NOTICE: Under Supreme Court Rule 367 a party has 21 days after
the filing of the opinion to request a rehearing. Also, opinions
are subject to modification, correction or withdrawal at anytime
prior to issuance of the mandate by the Clerk of the Court.
Therefore, because the following slip opinion is being made
available prior to the Court's final action in this matter, it
cannot be considered the final decision of the Court. The
official copy of the following opinion will be published by the
Supreme Court's Reporter of Decisions in the Official Reports
advance sheets following final action by the Court.
Docket No. 80665--Agenda 29--September 1996.
MARKETVIEW MOTORS, INC., Appellee, v. COLONIAL INSURANCE COMPANY
OF CALIFORNIA, Appellant.
Opinion filed February 6, 1997.
JUSTICE MILLER delivered the opinion of the court:
Plaintiff, Marketview Motors, Inc., filed a declaratory
judgment action in the circuit court of Champaign County against
defendant, Colonial Insurance Company of California. Marketview
alleged Colonial failed to provide proper notice of cancellation of
an automobile insurance policy for nonpayment of a premium as
required by section 143.15 of the Illinois Insurance Code (215 ILCS
5/143.15 (West 1994)). The trial judge found that proper notice of
cancellation had been given and granted summary judgment in favor
of Colonial Insurance.
The appellate court reversed. 277 Ill. App. 3d 627. The
appellate court held that section 143.15 of the Insurance Code
requires an insurance company to provide at least 10 days' actual
notice before a cancellation for nonpayment of a premium becomes
effective.
Colonial Insurance filed a petition for leave to appeal to
this court. 155 Ill. 2d R. 315(a). We allowed Colonial's petition.
For the reasons that follow, we reverse the appellate court and
affirm the circuit court.
BACKGROUND
In February 1994, Lawrence Miller purchased a 1987 Chevrolet
Monte Carlo from Marketview Motors. Marketview retained a lien on
the vehicle. Miller purchased an automobile insurance policy from
Colonial Insurance to cover the vehicle. Miller later failed to pay
his insurance premium.
On March 17, 1994, Colonial mailed a notice of cancellation of
Miller's insurance coverage to Miller and Marketview. As a lien
holder, Marketview was entitled by statute to notice of this
cancellation. 215 ILCS 5/143.14(a) (West 1994). In addition,
section 143.15 of the Insurance Code provides:
"All notices of cancellation of insurance as defined
in subsections (a), (b) and (c) of Section 143.13 must be
mailed at least 30 days prior to the effective date of
cancellation to the named insured and mortgagee or lien
holder, if known, at the last mailing address known to
the company. All notices of cancellation shall include a
specific explanation of the reason or reasons for
cancellation. However, where cancellation is for
nonpayment of premium, at least 10 days notice of
cancellation shall be given." 215 ILCS 5/143.15 (West
1994).
Miller's Monte Carlo was involved in an accident. The accident
occurred at approximately 5:15 a.m. on either March 28, 1994, as
claimed by Marketview, or March 29, 1994, as claimed by Colonial.
As a loss payee under the insurance policy, Marketview demanded
payment from Colonial. Colonial denied coverage claiming that the
insurance policy was canceled at 12:01 a.m. on March 28, 1994, the
11th day after Colonial had mailed notice of cancellation to Miller
and Marketview.
Marketview filed a declaratory judgment action against
Colonial. In its complaint, Marketview alleged in the alternative
that: (1) it did not receive notice of the cancellation; or (2) it
"did not receive ten (10) days actual notice prior to cancellation
since letters from California to Illinois take several days to
deliver." Under either allegation, Marketview claimed Colonial
failed to satisfy the requirements of section 143.15. Therefore,
Marketview claimed the Monte Carlo was still insured when the
accident occurred.
Colonial filed a motion for summary judgment. Colonial stated
it mailed notice of cancellation to Miller and Marketview 11 days
prior to canceling Miller's policy for nonpayment of the premium.
Colonial stated it was immaterial whether the accident occurred on
March 28 or 29, 1994, because either date was subsequent to the
cancellation of the policy. Colonial argued that mailing is the
operative act under section 143.15 and that neither actual notice
nor additional time for mail delivery is required under the
language of the statute.
The trial judge agreed with Colonial and granted Colonial's
motion for summary judgment. The appellate court reversed the
judgment of the circuit court and remanded for factual findings as
to when the accident occurred and when notice was received by
Marketview. 277 Ill. App. 3d at 632.
The appellate court held that section 143.15 of the Insurance
Code requires an insurer to provide at least 10 days' actual notice
to an insured and any mortgagee or lien holder of the insured
property before a cancellation for nonpayment of a premium becomes
effective. In support of its holding, the appellate court found
that section 143.15 contains in one section two distinct provisions
relating to notice and that each provision has its own
requirements. 277 Ill. App. 3d at 629-30.
The appellate court believed that cancellations for reasons
other than nonpayment of premiums are accomplished by mailing
notice. These cancellations will be effective if mailed to the
proper parties "at least 30 days prior to the effective date of
cancellation." 215 ILCS 5/143.15 (West 1994).
The appellate court distinguished the provision regarding
cancellation for nonpayment of a premium by focusing on the word
"however" and on the phrase "shall be given" in the third sentence
of section 143.15. See 215 ILCS 5/143.15 (West 1994). By focusing
on this language and contrasting it with the phrase "must be
mailed" in the same section, the appellate court concluded that the
legislature intended to treat cancellations for the nonpayment of
a premium differently than other types of cancellations. The
appellate court stated the legislature "intended to shift from a
mailing requirement to a requirement of actual notice with respect
to cancellations for nonpayment of premiums." 277 Ill. App. 3d at
630.
Colonial Insurance filed a petition for leave to appeal to
this court (155 Ill. 2d R. 315(a)) and we allowed Colonial's
petition for leave to appeal.
DISCUSSION
Since the language used by the legislature is the best
indication of legislative intent, courts look first to the words of
the statute. Nottage v. Jeka, 172 Ill. 2d 386, 392 (1996). Section
143.15 in its first sentence provides that "[a]ll notices of
cancellation *** must be mailed at least 30 days prior to the
effective date of cancellation to the named insured and mortgagee
or lien holder." 215 ILCS 5/143.15 (West 1994). Additionally, all
notices of cancellation must include a specific reason or reasons
for cancellation. Section 143.15 in its third sentence provides
that, "[h]owever, where cancellation is for nonpayment of premium,
at least 10 days notice of cancellation shall be given." 215 ILCS
5/143.15 (West 1994).
We believe that the third sentence of section 143.15 reduces
from 30 to 10 the minimum number of days prior to the effective
date of cancellation a notice of cancellation must be mailed when
cancellation is for nonpayment of a premium and does not change the
method by which that notice is provided. An examination of the
statutory history of section 143.15 indicates that in amending the
statute the legislature has focused on expanding the number of
parties to whom a notice of cancellation must be given in order for
an insurance company to cancel a policy. The statutory history does
not indicate a legislative intent to shift the notice requirement
from mailing to actual notice.
A predecessor section to section 143.15 required an insurance
company to mail a notice of cancellation only to the named insured
and provided that proof of this mailing satisfied both the 30-day
general and the 10-day nonpayment of premium notice requirements.
See Ill. Rev. Stat. 1973, ch. 73, par. 755.1b. Later, on January 1,
1976, section 755.1b was repealed and replaced by section 755.14.
See Pub. Act 79--686, eff. January 1, 1976 (repealing Ill. Rev.
Stat. 1973, ch. 73, pars. 755.1 through 755.10, and adding Ill.
Rev. Stat. 1975, ch. 73, pars. 755.11 through 755.24). Section
755.14 increased the number of parties who were to receive notice
of cancellation of a policy. The amendment provided that in
addition to the named insured, the insured's "agent of record
and/or the insured's broker" were also to receive notice of
cancellation. Ill. Rev. Stat. 1975, ch. 73, par. 755.14.
Subsequently, the legislature separated the provision
describing the parties to whom notice was to be given from the
provision governing the method by which that notice was to be
accomplished by placing each provision in a separate statutory
section. See Pub. Act 80--1136, §1, eff. July 1, 1978 (amending
Ill. Rev. Stat. 1977, ch. 73, par. 755.14); Pub. Act 80--1128, §1,
eff. July 1, 1978 (amending Ill. Rev. Stat. 1977, ch. 73, par.
755.15). Thus, after the amendment effective July 1, 1978, section
755.14 outlined the parties to whom notice must be given and
section 755.15 provided the times and the method by which the
notice was to be given. See Ill. Rev. Stat. 1979, ch. 73, pars.
755.14, 755.15. Finally, the legislature added mortgagees or lien
holders to the list of those entitled to notice of cancellation.
See Ill. Rev. Stat. 1989, ch. 73, par. 755.14.
Although the specific reference to giving notice of
cancellation for nonpayment of premiums by mail contained in the
earlier version of the statute was omitted from the amended 1975
and 1979 statutes and the version of the statute in question here,
we believe that the legislature still intended that notice of
cancellation was to be made by mail. We believe that in each of the
amendments referred to, the focus of the legislature was on the
parties to whom notice was to be given and not on the method by
which the parties were to receive the notice.
As noted by the appellate court, in the course of these
amendments, the reference to mailing notice of cancellation for
nonpayment of a premium was omitted. However, we do not believe
that by omitting the reference to mailing, the legislature intended
to shift to an actual notice requirement. We believe that had the
legislature intended such a change it would have explicitly set
forth the change in the statute and not left it to be read into the
statute by omission.
Our conclusion regarding the legislature's intent is supported
by a recent amendment to section 143.15. Subsequent to the filing
of the appellate court's opinion on January 31, 1996, the
legislature amended section 143.15 of the Insurance Code. See Pub.
Act 89--669, §5, eff. January 1, 1997 (amending 215 ILCS 5/143.15).
The amended section provides:
"Mailing of cancellation notice. All notices of
cancellation of insurance *** must be mailed at least 30
days prior to the effective date of cancellation ***. All
notices of cancellation shall include a specific
explanation of the reason or reasons for cancellation.
However, where cancellation is for nonpayment of premium,
the notice of cancellation must be mailed at least 10
days before the effective date of the cancellation." Pub.
Act 89--669, §5, eff. January 1, 1997 (amending 215 ILCS
5/143.15).
On April 23, 1996, the amendment was a topic of oral testimony
in the House Insurance Committee. The sponsor of the amendment,
Representative Brady, introduced William Shepherd, who offered the
following testimony as a proponent of the amendment:
"What we're trying to do here is restore the law to
what we thought it was, what the Department of Insurance
thought it was, and I would suggest what the legislature
thought it was prior to the time that the Third [sic]
Appellate Court District interpreted one of the
provisions of the Insurance Code in the case of
Marketview Motors, Inc. v. Colonial Insurance. ***
Essentially what it did was construe the statute to
require an actual notice requirement rather than a
constructive or mailbox notice requirement. *** What this
amendment would do would be to restore to the nonpayment
of premium sections the mailbox rule. *** So what this
amendment does is take us back to where we thought we
were just a few months ago rather than change the notice
requirements."
On the floor of the House, Representative Brady summarized the
amendment by stating the amendment "clarifies that notices shall be
given by mail in the case of cancellation of insurance for non-
payment reasons." 89th Ill. Gen. Assem., House Proceedings, April
25, 1996, at 1 (first draft) (statement of Representative Brady).
We believe these comments indicate the amendment to section 143.15
was made in response to the appellate court's holding and was
intended to clarify the law regarding cancellations for nonpayment
of premiums. We view the legislature's amendment of section 143.15
as a clarification of the original language of the statute and not
a change in the substantive law. See Varelis v. Northwestern
Memorial Hospital, 167 Ill. 2d 449, 462-63 (1995). Accordingly, the
amendment to section 143.15 supports our conclusion that the
legislature never intended to require proof of actual notice for
the cancellation of a policy due to nonpayment of a premium.
The authorities relied upon by the appellate court do not
compel a different result. See 277 Ill. App. 3d at 630-31. Unless
the language of a statute or insurance policy provides otherwise,
the timing provision of a notice requirement begins to run upon
actual receipt of the notice. See, e.g., Scanlon v. Empire Fire &
Marine Insurance Co., 117 Idaho 691, 692-93, 791 P.2d 737, 738-39
(App. 1990) (discussing statutory language); Rocque v. Co-Operative
Fire Insurance Ass'n, 140 Vt. 321, 325, 438 A.2d 383, 385-86 (1981)
(discussing insurance policy language). However, for the reasons
discussed above, we believe section 143.15 does provide otherwise.
The language of section 143.15, the statutory history of section
143.15, and the legislature's response to the appellate court's
opinion indicate the legislature did not intend to impose an actual
notice requirement on an insurance company when canceling a policy
for nonpayment of premium.
CONCLUSION
For the foregoing reasons, we believe the legislature intended
for proof of mailing to satisfy the notice requirement of section
143.15 (215 ILCS 143.15 (West 1994)) when an insurance company
seeks to cancel a policy for nonpayment of a premium. Accordingly,
the judgment of the appellate court is reversed and the judgment of
the circuit court is affirmed.
Appellate court judgment reversed;
circuit court judgment affirmed.
JUSTICE HARRISON, dissenting:
I would affirm the appellate court's judgment. For the reasons
stated by the appellate court, I agree that section 143.15 of the
Insurance Code (215 ILCS 5/143.15 (West 1994)) requires an
insurance company to provide at least 10 days' actual notice before
cancelling a policy for nonpayment of the premium. I also agree
that there is a genuine issue of material fact, precluding summary
judgment, with respect to when the 10-day notice period expired
here and when the accident actually took place.
I will not repeat the appellate court's well-reasoned
construction of the Insurance Code's precancellation notice
requirements. The court's opinion has been published (277 Ill. App.
3d 627) and is available for review by anyone interested in
learning more about it. What does warrant additional comment,
however, is my colleagues' reliance on recent changes in the
Insurance Code to support their conclusion that the appellate
court's interpretation of the law is incorrect.
There is no question that subsequent amendments to a statute
may be an appropriate source for discerning legislative intent.
People v. Bratcher, 63 Ill. 2d 534, 543 (1976). Where a statute is
ambiguous and the legislature amends it soon after a controversy
has arisen as to its meaning, the amendment may be regarded as a
legislative interpretation of the original law rather than as an
attempt to change the law. Church v. State of Illinois, 164 Ill. 2d
153, 163 (1995); see Hyatt Corp. v. Sweet, 230 Ill. App. 3d 423,
433 (1992).
The problem with applying these principles here is that the
amendments were made in response to the very case which is now
before us for review years after the original legislation was
enacted. Rather than reflect the legislature's intent with respect
to the original law, the quoted statements from the house floor
show nothing more than that certain current members of the General
Assembly are unhappy with the appellate court's disposition of this
litigation and want it changed. By giving weight to the remarks of
these legislators, the majority has helped them achieve that
objective. In effect, the court has facilitated a legislative
override of the appellate court's judgment.
While not suggesting that anything untoward took place in this
particular case, I note that the potential for abuse is
substantial. The majority's approach creates a significant danger
that litigants with substantial resources or the support of
lobbying groups may be able to prevail on the legislature to alter
the law while a case is pending on review in order to help them
escape the consequences of adverse judgments. Not only is this a
subversion of the judicial process, it also raises grave separation
of powers concerns under article II, section 1, of this state's
constitution (Ill. Const. 1970, art. II, §1).
The separation of powers principles contained in article II,
section 1, of the constitution (Ill. Const. 1970, art. II, §1)
prohibit the legislative branch of government from exercising
powers belonging to the judiciary. The General Assembly has the
right to draft legislation and to amend statutes if it believes
that a judicial interpretation of a law is at odds with its intent.
Our court has expressly held, however, that the legislature may
not, by amendment, attempt to attribute to the original statute, at
the time of a reviewing court's opinion, a meaning different from
that declared in the opinion. This court has regarded such efforts
as an attempt by the legislature to specify how we should apply the
law to the particular case that is before us on review, and we have
condemned the attempts as unconstitutional. In re Marriage of Cohn,
93 Ill. 2d 190, 203-05 (1982).
In re Marriage of Cohn, 93 Ill. 2d 190 (1982), remains the law
in this state (see In re Petition of Kirchner, 164 Ill. 2d 468, 497
(1995)) and should be followed here. The intervening amendment, and
the floor debates on that amendment, should not be taken into
account in reviewing the appellate court's construction of section
143.15 of the Insurance Code (215 ILCS 5/143.15 (West 1994)). For
this reason, and the reasons given by the appellate court in its
opinion, I respectfully dissent.