Court Opinion

ID: 6552556
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:29:23.249956+00
Date Added: 2024-06-11T15:56:08.844450
License: Public Domain

JOHN Mauzy Pittman, Judge, dissenting. As stated by the majority, Pat Savelle was an employee of Oak Lodge Nursing Home and had medical insurance through her employer with the Arkansas Nursing Home Association Employee Benefit Trust (hereinafter “Trust”). The personal representative of Savelle’s estate, the appellee herein, brought suit against the trustees of the Trust seeking to enforce insurance coverage and to recover medical benefits. The lower court held that Savelle continued to have coverage and that the Trust was liable and found that American Investors Life Insurance Company was a subsequent successor to the Trust and Hable for appellee’s claims. American Investors now appeals from that decision. I must respectfully dissent from the majority opinion affirming the decision holding American Investors Hable because I beHeve that the lower court erred by precluding American Investors from presenting evidence as to the liabiHty it assumed. SaveHe became totally disabled with cancer and terminated her employment in December 1983. The Trust terminated on April 1, 1984, and the Employer Benefit Group (hereinafter “Group”) insured employees of the Oak Lodge Nursing Home who elected to continue coverage and assumed runoff claims, i. e., claims incurred in the previous year but not yet submitted. The Group terminated on January 1, 1986, and a Multiple Employer Trust underwritten by Paramount Life assumed the same runoff claims. Coverage through Paramount Life terminated on December 31, 1988, and American Investors provided coverage for continuing employees of the nursing home and assumed only runoff claims. This is the third appeal of this case. The first appeal involved the trial court’s order holding that despite SaveHe’s termination of employment and because she was totaHy disabled, she was entitled to continued coverage. The trial court further found that the Trust was liable for SaveHe’s claims until her death on AprH 28, 1986. We affirmed. SaveUe’s estate then filed a motion in the lower court seeking to enforce the judgment against the trustees in their individual capacities. The court granted the motion in its AprH 8, 1992, order holding that the trustees were liable in their individual and representative capacities. The court further held that American Investors was a successor in interest to the Trust and, based on the testimony of Robert Alexander that American Investors assumed claims outstanding as of January 1, 1989, that American Investors was hable for the judgment. The court reserved jurisdiction to name American Investors as a defendant. That decision was affirmed on appeal. American Investors was subsequendy joined as a defendant. On May 31, 1995, the court held that American Investors was hable for the original judgment and precluded American Investors from presenting any evidence of the liability it assumed because the court had previously found that American Investors was the responsible party as the successor in interest. The court further found that American Investors could not collaterally attack the court’s earlier finding, that Savelle had continuing coverage despite termination of her employment, because the finding was affirmed on appeal. American Investors now appeals the May 31, 1995, order arguing that it was not a party to the case when liability was decided by the court, that it did not have an opportunity to defend its interest, and that appellee failed to prove that it was the successor in interest to the Trust. I believe that the court erred in refusing to consider evidence concerning the liability American Investors assumed. American Investors argues that it assumed only runoff claims and that appellee has never shown or even asserted that Savelle’s claim was a runoff claim. Before American Investors can be held liable for Savelle’s claim, its assumed liability must be determined. Appellee argues that American Investors is precluded from asserting a defense because it is bound by the court’s earlier decision holding American Investors liable as successor, which was affirmed on appeal. Thus, she argues that the doctrines of “law of the case,” res judicata, and collateral estoppel apply. Generally, the law of the case applies only against those who were parties to the case when the prior decision was rendered. See Hodges v. Gray, 321 Ark. 7, 901 S.W.2d 1 (1995); McDonald’s Corp. v. Hawkins, 319 Ark. 2-A, 894 S.W.2d 136, supp’l op. (1995); Willis v. Estate of Adams, 304 Ark. 35, 799 S.W.2d 800 (1990); Potter v. Easley, 288 Ark. 133, 703 S.W.2d 442 (1986). The same is true for res judicata and collateral estoppel to apply. Carmical v. City of Beebe, 316 Ark. 208, 871 S.W.2d 386 (1994); Arkansas Dep’t of Human Services v. Dearman, 40 Ark. App. 63, 842 S.W.2d 449 (1992). Here, the court considered the doctrines of res judicata, law of the case and collateral estoppel as a basis of establishing American Investors’ liability. These doctrines have no application to this fact situation because American Investors was not a party to the case when its liability was determined. Lasdy, I do not believe the “privity” doctrine has any application to the case under consideration. A person is considered to be in privity with a party when that person controls or substantially participates in the control of the present action on behalf of a party. Arkansas Dep’t of Human Services v. Dearman, supra. Robert Alexander testified that he did not appear on behalf of American Investors at the hearing at which the court determined American Investors’ liability. The majority opinion places emphasis on the fact that Robert Alexander is associated with FeweU and Associates and American Investors, both of which are owned by Bob FeweU. Because of FeweU and Associates’ participation, the majority reasons that American Investors is now estopped from defending its interest. Privity requires that the entities have sirrfilar, non-adverse interests. Id. FeweU and Associates was a third-party administrator and, unlike American Investors, was not responsible for a judgment against the Trust. It appeared only to produce its records pertaining to its previous administration of the Trust, the Employee Benefit Group, and Paramount Life. Because the court ruled that it had previously determined that American Investors was hable and refused to give it an opportunity to present evidence regarding the liabüity it assumed, the case should be remanded. I would reverse and remand for the court to decide American Investors’ liabüity consistent with this opinion.