Opinion ID: 2184956
Heading Depth: 1
Heading Rank: 3

Heading: Direct Action Against the Insurers

Text: For their third point on appeal, Appellants argue that the trial court erred in dismissing their claims against Rogers's two insurers. They assert that if Rogers is entitled to acquired immunity, they should be allowed to proceed directly against its insurers, pursuant to Ark.Code Ann. § 23-79-210 (Repl.1999). Subsection (a)(1) provides in pertinent part: When liability insurance is carried by any cooperative nonprofit corporation, association, or organization, or by any municipality, agency, or subdivision of a municipality or of the state, or by any improvement district or school district, or by any other organization or association of any kind or character and not subject to suit for tort, and if any person, firm, or corporation suffers injury or damage to person or property on account of the negligence or wrongful conduct of the organization, association, municipality or subdivision, its servants, agents, ... then the person, firm, or corporation so injured or damaged shall have a direct cause of action against the insurer with which the liability insurance is carried to the extent of the amounts provided for in the insurance policy as would ordinarily be paid under the terms of the policy. [Emphasis added.] This court has heretofore only applied this provision to the insurers of charitable or nonprofit organizations, governmental entities, and county-owned hospitals. See Cherry v. Tanda, Inc., 327 Ark. 600, 940 S.W.2d 457 (1997); Rogers v. Tudor Ins. Co., 325 Ark. 226, 925 S.W.2d 395 (1996); Berry v. Saline Memorial Hosp., 322 Ark. 182, 907 S.W.2d 736 (1995); Jarboe v. Shelter Ins. Co., 317 Ark. 395, 877 S.W.2d 930 (1994). Section 23-79-210 is not applicable in this case for two reasons. First, it only provides for direct actions against an insurer in the event that the organization at fault is immune from suit in tort. Immunity from suit is the entitlement not to stand trial, while immunity from liability is a mere defense to a suit. See Robinson v. Beaumont, 291 Ark. 477, 725 S.W.2d 839 (1987). Acquired immunity is not immunity from suit; rather, it is immunity from liability. This court explained in Ellis, 233 Ark. 72, 342 S.W.2d 485: It is hornbook law that the immunity from suit of the sovereign state does not extend to independent contractors doing work for the state. But it is equally true that where a contractor performs his work in accordance with the plans and specifications and is guilty of neither a negligent nor a willful tort, he is not liable for any damages that might result. Id. at 77, 342 S.W.2d at 488 (citation omitted) (emphasis added) (quoting Ference, 370 Pa. 400, 403, 88 A.2d 413, 414). Unlike AHTD, Rogers is not an entity that enjoys immunity from suit in tort. This conclusion is clearly illustrated by the fact that Appellants were able to sue the contractor directly in the circuit court. Because Rogers is not immune from suit, the direct-action statute is not applicable. The second reason that section 23-79-210 is not applicable in this case is because its protections are only triggered where a person is injured on account of the negligence or wrongful conduct of the organization[.] We have already concluded in the previous two points that Rogers was entitled to rely on the defense of acquired immunity because it was not negligent in the performance of its contract with AHTD. Because Rogers was not negligent, its insurers may not be held responsible under the direct-action statute. The trial court was thus correct in dismissing the claims against the insurers.