Page:Parker v. Southern Farm Bureau Casualty Insurance Co.pdf/5

Rh Parker reported the accident to his Farm Bureau agent on September 17, 1993, and also filed a claim for his losses.

On September 22, 1993, Farm Bureau mailed Parker a "Cancellation Reminder Notice" informing him that his policy was canceled September 9, 1993, because the quarterly premium had not been paid. The notice invited Parker to reinstate his coverage. Parker took the notice to his Farm Bureau agent on September 27, 1993, and also showed the agent his check register with the notation of a check for the September 2 premium payment. Parker paid the premium on September 27, and his Farm Bureau agent attempted to reinstate Parker's coverage effective September 9, 1993. However, Farm Bureau's underwriting department refiised to allow the retroactive reinstatement and instead reinstated the policy effective October 4, 1993. Parker's efforts to settle the claim with Farm Bureau were unsuccessful, and he filed suit against the company on July 13, 1994. Parker sued Farm Bureau for failure to comply with the terms of his policy and with Ark. Code Ann. § 23-89-304 (Repl. 1992), which requires ten days' notice of cancellation for nonpayment of insurance premiums. Parker also asserted a claim for the first party tort of bad faith for the failure to pay his claim. He sought recovery for the damages to his vehicle, statutory penalty, attorney's fees, punitive damages, and a declaratory judgment that Farm Bureau was required to pay the damages sustained by the other driver.

The trial court granted Parker summary judgment on the issue of insurance coverage, finding that Farm Bureau failed to comply with the ten-day notice requirement. The trial court granted Farm Bureau summary judgment on the bad-faith claim. Parker was awarded $1,403.73, which included the twelve percent statutory penalty, and attorney's fees in the amount of $10,676. Farm Bureau was also adjudged liable for the other driver's damages of $439.59.

Parker appeals from the dismissal of his bad faith claim and from the trial court's award of less than the requested attorney's fees. Parker also asserts that the trial court erroneously limited the scope of discovery, which he needed to establish his claim of bad faith. Farm Bureau cross-appeals the trial court's award of attorney's fees.

Although Farm Bureau does not appeal the award of summary judgment on the issue of coverage, it is necessary to review the basis