Court Opinion

ID: 9774752
Source: CourtListenerOpinion
Date Created: 2023-08-29 18:32:39.25692+00
Date Added: 2024-06-11T08:50:28.730066
License: Public Domain

Darrell Hickman, Justice, concurring in part, dissenting in part. We are recognizing in this case that there exists a cause of action by an insured against his insurance company for bad faith or outrageous conduct. Such a cause of action is for both compensatory and punitive damages, but the emphasis is on the punitive aspect — because if the conduct of the insurance company is outrageous, it ought to be punished. The majority opinion does not refer to the new tort as outrage, but as one arising out of bad faith. It is generally agreed that this tort was first recognized in California and is undergoing a period of refinement. Other states are following that trend to one degree or another. Allen, Insurance Bad Faith Law: The Need for Legislative Intervention, 13 Pac. L.J. 833 (1982); Benton and Johnson, The Tort of Bad Faith: A Perspective Look at The Insurer’s Expanding Liability, 8 Cum. L. Rev. 241 (1977). In the case of Findley v. Time Ins. Co., 264 Ark. 647, 573 S.W.2d 908 (1978), we left unanswered the question of whether we would recognize this new tort, but laid down quite plainly the elements of the tort, if we did choose to recognize it. In Givens v. Hixson, 275 Ark. 370, 631 S.W.2d 263 (1982), we sharply defined our understanding of the tort of outrage. We said:. The new and still developing tort of outrage is not easily established. It requires clear-cut proof. ‘Liability has been found only [our italics] where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.’ Restatement of Torts (2d), § 46, Comment d (1965); M.B.M. Co. v. Counce, 268 Ark. 269, 569 S.W.2d 681 (1980). It is for the trial court to determine, in the first instance, whether the conduct may reasonably be regarded as so outrageous as to permit recovery. Restatement, id., Comment H. The majority opinion is in every respect in line with the Findley case. The tortean only be based upon an affirmative act of intentional dishonest, malicious, or oppressive conduct by a company to avoid its liability. Those are strong words, and impose a heavy burden on an insured, as they well should, because Arkansas has an adequate remedy for an insured against a company that either refuses or through nonfeasance will not honor its contract obligations. See Ark. Stat. Ann. § 66-3001 et seq. (Repl. 1980). While good reasons for recognizing this cause of action exist, the tort should not be merely a new legal tool to collect attorney’s fees, or a means of intimidating the insurance industry so it cannot fairly and reasonably resist false, suspicious or even disputed claims. That is the reason I characterize the new tort as outrage, because it better describes the kind of conduct that should result in punishment. Bad faith can be, in my judgment, interpreted by jurors as merely negligence, and this tort is not one of negligence — it is one of intentional malicious, dishonest and oppressive conduct. The evidence in this case does not justify a finding that Aetna is guilty of such conduct. Negligence, and poor judgment, probably; outrageous conduct, hardly. The only real evidence the appellee presented that could support a finding of intentional oppressive conduct was the reference to the statement by the adjuster that he might be called on to explain to the Internal Revenue Service why Aetna would pay $75,000 when there was only $23,000 inventory on the books. That statement could be taken either way. The adjuster had from the beginning questioned the records of the appellee which were admittedly deficient. He had the responsibility to pay a substantial amount for a fire loss and had every right to question how much loss there actually was. Furthermore, this was a conversation between a lawyer hired by the appellee to get the maximum benefits under the policy and an adjuster hired to see that no more was paid than was owed under the policy. The attorney said it was his “impression” it was a threat. That is not “clear-cut” proof; standing alone that is not enough, by any test, to support a finding of outrageous conduct which resulted in a $5,000,000 judgment for punitive damages. It is a judgment question on our part that Lawyer Glasgow should not have been allowed to testify under the circumstances of the case, as it was tried below. We do not find that there was any unethical conduct on his part. Glasgow did immediately withdraw from the case when he saw he might have to be a witness. At that time he saw that there might exist a suit against Aetna for outrage. He already had a contingent fee arrangement with the appellee, and it was not changed when new lawyers were hired to pursue the suit. He did sit at the counsel table throughout the trial, but apparently as a representative of the corporation, Broadway Arms, and therein lies the problem. It could easily appear he was counsel in the case. Our rule against lawyers testifying in a case in which they continue to participate as attorneys has become fixed — we will not allow it. Bishop v. Linkway Stores, Inc., supplemental opinion, 280 Ark. 124, 655 S.W.2d 426 (1983); Boling v. Gibson, 266 Ark. 310, 584 S.W.2d 14 (1979). That is a relatively recent position of ours. Certainly the lawyer can testify on a retrial, he just cannot participate in any way in the suit, nor appear to. The reason we do not allow lawyers to tetify in a case in which they are counsel is because of the special role a lawyer plays as an officer of the court and advocate. He should not be allowed to play that role in front of a jury and then testify under oath to something that will aid his case. See Boling v. Gibson, supra. I would reverse the judgment and dismiss the cause.