United States District Court, W.D. Arkansas, Fort Smith Division
DAVID HARPER, D.D.S., M.S. PLAINTIFF
UNUM GROUP and THE PAUL REVERE LIFE INSURANCE COMPANY DEFENDANTS
OPINION AND ORDER
HOLMES, III CHIEF U.S. DISTRICT JUDGE.
the Court is Defendants Unum Group and The Paul Revere Life
Insurance Company's (collectively, “Unum”)
motion for partial summary judgment (Doc. 57), Plaintiff Dr.
David Harper's response (Doc. 61), Unum's reply (Doc.
64), and the parties' supporting documents. For the
reasons set forth below, Unum's motion will be granted.
case involves a Lifetime Total Disability Benefit Rider as
part of an insurance policy issued by Unum to Dr. Harper on
January 9, 1993. The rider provides total disability income
protection coverage, with the monthly benefit to start paying
when he is 65 years old. Dr. Harper is currently 63 years
old. Dr. Harper is disabled, and claims that his disability
under the rider was improperly characterized as due to
sickness rather than injury. For total disability due to
injury, the monthly benefit amount paid to Dr. Harper upon
his turning 65 would be $15, 000. For total disability due to
sickness, the monthly benefit under the policy would be $9,
approved D r. Harper's claim for total disability in July
of 2013 when he was 59 years old, but Unum determined in a
December 3, 2013 letter that D r. Harper's disability was
related to a sickness and not an injury. Based on this
decision, Dr. Harper claims breach of contract, negligence,
bad faith, and violation of the Arkansas Deceptive Trade
Practices Act, Ark. Code Ann. § 4-88-101 et seq. (Doc.
He seeks the following relief: a declaratory judgment that
his disability was caused by injury; compensatory damages in
the form of monthly benefits for total disability due to
illness upon reaching the age of 65; punitive damages for
Unum's alleged bad faith; prejudgment interest; a
twelve-percent statutory penalty; and attorney's fees.
parties agree that the rider at issue does not apply until
Dr. Harper reaches his 65th birthday and that Dr. Harper is
receiving full monthly benefits to which he is currently
entitled under the policy. (Doc. 62). Unum argues that Dr.
Harper has not suffered any damages, and he is only entitled
to declaratory judgment if he is successful on the merits of
his claims. Unum therefore seeks the entry of summary
judgment on all of Dr. Harper's remedies requests except
for declaratory judgment and attorney's fees.
Harper's response focuses heavily on temporal
restrictions which led to the lawsuit's filing. The
limitations period invoked in Unum's policy requested the
filing of the immediate lawsuit within three years of when
written proof of the loss was required. (Doc. 63, pp. 2-4).
Further, Dr. Harper's treating neurosurgeon has been
diagnosed with ALS and is quickly losing his ability to
speak, a fact witness is almost 90 years old, and two of
Unum's reviewing physicians are elderly, with one having
since retired. (Id., pp. 4-6). While the Court
understands the reasons why Dr. Harper filed the instant
lawsuit when he did, that alone does not entitle him to more
than a declaratory judgment at this time.
primary issue ripe for adjudication in the instant motion is
whether Unum committed an anticipatory breach, as contested
by Dr. Harper. Where there is no repudiation of a disability
insurance policy so as to result in an anticipatory breach,
the insured is not entitled to future payments under the
policy. Gen. Am. Life Ins. Co. v. Yarbrough, 360
F.2d 562, 568 (8th Cir. 1966).In Willis v. Insurance Company
of North America, the court found that under Arkansas
law an insurer's determination that the insured was not
totally disabled was not an anticipatory repudiation such
that the insured was entitled to a lump-sum award
representing the present value of future installments of the
insurance policy. 820 F.Supp. 408, 410 (E.D. Ark. 1993).
“[T]he distinction lies in whether the insurance
company renounces the fact that it is bound by the contract
or merely denies that it is liable to an insured under the
terms of the policy.” Id. Here, Unum has not
renounced the fact that it is bound to the policy at issue,
or even specifically to the rider to that policy; rather,
Unum takes the position that the rider obligates it to pay
Dr. Harper for total disability due to sickness as opposed to
injury when he attains the age of 65. Unum has not committed
an anticipatory breach because it has not repudiated the
disability insurance policy. As a result, Dr. Harper is not
entitled at this time to future benefits under the policy and
compensatory damages cannot be recovered in the present
lawsuit. Because compensatory damages will not be awarded if
Dr. Harper is successful on the merits of his claim, no
prejudgment interest will be awarded, either.
Unum argues that punitive damages may not be awarded where
there are no compensatory damages. The Court agrees, and will
not allow the recovery of punitive damages in this case.
See Howard Brill, Arkansas Law of Damages
§ 9:5 (2016) (“Punitive damages cannot be awarded
unless the issue of compensatory damages has been both
submitted to the jury or fact-finder and decided
Unum argues that Dr. Harper cannot recover a twelve-percent
statutory penalty under Ark. Code Ann. § 23-79-208
because that statute only applies in cases “in which
loss occurs.” Dr. Harper responds that he has
“suffered the loss in the form of an injury causing
disability, for which Unum has declined to pay full benefits
. . . .” For purposes of this litigation, no loss has
occurred because the parties agree that Dr. Harper is
receiving the full monthly benefits to which he is currently
entitled under the policy. (Doc. 62). Furthermore, Arkansas
state law does not allow the recovery of the twelve-percent
penalty in declaratory judgment actions. See Ark.
Code Ann. § 23-79-209; Shelter Mut. Ins. Co. v.
Smith, 300 Ark. 348, 353-54 (1989). The Court finds that
Dr. Harper cannot recover a twelve-percent penalty pursuant
to Ark. Code Ann. § 23-79-208 because it is inapplicable
under the facts of this case.
THEREFORE ORDERED that Unum's motion for partial summary
judgment (Doc. 57) is GRANTED. In the event that Dr. Harper
is successful on the merits of his substantive claims, he
cannot recover compensatory damages, prejudgment interest,
punitive damages, or the twelve-percent statutory penalty. To
the extent that these damages requests are to be construed as
claims, they are DISMISSED WITH PREJUDICE.
 By previous order, the Court dismissed
without prejudice Dr. Harper's claim for breach of
contract due to ambiguity. (Doc. 52). In his amended
complaint that followed, Dr. Harper reasserted the breach of
contract due to ambiguity claim with exactly the same
allegations. (Doc. 53). Dismissal without prejudice is