) months before the accident, the insurance company had cancelled the policy due to the insured’s failure to pay the premium.

The declaratory judgment action was filed against the insured defendants and the plaintiffs from the underlying action. This declaratory judgment action was opposed by the injured party plaintiff. However, when the tortfeasor defendants from the underlying matter, i.e. the named insured on the policy who failed to pay the premium and her permissive user of the vehicle, failed to respond to the Complaint, a default judgment was secured against those underlying defendants in this companion declaratory judgment action.

Thereafter, the motion for summary judgment was filed, which was opposed by the injured party plaintiff. Documentation required to satisfy the requirement of Pennsylvania law of showing that the proper notices had been mailed to the insured prior to the cancellation of the policy was gathered and presented as part of the motion. It was also established that there were no attempts by the insured to reinstate the policy at any time prior to the accident.

The injured party plaintiff attempted to argue that there were issues of fact and additional discovery that had to be completed before the court should address the motion for summary judgment. In granting the summary judgment the Schuylkill County Court of Common Pleas rejected the injured party’s arguments that there remained issues as to whether the carrier complied with Pennsylvania law in cancelling the policy, whether payments were made, and whether the insured had made any efforts to reinstate the policy.

The court accepted the defense argument that, under Pennsylvania law, the carrier was not required to show that the insured actually received the cancellation notices. Rather, all that was required here, as shown, was that the cancellation notices were issued to the address provided by the insured, which raised a presumption that the notices were received. The court also found the insureds’ failures to respond to the Complaint and the motion for summary judgment to constitute judicial admissions of the claims made by the carrier that proper notices had been provided. As such, it followed that no other party could dispute these claims.

Accordingly, a judicial declaration was secured for the carrier that it need not defend or indemnify the insureds in the underlying motor vehicle accident lawsuit brought by the injured party.

Anyone desiring a copy of this Opinion and Order may contact me at

The facts of each case are different. No specific results are implied for future cases. Descriptions of awards in previous cases are no guarantee of future results and should not create any expectations that my firm or I can achieve similar results in another case.

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