677 F.3d 801
8th Cir.2012Background
- Graham sustained permanent vision loss from a July 5, 2005 explosion of Easy-Off oven cleaner while insured under Hartford’s accidental death and dismemberment policy.
- The policy provides life insurance and dismemberment benefits, including loss of sight.
- Proof of loss was required within 90 days; the policy forbids legal action after three years following the date proof of loss is due.
- Graham submitted a timely proof of loss, Hartford denied the claim, and Graham appealed; the claim remained unresolved.
- On July 2, 2010, Graham filed a breach of contract suit in federal court, within Arkansas’s five-year contract statute but outside the policy’s three-year action window.
- The district court granted Hartford judgment on the pleadings, applying a shorter contractual period; Graham appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 23-79-202(b) voids policy shortening. | Graham: statute voids shorter periods in policies. | Hartford: policy-specified period may be reasonable. | Statute voids shorter periods; policy shortening invalid. |
| Whether five-year statute governs actions on life insurance policies. | Graham: five-year limit applies under Ark. law. | Hartford: policy-imposed period controls if reasonable. | Five-year period applies; policy cannot shorten below five years. |
| What is the meaning of 'period prescribed by law' in Ark. Code Ann. § 23-79-202(a)-(b)? | Graham: it refers to the five-year statute, not judicially created rules. | Hartford: it can incorporate a shorter reasonable period. | Period prescribed by law is the full five years; policy shortening is void. |
Key Cases Cited
- Ferguson v. Order of United Commercial Travelers of Am., 307 Ark. 452, 821 S.W.2d 30 (1991) (parties may contract for shorter periods if not unreasonably short)
- Hawkins v. Heritage Life Ins. Co., 63 Ark. App. 67, 973 S.W.2d 823 (1998) (lesser filing period allowed if reasonable)
- Wilkins v. Hartford Life & Accident Ins. Co., 299 F.3d 945 (2002) (statutory maximum governs; contract may not shorten beyond statute)
- Butler (Pacific Mutual Life Ins. Co. v. Butler), 190 Ark. 282, 78 S.W.2d 813 (1935) (period fixed by statute of limitation controls; policy cannot shorten)
- Warrell (Mutual Benefit Health & Accident Ass'n v. Warrell), 96 F.2d 447 (1938) (insurer cannot shorten time contrary to statutory period)
- Stoltz (First Pyramid Life Ins. Co. of Am. v. Stoltz), 311 Ark. 313, 843 S.W.2d 842 (1992) (life insurance statute of limitations is five years)