Parker v. Southern Farm Bureau Casualty Insurance Co.

by the Arkansas Supreme Court

Supreme Court of Arkansas

326 Ark. 1073

Rickey Parker  v.  Southern Farm Bureau Casualty Insurance Company

Appeal from Johnson Circuit Court

No. 95-1134 --- Opinion delivered: December 23, 1996.
[Petition for rehearing denied January 27, 1997.] 

Syllabus

1. DISCOVERY – TRIAL COURT HAS WIDE DISCRETION – WHEN ABUSE OF DISCRETION WILL BE FOUND. – The trial court has wide discretion in matters pertaining to discovery and a trial court's decision will not be reversed absent an abuse of discretion; abuse of discretion has been found where there has been an undue limitation of substantial rights of the appellant under the prevailing circumstances; a motion for production of documents must be considered in the light of the particular circumstances which give rise to it, and the need of the movant for the information requested.
2. DISCOVERY – GOAL OF DISCOVERY TO ALLOW LITIGANT TO PREPARE ADEQUATELY. – In cases where the appellant is relegated to having to prove his claim by documents, papers, and letters kept by the appellee, the scope of discovery should be broader; this factor is considered in deciding whether there has been an abuse of discretion in denying a discovery request; the goal of discovery is to permit a litigant to obtain whatever information he may need to prepare adequately for issues that may develop without imposing an onerous burden on his adversary.
3. DISCOVERY – PROTECTIVE ORDER PROPERLY GRANTED – NO ABUSE OF DISCRETION FOUND. – Where, during the course of discovery, appellee provided appellant with substantial information and material regarding the billing and notice procedures, and appellant did not request cancellation notices issued by appellee to other policyholders prior to filing his cause of action, and appellant did not show how notices sent after his lawsuit was filed would be relevant to his bad-faith claim, the supreme court could not say that the trial court abused its discretion in granting the protective order limiting discovery; a cause of action for bad faith must exist and be complete at the time such a lawsuit is filed; a motion for production of documents must be considered in the light of the particular circumstances which give rise to it and the need of the movant for the information requested.
4. DISCOVERY – WORK PRODUCT NOT EQUAL TO ATTORNEY–CLIENT PRIVILEGE. – Work product is not the same as a privilege that protects the sanctity of confidential communications; the attorney–client privilege and the work-product rule the principles upon which they are based, while susceptible to confusion, are separate and distinct.
5. DISCOVERY – TRIAL COURT HAS BROAD DISCRETION IN MATTERS RELATING TO DISCOVERY – NO ABUSE OF DISCRETION FOUND. – The trial court's ruling excluding certain portions of appellant's claim file under the work-product doctrine was upheld where appellant did not explain how these documents were pertinent to his claim of bad faith, nor did he argue that he was prejudiced by their exclusion; no abuse of discretion was shown; a trial court has broad discretion in matters pertaining to discovery, and that discretion will not be second-guessed by the appellate court absent an abuse of discretion that is prejudicial to the appealing party.
6. TORTS – INSURANCE COMPANIES – WHEN LIABILITY FOR BAD FAITH MAY BE INCURRED. – An insurance company may incur liability for the first-party tort of bad faith when it affirmatively engages in dishonest, malicious, or oppressive conduct in order to avoid a just obligation to its insured; the tort of bad faith requires affirmative misconduct, without a good-faith defense; the affirmative conduct must be dishonest, malicious, or oppressive in an attempt to avoid the insurer's liability under an insurance policy.
7. TORTS – BAD FAITH – AFFIRMATIVE MISCONDUCT MUST BE PRESENT FOR LIABILITY TO BE INCURRED. – The tort of bad faith cannot arise merely from the denial of a claim, without some affirmative misconduct; a cause of action must exist and be complete at the time the action is commenced; the subsequent occurrence of a material fact cannot aid in maintaining it.
8. TORTS – NONE OF APPELLEE'S CONDUCT AFTER FILING OF COMPLAINT COULD BE USED BY APPELLANT TO SUPPORT HIS CLAIM OF BAD FAITH – APPELLEE'S ACTION DID NOT RISE TO LEVEL OF BAD FAITH. – Where none of the conduct by appellee after the filing of the complaint, including legal positions asserted, could provide a basis for appellant's bad-faith claim, and it was not apparent from the abstract that the lack of notice was even raised by appellant prior to the filing of the lawsuit, the court could not say that appellee's action, albeit mistaken, in denying the claim for nonpayment of premium constituted dishonest, malicious, or oppressive conduct rising to the level of bad faith.
9. ATTORNEY & CLIENT – AMOUNT OF FEE AWARDED – TRIAL COURT HAS SUPERIOR PERSPECTIVE IN DETERMINING. – Due to the trial court's superior acquaintance with the record and the quality of the service rendered, the supreme court will usually defer to the trial court's superior perspective in awarding attorney's fees and will reverse only when there has been an abuse of discretion.
10. ATTORNEY & CLIENT – AMOUNT OF FEE AWARDED – FACTORS TO BE CONSIDERED. – The amount of the fee should not be such that attorneys would avoid the type of litigation, or fail to sufficiently prepare, that the fee should be commensurate with the time and amount of work involved, and the ability present and necessary to meet the issues that arise in the case; the amount recovered in the action is a relevant consideration.
11. ATTORNEY & CLIENT – AWARD OF FEE – FACTORS FOR DETERMINATION OF AMOUNT. – The following factors are relevant in the determination of an award of attorney's fees: (1) the experience and ability of the attorney; (2) the time and labor required to perform the service properly; (3) the amount involved and the result obtained in the case; (4) the novelty and difficulty of the issues involved; (5) the fee customarily charged for similar services in the locality; (6) whether the fee is fixed or contingent; (7) the time limitations imposed upon the client in the circumstances; and (8) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
12. ATTORNEY & CLIENT – FACTORS PROPERLY CONSIDERED – NO ABUSE OF DISCRETION FOUND IN FEE AWARDED. – Where appellant submitted a detailed bill for 117.60 total hours, it was virtually impossible to separate those services related to the coverage claim and those related to the bad-faith claim, the fee was very large in relation to appellant's recovery, and the trial court, in its order, considered these and all of the relevant factors presented in the case, the supreme court could not say that there was an abuse of discretion in the award of the fee.

Appeal from Ashley Circuit Court; Sam Pope, Judge; affirmed on appeal; affirmed on cross appeal.

Arnold, Hamilton, & Streetman, by: Thomas S. Streetman, for appellant.

John Richard Byrd, Sr., for appellee.

[Opinion of the court by Justice ANDREE LAYTON ROAF. Special Justice ELTON A. RIEVES, III joins the court's opinion. Concurring opinion by Justice TOM GLAZE. Dissenting opinions by Justice ROBERT L. BROWN and Special Justice MICHAEL E. STUBBLEFIELD. Chief Justice BRADLEY D. JESSON and Justice ROBERT H. DUDLEY not participating.]