# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 5- 37 55

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Si m m on s Fo od s, In c.

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

In du st ria l Ri sk Ins ur ers , an Un in co rp or at ed for Pro fit Ass oc ia ti on ; Swi ss Rei ns ur an ce Am eri ca Co rp or at io n; W es tp or t In su ran ce Co rp or at io n; Iro ns ho re

Sp eci al ty Ins ur an ce Co m pa ny

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el la nt

s

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No. 1 5- 38 45

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Si m m on s Fo od s, In c.

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

In du st ria l Ri sk Ins ur ers , an Un in co rp or at ed for Pro fit Ass oc ia ti on ; Swi ss Rei ns ur an ce Am eri ca Co rp or at io n; W es tp or t In su ran ce Co rp or at io n; Iro ns ho re

Sp eci al ty Ins ur an ce Co m pa ny

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

__ __ __ __ __ __
App eal s fr om

Uni te d S ta te s Di st ric t Co ur t fo r th e Weste rn Dis tri ct of Ark an sa s - F ay et te vi ll e__ __ __ __ __ __

Su bm it te d: Jan ua ry

11 , 20 17
Fil ed : J ul y

11 , 20 17

__ __ __ __ __ __

Befo re RI LEY, Ch ie f Ju dg e, LOKEN and BENTON, Circu it Ju dg es

. 1

__

__ __ __ __ __

RILEY, Chi ef J ud ge

.

In 20 11

, S i mm o n s F oo ds

, In c., m ad e a cl ai m un de r two pr op ert y in su ran ce

po li ci es i t h a d wit h In du st ria l Ri sk In su rers an d Iro ns ho re Sp eci al ty In su ran ce

Co m pa ny (co ll ect iv el y , th e in su rers ). The in su rers de ni ed a po rti on of th e cl ai m th at 2

rel at ed to on e o f S i mm on s’s da m ag ed pr op ert ie s in Okl ah om a, whi ch ev en tu al ly

res ul te d i n S im m on s fi li ng su it in Ark an sa s whe re Si m m on s is he ad qu art ered

. The

in su rers m ov ed to di sm is s th e act io n ba se d on po li cy pr ov is io ns req ui rin g an y act io n
be bro ug ht wit hi n o ne y ear o f th e d at e o f lo ss , a win do w t ha t ha d cl os ed so m e ti m e
earl ie r. The di st ric t co ur t ap pl ie d Ark an sa s la w—wh ic h vo id s s u c h co nt ract ua l

pr ov is io ns , un li ke Okl ah om a la w—an d de ni ed th e m ot io n. The cas e wen t to tri al

, an d

aft er th e jur y ve rd ic t Si m m on s reco ve red $2 ,81 7,3 80 .11 of th e $3 ,58 4,0 41 .90 it

so ug ht

. The di st ric t co ur t th en or de red th e in su rers to pa y pr ejud gm en t in te res t. The

di st ric t co ur t reject ed Si m m on s’s at te m

pt to reco ve r an ad di ti on al 12 % in da m ag es

The Hon or ab le W il li am Ja y Ri le y st ep pe d do wn as Ch ie f Ju dg e of th e Uni te d 1

St at es Co ur t of App eal s fo r th e Eig ht h Ci rcu it at th e cl os e of bu si ne ss on Mar ch 10

, 20 17 . He has be en su ccee de d b y th e Hon or ab le Lave ns ki R. Sm it h.

The m em be r co m pa ni es of In du st ria l Ri sk In su rers , W es tp or t In su ran ce 2

Co rp or at io n an d Swis s Rei ns ur an ce Am eri ca Co rp or a t io n, were al so na m ed
de fen da nt s an d are th eref

or e in cl ud ed as “ in su rers .” Als o, th e pa rti es refe r to a si ng le
cl a i m, n o twi th st an di ng th e fact th ere are two po li ci es , ap pa ren tl y be cau se a si ng le

ev en t— a sn ows to rm

—was in vo lv ed

. Bec au se it do es no t affe ct ou r an al y si s, we wil l
do th e sa m e.

-2

-an d a ls o a tt or ne y fees , fin di ng Sim

m on s fa il ed to cle ar t he st at ut or y th res ho ld . See

Ark

. Co de Ann

. § 23 -7 9- 20 8. Neit he r si de is sa ti sf ie d wit h ho w th in gs were res ol ve d.

The in su rers ap pe al th e d e n i a l o f t he ir m ot io n to di sm is s an d th e award of

pr ejud gm en t in te res t. Si m m on s cro ss -ap pe al s th e de ci si on no t t o award st at ut or y
da m ag es or at to rn ey fees

. W e affi rm th e de ni al of th e in su rers ’ m ot io n to di sm is s,

rev ers e an d va cat e th e award of pr ejud gm en t in te res t, an d a ffi rm th e reject io n of

Si m m on s’s cl ai m s fo r st at ut or y da m ag es an d a tt or ne y

fees

.

I. BACKGRO UND

Si m m on s is a la rg e, f

a mi l y- o w ne d po ul try an d pe t-f oo d co m pa ny th at is

in co rp or at ed in Ark an s a s a nd he ad qu art ered in Ben to n Co un ty, Ark an sa s. The

in su rers is su ed two m at eri al ly id en ti cal pr op ert y in su ran ce po li ci es to Si m m on s, wit h

a co ve rag e te rm fro m Sep te m be r 1, 20 10

, to Sep te m

be r 1, 20 11

, an d a joi nt li ab il it y

li m it of $1 00 m il li on

. Acco rd in g to Si m m on s’s Ass is ta nt Ri sk Man ag er, th e po li ci es

were “ ne go ti at ed

, en te red

, is su ed

, an d de li ve red to Si m m on s at it s co rp or at e of

fic e in

Ben to n Co un ty, Ark an sa s,” an d th e po li cy pr em iu m s were pa id fro m Ark an sa s. The

po li ci es co ve red 51 pr op ert ie s Si m m on s own ed , s pe ci fic al ly: 21 in Ark an sa s, 13 in

Okl ah om a, an d 17 sc at te red th ro ug ho ut Kan sa s, Mi ss ou ri, New Je rs ey , an d Can ad a.

In Feb r ua ry 20 11

, a sn ows to rm swe pt th ro ug h Okl ah om a an d Mi ss ou ri an d

da m ag ed se ve ral of Si m

m on s’s co ve red bu il di ng s an d farm s. Si m m on s m ad e a cl ai m

fo r al l of it s da m ag ed pr op ert ie s un de r th e po li ci es , whi ch pr ov id ed th at th e in su rers ’

li ab il it y “ sh al l n ot ex ceed th e sm al le r of th e fo ll owi ng : 1. th e co st to rep ai r, reb ui ld

or rep la ce on th e sa m e si te wit h ne w m at eri al s of li ke ki nd an d qu al it y , whi ch ev er is

th e smalle st ; 2

. th e act ua l exp en di tu re inc ur red in rep ai rin g, rebu il di ng or rep la ci ng

on th e sa m e or an ot he r si te

, whi ch ev er is th e sm al le st .” The pa rti es res ol ve d m os t of

th e cl ai m wit ho ut is su e. The ex cep ti on was a di sp ut e ab ou t Si m m on s’s can -m ak in g

f a c i l it y in Fo rt Gib so n, Okl ah om a, a 30 0- fo ot by 40 0- fo ot m et al st ru ct ur e th at

su st ai ne d co ns id erab le da m ag e to it s ro of an d su pp or ti ng co lu m ns

. The pa rti es
di sa gr eed on ho w th e po li ci es co ve red t h e s it ua ti on —Si m m on s co nt en de d it was

-3

-en ti t l e d t o r eco ve r th e co st to reb ui ld th e st ru ct ur e, whi le th e in su rers as se rte d th ey

were on ly ob li ga te d to pa y fo r th e co st to rep ai r sp eci fie d da m ag es

. Si m m on s el ect ed

to reb ui ld th e faci li ty de sp it e th is im pa ss e, an d eve nt ua ll y su bm it te d in vo ic es to th e

in su rers to ta li ng $7 ,36 7,8 59 .12

. The in su rers m ai nt ai ne d th ei r po si ti on an d rem it te d

th e i r f i n a l pa y m en t in Ju ly 20 13

, ha vi ng pa id on ly th e $3 ,87 9,0 97 .99 th ey in it ia ll y
of fere d Si m m on s. Si m

m on s se nt a l e tt er st at in g it s di sa gr eem en t an d de m an di ng 3

$3 ,58 4,0 41 .90 . The i ns ur ers reject ed th is las t-d it ch effo rt t o a vo id li ti ga ti on

.

Si m m on s fil ed su it in th e W es te rn Dis tri ct of Ark an sa s on Sep te m be r 20

, 20 13

,

se ek in g $3 ,58 4,0 41 .90 fo r t h e in su rers ’ al le ge d br each of co nt ract

. See 28 U.S.C. 4

§ 13 32 (a)( 1) (d iv ers it y

juri sd ic ti on ). The i ns ur ers m ov ed to di sm is s th e act io n, se e
Fed

. R. Ci v. P. 12 (b )(6 ), ba se d on a ti m e-l im it at io n pr ov is io n in th e po li ci es th at

p r o v i d e d : “N o su it or act io n on th is po li cy fo r th e reco ve ry of an y cl ai m sh al l be

su st ai na bl e in an y co ur t of la w or eq ui ty

. . . un le ss co mmenc ed wi th in tw el ve mon th s

ne xt af te r in cep ti on of th e lo ss .” (Em ph as is ad de d)

. If en f

o rced

, th e li m it at io n

pr ov is io n co ul d ba r Si m

m on s’s su it gi ve n th at th e la wsu it was fil ed ov er 31 m on th s

aft er th e sn ows to rm (i.e

., 19 m on th s to o la te ). Si m m on s co un te red th at Ark an sa s la w

ap pl ie d, m ak in g th e pr ov is io n un en fo rcea bl e an d th e act io n ti m el y

. The di st ric t co ur t

ag reed wit h Si m

m on s an d de ni ed th e m ot io n be cau se it co ns id ered “ th e ti m el in es s of

th e su it [to be ] a pr oc ed ur al m at te r” an d th eref or e “ go v e r ne d by th e la w of th e

fo ru m .” The in su rers di sa gr eed wit h th is cl as si fic at io n an d as ke d th e di st ric t co ur t

to cert ify to ou r co ur t whe th er th e ti m el in es s is su e is pr oc ed ur al or su bs ta nt iv e. See

28 U.S.C. § 12 92 (b ) (in te rlo cu to ry ap pe al ). The di st ric t co ur t de cl in ed to do so ,

Of th is am ou nt , $ 1,1 70 ,48 2.5 4 was fo r te m po rary repai rs to th e Fo rt Gi bs on 3

faci li ty. The rem ai ni ng $2 ,70 8,6 15 .45 refl ect s wh at th e in su rers ’ ex pe rts est im at ed
it wou ld co st to rep ai r th e st ru ct ur e.

Not e th e m at h do es no t ad d up : th e $7 ,36 7,8 59 .12 Si m m on s cl ai m ed m in us th e 4
$3 ,87 9,0 97 .99 th e in su rers pa id do es no t equ al th e $3 ,58 4,0 41 .90 Si m m on s so ug ht

. Tha t is

, Si m

m on s’s de m an d was ab ou t $9 5,0 00 to o hi gh

. W e di sc us s th e si gn ifi can ce of th is fat efu l m is cal cu la ti on lat er. See in fra, s ect io n II .C.

-4

-reas on in g th at reg ard le ss of whe th er th e is su e was pr oc ed ur al (as th e di st ric t co ur t

in it ia ll y fo un d) or su bs ta nt iv e (as th e in su rers ur ge d) it w o u l d be go ve rn ed by

Ark an sa s l aw. The ca se m ov ed for ward

.

At tri al

, th e pa rti e s pr es en te d co nf li ct in g ev id en ce on th e two is su es th e jury

ne ed ed to de ci de

. Fi rs t, the pa rti es co nt in ue d th ei r qu arre l ov er whe th er the faci li ty

co ul d ha ve b e e n rep ai red

. Seco nd

, if th e reb ui ld were pr op er, th e pa rti es di sp ut ed

whe th er Si m

m on s was en ti tl ed to th e fu ll $3 ,58 4,0 41 .90 it so ug ht

. On th is po in t th e

in su rers cl ai m ed Si m

m on s’s f i g u r e in cl ud ed cert ai n “ be tt erm en ts ” th at were no t

co ve red by th e po li ci es —fo r ex am pl e a ne w do ck do or , ad di ti on al ex ha us t fan s, an d

hi gh er-q ua li ty st eel —wh il e Si m m on s po si te d th es e ex pe ns es were ei th er req ui red by

lo cal co de or wou ld sa ve m on ey i n t h e l o n g ru n. Fo ll owi ng th e jury’ s fin di ng s,
Si m m on s was en ti tl ed to $2 ,81 7,3 80 .11 in da m ag es

. The di st ric t co ur t la te r award ed

Si m m on s pr ejud gm en t in te res t. See Ar k

. Co de Ann

. § 4- 57 -1 01 (d ) (p reju dg m en t

in te res t); se e al so W oo dl in e Mo to r Frei gh t, In c. v. Trou tm an Oil Co

., I n c

. , 93 8

S.W

. 2 d 5 6 5

, 56 8 (Ark

. 19 97 ). The di st ric t co ur t reject ed Si m m on s’s req ue st fo r
ad di ti on al rel ie f un de r Ark

. Co de Ann

. § 23 -7 9- 20 8 (s ta tu to ry da m ag es an d at to rn ey

fees ), fin di ng Si m

m on s fel l sh or t of th e st at ut or y th res ho ld “ [b ]y t h e s li gh te st of

m arg in s.” W e m

us t no w de te rm in e whe th er th e di st ric t co ur t was co rrec t to : (1 ) ap pl y

Ark an sa s la w an d de ny t h e i n s u r e rs ’ m ot io n to di sm is s; (2 ) award Si m m on s

pr ejud gm en t in te res t; an d (3 ) reject Si m m on s’s req ue st fo r st at ut or y da m ag es an d

at to rn ey fees . See 2 8 U.S.C. § 12 91 (ap pe ll at e juri sd ic ti on ).

II

. DISCUSS IO N

A. Mot io n to Dis m is s
The in su rers fir st co nt en d Sim m on s’s su it was un ti m el y an d th eref

or e sh ou ld

ha ve be en di sm is se d. W he th er th is co nt en ti on ha s m eri t hi ng es la rg el y o n w h i c h

st at e’s la w we m

us t app ly. Und er Arkan sa s law, an in su red ha s fiv e y ears to su e an

in su rer fo r br each of a pr op ert y in su ran ce po li cy an d “ [a]ny st ip ul at io n or pr ov is io n

in th e po li cy or co nt ract req ui rin g th e act io n to be br ou gh t wit hi n an y sh or te r ti m e or

-5

-be ba rred is v o i d .” Ark

. Co de Ann

. § 23 -7 9- 20 2; id

. § 16 -5 6- 11 1( a). Thu s, un de r

Ark an sa s la w, Si m

m on s’s su it was ti m el y , an d th e in su rers do no t su gg es t ot he rwis e.
The in su rers ar gue Okl ah om a la w ap pl ie s, an d Okl ah om a la w al lo ws co ur ts to en fo rce

li m it at io n pr ov is io ns li ke th e on e he re. See, e.g ., Cl ip pe rto n v. All st at e In s. Co

., 15 1 5

F

. A p p ’x 65 2, 65 5 (1 0t h Ci r. 20 05 ). The di st ric t co ur t ap pl ie d Ark an sa s l a w a n d

de ni ed th e m ot io n to di sm is s, bo th of w h i ch are de ci si on s we rev ie w de no vo

. See, e.g ., C art on v. Gen . M ot or s Accep ta nc e Co rp ., 6 11 F.3 d 45 1, 45 4

- 5 5 (8 th Ci r.

20 10 ). In de ci di ng wha t la w ap pl ie s, fed eral co ur ts ex erci si ng di ve rs it y juri sd ic ti on

ap pl y th e fo ru m st at e’s ch oi ce-o f-l aw pr in ci pl es —h ere, th at is Ark an sa s. See Am

. Fi re & C as . Co. v . Hege l, 8 47 F.3d 95 6, 9 59 (8t h C ir. 2 01 7)

.

W it h th at in m in d, th e fir st st ep is to de te rm in e whe th er th e ti m el in es s is su e is

pr oc ed ur al or su bs ta nt iv e in na tu re. If it is pr oc ed ur al

, th en Ark an sa s la w ap pl ie s; if

it is su bs ta nt iv e, th en fu rth er an al y si s is ne ed ed

. See Trav is Lum b e r C o

. v.
Deic hm an , 31 9 S.W .3d 23 9

, 2 5 5 (Ark

. 20 09 ). The in su rers po si t “ [e]ver y co ur t to

co ns id er th e en fo rcea bi li ty of a su it li m it at io n pr ov is io n in an in su ran ce co nt ract ha s

tre at ed it as a su bs ta nt iv e, no t pr oc ed ur al , i ss ue .” Howev er th e in su rers of fer sc an t

su pp or t fo r th is b o l d c la im —t he y ci te two ou t-o f-ci rcu it

, di st ric t-l ev el de ci si on s. 6

Si m m on s m ak es an al te rn at iv e arg um en t th at it s s u i t was ti m el y ev en if 5

Okl ah om a la w ap pl ie s, be cau se th e ti m e pe rio d was eq ui ta bl y to ll ed or waiv ed du rin g th e conti nue d ne go ti at io ns an d cl ai m -ad jus tm en t pe rio d. W e co nc lu de Okl ah om a la w do es no t ap pl y an d th eref or e ex pr es s no vi ew as to whe th er Si m m on s’s su it w a s ti m el y un de r Okl ah om a la w.

See Bai ll ie Lum

be r Co

., L.P. v. Ace Am

. In s. Co

., No. 11 -CV-9 95 A, 20 14 W L 6

69 97 52 4, at *8 (W. D.N.Y. Dec. 10

, 20 14 ); Si m on s v. N. Cen t. Cro p In s., In c., No. 98

c 10 99

, 1 9 98 W L 3 21 46 6, at *2 -3 (N.D. Il l. Ju ne 12 , 1 99 8)

. Bu t se e, e.g ., S un In s. Offi ce, Ltd . v. Cl ay , 13 3 S o. 2d 73 5, 73 8 (Fl a. 19 61 ) (d et erm in in g a Fl or id a st at ut e

vo id i n g l i mi t at io n pr ov is io ns al way s ap pl ie s in Fl or id a co ur ts pr ov id ed th ere is

pe r s o n a l ju r i sd ic ti on ); Gall ih er v. St at e Mu t. Life In s. Co

., 43 So

. 83 3, 83 4 (Ala

. 19 07 ) (h old ing G eo rg ia la

w gove rn ed the “ ‘ va lid ity

, in te rp ret at io n, an d co ns tru ct io n’”
of a Geo rg ia co nt ract

, bu t foru m la w go ve rn ed “ al l rem ed ie s on co nt ract s” (q uo ti ng

-6

-Mo re im

po rta nt ly, th e st at em en t al m os t di rect ly co nf li ct s wit h a cas e fro m th e on ly

co ur t wh os e cl as si fic at io n c on tro ls : t he Arka ns as Su pr em e Co ur t.

In Gul f In su ran ce v. Hol la nd Co ns t., an Okl ah om a-b as ed in su red ob ta in ed a

pr op ert y in su ran ce po li cy fro m a Tex as -b as ed in su rer. Gul f In s. Co

. v. Hol la nd

Co ns t. Co

., 23 6 S.W .2d 10 03

, 10 04 (Ark

. 19 51 ). The in su red mad e a c l ai m un de r

th at po li cy whe n so m e of it s pr op ert y was da m ag ed in Ark an sa s, an d th e in su rer
de ni ed co ve rag e. See id

. Thre e y ears pa ss ed fro m th e da te of th e in ci de nt be fo re th e

in su red fil ed su it in Ark an sa s st at e co ur t. See id

. Lik e he re, th e in su rer po in te d to a

li m it at io n pr ov is io n wit hi n th e po li cy st at in g: “ ‘N o su it act io n on th is po li cy , fo r th e

reco ve ry of an y cl ai m , sh al l be su st ai na bl e in an y co ur t

. . . un le ss co m m en ced wit hi n
twel ve m on th s ne xt aft er th e ha pp en in g of th e lo ss .’ ” Id

. at 10 05

. Als o li ke he re, th e

in su rer arg ue d Okl ah om a la w ap pl ie d an d al lo wed th e cl au se to be en fo rced

. See id

. The Arka ns as Su pr em e Co ur t d is ag reed :

[T ] he pe ri od of li mit at io n in w h i c h su it may be fi le d

. . . i s a mat te r of

pr oc ed ur e an d no t of su bs ta nt iv e l a w

. . . . W he re th e st at ut es of th e fo ru m m ak e vo id al l ag reem e n t s w h ereb y th e ti m e fo r th e br in gi ng of

act io ns is fix ed at a pe rio d le ss th an th at pr es cri be d by la w, a co nt ract ua l

st ip ul at io n m ad e in an ot he r juri sd ic ti on is no t av ai la bl e as a de fen se

.

Id

. at 10 0 6 ( e mp h a s is ad de d) (ci ta ti on an d in te rn al qu ot at io n m ark s om it te d)

. The

Ark an sa s Su pr em e Co ur t d e cl in ed to gi ve effe ct to th e li m it at io n pr ov is io n an d

affi rm ed th e jury verd ic t i n fa vo r of th e in su red . See i d.

Jo ne s v. Jo ne s, 18 Ala. 24 8, 25 0 (1 85 0) )). W e al so no te bo th Bai ll ie an d Si m on s

se em to sk ip th e pr oc ed

ur al /su bstan ti ve qu es ti on al to ge th er, an d ne it he r of th es e cas es is co nt ro ll in g h ere.

-7

-The in su rers try to av oi d a si m il ar resu lt he re by co nt en di ng in or al arg um en t

Gul f In su ran ce is “ di st in gu is ha bl e on m an y , m an y gr ou nd s.” W e di sa gr ee. At or al 7

arg um en t, th e in su rers fir st su gg es te d Gul f In su ran ce “ was go in g to be go ve rn ed by

Ark an sa s la w un de r an y so rt of ch oi ce-o f-l aw an al y si s” be cau se th e da m ag e oc cu rred

in Ark an sa s. W he th er so m e ot he r ch oi ce-o f-l a w p r in ci pl e wou ld ha ve cal le d fo r

ap pl ic at io n of Ark an sa s la w i s i rrel ev an t, b ecau se th e Ark an sa s Su pr em e Co ur t di d

no t rel y on a n y su ch ot he r pr in ci pl e—i t rel ie d so le ly on it s de te rm in at io n th at th e

t i mel in es s is su e was pr oc ed ur al an d go ve rn ed by th e fo ru m ’s la w. See id

. W e a r e

al so un pe rs ua de d by th e in su rers ’ at te m pt to hi gh li gh t sl ig ht di ffer en ces be twee n th e

li m it at io n pr o v i s i o n in Gul f In su ran ce an d th e on e he re. The op erat iv e la ng ua ge 8

st ru ck do wn by th e Ark an sa s Su pr em e Co ur t was a cl au se sh or te ni ng th e ti m e an

in su red co ul d s ue an in su rer. Th at lan gu ag e si m il arl y ex is ts he re.

Last , t he in su rers or al ly arg ue d “ th e l a w h a s c om e a lo ng way si nc e th e Gul f

cas e as to ho w [co ur ts ] tre at su it -li m it at io n pr ov is io ns .” Maybe so

. Howev er, “ ‘[a] s

a fed eral co ur t, ou r ro le in di ve rs it y cas es is to in te rp ret st at e la w, no t to fas hi on it .’ ”

W iv el l v. W el ls Farg o Ban k, N.A., 77 3 F.3 d 88 7, 89 6 (8 th Ci r. 20 14 ) (q uo ti ng

Dan ni x Pai nt in g, LLC v. Sh erwi n- W il li am s Co

., 73 2 F.3 d 90 2, 90 5 (8 th Ci r. 20 13 )).

W he n d eal in g wi th an is su e of st at e la w we are b ou nd by ruli ng s o n t ha t i ss ue fro m

Des pi te su gg es ti ng “ [e]ver y co ur t” ha s fo un d li mi t a ti on pr ov is io ns to be 7

su bs ta nt iv e, th e in su rers ne gl ect ed to ci te Gul f In su ran ce ev en on ce in t h e i r br ie fs

. The in su rers ’ on ly at te m

pt to di st in gu is h Gul f In su ran ce cam e du rin g or al arg um en t.

The po li cy in Gul f In su ran ce co nt ai ne d a fai l-s afe cl au se of so rts in th at it 8

req ui r e d s u i ts be co m

m en ced wit hi n a y ear of th e lo ss , “ ‘ pr ov id ed th at whe re su ch
li mit at io n of ti m e is pr oh ib it ed by th e la ws of th e St at e W he re in th is po li cy is is su ed

, th en in th at ev en t no su it or act io n un de r th is po li cy , sh al l b e s u s t a in ab le un le ss

co m m en ced wit hi n th e s ho rte st li m it at io n pe rm it te d un de r th e la ws of su ch st at e.’”
Id

. at 10 05 (em

ph as is ad de d)

. The Ark an sa s Su pr em e Co ur t d i d no t ad dr es s th is
la ng ua ge , pr ob ab ly be cau se th e pr ov is o was n o t ap pl ic ab le —t he po li cy was no t is su ed in Arka ns as . See i d. at 10 04 -0 6.

-8

-th e st at e’s hi gh es t co ur t. See id

. at 89 6- 97

. W e are face d wit h an is su e of Ark an sa s

la w, an d th e Ark an sa s Su pr em e Co ur t ha s de ci de d th at is su e, so we are bo un d by th at

de ci si on reg ard le ss of whe th er we th in k it wis e o r in acco rd an ce wi th th e su pp os ed

na ti on al tre nd

. If th e Ark an sa s Su pr em e Co ur t or le gi sl at ur e wan ts to ch an ge st at e

l a w , th en th ey can do so —we can no t. Si m m on s’s su it was ti m el y , an d th e di s t r i c t

co ur t was rig ht to de ny the in su rers ’ m ot io n t o d is m is s.

B. Prejud gment I nter es t

The in su rers ne xt arg ue Si m m on s is no t en ti tl ed to pr ejud gm en t in te res t, whi ch

is an ot h er is su e we de ci de (th is ti m e wit ho ut di sp ut e) un de r Ark an sa s la w. See

Mad do x v. Am

. Airl in es , In c., 29 8 F.3 d 69 4, 69 9 (8 th Ci r. 2 0 02 ). “ Preju dg m en t

in te res t is co m

pe ns at io n fo r reco ve rab le da m ag es wro ng fu ll y wit hh el d fro m th e ti m e

of th e lo ss un ti l jud gm en t.” Dor se tt v. Bu ffi ng to n, 42 9 S.W .3d 22 5, 23 2 (Ark

. 20 13 ).
A p rev ai l i n g p l a i nt iff is en ti tl ed to pr ejud gm en t in te res t “ if th e am ou nt of da m ag es
is de fin it el y as cert ai na bl e by m at he m at ic al co m pu ta ti on , or if th e ev id en ce fu rn is he s
da ta th a t m ak e it po ss ib le to co m pu te th e am ou nt wit ho ut rel ia nc e on op in io n or
di sc ret io n.” Id

. Howev er “ [i]f th e da m ag es are no t by th ei r na tu re ca pa bl e of exa ct

de te rmi n a ti on , bo th in ti m e an d am ou nt

, pr ejud gm en t in te res t is no t an it em of

reco ve ry .” Id . at 2 32 -3 3.

The pa rti es di sa gr ee ab ou t ho w th es e ru le s ap pl y in th is cas e. To th e in su rers , th is ca s e i s s i mi l a r to W oo dl in e Mo to r Frei gh t, In c. v. Trou tm an Oil Co

., In c., 93 8

S.W .2d 56 5 (Ark

. 19 97 ). W e ag ree th at cas e is “ in st ru ct iv e.” In W oo dl in e, a ve hi cl e
dr iv er cau se d a cras h th at da m ag ed a co nv en ie nc e st or e. See id

. at 56 6. The bu il di ng

own er su ed

. See id

. At tri al “ [t]he re w a s c o nf li ct in g te st im on y as to whe th er th e 9

The te na nt al so su ed fo r pe rs on al pr op ert y da m ag e (e.g

., in ve nt or y ), whi ch 9

Si m m on s cl ai m s m ak es W oo dl in e di st in gu is ha bl e. See id

. at 56 6, 56 9. Howev er, th e Ark an sa s Su pr em e Co ur t bi fu rcat ed it s di sc us si on an d of fere d se pa rat e rat io na le s fo r why pr ejud gm en t in te res t was in ap pr op ria te fo r th e own er an d th e te na nt

. See id

. at

-9

-b u i l di ng ne ed ed to be co m pl et el y to rn do wn, or whe th er pa rt of th e st ru ct ur e co u l d

ha ve be en rep ai red .” Id

. at 56 9. The ju r y a w a r d e d $1 00 ,00 0 of th e $2 02 ,00 0 th e

own er s ou gh t fo r pr op ert y da m ag e. See id . a t 5 66 -6 7. Gi ve n t ha t “ th e es ti m at es to

rep ai r or rep la ce [th e] bu il di ng va rie d su bs ta nt ia ll y ,” th e Ark an sa s Su pr em e Co ur t

he ld pr ejud gm en t i nt eres t was im pr op er be cau se “ it was im po ss ib le to co m

pu te th e

am ou nt of [th e pl ai nt iff ’s] da m ag es wit ho ut rel ia nc e on op in io n o r di sc ret io n.” Id

.
at 56 9. In Si m

m on s’s cas e, th e jury ha d to ex erci se di sc ret io n to reac h a ve rd ic t ba se d

on “ co nf li ct in g te st im on y ” an d es ti m at es th at “ va rie d su bs ta nt ia ll y ” as to Si m m on s’s

da m ag es

. Thi s su gg es ts “ th e am ou nt du e [Si m m on s] was ne it he r l i q u i d a te d as a
do ll ar s um

no r as cert ai na bl e b y

fix ed st an da rd s.” Id

.

Si m m on s st il l m ai nt ai ns pr ejud gm en t in te res t was pr op er be cau se th e po li ci es

pr ov id ed a “ m et ho d” to as cert ai n da m ag es : th e i n su rers owe d ei th er “ th e co st to

rep ai r, reb ui ld or rep la ce” th e faci li ty or “ th e act ua l ex pe nd it ur e in cu rred in rep ai rin g,
reb ui ld in g or rep la ci ng ” th e faci li ty, whi ch ev er was le ss

. To Si m m on s, th e da m ag es

were cap ab le of ex act de te rm in at io n b e c a u s e th ere was “ no di sp ut e co nc ern in g th e

am ou nt Si m

m on s sp en t to rep la ce th e bu il di ng .” Th u s , on ce th e jury d eci de d wha t

Si m m o n s po si ts was th e on ly i ss ue at tri al —“ whe th er th e en ti re bu il di ng ne ed ed to

be rep la ced at al l” —t he re was no ro om le ft fo r “ op in io n or di sc ret io n,” no th in g fo r

th e jury to as cert ai n. Dor se tt , 4 29 S.W .3d at 23 2. Bu t th e rec or d a nd ve rd ic t sh ow

th at was n ot th e cas e.

The pa rti es st ip ul at ed to ho w m uc h Si m m on s act ua ll y sp en t on th e faci li ty an d

ho w m uc h t he in su rers vo lu nt ari ly p ai d Si m m on s. If th e jury s im

pl y pl ug ge d t he se fig ur es in to Si m

m on s’s p ro ffer ed da m ag es fo rm ul a, wit ho ut rel y in g on an y op in io n

or di sc ret io n, it wou ld ha ve award ed ab ou t $3 .5 m il li on in da m ag es

. Yet, as Si m m on s

sa id at or al arg um en t, “ juri es do wha t juri es do ”—t he jury a w ard ed Si m m on s

56 9. W e rel y on ly on th e co ur t’s di sc us si on as to th e own er’s cl ai m fo r pr ejud gm en t in te res t, m ak in g t hi s d is ti nc ti on irr el ev an t.

-1 0-$2 ,81 7,3 80 .11

. Neit he r pa rty su gg es te d th is fig ur e at tri al

, no r do th ey of fer an y

ex pl an at io n on ap pe al as to ho w th e jury m ay ha ve reac he d th is su m

. “ The fact th at

th e jury award ed a le ss er am ou nt th an req ue st ed is no t ne ces sa ril y di sp os it iv e, bu t it

is un cl ear he re

. . . ho w th e jury arri ve d at th e to ta l da m ag es am ou nt .” Yazd ia np ou r

v. Safe bl oo d Tech s., In c., 77 9 F.3 d 53 0, 54 0 (8 th Ci r. 20 15 ); cf. Acev a Tech s., LLC

v. Ty so n Fo od s, In c., 42 9 S.W .3d 35 5, 36 5- 66 (Ark

. Ct

. App

. 20 13 ) ( a ward in g

pr ejud gm en t in te res t whe re th e pl ai nt iff reco ve red le ss th an it so ug ht

, bu t it was cl ear
ho w th e jury cal cu la te d da m ag es ). The jury co u l d n o t, an d in de ed di d no t, bl in dl y

acce pt ev ery in vo i c e S i mm on s of fere d in to ev id en ce. The jury ha d to us e it s
di sc ret io n to as cert ai n whi ch ex pe rts to be li ev e, whi ch ex pe ns es were co ve red un de r

th e po li ci es , an d whe th er the in vo ic es “ ‘reflec te d rel ia bl e an d fai r do ll ar am ou nt s.’”

Yazd ia np ou r, 77 9 F.3 d at 54 0 (q uo ti ng Si m s v. Mo se r, 28 4 S.W .3d 50 5, 52 0 (Ark

. 20 08 )). Th e n eed fo r su ch di sc ret io n m ean s Si m m on s’s da m ag es were no t cap ab le

of ex a c t d et erm in at io n un ti l th e jury sp ok e an d th e di st ric t co ur t en te red jud gm en t,

an d p reju dg m en t i nt eres t was no t ap pr op ria te

. 1 0

W e reac h th is co nc lu si on reg ard le ss of ou r st an da rd of rev ie w, an is su e up on 1 0

w h i c h th e pa rti es di sa gr ee (b ut do no t el ab or at e). The in su rers pr op os e d e n o v o

rev ie w, ci ti ng Ch il dr en ’s Bro ad cas ti ng Co rp

. v. W al t Dis ne y Co

., 35 7 F.3 d 86 0, 86 8 (8 th Ci r. 20 04 ). Si m

m on s su gg es ts an ab us e-o f-d is cret io n st an da rd

, po in ti ng to All

W ay s Log is ti cs , In c. v. USA Truc k, In c., 58 3 F.3 d 51 1, 51 8 (8 th Ci r. 20 09 ). W e ne ed

no t reco nc il e th is ap pa ren t in co ns is te nc y wit hi n ou r pr eced en t, beca us e “ [a] di st ric t

co ur t by de fin it io n ab us es it s di sc ret io n whe n it mak e s a n e r ro r of la w.” Koo n v. Uni te d S ta te s, 5 18 U.S. 81 , 10 0 (1 99 6)

.

-1 1-C. Sta tuto ry Damag es an d Atto rney Fees

Fo r it s pa rt, Si m

m on s cl ai m s it sh ou ld ha ve rece iv ed st at ut or y da m ag es an d

at to rn ey fees

. Und er Ark. Co de Ann . § 2 3- 79 -2 08 (a)( 1) , an i ns ur er fo un d t o h av e 1 1

im pr op erl y wit hh el d pa y m en t on a cl ai m “ sh al l be li ab le to pa y th e ho ld er of th e

po li cy

. . . , in ad di ti on to th e am ou nt of th e lo ss , twel ve pe rcen t (1 2%) da m ag es up on

th e am ou nt of th e lo ss , to ge th er wit h al l reas on ab le at to rn ey ’s fees fo r th e pr os ecu ti on

an d co ll ect io n of th e lo ss .” Thi s ad di ti o n a l r e l i e f is av ai la bl e on ly “ if th e am ou nt

reco ve red fo r th e lo ss is wit hi n twen ty pe rcen t (2 0%) of th e a mo u n t de m an de d or
whi ch [was ] so ug ht in th e su it .” Id . § 2 3- 79 -2 08 (d )(1 ).

The Ark an sa s Su pr em e Co ur t ha s m ad e cl ear th e st at ut e is “ st ric tl y co ns tru ed

in fav or of th e pa rty so ug ht to be pe na li zed ” an d “ sh ou ld no t be he ld to ap pl y ex cep t

in cas es th at co m e cl earl y wit hi n th e st at ut e.” Pri m eri ca Life In s. Co

. v. W at so n, 20 7

S.W .3d 44 3, 44 8 (Ark. 20 04 ). W he th er thi s case co m es “ cl earl y wit hi n th e st at ut e”

de pe nd s on whe th er Si m

m on s reco ve red at lea st 80 % of th e am ou nt it “ de m an de d”

or “ so ug ht in th e su it .” Afte r th or ou gh an al y si s, th e di st ric t co ur t fo un d “ Si m m on s

fai l[e d] to ch in th is st at ut or y ba r, as it s ne t reco ve ry of $2 ,81 7,3 80 .11 is on ly 78 .6%

of it s $3 ,58 4,0 41 .90 de m an d.” W e rev ie w th e di st ric t co ur t’s le ga l co nc lu si on de

no vo , an d th e fact ua l fi n d i ng s su pp or ti ng it fo r cl ear erro r. See, e.g ., Ja ck so n v.

All st at e In s. Co ., 78 5 F .3d 11 93 , 12 06 (8t h C ir. 2 01 5)

.

Si m m on s p r op os es two reas on s why th e di st ric t co ur t was wro ng

. Fi rs t,

Si m m on s su gg es ts th e di st ric t co ur t to ok to o na rro w a vi ew in de ci di ng wha t nu m be rs

to us e. Tha t is

, th e m at h sh ou ld refl ect th e qu es ti on po se d to th e jury: “ W ha t

. . . was

th e le as t am ou nt fo r whi ch Si m m on s co ul d ha ve rep la ced th e en ti re Ft

. Gib so n

Bu il di ng ? ” Si m

m on s sa id th is nu m

be r was $ 6

, 0 9 8 ,08 0, th e “ am ou nt de m an de d.”

The Ark an sa s Su pr em e Co ur t ha s he ld § 23 -7 9- 20 8 is “ a pr oc ed ur al m at te r,” 1 1

an d th eref

or e m ay be ap pl ie d reg ard le ss o f wha t st at e’s su bs ta nt iv e la w go ve rn s. Sh ep he rd v. St at e Aut o P ro p. & Cas . Ins . Co., 8 50 S.W .2d 32 4, 3 29 (Ark . 19 93 ).

-1 2-The jury fo un d th e nu m be r to b e $ 5

, 5 2 5,9 95 .56

, th e “ am ou nt reco ve red .” If th es e

nu m be rs are us ed

, th en Si m

m on s reco ve red 90 .6% of th e am ou nt it so ug ht

. Bu t th is

ap pr oa ch fai ls to reco gn iz e th e d iff eren ce be twee n an in su ran ce cl ai m an d a le ga l

cl ai m , and th e st at ut or y th res ho ld is co nc ern ed wit h t he lat te r. See Ark . Cod e Ann

. § 23 -7 9- 20 8( d) (1 ) (ref

erri n g t o th e am ou nt so ug ht “ in th e su it ” (em ph as is ad de d) );

Nat’l St an da rd In s. Co

. v. W es tb ro ok s, 96 2 S.W .2d 35 5, 35 7 (Ark

. 19 98 ) (“ Thi s co ur t

ha s pr ev io us ly in te rp ret ed th e la ng ua ge ‘am ou nt de m an de d or whi ch is so ug ht in th e

su it ’ as ‘the am ou nt su ed fo r.’” (q uo ti ng Mu t. Rel ie f Ass ’n v. Po in de xt er, 10 S.W .2d

17

, 18 (Ark

. 19 28 ))). Si m m on s m ad e an in su ran ce cl ai m , an d th e in su rers de ni ed pa rt

of th at cl ai m

. Si m

m on s th en de m an de d an d ul ti m at el y su ed fo r th e di ffer en ce, no t th e

en ti re $6 ,09 8,0 80

, a po in t it rep eat ed ly ack no wled ge s th ro ug ho ut it s b r ie fs

. Thi s
ad m it te d t ru th is en ou gh to de feat th is ve rs io n o f Si m m on s’s ar gu m en t.

Alt ern at iv el y , Si m

m on s co nt en ds t h e d i s t ric t co ur t fai le d to gr as p th e

“ su bs ta nc e” of it s de m an d. Not wit hs ta nd in g th e ab ov e ap pr oa ch

, Si m m on s sa y s it

was “ un di sp ut ed ” Si m

m on s was su in g to reco ve r th e di ffer en ce be twee n wha t it sp en t

to rep la ce th e faci li ty an d wha t th e in su rers vo lu nt ari ly pa id

. Tha t di ffer en ce was $3 ,48 8,7 61 .13

, an d us in g th is as th e “ am ou nt de m an de d” wou ld m ean a reco ve ry rat e

of 8 0.8 %. The di st ric t co ur t was rig ht to reject th is at te m pt at rev is io ni st hi st or y

. Giv en th e pa rti es ’ st ip ul at io ns , th is is th e co rrec t d i f fere nc e an d ap pe ars to be th e

m os t Si m m on s co ul d ha ve reco ve red

. Yet, fo r so m e un kn own reas on , Si m m on s

co ns is te nt ly de m an de d an am ou nt al m os t $1 00 ,00 0 m or e th an th at

. Co ns id er: In it s

pr e-s ui t de m an d le tt er, Si m m on s so ug ht $3 ,58 4,0 41 .90 ; th e co m pl ai nt st at ed th e su it

was for $3 ,58 4,0 41 .90 , and as ke d for an add it io na l 12 % of th at am ou nt as st at ut or y
da m ag es ; pr et ria l di sc lo su res an d rep or ts refl ect th is hi gh er nu m be r; an d th e jury was

to ld th is was th e st ip ul at ed am ou nt Si m m on s was se ek in g. W he n th e di st ric t c o ur t

m id -tr ia l ex pr es se d co nc ern ab ou t th e or ig in of th is nu m be r, Si m m on s do ub le d do wn

an d reaf fir m ed th at “ at th e en d of th e da y

. . . th is la wsu it is fo r 3.5 84 m il li on .” The

cl os es t Si m

m on s cam e to red uc in g it s de m an d was in cl os in g arg um en ts whe n

co un se l ack no wled ge d so m e ex pe ns es di d rel at e to so -cal le d be tt erm en ts th at were

-1 3-no t te ch ni cal ly co ve red by th e po li ci es , bu t ev en th en Si m m on s so ug ht to jus ti fy th e

co st s. It se em s cl ear to us th at al l pa rti es op erat ed un de r th e as su m pt i o n Si m

m on s

was se ek in g $3 ,58 4

, 0 4 1

. 9 0, an d Si m m on s ne ve r m ad e a fu ll an d ti m el y at te m pt to

m ak e a “ ne w an d le ss er de m an d.” Id

. at 35 8. Bec au se Si m m on s fai le d to reco ve r at

le as t 8 0% o f th at am ou nt , it was n ot en ti tl ed to st at ut or y da m ag es or a tt or ne y

fees

.

II I. CONCLUSI ON

W e affi rm th e di st ric t co ur t’s de ci si on to de ny th e in su rers ’ m ot io n to di sm is s,
be cau se th e li m it at io n p ro vi si on is pro ced ur al an d is vo id un de r Ark an sa s l aw. W e

rev ers e an d va cat e th e award of pr ejud gm en t in te res t, be cau se th e jury ha d to ex erci se
di sc ret io n in de te rm in in g Si m m on s’s lo ss

. W e affi rm th e de ni al o f Si m m on s’s

req ue st fo r st at ut or y da m ag es an d at to rn ey fees

, be cau se Si m m on s di d no t reco ve r th e

st at ut or y th res ho ld of a t l eas t 8 0% o f th e am ou nt it de m an de d i n t he su it

.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-1 4-