MedMarc Casualty Insurance v. Forest Fiealthcare, Inc.

Ray Thornton, Justice,

dissenting. Because I believe that Forest and Regional, rather than Medmarc, had the burden of allocating the verdict from the Thurman case, and because they failed to meet this burden, I must respectfully dissent.

When a portion of a judgment is covered by an insurance policy and a portion of a judgment is not covered by an insurance policy, the insured bears the burden of allocating the judgment. See Morris v. Western States Mutual Automobile Insurance Co., 268 F.2d 790 (7th Cir. 1959); General Accident Fire & Life Assurance Corp. v. Clark, 34 F.2d 833 (9th Cir. 1929); Aetna Insurance Co. v. Waco Scaffold & Shoring Co., 370 So.2d 1149 (Fla. Dist. Ct. App. 1978); Allan D. Windt, Insurance Claims and Disputes §§ 6:26, 6:27 (4th ed. 2004); 14 Couch, Lee R. Russ, Couch on Insurance § 205:79 (3rd ed. 2004).

The majority asserts that by providing legal representation to Forest and Regional during the Thurman case, Medmarc assumed the burden of allocating the judgment. This contention is misplaced. In support of this position, the majority opinion cites Allan Windt’s insurance treatise, which provides:

Most courts have held that the burden [of allocating the verdict] is on the insured. An exception, however, should be made to that rule in those cases in which the circumstances surrounding the defense of the underlying action were such that the insurer was obligated to seek an allocated verdict or advise the insured of the need for one, but failed to fulfill that obligation. In that event, the burden of persuasion should be placed on the insurer.

Allan D. Windt, Insurance Claims & Disputes § 6:27 (4th ed. 2001) (emphasis added).

Relying on the forgoing legal principles, I would conclude that Medmarc did not fail to fulfil its obligations to Forest and Regional. Medmarc did provide representation for Forest and Regional during the Thurman trial. During its representation, Medmarc adequately notified Forest and Regional of their need for an apportioned verdict. Specifically, Medmarc disclosed to Forest and Regional the need to allocate the judgment in a letter from Jim Martin, president of Uni-Ter Claims Services Corporation, to Roger Glasglow, Forest and Regional’s attorney. In the letter, Mr. Martin wrote, “[I]t is quite important that any verdict form used at trial requires the jury to allocate damages awarded between injuries, which took place within the Medmarc policy period, and those, which took place outside of that period . . . Medmarc will not be responsible for injuries, which took place outside of its policy period.”1 Additionally, Medmarc adequately attempted to receive an allocated verdict by requesting an apportionment instruction. Because Medmarc informed Forest and Regional of the need for an apportioned verdict, and because Medmarc requested a jury instruction that would have allowed for the apportionment of the judgment, Medmarc fulfilled its obligations to Forest and Regional. Accordingly, the burden of apportioning the verdict did not shift from Forest and Regional to Medmarc.

Because the burden of allocating the judgment from the Thurman case rested on Forest and Regional, and because Forest and Regional failed to meet this burden, I would conclude that the trial court erred when it granted Forest and Regional’s motion for partial summary judgment and when it allocated twenty-five percent of the Thurman verdict to the Medmarc policy period. Accordingly, I would reverse and remand this case to the trial court. Upon remand, I would instruct the trial court to enter an order granting summary judgment in favor of Medmarc. See Wilson v. McDaniel, 247 Ark. 1036, 499 S.W.2d 944 (1970) (explaining that we can review the denial of a motion for summary judgment in conjunction with our consideration of an order in which a cross-motion for summary judgment was granted).

I respectfully dissent.

It should be noted that while Medmarc’s policy period extended from April 1, 1999, until April 1, 2000, Mrs. Thurman resided at Forest for only forty days during that time.