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

• Decision Date: 26 June 1996
• Docket Number: No. CA,CA
• Citation: 924 S.W.2d 828,54 Ark.App. 79
• Parties: SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY, Appellant, v. Calvin PETTIE, Appellee. 95-324.
• Court: Arkansas Court of Appeals

Page 828

924 S.W.2d 828

54 Ark.App. 79

SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY, Appellant, v. Calvin PETTIE, Appellee.

No. CA 95-324.

Court of Appeals of Arkansas Division III.

June 26, 1996.

J. Shane Baker, Marianna, for Appellant.

B. Michael Easley, Forrest City, for Appellee.

MAYFIELD, Judge.

This opinion is substituted for one issued on June 12, 1996, which has been withdrawn. The case is an appeal from a judgment against the appellant holding it liable under the underinsured motorist coverage (UIM) provisions of an insurance policy issued by it. The case was ultimately submitted to the court, without a jury; therefore, any factual determinations are subject to review under the clearly erroneous standard of Rule 52(a) of the Arkansas Rules of Civil Procedure.

In December 1989, appellee, a truck driver, was injured while riding as a passenger in his employer's truck when it ran off the road and overturned in a ravine. At the time of the accident, the truck was being driven by appellee's co-employee, Ronnie McClellan, and appellee was sleeping in the passenger seat. Appellee's injuries occurred during and within the course and scope of his employment. All of appellee's medical expenses were paid by his employer's workers' compensation carrier; however, it was stipulated that appellee was not fully compensated for his injuries by his workers' compensation benefits and that his remaining damages were in excess of $25,000.00.

At the time of the accident, appellee was insured under a policy appellant had issued to appellee's wife that contained a provision for $25,000.00 in UIM coverage. This provision provided:

In consideration of the premium charged, we will pay damages for bodily injury which a covered person is legally entitled to recover from the owner or operator of an underinsured auto....

....

The Underinsured Motorist coverage does not apply to:

....

4. any person while occupying or being struck by an auto, owned by or furnished for the regular use of a covered person, that is not an insured auto under this endorsement....

Appellee made claim for the $25,000.00 UIM coverage, alleging that the workers' compensation benefits he received from his employer did not compensate him for his pain, suffering, and loss of wages.

Appellant denied appellee's claim, and in September 1993, appellee filed suit. Appellant answered, denying that appellee was entitled to UIM benefits and contending that appellee's workers' compensation was appellee's exclusive remedy. Appellant also claimed that the truck appellee was occupying in the accident was not an "underinsured auto" as defined by the policy.

Subsequently, appellant made a motion for summary judgment, alleging that, under the policy provisions, appellee was not "legally entitled to recover" from either the owner of the vehicle or the operator of the vehicle and that coverage was expressly excluded under the "regular use" exclusion of the UIM endorsement. Appellee denied the motion should be granted and alleged that the "regular use" exclusion was ambiguous and presented a question of fact. The motion was denied and the parties filed a joint motion requesting the court to take the case under consideration and render a final decision based upon the stipulations, briefs, and other evidence before it.

Judgment was subsequently entered by the trial court for the appellee in the amount of $25,000, plus twelve percent penalty and attorney's fee. The trial court: (1) rejected appellant's argument that appellee was not legally entitled to recover against the owner and operator of the vehicle, and rejected appellant's conclusion that appellee had no UIM claim under the policy; (2) rejected appellant's argument that appellee's claim was barred by the statute of limitations; (3) found the exclusion in appellant's policy relating to an "auto owned by or furnished for the regular use of" a covered person was ambiguous and did not preclude coverage under the fact situation; and (4) found that appellee's workers' compensation benefits were sufficient to trigger his rights to recovery under the UIM provision of the policy issued by appellant.

I.

Appellant first argues that the trial court erred as a matter of law in awarding appellee UIM benefits because the exclusive remedy doctrine of workers' compensation law prevents appellee from being "legally entitled to recover" from the owner of the vehicle, and the joint-enterprise doctrine prevents appellee from being "legally entitled to recover" from the operator.

Appellant contends that Ark.Code Ann. § 23-89-209 (Supp.1995), the Underinsured Motorist Statute, creates a condition precedent that requires the insured to prove that he is "legally entitled to recover" from the owner or operator of another vehicle before UIM benefits can be collected. Moreover, the policy language in the case at bar also uses the phrase "legally entitled to recover." Therefore, the appellant contends that both the statute and the policy require the injured party to prove that the operator or owner of the underinsured vehicle was negligent and underinsured, and also that he has a legally enforceable claim against the owner or operator.

But the appellant's reference to the requirement that UIM coverage only applies when the injured party proves that the operator or owner of the underinsured vehicle was negligent and the injured party is "legally entitled to recover" does not mean that the appellant is contesting in this case the issue of negligence on the part of the driver of the vehicle in which the appellee was riding at the time the appellee was injured. Nowhere in the briefs filed by the appellant is there any suggestion that the driver of the vehicle, which ran off the road while the appellee was sleeping, was not negligent or that his negligence was not the proximate cause of the appellee's injuries.

What the appellant does contend in the instant case, is that Ark.Code Ann. § 11-9-105(a) (Repl.1996), of the workers' compensation law, bars appellee from being "legally entitled to recover" against the owner of the vehicle because that owner is the appellee's employer, and this section provides that "[t]he rights and remedies granted to an employee subject to the provisions of this chapter, on account of injury or death, shall be exclusive of all other rights and remedies of the employee...." Also, as to the driver of the vehicle, the appellant contends that workers' compensation is exclusive because Rea v. Fletcher, 39 Ark.App. 9, 832 S.W.2d 513 (1992), holds that supervisory as well as non-supervisory employees are immune from suit for negligence in failing to provide a safe place to work. And in addition, according to the appellant, the appellee is barred from recovering from the operator of the vehicle under the "joint-enterprise doctrine."

Therefore, it is the appellant's position that the appellee cannot show he has a "legally enforceable claim" and cannot be considered "legally entitled to recover." Although the appellant relies upon cases from other jurisdictions, we think the Arkansas Supreme Court has decided cases which control the instant case.

In Hettel v. Rye, 251 Ark. 868, 475 S.W.2d 536 (1972), our supreme court held that the policy requirement that an insured must be legally entitled to recover from an uninsured motorist is intended only to require a showing of fault on the part of the uninsured motorist. The court stated:

The uninsured motorist clause is intended not to afford coverage to the uninsured motorist but rather to provide protection to the policyholder against the perils of injury by such a motorist. It is generally held that the policy requirement that the insured "be legally entitled to recover" from the uninsured motorist is intended only to require a showing of fault on the part of the latter. Upon that reasoning, in cases directly in point here, it has been held that the policyholder may recover against the insurer even though the statute of limitations has run in favor of the uninsured motorist, or even though the plaintiff has dismissed his suit against the uninsured motorist with prejudice.

251 Ark. at 869-70, 475 S.W.2d at 537-538 (citations omitted).

In Travelers Insurance Company v. National Farmers Union Property and Casualty Co., 252 Ark. 624, 480 S.W.2d 585 (1972), our supreme court held that a provision of uninsured motorist coverage was invalid which provided that any amount payable under that coverage because of bodily injury would be reduced by the amount paid, and the present value of all amounts payable, on account of such injury under any workmen's compensation law. The court recognized that there was a division of authority on the question of the validity of such provisions, 252 Ark. at 629-30, 480 S.W.2d at 590, but the court concluded:

The uninsured motorist legislation was passed long after adoption of the Workmen's Compensation Act. When we consider the basic purposes of the latter act, our belief that the legislature did not intend that the Uninsured Motorist Act be the means of discrimination against working people protected under the workmen's compensation laws is strengthened.... The right claimed by the [company issuing the policy providing for uninsured motorist coverage] would simply provide it with a windfall in the case of one covered by the workmen's compensation laws. The purpose of the Uninsured Motorist Act was to protect the insured, not the insurer.

252 Ark. at 631-32, 480 S.W.2d at 591.

In Gullett v. Brown, 307 Ark. 385, 820 S.W.2d 457 (1991), it was held that workers' compensation benefits were the exclusive remedy of an employee injured in the course of his employment by an uninsured motorist where the uninsured motorist coverage was provided by the employer's self-insurance program. But, the court distinguished Travelers, supra, because in that case the uninsured motorist coverage was provided by the employee's own insurance. Likewise,...