Case Title: Flemens v. Harris

Citation: 

Docket Number: 

State: arkansas

Court: Arkansas Supreme Court

Date: 1996-02-12T00:00:00Z

Document:
Roger D. FLEMENS and Nancy Flemens v. Glen D.
HARRIS

94-245                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered February 12, 1996


1.   Insurance -- statute of limitations commences for an insurance
     agent at the time the negligent act occurs. -- The statute of
     limitations for an insurance agent commences at the time the
     negligent act occurs, in keeping with the traditional rule in
     professional malpractice cases.

2.   Courts -- decisions are applied retrospectively  -- limitation
     rules have long been in effect. --  The decisions of the
     supreme court are applied retrospectively -- a decision of the
     court, when overruled, stands as though it had never been;
     furthermore, limitation rules regarding malpractice actions
     have been applicable since 1877.

3.   Insurance -- limitation of actions -- decision based on
     longstanding rule -- trial court correctly applied the law. -- 
      Where there had been no change in the applicable rule and
     thus no "retroactive" application, the trial court correctly
     applied the decisional law of the Court as it existed when it
     decided appellant's case.  


     Appeal from Howard Circuit Court; Ted Capeheart, Judge;
affirmed.
     Wright, Chaney, Berry & Daniel, P,A., by:  Don P. Chaney, for
appellants.
     Wood, Smith, Schnipper & Clay, by:  Lynn Williams and Philip
M. Clay, for appellee.
     Andree Layton Roaf, Justice.February 12, 1996 *ADVREP12*









ROGER D. FLEMENS AND NANCY
FLEMENS,
                    APPELLANTS,

V.

GLEN D. HARRIS,
                    APPELLEE.


94-245




APPEAL FROM THE HOWARD COUNTY
CIRCUIT COURT,
NO. CIV91-87,
HON. TED CAPEHEART, JUDGE,



AFFIRMED.


                  Andree Layton Roaf, Justice.

     This is the second appeal of this case involving a claim of
negligence against an insurance agent; the first appeal was
dismissed without prejudice pursuant to Ark. R. Civ. P. 54(b). 
Flemens v. Harris, 319 Ark. 659, 893 S.W.2d 783 (1995).  Appellants
Roger and Nancy Flemens appeal from an order granting summary
judgment in favor of appellee Glen D. Harris on the basis that the
Flemenses' action was barred by the running of the statute of
limitations.  We affirm.
                             Facts.
     Appellee Glen Harris passed the state examination for
insurance agents in June 1988 and opened a Shelter Life Insurance
Company office in Dierks, Arkansas.  Roger Flemens, a self-employed
grocery store and gas station operator, submitted a disability
insurance application through appellee's office on August 8, 1988,
and was issued a policy by Shelter Life Insurance Company
(Shelter).  Roger Flemens' wife, appellant Nancy Flemens, was the
intended third party beneficiary of the disability insurance
policy.
     On December 15, 1988, Roger Flemens sustained injuries as a
result of a motor vehicle accident.  Mr. Flemens made a claim for
disability insurance benefits from Shelter and received one payment
for the period December 16, 1988, through December 29, 1988.  The
payment was made on February 7, 1989.  On March 21, 1989, Flemens
was notified by Shelter that there was "a problem with this
matter."  Shelter Life Insurance stated that there had been a
misrepresentation on the application regarding Flemens' income --
the income shown on his tax returns was significantly below that
which he claimed on the application form.  Subsequently, Roger
Flemens' disability benefits were terminated.
     Roger and Nancy Flemens filed a complaint against Shelter and
Glen Harris on December 13, 1991.  The complaint alleged Harris was
negligent in handling Roger Flemens' application for disability
insurance.  The complaint further alleged that the negligence on
the part of Harris was imputable to Shelter under the law of
agency.  In addition, the complaint alleged that Flemens
substantially complied with the terms of the policy and, despite
demand, Shelter failed to pay benefits due under the policy.
     Appellee Harris moved for summary judgment asserting that the
three-year statute of limitations barred the Flemenses' action. 
The trial court found that the applicable statute of limitations
for negligence of an insurance agent is three years and begins to
run at the time the negligent act occurs, not when it is
discovered.  The trial court further concluded that the negligence,
if any, committed by Harris occurred in August 1988 and the action
against Harris was filed in December 1991.  Accordingly, the trial
court granted separate defendant Glen Harris' motion for summary
judgment.  The record reflects that Shelter entered into a
settlement agreement with the Flemenses and the action against
Shelter was dismissed with prejudice.

                     Statute of limitations.
     On appeal, both parties agree that the applicable statute of
limitations on actions for the negligence of an insurance agent is
three years.  The appellants, however, submit that the trial court
erred in determining when the applicable three-year period began to
run.  The appellants assert that the statute of limitations did not
begin to run until receipt of the March 21, 1989, letter from
Shelter which terminated benefits because this letter represented
their first loss, i.e. damage, which was necessary for their tort
action to mature.
     The appellants rely upon Midwest Mutual Ins. Co. v. Ark. Nat'l
Co., 260 Ark. 352,