Summary
The Arkansas Supreme Court held that an underinsured-motorist insurer named as a party in the original action could not avoid being bound by the adjudication of liability and damages after requesting severance from the trial. Requiring the insured to relitigate those issues in a second trial was barred by issue preclusion and was unfair. The court reversed and remanded.
Topics
Practice areas
Questions Presented
- Whether the appeal was properly treated as an appeal from the judgment entered after the second trial rather than as an appeal from the denial of a motion for summary judgment.
- Whether the trial court erred by severing Southern Farm Bureau from the original action without requiring it to be bound by the fact-finder's determination of liability and damages.
- Whether requiring Brinker to relitigate liability and damages against Southern Farm Bureau was barred by the issue-preclusion component of res judicata.
Holdings
- Although denial of a motion for summary judgment ordinarily is not appealable, the appeal was properly treated as an appeal from the judgment rendered after the second trial because Brinker was challenging the refusal to grant judgment on his UIM claim without requiring him to relitigate the underlying tort issues.
- When an underinsured-motorist insurer is named as a party in the action and is severed from the trial at its own request, the insurer remains a party and may be bound by the prior adjudication of liability and damages; the trial court erred by severing Southern Farm Bureau without requiring it to be bound by the original verdict.
- Requiring Brinker to try liability and damages twice was barred by the issue-preclusion facet of res judicata because Southern Farm Bureau remained a party and had an opportunity to litigate those issues in the original action.
Key quotations
“Requiring the appellant to try his case twice is blatantly unfair and clearly barred by res judicata.”
“In short, we agree with appellant that the trial court erred in severing Southern Farm Bureau without requiring that it be bound by the verdict in the original trial.”
Factual background
A school bus from Forrest City School District No. 7 collided with Overtus Brinker, who had $100,000 in underinsured-motorist coverage with Southern Farm Bureau Casualty Insurance Company. Brinker sued the school district, the bus driver, and Southern Farm Bureau, but the insurer was severed from the first trial and refused to be bound by the verdict. The school district admitted liability, and the jury awarded Brinker $100,000; after the district paid its $25,000 limit, Southern Farm Bureau refused to pay the balance of Brinker's claimed UIM benefits. Brinker was then required to litigate liability and damages again against the insurer.
Procedural history
Brinker sued the school district, its bus driver, and Southern Farm Bureau for damages and underinsured-motorist benefits. The trial court denied Southern Farm Bureau's motion to dismiss but severed the insurer from the first trial and declined to bind it to the resulting verdict. The school district admitted liability, and the jury awarded Brinker $100,000; after the district paid its $25,000 limit, Southern Farm Bureau refused Brinker's demand for the remaining $75,000. The trial court denied Brinker's summary-judgment motion and conducted a second trial against Southern Farm Bureau, resulting in a $65,000 award. The Supreme Court of Arkansas reversed and remanded.
Remand instructions
Remanded for further action consistent with the opinion, including application of the original fact-finder's determination of liability and damages rather than requiring relitigation of those issues against Southern Farm Bureau.