Opinion ID: 2436778
Heading Depth: 1
Heading Rank: 3

Heading: recovery by the loss payee

Text: State Farm asserts that the trial court erred in entering judgment in favor of loss payee First National Bank against State Farm since the bank has not repossessed the automobile as required by the language of the policy. The relevant policy provision provides as follows: If a creditor is shown in the declarations, we may pay any comprehensive or collision loss to: 1. you and, if unpaid, the repairer; or 2. you and such creditor, as its interest may appear, when we find it is not practical to repair your car. 3. the creditor, as to its interest, if your car has been repossessed. State Farm's contention that First National cannot recover because it has not repossessed the automobile is premised on the incorrect assumption that subsection (2) of the above provision is inapplicable because the insured, Ola Stockton, does not have an interest in the policy. However, as held above, she does have an interest in the policy since State Farm did not effectively cancel the policy. Subsection (2) does not require repossession but simply that the insurer find it impractical to repair the automobile in question. State Farm does not dispute the fact that this condition has been satisfied. In fact, one of its witnesses admitted that the car was totaled. Therefore, we find the trial court was correct in entering judgment in favor of First National Bank. State Farm also argues that the trial court erred in holding that First National Bank was entitled to a judgment against State Farm in the amount of $1,348.40 plus interest in that there is no evidence to support such a ruling. Stockton testified at trial that the market value of her automobile was $2,300.00. She admitted that she derived this figure from the fact that she paid $2,300.00 for the vehicle four months prior to the accident. The stipulated NADA (National Automobile Dealers' Association) market value on the date of the accident was $1,905.00. The trial court averaged the two numbers for an actual cash value of $2,100.00. Pursuant to the Limit of Liability section of the policy, the court subtracted the policy deductible of $500.00 and the stipulated salvage value of $251.60, resulting in a net judgment of $1,348.40. State Farm asserts, in effect, that what Ola Stockton paid for the car four months prior to the accident was incompetent evidence of market value. State Farm cites no authority in support of this proposition, nor is the argument convincing on its face. Therefore, we do not consider its contention. Reed v. Alcoholic Beverage Control Div., 295 Ark. 9, 746 S.W.2d 368 (1988). Affirmed. PURTLE and HAYS, JJ., dissent in part.