“Mailbox Rule” Means Policy Was Cancelled Before Tragic Accident

I worked for a daily newspaper for a number of years as a crime reporter, and in writing about crime, as with insurance coverage, it is good to remember something: at the root of it all is a story about human beings who suffered.
In Cornhusker Casualty Ins. Co. v. Kachman, 2006 WL 151932 (W.D. Wash. January 18, 2006), the insured, Rockeries, Inc., frequently failed to pay premiums when due, leading to a number of cancellation notices over the years. In 2004, Rockeries again failed to pay its installment premium on time, and the insurer mailed a notice that the policy would be cancelled unless paid by October 19. The mailing was done as required by Washington insurance statutes. Rockeries did not pay by October 19, however, and the company’s vehicle insurance was cancelled.
Tragically, three days later, an accident occurred. The details are not in the case, but according to Maureen Falecki, an attorney for the insurer with the Seattle firm of Keller Rohrback , a trailer full of boulders being pulled uphill by a Rockeries truck disengaged and rolled backwards. The trailer crushed and pushed for several blocks a pickup being driven by Leanne Samples, a woman in her 30s. Samples was pronounced dead shortly afterward.

The judge in the case, Ronald Leighton, said the Washington statutes were clear: the insurer’s certified mailing of the cancellation notice, even though never actually picked up by the insured, was an effective means of notice (a variation of the common law “mailbox rule” that considers that a letter that was sent was later received). The policy was therefore cancelled at the time of the accident.
Judge Leighton wrote: “Some may view the Court’s conclusions as harsh and advocate that the Court seek refuge in some time-honored rule of statutory construction that, from time to time, is used to circumvent the plain language of a statute. This the Court will not do. This Court can, and the Washington Legislature unquestionably did, conjure up scenarios that reach unfortunate or unrealistic outcomes no matter what requirements were imposed to achieve policy cancellation. . . . When a statutory provision is plain on its face, the Court must give effect to that plain meaning as an expression of legislative intent.”

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