Was an insurance policy effectively cancelled when notice of cancellation had been given as required by the insurance policy provisions, although the insureds had not received notice of cancellation? Petitioner-insurer instituted a declaratory judgment action seeking an affirmative answer to this question and then moved for summary judgment in its favor on the basis of supporting documents and affidavits. Respondents opposed the motion supported by an affidavit of the insured that the notice of cancellation had not been received. The respondents' position was that receipt of the notice was a prerequisite to cancellation. The motion for summary judgment was denied and this ruling is the subject of this special action.
We assume jurisdiction since appellate intervention via special action procedure is appropriate under certain circumstances when summary judgment is erroneously denied. Allison Steel Manufacturing Co. v. Superior Court, 22 Ariz.App. 76, 523 P.2d 803 (1974).
Another condition entitled "Cancellation by Company Limited" also provides, in part:
It is undisputed that non-payment of premium was the reason for cancellation, that the insurer mailed a notice in writing at least ten days prior to the effective date of cancellation to the address shown in the policy, and secured a post office receipt which established that the notice of cancellation had been mailed to the insured at such address in compliance with the time requirement of the policy.
The above-quoted policy provision is called the "Standard Cancellation Provision". A perusal of cases from other jurisdictions discloses an almost unanimity of view that mailing of the cancellation notice is sufficient and that receipt is not required. Robbins v. Southern General Insurance Company, 243 A.2d 686 (D.C. App. 1968); Allstate Insurance Company v. Dougherty, 197 So.2d 563 (Fla.App. 1967); Harang v. Sparacino, 257 So.2d 785 (La. App. 1972); Jensen v. Traders & General Insurance Company, 52 Cal.2d 786, 345 P.2d 1 (1959); Hartsfield v. Carolina Casualty Insurance Co., 411 P.2d 396 (Alas. 1966); Annot. 64 A.L.R.2d 982, Sec. 15 (1959).
Initially we would point out that the cases of Farmers Insurance Group v. Merryweather, 214 N.W.2d 184 (Iowa 1974) and Gooden v. Camden Fire Insurance Association, 11 Mich.App. 695, 162 N.W.2d 147 (1968), holding that actual receipt is required, are not apposite since they are concerned with interpretation of statutory language. Nor do we have a situation as in Hartsfield v. Carolina Casualty Insurance Co., supra, wherein it was held that the denial of receipt of the notice of cancellation raised a genuine issue as to a material fact which precluded the granting of summary judgment. The court held that the denial of receipt rebuts a prima facie case of mailing and creates an issue of fact for resolution by the trier of fact. See also, Allied American Mutual Fire Insurance Co. v. Paige, 143 A.2d 508 (D.C.Mun.App.
We approve the following statement in Cherokee Insurance Company v. Hardin, supra:
In holding that the standard cancellation clause does not require receipt of the notice of cancellation by the insured, we reject respondents' contention that such a construction is contrary to the clear public policy of this state. The weight of authority is contrary to respondents' position. See Hartsfield, supra; Trinity Universal Ins. Co. v. Willrich, 13 Wn.2d 263, 124 P.2d 950 (1942); State Farm Mutual Automobile Insurance Co. v. Chaney, 272 F.2d 20 (10th Cir.1959); Boyle v. Inter Insurance Exchange of Chicago Motor Club, 335 Ill.App. 386, 82 N.E.2d 179 (1948). We decline to follow the decision in Koehn v. Central National Ins. Co., 187 Kan. 192, 354 P.2d 352 (1960), relied upon by respondents. In fact, A.R.S. Sec. 20-1632 would appear to refute their position:
Thus we see that petitioner complied with the statutory mandate as to notice of cancellation and established conclusively that the insurance policy was cancelled prior to the accident as to which coverage was claimed. The insurance policy provision as to cancellation is clear and unambiguous — the parties thereto agreed that mailing of the notice of cancellation and not receipt of such notice by the insured would effect a cancellation of insurance coverage (for non-payment of premium). To require receipt of the notice, contrary to the terms of the policy, would place a burden upon the insurer for which it had received no premium. It is not difficult to envision, in view of the ever increasing mobility of present-day society, a situation where the insured pays the initial premium and because of his itinerant status, never receives notice of cancellation for non-payment of premiums. Insurance coverage could be gratuitously extended ad infinitum. Such ludicrous, unrealistic situations are avoided by the standard cancellation clause such as we have here.
There being no factual issue as to whether the notice of cancellation was mailed, petitioner's motion for summary
HOWARD, C.J., and HATHAWAY, J., concur.