Graves v. ABC Roofing Co.

MARTIN (Robert M.), Judge. We need only consider the appellant’s second assignment of error that TIFCO and Travelers failed to effectively cancel the policy so that Travelers should be the carrier on the risk. We agree with the appellant. N.C. Gen. Stat. § 58-60 requires: [254] When an insurance premium finance agreement contains a power of attorney or other authority enabling the insurance premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be cancelled unless such cancellation is effectuated in accordance with the following provisions: (1) Not less than 10 days’ written notice be mailed to the last known address of the insured or insureds shown on the insurance premium finance agreement of the intent of the insurance premium finance company to cancel his or their insurance contract or contracts unless the defaulted installment payment is received. A notice thereof shall also be mailed to the insurance agent. (2) After expiration of such period, the insurance premium finance company shall mail the insurer a request for cancellation, including a copy of the power of attorney, and shall mail a copy of the request for cancellation to the insured at his last known address as shown on the insurance premium finance agreement. (3) Upon receipt of a copy of such request for cancellation notice by the insurer or insurers, the insurance contract shall be cancelled with the same force and effect as if the aforesaid request for cancellation had been submitted by the insured himself, without requiring the return of the insurance contract or contracts. Although it is difficult to identify and reconstruct chronologically the specific steps taken by TIFCO and Travelers to attempt to cancel the worker’s compensation policy, the following chain of events appears from the testimony of Charles Williams for Travelers and from the supporting documents offered by Travelers: (1) Travelers first received oral notice from TIFCO on 19 June 1978 requesting cancellation. (2) On 22 June 1978, Charles Williams, senior account analyst for Travelers, mailed a notice of cancellation to William Glover, [255] owner and operator of ABC, such notice indicating a cancellation date of 17 June 1978. (3) Written notice from TIFCO requesting cancellation did not come to Travelers until sometime in July 1978. (4) Although Mr. Glover denies receiving such notice of cancellation, the Notice of Cancellation allegedly mailed by TIFCO to Mr. Glover bears a mailing date of 12 June 1978 and identifies the effective date of cancellation as 17 June 1978, five days later. (5) When Travelers’ notice of cancellation was issued on 22 June 1978, to be effective 17 June 1978, it did not have a written request for cancellation from TIFCO, nor did Travelers have any indication in its file that TIFCO had given notice to Mr. Glover. TIFCO failed to follow the procedure of first submitting a written notice to Mr. Glover of its intent to cancel at a date not sooner than ten days and advising of his right to cure any default, and then following that notice period submitting a written request to Travelers for cancellation with a copy to Mr. Glover. Thus the Commission erred in concluding that TIFCO and Travelers complied with N.C. Gen. Stat. § 58-60 and effectively cancelled the workers’ compensation policy. For the foregoing reasons the opinion of the Industrial Commission is Reversed. Judges Webb and Wells concur.