Opinion
CA04-95
Opinion Delivered October 6, 2004
Appeal from the Faulkner County Circuit Court, CIV03-182, Honorable Charles Edward Clawson, Jr., Circuit Judge, Reversed and Remanded.
This is an appeal from the grant of a motion for summary judgment in favor of appellee, Southern Farm Bureau Casualty Insurance Company. Appellant, May Morgan, was involved in a one-vehicle collision in which her automobile was destroyed. She filed a claim with appellee. Appellee denied the claim, taking the position that the policy was null and void because of the misrepresentation of a material fact. Appellant filed her complaint, seeking to recover on her policy and charging that appellee acted in bad faith in declaring her policy null and void. Appellee filed its motion for summary judgment, which was granted by the trial court. We reverse and remand for trial.
In McWilliams v. Schmidt, 76 Ark. App. 173, 186, 61 S.W.3d 898, 908 (2001) (citations omitted), we explained:
In summary-judgment cases, we need only decide if the granting of summary judgment was appropriate based upon whether the evidentiary items presented by the moving party in support of the motion left a material question of fact unanswered. Summary judgment is no longer considered a drastic remedy but is regarded simply as one of the tools in the trial court's efficiency arsenal. All proof submitted must be viewed in a light most favorable to the party resisting the motion, and any doubts and inferences must be resolved against the moving party. On a summary-judgment motion, once the moving party establishes a prima facie entitlement to summary judgment by affidavits or other supporting documents, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact.
In its motion for summary judgment, appellee asserted that appellant and her husband, Tommy Morgan, applied for two policies of insurance on September 25, 2002; that Tommy filled out an application with Farm Bureau Mutual Insurance Company for a homeowner's policy while appellant simultaneously filled out an application for coverage with appellee Southern Farm Bureau Casualty Insurance Company on their vehicles; that "each was asked whether anyone in the household was a convicted felon"; that both responded that there was no convicted felon in the household; that Tommy Morgan "has a remarkable string of criminal convictions, of which his wife was well aware"; that the policies were issued based upon the information provided in the applications; and that neither company would have issued a policy to the Morgans had the true facts been revealed.
Attached to the motion were: 1) excerpts from Tommy Morgan's deposition, discussing his arrests and convictions; 2) excerpts from appellant's deposition, in which she acknowledged that she was aware that Tommy had been arrested before, that he had been convicted of a felony, and that she herself had "sorta kinda" been arrested; 3) the application for automobile insurance signed by appellant only, which asked if anyone in the household had ever been arrested or convicted of a felony and with respect to which the box marked "No," was checked; 4) an affidavit from appellee's regional underwriting manager, which asserted that neither policy would have been issued by either company "had the truth of the criminal records of Tommy and May Morgan been revealed" and that the questions were included on the application because that information was considered to be highly significant to the risk.
For her first point of appeal, appellant contends that the trial court erred in accepting as uncontroverted the underwriter's affidavit that was submitted by appellee in support of its motion for summary judgment because he was not a disinterested witness. She argues that there was no allegation in the pleading or the proof offered below that she had a criminal record, only that her husband had one, and that she has difficulty understanding how the failure to reveal her husband's criminal record was material to the risk that appellee assumed when it issued its policy of insurance on an automobile owned by her. Appellee counters the argument by noting that an uncontroverted affidavit is deemed to be true for the purposes of a summary-judgment motion and that because appellant did not controvert the underwriter's affidavit, she cannot be heard to argue that it should not be accepted at face value. We find that the affidavit, taken at face value, does not support the grant of summary judgment.
Appellee's underwriter's affidavit provided in pertinent part:
3. Southern Farm Bureau Casualty Insurance Company issued a policy of motor vehicle insurance to Tommy and May Morgan.
. . .
7. Neither Farm Bureau Mutual Insurance Company of Arkansas, Inc. nor Southern Farm Bureau Casualty Insurance Company would have issued either policy had the truth of the criminal records of Tommy and May Morgan been revealed.
8. The questions on the two applications which were filled out by Tommy and May Morgan are included on the application because those particular questions seek information that is considered to be highly significant to the risk. Both Farm Bureau Mutual Insurance Company of Arkansas, Inc. and Southern Farm Bureau Casualty Insurance Company rely on the answers given in the applications to evaluate whether a risk is acceptable.
(Emphasis added.)
As noted earlier in this opinion, in reviewing a trial court's grant of summary judgment, all proof submitted must be viewed in a light most favorable to the party resisting the motion, and any doubts and inferences must be resolved against the moving party. McWilliams, supra. It is only after the moving party establishes a prima facie entitlement to summary judgment by affidavits or other supporting documents that the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. Id.
Here, while it is true that appellant acknowledged in her deposition that she was not only aware of her husband's prior convictions, but that she too had been "sorta kinda" arrested, thus making her responses on the application incorrect, the underwriter's affidavit avers in pertinent part: "Neither Farm Bureau Mutual Insurance Company of Arkansas, Inc., nor Southern Farm Bureau Casualty Insurance Company would have issued either policy had the truth of the criminal records of Tommy and May Morgan been revealed." (Emphasis added.) An admission of a "sorta kinda" arrest does not constitute a "criminal record," yet it is appellant's "criminal record" that the affidavit asserts, in part, as the basis upon which it would have refused to issue the policy. Moreover, there is no asserted basis in the underwriter's affidavit that the policy would not have been issued if appellee had known that appellant lied on the application about her own arrest and Tommy's arrests and felony convictions. That is, the underwriter did not rely upon the fact that appellant misrepresented that she had never been arrested and that her husband had never been arrested nor convicted of a felony. Rather, he asserted the fact that Tommy and appellant had criminal records as the sole basis for claiming that appellee would not have issued either policy if it had known. The problem, again, is that appellee's own proof demonstrates a question of fact with respect to a criminal record for appellant.
In short, it was the underwriter's affidavit that had to explain what facts were demonstrated by the other evidence and why appellee would not have issued the policy if those facts had been known. While there was other evidence submitted with the motion for summary judgment that might well have been a basis for appellee to have refused to issue the policy to appellant, the affidavit did not rely upon it. Consequently, viewing appellee's proof in the light most favorable to appellant, as we must do, we cannot say that it established a prima facie entitlement to summary judgment. We conclude, therefore, that the trial court erred in awarding summary judgment to appellee.
For her second point, appellant contends that the trial court erred in finding a material misrepresentation of fact in the absence of any proof as to materiality. Regarding this second point, appellant asks this court to revisit the case of Southern Farm Bureau Life Insurance Co. v. Cowger, 295 Ark. 250, 748 S.W.2d 332 (1988). Our resolution of the first issue on appeal makes it unnecessary to address this point. Moreover, Cowger is a supreme court case, which we would be bound to follow.
Reversed and remanded.
HART and VAUGHT, JJ., agree.