Court Opinion

ID: 9778128
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:33:48.179891+00
Date Added: 2024-06-11T07:33:03.987721
License: Public Domain

Darrell Hickman, Justice. Lamar Jones, Jr., age thirty-three, purchased a new Ford pick-up truck in 1976 from the Eudora Motor Company, a Ford motor company dealer. The purchase was financed through Ford Motor Credit Company. The salesman, Harold Stokes, sold Jones Ford credit life insurance. Jones died a little over three months later from what was diagnosed as a heart attack caused by diabetes. Peggy Jones, the widow, did not make payments on the truck and Ford Motor Credit filed suit in Chicot County Circuit Court to recover the vehicle. Peggy Jones, as administratrix of Jones’ estate, filed a counterclaim joining Ford Life Insurance, the salesman and Eudora Motor Company claiming damages for $10,000 for misleading representations. Ford Life Insurance Company denied coverage because of a misrepresentation and credited the premium to the Jones’ account with Ford Motor Credit because Jones had suffered a heart attack three years before and been under a doctor’s care since. The suit against Stokes and Eudora Motor was dismissed. The case was submitted to a jury and it returned a verdict in favor of Peggy Jones for the amount owed on the vehicle, which was stipulated to be $4,826.86; a 12% statutory penalty; and, a $500.00 attorney’s fee was also awarded. Ford Life and Ford Motor Credit appeal alleging three errors. The last two have merit. Judgment was granted in favor of Peggy Jones for the amount of money due on the truck rather than payment being ordered to Ford Motor Credit Company to satisfy the indebtedness. The insurance policy clearly provided that Ford Mo*ir Credit would be the beneficiary. The judgment of the lower court in this regard was, of course, erroneous. Also, the court awarded statutory penalty and attorney’s fee as authorized by Ark. Stat. Ann. § 66-3238 (Repl. 1966). The penalty and attorney’s fee may not be awarded unless the exact amount sued for is recovered. Southwestern Ins. Co. v. Camp, 253 Ark. 886, 489 S.W. 2d 498 (1973). Peggy Jones sued for $10,000 and only recovered the amount owed on the trucks The judgment is reversed in these regards. The other issue raised on appeal by the appellants has given us considerable trouble. The appellants argue that it was not disputed that Lamar Jones, Jr. had a heart attack three years before and had been under a doctor’s care for several years before the insurance was issued. It is also undisputed that Mr. Jones candidly told the agent for Ford Life, Howard Stokes, who was also the salesman of the vehicle, that he had this heart condition and had been under a doctor’s care. Even so, Jones signed a form which can best be described by its reproduction. [[Image here]] It can be readily seen that this policy has only one place for the signature of the insured and that is at the bottom of the form under a heading called “Health Statement.” There is nowhere else on the form, nor any other relevant document used by Ford Life, for the insured to answer any questions, make any statements or qualify the language in the insurance policy. The appellants contend that Jones made an incorrect statement. All Jones did was sign their printed form which says, “I am in good health.” We are not unmindful of an Arkansas statute that deals with this matter. Ark. Stat. Ann. § 66-3208 (Repl. 1966) provides: All statements in any application for life or disability insurance policy . .. shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealment of facts, and incorrect statements shall not prevent a recovery under the policy or contract unless either: (a) fraudulent; or (c) the insurer in good faith either would not have issued the policy or contract... or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise. The appellants argue that this statute applied to this case voids the policy. We disagree. It was stipulated by the parties that the salesman, Stokes, was a “soliciting agent” for Ford Life (later the appellee’s attorney obviously regretted this agreement). We have held before many times that a soliciting agent has no authority to change or alter the provisions of a policy and cannot bind the company. National Life and Accident Ins. Co. v. Broyles, 197 Ark. 113, 122 S.W. 2d 603 (1939). We do not quarrel with these decisions. We simply do not feel they apply in this case. Stokes, the salesman, was an employee of Eudora Motor Company, a Ford dealership. A new Ford pick-up was sold to Jones, financed by Ford Credit Company through an application filled out by Stokes, insurance was issued by Ford Life Insurance Company at the request of Stokes, Ford’s agent, and Stokes received 35% of the premium paid. It is undisputed that Stokes was told in detail the truth of Jones’ condition. There is no evidence whether Stokes relayed the information to Ford Life or not. Stokes did not testify. Ford Life has a policy of not inquiring of an insured’s health until a claim is made. The insurance form of Ford Life Insurance’s contract, which is reproduced herein, contains its printed statement that “to the best of my knowledge and belief I am now in good health” with no room for disagreement. Such a statement on such a form should not be used as a defense when, in fact, it is undisputed that there was no misrepresentation or fraudulent statement. In addition to this defense the company had the defense that its agent is a “soliciting agent” with no legal authority to bind the company. In other words, it does not matter what Jones told Stokes. The agent is given a form which cannot be altered, only signed. Obviously the agent is encouraged to sell insurance, which is Ford Life’s business, and is paid a handsome commission. Everyone is satisfied until the death of the insured when it may be learned that he was not “in good health.” Such a situation places an unrealistic burden on an insured which can only result in a decided advantage inuring to the benefit of the company. It leaves room for all sorts of abuses by the agent, the insured and the company. We limit our decision to the facts in this case. We are not unmindful that a strong argument can be made that we are making a decision that flies in the face of our previous decisions and Ark. Stat. Ann. § 66-3208 (Repl. 1966). However, in the final analysis it is our duty to see that the law enables people to have a fair decision after their day in court and undoubtedly our decision in this case cannot be characterized otherwise. The judgment is reversed and remanded for proceedings not inconsistent with our decision. Harris, C.J., concurs. George Rose Smith, Fogleman and Byrd, JJ., dissent.