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Southern Farm Bureau Casualty Insurance Co. v. Parsons

Court of Appeals of Arkansas, Division III

February 18, 2015

SOUTHERN FARM BUREAU CASUALTY INSURANCE COMPANY APPELLANT/CROSS-APPELLEE
v.
STUART PARSONS APPELLEE/CROSS-APPELLANT

APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, SEVENTEENTH DIVISION [NO. 60CV-2011-2460] HONORABLE MACKIE M. PIERCE, JUDGE

Turner Law Firm, P.A., by: Andy L. Turner and Ben C. Hall, for appellant.

Gibson Law Firm, PLLC, by: Jesse J. Gibson, for appellee.

ROBERT J. GLADWIN, CHIEF JUDGE

Southern Farm Bureau Casualty Insurance Company (SFB) appeals the circuit court's decision to set aside an interpleader order that allowed SFB to deposit insurance proceeds into the court registry and be discharged from liability. SFB's insured, appellee Stuart Parsons, cross-appeals from the dismissal of his bad-faith claim against SFB. We affirm on direct appeal and cross-appeal.

Parsons was seriously injured by an uninsured driver in October 2010. Upon undergoing extensive medical treatment, he made demand on SFB for $50, 000 in uninsured-motorist (UM) benefits. SFB accepted the claim but did not pay the proceeds directly to Parsons. Instead, SFB filed an interpleader complaint naming Parsons and several of his medical-care providers as defendants. The complaint alleged that Parsons and the providers had competing claims to the UM benefits and that SFB should be permitted to deposit the $50, 000 into the court registry and be discharged from liability.

Following a hearing, the circuit court entered the following order on November 9, 2011:

On Motion of Plaintiff [SFB], and for good cause shown, the Pulaski County Circuit Clerk is hereby authorized to accept from Plaintiff a check or draft in the sum of $50, 000.00 and to deposit the proceeds in an interest bearing account until further Order of this Court. Acceptance and deposit of the proceeds by the Pulaski County Circuit Clerk shall discharge Plaintiff of any liability in connection with the motorcycle/auto accident of October 30, 2010 that occurred in Searcy, White County, Arkansas, and the proceeds of Policy Number MV01131192.

After the order was entered, but before the court decided how to distribute the deposited proceeds, Parsons filed a motion on March 6, 2012, to dismiss SFB's interpleader action. The motion argued that SFB should have paid the $50, 000 directly to Parsons instead of filing the interpleader complaint because, at the time the complaint was filed, no medical-care provider had filed a lien against the policy proceeds. Parsons also counterclaimed against SFB for breach of contract and bad faith, alleging that SFB had a duty to pay him the full UM proceeds; that, in filing the interpleader action, SFB placed the interests of his medical-care providers above his own interests; and that SFB dishonestly advised him that the interpleader was necessary due to requirements of Medicaid and Medicare, neither of which had provided benefits to him after his accident.

SFB responded that the circuit court lacked jurisdiction to vacate the November 2011 interpleader order because the order had been entered more than ninety days earlier. See Ark. R. Civ. P. 60 (2014). The court disagreed and, on August 1, 2012, set the interpleader order aside.

Once the interpleader action was dismissed, Parsons successfully moved for summary judgment on his breach-of-contract claim. He received, in addition to the full policy proceeds, penalties, interest, and attorney's fees pursuant to Ark. Code Ann. § 23-79-208(a)(1) (Repl. 2014). A subsequent order dismissed Parsons's bad-faith claim, and this appeal and cross-appeal followed.[1]

Direct Appeal

SFB argues that the circuit court lacked jurisdiction to set aside the November 2011 interpleader order more than ninety days after it was entered. SFB cites Ark. R. Civ. P. 60(a), which reads as follows:

(a) Ninety-Day Limitation. To correct errors or mistakes or to prevent the miscarriage of justice, the court may modify or vacate a judgment, order or decree on motion of the court or any party, with prior notice to all parties, ...

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