Glenn v. Farmers and Merchants Ins. Co.
| Decision Date | 22 December 1986 |
| Docket Number | Civ. No. 85-5113. |
| Citation | 649 F. Supp. 1447 |
| Parties | Edna GLENN, Plaintiff, v. FARMERS AND MERCHANTS INSURANCE COMPANY, Tri-State Insurance Company, Midwestern Insurance Company, a/k/a Collectively the Silvey Companies, Defendants. |
| Court | U.S. District Court — Western District of Arkansas |
Jeff Slaton, Springdale, Ark., for plaintiff.
James M. Roy, Jr., Roy & Lambert, Springdale, Ark., for defendants.
In this case, plaintiff, Edna Glenn, sued the defendant insurance carriers seeking substantial damages because of the insurance carriers' failure to pay her certain income disability benefits which she believes are due her under the provisions of the so-called Arkansas no-fault insurance provisions (Ark.Stat.Ann. § 66-4014). The suit was initially filed by Ms. Glenn as a class action in which she sought to sue for all others similarly situated.
The facts necessary for a determination of the issues pending in this matter are not substantially in dispute. Ms. Glenn purchased an automobile insurance policy from Farmers and Merchants Insurance Company, one of the members of The Silvey Group. Among other things, the policy included income disability benefits required and prescribed by Ark.Stat.Ann. § 66-4014(b).
That provision of Arkansas law requires that: "Every automobile liability insurance policy covering any private passenger motor vehicle issued or delivered in this state shall provide minimum medical and hospital benefits, income disability and accidental death benefits, under policy provisions and on forms approved by the Commissioner of Insurance...." In relation to income disability benefits, the statute provides:
(b) INCOME DISABILITY BENEFITS. Seventy percent (70%) of the loss of income from work during a period commencing eight (8) days after the date of the accident, and not to exceed fifty-two (52) weeks, but subject to a maximum of $140 per week....
In compliance with this statute, the insurance policy provided work-loss benefit coverage for work loss "incurred during a period commencing eight (8) days after the day of the accident and not to exceed fifty-two (52) weeks."
On January 27, 1984, plaintiff was involved in an automobile accident, and it is admitted that the policy was in full force and effect at the time. She missed no work as a result of the accident until October 15, 1984, when she had knee surgery. As a result of the surgery and the time necessary for recuperation, Ms. Glenn was off work from October 15, 1984, through January 20, 1985, and was paid a total of $1,960.00 for fourteen (14) weeks at $140 per week (the wage rate agreed to be correct).
Ms. Glenn then returned to work and there was no further claim until she began to miss work in April of 1985 due to back problems. She saw Dr. Jim Arnold, a specialist, and after x-raying her back, he determined that there was a possible back injury, i.e., a nerve root irritation, and advised that plaintiff could not work for a period of time.
The plaintiff, through her attorney, then made a claim for additional wage loss. In a discussion with the insurance adjuster for The Silvey Companies, her attorney was told that it was the opinion of the adjuster that the claim would not be paid because the insurance carrier interpreted the policy provisions as prescribed by the Arkansas law to provide for wage losses incurred during a period of fifty-two (52) weeks after the date of the accident.
Plaintiff's attorney then made a written demand to the insurance carrier on June 20, 1985, and by letter dated June 18, 1985, an employee of the insurance carrier advised Ms. Glenn's attorney that the claim would not be paid because "we interpret the phrase `... incurred during a period commencing eight (8) days after the accident and not to exceed fifty-two (52) weeks,' to be a time loss limitation on work loss benefits beginning eight (8) days after the date of accident and extending for fifty-two (52) weeks from that date."
Plaintiff then filed what her attorney denominated a "class action." In the complaint, as amended, plaintiff sued in behalf of herself for the work-loss benefits that she believed to be due and sought twelve percent (12%) penalty and attorney's fees authorized by Ark.Stat.Ann. § 66-3238.
It is also alleged that the defendants have interpreted the policy provisions in a similar manner in relation to claims made by other Arkansas residents, and plaintiff seeks to collect consequential damages for each of the class members in the amount of $20,000.00.
Plaintiff's complaint, as amended, also seeks damages for intentional infliction of emotional distress in the amount of $100,000.00 for herself and $20,000.00 for each class member; damages of $100,000.00 for herself and $20,000.00 for each class member for defendants' "bad faith"; and $10,000,000.00 for herself and each of the class members as punitive damages.
During the pretrial phases of this case, it became "troublesome" to say the least. Many discovery disputes arose, most of which, in the court's view, were unwarranted and unnecessary. As Mr. Jeff Slaton, plaintiff's attorney, attempted to discover the facts necessary to support a class action, he only received information which should have indicated to him that there was no basis for the class action allegations to be maintained. Instead, he became suspicious of the information he was receiving, and, without much basis in the court's view, did not seem to believe anything that he was receiving or anyone involved in the case. This contributed to long, drawn-out and bitter discovery disputes, the likes of which this court abhors.
Finally, after numerous extensions of the time to move for class certification as required by Rule 24 of the Rules of the Eastern and Western Districts of Arkansas, Mr. Slaton advised the court, by letter dated May 21, 1986, that:
He asked that the class action allegation be removed from the lawsuit "because at the current time, we have not located enough claims involving the fifty-two (52) week, eight (8) day limitation that would be of a sufficient number for the court to certify a class."
In due course, the defendants filed motions for partial summary judgment seeking a dismissal of the bad faith, intentional infliction of emotional distress, and punitive damage portions of the complaint. Plaintiff then moved for partial summary judgment in relation to the question of the proper interpretation of the provisions of the policy and of Arkansas law. In turn, defendants moved for summary judgment on this aspect of the case.
Shortly before the matter was scheduled to be tried, the court, in a telephone conference call, advised counsel that it intended to grant the motions for summary judgment in relation to the bad faith, intentional infliction of emotional distress, and punitive damage claims, and would further consider the motions filed in behalf of each of the parties in relation to the proper interpretation of the policy provisions.
After fully considering the matter, the court is prepared to rule. As counsel for the parties were advised in the telephone conversation prior to the scheduled trial, the court is fully convinced that there is not now and never was a basis for the bad faith, intentional infliction of emotional distress, or punitive damage claims raised by the plaintiff. As can be seen in the cases on point collected in the footnote below,1 those kinds of actions are reserved for willful, malicious, wanton, and other outrageous conduct evidencing hatred, ill will, and a spirit of revenge. As can be seen from a mere reading of the policy provisions which are substantially as prescribed and required by Arkansas law, there is, to say the very least, serious doubt about whether plaintiff's interpretation is correct. In fact, as will be set forth below, the court does not believe that it is.
Not only is it not at all clear that defendants' interpretation of the policy provision in question is wrong, the court is persuaded that the insurance carrier has properly interpreted the provision. Plaintiff has argued that this provision is drafted in ambiguous terms and, thus, should be construed in favor of the insured, citing State Farm Mut. Ins. Co. v. Pennington, 215 F.Supp. 784 (E.D.Ark.1963), and Hope Spoke Co. v. Maryland Cas. Co., 102 Ark. 1, 143 S.W. 85 (1912).
Of course, the rule in almost every jurisdiction is that where the insurance carrier, unfettered by requirements of law, drafts ambiguous language into its insurance policy, the policy will be liberally interpreted in favor of the insured and against the party drafting it. See the discussion and cases cited from many jurisdictions at 43 Am. Jur.2d Insurance § 283. However, that rule does not answer the question of how this policy should be interpreted. The relevant Arkansas statute does not give the insurance carrier any other option but to provide the income disability benefits coverage specifically prescribed by Ark.Stat. Ann. § 66-4015. The language used in the policy, with the exception of a missing comma which does not appear to affect the interpretation, is taken verbatim from the Arkansas statute. This was undoubtedly done because the statute requires that this coverage be provided.
Since Arkansas law requires and prescribes certain coverage "under policy provisions and on forms approved by the Commissioner of...
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