{ "id": 1884225, "name": "Dalton DAVES and Sentry Indemnity Company v. HARTFORD ACCIDENT AND INDEMNITY COMPANY", "name_abbreviation": "Daves v. Hartford Accident & Indemnity Co.", "decision_date": "1990-05-14", "docket_number": "89-347", "first_page": "242", "last_page": "251", "citations": [ { "type": "official", "cite": "302 Ark. 242" }, { "type": "parallel", "cite": "788 S.W.2d 733" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "Ark. Code Ann. \u00a7 23-89-101", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 1987, "opinion_index": 0 }, { "cite": "246 Ark. 1021", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1604016 ], "weight": 2, "year": 1969, "opinion_index": 0, "case_paths": [ "/ark/246/1021-01" ] }, { "cite": "296 P.2d 801", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1956, "opinion_index": 0 }, { "cite": "46 Cal. 2d 423", "category": "reporters:state", "reporter": "Cal. 2d", "case_ids": [ 4370318 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/cal-2d/46/0423-01" ] }, { "cite": "5 Ark. App. 42", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6137183 ], "weight": 2, "year": 1982, "opinion_index": 0, "case_paths": [ "/ark-app/5/0042-01" ] }, { "cite": "288 Ark. 399", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8721222 ], "weight": 2, "year": 1986, "opinion_index": 0, "case_paths": [ "/ark/288/0399-01" ] }, { "cite": "266 Ark. 432", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8719372 ], "weight": 2, "year": 1979, "opinion_index": 0, "case_paths": [ "/ark/266/0432-01" ] }, { "cite": "256 Ark. 1047", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8726434 ], "weight": 2, "year": 1974, "opinion_index": 0, "case_paths": [ "/ark/256/1047-01" ] }, { "cite": "252 Ark. 737", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1630024 ], "weight": 3, "year": 1972, "opinion_index": 0, "case_paths": [ "/ark/252/0737-01" ] }, { "cite": "246 Ark. 995", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1604103 ], "weight": 2, "year": 1969, "opinion_index": 0, "case_paths": [ "/ark/246/0995-01" ] }, { "cite": "647 S.W.2d 462", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 1748198 ], "year": 1983, "opinion_index": 0, "case_paths": [ "/ark/278/0585-01" ] }, { "cite": "275 Ark. 585", "category": "reporters:state", "reporter": "Ark.", "year": 1983, "opinion_index": 0 }, { "cite": "294 Ark. 25", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1895704 ], "weight": 2, "year": 1987, "opinion_index": 0, "case_paths": [ "/ark/294/0025-01" ] }, { "cite": "260 Ark. 3", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1616752 ], "weight": 2, "year": 1976, "opinion_index": 0, "case_paths": [ "/ark/260/0003-01" ] }, { "cite": "211 Ark. 123", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1473201 ], "weight": 3, "year": 1947, "opinion_index": 0, "case_paths": [ "/ark/211/0123-01" ] }, { "cite": "Ark. Code Ann. \u00a7 23-89-202", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 1987, "opinion_index": 0 } ], "analysis": { "cardinality": 679, "char_count": 15597, "ocr_confidence": 0.882, "pagerank": { "raw": 2.96889758569047e-07, "percentile": 0.8501545843020192 }, "sha256": "064afa485f61ece248bb85d1ea174b6474319c7d820a549dc8a6a8d355e43968", "simhash": "1:ff6708c80d0cf07e", "word_count": 2527 }, "last_updated": "2023-07-14T14:34:09.444418+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Dalton DAVES and Sentry Indemnity Company v. HARTFORD ACCIDENT AND INDEMNITY COMPANY" ], "opinions": [ { "text": "Jack Holt, Jr., Chief Justice.\nThis case involves enforcement of a statutory lien by the appellee, Hartford Accident and Indemnity Company (Hartford), against appellants, Dalton Daves, Hartford\u2019s insured, and Sentry Indemnity Company (Sentry), to collect monies paid by Hartford to Daves under an automobile liability policy. The jury found for Hartford, and the trial court entered judgment accordingly. We affirm as modified.\nOn June 8, 1986, Daves was injured in an automobile collision with Kathryn Breyel. Daves was insured by Hartford under a liability policy that included medical payment and wage loss coverage as required by Ark. Code Ann. \u00a7 23-89-202 (1987). Hartford paid Daves $9,060 under these coverages.\nAfter demand by Hartford, Sentry (Breyel\u2019s insurer) paid Daves\u2019 collision damage. However, Sentry did not reimburse Hartford for the medical and wage loss payment. In May of 1987, Daves filed a personal injury suit against Breyel. On October 16, 1987, Daves settled with Breyel and Sentry, by which Daves received $25,000. The trial court dismissed the suit with prejudice. As part of the settlement, Daves agreed to indemnify and hold Sentry harmless for all claims that \u201cHartford may make against Sentry by virtue of the medical PIP [personal injury protection] and subrogation lien that Hartford is making in this case\u201d in exchange for Sentry\u2019s not placing Hartford\u2019s name on the settlement check.\nPrior to the settlement, Hartford notified Sentry on a number of occasions of its subrogation claim for reimbursement for the amount it paid for Daves\u2019 medical bills and lost wages. Hartford first learned of the lawsuit and settlement on December 9, 1987, when Sentry wrote Hartford a letter advising Hartford that Sentry would not \u201chonor your subrogation claim in as much as your insured\u2019s attorney agreed to waive all subrogation rights . ...\u201d On December 28,1987, Hartford notified Daves concerning its claim, but Daves refused to pay.\nOn March 2, 1988, Hartford filed suit against Daves and Sentry alleging that Hartford, pursuant to its lien rights and third party beneficiary status, was entitled to judgment in the amount of $9,060 plus interest. Appellants answered, stating that Hartford had waived its subrogation rights by not taking steps to procure protection of those rights during the litigation between Daves and Breyel and that Hartford was estopped from bringing any claim for its subrogation interest because Hartford informed Daves that its interest had been paid by Sentry, prior to the conclusion of the litigation, and Daves relied on this statement in reaching a settlement and dismissing the litigation.\nAt the close of Hartford\u2019s case, appellants moved for a directed verdict on the basis that Hartford had not proved it was a third-party beneficiary. The trial court denied the motion. At the close of all the evidence, both Sentry and Daves again moved for a directed verdict on the ground that there was no proof in the record that Hartford was entitled to third-party beneficiary status. In addition, Sentry moved for a directed verdict in its favor on the basis that Hartford had no cause of action under the lien statute because the settlement money was in the hands of Daves at the time the suit was filed and because a direct action against Sentry is not allowed without Hartford\u2019s first filing a suit against the insured. The court denied the motions and submitted the case to the jury on the issue of estoppel and damages. In answering the interrogatories, the jury found that (1) Hartford was not es-topped to assert its lien rights, and that (2) the amount of damages suffered by Hartford was $9,060. Judgment was entered for that amount plus interest. From this order, Daves and Sentry appeal.\nI. JURISDICTION\nAppellants contend that the circuit court had no jurisdiction to enforce Hartford\u2019s statutory lien, and, therefore, the trial court erred in directing a verdict for Hartford against Daves. This point is meritless.\nUnder the Arkansas Constitution, circuit courts have original jurisdiction in all cases where jurisdiction is not expressly vested in another court. Russell v. Cockrill, Judge, 211 Ark. 123, 199 S.W.2d 584 (1947). In order to successfully attack the circuit court\u2019s jurisdiction, a party must show that another court has been given exclusive jurisdiction of the subject matter. Id.\nAppellants have not cited any authority for the proposition that Hartford\u2019s action to enforce its statutory lien or subrogation rights and recover money damages is cognizable exclusively in equity. Furthermore, it is clear that Hartford\u2019s action is cognizable in law. First of all, it is well established that an action for money damages is cognizable in law. See Priddy v. Mayer Aviation, Inc., 260 Ark. 3, 537 S.W.2d 370 (1976). Secondly, this court has allowed statutory liens and subrogation rights to be enforced in circuit court. Henry, Walden & Davis v. Goodman, 294 Ark. 25, 741 S.W.2d 233 (1987); Farm Bureau Mut. Ins. Co. v. Riverside Marine Remfg., 275 Ark. 585, 647 S.W.2d 462 (1983).\nThis court has held that where a defendant raises a defense cognizable only in equity, the case must be heard in equity. See Poultry Growers v. Westark Prod. Credit, 246 Ark. 995, 440 S.W.2d 531 (1969). However, the doctrine of estoppel in pais is available both in law and equity. Branch v. Standard Title Co., 252 Ark. 737, 480 S.W.2d 568 (1972). See also United States Fire Ins. Co. v. Montgomery, 256 Ark. 1047, 511 S.W.2d 659 (1974). Estoppel in pais is the doctrine by which a person may be precluded by his acts or conduct or by failure to act or speak under circumstances where he should do so, from asserting a right which he otherwise would have had. See Branch, supra.\nAppellants, in their answer, asserted that Hartford had waived its subrogation rights by not taking steps to procure protection of those rights during the litigation between Daves and Breyel and that Hartford was estopped from bringing any claim for its subrogation interest in that Hartford informed Daves that its interest had been paid by Sentry, prior to the conclusion of the litigation. This is essentially an estoppel in pais argument, which is cognizable in law.\nII. THIRD-PARTY BENEFICIARY STATUS\nFor reversal, appellants contend that the trial court erred in finding as a matter of law for Hartford against Sentry and Daves that Hartford was a third-party beneficiary of the settlement of the personal injury lawsuit. The court made no such finding, nor was the jury instructed on the law regarding third-party beneficiaries. Since the only question, besides damages, placed before the jury by the trial court was whether or not Hartford was estopped to assert its lien rights, it is obvious that the court concluded, as a matter of law, that Hartford had established its rights to a statutory lien.\nIII. STATUTORY LIEN\nArkansas Code Ann. \u00a7 23-89-207 (1987) provides:\nInsured\u2019s rights of reimbursement.\n(a) Whenever a recipient of \u00a7 23-89-202(1) and (2) benefits recovers in tort for injury, either by settlement or judgment, the insurer paying the benefits has a right of reimbursement and credit out of the tort recovery or settlement, less the cost of collection, as defined.\n(b) All cost of collection thereof shall be assessed against the insurer and insured in the proportion each benefits from the recovery.\n(c) The insurer shall have a lien upon the recovery to the extent of its benefit payments.\nThis code provision grants an insurer, who has paid benefits to its insured under section 23-89-202(1) and (2), a lien upon, and a right of reimbursement from, any tort recovery or settlement obtained by its insured. See Northwestern Nat\u2019l Ins. Co. v. Amer. States Ins. Co., 266 Ark. 432, 585 S.W.2d 925 (1979); Carnathan v. Farm Bureau Ins. Co., 288 Ark. 399, 705 S.W.2d 885 (1986). See also National Inv. Fire and Cas. Ins. Co. v. Edwards, 5 Ark. App. 42, 633 S.W.2d 41 (1982). This right of reimbursement is in the nature of subrogation. Northwestern Nat\u2019l Ins. Co., supra. The underlying principle of subrogation rights is to avoid double recovery by the insured. Farm Bureau Mut. Ins. Co., supra.\nIn this case, Hartford paid benefits to Daves under section 23-89-202(1) and (2), and Daves later settled with the tortfeasor and her insurer, Sentry, for $25,000. Under section 23-89-207, Hartford was entitled to a lien upon, and a right of reimbursement from, the settlement proceeds in the amount it paid in benefits to Daves, less its share of the costs of collection.\nIV. LIABILITY OF SENTRY\nAppellants do not dispute that Hartford is entitled to enforce its statutory lien against Daves and recover the amount it paid in benefits to Daves, less its share of the costs of collection, from the settlement proceeds. However, Sentry asserts that Hartford has no cause of action against it for the statutory lien and, accordingly, that the trial court erred in directing a verdict for Hartford against Sentry.\nWhether or not Hartford can enforce its lien against Sentry is a question of first impression in this state. We hold that Hartford\u2019s lien is enforceable.\nInitially, Sentry contends that it is normal procedure for an insurer, in attempting to subrogate a claim, to file suit against the negligent party, not that party\u2019s insurer. Although this court has not addressed whether a suit against a wrongdoer\u2019s insurer is proper, other courts have allowed such actions. See Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal. 2d 423, 296 P.2d 801 (1956). While it may be the \u201cnormal\u201d procedure for a subrogated insurer to file a subrogation claim against the wrongdoer, we see no reason, and appellants offer none, why an insurer cannot enforce its claim against the wrongdoer by an action against the wrongdoer\u2019s insurer.\nSentry, citing Trinity Universal Ins. Co. v. State Farm Mutual Auto Ins. Co., 246 Ark. 1021, 441 S.W.2d 95 (1969), claims that Hartford\u2019s suit is a direct action, which may be brought only after obtaining a judgment against the insured under Ark. Code Ann. \u00a7 23-89-101 (1987). We disagree.\nSentry cites dicta in Trinity for the proposition that Hartford cannot sue Sentry directly under section 23-89-101, which concerns subrogation of an injured person to the right of an insured and the right of the injured person to sue the insurer directly. The case at bar can easily be distinguished in that it involves an attempt by an insurer who has paid benefits to its insured, pursuant to section 23-89-202, to be reimbursed from settlement proceeds subsequently received by the insured in a settlement with a tortfeasor and her insurer under section 23-89-207.\nIn sum, we find nothing in Trinity that prohibits Hartford from filing a direct action against Sentry pursuant to section 23-89-207.\nFinally, appellants argue that a statutory lien cannot benefit Hartford in a suit against Sentry when the proceeds have been paid over to Daves.\nPrior to the settlement between Sentry and Daves, Hartford repeatedly notified Sentry of its subrogation claim. Thereafter, Sentry, with full knowledge of Hartford\u2019s interest, paid Daves pursuant to the settlement, without notifying Hartford of the settlement or Daves\u2019 suit, and then excluded Hartford\u2019s name from the settlement check in exchange for Daves\u2019 agreement, prepared by Sentry, to indemnify Sentry for all claims \u201cHartford may make against Sentry by virtue of the medical PIP and subrogation lien that Hartford is making in this case.\u201d\nObviously, from the wording in its agreement, Sentry\u2019s maneuvers were simply a well designed and calculated attempt to escape its acknowledged duty to Hartford. Under the circumstances, we hold that Sentry cannot legally or equitably ignore its responsibility to pay Hartford\u2019s lien even though it may have parted with the settlement proceeds through improvident payment to Daves.\nV. ADMISSION OF TESTIMONY\nAppellants argue that the trial court abused its discretion in not admitting into evidence the relevant testimony of Jon Ahrens concerning Hartford\u2019s policy on compromising statutory lien claims.\nJon Ahrens, claims manager for Hartford, was asked on cross-examination if he, in handling subrogation claims, ever agreed to accept less than the amount of the claim. Hartford\u2019s counsel objected on irrelevancy grounds, and the court sustained the objection, but agreed to let appellants make a proffer. In the proffered testimony, Ahrens testified that although the company does compromise subrogation claims, it does not compromise statutory lien claims, \u201clike under PIP benefits.\u201d Appellants\u2019 attorney then asked him what he would do if there were not enough coverage to pay the company, the insured, and the insured\u2019s lawyer. He testified that he did not know because he had never had such a claim, but added a PIP claim \u201cmight\u201d be subject to compromise if \u201cyou had a PIP claim where you ran five thousand medical and five thousand work loss, you had a $10,000 lien and minimum limits twenty-five thousand and so forth----\u201d\nAppellants contend that this testimony was relevant to the issue of Daves\u2019 lost opportunity to compromise Hartford\u2019s claim, which went to the issue of detrimental reliance under the estoppel theory asserted by appellants.\nIn viewing the proffered testimony, it is not readily determinable under what circumstances Hartford would compromise a PIP claim. Accordingly, the trial court could not determine the relevancy of this testimony. As a result, no abuse of discretion occurred.\nVI. COST OF COLLECTION\nAppellants contend that the trial court erred in not reducing the amount of Hartford\u2019s judgment by Daves\u2019 cost of collection incurred in the personal injury lawsuit. This argument is essentially that Hartford should pay its share of the cost of collection.\nSection 23-89-207 (b) provides that all costs of collection in an action to recover for injury \u201cshall be assessed against the insurer and insured in the proportion each benefits from the recovery.\u201d The costs of collection under this section include reasonable attorney\u2019s fees. Northwestern Nat\u2019l Ins. Co., supra.\nIn this case, Daves did not notify Hartford of his suit against the tortfeasor so that Hartford could intervene to protect its interest and then refused to reimburse Hartford out of the settlement recovery, contrary to the dictates of section 23-89-207(a). As a result, Hartford was forced to bring a different action to enforce its claim, thereby incurring separate expenses and attorney\u2019s fees.\nAccordingly, Hartford contends that it has paid its share of the \u201ccosts\u201d and thus the trial court did not err in refusing to reduce the amount of its judgment. However, Hartford\u2019s costs were not \u201ccosts of collection\u201d of the tort settlement. Although the end result may be unjust, we must follow the code provision, which dictates that Hartford be assessed costs of collection in the proportion it benefited from the recovery by Daves.\nThe amount of the settlement was $25,000; Hartford, in enforcing its lien, received $9,060 from the settlement, or 36.24 % of the settlement. Daves\u2019 costs of collection were $7,939 ($7,500 in attorney\u2019s fees and $439 in other expenses). Hartford\u2019s share of the fees and expenses is $2,877.09. Accordingly, we reduce the amount of Hartford\u2019s award from $9,060 to $6,182.91.\nAffirmed as modified.", "type": "majority", "author": "Jack Holt, Jr., Chief Justice." } ], "attorneys": [ "Jim O\u2019Hara, for appellants.", "Kemp, Duckett, Hopkins & Spradley, by: Donald K. Campbell III and Randolph B. Hopkins, for appellee." ], "corrections": "", "head_matter": "Dalton DAVES and Sentry Indemnity Company v. HARTFORD ACCIDENT AND INDEMNITY COMPANY\n89-347\n788 S.W.2d 733\nSupreme Court of Arkansas\nOpinion delivered May 14, 1990\nJim O\u2019Hara, for appellants.\nKemp, Duckett, Hopkins & Spradley, by: Donald K. Campbell III and Randolph B. Hopkins, for appellee." }, "file_name": "0242-01", "first_page_order": 268, "last_page_order": 277 }