Southern Pioneer Life Insurance Co. v. Thomas

COURTNEY HUDSON HENRY, Justice,

concurring.

I concur with the majority’s opinion that the McCarran-Ferguson Act (MFA) reverse-preempts the Federal Arbitration Act (FAA) and that the MFA three-pronged test articulated in United States Department of the Treasury v. Fabe, 508 U.S. 491, 113 S.Ct. 2202, 124 L.Ed.2d 449 (1993), is satisfied. In this instance, the MFA trumps the FAA, and our state | Sstatute governs. See Lawson v. Life of the S. Ins. Co., No. 4:06-CV-42 (WLS), 2010 WL 1416551 (M.D.Ga. Mar. 31, 2010), aff'd on other grounds, Lawson v. Life of the S. Ins. Co., 648 F.3d 1166 (11th Cir. 2011). However, the analysis does not end there. I write separately to emphasize that, after concluding that the MFA reverse-preempts the FAA, we müst apply Arkansas Code Annotated section 16-108-201(b) (Repl.2006), to the facts of this case.

In our review of section 16-108-201(b) in IGF Insurance Co. v. Hat Creek Partnership, 349 Ark. 133, 76 S.W.3d 859 (2002), this court noted that a specific federal statute governing crop insurance allowed the arbitration of disputes relating to crop insurance. This court observed that, but for the specific federal statute dealing with arbitration and crop insurance, the MFA would have allowed the Arkansas Uniform Arbitration Act (AUAA) to prevent the enforcement of the arbitration provision at issue. We held that “the [MFA] does not apply, and the Federal Crop Insurance Act’s provisions mandating arbitration clauses in federal crop reinsurance policies preempts the Arkansas statute that would ordinarily render the arbitration clause unenforceable.” Id. at 143, 76 S.W.3d at 866 (emphasis added). Thus, the present case is distinguishable from Hat Creek because no federal statute preempts section 16-108-201.

Our inquiry must focus on the language of our own particular statute. Section 16-18-201(b) provides:

(b)(1) A written provision to submit to arbitration any controversy thereafter arising between the parties bound by the terms of the writing is valid, enforceable, and irrevocable, save upon such grounds as exist for the revocation of any contract.
(2) This subsection shall have no application to personal injury or tort matters, employer-employee disputes, nor to any insured or beneficiary under any insurance policy or annuity contract.

| ¡)Ark.Code Ann. § 16-108-201(b) (emphasis added). Here, the Arkansas General Assembly has specifically exempted insurance policies from contracts containing arbitration clauses that are generally held to be enforceable. Id. In considering the meaning of a statute, we construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. Vanderpool v. Fidelity & Cas. Ins. Co., 327 Ark. 407, 939 S.W.2d 280 (1997). The basic rule of statutory construction to which all other interpretive guides defer is to give effect to the intent of the legislature. Id.

I agree with the circuit court’s ruling that section 16-108-201(b) governs this dispute. Based on the plain language of section 16-108-201, arbitration does not apply to “any insured or beneficiary under any insurance policy[.]” Id. “Any insurance policy” includes appellees’ credit-life insurance policy from Southern Pioneer for which they paid a single one-time premium of $1450.54, as reflected in the retail-installment-sales contract (RISC) containing the arbitration clause. I would hold that section 16-108-201 dictates that Southern Pioneer cannot compel arbitration of the insurance matter indirectly through the arbitration clause of the RISC.

This interpretation comports with the legislative intent of section 16-108-201. This court has held that it will not interpret a statute to yield an absurd result that is contrary to legislative intent. Hartford Fire Ins. Co. v. Sauer, 358 Ark. 89, 186 S.W.3d 229 (2004). Here, the General Assembly’s intent was made quite clear by the emergency clause in Act 616 of 19811 that the Act “shall have no application to ... any insured or beneficiary under any | Tinsurance policy[.]” This language has not changed since the enactment of the AUAA in Act 260 of 1969. Thus, section 16-108-201 expresses the public policy of Arkansas that disputes relating to “any insurance policies]” are not arbitrable. Id. For these reasons, I would affirm the circuit court’s ruling on this basis.

CORBIN and DANIELSON, JJ., join.

. The emergency clause of Act 616 of 1981 reads:

SECTION 3. Emergency. It has been found and is declared by the General Assembly of Arkansas that doubt and confusion exist as to the applicability of the Uniform Arbitration Act to certain disputes; that it is imperative that such doubt and confusion be resolved at once; and that said doubt and confusion can be resolved only through enactment of this bill. Therefore, an emergency is declared to exist, and this Act being necessary for the public peace, health and safety shall take effect and be in force from the date of its approval.
APPROVED: March 23, 1981.