Case Title: Smith v. Shelter Mut. Ins. Co.

Citation: 

Docket Number: 

State: arkansas

Court: Arkansas Supreme Court

Date: 1997-02-10T00:00:00Z

Document:
Judy SMITH v. SHELTER MUTUAL INSURANCE
COMPANY

96-217                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered February 10, 1997


1.   Insurance -- interpretation of policies -- when resort to rules of
     construction necessary. -- When reviewing insurance policies, the
     supreme court adheres to the rule that where the terms of the
     policy are clear and unambiguous, the policy language
     controls; absent statutory strictures to the contrary,
     exclusionary clauses are generally enforced according to their
     terms; it is unnecessary to resort to rules of construction in
     order to ascertain the meaning of an insurance policy when no
     ambiguity exists; the terms of an insurance contract are not
     to be rewritten under the rule of strict construction against
     the company issuing it so as to bind the insurer to a risk
     that is plainly excluded and for which it was not paid. 

2.   Insurance -- proof of future financial responsibility not in issue --
     statute relied upon by appellant irrelevant. -- Appellant's reliance
     on the provision of the Motor Vehicle Safety Responsibility
     Act that mandates that an automobile owner or operator who has
     been in an accident provide proof of his or her financial
     responsibility for the future by filing a certificate of
     insurance showing that there is in effect a motor-vehicle
     liability policy had no application whatever to an insurance
     policy that had not been used as proof of financial
     responsibility in the future; this part of the Motor Vehicle
     Safety Responsibility Act was not relevant. 

 3.  Insurance -- compulsory insurance law not intended to affect validity of
     policy exclusions -- appellant's argument rejected. -- Appellant's
     argument that the compulsory motor-vehicle liability insurance
     law, Ark. Code Ann.  27-22-101 et seq. (Repl. 1994), renders
     the exclusionary clause void as against public policy was
     rejected where the legislative intent of these provisions was
     clear from the language used; in enacting the compulsory
     insurance law, the legislature specifically provided that the
     compulsory insurance law was not intended to affect the
     validity of any policy exclusions; it was unnecessary for the
     appellate court to address cases from other jurisdictions that
     relied on their own states' statutes. 

4.   Judgment -- summary judgment entered in appellee's favor -- no error found.
     -- Where no genuine issue of material fact remained to be
     resolved, the trial court did not err in entering summary
     judgment in favor of appellee.


     Appeal from Saline Circuit Court; John W. Cole, Judge;
affirmed.
     Swindoll Law Firm, by:  James F. Swindoll, for appellant.
     Huckabay, Munson, Rowlett & Tilley, P.A., by:  John E. Moore
and Julia L. Busfield, for appellee.

     W.H."Dub" Arnold, Chief Justice.
     This is an appeal from a summary judgment entered in favor of
appellee Shelter Mutual Insurance Company upholding a clause in an
automobile liability insurance policy that excluded coverage to the
minor son of the insured.  The sole issue on appeal is whether  
the trial court erred in refusing to find that the exclusion was
void as against public policy.  We find no error and affirm.   
     The facts in this case are not in dispute.  On February 14,
1994, Jason Lockett, a minor, was driving a 1993 Dodge van on a
public road in Saline County, Arkansas, when it collided with a
dump truck driven by Gerald Hobby.  Tammy Smith, minor daughter of
appellant Judy Smith, was a pedestrian in the area and allegedly
sustained injuries as a result of the accident.  
     The van was insured under a policy issued by Shelter to
Jason's father, John Lockett.  The policy contained a driver-
exclusion endorsement providing that:   
     No insurance is provided by this policy while any 
     automobile is being driven by or is under the direct 
     control of:

     . . . .
 
     Jason Lockett 

This endorsement was signed by John Lockett, the policyholder.  

     On March 3, 1994, Smith sued John Lockett on a negligence
theory.  On June 3, 1994, Shelter, relying on the named-driver
exclusion, filed suit for declaratory judgment, claiming that no
defense or coverage was owed to Lockett.  Thereafter, on June 27,
1994, Smith filed suit against Shelter, contending that she was
entitled to both personal-injury protection and uninsured motorist
benefits under the Lockett policy.  After consolidating the Shelter
declaratory-judgment action with Smith's contract action, the trial
court granted summary judgment against Smith on the basis that the
policy's exclusion of Jason Lockett as a named driver was explicit
and unambiguous, and that Shelter owed no coverage and no duty to
defend under the policy.  The trial court further found that the
named-driver exclusion was not violative of public policy.  It is
from this adverse ruling that Smith appeals.
     When reviewing insurance policies, we adhere to the long-
standing rule that, where the terms of the policy are clear and
unambiguous, the policy language controls; absent statutory
strictures to the contrary, exclusionary clauses are generally
enforced according to their terms.  Noland v. Farmers Ins. Co., 319
Ark. 449,