Court Opinion

ID: 9779464
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:51:25.729544+00
Date Added: 2024-06-11T07:33:26.543885
License: Public Domain

Tom Glaze, Justice, dissenting. In Midwest Mutual Ins. Co. v. Ark. Nat’l Co., 260 Ark. 352, 538 S.W.2d 574 (1976), this court concluded that, where an insurance agent neglected to reinstate the insured’s vehicle coverage, the statute of limitations commenced when the insured first learned he had no coverage and not the date the agent failed to obtain it. Applying that rule to the situation now before our court, Roger and Nancy Flemens, the insureds, were first notified on March 21, 1989 that their insurance agent had failed in August 1988 to obtain the disability insurance coverage they had requested. Using the March 21, 1989 date and the three-year statute of limitations, the Flemens’s complaint, alleging negligence on their agent’s part, was timely filed on December 13, 1991. The majority opinion concedes that the Flemenses, in contending their action against their insurance agent was filed timely, understandably relied on this court’s decision in Midwest, but the majority court then proceeds to offer reasons why the Midwest decision should not decide this case. The majority opinion falls short of overruling that decision, but it might as well have done so — at least as to the Midwest court’s extensive discussion of the three-year limitations statute and its application to an insurance agent’s negligent acts. Primarily, the majority court suggests Midwest’s discussion of the three-year statute of limitations issue was purely dictum and for that reason, is not precedent here. I strongly disagree! In Midwest, Arkansas National had a standing agreement to insure Red Top’s taxicabs effective the same day Red Top requested coverage. Arkansas National and its agent neglected to follow Red Top’s request made on August 11, 1970, and as a consequence, one of Red Top’s taxicabs was uninsured when it collided with a motorcycle on August 20, 1970. Robert Bratton was driving the motorcycle which was owned by Archie Lee Lowe. On May 24, 1971, Bratton and Lowe sued Red Top for personal injuries and property damage. Red Top subsequently filed a third-party complaint against its insurance agent, Arkansas National, alleging it had negligently failed to obtain insurance per the parties’ agreement and Arkansas National’s negligence had forced Red Top to defend against Bratton’s and Lowe’s lawsuit. The trial court in Midwest dismissed Arkansas National from the lawsuit, but the remaining claims were tried, resulting in a verdict against Red Top, with Bratton and Lowe obtaining a judgment in the sum of $6,850. Afterwards, Red Top assigned to Midwest Mutual Insurance company, its “chose in action” against Arkansas National, representing Red Top’s action against Arkansas National for failing to obtain the insurance coverage Red Top had requested. Based upon that assignment, Midwest filed suit against Arkansas National and its agent for the $6,850 paid Bratton and Lowe. Arkansas National conceded its agent had been negligent, but argued (1) the statute of limitations had run and (2) Red Top’s assignment to Midwest was invalid. The trial court granted Arkansas National’s motion for summary judgment, holding Red Top’s cause of action against Arkansas National was statutorily barred by the three-year limitations, since Red Top’s action accrued on August 11, 1970 — the date Arkansas National negligently failed to obtain Red Top’s vehicle insurance coverage. On appeal of the trial court’s ruling, this court held the trial court was wrong in concluding Midwest Mutual’s cause of action was barred by the statute of limitations. In fact, the Midwest court stated that “the limitations question on appeal boiled down to when Red Top’s cause of action accrued against its insurance agent.” Most of the court’s opinion in Midwest sets out the cases and rationale it considered when deciding the trial court erred in ruling Red Top’s (and therefore its assignee’s, Midwest Mutual) cause of action against Arkansas National was procedurally barred by the limitations statute. Although it rejected the trial court’s statute of limitations ruling, the supreme court affirmed the lower court on the second defense Arkansas National had argued at trial — Red Top’s assignment to Midwest Mutual was invalid. As is readily discernable from the above, the Midwest court had before it the trial court’s ruling that Midwest Mutual’s cause of action was barred by the three-year statute of limitations because its action commenced on the date its insurance agent negligently failed to obtain the requested insurance coverage. That legal issue was before this court on appeal, and the court addressed it, lest that trial court’s erroneous ruling on the issue be perceived as valid by that trial court and possibly other trial courts and parties. Because it was essential for the court in Midwest to decide the limitations issue, that court’s holding is binding authority and controls the case now before us. The remaining remarks in the majority opinion are largely based on the erroneous assumption that the Midwest decision is dicta and not controlling here. For that reason alone, the majority court’s other points can be summarily discarded. However, I mention one matter briefly. The majority court conceives of no reason why professionals, such as attorneys, doctors and certified public accountants, should be considered differently from insurance agents when construing and applying the three-year statute of limitations. While much can be said and argued to counter the majority opinion on this point, it is sufficient to say that Midwest was decided in 1976, and the General Assembly could have changed that case law so as to treat insurance agents under the same limitations rationale or rule utilized in malpractice actions against “professionals.” For two decades, the General Assembly has been silent on this subject. Nor, until today’s decision, has this court refused to follow Midwest. For the foregoing reasons, I respectfully disagree with the majority opinion, and would reverse this case. Corbin, J., joins this dissent.