Switzer v. Shelter Mut. Ins. Co.

• Decision Date: 26 May 2005
• Docket Number: No. 04-80.,04-80.
• Parties: Don J. SWITZER, Individually, And Don J. Switzer, Administrator of the Estate of Sandra Switzer, Deceased, Appellants/Cross-Appellees, v. SHELTER MUTUAL INSURANCE COMPANY, Appellee/Cross-Appellant.
• Court: Arkansas Supreme Court

208 S.W.3d 792

Don J. SWITZER, Individually, And Don J. Switzer, Administrator of the Estate of Sandra Switzer, Deceased, Appellants/Cross-Appellees, v. SHELTER MUTUAL INSURANCE COMPANY, Appellee/Cross-Appellant.

No. 04-80.

Supreme Court of Arkansas.

May 26, 2005.

COPYRIGHT MATERIAL OMITTED

David A. Hodges, Little Rock, and Mitch Cash, Marshall, for appellants.

Matthews, Sanders & Sayes, by: Doralee Idleman Chandler and Roy Gene Sanders, Little Rock, for appellee.

DONALD L. CORBIN, Justice.

Appellant Don J. Switzer, Individually, and as Administrator of the Estate of Sandra Switzer, Deceased, appeals the judgment of the Searcy County Circuit Court, denying his motion for a new trial or judgment notwithstanding the verdict ("JNOV") and granting Appellee Shelter Mutual Insurance Company's motion for a directed verdict. On appeal, Switzer argues that the trial court erred in denying his motion because there was no evidence to support the jury's finding of an agency relationship, and the verdict was impermissibly inconsistent. He also argues that the trial court erred in granting Shelter's motion for directed verdict on the claim of bad faith. Shelter has cross-appealed, arguing that the trial court erred in failing to grant a directed verdict in its favor on Switzer's remaining claims. This case was certified to us from the Arkansas Court of Appeals, as involving an issue requiring clarification and development of the law; hence, our jurisdiction is pursuant to Ark. Sup.Ct. R. 1-2(b)(5).

This matter stems from an automobile accident that occurred on September 5, 1998, on U.S. Highway 65 near Greenbrier, Arkansas. On that day, Bobby Switzer was driving his mother's vehicle, while Sandra Switzer was a passenger. The pair had been to Conway on a shopping trip and were returning home when Sandra asked her son to stop at Colt's Quick Stop, so that she could buy a birthday present for his girlfriend. The Switzer vehicle was traveling north on Highway 65 when Bobby attempted to make a left-hand turn into Colt's. He did not see a vehicle traveling southbound on Highway 65 until after he began to make the turn. The southbound vehicle was driven by Mark Kirkpatrick. Also in the car were Karla and John Kirkpatrick, Mark's wife and son. The vehicles collided, and the force of the impact threw Sandra from her vehicle. She later died from the injuries she sustained in the accident.

The accident was reported to the Switzers' insurance agent, T.P. Hubbard, an employee of Shelter. A loss report was forwarded to Shelter's claim office and was assigned to claims adjuster Amber Wooten. The Kirkpatricks obtained counsel and presented Shelter with a claim for damages in the amount of $169,000.00. After reviewing the loss report, as well as the accident report in which the investigating officer attributed the accident to the fault of Bobby Switzer, Wooten recommended paying the policy limits on the claim in exchange for releases protecting the Switzers from further claims. Wooten provided the Kirkpatricks with standard Shelter releases. The releases listed Don and Sandra Switzer, as well as Bobby Switzer. According to Shelter, Wooten did not notify or seek Switzer's permission to settle the Kirkpatrick claim.

On February 12, 1999, approximately three months after the releases were executed, Don Switzer, in his individual capacity, and as administrator of Sandra's estate, filed a wrongful-death lawsuit against Mark Kirkpatrick. Kirkpatrick deposed Switzer in connection with the suit. During his deposition, Switzer testified that he was aware that Shelter was going to pay the Kirkpatricks' claim. He testified that he learned of this information from his agent, Hubbard.

Following Switzer's deposition, Kirkpatrick filed a motion for summary judgment, arguing that the releases signed by the Kirkpatricks constituted a complete settlement of all disputes between the Switzers and the Kirkpatricks. Switzer filed a response, arguing that he did not have knowledge of, nor ever consented to, the settlement paid by Shelter. He claimed that his deposition testimony had been a mistake, because his agent did not tell him of the settlement until after it was completed. He also submitted affidavits from Hubbard and Wooten supporting his contention that he did not learn of the settlement until after it had been completed. Moreover, the affidavits stated that Switzer knew nothing of the settlements, nor did he have anything to do with the settlements. Nevertheless, the trial court granted Kirkpatrick's motion for summary judgment, finding that Switzer was aware of the settlement and failed to object to it. Switzer did not appeal this order.

Thereafter, on October 2, 2001, Switzer filed the present suit against Shelter, alleging that it negligently prepared the releases and failed to preserve his right to sue Kirkpatrick. His complaint alleged that Shelter was negligent and acted in bad faith. The case proceeded to trial. In order to determine whether Switzer could prevail in his negligence action against Shelter, it was necessary for the parties to try the merits of the underlying tort case. Thus, the jury heard evidence regarding the accident that occurred on September 5. At the close of Switzer's case, Shelter moved for a directed verdict on all claims. With regard to the claim of bad faith, Shelter argued that there was no evidence presented to establish the required elements of bad faith. The trial court agreed and directed a verdict in Shelter's favor on this claim. In so ruling, the trial court noted that the proof, even viewed in a light most favorable to Switzer, did not establish that Shelter was malicious or offensive in its handling of the claim.

Shelter also moved for a directed verdict on the negligence claim, arguing that Switzer's right to file suit against Kirkpatrick was not legally estopped by the releases and that Switzer's own actions of testifying during the deposition that he knew of the settlement and failing to appeal the order granting Kirkpatrick's motion for summary judgment prevented him from pursuing his claims. The trial court denied this motion, and the matter was submitted to the jury on interrogatories.

The jury subsequently found that Shelter had been negligent with regard to the September 5, 1998, accident and awarded damages in the amount of $100,000.00 to Switzer, in his individual capacity, to the estate in the amount of $1,000.00, and $50,000.00 to each of Switzer's sons. The jury also apportioned fault as sixty-seven percent to Bobby Switzer and thirty-three percent to Mark Kirkpatrick. The jury further found that Bobby was acting as Sandra's agent at the time of the accident, thus his negligence was imputed to her. As a result, the trial court entered judgment on behalf of Shelter, because Switzer would not have prevailed in an action against Kirkpatrick.

Following the trial, Switzer submitted a motion for new trial and JNOV on July 21, 2003. In this motion, Switzer argued that either a new trial was warranted or that he was entitled to JNOV because the jury's verdict that Bobby was acting as an agent for Sandra at the time of the accident was clearly contrary to the preponderance of the evidence. He also argued that the jury's verdict was impermissibly contradictory because the jury found that there was no joint enterprise but that there was an agency relationship. In support of his motion, Switzer argued that this court's decision in Yant v. Woods, 353 Ark. 786, 120 S.W.3d 574 (2003), also warranted entry of judgment on his behalf because this court indicated its displeasure with the theory of joint enterprise. He also asserted that a new trial was warranted on the basis that the trial court committed an error of law when it granted Shelter's motion for directed verdict on the claim of bad faith.

The trial court denied Switzer's motion for a new trial and JNOV in a letter order dated August 11, 2003. In that letter order, the trial court stated that Switzer was not "procedurally entitled to JNOV." There was no mention of the motion for new trial. Thereafter, Switzer filed a timely notice of appeal.

For his first point on appeal, Switzer argues that the trial court erred in denying his motion for a new trial or JNOV, because there was no evidence to support the jury's decision to impute Bobby's negligence to his mother Sandra, a passenger at the time of the accident. According to Switzer, the imputation doctrines of joint enterprise and agency are virtually indistinguishable, and the jury's verdict that there was no joint enterprise is inconsistent with its subsequent finding that an agency relationship existed between Bobby and Sandra. Switzer further argues that the evidence to support a finding of agency must show that Sandra exercised control, and because there was no such evidence, the trial court erred in denying his motions. Shelter counters that Switzer failed to preserve this argument for appellate review. Alternatively, Shelter argues that the trial court did not err in denying the motion because the jury's verdict was supported by ample evidence.

As a threshold issue, this court must determine whether Switzer has preserved his motion for a new trial and JNOV. Shelter argues that neither is preserved. At the outset, we note that it is unnecessary for us to analyze the issue of whether Switzer's motion for JNOV was preserved, because at oral argument before this court, counsel for Appellant conceded that he did not move for a directed verdict at trial and, therefore, admitted that his motion for JNOV is not preserved for appellate review.

We next turn to Switzer's motion for a new trial. A motion for new trial is governed by Ark. R. Civ. P. 59(a), which provides in relevant part:

A new trial may be granted to all or any of the parties and on all or part of the claim on the application of the party aggrieved, for any of the following grounds materially affecting the substantial...