First Marine Ins. Co. v. Booth

• Decision Date: 16 May 1994
• Docket Number: No. 93-1404,93-1404
• Citation: First Marine Ins. Co. v. Booth, 876 S.W.2d 255, 317 Ark. 91 (Ark. 1994)
• Parties: FIRST MARINE INSURANCE COMPANY, Appellant, v. Rickey BOOTH, Appellee.
• Court: Arkansas Supreme Court

Page 255

876 S.W.2d 255

317 Ark. 91

FIRST MARINE INSURANCE COMPANY, Appellant, v. Rickey BOOTH, Appellee.

No. 93-1404.

Supreme Court of Arkansas.

May 16, 1994.

Bruce Munson, Little Rock, for appellant.

Barry Paddock, Texarkana, TX, for appellee.

NEWBERN, Justice.

The appellee, Rickey Booth, sued First Marine Insurance Company (First Marine), the appellant, and E-Z Mart. The claim resulted from damage to an outboard boat motor caused, Mr. Booth alleged, by defective gasoline purchased from E-Z Mart. His claim against First Marine, which insured the motor against casualty loss, was for a bad faith refusal to pay the claim. First Marine appeals from a judgment entered on the basis of a jury verdict awarding Mr. Booth damages on his bad faith claim and from the Trial Court's award of an attorney's fee to Mr. Booth. We hold the evidence was insufficient to support the bad faith verdict but that the attorney's fee was justified. We reduce the judgment against First Marine by subtracting the bad faith award and affirm the judgment as modified.

In addition to his recovery against First Marine, Mr. Booth was awarded $4,539.52 against E-Z Mart, which was the full amount he had demanded as the cost of repair of the motor. The jury found that First Marine breached its contract of insurance by failure to pay Mr. Booth's claim against it. Damages of $5,000 were assessed against First Marine. The Trial Court reduced that award to $460.48 by subtracting the $4,539.52 recovered against E-Z Mart to avoid double recovery. The jury's award against First Marine for bad faith was $2,500. The Trial Court entered a judgment for those amounts and added a $2,500 attorney's fee.

On First Marine's motion the Trial Court reduced the judgment $250 which was the amount of the policy deductible and $44 representing a portion of the repair estimate not attributable to the alleged negligence of E-Z Mart.

Mr. Booth testified that on July 18, 1991, he purchased approximately twenty-six gallons of gasoline for his motorboat from the E-Z Mart in DeQueen. He immediately experienced problems starting and running the motor. He later added approximately eighteen gallons of gasoline purchased from another store. A few days later he again took the boat out and noticed a loud noise coming from the motor. He took the motor in for repair and was told that the damage was probably caused by defective gasoline. He was given a repair estimate of $4,539.52.

Mr. Booth notified First Marine of his claim. Mr. Powell, a claims adjustor for First Marine, examined the motor and concluded the damage was caused by fuel contaminants. He told Mr. Booth the claim would be denied because the insurance contract excluded "damage caused by fuel additives."

Mr. Booth complained to the Arkansas Insurance Commission. A copy of a letter from Mr. Powell to the Commission was sent to Mr. Booth stating, "We have decided to give the insured the benefit of the doubt if concrete proof can be gained that the loss was due to contaminated gasoline." Mr. Booth then filed suit against E-Z Mart and First Marine.

The Trial Court denied First Marine's motions for directed verdict. The jury returned its verdict in favor of Mr. Booth, and First Marine moved to have it set aside on the ground that the jury improperly awarded more than the amount claimed, ignored the policy deductible, and failed to calculate depreciation in reaching the amount awarded. First Marine also asked that the attorney's fee award be set aside. The Trial Court denied the motion but modified the judgment to take into account the $250 deductible and the unrelated repair bill of $44.

First Marine moved for a judgment notwithstanding the verdict or in the alternative a new trial. First Marine contended the jury finding of bad faith was not supported by substantial evidence or that it was clearly contrary to the preponderance of the evidence.

1. Sufficiency of the evidence

First Marine contends the jury was not presented with sufficient evidence to justify a finding of bad faith. In support of this contention First Marine points to the trial testimony which conflicted as to whether or not the damage was caused by defective gasoline. First Marine also claims that the fuel additive exclusion in the insurance contract shows that the dispute was based on an honest, good faith disagreement as to the contract's correct interpretation.

In reviewing a trial court's refusal to set aside a jury verdict, this Court must view the evidence in the light most favorable to the party against whom the motion was made and must affirm if there is any substantial evidence to support the verdict. See Bank of Malvern v. Dunklin, 307 Ark. 127, 817 S.W.2d 873 (1991). As well, when the Trial Court denies a motion for a new trial on the ground that the verdict was not clearly contrary to the preponderance of the evidence, the test on appeal is whether there is substantial evidence to support the jury verdict. Substantial evidence is that evidence which is of sufficient force and character to compel a conclusion one way or another. It must force the mind to pass beyond suspicion or conjecture. Rathbun v. Ward, 315 Ark. 264, 866 S.W.2d 403 (1993).

To be liable for bad faith the insurer must engage in affirmative misconduct, without a good faith defense, in a malicious, dishonest, or oppressive attempt to...