Village Market, Inc. v. State Farm General Insurance

Per Curiam. In its petition for rehearing, appellant, Village Market, Inc., seeks reconsideration of only that portion of this court’s opinion that awards State Farm General Insurance Company, Inc., attorney’s fees under Ark. Code Ann. § 16-22-308 (Repl. 1994). The amicus petitioners timely join in Village Market’s rehearing petition. Petitioners argue that the court’s majority opinion failed to consider the statutory-construction argument originally offered by Village Market, and in disregarding that argument, caused error. We must agree.

In this court’s initial consideration of the attorney’s fee issue, Village Market pointed out that State Farm was awarded an attorney’s fee under § 16-22-308, but that Ark. Code Ann. § 23-79-208 (Repl. 1992) is the statute that controls attorney’s fee awards, and it provides no such fee to insurers when they prevail in an insured’s claim under his or her policy. Village Market, citing State Farm Mut. Auto Ins. Co. v. Brown, 48 Ark. App. 136 , 892 S.W.2d 519 (1995), explained that § 16-22-308 is a general statute that provides for attorney’s fees in actions on breach of contract, but § 23-79-208 is a specific statute that provides for attorney’s fees on insurance loss claims and allows such fees (and penalties) for only insureds and then only under special circumstances. Our earlier opinion did not specifically address Village Market’s citations or argument, but instead stated the following:

Village Market reads into § 23-79-208 a prohibition against the recovery of attorney’s fees by insurers that is simply not there. In fact, the statute is utterly silent as to what an insurer may or may not recover should it prevail in a claim brought by the insured for failure to pay the loss. We decline to interpret this silence as legislative intent to prohibit such a recovery.

Two major principles are controlling in this case. First, when interpreting statutes, the rule is settled that a general statute must yield when there is a specific statute involving the particular matter. Board of Trustees v. Stodola, 328 Ark. 194 , 942 S.W.2d 255 (1997); see also Brown, 48 Ark. App. 136 , 892 S.W. 2d 519 . Second, we must consider the fundamental principle that attorney’s fees are not awarded unless expressly provided for by statute or rule. McQuillan v. Mercedes-Benz Credit Corp., 331 Ark. 242 , 961 S.W.2d 729 (1998). If we had fully considered Village Market’s statutory-construction argument when interpreting §§ 16-22-308 and 23-79-208, we would not have “declined to interpret § 23-79-208’s silence as to what an insurer may or may not recover should it prevail in a claim brought by the insured.” (Emphasis added.)

In considering and applying the foregoing statutory principles, we first read the plain language of § 23-79-208, which provides for attorney’s fees in actions between policyholders and insurance companies. That statute allows attorney’s fees to insureds under prescribed circumstances, but omits any reference for such fee awards to insurers. Next, in reading § 16-22-308, that statute never mentions insurance policies and never expressly provides attorney’s fees for either insureds or insurers. Because attorney’s fees are awarded only when expressly allowed by statute or rule, the silence of such fee awards to insurers in §§ 16-22-308 and 23-79-208 can only be interpreted to mean that the General Assembly never intended that attorney’s fees be awarded to insurers when an insured has filed an action seeking recovery for a claim under his or her policy.

In conclusion, we agree that Village Market’s (and amici curiae’s) construction of §§ 16-22-308 and 23-79-208 is correct. Therefore, we grant its petition for rehearing and reverse only that part of the trial court’s decision awarding State Farm attorney’s fees.

Newbern, Brown, and Imber, JJ., dissent.