Branscumb v. Freeman
| Decision Date | 16 December 2004 |
| Docket Number | No. 04-147.,04-147. |
| Citation | 200 S.W.3d 411 |
| Parties | James C. BRANSCUMB, Appellant v. Clinton FREEMAN, Appellee. |
| Court | Arkansas Supreme Court |
Becky A. McHughes and Josh E. McHughes, Little Rock, for appellant.
Bennie O'Neil, North Little Rock, for appellee.
The issue on appeal is whether a cause of action for negligence arises against the owner of an uninsured motor vehicle based solely upon a violation of the Arkansas Motor Vehicle Safety Responsibility Act, Ark.Code Ann. § 27-19-101, et seq. (2004), and the Arkansas Motor Vehicle Liability Insurance Act, Ark.Code Ann. § 27-22-101, et seq. (2004). Because this is a matter of first impression, we have jurisdiction pursuant to Rule 1-2(b)(1) of the Arkansas Rules of the Supreme Court.
Appellee Clinton Freeman allowed Jonathan D. Bell to test drive his uninsured 1992 Honda motorcycle on October 30, 1999. While operating the motorcycle, Bell entered an intersection but failed to stop at a stop sign, whereupon the motorcycle collided with a vehicle driven by Appellant James C. Branscumb. Branscumb filed a complaint in circuit court against both Bell and Freeman in which he alleged that Freeman was negligent in allowing Bell to operate his vehicle without insurance as required by Ark.Code Ann. §§ 27-22-104 & 27-19-711 (2004). He also alleged in the complaint that the accident was proximately caused by Bell's negligence in failing to stop at the stop sign. The circuit court determined that Freeman was sued by Branscumb solely on the basis that Freeman owned an uninsured motorcycle that a third party was driving when, as a result of the driver's alleged negligence, the motorcycle collided with the vehicle operated by Branscumb. Based on the pleadings, the court ruled that Branscumb failed to state a claim under Arkansas law against Freeman and, therefore, dismissed the complaint against Freeman.
Branscumb initially appealed the dismissal of his claim against Freeman to the Arkansas Court of Appeals. On September 17, 2003, the Court of Appeals dismissed the appeal for lack of a final order in that the judgment did not dispose of Branscumb's additional claim against the separate defendant Bell. Branscumb v. Freeman, CA02-1030, 2003 WL 22139584, at *1 (Ark.App. Sept. 17, 2003). The circuit court subsequently disposed of the case by entering summary judgment in favor of Branscumb on his claim against Bell, finding that Bell's negligence in failing to stop proximately caused the accident. Following entry of a final order on December 3, 2003, Branscumb timely filed a second notice of appeal, contending that the trial court erred in dismissing his claim against Freeman.1
We have repeatedly set forth our standard of review for orders of dismissal pursuant to Ark. R. Civ. P. 12(b)(6). Clayborn v. Bankers Standard Ins. Co., 348 Ark. 557, 75 S.W.3d 174 (2002). This court reviews a trial court's decision on a motion to dismiss by treating the facts alleged in the complaint as true and by viewing them in the light most favorable to the plaintiff. King v. Whitfield, 339 Ark. 176, 5 S.W.3d 21 (1999); Neal v. Wilson, 316 Ark. 588, 873 S.W.2d 552 (1994). In viewing the facts in the light most favorable to the plaintiff, the facts should be liberally construed in plaintiff's favor. Rothbaum v. Arkansas Local Police & Fire Retirement Sys., 346 Ark. 171, 55 S.W.3d 760 (2001); Martin v. Equitable Life Assurance Soc. of the U.S., 344 Ark. 177, 40 S.W.3d 733 (2001). Our rules require fact pleading, and a complaint must state facts, not mere conclusions, in order to entitle the pleader to relief. Ark. R. Civ. P. 8(a)(1); Grine v. Board of Trustees, 338 Ark. 791, 2 S.W.3d 54 (1999); Brown v. Tucker, 330 Ark. 435, 954 S.W.2d 262 (1997).
This appeal also requires us to determine the intent and application of the Arkansas Motor Vehicle Safety Responsibility Act and the Arkansas Motor Vehicle Liability Insurance Act. We review statutory interpretation appeals de novo, as it is for us to decide the meaning of the statute. Premium Aircraft Parts, LLC v. Circuit Court of Carroll County, 347 Ark. 977, 69 S.W.3d 849 (2002).
The underlying lawsuit is a subrogation claim. In St. Paul Fire & Marine Insurance Co. v. Murray Guard, Inc., 343 Ark. 351, 37 S.W.3d 180 (2001), we said subrogation is an equitable remedy that rests upon principles of unjust enrichment and attempts to accomplish complete and perfect justice among the parties. Id. (). We have further said that the elements of subrogation are as follows: 1) a party pays in full a debt or an obligation of another or removes an encumbrance of another, 2) for which the other is primarily liable, 3) although the party is not technically bound to do so, 4) in order to protect his own secondary rights, to fulfill a contractual obligation, or to comply with the request of the original debtor, 5) without acting as a volunteer or an intermeddler. Id. (citing Blackford v. Dickey, supra). Finally, we have said that subrogation is a doctrine of equity governed by equitable principles. Id. ().
In the instant case, Branscumb's insurance carrier, Guideone Insurance Company, paid his damages under the uninsured motorist clause of his policy. Under a theory of subrogation, Branscumb sought to recover damages in the amount of $9,163.83 by suing the person(s) who allegedly were responsible for his injuries — Bell, for negligently operating the motorcycle and Freeman for failing to insure the motorcycle. Branscumb submits that the owner's failure to keep insurance on his motorcycle should be evidence of negligence under the Arkansas Motor Vehicle Safety Responsibility Act, Ark.Code Ann. § 27-19-101, et seq. (2004), and the Arkansas Motor Vehicle Liability Insurance Act, Ark.Code Ann. § 27-22-101, et seq. (2004), and therefore his claim was improperly dismissed by the circuit court. We disagree.
Under the Motor Vehicle Safety Responsibility Act, the driver of a vehicle bears the responsibility of reporting an accident, and the penalty for failing to report an accident is license suspension.2 Ark.Code Ann. §§ 27-19-501, 508 (Repl. 2004). Similarly, it is the driver's failure to file proof of insurance within 90 days of the accident that results in a presumption that the driver and the vehicle the driver is operating are uninsured. Ark.Code Ann. § 27-19-503 (Repl.2004). In any event, the legislature has expressly provided that following an accident, the report and the security (if the vehicle is uninsured) required under the Act and any action taken by the enforcement agency, shall not be evidence of negligence in civil actions. Ark.Code Ann. § 27-19-621 (Repl.2004).
Furthermore, subchapter seven of the Motor Vehicle Safety Responsibility Act does not provide for universal application; instead, it requires proof of financial responsibility for the future (i.e., mandatory liability insurance) and applies only to those persons "who have been convicted of or forfeited bail for certain offenses under motor vehicle laws or who have failed to pay judgments upon causes of action arising out of ownership, maintenance, or use of vehicles of a type subject to registration under the laws of this State." Ark.Code Ann. § 27-19-702 (Repl.2004). See Smith v. Shelter Mutual Ins. Co., 327 Ark. 208, 937 S.W.2d 180 (1997)(citing State Farm Mutual Auto Ins. Co. v. Cartmel, 250 Ark. 77, 78, 463 S.W.2d 648, 649 (1971)); Aetna Casualty & Surety Co. v. Simpson, 228 Ark. 157, 306 S.W.2d 117 (1957).
The Motor Vehicle Liability Insurance Act, Ark.Code Ann. § 27-22-101, et seq. (Repl.2004), is supplemental to and cumulative to the Motor Vehicle Safety Responsibility Act. Ark.Code Ann. § 27-22-102. Section 27-22-104 provides:
(a)(1) It shall be unlawful for any person to operate a motor vehicle within this state unless the vehicle is covered by a certificate of self-insurance under the provisions of § 27-19-107, or by an insurance policy issued by an insurance company authorized to do business in this state.
(2) Failure to present proof of insurance coverage at the time of arrest and a failure of the Vehicle Insurance Database to show current insurance coverage at the time of the traffic stop creates a rebuttable presumption that the motor vehicle is uninsured.
Ark.Code Ann. § 27-22-104 (Emphasis added). In addition, Ark.Code Ann. § 27-22-105 states:
(a) When the operator of any motor vehicle is involved in a motor vehicle accident in this state and the vehicle is found not to be adequately insured, as required by § 27-22-104(a)(1), the operator shall be deemed guilty of a Class A misdemeanor.
(b) In addition, if a person is convicted of driving an inadequately insured vehicle which has been involved in an accident under subsection (a) of this section, the court may order that the vehicle be impounded until proof of vehicle insurance coverage is made to the court. The owner of the vehicle impounded shall be responsible for all costs of impoundment.
Ark.Code Ann. § 27-22-105 (Emphasis added). The legislative history behind these pertinent statutes is reflected in the Publisher's Notes to Act 988 of 1991, Section 1:
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