Village Market, Inc. v. State Farm General Insurance

Tom Glaze, Justice,

dissenting in part. I disagree only with that part of the majority opinion awarding attorney’s fees to State Farm General Insurance Company. The trial court awarded State Farm attorney’s fees pursuant to Ark. Code Ann. § 16-22-308 (Repl. 1994), which I am of the opinion does not apply.

Section 16-22-308 is a general statute that was enacted in 1989 and provides for the recovery of attorney’s fees in actions for breach of contract. In 1959, Ark. Code Ann. § 23-79-208 (Repl. 1992) was enacted, and specifically provides that, under certain circumstances, an insured may be awarded attorney’s fees when his loss claim covered by the policy is wrongfully denied or delayed by the insurance company. (Emphasis added.) Very clearly, § 23-79-208 is compiled under our laws regarding insurance policies and a Code subchapter designated “suits against insurers” • — ■ which is exactly what this court now has before it.

Section 23-79-208 does not authorize attorney’s fees to insurers and such fees may only be awarded insureds when the insureds meet certain requirements described by the insurance statute. Arkansas’s general statute § 16-22-308 (enacted after § 23-79-208) makes no mention of insurance policies so as to indicate that the General Assembly intended § 16-22-308 to cover insureds’ suits against insurers.

In interpreting statutes, the rule is well settled that a general statute must yield when there is a specific statute involving the particular matter. See Board of Trustees v. Stodola, 328 Ark. 194, 942 S.W.2d 258 (1997). We are also guided by the controlling principle that attorney’s fees incurred in the pursuit of civil actions are not awarded unless expressly provided for by statute or rule. McQuillan v. Mercedes-Benz Credit Corp., 331 Ark. 242, 961 S.W.2d 729 (1998). Here, § 16-22-308 does not expressly allow an insurer attorney’s fees when an insured loses his or her claim against the insurer, and I submit the General Assembly never intended an insurer should obtain attorney’s fees in such circumstances.

Finally, I point out that a rather odd result occurs from the majority’s decision to apply § 16-22-308 to an insured’s lawsuit against an insurer. As previously indicated, a prevailing insured’s right to attorney’s fees (and penalty) under § 23-79-208 is limited and may be awarded only if the amount recovered for the loss by the insured is within 20% of the amount demanded or which was sought in the suit. If the insured fails to meet this requirement in § 23-79-208, the question then arises whether the insured might then request attorney’s fees under § 16-22-308? In other words, if the insured failed to prevail under the terms in § 23-79-208 when requesting attorney’s fees, may the insured obtain such fees as a prevailing party under § 16-22-308? An insurer, of course, cannot obtain attorney’s fees under § 23-79-208 because the General Assembly did not authorize such fees. However, the insurer may now obtain attorney’s fees under § 16-22-308 without any restriction like the one required of an insured in § 23-79-208. Instead, all an insurer must do under § 16-22-308 is prevail in a lawsuit brought against it by an insured.

In my view, the General Assembly never intended to award attorney’s fees to a state-regulated insurance company in cases where an insured seeks payment for a loss claim under his or her policy. In fact, § 23-79-208 restricts even an insured’s right to attorney’s fees to those limited circumstances where the insured has shown its insurer exercised unwarranted delay tactics when considering the payment of the insured’s claim. See State Farm Mut. Auto. Ins. Co. v. Thomas, 316 Ark. 345, 871 S.W.2d 571 (1994). For these reasons and the ones addressed previously, I would reverse the trial court’s award of attorney’s fees to State Farm.

Arnold, C.J., and Thornton, J., join this dissent.