Anderson v. General Casualty Insurance

GREENE, J. This matter arises from an administrative complaint filed with the Maryland Insurance Administration as a result of Southern Guarantee Insurance Company’s 1 cancellation of an insurance policy issued to Anderson’s Exxon/JSM Enterprises Inc. 2 Southern Guarantee mailed the notice of cancellation to Anderson, addressed “care of’ Ben Brown Insurance Agency, at the address listed on the declarations page of the policy. After an investigation, the Maryland Insurance Administration determined that Southern Guaranty had properly notified Anderson’s Exxon of the cancellation. On judicial review, the ²⁴⁰ Circuit Court affirmed the decision, as did the Court of Special Appeals on appeal. We are now asked to decide whether notice mailed to the insured, “care of’ a third party listed in the declarations page, constitutes proper notice sufficient to meet the statutory notice requirements.

We shall hold that, because the terms of the insurance contract at issue provided a “mailing address” for the insured, written notice of intent to cancel the insurance policy mailed to that address complied with the statutory notice requirements for cancellation of the policy. Furthermore, because the insured consented to the designation of a third party as his agent to receive such notification or at least acquiesced in the designation, notice sent to that third party, consistent with the terms of the insurance contract, is proper notice. Accordingly, we shall affirm the judgment of the Court of Special Appeals. FACTUAL AND PROCEDURAL BACKGROUND Mark W. Anderson is the owner of an Exxon gasoline and service station located in Ocean City, Maryland. 3 Throughout the 26 years Anderson has operated the business, he has used the services of Benjamin F. Brown Insurance Agency, Inc. (“Brown”) to procure insurance for the gasoline and service station.

When Anderson needed insurance coverage for automobile, towing, and road services, he contacted Brown. Because Brown could not directly procure insurance for these types of activities, Brown contacted Ashcraft & Associates Insurance Agency, Inc., which placed the insurance with Southern Guarantee Insurance Company. Southern Guarantee then issued Anderson’s Exxon a Commercial Garage Liability Policy with renewal effective dates of June 1, 2002, to June 1, 2008. The declarations page of the policy listed the Named Insured and Mailing Address as: 4 Anderson’s Exxon/JSM Ent.

Inc. ²⁴¹ c/o Ben Brown Insurance Agency 304 Compton Avenue Laurel, Maryland 20707-4330 Anderson received a copy of the policy from Brown, including the declarations page, via U.S. Mail. Anderson did not dispute the use of Brown’s mailing address as his point of contact. Because the premiums for Anderson’s policy were based on the size of his payroll, Southern Guaranty attempted to conduct a financial audit of Anderson’s Exxon business, through Profitworks, an outside audit company. Compliance with the audit was a condition of the policy, and if Anderson failed to comply with the audit condition, Southern Guaranty was permitted to cancel the policy in compliance with statutory notice requirements of Md.Code (1974, 2006 Repl.Vol.), § 27-601 of the Insurance Article. 5 Therefore, when South ²⁴² ern Guaranty did not receive any response to its inquiries regarding Anderson’s payroll, 6 it issued a notice of cancellation for failure to comply with the audit provision.

On January 16, 2003, Southern Guaranty mailed the notice, addressed to Anderson’s Exxon c/o Ben Brown’s Insurance Agency, at the address listed in the declarations page. The cancellation was effective March 4, 2003. On March 17, 2003, Southern Guaranty mailed Anderson a check for the unearned insurance premiums on the cancelled policy. The refund check was also sent to the address listed in the declarations, even though Southern Guaranty was aware of Anderson’s business address in Ocean City.

The refund check was eventually cashed by Anderson’s Exxon. As a result of an accident.that occurred on July 24, 2003, a third party filed a personal injury claim against Anderson’s Exxon. When Southern Guaranty received the claim, it informed the claimant that the policy had been cancelled. Anderson then filed a Complaint with the Maryland Insurance Administration alleging that Southern Guaranty had improperly cancelled the policy because it had no t provided him with the required notice.

The Maryland Insurance Administration conducted an investigation, and determined that the cancellation was proper because Southern Guaranty provided proper notice. Anderson requested a hearing, and the matter was referred to the Office of Administrative Hearings. After a hearing on the matter, the Administrative Law Judge affirmed the decision of the Maryland Insurance Administration. The Administrative Law Judge found that “the Licensee sent a notice of cancellation of policy 00CPP56144 to the Complainant’s address as stated on the policy.” Based on this and other findings of fact, the Administrative Law Judge concluded as a ²⁴³ matter of law that Southern Guaranty complied with the statutory requirements.

Anderson filed a Petition for Judicial Review in the Circuit Court for Baltimore City. After a hearing, the Circuit Court affirmed the decision of the Administrative Law Judge. 7 Anderson appealed to the Court of Special Appeals. In an unreported opinion, the intermediate appellate court affirmed the judgment of the Circuit Court. The Court of Special Appeals concluded that “it was a factual question to determine whether notice to Brown under section 27-601[ 8 ] constituted notice to Anderson because Brown was Anderson’s agent.” Because the Court of Special Appeals determined that the Administrative Law Judge’s findings were supported by the evidentiary record, it upheld the Circuit Court’s decision.

Thereafter, Anderson filed a petition for writ of certiorari in this Court, which petition we granted. 9 Anderson v. General Casualty, 399 Md. 592 , 925 A.2d 632 (2007). DISCUSSION Petitioner argues that Southern Guaranty was required to provide notice to Anderson directly, and that sending the notice of cancellation to Brown did not satisfy the requirements of § 27-601 of the Insurance Article, currently § 27-602. As support for his position, the petitioner cites Admiral Ins. Co. v. John Stromberg & Assocs., 77 Md.App. 726 , 551 A.2d 923 (1989), in which the court wrote: “[Tlhe statute was ²⁴⁴ intended to benefit the individual insureds by giving them advance notice that their policy was going to be cancelled or non-renewed and affording them a reasonable opportunity to replace that insurance.” Admiral, 77 Md.App. at 739 , 551 A.2d at 930 .

Petitioner attempts to bolster his position by arguing that the legislature must have intended that the insurer personally notify the insured. Petitioner further argues that the Court of Special Appeals erred when it found that “there was substantial evidence ... to support the agency’s findings.” According to Petitioner, the issue in this case is purely a question of law, and therefore Petitioner asserts that the Court of Special Appeals should have substituted its judgment for that of the agency. Respondent argues that because the agency’s decision was based on substantial evidence, we should defer to its decision. Furthermore, Respondent maintains that it complied with the notice requirements by mailing the notice of cancellation to the insured, at the address listed in the declarations.

In support of its position, Respondent argues that Brown was acting as Anderson’s agent for purposes of procuring insurance and receiving insurance notices, and therefore sending notice to Anderson’s agent fulfilled the requirements of the statute. Finally, Respondent posits that the public policy interests that Petitioners allude to were met when Southern Guaranty mailed the notice of cancellation to Brown. The present case comes to this Court on review of an administrative agency decision. When this Court reviews a decision of an administrative agency, we take the same posture as the circuit court or the intermediate appellate court, and limit our review to the agency’s decision.

Watkins v. Sec’y, Dep’t of Pub. Safety & Corr. Servs., 377 Md. 34, 45-46 , 831 A.2d 1079, 1086 (2003). In general, review of administrative agency decisions is narrow.

Id. With respect to findings of fact, we must determine whether the agency decision is supported by substantial evidence in the record. Board of Physician Quality Assurance v. Mullan, 381 Md. 157, 164 , 848 A.2d 642, 646 (2004). As to conclusions of law, we give ²⁴⁵ significant weight to an agency’s experience in interpreting a statute the agency administers.

John A. v. Bd. of Educ. for Howard County, 400 Md. 363, 382 , 929 A.2d 136, 147 (2007). Nonetheless, if an agency has made an erroneous conclusion of law, it is our duty to correct that conclusion. Id. Maryland law requires that an insurance provider send notice of the intention to cancel, “to the insured,” at least 45 days before it intends to cancel a policy.

Md.Code (1974, 2006 Repl.VoL), § 27-601 of the Insurance Article, now § 27-602. We are asked in the case at bar to interpret the meaning of the phrase “to the insured.” The guiding principle of statutory interpretation is to ascertain and effectuate the legislature’s intent. Sprenger v. Pub. Serv.

Comm’n, 400 Md. 1, 29 , 926 A.2d 238, 254 (2007). If the language of the statute, construed in light of its plain meaning, is unambiguous, our analysis ends there. Id. at 29-30 , 926 A.2d at 254-55 . Because we determine that the plain language of the statute is unambiguous, in that it requires an insurer to notify “the insured,” we need not look to outside sources for further evidence of legislative intent.

Petitioner’s reliance on Admiral is misplaced because its language merely confirms the legislative