Court Opinion

ID: 7822230
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:58:49.363431+00
Date Added: 2024-06-11T16:30:46.038135
License: Public Domain

John I. Purtle, Justice, dissenting. In the present case the appellees’ rights under the contract of insurance had expired for nonpayment of premiums. Mrs. Smith’s rights as a loss payee continued beyond that date ostensibly to allow her to get a new policy or reinstate the old policy and be protected in the interim. The loss occurred during this time and payment was made by the insurance company to Mrs. Smith in the full amount of the policy plus interest. Appellees now wish to benefit from a penalty provision of the insurance code. Penalties and forfeitures are not favored in the law. Harper v. Wheatley Implement Co., Inc., 278 Ark. 27, 643 S.W.2d 537 (1982). Neither is unjust enrichment favored by the law. Whitley v. Irwin, 250 Ark. 543, 465 S.W.2d 906 (1971). The case of Farm Bureau Mutual Ins. Co. v. Shaw, 269 Ark. 757, 600 S.W.2d 432 (Ark. App. 1980), cited by the majority, is a very different situation than the one presently before us. The insureds in Shaw had received a premium notice extending their protection for ten days from the due date of the premium and the loss occurred within this time. The present appellees received no such extension and were in fact not covered by the policy. In Farm Bureau Insurance Co. v. Paladino, 264 Ark. 311, 571 S.W.2d 86 (1978), this court stated: “We have consistently held that the 12% penalty and attorney’s fee, as provided for in Ark. Stat. Ann. § 66-3238 (Repl. 1966), can only be awarded when the exact amount sued for is recovered.” In the case before us, the appellees had no standing to sue under the contract and, indeed, were not entitled to recover a single penny from the insurance company. How the majority can award a penalty and attorney’s fees to one who could not recover any amount anyway is utterly beyond me. Therefore, I would not allow the penalty or the attorney’s fees to be paid to appellees.