Court Opinion

ID: 9666361
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:11:49.845989+00
Date Added: 2024-06-11T18:15:26.962079
License: Public Domain

Steele Hays, Justice, dissenting. Nothing in the majority opinion justifies overruling the established principle of Arkansas insurance law that to deny recovery an insurer must show a causal connection between a fact misrepresented in an application for life insurance and the subsequent loss. While this principle appeared in National Old Line Ins. Co. v. People, 256 Ark. 137, 506 S.W.2d 12 (1974), as an interpretation of the Arkansas Insurance Code of 1959, it actually has been a part of Arkansas law since it was first stated in Inter-Ocean Casualty Co. v. Huddleston, 184 Ark. 1129, 458 S.W. 23 (1932). A doctrine so well established in the law should not be so easily overruled, in the absence of compelling reasons. Having been a part of our law for over a decade the rule has doubtless become a basis for insurers to anticipate losses. Professor Adams had noted Justice Byrd’s comment in National Old Line that “the burden initially cast on insurers by the rule is not likely to remain with them, for premium rates will be adjusted to absorb the added cost. . . .” Adams, Misrepresentation in the Procurement of Insurance, 4 U.A.L.R.L.J. 17 (1981).Toreverse the rule now invites insurers to retain the benefits which will result from our change of position. While the majority concedes that fairness favors a causal connection requirement, it denies that the statute admits of such an interpretation. The majority does not challenge Justice Smith’s conclusion that the statute “merely provides a minimum prerequisite to the insurer’s successful defense.” Old Republic Ins. Co. v. Alexander, 245 Ark. 1029, 1044, 436 S.W.2d 829, 838 (1969). Nor does it complain that the causation requirement runs against public policy; indeed, several states have explicitly incorporated the requirement into their statutes. Kan. Stat. Ann. § 40-418 (1986); Mo. Rev. Stat. § 376.580 (1959); R.I. Gen. Laws § 27-4-10 (1979). Rather, under the rubric of honoring legislative intention, the majority has imposed its own judgment over time-tested law. Had the legislature actually intended not to require proof of a causal connection, it could have acted to clarify its position during any one of the legislative sessions conducted since National Old Line was handed down in 1974. Generally, legislative inaction following a practical interpretation of a statute is evidence that the legislature intends to adopt such an interpretation. Sutherland Stat. Const. § 49.10 (4th ed.). “There is a strong authoritative effect of judicial interpretive opinions that the legislature has acquiesced in by the lapse of time without action.” Johnstone, An Evaluation of the Rules of Statutory Interpretation, 3 U. Kan. L. Rev. 1 (1954). Accord, Shivers v. Moon Distributors, 223 Ark. 371, 265 S.W.2d 947 (1954). By its long acquiescence in the National Old Line holding, the legislature has expressed its satisfaction with our interpretation of the insurance code. Thus, the majority is shunning this legislative expression by overruling National Old Line and giving a new and different meaning to the act. For these reasons I believe the trial court should be affirmed. Hickman, J., joins this dissent.