Hand v. Northwestern Nat. Ins. Co.

• Citation: 255 Ark. 802,502 S.W.2d 474
• Decision Date: 24 December 1973
• Docket Number: No. 73--172,73--172
• Parties: Ferdinand D. HAND and James W. Randall, d/b/a Southland Insurance Agency, Appellants, v. NORTHWESTERN NATIONAL INSURANCE CO., Appellee.
• Court: Supreme Court of Arkansas

Page 474

502 S.W.2d 474

255 Ark. 802

Ferdinand D. HAND and James W. Randall, d/b/a Southland

Insurance Agency, Appellants, v. NORTHWESTERN NATIONAL INSURANCE CO., Appellee.

No. 73--172.

Supreme Court of Arkansas.

Dec. 24, 1973.

Wright, Lindsey & Jennings, Little Rock, for appellants.

Laser, Sharp, Haley, Young & Boswell, Little Rock, for appellee.

FOGLEMAN, Justice.

This appeal springs from the dismissal of appellants' complaint on motion of appellee. Appellants operate an insurance agency and appellee is their insurer under an Insurance Agents' and Brokers' Errors and Omissions Policy. This action was brought by appellants to recover from appellee the amount of a fire loss allegedly suffered by F. L. and Delma Abernathy which was not covered by fire insurance due to the failure of appellants to renew a policy. Appellee first filed a pleading which it entitled 'Motion to Dismiss.' This motion alleged that plaintiffs are not the real parties in interest and that defendant was not a proper party. After a response by appellants, which seems to be more responsive to a brief of appellee in support of its motion than to the motion itself, appellee filed an amendment to its motion, 'readopting' the allegations of its original motion, but adding that it was not a proper party defendant for the 'additional' reason that the policy involved contained the following clause:

Action Against Company. No action shall lie against the company unless, as a condition precedent the Insured shall have fully complied with all the terms of this policy, nor until the amount of the Insured's obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company.

Appellants then filed a supplemental response, which also seems to be more in the nature of a brief than a response. The gist of this response is the contention that the appellants, under the circumstances should not have been required to suffer a lawsuit and judgment against them, when their admitted negligence and the damages suffered in the matter were clear, particularly in view of a denial of coverage by appellee. Appellants also claimed to be the real party in interest because they had paid the full amount of the loss to the party to have been insured, $11,700, of which $10,700 was loaned to them by Farmers and Merchants Insurance Company, under the terms of a loan receipt in which their right to sue appellee was recognized. Appellee covered all losses in excess of $1,000.

After the circuit judge had advised counsel for both parties by letter that the motion was sustained, appellants filed a motion to set aside the judgment of dismissal (which had not then been formally entered). The grounds alleged were that appellee's motion to dismiss was not a proper pleading under the laws of Arkansas and that, if it were treated as a motion for summary judgment, there remained genuine and material issues of fact. Thereafter, the formal order of dismissal was entered. It contained these specific findings:

1. That the plaintiffs are bound by the terms of their written contract with the defendant.

2. That the plaintiffs are bound by their contract and by the law of this state and are precluded from bringing a direct action against this defendant.

3. That defendant, Northwestern National Insurance Company is not a proper party defendant in this cause.

The rules of pleading in this state are appropriately liberal and this court has, at least since the adoption of the Civil Code, regarded substance rather than form. In this case, however, the true nature of the pleadings seems well obscured by their titles and the treatment given them by the parties. Whatever they are, we are convinced that the order of dismissal was at least premature.

A motion to dismiss upon jurisdictional grounds or for want of venue has been recognized by this court. See Hoggard & Sons v. Russell Burial Assn., 255 Ark. 576, 501 S.W.2d 613 (1973); Arkansas-Louisiana Highway Improvement District v. Douglas-Gould and Star City Road Improvement District,138 Ark. 162, 210 S.W. 150. We have also approved its use to obtain dismissal for abuse of process. Heard v. McCabe, 130 Ark. 185, 196 S.W. 917. When based upon the assertion that the complaint fails to state a cause of action, it is tantamount to a general demurrer. Meeks v. Arkansas Power & Light Co., 147 Ark. 232, 227 S.W. 405. Such a pleading is not described in the Civil Code, or amendments thereto, and our attention has not been called to any case in which it has been recognized for other purposes, except, of course, for the motion to dismiss a chancery case for insufficiency of the evidence on behalf of a plaintiff, provided for by Ark.Stat.Ann. § 27--1729 (Repl.1962). Ark.Stat.Ann. § 27--1162 (Repl.1962), relied upon by appellee does not authorize any pleading. It simply authorizes hearings on pretrial motions outside the county in which an action is pending.

This court has always determined the nature and function of a pleading by its content, and sometimes even by the manner in which it is treated by the parties and the trial court, rather than by its title. See Hoggard & Sons v. Russell Burial Assn., supra. When we view appellee's first motion in this case, it appears that it should be characterized as a demurrer for defect of parties, authorized by Ark.Stat.Ann. § 27--1115 (Repl. 1962). Appellee says in its brief here that the court correctly granted its motion as a demurrer for defect of parties. In order for such a demurrer to be sustained, the defect must appear upon the face of the complaint. Hoggard & Sons v. Russell Burial Assn., supra. See also, McCallister's Admr. v. Savings Bank of Louisville, 80 Ky. 684 (1883), construing the code section we adopted and now appearing as Ark.Stat.Ann. § 27--1115; Cleveland v. Biggers, 163 Ark. 377, 260 S.W. 432.

There is nothing in the complaint to suggest that the plaintiffs are not the real parties in interest, i.e., the sole owner of the alleged cause of action against appellee. Even though the insurance contract is the basis of appellants' cause of action, and is described and identified in the complaint, it was not made an exhibit thereto. The terms relied upon by appellee are nowhere mentioned in the complaint. There is nothing in the complaint to indicate that appellee is not the only possible defendant in the cause of action alleged by appellants. The first motion could not properly have been sustained as a demurrer.

The amendment to this motion, by importing grounds based upon facts not appearing on the face of the pleading, seems to have made the pleading a 'speaking demurrer.' Hoggard & Sons v. Russell Burial Assn., supra. Such a pleading is not only not recognized but is abhorred, eschewed and rejected by the courts of Arkansas. Hoggard & Sons v. Russell Burial Assn., supra; Jones v. Capers, 231 Ark. 870, 333 S.W.2d 242; Rider v. McElroy, 194 Ark. 1106, 110 S.W.2d 492. It has only been given consideration when it could be treated as a motion to dismiss for want of jurisdiction. Hoggard & Sons v. Russell Burial Assn., supra; Askew v. Murdock Acceptance Corporation, 225 Ark. 68, 279 S.W.2d 557.

Somewhere in the course of the proceedings, however, appellee resorted to a discovery deposition of appellant Jim Randall. Nothing in that deposition showed that the court did not have jurisdiction of the cause of action. We do not agree with appellee that it was proper to introduce proof on the question of a defect of parties on demurrer. Although appellee nowhere suggests that its pleadings should be considered as a general demurrer, evidence could not be offered in that case either. This leaves the motion for summary judgment as a basis of treatment of the motion which could result in a dismissal of the action. If so, its character as such was so well veiled that an adverse party might well be excused for not responding to it as such. Appellants suggest that possibility, but appellee does not so treat it.

Appellee, as a matter of fact, states in its brief that the trial court correctly construed its initial motion as the equivalent of a demurrer for defect of parties. It went on to submit that the court correctly allowed the motion to be amended so as to allow proof to be taken on the question regarding a defect of parties and properly dismissed the complaint on that basis. While we do not agree, we should affirm this order, if we could sustain it on any ground. Reamey v. Watt, 240 Ark. 893, 403 S.W.2d 102; Reeves v. Arkansas Louisiana Gas Co., 239 Ark. 646, 391 S.W.2d 13; Polk v. Stephens, 126 Ark. 159, 189 S.W. 837. This being so, and in view of the statement in the order of dismissal that the court had considered the deposition of Randall, we have considered the motion as one for summary judgment and find that we cannot sustain the order as the granting of such a motion.

In order for summary judgment to be justified, there must have been no genuine issue of material fact. All doubts about the question are resolved and all inferences drawn against the moving party. Moon v. Sperry & Hutchinson Co., 250 Ark. 453, 465 S.W.2d 330; Evers v. Guaranty Inv. Co., 244 Ark. 925, 428 S.W.2d 68. The evidence must be viewed in the light most favorable to the party against whom the judgment would go. Wilson v. McDaniel, 247 Ark. 1036, 449 S.W.2d 944. If fair-minded men might differ about the conclusion to be drawn or if inconsistent hypotheses might reasonably be drawn from the supporting testimony, a summary judgment should be denied. Mason v. Funderburk, 247 Ark. 521, 446 S.W.2d 543; Harvey v. Shaver, 247 Ark. 92, 444 S.W.2d 256. If there is any doubt whatever, a summary judgment should be denied. Bull v. Manning, 245 Ark. 552, 433 S.W.2d 145.

The deposition of Randall, the only possible support for a motion for summary judgment in this case, rather than clearly demonstrating the absence of...