Rodland v. Metropolitan Property & Liability Insurance

WIEAND, Judge: On October 14, 1984, John Mark Rodland made application to Metropolitan Property and Liability Insurance Company (Metropolitan) for a policy of automobile insurance. In connection therewith, he certified that his answers to questions were true and correct and paid a premium for the quarterly period from October 15, 1984 to January 15, 1985. Approximately a month later, Metropolitan sent Rodland notice of cancellation, effective December 9, 1984, and included a check in the amount of $58.50, which represented a pro rata refund of the quarterly premium. The reason for the cancellation of the policy was an undisclosed prior record of traffic violations which included convictions for speeding and failure to stop for a red light. Although the cancellation notice advised Rodland that he had a right to obtain a review of the policy’s cancellation by the Insurance Commissioner, Rodland elected not to challenge the cancellation of the policy. Instead, he cashed Metropolitan’s refund check on December 7, 1984. On December 17, 1984, he was involved in a vehicular accident in which he sustained personal injuries. Rodland then filed a civil action against Metropolitan to recover no-fault benefits. He contended that the notice of cancellation had been improper and that, in any event, Metropolitan was estopped from cancelling the policy because it had knowledge that at the time of purchasing the policy he, Rodland, had surrendered his coverage with another insurance company. Following trial, a jury found in response to special interrogatories that it had not been represented to Rodland at the time of purchasing the policy that it was non-cancellable and that Rodland had, in fact, received the written notice of cancellation sent by Metropolitan. These findings were molded into a verdict for the defendant insurer. When Rodland filed post-trial motions, [427] however, the trial court concluded that only the Insurance Commissioner had jurisdiction to determine whether the Metropolitan policy had been properly cancelled. Therefore, the court vacated the verdict and dismissed Rodland’s complaint. Rodland appealed. He argues that the trial court erred when it determined that it lacked jurisdiction to decide the case. The legislature has provided in the Act of June 5, 1968, P.L. -, No. 78, § 8, as amended, 40 P.S. § 1008.8(a), that Any insured may within twenty days of the receipt by the insured of notice of cancellation or notice of intention not to renew, and of the receipt of the reason or reasons for the cancellation or refusal to renew as stated in the notice, request in writing to the Insurance Commissioner that he review the action of the insurer in cancelling or refusing to renew the policy of such insured. The cancelling insurance company is required to give notice to its insured of this provision. See: Act of June 5, 1968, § 6, supra, as amended, 40 P.S. § 1008.6. In conducting such a review, the Insurance Commissioner can be called upon to determine whether, in cancelling the policy, the insurer acted properly and complied with the conditions for cancellation set forth in section 5 of the statute. There is nothing in the statute, however, which purports to make review by the Commissioner a condition precedent to an action to recover under a policy of insurance which has been alleged by the claimant to have been cancelled ineffectively by the insurer. The trial court’s reliance on Metropolitan Property & Liability Insurance Co. v. Insurance Commissioner, 517 Pa. 218, 535 A.2d 588 (1987), is misplaced. There, the insurer attempted to rescind a policy of automobile insurance because the applicant had misrepresented his driving record. The opinion announcing the judgment of the Court was authored by Mr. Justice McDermott and was joined by one other member of the Court. They reasoned that the statutory procedure was the exclusive means by which an [428] insurance company could terminate a policy of insurance and that unilateral rescission by the insurer because of a material misrepresentation by the insured was no longer an available remedy. Because this view did not gather a majority of the Court, it is not precedential. Three justices held that rescission was inappropriate in that case because the misrepresentation by the applicant had not been material. A fourth justice concurred in the result. Neither the opinion announcing the decision of the Court nor the concurring opinion suggested that the Insurance Commissioner had exclusive jurisdiction to determine whether a policy of insurance had been properly cancelled. In the instant case, Metropolitan acted according to the terms of the statute to notify Rodland that his policy was being terminated and returned to him the unused portion of the premium which he had paid. Rodland was also given notice that he could obtain a review of Metropolitan’s decision to terminate by written request directed to the Insurance Commissioner within twenty days after receipt of the notice of cancellation. Rodland, however, elected to cash the refund check and did not request a review of the insurer’s action to terminate. Under these circumstances, the policy of insurance was validly cancelled, and the trial court had jurisdiction to make such a determination. See: Stevens v. Kemper Insurance Co., 384 Pa.Super. 263, 558 A.2d 113 (1989), allocatur denied, 523 Pa. 646, 567 A.2d 650 (1989). It follows that the trial court erred when it held that it lacked jurisdiction to hear the instant litigation and dismissed appellant’s complaint. However, appellant has advanced no other argument in this appeal. He has not challenged in any way the special findings of the jury which resulted in a verdict for the defendant insurer. That verdict, being jurisdictionally proper, will be reinstated. The order of the trial court dismissing appellant’s complaint for lack of jurisdiction is reversed, and the verdict in favor of the defendant is reinstated. CIRILLO, President Judge, files a dissenting opinion.