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Archive for June, 2010

Southern Farm Bureau Casualty Insurance Co. v. Krouse, No. CA 09-1264.

In July 2002, Rebecca Krouse’s truck was rear-ended by a car driven by Zachary Stumon and owned by his roommate, Randy Givens. As a result of the accident, Krouse incurred substantial medical bills to treat her injuries, substantial property damage to her truck, auto rental costs, and wage loss. Krouse settled with Stumon, Givens, and American Home Assurance Company for the $25,000 policy limits for bodily injury for the vehicle owned by Givens.

She then looked to her own insurer, Southern Farm Bureau Casualty Insurance Company (“Farm Bureau”), to collect from her $50,000 under-insured motorist (“UIM”) policy. Farm Bureau agreed to pay for Krouse’s property damage and auto rental costs. It refused, however, to pay for her medical bills or wage loss because she failed to provide Farm Bureau appropriate notice under the policy prior to settling with Stumon and Givens.

In 2004, Krouse sued Farm Bureau for the $50,000 limits of her UIM policy, her costs, and attorney fees. Farm Bureau answered the complaint and asserted a counterclaim for declaratory judgment, arguing that Krouse was not entitled to recover under the UIM policy because she failed to comply with the notice requirements. In turn, Krouse responded that she had complied with the notice provisions and that Farm Bureau had actual notice of the settlement. In her answer to Farm Bureau’s counterclaim, Krouse again requested costs and attorney fees.

In May 2009, a jury found in Krouse’s favor and awarded her $30,500 for medical bills, wage loss, pain, suffering, and mental anguish. The trial judge subtracted her previous settlement from the award, leaving her a final award of $5,500. Krouse then petitioned the court under Ark. Code Ann. § 23-79-209 for $22,162 in attorney fees. The trial court granted her request, noting that Ark. Code Ann. § 23-79-209 applies to any declaratory judgment action, even if raised by counterclaim.

On appeal, the Arkansas Court of Appeals agreed with the trial court, noting that the case involved two causes of action: (1) one for payment of an insurance claim, governed by Ark. Code Ann. § 23-79-208; and (2) one for a declaratory judgment, governed by Ark. Code Ann. § 23-79-209. Even though Krouse prevailed on her claim for payment under the UIM policy, governed by § 23-79-208, the application of § 23-79-208 does not preclude application of § 23-79-209 if both are at issue. Because Farm Bureau asked for a declaratory judgment, Krouse was entitled to attorney fees for successfully defending against it. Accordingly, the court affirmed the trial court’s decision.

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In September 2005, James Chapman was honorably discharged from the Coast Guard for failing to “maintain reasonable and consistent progress” during his probationary weight-loss period. He weighed around 250 pounds and had 32% body fat at the time he was discharged. In April, he had been given six months to shed 70 pounds and 8% body fat.

Chapman asked the Board for Correction of Military Records to vacate the discharge, reinstate him to active duty, or correct his military records so he could retire with 20 years of service. He had been approved to retire in September 2006. Chapman claimed the Coast Guard “condoned for 19 years his marginal weight performance,” and his commanding officer had unfairly singled him out in his last year of service. The board ruled against him, noting that he had previously been placed on weight probation in 1992, 1993, 1998, 2000, 2001, 2002, and 2003.

Chapman then filed a claim under the Military Pay Act, alleging that his commanding officer had used the weight program to remove him from the Coast Guard for filing grievances. The Court of Federal Claims, however, found the board’s conclusion was reasonable based on Chapman’s previous compliance with the weight program through a combination of diet and exercise. The court further noted that compulsive overeating does not qualify as a physical disability in the military.

For the full story, click here.

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