Arkansas Cases
JOHN GIBSON AUTO SALES v. DIRECT INS. CO., CA06-316
(12-20-2006) John Gibson Auto SALES, Inc. Appellant v.
Direct Insurance COMPANY, Appellee No. CA06-316. Court of
Appeals of Arkansas Divisions III & IV. December 20, 2006.
Appeal from the Garland County Appellant Circuit Court
[No. Cv-05-1145-3], Hon. David B. Switzer, Judge.
AFFIRMED.
SAM BIRD, Judge
Appellant John Gibson Auto Sales, Inc. (Gibson), appeals
from an order granting summary judgment in favor of
appellee Direct Insurance Company (Direct). Gibson is an
automobile dealer in Hot Springs. On February 9, 2005,
pursuant to an Installment Sale Contract, Gibson sold a 1998
GMC Suburban vehicle to Rochelle Hunter. According to the
contract, Hunter paid $1,000 as a down payment and Gibson
financed a balance of $11,700, to be paid in monthly
installments of principal and interest. The contract
required Hunter to obtain a casualty insurance policy
covering the vehicle, and she acquired such a policy from
Direct. On June 5, 2005, the vehicle sustained a loss, and
Gibson, claiming to be a lien holder and loss payee under
the policy, made demand upon Direct for payment of its
loss. Direct refused to pay, contending that the insurance
policy had been cancelled prior to the loss to the vehicle
due to non-payment of premiums.
On June 25, 2005, Gibson filed a complaint in the Garland
County Circuit Court praying for judgment in the amount of
$11,849.59, less applicable deductibles, and for statutory
penalties, costs, interest, and attorney fees. In its
answer, Direct denied that Hunter’s insurance policy was in
effect
on June 5, 2005, denied that Gibson was a loss payee on
that date, and alleged that the insurance policy in
question had been effectively cancelled on June 3, 2005,
due to non-payment of premium.
On November 1, 2005, Gibson filed a motion for summary
judgment, contending that Direct had failed to give Gibson
proper notice of cancellation of the policy as required by
Ark. Code Ann. § 23-89-304. In the brief supporting
its motion, Gibson argued that, under the statute, an
insurer’s notice of cancellation of an insurance policy must
be given at least twenty days prior to termination, except
that where the cancellation is for non-payment of premiums,
the notice is not effective unless it is given at least ten
days prior to termination and contains a statement of the
reason the policy is to be cancelled.
Gibson attached to its motion the written notice of
cancellation that it received from Direct, which was dated
May 23, 2005, and provided for an effective date of June 3,
2005, but which did not contain a statement of the reason
why the policy was being cancelled. In addition, Gibson
attached a “Cancellation of Policy” dated June 13, 2005.
Gibson contended that, because the May 23 notice did not
contain the reason why the policy was being canceled, the
cancellation could not have been effective until June 13,
which was twenty days after the notice was sent.
Furthermore, pointing to the June 13 cancellation notice,
Gibson argued that Direct’s “own documents show the policy
was in effect on the date of the loss.” Gibson therefore
claimed that coverage under the policy was in effect on the
date of the loss, which was June 5, 2005.
Direct filed a cross-motion for summary judgment on
November 21, 2005, claiming that Gibson was “not a bank or
other lending institution” and that statutory notice of
intent to cancel the policy was required to be given only
to the insured and “any bank or lending institution shown
on the policy and having a lien on the insured’s
automobile.” Direct argued that because Gibson was neither
a bank nor other lending institution, Gibson was not
entitled to notice, but that notice had been given to
Gibson as a courtesy, rather than as a requirement of Ark.
Code Ann. § 23-89-304.
In its reply to Direct’s motion, Gibson conceded that it
was not a bank but argued that it was a lending institution
under the statute. To support its claim, Gibson asserted
that, in its normal course of business, it loaned monies
and was subject to both state and federal regulations as to
lending. It also asserted that the intent of the statute is
to give notice of cancellation to a lien holder, so the
lien holder can take appropriate action to protect its
interest.
By letter dated January 6, 2006, the trial court announced
that it was granting Direct’s cross-motion for summary
judgment, finding that the “[sole] issue [was] whether
plaintiff [Gibson] in this case is a `lending
institution.'” The court determined that Gibson was not a
lending institution, and Gibson now appeals.
Summary judgment was appropriate in this case, as both
parties concede that there are no issues of material fact
left to be resolved and the issue is purely one of law,
involving the interpretation of Ark. Code Ann. §
23-89-304(b) (Supp. 2003). See State Farm Mut. Auto. Ins.
Co. v. Henderson, 356 Ark. 335, 150 S.W.3d 276 (2004). We
review issues of statutory interpretation de novo, as it is
for this court to decide what a statute means. Id. In this
respect, we are not bound by the trial court’s decision;
however, in the absence of a showing that the trial court
erred, its interpretation will be accepted as correct on
appeal. Id.
Arkansas Code Annotated section 23-89-304(b) states as
follows:
(1)No notice of cancellation to any bank or other lending
institution shown on the policy and having a lien on the
insured’s automobile shall be effective unless mailed or
delivered by the insurer to the bank or other lending
institution.
(2)No notice of cancellation to any bank or other lending
institution shall be effective unless mailed or delivered
at least twenty (20) days prior to the termination of the
insurance protecting the interest of the bank or lending
institution, provided that, when cancellation is for
nonpayment of premium, at least ten (10) days’ notice of
cancellation accompanied by the reason therefor shall be
given.
Simply stated, subsection (1) provides that, to be
effective, policy cancellation notices must be mailed or
delivered to banks or other lending institutions that have
a lien on an insured’s automobile and are shown on the
policy. Subsection (2) further provides that, to be
effective, insurance policy cancellation notices to banks or
other lending institutions must be mailed or delivered at
least twenty days before termination of the insurance
policy, except that, when the reason for the cancellation
is non-payment of premiums, the time for giving effective
notice is reduced to ten days and the notice must contain
the reason for the policy’s cancellation.
On appeal, Gibson contends that the trial court erred in
its finding that Ark. Code Ann. § 23-89-304(b) did
not require that it be given notice of cancellation of the
insurance policy, arguing that the clear intent of the
statute was to provide advance notice to lien holders that
insurance would be cancelled. Gibson asserts that, although
it is not a bank, as an “other lending institution” it is
entitled to notice under the statute, pointing to the fact
that it is regulated by both state and federal regulations
for lending.
The problem with this argument is that there is nothing in
the record to establish that Gibson is a “lending
institution.” Although Gibson asserted that it loaned
monies and was subject to both state and federal
regulations as to lending, it produced no evidence that its
primary function was the business of lending. We recognize
that the term “lending institution,” as used in Ark. Code
Ann. § 23-89-304(b), is not defined in the statute.
However, in our view, the term “lending institution” means
an organization that is primarily engaged in the lending
business; if the organization’s credit and lending
operations, however extensive, and even though regularly
carried on, is an incidental function of its main business,
then the organization is not a lending institution for the
purpose of Ark. Code Ann. § 23-89-304(b).
Here, there is simply no proof that Gibson’s primary
function was the business of lending. Rather, the evidence
shows that Gibson was an automobile dealer and that its
loan to Hunter was simply an extension of credit that was
incidental to Gibson’s main business — selling
automobiles. Though Gibson claimed that it “loaned monies,”
it produced no evidence to show that this was its primary
function. We therefore hold that Gibson was not a “lending
institution” within the meaning of Ark. Code Ann. §
23-89-304(b), and we affirm the trial court’s decision to
grant summary judgment in favor of Direct.
The dissenting judge does not disagree with the trial
court’s conclusion that Gibson was not a lending
institution within the meaning of Ark. Code Ann. §
23-89-304. Rather, the dissent contends that whether or not
Gibson is a lending institution is irrelevant because Direct
did not offer proof that the policy had been terminated
prior to the loss to the vehicle on June 5, 2005. The
dissenting position ignores the pleadings, summary-judgment
motions, and arguments of the parties below, and overlooks
the sole basis of the trial court’s decision. The parties’
pleadings and motions demonstrate that the case presented to
the trial court evolved into the single question of whether
Gibson was a lending institution.
For example, the essence of Gibson’s complaint is that it
was entitled to recover for the June 5, 2005 damage to
Hunter’s car because Gibson was named in the policy as a
loss payee. Direct’s answer denied that the policy was in
effect because the policy had been cancelled on June 3,
2005, due to non-payment of premiums. On November 1, 2005,
Gibson filed its summary-judgment motion to which was
attached, among other things, copies of notices of “Intent
to Cancel Policy” addressed to John Gibson Auto dated May
23, 2005 and June 13, 2005, respectively. Both notices bore
the applicable policy number, identified the insured
(Hunter) and the insured vehicle, and contained an
effective cancellation date of June 3, 2005. Gibson did not
argue in its motion that it did not receive notices of the
policies’s cancellation on June 3, 2005. Rather, it argued
that “proper notice of cancellation was not given . . .” in
the manner required by Ark. Code Ann. § 23-89-304.
Specifically, it argued that since the notice dated May 23
did not contain a statement of the reason for the
cancellation as required by Ark. Code Ann §
23-89-304(b)(2), it was not effective to cancel the policy
until twenty days after the notice was given. Gibson then
pointed to the June 13, 2005 cancellation notice and argued
that Direct’s “own documents” demonstrate that the policy
was still in effect on June 5.
On November 21, 2005, Direct filed its cross-motion for
summary judgment alleging and arguing that, because Gibson
was not a bank or other lending institution, it was not
entitled, under Ark. Code Ann. §
23-89-304(b)(1)-(2), to notice of cancellation of a policy.
In its reply to Direct’s motion, Gibson alleged that the
parties were in agreement as to the relevant facts in this
case, and conceded that the “true issue is whether [Gibson]
as a loss payee was entitled to the 20 day notice as
required by A.C.A. § 23-89-304(b)(1).” Gibson
admitted that it was not a bank but argued that, as a lien
holder, it was an “other lending institution” within the
meaning of the statute.
From the foregoing summary of the pleadings and arguments,
it is clear that the issue framed by the parties in their
respective pleadings and motions for summary judgment was
whether Gibson was a “bank or other lending institution”
within the meaning of § 23-89-304. In the letter
setting forth its findings, the court noted that “the [sole]
issue is whether [appellant] in this case is a `lending
institution.'” In its order granting Direct’s motion for
summary judgment, the only finding made by the court was
that Gibson “has not established that it is a lending
institution.” Gibson’s only point on appeal is that the
trial court erred in its finding that Ark. Code Ann.
§ 23-89-304(b) did not require that notice of
cancellation of the insurance policy be given to Gibson.
The dissenting judges would have us decide this case upon
an issue that was not ruled upon by the trial court. When a
party does not obtain a ruling on an argument before the
trial court, the issue is procedurally barred from our
consideration on appeal. Israel v. Oskey, 92 Ark. App. 192,
___ S.W.3d ___ (2005). Therefore, we cannot decide this
case, as the dissent urges us to, on the issue of whether
the casualty insurance policy had been terminated prior to
the loss of the vehicle.
Affirmed.
PITTMAN, C.J., and GLADWIN, CRABTREE and ROAF, JJ., agree.
BAKER, J., dissents.
KAREN R. BAKER, Judge, dissenting. I dissent from the
majority’s opinion affirming the trial court’s grant of
summary judgment to appellee. First, and foremost, we must
be mindful that we are reviewing the trial court’s order
that simultaneously denied appellant’s motion for summary
judgment and granted appellee’s motion for summary
judgment. Therefore, we must review the matter with
awareness that the trial court’s decision, and our
subsequent approval or disapproval of the trial court’s
action, directly affects the parties’ access to our
judicial system:
Our supreme court has stated that we only approve the
granting of the motion when the state of the evidence as
portrayed by the pleadings, affidavits, discovery
responses, and admissions on file is such that the
nonmoving party is not entitled to a day in court, i.e.,
when there is not any genuine remaining issue of material
fact and the moving party is entitled to judgment as a
matter of law. Wallace v. Broyles, 332 Ark. 189, 961
S.W.2d 712 (1998) (emphasis added). Neither Arkansas Rule
of Civil Procedure 12 nor Rule 56 authorizes the trial
court to summarily dismiss a complaint where there are
matters before the court that show there is an issue of
fact to be decided. Maas v. Merrell Assoc., Inc., 13
Ark. App. 240, 682 S.W.2d 769 (1985).
Buie v. Certain Underwriters at Lloyds of London, 79 Ark.
App. 344, 349, 87 S.W.3d 832, 836 (2002).
Arkansas Rule of Civil Procedure 56(e) states that, “When
a motion for summary judgment is made and supported as
provided in this rule, an adverse party may not rest upon
the mere allegations or denials of his pleadings, but his
response, by affidavits or as otherwise provided in this
rule, must set forth specific facts showing that there is
a genuine issue for trial.” . . . However, Rule 56(e)
further states, “If he does not so respond, summary
judgment, if appropriate, shall be entered against him.”
(emphasis added).
Buie, 79 Ark. App. at 349-50, 87 S.W.3d at 836 (2002).
Furthermore, summary judgment is not proper where the
evidence, although not in material dispute as to actuality,
reveals aspects from which inconsistent hypotheses may be
drawn. Luningham v. Arkansas Poultry Fed’n Ins. Trust, 53
Ark. App. 280, 922 S.W.2d 1 (1996).
One of the difficulties that I have with the majority’s
conclusion in this case is that it is premised on the
finding that the parties conceded that the only issue
before the trial court was the interpretation of Ark. Code
Ann. § 23-89-304(b). I have examined the pleadings
and can find no such concession by appellant either below
or on appeal. Appellant’s motion for summary judgment reads
as follows:
Comes now the Plaintiff, JOHN GIBSON AUTO SALES, INC., and
for it’s [sic] Motion states:
1. Plaintiff filed it’s [sic] Complaint herein against
the Defendant’ [sic] seeking payment for a loss under a
policy of insurance.
2. That Plaintiff submits with this Motion the Affidavit
of Mona Hamilton, and a supporting brief.
3. That there are no material issues as to liability and
Plaintiff is entitled to judgment as a matter of law.
4. That pursuant to Rule 56 of the Rules of Civil
Procedure, this Honorable Court should enter an order
granting judgment in Plaintiff’s favor as to liability
under the policy of insurance.
WHEREFORE, Plaintiff prays that this Honorable Court
enter a judgment finding a liability to Plaintiff under
the policy of the insurance.
This motion for summary judgment does not cite Ark. Code
Ann. § 23-89-304(b), nor does it mention statutory
construction, but it does assert that there are no material
issues as to liability. Examining further, the brief in
support of the first motion for summary judgment is
entitled “Brief in Support of Motion for Summary Judgment
on Liability.” The first paragraph reads as follows:
On February 9, 2005, Plaintiff sold to Defendant’s
insured, ROCHELLE HUNTER, one 1998 GMC suburban vehicle.
(A copy of the Sales Contract is attached hereto as
Exhibit A). Plaintiff was noted as a lien holder under a
policy of insurance issued by Defendant. (See response to
Interrogatory No. 4 attached hereto as Exhibit B). That on
June 5, 2005, the subject vehicle suffered a casualty
loss. Thereafter, Plaintiff made claim to the Defendant
for benefits under the policy. On June 27, 2005, Danette
Dilworth, a Claims Adjuster working behalf of the
Defendant submitted to Plaintiff a letter with attachments
stating “Letter of intent to cancel was mailed on May 23,
2005 and the actual cancellation letter was mailed on June
13 2005”) [sic] A copy of said letter and attachments
are attached to the supporting Affidavit of Mona Hamilton.
The first paragraph does not mention Ark. Code Ann.
§ 23-89-304(b), or that the only issue before the
trial court is one of statutory construction. It appears
that this paragraph merely establishes the timeline that
shows that the loss occurred after the notice of intent to
cancel was mailed, but prior to the cancellation of the
policy. If that timeline is accurate, then the policy was
still in effect at the time of the loss. Yet, the majority
has concluded that appellant conceded that the statutory
construction of Ark. Code Ann. § 23-89-304(b) was the
only issue before the court.
The second paragraph of appellant’s brief in support of its
motion for summary judgment reads as follows:
Defendant denied coverage contending the policy lapsed
for non-payment. Plaintiff asserts that proper notice of
cancellation was not given and seeks recovery under the
policy.
That statement makes no concession that the only issue
before the trial court was one of statutory construction.
It is followed by argument that cites Ark. Code Ann
§ 23-89-304, and the statute is set forth
line-by-line. Appellant argues that as a lienholder it was
entitled to statutory notice.
In the next paragraph, after establishing the timeline that
proved that the insurance policy was still in effect at the
time of the loss, appellant mentions that appellee also
failed to comply with a statutory notice. The brief in
support specifically cites only Ark. Code Ann. §
23-89-304(a)(2). Yet, somehow, the majority concludes that
the parties conceded that the only issue before the court
was a matter of statutory interpretation for Ark. Code Ann.
§ 23-89-304(b). The next paragraph reads in full:
Subsection (a)(2) requires that 20 days notice of
cancellation be provided to a lien holder, unless the
cancellation is based upon non-payment of premium, then
only a ten day notice is required, but the reason for
cancellation must be given. The notice of intent to cancel
dated May 23, 2005, and marked as Exhibit B to the
Affidavit of Mona Hamilton does not state the reason why
the policy was to be canceled. Accordingly pursuant to
subsection (a)(2) of A.C.A. § 23-89-304, the
cancellation could not be effective until 20 days after
May 23, 2005. Since the loss occurred on June 5, 2005,
Plaintiff is entitled to coverage under the policy.
The reference is repeated for subsection (a)(2), and again
there is no reference to subsection (b). Subsection (a)(2)
addresses notices to a named insured. After all, “by the
plain language of section 23-89-304, an insurance company
must give notice of cancellation to both the insured and to
any bank or other lienholder on the named insured’s
automobile for cancellation to be effective.” Stanley Wood
Chevrolet-Pontiac, Inc. v. Progressive Cas. Ins. Co., 79
Ark. App. 37, 83 S.W.3d 445 (2002). A lienholder, sometimes
designated as a mortgagee, who is named as a loss payee is
a named insured, Price v. Harris, 251 Ark. 793, 475 S.W.2d
162 (1972), even if not an insured for all purposes, see
Dalrymple v. Royal-Globe Ins. Co., 280 Ark. 514, 659 S.W.2d
938 (1983). One does not have to be a lending institution to
be designated a loss payee. See Farmers Mutual Ins. Co. v.
Lane, 278 Ark. 53, 643 S.W.2d 544 (1982); Price, supra.
Next appellant’s brief sets forth analysis under other
statutory provisions regarding insurance that awards
statutory protections to a secured party who qualifies as
an insured. See Sphere Drake Ins. Co. v. Bank of Wilson,
312 Ark. 540, 543, 851 S.W.2d 430, 432 (1993) (stating that
while we know of no case directly on point decided by this
court, Sphere Drake has given us no reason to hold that a
secured party who qualifies as an insured is not entitled
to the benefit of the statutory provision). Furthermore,
under a subsection titled “Unfair methods of competition
and unfair or deceptive acts or practices defined,”
Arkansas Code Annotated section 23-66-206(9)(B) (Repl. 2001
& Supp. 2005) provides as follows:
Cancellations of property and casualty policies shall
only be effective when notice of cancellation is mailed or
delivered by the insurer to the named insured and to any
lien-holder or loss payee named in the policy at least
twenty (20) days prior to the effective date of
cancellation. However, where cancellation is for
nonpayment is for nonpayment of premium, at least ten (10)
days’ notice of cancellation accompanied by the reason for
cancellation shall be given.
See also Columbia Mut. Ins. Co. v. Home Mut. Fire Ins. Co.,
74 Ark. App. 166, 47 S.W.3d 909 (2001).
Given that there is case law and statutory law supporting
appellant’s argument that a loss payee lienholder can
qualify as an insured on an insurance policy, I think it is
possible that appellant intentionally cited subsection
(a)(2) and not subsection (b). Nor is any concession that
the statutory interpretation of Ark. Code Ann. §
23-89-304(b) is the only issue before the court to be found
in the final two paragraphs of the appellant’s brief in
support of its motion for summary judgment:
Defendant’s own notice of cancellation dated June 13,
2005, attached as exhibit C to the Affidavit of Mona
Hamilton shows the cancellation date of June 13, 2005.
Again the loss was on June 5, 2005, coverage was in
effect. It should be noted that the intent to cancel was
dated May 23, 2005 and the notice of cancellation was June
13, 2005, taking into account the 20 day requirement of
A.C.A. § 23-89-304.
Since Defendant’s own documents show the policy was in
effect on the date of loss, and that A.C.A. §
23-89-304 was not complied with, Defendant should be held
responsible under the policy.
The conclusion of appellant’s brief in support states that
the policy was in effect on the day of the loss and that
the notice of cancellation was sent twenty days after the
notice of intent to cancel. The timeline set out by
appellant is consistent with the statute requirement that
an insurer provide twenty days notice prior to the
cancellation of the insurance policy.
I can find no concession by appellant that the only issue
before the trial court was the interpretation of Ark. Code
Ann. § 23-89-304(b).
In response to appellant’s motion, appellee filed a
document entitled “Cross-motion for Summary Judgment and
Response to Plaintiff’s Motion for Summary Judgment.” It
does not refute appellant’s claim that the policy was in
effect at the time of the loss of the vehicle. It does cite
Ark. Code Ann. § 23-89-304(b), but does not reference
Ark. Code Ann. § 23-89-304(a)(2). It claims that it
provided a ten (10) day notice of cancellation as a
courtesy, but that it was not required to provide any
notice whatsoever. The basis for its claim that appellant
was not entitled to notice of the cancellation of this
policy, for which it was a loss payee lienholder, was that
appellant is an automobile dealer. Specifically, appellee
argues that “[b]ecause the statute does not require notice
to motor vehicle dealers who sell vehicles under an
installment sales contract, plaintiff in this case was not
entitled to any notice, and its complaint against Direct is
without merit.” In furtherance of that claim, appellee
argues as follows:
Under the statutory construction maxim inclusion unius
est exclusion alterius, which the Arkansas Supreme Court
has called a “settled rule of construction,” the inclusion
of one in a list works to exclude all others. Arthur v.
Zearley, 320 Ark. 273, 281, 895 S.W.2d 928 (1995).
Applying the maxim, one concludes that the inclusion in
the statute of banks and other lending institutions is an
exclusion of other entities that might hold a lien on an
insured vehicle.
It appears that appellee is arguing that the inclusion of
banks and other lending institutions in Ark. Code Ann.
§ 23-89-304(b) excludes any secured party who
qualifies as an insured under subsection (a) who might be
entitled to notice. Because appellee does not mention Ark.
Code Ann. § 23-89-304(a), it is possible that
appellee is arguing that the inclusion of banks and other
lending institutions in Ark. Code Ann. §
23-89-304(b) excludes any secured party from any other
statutory protection provided by the law in the State of
Arkansas. As broad as this latter assertion seems, it is
consistent with appellee’s claim that “Arkansas law thus
does not entitle plaintiff to any notice of its
cancellation of [the] automobile insurance policy and that
the notice that was given was a courtesy rather than a
fulfillment of a requirement.” Appellee does not directly
respond to appellant’s argument that it was entitled to
notice under Ark. Code Ann. § 23-8-304(a). There
were no affidavits or other documents attached to appellee’s
motion. Clearly appellee was proposing that Ark. Code Ann.
§ 23-89-304(b) excludes an automobile dealer that
holds a lien on a vehicle from receiving notice of the
cancellation of a policy on which it is a loss payee.
In addition to the fact that appellee omitted any specific
reference to Ark. Code Ann. § 23-89-304(a), not once
did appellee say that the policy was terminated on a
specific date, or attach a copy of the cancellation, or
even state that the policy was cancelled prior to the date
of the loss. Instead, appellee argues only that Arkansas
law specifically excludes all lienholders on automobiles
from notice of a policy cancellation unless the lienholder
proves that it is a bank or lending institution. As the
majority writes this concept into law, a lienholder must
prove that it is in the business of loaning money separate
and apart from any other business before it can be legally
entitled to the same protection that a lienholder who is in
the business of loaning money is afforded. The question
that then arises is who might loan people money to buy
cars. Banks loan money to people with good credit and work
histories. Sometimes though, people do not qualify for bank
loans. Sometimes people are considered too high a risk for a
bank to loan money to them.
We have a higher percentage of people in this State below
the poverty level than the national average. In this
largely rural state, people need cars to get to jobs, buy
groceries, take their children to schools, and go to the
doctor. Car insurance is not an unnecessary luxury. We
require people to maintain and prove insurance coverage for
licensing and traffic use. The majority’s opinion
reinforces the belief that our laws afford no protection to
those who loan money to the economically disadvantaged and,
in act, specifically excludes them from the protection
afforded other secured parties.
Next at the summary judgment stage, appellant filed a
document entitled “Plaintiff’s Reply Brief.” Appellant’s
reply brief argues that if you’re going to look at Ark.
Code Ann. § 23-8-304(b) then it includes
lienholders. Appellant also filed a document entitled
“Plaintiff’s Response to Defendant’s Cross Motion for
Summary Judgment.” In that document, appellant admits the
allegations of Defendant’s paragraph seven which reads,
“Direct states that Arkansas law requires statutory notice
of insurance cancellation be sent only to the insured and to
`any bank or lending institution shown on the policy and
having a lien on the insured’s automobile.’ Ark. Code Ann
§ 23-89-304.” Then appellant denied paragraph eight
of appellee’s motion that reads, “Direct states that
plaintiff was neither the insured on the policy of insurance
in question nor a bank or other lending institution as
described in the statute.” Those answers indicate that
appellant was asserting that it was afforded protection
under subsection (a) as well as (b).
On appeal, appellant focuses on the fact that the trial
court erred in finding that the application of Ark. Code
Ann. § 23-89-304(b) precluded recovery for appellant
because it was not entitled to notice. The majority
misconstrues that focus, an argument directed at the trial
court’s ruling, as a concession that the interpretation of
Ark. Code Ann. § 23-89-304(b) was the only issue and
that appellant had abandoned any other claim.
We are reviewing a motion for summary judgment. On appeal,
appellant states that “[s]ince the loss occurred on June 5,
2005, the twenty days had not expired, and the policy was
in effect.” The pleadings of appellant to the trial court
asserted that the policy was in effect at the time of the
loss. Before this court should undertake an analysis of the
notice provision, we should first determine whether or not,
as a matter of law, the policy was cancelled prior to the
loss. Appellant initially cited those statutory notices
provisions to bolster its position that the policy was
still in effect at the time of the loss. Appellant did not
argue that the policy had been cancelled prior to the loss,
but that cancellation was ineffective to it, due to
improper notice. A factual determination of when the policy
is cancelled is a prerequisite for any analysis regarding
statutory notice requirements. For that reason alone, this
case should be reversed.
Under no analysis of the pleadings can I find that
appellant ever conceded that the only issue before the
trial court on summary judgment was the interpretation of
Ark. Code Ann. § 23-89-304(b). However, even had
appellee established by sufficient proof that the policy
was terminated prior to the loss, and if the only issue
before the trial court had indeed been an interpretation of
Ark. Code Ann. § 23-89-304(b), I still could not
accept the majority’s conclusion that the law of this State
protects lienholders, when named as a loss payee in a
policy of insurance, only if they prove they are
institutions exclusively in the business of loaning money.
Accordingly, I dissent.