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In RE:

This proceeding arose upon a request for hearing made by James & Noreen Lyons to contest the pending cancellation of automobile insurance coverage provided by North East Insurance Company. On June 12, 2003, the insurer mailed a notice of cancellation effective July 11, 2003 on policy number 02180051926, citing as the grounds for cancellation, “Material Misrepresentation -Requested 94 Dodge added eff 02/07/03 and was titled to James’ employer Darrell Cyr no coverage”. Pursuant to 24-A M.R.S.A. §§ 2915 and 2920, North East Insurance Company provided the insured with proper notice and the insured's hearing request was timely.

A hearing in this matter was held on July 23, 2003 with Mary Ellen Albert sitting as designated hearing officer pursuant to 24-A M.R.S.A. §§ 210 and 2920. The purpose of the hearing was limited to establishing the existence of the proof or evidence given by the insurer to support its reason for policy termination. Staff representing North East Insurance Company appeared at the hearing. James Lyons submitted a sworn statement in lieu of appearing at the hearing. Although he had provided telephone numbers where he could be reached during the hearing, no one answered when such attempts were made. As he was not available for cross-examination, his statement was not entered into the record.

FINDINGS OF FACT
The following facts have been proven by a preponderance of evidence submitted:

1. North East insures Mr. & Mrs. Lyons’ vehicles with the current policy term of November 30, 2002 to November 30, 2003.
2. On Feb. 7, 2003, the insureds requested that a Dodge Dakota pick up truck be added to the policy.
3. On March 13, 2003, title was obtained that showed the vehicle was titled to Darryl Cyr.

ANALYSIS AND CONCLUSION OF LAW
Title 24-A. M.R.S.A. § 2914 (2) states that an insurer may cancel a policy for “Fraud or material misrepresentation affecting the policy or the presentation of a claim.”

Ethyl Potvin, Personal Lines Manager for North East Insurance Company testified that on May 28, 2003 a request was made to add a 1994 Dodge Dakota to the Lyons’ existing policy. As the number of vehicles would then exceed the number of listed operators on the policy, this triggered a title check on the vehicle. The title revealed James Lyons and Darryl Cyr as the owners of the vehicle. A motor vehicle record was then requested on Darryl Cyr that shows he had two speeding violations along with a seat belt violation. North East contacted the agent to inquire who Darryl Cyr was and his relation to the Lyons. She learned that Darryl Cyr was James Lyons’ employer and Mr. Cyr supplied the truck for business purposes. Ms. Potvin testified that the vehicle is used for business and personal auto policies cannot insure commercial vehicles.

Noreen Lyons e-mailed her request for the hearing. She stated in her request that she did get the titled corrected. However, James Lyons was added to the title along with Mr. Cyr. This indicates that the vehicle is co-owned by both men.

James Lyons submitted a sworn statement in lieu of appearing at the hearing and supplied this office with two telephone numbers where he could be reached at the time of the hearing.

Ms. Potvin had questions for Mr. Lyons and asked that we contact him. She stated that it was always Noreen Lyons who contacted the agency and company. Yet, Mr. Lyons’ sworn statement indicated he had the conversations with the agency and company. Ms. Ptovin wanted the opportunity to address some issues directly with Mr. Lyons as he was the one who submitted the sworn statement. We attempted to contact him at each number two times during the hearing and were unable to get an answer.

The Maine Administrative Procedures Act, at Title 5 M.R.S.A. § 9057, provides that no sworn written evidence shall be admitted unless the author is available for cross-examination. The failure of any party to appear in person does not affect the other party’s right to cross-examination. When attempts were made during the hearing to contact Mr. Lyons, the author of the sworn statement, at two separate numbers he had supplied, he could not be reached. The written evidence submitted by Mr. Lyons therefore cannot be entered into the record, pursuant to 5 M.R.S.A. § 9057 (5)

The Superintendent of Insurance has jurisdiction over this matter pursuant to 24-A M.R.S.A. § 2920. North East Insurance Company bears the burden of proof for establishing that the statutory grounds for policy cancellation exist. Based on the evidence presented at the hearing, the Superintendent hereby concludes that North East Insurance Company has established adequate grounds for policy cancellation.

INDEX OF RECORD:
Exhibit 1 - copy of notice & proof of mailing
Exhibit 2 - May 28 request to add 1994 Dodge
Exhibit 3 - Application for title dated 5/13/03
Exhibit 4 - Maine title record
Exhibit 5 - Amended declarations page
Exhibit 6 - Policy memo
Exhibit 7 - Mr. Lyons sworn statement

ORDER AND NOTICE OF APPEAL RIGHTS

The intended cancellation is hereby approved. North East Insurance Company is directed to continue coverage until September 19, 2003 at 12:01 am to allow the policyholder time to obtain other coverage.

This Decision and Order is a final agency action within the meaning of the Maine Administrative Procedure Act. It is appealable to the Superior Court in the manner provided in 24-A M.R.S.A. § 236 and M.R. Civ. P. 80C. Any party to the hearing may initiate an appeal within 30 days after receipt of this notice. Any nonparty whose interests are substantially and directly affected may initiate an appeal within 40 days of the effective date of this Decision and Order.

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