{
  "id": 1882826,
  "name": "Larry BARNETT, The Farmers Insurance Group of Companies, and The Truck Insurance Exchange v. ARKANSAS TRANSPORT COMPANY, Inc.",
  "name_abbreviation": "Barnett v. Arkansas Transport Co.",
  "decision_date": "1990-11-05",
  "docket_number": "90-29",
  "first_page": "491",
  "last_page": "499-D",
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      "cite": "798 S.W.2d 79"
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          "parenthetical": "citing MFA Mutual Ins. Co. v. Keller, 274 Ark. 281, 623 S.W.2d 841 (1981)"
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      "cite": "300 Ark. 445",
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      "case_ids": [
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          "parenthetical": "citing Southall v. Farm Bureau Mutual Ins. Co. of Ark., 283 Ark. 335, 676 S.W.2d 228 (1984)"
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        {
          "parenthetical": "citing Southall v. Farm Bureau Mutual Ins. Co. of Ark., 283 Ark. 335, 676 S.W.2d 228 (1984)"
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          "parenthetical": "citing Harper v. Wheatley Implement Co., 278 Ark. 27, 643 S.W.2d 537 (1982)"
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          "parenthetical": "citing Harper v. Wheatley Implement Co., 278 Ark. 27, 643 S.W.2d 537 (1982)"
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      "year": 1989,
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      "reporter": "Ark.",
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      "year": 1985,
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        {
          "parenthetical": "citing Kellensworth v. State, 278 Ark. 261, 644 S.W.2d 933 (1983)"
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  "last_updated": "2023-07-14T18:41:20.399175+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
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  "casebody": {
    "judges": [
      "Turner, J., not participating."
    ],
    "parties": [
      "Larry BARNETT, The Farmers Insurance Group of Companies, and The Truck Insurance Exchange v. ARKANSAS TRANSPORT COMPANY, Inc."
    ],
    "opinions": [
      {
        "text": "Jack Holt, Jr., Chief Justice.\nThis case involves an insurance contract issued by the appellant, The Truck Insurance Exchange (Exchange), through its agent, Larry Barnett, to the appellee, The Arkansas Transport Company, Inc. (Transport), for the period between September 10,1985, through September 10,1986. The Exchange is a member company of, and owned by, the appellant, The Farmer Insurance Group of Companies.\nIn its complaint, Transport initially asserted claims of breach of contract, deceit, fraudulent misrepresentation, negligence, and bad faith breach of contract. On June 1,1989, the jury awarded Transport $115,251.00 on its claim of breach of contract. The trial court entered its judgment on October 24,1989, which incorporated the jury award of $115,251.00 and also included $34,497.00 in attorney\u2019s fees and $691.69 as reimbursement for costs to Transport.\nThe appellants allege two points of error on appeal: 1) that the trial court erred in refusing to allow them to cross-examine James E. Siegler, Jr., concerning the Arkansas Transportation Commission\u2019s authorization of Transport\u2019s supplemental insurance tariff, and 2) that the trial court erred in awarding Transport attorney\u2019s fees in the amount of $34,497.00. Additionally, Transport cross-appeals and argues that the trial court erred in directing a verdict in favor of the appellants on the issue of fraud and submission of punitive damages.\nWe find no merit in any of the parties\u2019 claims and affirm.\nTransport first purchased a gross receipts liability policy from the Exchange through its agent, Larry Barnett, for the period September 10, 1984, to September 10, 1985. Transport, under this gross receipts policy, paid a monthly premium that was calculated as a specified percentage of the gross receipts that it had earned during the previous month. Before the expiration of this policy, in March and August 1985, the Exchange\u2019s commercial managers recognized the desirability of increased premiums for this special type of insurance coverage, but no action was taken to implement an increase.\nOn September 9, 1985, Barnett confirmed in writing to Transport that its renewal premium rate from September 10, 1985, to September 10,1986, would be $4.79 per $100.00 of gross receipts. Subsequently, on December 24, 1985, the Exchange notified Transport that its premium rate would be changed on February 1, 1986, to $7.19 per $100.00 of gross receipts, an increase of $2.40. Transport paid the increased premium to the Exchange from February 1 to September 10, 1986, ostensibly under protest.\nDuring this period, Transport was granted a $4.90 tariff rate increase from the Arkansas Transportation Commission (Commission) on January 17,1986, that went into effect on March 1, 1986.\nAt trial, James E. Siegler, Jr., Transport\u2019s Chief Operating Officer, testified on direct examination in pertinent part as follows:\nQ Could you tell the ladies and gentlemen of the jury why it is important, as a trucking company, that you have a rate that you know you are going to have for a year.\nA I\u2019ll try. In our business, we are a regulated common carrier, and by regulated means different state agencies and government agencies regulate our business, they tell us exactly what we can haul, when we can haul it and how much we can haul it for. Now, it\u2019s true that we have had some deregulation in the United States recently, but still rates are regulated. Now, on ICC basis, the rates are pretty much loose enough that you can file a rate and within so many days, it will be approved, it\u2019s just a stamp of approval. However, we have business in Arkansas, Louisiana and Tennessee that the states have also governed their tariffs and we have to apply for a rate increase, and that application form sometimes takes as long as six months, you have to file it, you have to have a hearing on it, and, after the hearing, they\u2019ll wait and give their decision on that rate increase, and sometimes they grant the increase, sometimes they don\u2019t but insurance cost is such a large expense in our business that we need to have some type of finger on what our costs are going to be in the future, whether we need a rate increase ourselves, so that\u2019s the reason why it\u2019s so important that we know what our insurance costs are going to be, at least for a certain period of time in advance.\nOn cross-examination, Mr. Siegler also testified in pertinent part as follows:\nQ Mr. Siegler, when you received this rate increase in February of \u201886, the one that\u2019s the subject of this lawsuit, did you, in fact, pass any of this along to your customers?\nA We have tried to pass most of it to our customers, but we haven\u2019t been able to do 100% of it.\nThe appellants then attempted to introduce a certified copy of Transport\u2019s approved tariffs on file with the Commission. Transport objected on the basis of relevancy, and the trial court denied the introduction of the document.\nThe appellants claim first that the trial court erred in refusing to allow them to cross-examine Mr. Siegler concerning the Commission\u2019s authorization of Transport\u2019s supplemental insurance tariff. They argue that the proffered document contradicts his testimony and that the proffered document is relevant.\nThe appellants contend that Mr. Siegler\u2019s testimony, that an application for a tariff rate increase \u201csometimes takes as long as six months,\u201d was an affirmative statement that it had taken six months for Transport to implement a tariff increase in this case. Read in context, the patently misconstrued interpretation advocated by the appellants is inaccurate because Mr. Siegler\u2019s testimony is clear and plain that a tariff rate increase \"sometimes takes as long as six months.\u201d The proffered document simply would not have contradicted this statement or have affected Mr. Siegler\u2019s credibility as a witness, as the tariff rate increase was approved on January 17,1986, and went into effect on March 1, 1986, approximately one and a half months later. Then, too, Transport was doing business in Louisiana and Tennessee, which also governed their tariffs.\nThe appellants also state that this document was relevant, in response to Transport\u2019s objection of irrelevancy. We noted in Washington Nat\u2019l Ins. Co. v. Meeks, 249 Ark. 73, 458 S.W.2d 135, appeal after remand 252 Ark. 1178, 482 S.W.2d 618 (1970), that where an inquiry is pertinent to the main issue and within the proper scope of cross-examination to wring disclosures which might present a view more favorable to the cross-examiner, no question of relevancy is involved. However, an offer of proof is necessary where the relevancy of materiality of the answer is not apparent. Additionally, rulings on the relevancy of evidence are discretionary with the trial court, and we do not reverse absent an abuse of discretion. Jim Halsey Co. v. Bonar, 284 Ark. 461, 683 S.W.2d 898 (1985) (citing Kellensworth v. State, 278 Ark. 261, 644 S.W.2d 933 (1983)). '\nIn this case, the main issue before the trial court was whether the appellants had breached an insurance contract with Transport. Any inquiry as to Transport\u2019s conveyance of the increased insurance premium to its customers is not readily apparent or relevant to this issue. The appellants argue that Transport had a duty to mitigate its damages to them and that the tariff rate increase was relevant in that regard. However, the appellants again misconstrue any duty that Transport might have had to mitigate its damages; Transport\u2019s duty to the appellants to mitigate its damages would have been limited to actions relating to its increased insurance premium under its contract. Any alleged recoupment of this cost through a tariff rate increase from Transport\u2019s various customers in Arkansas, Louisianna, and Tennessee as a result of increased premiums is, at best, purely speculative and not relevant to whether or not the insurance contract was breached and an increased premium rate charged by the appellants.\nContained in the record is an in chambers discussion, labeled by the court reporter as \u201coff the record,\u201d in which the trial court made a reference to the collateral source rule. The appellants now attempt to claim in their briefs that this comment by the trial court served as the basis for the trial court\u2019s ruling. However, the record clearly reflects that the trial court based its ruling on the irrelevancy of the tariff rate increase and that the reference to the collateral source rule was made after the trial court had made its ruling. Thus, the trial court did not rely on the rule for its action, and any discussion of the rule is inapplicable to this point of error.\nThe relevancy or materiality of the tariff rate increase not being apparent, the appellants\u2019 failure to make an offer of proof precludes us from speculating on this issue. Consequently, we can not say that the trial court abused its discretion in this matter.\nNext, the appellants assert that the trial court erred in awarding Transport attorney\u2019s fees in the amount of $34,497.00. Ark. Code Ann. \u00a7 16-22-308 (Supp. 1989) provides for attorney\u2019s fees in certain civil actions and provides as follows:\nIn any civil action to recover on an open account, statement of account, account stated, promissory note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, or breach of contract, unless otherwise provided by law or the contract which is the subject matter of the action, the prevailing party may be allowed a reasonable attorney fee to be assessed by the court and collected as costs.\nOur general rule relating to attorney\u2019s fees is well established and is that attorney\u2019s fees are not allowed except when expressly provided for by statute. Damron v. University Estates, Phase II, Inc., 295 Ark. 533, 750 S.W.2d 402 (1988) (citing Harper v. Wheatley Implement Co., 278 Ark. 27, 643 S.W.2d 537 (1982)).\nIn this case, the jury returned a verdict hi favor of Transport on June 1, 1989. Section 16-22-308 was revised to include the term \u201cbreach of contract\u201d and was made effective by Act 800 of 1989 on July 3, 1989. The trial court subsequently entered its judgment on October 24, 1989. The appellants claim, while recognizing the court of appeals\u2019 decision in City of Fayetteville v. Bibb, 30 Ark. App. 31, 781 S.W.2d 493 (1989), that it is improper to retroactively apply a statute that has the effect of declaring fees to be an element of consequential damages.\nIn Bibb, the court of appeals discussed the issue as follows:\nIn Harrison v. Matthews, 235 Ark. 915, 362 S.W.2d 704 (1962), the court said:\nThe rule by which statutes are construed to operate prospectively does not ordinarily apply to procedural or remedial legislation. \u2018The strict rule of construction contended for does not apply to remedial statutes which do not disturb vested rights, or create new obligations, but only supply a new or more appropriate remedy to enforce an existing right or obligation. These should receive a more liberal construction, and should be given a retrospective effect whenever such seems to have been the intention of the Legislature.\u2019\n* * * *\nCourts of other states which have considered the specific issue raised here have held that statutes providing for attorney\u2019s fees to be taxed as costs are to be given retrospective application. In Cox, the court said:\nThe general rule that statutes will be given prospective operation only does not apply to statutes effecting procedure. Taxing of attorney\u2019s fees as costs relates to a mode of procedure.\nWe agree.\n(Citations omitted.)\nWe, in turn, adopt the court of appeals\u2019 rationale in holding that a statute providing for attorney\u2019s fees to be taxed as costs is to be given retrospective application. Since the trial court\u2019s judgment was not entered until after the statute went into effect, the trial court\u2019s award of attorney\u2019s fees was valid.\nThe appellants alternatively contend that the amount of the award for attorney\u2019s fees is excessive. In Miller\u2019s Mutual Ins. Co. v. Keith Smith Co., 284 Ark. 124, 680 S.W.2d 102 (1984) (citing Southall v. Farm Bureau Mutual Ins. Co. of Ark., 283 Ark. 335, 676 S.W.2d 228 (1984)), we noted that an award of attorney\u2019s fees is a matter within the sound discretion of the trial court, and in the absence of abuse, its judgment will be sustained on appeal.\nHere, the trial court made an award of 90% of counsel\u2019s total bill for services provided on this case. The reduction in the percentage was a result of Transport\u2019s counsel having attributed 5 % to 10 % of the fee as being solely related to the claims of fraud or bad faith. Transport\u2019s counsel stated in his deposition testimony as follows:\nQ ... Were you continuing during that trial preparation to prepare for the broader two counts in the litigation, the bad faith, punitive damages?\nA I can\u2019t remember, Chris. I was just preparing for everything that might happen at trial. I guess the primary thing was to prepare the breach of contract because if I didn\u2019t get the breach of contract, I couldn\u2019t get anything else.\nQ And good faith, that was pulling out time not contributed to the breach of contract, the five or ten percent you testified to?\nA Yes, because you just can\u2019t separate the two. It\u2019s almost an impossible task to separate issues like that.\nQ No further questions, thanks, I appreciate it.\nThe appellants further provide the following breakdown of Transport\u2019s counsel\u2019s expenses:\nDrafting pleadings 3%\nClient communication and case management 7 %\nDiscovery disputes 28 %\nDeposition trips to Kansas City and Los 10% Angeles\nResearching and responding to summary 12% judgment and motion in limine\nIntensive trial preparation (5/21/89 to 30% 5/31/89)\nTrial 10%\nCounsel\u2019s hourly rate structure was stipulated as being reasonable in amount. The deposition testimony obtained in Kansas City and Los Angeles was introduced into evidence or used for cross-examination purposes at trial; travel expenses related to the taking of these depositions. Even if we were to concede the accuracy of the appellants\u2019 characterization of Transport\u2019s costs and fees, the appellants fail to demonstrate any abuse of discretion in the trial court\u2019s award of attorney\u2019s fees to Transport.\nFinally, Transport cross-appeals and asserts that the trial court erred in directing a verdict in favor of the appellants on the issue of fraud and the submission of punitive damages. We note initially that both of the parties briefed this point of error, but failed to indicate any reference to the trial court\u2019s ruling in the record. We have searched the transcript and found no ruling by the trial court relating to a directed verdict in favor of the appellants on the issue of fraud and the submission of punitive damages.\nWe noted in McDonald v. Wilcox, 300 Ark. 445, 780 S.W.2d 17 (1989), that although the statement of facts in the appellant\u2019s brief recited that a motion in limine was heard by the court in chambers and denied, where there was nothing in the record and consequently nothing in the appellant\u2019s appendix to show that the motion was ever ruled on, and there was no record of any proceedings in chambers where the motion was supposed to have been denied, there was no order or ruling before the supreme court forming the basis for the point argued. As a result, there was nothing before the court on which to rule.\nWe find McDonald to be determinative on this point of error, and hold that there is nothing before us upon which to rule because there is no order or ruling forming the basis for the point argued.\nAffirmed.\nTurner, J., not participating.\nSUPPLEMENTAL OPINION ON DENIAL OF REHEARING\nDECEMBER 17, 1990\n800 S.W.2d 429\n1. Torts \u2014 elements of cause of action in deceit. \u2014 The five elements of the tort cause of action in deceit are: (1) a false representation made by the defendant, which must ordinarily be one of fact; (2) knowledge or belief on the part of the defendant that the representation is false\u2014or, what is regarded as equivalent, that he has not a sufficient basis of information to make it; (3) an intention to induce the plaintiff to act or to refrain from action in reliance upon the misrepresentation; (4) justifiable reliance upon the representation on the part of the plaintiff, in taking action or refraining from it; (5) damage to the plaintiff, resulting from such reliance.\n2. Torts \u2014 deceit \u2014 no proof of false representation. \u2014 Because the appellee could not establish false representation, there was no cause of action for deceit.\n3. Appeal & error \u2014 repetitious arguments not proper subject for rehearing.\u2014Arguments that are merely repetitious of those already considered by the court are inappropriate subjects for a petition for rehearing.\nPetition for Rehearing; denied.\nEichenbaum, Scott, Miller, Liles & Heister, P.A., by: Christopher O. Parker, for appellants.\nWilliam M. Griffin III, for appellee.\nJack Holt, Jr., Chief Justice.\nAll parties requested a petition for rehearing.\nThe appellee, Arkansas Transport Company, Inc. (Transport), cross-appealed and asserted that the trial court had erred in directing a verdict in favor of the appellants, Larry Barnett, The Farmers Insurance Group of Companies (Farmers), and The Truck Insurance Exchange (Exchange), on the issue of fraud and the submission of punitive damages. The parties, in their briefs, did not direct us to a ruling on this issue nor did this court find a specific ruling in the record by the trial court relating to these issues; as a result, we declined to review Transport\u2019s cross-appeal.\nTransport cites to its supplemental appendix for a showing that the trial court ruled on the appellants\u2019 motion for directed verdict on fraud and punitive damages. The appellants initially made the motion in issue, then later made a motion for directed verdict on negligence, followed by the trial court\u2019s granting of \u201cthe motion.\u201d Although we interpreted the trial court\u2019s action to be in reference to the motion for directed verdict on negligence, which directly preceded the ruling, on further examination of the record we now recognize that the trial court evidently meant to include the motion for directed verdict on fraud and punitive damages in its ruling as well. Even so, Transport\u2019s argument is unpersuasive on this issue.\nIn Storthz v. Commercial Nat\u2019l Bank, 276 Ark. 10, 631 S.W.2d 613 (1982) (citing MFA Mutual Ins. Co. v. Keller, 274 Ark. 281, 623 S.W.2d 841 (1981)), we set forth the five elements of the tort cause of action in deceit. Proof of each element is necessary, and the elements are as follows:\n1) A false representation made by the defendant. In the ordinary case, this representation must be one of fact.\n2) Knowledge or belief on the part of the defendant that the representation is false - or, what is regarded as equivalent, that he has not a sufficient basis of information to make it. This element often is given the technical name of \u2018scienter\u201d.\n3) An intention to induce the plaintiff to act or to refrain from action in reliance upon the misrepresentation.\n4) Justifiable reliance upon the representation on the part of the plaintiff, in taking action or refraining from it.\n5) Damage to the plaintiff, resulting from such reliance.\nTransport asserts that the basic misrepresentation in this case was a representation to the insured that he had an insurance policy with a guaranteed rate for a year. Transport relies on letters dated March 8,1985, and August 28,1985,forits proposition that the Exchange made false representations with reference to the policy rates upon which it justifiably relied when it renewed its policy; however, the letter dated March 8 refers to a prior rate increase already in effect, and the letter dated August 28 merely contains observations and comments on the insurance coverage rates at issue. The evidence also reflects that the Exchange\u2019s Board of Governors did not approve the decision to increase the insurance rate until December 1985. Thus, the Exchange\u2019s decision in December could not have served as the basis of a false representation to Transport during its consideration of a policy renewal in September. In short, Transport has not met the threshold requirement of the first element of the cause of action; there was no false representation.\nThe appellants assert two points in their petition for rehearing; 1) that it should have been proper cross-examination to have asked Mr. Siegler, Transport\u2019s Chief Operating Officer, about his January 17 publication of an insurance surcharge, and 2) that a more complete, formal record was made relating to the relevancy of the insurance surcharge than this court originally considered and, consequently, the trial court\u2019s ruling should be addressed.\nThe appellants\u2019 first argument was thoroughly discussed in the text of the opinion, and arguments that are merely repetitious of those already considered by the court are inappropriate subjects for a petition for rehearing. Butler Mfg. Co. v. Hughes, 292 Ark. 198, 731 S.W.2d 214 (1987).\nWith regard to the appellants\u2019 second point, the appellants correctly point out, and the opinion reflects, that the insurance surcharge was proffered as an exhibit. Accordingly, the issue of the relevancy of the insurance surcharge was thoroughly discussed in this court\u2019s opinion and properly resolved. We declined, however, to speculate on the effect of the trial court\u2019s reference to the collateral source doctrine in making its decision to exclude the document. We will not do so now.",
        "type": "majority",
        "author": "Jack Holt, Jr., Chief Justice. Jack Holt, Jr., Chief Justice."
      }
    ],
    "attorneys": [
      "Eichenbaum, Scott, Miller, Files & Heister, P.A., by: Frank S. Hamlin and Christopher O. Parker, for appellants.",
      "Friday, Eldredge & Clark, by: William M. Griffin III, for appellee."
    ],
    "corrections": "",
    "head_matter": "Larry BARNETT, The Farmers Insurance Group of Companies, and The Truck Insurance Exchange v. ARKANSAS TRANSPORT COMPANY, Inc.\n90-29\n798 S.W.2d 79\nSupreme Court of Arkansas\nOpinion delivered November 5, 1990\n[Supplemental Opinion on Denial of Rehearing December 17, 1990.] ,\nEichenbaum, Scott, Miller, Files & Heister, P.A., by: Frank S. Hamlin and Christopher O. Parker, for appellants.\nFriday, Eldredge & Clark, by: William M. Griffin III, for appellee."
  },
  "file_name": "0491-01",
  "first_page_order": 529,
  "last_page_order": 541
}
