Buie v. Certain Underwriters at Lloyds

• Decision Date: 30 October 2002
• Docket Number: No. CA 01-1360.,CA 01-1360.
• Parties: Eddie BUIE v. CERTAIN UNDERWRITERS AT LLOYDS OF LONDON; UnionAmerica Insurance Company; Copenhagen Reinsurance Co. (UK), Ltd.; Zurich Reinsurance Co. (London), Ltd.
• Court: Arkansas Court of Appeals

87 S.W.3d 832

79 Ark. App. 344

Eddie BUIE v. CERTAIN UNDERWRITERS AT LLOYDS OF LONDON; UnionAmerica Insurance Company; Copenhagen Reinsurance Co. (UK), Ltd.; Zurich Reinsurance Co. (London), Ltd.

No. CA 01-1360.

Court of Appeals of Arkansas, Divisions III, IV.

October 30, 2002.

Mark B. Chadick, Pine Bluff, for appellant.

The Hustead Law Firm, A Professional Corporation, by: Patrick Q. Hustead, Denver, CO; and Eilbott Law Firm, by: Don Eilbott, Pine Bluff, for appellees.

KAREN R. BAKER, Judge.

This appeal arises from a grant of summary judgment deciding a contract dispute between an insured and his insurer. Appellant Eddie Buie filed suit against his insurer, appellees, for breach of contract based on its failure to pay on a fire loss claim. The circuit court granted summary judgment in favor of appellees finding that appellant had made material misrepresentations in applying for the policy issued by appellees, in continuing the policy, and in making a claim under the policy. The court further found that appellees had properly rescinded the insurance policy. On appeal, appellant argues that the trial court erred in finding as a matter of law that appellant's insurance policy with appellees was properly rescinded such that there was no coverage for appellant's fire loss. We hold that summary judgment in this case is not appropriate, and accordingly, we reverse and remand.

It is difficult to set forth a concise statement of facts in this case because of numerous factual disputes. However, the appellant, Eddie Buie, owned a convenience store, University One Stop. On December 3, 1997, the business was damaged by fire. Appellant reported the loss, but was subsequently informed that the insurance policy had been rescinded based on a provision in the policy which provided that the policy was void if the insured concealed or misrepresented a material fact. Appellees alleged, as the basis for invoking this provision, that appellant had failed to disclose a prior fire loss.

Appellant filed a complaint against appellees for damages he incurred in the fire. In response, appellees filed an answer and counter-claim. After discovery, appellees filed a motion for summary judgment arguing that the policy was rescinded and void due to a material misrepresentation. Appellant denied the allegations in the motion for summary judgment. The trial court granted the motion for summary judgment, and appellant then filed a motion to reconsider emphasizing that there was a material dispute as to several facts in the case. Appellees filed a motion to strike the motion to reconsider. The trial court never ruled on the motion to reconsider; thus, it was deemed denied. This appeal from the trial court's granting of appellees' motion for summary judgment followed.

As noted above, this case contains many disputed factual issues. A motion for summary judgment cannot be used to submit a disputed question of fact to a trial judge.¹ Walker v. Stephens, 3 Ark.App. 205, 626 S.W.2d 200 (1981) (citing Griffin v. Monsanto Co., 240 Ark. 420, 400 S.W.2d 492 (1966)). Appellees submitted a motion for summary judgment to the trial court. This motion included a section entitled "Undisputed Facts." Paragraph 5 asserts the following as an undisputed fact: "Plaintiff did not disclose the prior loss to Dale Dixon, the agent from whom Plaintiff purchased the insurance." Appellees cites the court to Exhibit B, which is a copy of the insurance application that had the box "no" checked in response to two questions regarding prior fire loss. Appellees also cites the court to Exhibit A, which is an excerpt from Dale Dixon's deposition, and the cited lines contain Mr. Dixon's representation that he was the person who checked "no" to the questions on the application regarding prior loss. He claimed that he checked the boxes based upon Mr. Buie's answers over the phone to his questions on the application.

This same motion also contained an excerpt from Eddie Buie's deposition. Mr. Buie stated that he had no knowledge concerning an application. Specifically, he said, "[I]t never dawned on me that I had to fill out an application." Furthermore, in response to the question, "Well, you knew Dale Dixon was coming to the store with an application, didn't you?", Mr. Buie replied, "No. He said, `I'll come out there and take care of you.'"

We agree from the motion as presented that it is undisputed that Mr. Buie did not disclose the prior fire loss.² However, the two factual circumstances presented in the supporting exhibits regarding the nondisclosure are irreconcilable. Mr. Dixon claims that Mr. Buie lied in response to specific questions on the insurance application. Mr. Buie claims a conversation concerning the application never happened.

In granting appellees' motion for summary judgment, the court found that appellant had "falsely answered no to both questions in the insurance application." In the portion of Mr. Dixon's deposition that was attached to the summary-judgment motion, he stated that he was the one who actually filled out the application. Not only did Mr. Buie not fill out the application, he did not sign the application, and he denies that he was aware that an application existed. The application, which was included in appellee's own exhibits, was signed by Mildred Brown. Mr. Buie was in Chicago when Ms. Brown signed the application. Thus, it is clear from appellees' own exhibits that a material question of fact existed as to agency, which is fatal to the summary-judgment motion. In MDH Builders v. Nabholz Const. Corp., 70 Ark.App. 284, 17 S.W.3d 97 (2000) (citing Hot Stuff, Inc. v. Kinko's Graphic Corp., 50 Ark.App. 56, 901 S.W.2d 854 (1995)), we held that whether an agent is acting within the scope of his apparent or actual authority is a question of fact.

Summary judgment is not proper where evidence, although in no material dispute as to actuality, reveals aspects from which inconsistent hypotheses might reasonably be drawn and reasonable men might differ. Walker v. Stephens, 3 Ark. App. 205, 626 S.W.2d 200 (1981) (citing Henricks v. Burton, 1 Ark.App. 159, 613 S.W.2d 609 (1981); Dodrill v. Arkansas Democrat Co., 265 Ark. 628, 590 S.W.2d 840 (1979); Braswell v. Gehl, 263 Ark. 706, 567 S.W.2d 113 (1978)). The object of summary judgment proceedings is not to try the issues, but to determine if there are any issues to be tried, and if there is any doubt whatsoever the motion should be denied. Id. (citing Trace X Chemical, Inc. v. Highland Resources, Inc., 265 Ark. 468, 579 S.W.2d 89 (1979); Ashley v. Eisele, 247 Ark. 281, 445 S.W.2d 76 (1969)). The trial court concluded that Mr. Buie falsely answered no to the questions on the application regarding prior fire loss. The trial court's finding is consistent with Mr. Dixon's deposition testimony. However, the trial court's finding directly contradicts Mr. Buie's deposition testimony, also attached to the summary-judgment motion.

In considering Mr. Buie's testimony, a finding that he answered falsely would be impossible because his testimony is that he not only never answered any questions regarding a fire loss, but that he was completely unaware of an application containing the questions at issue. The trial court's finding required a credibility determination, and that is inappropriate for a summary judgment.

Our supreme court has stated that we only approve the granting of the motion when the state of the evidence as portrayed by the pleadings, affidavits, discovery responses, and admissions on file is such that the nonmoving party is not entitled to a day in court, i.e., when there is not any genuine remaining issue of material fact and the moving party is entitled to judgment as a matter of law. Wallace v. Broyles, 332 Ark. 189, 961 S.W.2d 712 (1998) (emphasis added). Neither Arkansas Rule of Civil Procedure 12 nor Rule 56 authorizes the trial court to summarily dismiss a complaint where there are matters before the court that show there is an issue of fact to be decided. Maas v. Merrell Assoc., Inc., 13 Ark.App. 240, 682 S.W.2d 769 (1985).

In summary-judgment cases, we need only decide if the grant of summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of the motion left a material question of fact unanswered. National Union Fire Ins. Co. v. Guardtronic, Inc., 76 Ark.App. 313, 64 S.W.3d 779 (2002) (citing Inge v. Walker, 70 Ark.App. 114, 15 S.W.3d 348 (2000)). The burden of sustaining a motion for summary judgment is always the responsibility of the moving party. Id. All proof submitted must be viewed in a light most favorable to the party resisting the motion, and any doubts and inferences must be resolved against the moving party. National Union Fire Ins. Co., supra. We hold that there were material questions of fact left unanswered in this case.

Appellees also argue that appellant failed to rebut the evidence of the oral misrepresentation; thus, the granting of the motion for summary judgment was proper. However, in this case, the trial court's order granting appellees' motion for summary judgment does not mention an oral misrepresentation. Instead, the order was based on the finding that two questions on the insurance application were answered falsely.

Arkansas Rule of Civil Procedure 56(e) states that, "When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Appellee also argues that appellant failed to meet proof with proof and demonstrate the existence of a genuine issue of material fact. However, Rule 56(e) further states, "If he does not so respond, summary judgment, if appropriate, shall be entered against him." (emphasis added).

Resolving all doubts against...