United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 11-2070

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Kenneth Graham, *

*

Appellant, *

*

v. * Appeal from the United States

* District Court for the

Hartford Life and Accident Insurance * Eastern District of Arkansas.

Company; Hartford Life Insurance *

Company, *

*

Appellees. *

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Submitted: February 14, 2012

Filed: May 11, 2012

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Before LOKEN, BYE, and MELLOY, Circuit Judges.

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BYE, Circuit Judge.

Kenneth Graham suffered serious injuries to his eyes when a can of oven

cleaner exploded in his face. Graham sued Hartford Life and Accident Insurance

Company (Hartford) seeking coverage under his life insurance policy for accidental

dismemberment benefits. The district court dismissed Graham's suit, concluding it

was untimely because it was brought more than three years after the loss, outside the

policy's time limitations for bringing legal actions against Hartford. Graham appeals

arguing he brought suit within Arkansas's five-year statute of limitations for breach

of contract actions, and Arkansas law provides "[a]ny stipulation or provision in [a
property or life insurance policy] requiring the action to be brought within any shorter

time or be barred is void." Ark. Cod Ann. § 23-79-202(b). We reverse and remand

for further proceedings.

I

On July 5, 2005, a can of Easy-Off oven cleaner exploded in Graham's face. 

The accident caused Graham to suffer permanent vision loss in both eyes. At the time

of the accident, Graham was insured under an accidental death and dismemberment

policy issued by Hartford. The policy provided life insurance in the event an accident

resulted in Graham's death. The policy also provided for certain benefits if Graham

suffered from dismemberment, which included loss of sight.

The policy required Graham to file a proof of loss within ninety days after the

date of loss. The policy further provided "[y]ou cannot take legal action against us . . .

after three years . . . following the date proof of loss is due." Graham filed a timely

proof of loss with Hartford, but Hartford denied the claim. Graham then filed an

appeal with Hartford, which was also denied.

On July 2, 2010, less than five years after his accident but outside the time

period for filing legal actions as provided in the policy, Graham brought this breach

of contract action against Hartford in federal district court. Hartford filed a motion

for judgment on the pleadings arguing Graham failed to file the lawsuit within the

time limits set forth in the policy. Graham claimed his suit was timely because it was

filed within Arkansas's five-year statute of limitations for breach of contract actions.

Graham further contended Hartford's attempt to shorten the limitations period in the

policy was void pursuant to section 23-79-202 of the Arkansas Code, which governs

property and life insurance policies. Subdivision (a) of the statute provides an action

on a property or life insurance policy may be brought "at any time within the period

prescribed by law for bringing actions on promises in writing." Subdivision (b) of the

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statute further states "[a]ny stipulation or provision in the policy or contract requiring

the action to be brought within any shorter time or be barred is void."

Notwithstanding the provisions of section 23-79-202(b), the district court

granted Hartford's judgment on the pleadings. The district court relied on several

Arkansas cases which generally allow insurance companies to contract for a shorter

limitations period than the period provided by the applicable statute of limitations, as

long as the period is reasonable. The district court also denied Graham's request to

certify the issue to the Arkansas Supreme Court. Graham filed a timely appeal.

II

"We review de novo the district court's entry of judgment on the pleadings."

Waldron v. Boeing Co., 388 F.3d 591, 593 (8th Cir. 2004).

The district court correctly recognized that Arkansas law generally permits

insurance companies to contract for a shorter period of time within which

policyholders may sue than the maximum period allowed by the state's applicable

statute of limitations, so long as the period of time allowed is still reasonable. See

Ferguson v. Order of United Commercial Travelers of Am., 821 S.W.2d 30, 32 (Ark.

1991) ("It has long been the rule in Arkansas that parties are free to contract for a

limitation period which is shorter than that prescribed by the applicable statute of

limitations, so long as the stipulated time is not unreasonably short[.]"); Hawkins v.

Heritage Life Ins. Co., 973 S.W.2d 823, 826 (Ark. Ct. App. 1998) ("[P]arties in

Arkansas have the right to contract for something less than the statutory five-year

limitation period as long as the lesser filing period is reasonable."); see also Wilkins

v. Hartford Life & Accident Ins. Co., 299 F.3d 945, 948 (8th Cir. 2002) (applying

Arkansas law and indicating the general statute of limitations for contract actions

"'establishes a maximum, not a minimum' period") (quoting Hawkins, 973 S.W.2d at

826).

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The general rule announced and applied in Ferguson, Hawkins, and Wilkins has

its limitations, however. A contractually shortened period must "not contravene some

statutory requirement or rule based upon public policy." Ferguson, 821 S.W.2d at 32. 

Graham contends section 23-79-202 of the Arkansas Code, which applies to property

and life insurance policies,1

 is one such statutory requirement. Graham further

contends Hartford's policy provision, shortening the period for him to file suit to a

period of less than five years, contravenes the statutory requirement. We agree.

The statute clearly provides an action on a claim or loss arising under a life

insurance policy may be brought "at any time within the period prescribed by law for

bringing actions on promises in writing." Ark. Code Ann. § 23-79-202(a) (emphasis

added). The period prescribed by Arkansas law for bringing actions on promises in

writing is five years. See Ark. Code Ann. § 16-56-111(a) ("Actions to enforce written

obligations, duties, or rights . . . shall be commenced within five (5) years after the

cause of action shall accrue."); see also First Pyramid Life Ins. Co. of Am. v. Stoltz,

843 S.W.2d 842, 844 (Ark. 1992) ("The statute of limitations on actions to recover on

a life insurance policy is five years from the accrual of the cause of action.") (citing

Ark. Code Ann. §§ 23-79-202 & 16-56-111). The two statutes, when read together,

give an insured five full years to bring an action on a life insurance policy because the

phrase "at any time" necessarily encompasses all five years. Under subdivision (b)

of section 23-79-202, "[a]ny stipulation or provision in the policy or contract requiring

the action to be brought within any shorter time or be barred is void." The phrase

"any shorter time" necessarily refers to a shorter time than the full five years. 

Hartford's policy impermissibly shortened the time for Graham to bring an action on

1

Hartford concedes Graham's policy is a life insurance policy within the

meaning of section 23-79-202, even though Graham claims dismemberment benefits

under the policy rather than death benefits. See Dodson v. J.C. Penney Co., 336 F.3d

696, 701 (8th Cir. 2003) (holding Arkansas's definition of life insurance includes

policies granting accidental dismemberment benefits).

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his life insurance policy to something less than five years. Such provision in the

policy is therefore void pursuant to subdivision (b) of section 23-79-202.

We reject Hartford's contention that section 23-79-202's reference to "period

prescribed by law for bringing actions on promises in writing" incorporates the

judicial rule of law discussed in Ferguson, Hawkins, and Wilkins, which generally

permits insurers to shorten the period for bringing actions under insurance policies to

a reasonable time. Although the Arkansas courts have not addressed the meaning of

the phrase "period prescribed by law" within section 23-79-202, both the Arkansas

Supreme Court and our court have addressed the meaning of a predecessor statute

containing the identical phrase. See Pacific Mut. Life Ins. Co. v. Butler, 78 S.W.2d

813, 815 (Ark. 1935) (interpreting section 6153, Crawford & Moses' Digest); Mutual

Benefit Health & Accident Ass'n v. Warrell, 96 F.2d 447, 449 (8th Cir. 1938) (same).

In Butler, the Arkansas Supreme Court referred to the "period prescribed by

law" as "the period fixed by the statute of limitation of the state applicable to such

suits." 78 S.W.2d at 815. In this case, the "period fixed by the statute of limitation"

is the full five-year period set forth in section 16-56-111 of the Arkansas Code, not

some different period allowed by a judicial rule (which rule is itself subject to

statutory requirements). The Arkansas Supreme Court specifically addressed the

meaning of that portion of the statute now contained in subdivision (b), stating:

it is intended to nullify any limitation of the time within which a cause

of action arising out of insurance policies may be instituted to a time

shorter than the period fixed by the statute of limitation of the state

applicable to such suits. In other words, the statute of limitation defining

the time within which an insurance policy may be sued upon may not be

shortened by any provisions contained in the policy. The effect of the

statute is to make such provision void[.]

Butler, 78 S.W.2d at 815.

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In Warrell, the Eighth Circuit interpreted the same language to reject an

insurer's claim that the period of recovery on a disability insurance policy should have

been limited to the two years before suit was brought instead of the full "five years

before [the] action was brought in accordance with the state statute of limitations on

such actions." 96 F.2d at 449. The insurer argued for a two-year period

based upon a provision of the policy reading: "No action at law or in

equity shall brought to recover on this policy prior to the expiration of

sixty days after proof of loss has been filed in accordance with the

requirements of this policy, nor shall such action be brought at all unless

brought within two years from the expiration of the time within which

proof of loss is required by the policy."

Id. In affirming the district court's decision to allow five years of recovery instead of

two years, our court said the insurer's argument was "met by section 6153, Crawford

& Moses' Dig. Ark." Id. We then quoted the identical language at issue in this case,

which states an action on a property or life insurance policy may be brought "'at any

time within the period prescribed by law for bringing actions on promises in writing;

and any stipulation or provision in any such policy of insurance requiring such action

to be brought within any shorter time or be barred shall be and the same is hereby

declared to be void.'" Id. (quoting section 6153, Crawford & Moses' Digest).

We see no material distinction between the policy provision we interpreted in

Warrell and the provision in Hartford's policy with respect to each provision's attempt

to shorten the period of time within which an insured may bring an action on a policy

to something less than the full five years for bringing actions on promises in writing. 

Our holding in Warrell, as well as Butler's reference to the "period fixed by the statute

of limitation of the state applicable to such suits," are both inconsistent with Hartford's

current contention that the "period prescribed by law" referred to in section 23-79-202

means something other than the full five-year period set forth in section 16-56-111.

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III

We reverse and remand for further proceedings consistent with this opinion.

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