Helms v. Southern Farm Bureau Cas. Ins. Co.

• Decision Date: 27 February 1984
• Docket Number: No. 83-256,83-256
• Citation: 281 Ark. 450,664 S.W.2d 870
• Parties: , 16 Ed. Law Rep. 675 Barbara Sue HELMS et al., Appellants, v. SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY, Appellee.
• Court: Arkansas Supreme Court

Page 870

664 S.W.2d 870

281 Ark. 450, 16 Ed. Law Rep. 675

Barbara Sue HELMS et al., Appellants, v. SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY, Appellee.

No. 83-256.

Supreme Court of Arkansas.

Feb. 27, 1984.

Bill W. Bristow and Mooney & Boone by Joe C. Boone, Jonesboro, for appellant.

F. David Rees, Jonesboro, for Baker and Summit.

Barrett, Wheatley, Smith & Deacon, Jonesboro, for Farm Bureau.

McDaniel, Gott & Wells, P.A., Jonesboro, for Minick.

HICKMAN, Justice.

This case arises from the tragic school bus accident outside Uno, Arkansas, Poinsett County, which killed five faculty members, four students, the driver, and injured the remaining 29 passengers. It is undisputed that at the time of the accident the teachers and the driver were employees of the Jonesboro School District and acting within the scope of their employment. The school district's insurance company, Southern Farm Bureau Casualty Insurance, interpleaded $500,000, which was the proceeds of the district's policy. One of the injured teachers and representatives of two teachers, who had been killed, claimed part of the proceeds.

Several of the students filed a motion for a declaratory judgment arguing that the teachers were not entitled to any part of the policy proceeds. The district court agreed with the students and found that the teachers' remedy was either under worker's compensation coverage or a claim against the driver's personal estate; but that the driver was not an insured under the policy as against claims by the teachers or their representatives. On appeal the teachers argue that it is against public policy to foreclose their right to the insurance policy proceeds under Act 165 of 1969. That act grants political subdivisions, including school districts, tort immunity, but requires them to carry liability insurance on their motor vehicles. The appellants argue that either the driver of the bus should be considered an "insured" under the school district's policy, or that they should be allowed to sue the school district itself.

Arkansas has granted school districts immunity from tort liability. Ark.Stat.Ann. § 12-2901 (Repl.1979). We have said that that statute is a clear and unambiguous statement of public policy. Sullivan v. Pulaski County, 247 Ark. 259, 445 S.W.2d 94 (1969). It is also required that school districts carry liability insurance on motor vehicles in the minimum amounts prescribed by the Motor Vehicle Safety Responsibility Act. Ark.Stat.Ann. § 12-2903 (Repl.1979). See also Sturdivant v. City of Farmington, 255 Ark. 415, 500 S.W.2d 769 (1973); Ark.Stat.Ann. § 75-1466 (Supp.1983).

Because of the above requirements, the Jonesboro School District was obligated to be insured on its motor vehicles for at least $25,000 per person and $50,000 per occurrence. Jonesboro School District insured itself far in excess of the limits and obtained a policy for $300,000/$500,000. The policy has a standard section which provides:

The insurance with respect to any person or organization other than the named insured does not apply ... to any employee while engaged in the business of his employer, with respect to bodily injury to another employee of the same employer injured in the course of such employment ....

That...