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Man killed when his car was struck by a milk tanker truck

Trucking Lawsuit:        Crump v Unigard Insurance Company

This insurance dispute arises from the accidental death of Thomas J. Crump Sr., who was killed when his car was struck by a milk tanker truck as he made a left turn into his driveway in the Town of Stockholm (St. Lawrence County) on November 29, 1996. Crump's widow brought a wrongful death suit against Prosper's Trucking, Inc., the owner of the milk tanker.

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Prosper's insurer, Unigard Insurance Company, disclaimed coverage, asserting that Prosper's policy had been cancelled four days before the accident for failure to pay a premium installment. Crump's estate then brought this action to compel Unigard to defend and indemnify Prosper's Trucking in the wrongful death suit. When Prosper's obtained its policy from Unigard in March 1996, the trucking company entered into a premium finance agreement with AFCO Credit Corporation which gave AFCO authority to cancel the policy if Prosper's failed to make a premium payment. Contending that Prosper's missed a payment in October 1996, AFCO mailed a notice of intent to cancel the policy on November 1, as required by Banking Law § 576.

On November 19, AFCO mailed a notice of cancellation which said the policy would be cancelled as of November 25, 1996, four days before Crump's fatal accident. Unigard did not receive the cancellation notice until December 6, 1996. Supreme Court ruled in favor of Unigard, holding that the policy cancellation took effect on November 25 even though Unigard did not receive the notice until 11 days later. The court held that Banking Law § 576 abrogated the common law rule that a notice of cancellation cannot take effect until it is actually received by the insurer.

The Appellate Division, Third Department reversed the order and declared that Unigard must defend and indemnify Prosper's, ruling that the policy cancellation did not take effect until Unigard received the notice on December 6, 1996. It said there was nothing in the language or legislative history of section 576, or of a 1978 amendment to the section, reflecting an intent to nullify the common law rule. "Since the rationale underlying both the statute and the common law rule is to protect the insured and third parties by preventing gaps in coverage, we find this interpretation to be in accord with public policy," it said. For appellant Unigard: Gerard A. Strauss, Hamburg (716) 649-4600 For respondent Crump: Robert J. Sassone, Norwood (315) 353-7398 For respondent Prosper's Trucking: Arthur J. Siegel, Albany (518) 462-7421. For more information concerning New York truck accident laws, contact our New York truck accident lawyer specialists at (718) 721-2000.