Court Opinion

ID: 9680703
Source: CourtListenerOpinion
Date Created: 2023-08-24 07:36:58.320528+00
Date Added: 2024-06-11T18:17:30.022815
License: Public Domain

Conley Byrd, Justice, dissenting in part. I dissent to that portion of the majority opinion disallowing the accumulated interest on the Frisby judgment against Blissett. Article 2 § 13 of the Arkansas Constitution, provides that, “Every person is entitled to a certain remedy in the laws for all injuries or wrongs he may receive in his person, property or character, . . .” Arkansas Statutes § 29-124 (Repl. 1962), provides: “Creditors shall be allowed to receive interest at the rate of six (6) per cent per annum on any judgment before any court or magistrate authorized to enter up the same from the day of signing judgment until the effects are sold or satisfaction be made;. . .” Arkansas Statutes § 68-606 (Repl. 1957), requires that upon receipt of partial payment on any judgment the amount thereof shall first be credited to payment of interest and the balance if any to principal. In speaking of the damages suffered by the insured when the insurer negligently fails to settle within the policy limits and an excess verdict is entered, the annotator in 40 A.L.R. 2d at page 190 (§ 7 Damages) states: “The great majority of the cases involving a charge that a liability insurer has wrongfully rejected an offer by the injured party to compromise a claim against the insured have involved the situation where, following a refusal by the insured to contribute a figure within the policy limits toward a compromise offer, the action against the insured results in an adverse judgment in excess of the insurance coverage. There appears to be no doubt that in such a situation an insurer whose bad faith or negligence (as required in the particular jurisdiction) is established, may be held liable to the insured for the amount which the latter was required to pay in satisfaction of the judgment, in so far as that amount exceeds any contribution which the insured would have had to make if the settlement offer had been accepted.” From the foregoing, I conclude that the injury suffered because of the insurer’s conduct is that amount of the judgment entered in excess of the policy limits. This amount, however by virtue of Ark. Stat. Ann. § 29-124 (Repl. 1962), and Ark. Stat. Ann. § 68-606, supra, in-eludes the interest accumulating thereon at the rate of six percent per annum. If then, in an action by the insured against the insurer for negligent failure to settle, the damage or injury is the excess judgment, where have we provided a remedy pursuant to Art. 2 § 13 of the Constitution for the injury the insured received if we hold that he is not entitled to the accumulated interest on the judgment against him? If appellant had performed its duty and settled within the policy limits there would be no excess judgment on which interest could accumulate. Thus, I take it as being logically established that the accumulating interest on the judgment against Blissett is the direct and proximate cause of the insurer’s wrongful conduct. In other words the accumulating interest is nothing more nor less than an injury that is permanent and continuing in character. In 22 Am. Jur 2d Damages § 19, it is pointed out that such damages may be recovered to the date of trial “. . . if they are the natural and necessary result of the injury complained of and do not themselves constitute a new cause of action — or in other words, if no other action can be maintained for them.” The illogic of the majority view can be shown by assuming that the insurer in its private correspondence conceded its liability for the excess judgment of some $11,-000 but through dilatory tactics and a crowded trial court docket found that it could delay a trial on the issue for two years. In that situation the insurer could deposit the $11,000 in a savings account and draw an income of $1,-320 at 6% interest while the judgment against Blissett is increasing to ($11,000 plus $1,320) to $12,320. I cannot think of anything more disgusting than a law that makes it profitable for one to delay the payment of his just obligations. In condemning a similar delay in Consolo v. Federal Maritime Comm’n, 383 U.S. 607 (1966), Mr. Justice White stated: “. . . Further, although Flota’s suit was pending for about two years, the record indicates that much of the delay involved in this case was at the request or approval of Flota. At any rate, it has never been the law that a litigant is absolved from liability for that time during which his litigation is pending. . . . During this time Flota was able to postpone the predictable demise of its discriminatory contract and Consolo continued to suffer injury.” The interest issue has been discussed in two cases before this court, Southern Farm Bureau Casualty Insurance Co. v. Hardin, 233 Ark. 1011, 351 S.W. 2d 153 (1961), and Tri State Insurance Company v. Busby, 251 Ark. 568, 473 S.W. 2d 893 (1971). If they are authority for the proposition now before the court, they should be overruled as a denial of a remedy for a wrong under Art. 2 § 13, supra. Actually the matter of the recovery of interest has generally had a rather summary (and sometimes inconsistent) treatment in our many decisions. See for instance, Kelly v. Altemus, 34 Ark. 184 (1879), where the court said: “The ordinary measure of damages for the plaintiff in replevin, in the absence of proof of special damage, is legal interest on the value of the property, in addition to the property itself or its value. . . . This with regard to property which has no useable value, except for consumption. With regard to property having a useable value by way of bailment for hire, like horses or tools, the true measure is the value of the use during the detention. ...” In Bradley Lumber Co. v. Hamilton, 117 Ark. 127, 173 S.W. 848 (1915), there was a claim for conversion of timber. In holding that the claimant was entitled to interest on the value it was said: “In Nunn v. Lynch, supra, the court cited with approval the discussion in the case of Laycock v. Parker, 103 Wis. 161. In that case the court held that where damages were capable of ascertainment by reference to reasonably certain market values and the various items of damage have been duly and adequately presented, and its payment demanded before suit is commenced, the claimant is entitled to interest from the time of súch demand. “The claim of the plaintiff in this case was capable of ascertainment by the defendant after its presentation by reference to the reasonably certain market value of timber cut and removed by the defendant. Therefore, the plaintiff was entitled to interest, and no error prejudicial to the defendant was committed in the allowance made by the court.” However, in Kansas City Fibre Box Co. v. F. Burkhart Mfg. Co., 184 Ark. 704 (1931), appellant had sold the timber it had cut and removed from appellee’s land by filing a cross bond in a replevin action. This court, after upholding a rather generous market value finding without a deduction for the cost of hauling to the rail siding, rather summarily denied a cross appeal for interest on the basis that no demand had been made prior to trial. In a number of tort cases interest has been allowed either by the court or the jury. In Nunn v. Lynch, 89 Ark. 41, 115 S.W. 926 (1908), interest was allowed in an ejectment action. In Railway Co. v. Yarbrough, 56 Ark. 612 (1892), the allowance upon the value of crops destroyed by flood water was approved. In Ryburn v. Pryor, 14 Ark. 505 (1854); Hooten v. State, Use of Cross County, 119 Ark. 334, 178 S.W. 310 (1915); Meyers v. Meyers, 210 Ark. 714, 197 S.W. 2d 477 (1946), and Humphreys v. Butler, 51 Ark. 351 (1888), interest was allowed for conversion. The allowance of interest by the jury in personal injury actions has been approved in The Railway Ice Company v. Howell, 117 Ark. 198, 174 S.W. 241 (1915), and in St. Louis I.M. & Ry Co. v. Cleere, 76 Ark. 377, 88 S.W. 995 (1905)1. In the last mentioned case the issue was the sufficiency of the evidence to sustain a $20,000 verdict. In so doing this court stated: “The plaintiff was entitled to interest at the rate of 6 per cent per annum on the amount of the damages from the date of Tomlinson’s death, when the cause of action arose, to date of recovery. Computing interest at that rate on an estimate of damages at $13,190 from July 8, 1894, the date of Tomlinson’s death, up to February 14, 1903, the date of judgment, would make a total of $20,000 principal and interest.” In summation, I submit that the tort theory used in Tri State Ins. Co. v. Busby, supra, does not stand the test of our prior decisions. The Busby case also fails to recognize that the matter in issue is a liquidation claim that constitutes a continuing injury to the aggrieved insured. Since I can think of no way in which the accumulating interest on the excess judgment against Blissett can be considered in any way other than an injury directly and proximately caused by Members Mutual Insurance Company, it appears to me that we are violating Art. 2 § 13 of the Constitution, supra, when we deny to Blissett a remedy for the wrong he has received. Other jurisdictions ordinarily allow the recovery of interest. See Southern Farm Bureau Casualty Insurance Co. v. Mitchell, 312 F. 2d 485 (1963 C.A.A. 8); Augustin v. General Accident Fire and Life Assurance Corp., 283 F. 2d 82 (7th C.A.A. 1960); and Lee v. Nationwide Mutual Insurance Company, 286 F. 2d 295 (4th C.A.A. 1961). For the reasons stated, I respectfully dissent to the disallowance of the accumulated interest.  A.M.I. § 2219, the present value instruction requires the jury to consider interest with respect to future damages.