Empire Fire & Marine Insurance Co. v. Spurlock
This text of 1979 OK 54 (Empire Fire & Marine Insurance Co. v. Spurlock) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
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The principal question presented by this original proceeding for review is whether the failure of Empire Fire and Marine Insurance Company (Empire) to comply with 85 O.S.Supp.1974 § 64(e)1 in cancelling a policy of workmen’s compensation insurance issued by it, resulted in insurance coverage remaining in effect for the entire policy period, July 16, 1975 to July 16, 1976.
The facts concerning insurance coverage are undisputed: Empire issued its workmen’s compensation policy to Decker Foundry, Inc. (Decker) covering a period from July 16,1975, to July 16,1976. A copy of the coverage period was filed with the State Industrial Court. Thereafter, Empire notified Decker by certified mail of its intention to cancel the policy effective December 4,1975, and again effective January 1, 1976. Empire admits that it did not notify the State Industrial Court of its intention to cancel the policy. Decker applied to the State Industrial Court for permission to become an own risk employer. On February 18, 1976, Decker’s application was approved effective February 13, 1976, for a period of one year.
On September 1, 1978. the Specially Designated Workers’ Compensation Court en banc, issued its order finding the attempts by Empire to cancel its policy on December 4, 1975, and on January 1, 1976, were ineffective. It determined that Empire had a policy of insurance in effect from the period July 16, 1975, to July 16, 1976, and that all employees of Decker who sustained injuries during that period could proceed against Empire.
Empire contends the Workers’ Compensation Court erred in not finding Decker qualified as an own risk employer effective February 18, 1976, and in finding that it was liable for compensation claims occurring prior to July 16, 1976, or after February 18, 1976.
Empire relies upon In Re Hines, 509 P.2d 669 (Okl.1973), in its assertion that it is not liable for compensation claims after February 18, 1976. In Hines we held that where the employer has procured other insurance, a former carrier who failed to notify the State Industrial Court of cancellation is not liable to an employee injured after the ef[770]*770fective date of the new insurance. Hines overruled, to the extent inconsistent with its holding, Traders & General Insurance Co. v. Harris, 398 P.2d 843 (Okl.1965) and Tri-State Casualty Co. v. Speer, 189 Okl. 191, 115 P.2d 130 (1941).
The cancellation of coverage in Hines was initiated by the employer who replaced the coverage with a new insurance policy. The subsequent carrier received premiums under the new policy. The rationale behind the holding was that where the purpose of Section 64(e), i. e., to allow the employer sufficient time within which to protect himself and his employees by procuring other insurance, has been served, the statute should not be rigidly construed so as to unjustly penalize an insurance carrier for its failure to strictly comply with the notice requirements. Traders & General Ins. Co. v. Harris, supra, Tri-State Casualty Co. v. Speer, supra, and Preferred Accident Insurance Co. v. Van Dusen, 202 Okl. 124, 210 P.2d 341 (1949), held that Section 64(e) notice requirements must be strictly complied with to cancel coverage. An exception to the rule was enunciated in Hines.
In this case, cancellation of the coverage was initiated by the carrier and no new insurance policy was procured by the employer, although the employer was granted permission to be an own risk employer. Being granted own risk status is not the same as protection of the employer and employees by other insurance, within the contemplation of the purpose of the statute. Thus, the reasons in Hines for not strictly construing the notice requirements of Section 64(e) do not exist in the present case, and the exception carved out in Hines should not be extended to this case.
It is apparent the legislature intended the notice requirements for cancellation of Section 64(e) be otherwise mandatory because following our decision in Hines in 1973, the statute was amended in 1974 to provide that, if a contract of insurance has been terminated by an employer who has obtained other insurance, then in that event there is no liability to the predecessor insurer.2 In this case the attempt to terminate the policy of insurance was by the insurer, not the employer, Empire.
We, therefore, hold the failure of Empire to comply with the requirements of 85 O.S. Supp.1974 § 64(e) in attempting to cancel the policy of insurance issued by it covering the period of July 16, 1975 to July 16, 1976, resulted in the policy remaining in effect until July 16, 1976, notwithstanding the fact that Decker was granted own risk status prior to July 16, 1976.
Empire also contends the Workers’ Compensation Court erred in failing to find the last day of exposure was the date of injury of those claimants who claim to suffer from occupational disease. Empire, however, admits in its petition for review that the date of the last exposure was June, 28, 1976. We, therefore, will not pass upon this question.3
The order of The Workers’ Compensation Court is sustained.
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Cite This Page — Counsel Stack
1979 OK 54, 593 P.2d 768, 1979 Okla. LEXIS 197, Counsel Stack Legal Research, https://law.counselstack.com/opinion/empire-fire-marine-insurance-co-v-spurlock-okla-1979.