Court Opinion

ID: 9759685
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:25:14.092193+00
Date Added: 2024-06-11T10:15:03.509604
License: Public Domain

Tom Glaze, Justice, concurring. I agree that the trial court should be affirmed, but for a different reason than that set out in the majority opinion. The main substantive issue on appeal is whether the trial judge erred in dismissing appellant Rickey Parker’s bad-faith claim. In making his decision, the judge had before him appellee Southern Farm Bureau Casualty Insurance Company’s theory that, under the holding in Farmers Ins. Company v. Hall, 263 Ark. 734, 567 S.W.2d 296 (1978), Southern Farm was not required to give an insured the ten-day cancellation notice provided in Ark. Code Ann. § 23-89-304 (Repl. 1992). In the Hall decision, Hall elected to renew his six-month liability policy which was to commence on January 3, 1975. However, he failed to pay his premium until January 25, 1975, shordy before his vehicle was damaged in a collision. Hall had previously received an “Offer to Renew” notice on December 11, 1974, from Farmers Insurance, informing him that the renewal date was January 3, 1975. Although the trial court held in Hall’s favor, finding his policy was still in force, this court reversed, holding the policy by its own terms had lapsed. The Hall court stated the following: Appellant [Farmers Insurance] was not required to give notice of cancellation of the policy under Ark. Stat. Ann. §§ 66-4007 — 66-4013 (Supp. 1977) [now Ark. Code Ann. §§ 23-89-301 — 308 (Repl. 1992)]. There was no cancellation of the policy. If the offer to renew had not been made, the policy would have expired by its own terms. Notice of cancellation of a policy may be required upon nonpayment of the premium under § 66-4008, but this requirement applies only to a cancellation by unilateral action of the insurer before the end of the policy term and not an automatic termination by expiration of the policy period. (Emphasis added.)1  In the present case, Southern Farm had established a billing system like Farmers Insurance in the Hall case, where a “renewal notice” was sent to the insured prior to the policy’s renewal or expiration date. Southern Farm’s contention was that Parker had paid only for three-months’ coverage, and Southern Farm, in good faith, had notified Parker prior to the three-month period that his policy would lapse, unless Parker had paid his six-month premium in full. Parker clearly failed to do so. Even so, the trial court still determined Parker’s policy was in force. The trial court held that Southern Farm’s interpretation of the Hall decision was wrong and that, while the company contended Parker’s policy was like a renewal policy such as the one in Hall, Parker’s policy, instead, was for a six-month term and only three months had expired. The trial court concluded that, unlike the Hall decision, Parker was not renewing his policy, and Southern Farm was required to give Parker the ten-day cancellation notice in § 23-89-304(a)(l) when he failed to pay the three-month premium balance owed on his policy. Even though the trial court rejected Southern Farm’s legal theory concerning this ten-day notice issue, it decided the company’s argument had been made in good faith. In my view, to overturn the trial court’s decision would tend to chill legitimate legal arguments. While Parker is convinced Southern Farm’s argument was spurious, the trial court was not so sure (and neither am I), especially since Southern Farm’s theory was based upon legal precedent similar to the situation in this case. Also, while Parker seems convinced that Southern Farm’s failure to accept responsibility for Parker’s claim was personally and oppressively directed at him, Southern Farm had mailed Parker a timely “renewal notice” like the one utilized in the Hall case. That notice very clearly informed Parker that the notice was the only one he would receive if he intended to keep his coverage in force. Southern Farm’s “renewal notice” was based upon Hall, and even though it was ultimately held by the trial court to be invalid, that holding does not mean Southern Farm was in bad faith in adopting such a notice procedure. At least, I cannot say the trial court erred in reaching such a conclusion. In other issues, Parker asserts the trial court erred in denying him certain discovery which might have led him to evidence bearing on the “bad faith” issue. For example, Parker claims that, if he could have obtained Southern Farm’s twenty most recent notices to its insureds who were to be cancelled for nonpayment of premiums, he might have been able to show if he was being treated differently from other insureds who were similarly situated. I agree with Parker that our rules establishing discovery procedures should be given a broad and liberal interpretation. However, in reading Parker’s brief and listening to oral argument, I fail to understand the relevance of the information sought by Parker or how it could help his case. Undoubtedly, Southern Farm had established a dual-notice system which, when applied to Parker and others in his circumstances, the trial court held was invalid. That being said, I think the trial court was quite right in denying his discovery request.   Sections 66-4008 and 4009, among other things, provided for ten-days notice of cancellation for nonpayment of premium.