THE STATE OF SOUTH CAROLINA
In The Supreme Court

Auto Now Acceptance Corporation,        Respondent,

v.

Catawba Insurance Company,        Petitioner.

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

Appeal From Richland County
Larry R. Patterson, Circuit Court Judge

Opinion No. 25525
Heard June 25, 2002 - Filed September 3, 2002

REVERSED

William P. Davis and Holly L. Palmer, both of Baker, Ravenel & Bender, of Columbia; for Petitioner.

Joseph Gregory Studemeyer, of Columbia; for Respondent.

JUSTICE BURNETT: Auto Now Acceptance Corp. (“Auto Now”) brought this action against Catawba Insurance Co. (“Catawba”) for failing to provide it notice of cancellation of an insurance policy listing Auto Now as loss payee. A divided Court of Appeals affirmed the trial judge’s ruling in favor of Auto Now. See Auto Now Acceptance Corp. v. Catawba Ins. Co., 342 S.C. 526, 537 S.E.2d 553 (Ct. App. 2000). We reverse.

FACTS

  Catawba issued an automobile insurance policy to Jacqueline D. Robinson and Michelle Jones (“Insured”). Auto Now took assignment of the installment sales contract between Insured and the car dealership. Catawba listed Auto Now as loss payee on Insured’s policy. Insured financed the insurance premium with Premium Budget, Inc. (“PBI”). Insured executed a power of attorney granting authority to PBI to cancel the insurance policy upon ten days’ notice to Insured in the event of Insured’s default in repayment of the premium.

Insured defaulted and PBI mailed Insured notice of its intent to cancel. Following an additional notice to Insured, PBI mailed notice of cancellation to Catawba.¹ Neither PBI, Insured, nor Catawba notified Auto Now of the cancellation. Fire destroyed Insured’s automobile two months after PBI cancelled the insurance. Auto Now learned of the policy’s cancellation only after Insured defaulted on the loan.

ISSUES