United States District Court, W.D. Arkansas, Harrison Division
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS, UNITED STATES DISTRICT JUDGE
before the Court is a Motion for Partial Summary Judgment
(Doc. 20) filed by Defendant State Farm Fire & Casualty
Company ("State Farm"). Plaintiffs Joe and Donna
Lee ("the Lees") are represented by counsel but
failed to respond to the Motion. More than two months have
passed since a response was due. For the reasons explained
herein, the Motion (Doc. 20) is GRANTED.
the time relevant to this case, the Lees owned a home located
at 180 Road 1419 in Mountain Home, Arkansas. On January 30,
2016, a fire damaged or destroyed the home and the Lees'
personal property. At the time, the Lees had an insurance
policy with State Farm that covered loss caused by fire. The
Lees thus demanded payment from State Farm under the terms of
their policy, but State Farm denied their claim on suspicion
that the fire was not accidental. After State Farm denied
their claim, the Lees filed suit in the Circuit Court of
Baxter County alleging breach of contract and breach of the
duty of good faith and fair dealing. State Farm removed the
case to this Court and later filed a Motion to Dismiss (Doc.
6), which was granted in an Order issued on June 22, 2017
(Doc. 12). In the wake of that Order, the Lees filed an
Amended Complaint (Doc. 17) on July 14, 2017. State Farm
filed the instant Motion for Partial Summary Judgment on
November 3, 2017, and, as noted above, the Lees failed to
respond. The Motion is ripe for decision.
Rule of Civil Procedure 56(a) provides that, "[t]he
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law." The
Court must review the facts in the light most favorable to
the opposing party and give that party the benefit of any
inferences that logically can be drawn from those facts.
Canada v. Union Elec. Co., 135 F.3d 1211, 1212-13
(8th Cir. 1997). The moving party bears the burden of proving
the absence of a genuine dispute of material fact and that it
is entitled to judgment as a matter of law. See Fed.
R. Civ. P. 56(c); Matsushita Eiec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586-87 (1986).
the moving party has met its burden, the non-moving party
must "come forward with 'specific facts showing that
there is a genuine issue for trial."'
Matsushita, 475 U.S. at 587. However, "the mere
existence of a scintilla of evidence in support of the
plaintiffs position will be insufficient" to survive
summary judgment. Anderson v. Durham D&M, LLC,
606 F.3d 513, 518 (8th Cir. 2010) (quoting Anderson v.
Liberty Lobby, inc., 477 U.S. 242, 252 (1986)). Rather,
in order for there to be a genuine issue of material fact,
the non-moving party must produce evidence "such that a
reasonable jury could return a verdict for the nonmoving
party." Ailison v. Flexway Trucking, Inc., 28
F.3d 64, 66 (8th Cir. 1994) (quoting Anderson, 477
U.S. at 248). To meet its burden, "[t]he nonmoving party
must do more than rely on allegations or denials in the
pleadings, and the court should grant summary judgment if any
essential element of the prima facie case is not supported by
specific facts sufficient to raise a genuine issue for
trial." Register v. Honeywell Fed. Mfg. &
Techs., LLC, 397 F.3d 1130, 1136 (8th Cir. 2005) (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)).
In the case of a plaintiffs failure to respond to a motion
for summary judgment, the reviewing court must still address
the merits of that motion and not rule automatically in the
defendant's favor. Soliman v. Johanns, 412 F.3d
920, 922 (8th Cir. 2005), cert, denied, 549 U.S. 865
(2006); United States v. One Parcel of Real Prop.,
27 F.3d 327, 329 n.1 (8th Cir. 1994); Canada, 135
F.3d at 1213 ("When a motion would be dispositive of the
merits of the cause if granted, courts should normally not
treat a failure to respond to the motion as
initial matter, although State Farm styled the present Motion
as one for Summary Judgment on the Lees' claim for breach
of good faith and fair dealing, it is more properly a Motion
for Summary Judgment on the Lees' claim for the tort of
bad faith. This is because, as the Court explained in its
prior Order, Arkansas law generally does not recognize a
separate claim for breach of good faith and fair dealing.
Ark. Research Med. Testing, LLC v. Osborne, 2011
Ark. 158, at *6 (declining to "recognize a separate
contract claim for breach of the duty of good faith and fair
dealing"); Country Corner Food & Drug, Inc. v.
First State Bank & Trust Co. of Conway, Ark., 332
Ark. 645, 655 (1998) ("The fact that every contract
imposes an obligation to act in good faith does not create a
cause of action for a violation of that obligation, and . . .
this court has never recognized a cause of action for failure
to act in good faith."); see also Mountain Home
Flight Serv., Inc. v. Baxter Cnty., Ark., 758 F.3d 1038,
1043 (8th Cir. 2014) ("The Supreme Court of Arkansas has
clarified that Arkansas contract law does not recognize a
separate contract claim for breach of a duty of good faith
and fair dealing." (quotation marks omitted)).
Arkansas courts do recognize a tort for bad faith against
insurance companies. This tort applies to "an insurer
who actively engaged in dishonest, malicious, or oppressive
conduct in order to avoid its liability."
Osborne, 2011 Ark. 158, at *6. Although Arkansas law
recognizes this tort, "[t]he standard for establishing a
claim for bad faith is rigorous and difficult to
satisfy." Unum Life Ins. Co. of Am. v. Edwards,
362 Ark. 624, 627 (2005) (citing Delta Rice Mill, Inc. v.
Gen. Foods Corp., 763 F.2d 1001, 1004 (8th Cir. 1985)).
A plaintiff must allege (and prove) that the "defendant
insurance company engaged in affirmative misconduct that was
dishonest, malicious, or oppressive." Unum, 362
Ark. at 628; see also Findley v. Time Ins. Co., 264
Ark. 674, 649-651 (1978). The Arkansas Supreme Court has
found substantial evidence of bad faith on the part of
insurance companies where, for example, "an insurance
agent lied by stating there was no insurance coverage ... and
where a carrier intentionally altered insurance records to
avoid a bad risk." State Auto Prop. & Cas. Ins.
Co. v. Swaim, 338 Ark. 49, 58 (1999) (internal citations
is no evidence in the record on which a reasonable jury could
conclude that State Farm acted dishonestly, maliciously, or
oppressively in how it handled the Lees' policy claim.
True, State Farm denied coverage under the policy. But, the
law is clear that "[t]he tort of bad faith does not
arise from a mere denial of a claim; there must be
affirmative misconduct." Unum, 362 Ark. at 628
(citing Stevenson v. Union Standard Ins. Co., 294
Ark. 651, 654 (1988)).
mere denial of the claim, the only other allegations that
could serve as the basis for the Lees' claim of bad faith
are the naked assertions that 1) State Farm did not follow
the requirements of the Arkansas Arson Reporting Immunity
Act (Doc. 17, ¶ 21), 2) State Farm did
not report the fire to the Arkansas Fire Marshal as indicated
in a letter sent to the Lees (Doc. 17, ¶ 22), 3) State
Farm did not in fact send a letter to the Fire Marshal (Doc.
17, ¶ 23), and 4) State Farm's letter to the Lees
indicating that it had reported the fire was sent to them in
an effort to coerce the Lees to drop their claim (Doc. 17,
undisputed evidence in the record refutes each of these
allegations and demonstrates that State Farm is entitled to
judgment as a matter of law on this claim. First, the
evidence confirms that State Farm did in fact submit notice
of the fire to the proper officials, in accordance with the
Arkansas Arson Reporting Immunity Act. See, e.g.,
Doc. 19-1 (Copy of April 6, 2016, letter from State Farm to
the Arkansas State Police-Attn. State Fire Marshal-that
specifically mentioned that it was being sent to comply with
the Arkansas Arson Immunity Statute); Doc. 19-2 (business
records indicating submission of the letter by State Farm to
the Arkansas Fire Marshal as well as to the Lees); Doc. 19-4
(response letter on April 18, 2016, from an official with the
Arkansas State Police to State Farm). Moreover, the Lees'
attempt to portray State Farm's letter to them
(i.e. the one stating that the Arkansas Fire Marshal
had been notified) as malicious is rebutted by the fact that
the Arkansas Arson Reporting Immunity Act expressly
requires the insurance company to promptly notify an
insured when it sends information to an authorized agency
after concluding that a fire may have been "other than
accidental." See Ark. Code Ann. §
short, the Lees have not met their burden to demonstrate the
requisite malicious conduct necessary to sustain a claim for
bad faith against State Farm. Therefore, State ...