Federal Life & Cas. Co. v. Weyer

• Decision Date: 07 June 1965
• Docket Number: No. 5-3603,5-3603
• Citation: 239 Ark. 663,391 S.W.2d 22
• Parties: FEDERAL LIFE AND CASUALTY COMPANY, Appellant, v. Zieba WEYER, Appellee.
• Court: Arkansas Supreme Court

Page 22

391 S.W.2d 22

239 Ark. 663

FEDERAL LIFE AND CASUALTY COMPANY, Appellant, v. Zieba WEYER, Appellee.

No. 5-3603.

Supreme Court of Arkansas.

June 7, 1965.

Kirsch, Cathey & Brown, Paragould, for appellant.

Robert Branch, Paragould, for appellee.

JOHNSON, Justice.

This appeal involves Ark.Stat.Ann. § 66-3238 (Supp.1963), a statute allowing penalty and attorneys' fees in certain suits against insurers.

The facts are not disputed. In 1957, appellant Federal Life and Casualty Company issued a policy to appellee Zieba Weyer providing for payment of $100.00 per month for twelve months if she became totally disabled as a result of sickness. Early in 1963, appellee made a claim for benefits and was paid for a period from February to May 1963. Appellant determined that the insured had resumed work in April, 1963, and wrote her several letters demanding repayment of the last $100 payment. On October 15, 1963, appellee's attorney wrote appellant that appellee was totally disabled, enclosed medical reports from two doctors verifying the disability, and admitted that the insured had been overpaid $100, which should 'be credited against the amount which you now owe her.' On October 28, 1963, appellant wrote appellee's attorney that it had proof that appellee worked through July of 1963, that 'benefits for total disability as the result of an illness are payable when the insured is totally and continuously disabled and under the regular care of a duly licensed physician' and, 'since appellee returned to work on April 20, we feel she is not entitled to benefits after that date.'

On January 10, 1964, appellee filed suit in Greene Circuit Court against appellant, alleging the existence of the policy, that during February of 1963 appellee became totally disabled and claimed and was paid benefits by appellant, that she attempted to resume work in April and continued to attempt to work periodically until August 12, 1963, since which time appellee has been totally disabled. The complaint stated that appellant was entitled to $100 credit for the benefits paid in April; that appellee had given appellant notice of her claim which appellant refused to pay and denied liability under the policy. The complaint prayed for judgment for $400 plus any additional amounts which might accrue during pendency of the suit, plus twelve percent penalty, attorney's fee and costs.

Appellant filed a plea in abatement and answer, praying that the suit be abated until appellee filed notice of claim and proof of loss, that appellant be given a reasonable time within which to determine its position with regard to such claim, and to be permitted to file further responsive pleadings. Appellant thereafter filed its amended answer, conceding that based on a medical report it was liable to appellee for the benefits sued for, subject to credit for the $100 previously paid, and prayed judgment be rendered in accodance with its answer but that no penalty or attorney's fee be assessed. On October 16, 1964, appellant's motion for summary judgment came on for hearing. It was stipulated that the only issue was appellee's prayer for twelve percent penalty and attorney's...