dissenting. The decision today places the plaintiff/appellant (Felton) squarely in a Catch-22 situation caused first by our decision in Scamardo in 2004, which reversed over forty years of precedent, and then by our decision in Low in 2005, which reversed Scamardo. Accordingly, I have sympathy for a party who is caught in this morass created largely by this court and who is trying to discern how best to craft a lawsuit in a jurisprudential landscape of shifting sands. Under these circumstances, I would apply our decision in Low prospectively, not only because that is clearly the law in Arkansas, but also because it is manifestly the fair and just thing to do.
The following time line simplifies the history of this case.
• May 9, 2002 — This court handed down Clayborn v. Bankers Standard Insurance Company, 348 Ark. 557, 75 S.W.3d 174 (2002), which stated, in dictum, that the direct-action statute against a liability carrier did not apply even if the insured was a charitable institution.
• February 26, 2004 — This court handed down Scamardo v. Jaggers, 356 Ark. 236, 149 S.W.3d 311 (2004), which held that a plaintiff could sue a charitable organization, which rendered the direct-action statute against liability carriers inapplicable.
• December 17, 2004 — Felton sued Rebsamen Medical Center and Medical Assurance (direct action) for wrongful death.
• January 12, 2005 — Rebsamen affirmatively pled that it was a charitable institution immune from damages beyond its insurance coverage.
• January 13, 2005 — Medical Assurance affirmatively pled that no cause of action existed under Claybom and Scamardo.
• February 18, 2005 — The circuit court dismissed Felton’s complaint against Medical Assurance without prejudice based on Felton’s nonsuit motion.
• December 15, 2005 — This court handed down Low v. Insurance Company of North America, 364 Ark. 427, 220 S.W.3d 670 (2005), overruling Claybom and Scamardo and holding that charitable institutions are immune from tort liability, which again allowed direct-action suits against liability carriers.
• July 12, 2006 — Felton filed a first-amended complaint reasserting its claims against Medical Assurance in a direct action, citing the Low opinion.
• July 25, 2006 — Rebsamen answered and raised charitable immunity as a defense.
• August 1, 2006 — Medical Assurance raised the statute of limitations as a defense against the first-amended complaint.
• March 22, 2007 — The circuit court granted summary judgment in favor of Rebsamen and Medical Assurance.
Felton vigorously asserts that all parties had proceeded in good faith under the law as stated in Claybom and Scamardo, beginning with the filing of the complaint in December 2004. When Low overruled those decisions on December 15, 2005, and reverted to pre-Clayborn and Scamardo jurisprudence, it overruled our common-law cases and under Arkansas law should be applied prospectively. Stated differently, Felton contends that because of his reliance on Scamardo, Low should not be applied retroactively but only prospectively to causes of action arising after the Low decision became final. This would allow Felton to proceed solely against Rebsamen under the Claybom-Scamardo cases.
Felton is undeniably correct. The majority opinion states that Rebsamen pled charitable immunity as a defense in its original answer, but that is not entirely correct. It pled immunity “from damages exceeding its insurance policy limits,” which alerted Felton that liability coverage would take care of damages up to the policy limits.
The majority states that this court has previously held that Low should be applied retroactively. See Sowders v. St. Joseph’s Mercy Health Ctr., 368 Ark. 466, 247 S.W.3d 514 (2007). I disagree. In Sowders, we held that the “pool” arrangement was not insurance for purposes of the direct-action statute. We then discussed the impact of the Low decision and determined that Sowders would not be prejudiced one way or the other whether Low was applied retroactively or prospectively. We expressly said: “Sowders’s claim against St. Joseph’s is no less valuable under the holding in Low than it was before Low; thus, the application of the rule in Low does not result in any unfair prejudice to Sowders.” Sowders, 368 Ark. at 476, 247 S.W.3d at 521. The issue of applying Low retroactively or prospectively has not been decided by this court.
The rule of law concerning prospective application of new case law is plain. See Aka v. Jefferson Hosp. Ass’n, Inc., 344 Ark. 627, 42 S.W.3d 508 (2001); Parish v. Pitts, 244 Ark. 1239, 429 S.W.2d 45 (1968), superseded by Act 165 of 1969 (now codified at Ark. Code Ann. § 21-9-301 (Repl. 2004). In Parish, we recognized the “possible hardship on those who have justifiably relied upon the law as announced by the court in the past.” 244 Ark. at 1253, 429 S.W.2d at 52. We went on to say:
We declare the rule of liability to be applicable to this case and all other causes of action arising after this decision becomes final. This serves, in keeping with our system of the private enforcement of legal rights, to reward the present plaintiff for her industry, expense and effort, and for having given to this Court the opportunity to rid the body of our law of this unjust rule.
Id. at 1254, 429 S.W.2d at 52 (emphasis added).
In Aka v. Jefferson Hospital Association, Inc., supra, we applied our decision overruling a prior case prospectively and, citing Parish v. Pitts, we applied the decision only to the case at bar and “to causes of action arising after the decision becomes final.” 344 Ark. at 643, 42 S.W.3d at 519. This court has followed Parish v. Pitts in numerous cases since 1968. See, e.g., Fields v. S. Farm Bureau Cas. Ins. Co., 350 Ark. 75, 87 S.W.3d 224 (2002) (change in exception to parental-immunity doctrine applied prospectively); S. Farm Bureau Life Ins. Co., 295 Ark. 250, 748 S.W.2d 332 (1988) (change in misrepresentation defense raised by insurer applied prospectively); Leffler v. Banks, 251 Ark. 277, 472 S.W.2d 110 (1971) (reiterated that implied warranty change applied prospectively); Wawak v. Stewart, 247 Ark. 1093, 449 S.W.2d 922 (1970) (change in case law regarding implied warranty for sale of house applied prospectively); see also S.R. Shapiro, Comment Note, Prospective or Retroactive Operation of Overruling Decision, 10 A.L.R.3d 1371 (1966).
The majority misapprehends the rule of law set out in Parish v. Pitts and that line of cases. Those cases stand for the proposition that overruling a case will be applied retroactively only for the benefit of the appellant who worked to overturn the erroneous precedent. In our case, that would be the appellant in Low. For all other cases, the change in law would apply to causes of action arising after the Low decision became final. The Parish cases uniformly hold that the application of new case law should be prospective only.
The majority inexplicably concludes that Felton has suffered no prejudice by this court’s dual reversal because he had two months after Low was handed down to amend his complaint to comply with Low. But that rationale only controls if Low is not applied prospectively. Again, the Parish cases hold that Low should be applied prospectively. Felton was entitled to rely on our case law as it stood before the Low decision.
The cases relied on by the majority to deny Felton relief are patently inapposite. In all three cases, this court pointed out that the plaintiff could not have justifiably relied on the overruled case. In two cases relied on by the majority, Looney v. Bolt, 330 Ark. 530, 955 S.W.2d 509 (1997), and Baker v. Milam, 321 Ark. 234, 900 S.W.2d 209 (1995), the lawsuit was filed by the plaintiffs after the case that overruled previous precedent had been handed down. That was certainly not the situation in the case before us. Here, Felton filed his complaint before Low was handed down. In Flemens v. Harris, 323 Ark. 421, 915 S.W.2d 685 (1996), the plaintiffs lawsuit was also filed after the case that allegedly had overruled previous precedent. We pointed out that under such circumstances, the plaintiff could not have relied on the previous case law.
Unlike the cases cited by the majority, here Felton justifiably relied on the case law as it existed at the time he filed his complaint, which was Scamardo. And that is the touchstone, as S.R. Sapiro’s comment in ALR emphasizes:
Under the classical view that the courts merely discovered and announced existing law, which they had no hand in creating, no issue of restricting the rule of an overruling case to prospective operation could be presented, since the act of overruling was a confession that the earlier rule had been erroneous and should never have been applied at all; but the modern decisions, taking a more pragmatic view of the judicial function, have recognized the power of a court to hold that an overruling decision is operative prospectively only and is not even operative upon the rights of the parties to the overruling case.
Although the courts have given attention to various factors in determining whether or not to apply an overruling decision retroactively, it appears that the factor of reliance has received the most attention.
Sapiro, supra at 1377-79. I would adhere to the modern view as we did in Parish and the cases that followed. There can be no doubt that Felton relied on the law in effect when he filed his lawsuit, which, again, was Scamardo.
In short, this court demonstrably changed Arkansas’s common law in the middle of Felton’s litigation. Yet, Felton had a clear right to believe Low would be applied prospectively in light of Parish v. Pitts and its progeny. Nor do I believe that amending his complaint in July of 2006 to comply with Low nullifies Felton’s argument that Low should be applied prospectively. Under these facts, it is terribly unfair to penalize Felton when this court reversed itself twice within two years on the procedure to be followed and when our case law following Parish v. Pitts calls for just the opposite conclusion.
I respectfully dissent.
Imber, J., joins this dissent.