Holland

Larry Holland and his daughter Shelley Holland appeal from a judgment on the pleadings rendered in favor of defendant Sterling Casualty Insurance Company (Sterling) after the trial court found that (1) Sterling’s policy of automobile insurance for appellants had been cancelled by the financial institution which supplied the premiums for the policy, and (2) therefore there was no policy in effect which would support the appellants’ causes of action against Sterling for breach of the implied covenant of good faith and fair dealing and breach of contract. We find the trial court correctly construed the governing provision in the Insurance Code and we affirm the judgment.

Background of the Case

Sterling issued an auto insurance policy to plaintiff Larry Holland (plaintiff) for a Toyota Célica for a one-year period commencing May 3, 1985. Plaintiff’s daughter Shelley Holland (Shelley or collectively with plaintiff the Hollands) was also an insured driver under the policy. Defendant Central Bank doing business as Coast Program (Bank) financed the insurance premiums for the policy.

Insurance Code section 673 permits a lender such as Bank, who has advanced the premium for an…