*1 him and who have survived him shall be the owners of the same (asjoing tenants with right survivorship more than made (1) any by the payment banking if institution to such shall be a persons complete discharge institution as to the amount banking paid. added.) (Emphasis
These were two accounts where more than one person to receive the designated accounts and the statute clearly that where there is provides more than one person desig- nated, hold they tenants with joint right survivorship. It is true some instances the words “share and share alike” are to mean the interpreted estate would be held in common rather than jointly. But the in this case property question is two accounts and savings their nature is governed by the appropriate legislation.
Affirmed. AETNA CASUALTY AND SURETY COMPANY
v. BROADWAY ARMS CORPORATION 83-134
Supreme Court of Arkansas Opinion delivered December Opinion on [Substituted Denial of Rehearing February 1984.*] *Hays Hollingsworth, rehearing. grant JJ., would *3 S. Anderson by: ér Overton Kilpatrick, Anderson Clark, And, by: Eldredge E. ir William Friday, Michael Sutton, for appellant. H. Associates, by: L. Eubanks Gary Eubanks ir
Gary F. Hugh Spinks, appellee. Purtle, filed suit its I. Appellee Justice. John out arising the tort of bad faith
insurance carrier based upon for damages claim involving handling from a resulting jury’s (by interrogatories) fire. The verdict bad faith that the carrier had acted included finding sum of resulting (insured) damages appellee $175,000 $5,000,000 dam- compensatory punitive loss it is the trial court erred appeal 1) On that: ages. urged faith; court 2) to direct verdict on the issue of bad failing *4 in in erred allowing the the court instructing jury; 3) erred attorney for to awarded appellee testify; 4) damages the evidence; and not substantial supported were excessive in to a new trial. For the court erred 5) failing grant and below we reverse and remand. reasons stated and issued Casualty Surety Company (appellant) Aetna by Broadway a fire insurance on owned policy property The contained a rider Corporation policy Arms (appellee). in for during peak for a loss coverage 25%increase providing for loss The also included of coverage season. provisions $1,000 and to be to the to used clean up up premises business 22, 1981, fire the of On occurred on August in loss. case inventory destroyed and all insured’s premises shut being in the business insured’s damaged, resulting $30,000, down. Aetna advanced the sum of as appellee on few fire. A partial payment days after the loss,f dispute over the and matters ownership salvage arose deteriorated between the insurer and insured. The appellee obtained the services attorney Roger to handle Glasgow the claim. 10, 1981,
On November offered appellant appellee $63,225 sum all for settlement of claims under the policy. $45,000 This offer included ($30,000 for direct fire loss had $1,000 $17,225 been previously advanced), for and cleanup loss business. The offer was suit rejected appellee filed 4, on December 1981. had Glasgow originally agreed basis; appellee on an represent hourly however the fee was paid as billed fee schedule was agreed on March 1982. Subsequently, Glasgow associated Gary Eubanks to handle the case. The contract between attorneys in The two remains effect. Glasgow appellee agreed to split fee under the terms out in set agreement of March Although 1982. withdrew Glasgow attorney record he will get half of any fee collected this case. He continued to represent Broadway Arms in other suits brought them and was designated corporate representative for them during this cause and as such was allowed to sit at counsel table.
The matter was submitted to the jury on interroga- tories. The interrogatories included answers the effect 1) that: $100,000; had not coverage been increased to 2) variation; coverage should increase by 25% seasonal 3) $40,191 the loss of $17,225; earnings was 4) excess of faith; insurer acted bad and 5) appellee’s damages were $175,000 $5,000,000 assessed at compensatory punitive. first argument for reversal is that the court erred refusing direct verdict on the which pleadings charged appellant bad faith the first handling party loss under the insurance issued to the policy insured insurer. that the Appellant argues Trade Practices Act (Act of 1959), 66-3001, Ark. Stat. Ann. et seq. (Repl. 1980), §§ *5 and penalty and fees statute of Ark. Ann. Stat. 66-3238 §§ pre-empt area upon which the tort of bad faith is
133 Such inter- with this argument. founded. We do not agree of bad faith third claims would rule out party pretation effort to clean up is an Act Practices because the Trade fees of insurers and penalty undesirable conduct first claims. The penalty statute applies only party an insured has remedy fees statute is primary no when there is insurer who fails or refuses to claim pay for Act provides procedures Trade Practices bad faith. of the act. by to be utilized penalties provisions with the area of bad faith Neither of these remedies deals less it. much pre-empts is an
We
that bad faith
recognized
have previously
tort of bad
actionable
tort in Arkansas.
In
discussing
Co.,
647,
v. Time Ins.
faith in
Findley
Ark.
264
573 S.W.2d.
Mutual Ins.
earlier case Members
908
we
(1978),
cited
Blissett,
211,
Co. v.
Ark.
(1973),
254
terized ill Actual malice will or a of by spirit revenge. may be circum- inferred from and surrounding stances. Bad faith to first or third may party rise either give claims.
Three accusations bad faith made Aetna were in the action. present Appellee 1) pay refusal to alleged: limits policy under the fire failure to release the coverage; 2) insured; and threat the trans- 3) report the salvage action to the Internal Revenue Service. Less than days after the loss the insurer offered to settle the matter $63,225, the sum lump which was addition to the $30,000 advanced after the The immediately fire. offer was rejected by the insured. Suit was filed on December 1981. The jury found was due appellee the additional sum of $58,941 than provisions, under the which was more policy the offer found jury the insurer. the had appellant committed acts of bad faith and awarded in the damages $175,000 sums of $5,000,000 compensatory punitive. So far as the salvage concerned it remained the possession and control of appellee at all times. Testimony indicates salvage was discussed in September following fire each party apparently thought the other claimed the right There is salvage. about nothing of the handling dishonest, salvage claim which appears malicious op- or pressive as matter of law. The threat about is the IRS final act bad faith alleged tes- complaint. The timony on this subject indicates a representative of the insurer met with the insured’s first Glas- attorney, Roger gow, during discussion indicated that the insurer might be called $75,000 on the IRS to explain why it paid on a loss when the books of the insured revealed an inventory $23,000. value of It is probable claim agent’s statement intended to put some type pressure upon its insured to settle the claim. issue, This matter being fact it will not be decided at this time because we are for a new trial remanding and the matter may or may not be presented the same manner at the next trial. argument
The second for reversal the court erred the Trade Practices Act. A instructing jury regarding this Stat. Ann. includes (9)] act 66-3005 portion [Ark. § which Practices Settlement Unfair Claim headed section in part: states as to frequency such
Committing performing fol- business practice, a general indicate lowing: *7 . . . facts pertinent
(a) Misrepresenting reasonably and act acknowledge to Failing (b) . . . promptly stand- reasonable adopt implement to
(c) Failing . . . of claims investigation ards for the prompt conducting without to claims pay (d) Refusing . . . investigation reasonable . . . coverage or deny to affirm
(e) Failing faith to prompt, effectuate good (f) attempting Not . . . of claims fair and settlements equitable fee has us agreement much given concern. The agreement was entered into to the time prior had idea he attorney would be a witness. His fee was agreement reduced cent he to when decided fifty per become a witness and employ other counsel to the case. try We are of the to opinion due circumstances special fee, of this he case and also may testify share provided he completely withdraws from in the case participation other than as a witness. Unless completely he severs his attorney-client in this case he will be relationship not to allowed on retrial. If he testify testifies as an witness expert he may that Aetna acted in bad To testify faith. do so would not touch the ultimate issue but would in effect tell the jury how to decide the case. v. Gramling 346, Jennings, Ark. (1981). 463 274 625 S.W.2d where in a case testifying attorney of an The question been considered has in the outcome interest he has an case In the times. many this court disapproved 14 Gibson, Ark. 584 v. Adm’r. 266 Boling, trial and during a witness was as called attorney an (1979), it holding trial. In his continued partner of the case merits testify on the to attorneys improper trial, an when associate continued with the we stated an attorney must decide whether he should serve as an attorney or as a witness. The same issue was addressed in Enzor v. State, 545, 559 S.W.2d Ark. (1977), wherein we stated: must this to again opportunity
We take reiterate our in an strongly of an disapproval attorney testifying action in which an An attorney he is advocate. who testify an action should withdraw from litiga- hand, tion. On the other if an serve attorney going client, an he advocate for his should refrain from in the action. testifying Rushton v.
In testimony an discussing attorney National Bank First Magnolia, Ark. S. 426 W.2d we (1968), said thus becomes both attorney testifying witness, “advocate and of which requires lawyer one and the other of which him to be partisan requires *8 factual.” We held that the testimony such robbed of fairness which should characterize appearance court every Although Rushton because the at hearing. reversed trial, testified to vital torney issues we recognized it is to always fatal for an when attorney testify we stated: “. . . is within the it discretion of the trial court to permit to in a case even the rule lawyer testify though has been However, invoked.” this statement was made regarding who were not lawyers trying the case related to exclusion under the rule. have adopted
We Bar American Association Code of Professional Responsibility Rules Disciplinary the. contained therein. DR (A) 5-102 states:
If, after undertaking employment contemplated or pending litigation, a lawyer learns or it is obvious that or he lawyer his firm to be ought called as a witness client, on behalf of his he shall withdraw from conduct of the firm, trial and his if any, shall not continue representation in the trial . . . states: (D)
DR 5-105 or to employment to decline lawyer required If under a Disciplinary withdraw from employment associate, Rule, lawyer no or or other any partner, firm, or may accept with him or his continue affiliated employment. such states: (C)
DR 7-109 shall not offer to lawyer pay, A pay, acquiesce to a witness contingent payment compensation of his or the outcome of testimony content . . case . Evidence,
Arkansas Rules of Rule states: to Every person be witness competent except otherwise in these rules. provided has us much agreement given fee The time into prior was entered agreement concern. he would be a witness. His fee idea attorney had he cent when decided per was reduced by fifty agreement other counsel to the case. try. a witness and employ become special due to the circumstances opinion areWe fee, share in the testify provided he and also may this case in the case participation withdraws from completely he he severs his completely than as a witness. Unless other this case he will not attorney-client relationship testifies as an witness expert on retrial. If he testify allowed *9 in bad faith. To that acted do so testify not Aetna may he issue but would in touch not would ultimate how to decide the case. Gram v. ling tell the jury effect 346, 463 (1981). Ark. S.W.2d Jennings, 274 625 is that the verdict excessive argued by appellant It The the evidence. evidence will by was not supported Therefore, we will not be different on retrial. no doubt the evidence of bad On retrial faith it in this opinion. discuss misconduct to show affirmative of a be sufficient must dishonest, malicious, or oppressive. is which nature 138 of matter trial granting is within the sound new
discretion of the trial court. Dickerson Construction Co. v. Dozier, 266 Ark. 36 (1979), S.W.2d and General Tate, 347, 516 v. Motors Ark. Corp. (1974). In case has present appellant tried couch the argument the verdict in impeaching a manner jury approved by Evidence, the Arkansas Rules However, 606(b). Uniform the so called extraneous prejudicial information went only to the state of mind aof juror while Such deliberating. clearly matters are prohibited by Rule 606 (b) which states in part: a j may
. .. uror not testify any as to matter or statement occurring during course of the jury’s deliberations toor the effect of his or anything upon juror’s other mind or emotions as . . him . influencing We have tried to make it clear in prior decisions that it is for a improper lawyer to try to impeach a jury verdict by affidavits obtained from members the jury panel. Martin Blackmon, v. Ark. (1982). S.W.2d 435 The trial court did not err in refusing to set aside the verdict and grant new because of of jurors. misconduct above,
For reasons set out this is case reversed and remanded.
Adkisson, Hays, concur. J., C.J. in J., part Hickman, concurs and dissents part. J., Hollingsworth, participating. Justice, part, dissent- Hickman, concurring
Darrell We are ing part. this case that recognizing there exists a action his cause of insured insurance company faith or for bad conduct. Such a cause outrageous of action is compensatory punitive damages, for both but — is on the because if punitive aspect emphasis the insurance it company outrageous, ought The majority opinion does not refer to the punished. new tort as but as one out of bad outrage, faith. arising tort was first generally agreed
It is this recognized period undergoing California refinement. trend to one following states are degree Other
159 Allen, another. Insurance Bad The Need Faith Law: for Intervention, 13Pac. Benton and Legislative (1982); 833 L.J. The Tort Bad at The Johnson, Faith: A Look Perspective L. Liability, 8 Cum. Rev. Expanding Insurer’s (1977). 241 Co., 647, 573 In the case of v. Time Ins. Ark. Findley 264 908 we left unanswered the (1978), question S.W.2d tort, whether we would down this new but laid recognize tort, the elements if we did choose to quite plainly Hixson, 370, it. In Givens v. Ark. recognize 631 S.W.2d we (1982), defined our of the tort sharply understanding We said:. outrage. not outrage tort developing The new and still It clear-cut requires proof. ‘Liability established. easily conduct has where the been found only has italics] [our character, so extreme and been so outrageous decency, bounds of all beyond possible as to degree, go atrocious, utterly intolerable to be as regarded Torts (2d), Restatement of community.’ in a civilized § Counce, Ark. d M.B.M. Co. v. (1965); Comment It is for the court (1980). determine, instance, the conduct first whether as as to outrageous be so may reasonably regarded Restatement, id., H. Comment recovery. permit in line with the is in majority opinion every respect an affirmative case. The tortean be based Findley dishonest, malicious, or con- oppressive intentional act of are strong Those liability. duct to avoid its by company insured, words, they burden on impose heavy should, for remedy Arkansas has an adequate because well refuses or through that either company an insured against Ark. See obligations. will not honor its contract nonfeasance reasons et While (Repl. 1980). good Ann. 66-3001 seq. Stat. § exist, the tort should this cause of action recognizing fees, or a attorney’s new to collect merely legal tool it cannot industry so the insurance intimidating means false, or even disputed resist reasonably suspicious fairly claims. outrage, tort as the new is the reason I characterize
That should kind of conduct it better describes because *11 140 be, in
result punishment. Bad faith can in my judgment, by this is interpreted jurors merely tort negligence, — malicious, not one of it is one of intentional negligence dishonest and conduct. oppressive
The in does not a that evidence this case justify finding Aetna of such conduct. guilty Negligence, poor conduct, only The judgment, probably; outrageous hardly. real evidence that could a presented support the appellee the finding intentional conduct was reference oppressive the be to to statement the that he called on by adjuster might to the Revenue Aetna would explain why Internal Service $23,000 $75,000 inventory when there was on the pay That The way. books. statement could taken either had from the records of adjuster beginning the questioned He were deficient. had the appellee admittedly which to fire a substantial for a loss and responsibility amount pay had how every right actually to much loss there question Furthermore, was. this was a between a lawyer conversation hired to maximum benefits under appellee get and an hired to more see that no was policy adjuster paid than was owed under the said it his policy. attorney was it a threat. That “impression” was is not “clear-cut” proof; test, to enough, alone that is not standing support resulted in a conduct which finding outrageous a $5,000,000 damages. judgment punitive that Lawyer on our part is a
It judgment question under the testify been allowed to should not have Glasgow case, We not as it below. do of the was tried circumstances his on part. unethical that there was any find he the case when withdraw from did immediately Glasgow time he saw be a witness. At that he have to might saw He already for outrage. a suit Aetna might against there exist it appellee, arrangement fee had to pursue hired lawyers new were changed when was trial, but table throughout He did sit at the counsel suit. Broadway corporation, as a representative apparently he Arms, appear easily It could therein lies the problem. testifying lawyers Our rule counsel the case. as attorneys to participate which continue they in a case — v. Linkway Bishop not allow it. we will become fixed has Inc., Stores, 124, 655 supplemental opinion, Ark. S.W.2d
140-A Gibson, Ark. v. (1983); Boling Certainly ours. (1979). relatively That is a recent position retrial, participate cannot testify just can on he lawyer suit, we do not The reason any way in the nor to. appear counsel in a which are tetify they allow case lawyers as an officer lawyer because of the role special plays play not be allowed court and advocate. He should under testify and then oath jury role front Gibson, v. See Boling that will aid his case. something supra.
I would the cause. reverse the and dismiss judgment Adkisson, Richard B. Mr. concurring. Chief Justice, Roger Glasgow, attorney, entered into a contingent fee in arrangement Broadway Arms to an regard insurance contract claim Aetna. settlement against During negoti- ations, it to him that tort appeared a claim Aetna had arisen as result of Aetna’s in bad faith the of terms fulfilling their insurance contract. At that time Glasgow, realizing claim, he would abe witness in to the tort regard case, partially withdrew from the and another attorney, Eubanks, Gary was hired by Broadway Arms to prosecute however, the tort claim. Glasgow, continued to participate the through fee contingent not in arrangement, the claim, contract but also in to the regard tort claim in which he intended to testify. Glasgow’s full and with- complete drawal from the tort claim was required the American Bar Association of Code Professional Responsibility the Disciplinary Rules which this court has adopted. DR 5-102 states: (A)
If, after in or undertaking employment contemplated pending learns or it is obvious that litigation, lawyer in his firm lawyer or ought he be called as a witness client, on behalf of his he shall withdraw from the firm, the and his if shall not trial any, continue in . . representation the . court,
This in its failed to opinion, distinguish between the two causes of in could stating Glasgow action fee participate through contingent plan. damages the are distinguishable. should be allowed to Glasgow partici-
140-B the claim initial fee pursuant the contract pate he completely deprived otherwise would arrangement; the fee unilaterally agreed his fee he could not alter since However, fees participate he should arrangement. witness. since he was to be a from tort claim resulting Also, Mr. from Glasgow prohibited sharing contingent yet fee the tort claim for arrangement regarding another reason. The American Bar Association Code Responsibility Professional provides: DR 7-109(c):
A shall not pay, pay, acquiesce offer lawyer to witness payment contingent compensation content of his or the outcome of upon testimony . case . . contingent aof witness the payment prohibits
This section Glasgow participates If Mr. of a case. the outcome upon claim, his tort regarding fee arrangement be contingent necessarily will compensation case, the Code prohibited clearly a practice outcome Responsibility. of Professional *13 mis- Hays, some With concurring. Justice,
Steele the issue of on opinion I our original concurred givings, be permitted should attorney Roger Glasgow whether retrial, still retain of the on appellee on behalf testify I the trial. of on the outcome fee contingent substantial since that thought on authority point no clear found that fee arrangement, be informed of would jury that a mistake I believe the obstacle. would cure rehearing. be corrected on should I to this view: Mr. on Glasgow may testify have come himself retrial on condition that he disassociate entirely fee any hourly from case or interest the outcome. Such at as he had earned the time he withdrew and associated is, course, him, due but it is due other counsel irrespective and its result. I have definitive to anchor nothing to, it this but if DR Canons makes position 7-109 on the lay paid contingent for witness be improper outcome, can it for a witness to be acceptable lawyer how that, not pro- if lawyer Beyond on that basis? paid actually of who associated a case fessionally regardless it, of any why paid contingent percentage tries is he being fee arrangement fact of a recovery? very case. that he is still associated suggests would I have no concern that Roger Glasgow it, it is truth as he sees I think strictly adhere to the simply well-intentioned, witness, however impossible events, to testify facts and retain so as weigh impressions in the they when have a stake objectivity heavy outcome. The law makes for the exception litigant, course, but extended to exception should not be witnesses who are not parties. COMPANY
FARM MUTUAL INSURANCE BUREAU ARKANSAS, OF v. INC. SOUTHALL James Honorable Tom F. DIGBY 83-143 661 S.W.2d Supreme Court Arkansas delivered December Opinion