379 S.W.3d 734
Ark. Ct. App.2010Background
- Policy period 11/10/2003–11/10/2004; retroactive date 11/10/1994; Lloyd's issued a 'claims-made' policy to Dardanelle and Russellville Railroad, Inc.
- In October 2001, Charles Mills incurred a back injury while employed by D&R; Mills sought medical benefits under employer’s plan.
- Mills filed a FELA action against D&R on 01/02/2004; D&R notified Lloyd’s via Railway Claims Services on 01/09/2004.
- Lloyd’s denied coverage on 11/10/2004, finding Mills’s claim was an occupational claim recorded before the policy period.
- D&R sued in Pope County (02/10/2009) seeking defense and coverage; Lloyd’s counterclaimed for rescission and noncoverage.
- Summary judgment granted to Lloyd’s by circuit court; on appeal, court reversed and remanded for factual issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether notice timing triggers coverage under a claims-made policy | Pittman argues notice of a potential claim is not a claim. | Lloyd's contends notice is timely when recorded, precluding coverage here. | Reversed; factual questions remain on notice timing. |
| Whether Mills’s injury fell within 2(e) notice exceptions (serious loss, long disability) | D&R contends Mills did not reach 2(e) thresholds; no obligation to notify. | Lloyd's maintains Mills’s injury triggered 2(e) notice duties. | Not resolved; remand needed to assess applicability of 2(e). |
| Whether the policy language is unambiguous and governs the duty to defend | Insured entitled to liberal construction; coverage if any possibility arises. | Policy language controls; notice provisions define coverage boundaries. | Court discusses standard of review and liberal construction; reverses summary judgment. |
Key Cases Cited
- Ison v. Southern Farm Bureau Casualty Co., 93 Ark.App. 502 (Ark. App. 2006) (duty to defend arises where a possibility of coverage exists)
- Campbell & Co. v. Utica Mutual Insurance Co., 36 Ark.App. 143, 820 S.W.2d 284 (Ark. App. 1991) (notice in claims-made policies is a condition precedent to coverage)