noting a line of cases in which the court “has examined situations where language was omitted from the notice of appeal about the designation of the record even though the requirements of the rule were actually met”
How later courts described this case
- noting a line of cases in which the court “has examined situations where language was omitted from the notice of appeal about the designation of the record even though the requirements of the rule were actually met”
Written by the judges who cited it.
The opinion
Tom GLAZE, Justice, dissenting. The majority court totally misconstrues the purpose' and intent of Arkansas’s direct-action statute, Ark. Code Ann. § 23-79-210 (a)(l) (Repl. 1992). That statute recognizes that a nonprofit organization, like PEOPL here, is immune from tort liability caused by its agents or employees; but even so, that organization may still opt to obtain liability insurance to provide an avenue of redress to parties sustaining injuries caused by that tort-immune entity’s agents or employees. See Savage v. Spencer, 235 Ark. 946 , 362 S.W.2d 668 (1962). In this respect, § 23-79-210(a)(l) provides in pertinent part that a nonprofit organization, not subject to tort liability, may carry liability insurance, so that any person who suffers injury on account of the wrongful conduct of the organization shall have a direct cause of action against the insurance company. 1 Thus, even though the organization itself is immune from suit, the statute authorizes the organization’s insurer to be sued directly by the injured party.
Individual board members and officers of nonprofit organizations, on the other hand, have never been afforded tort immunity, and a person may sue a board member or officer individually for his or her negligence causing the plaintiff’s injury. Section 23-79-210(a)(1) neither expressly nor inferentially allows the injured person the right to file a direct action against any insurance company carrying tort liability coverage on any board member or officer of a nonprofit entity. See Savage, 235 Ark. at 950 , 362 S.W.2d at 670 .
Because board members and officers of nonprofit organizations can be individually sued, such organizations often feel obliged to arrange for director and officer liability and company reimbursement policies in order to protect those officials who agree, voluntarily usually, to serve or assist the organization. Here, PEOPL indisputably obtained such coverage from Tudor Insurance Company for its board and officer members and, in doing so, those individual members were the designated “insureds” under the policy. PEOPL, as an entity, was not designated or qualified as an insured.
In sum, under Arkansas law, a nonprofit organization is immune from tort liability, but if it obtains insurance naming itself as an insured to cover tort liability caused by its servants, agents and employees, a person injured by the organization’s agents or employees may bring his or her suit directly against the organization’s insurer. However, the direct-action statute is inapplicable to the nonprofit organization’s board members and officers who, under Arkansas law, can be sued in tort and who are named insureds in a liability policy. Simply put, § 23-79-210(a)(l), by its own plain language, in no way is intended to provide direct actions against insurers that issue policies covering insureds like board members and officers who may be found individually liable for tort liability.
For the reasons above, I would affirm the trial court’s decision.
Roaf, J., joins this dissent. In this respect, the statute covers the negligence of the organization or its servants, agents, or employees acting within the scope of their employment or agency with such organization.