Farm Bureau Insurance v. Paladino

571 S.W.2d 86, 264 Ark. 311, 1978 Ark. LEXIS 2109

Opinion

Darrell Hickman, Justice.

Carl Paladino’s barn burned and he sued his insurance company, Farm Bureau, in the Conway County Circuit Court for the $8,000.00 coverage Farm Bureau had on his barn.

There was no dispute over the fire loss of the barn nor the coverage. The dispute was whether Farm Bureau had good cause for not paying the claim within sixty days of proof of loss.

The trial judge found that Farm Bureau had no good cause for not paying the claim within sixty days and entered judgment for $8,000.00, plus 12% penalty, an attorney’s fee of $2,640.00, and 6% interest on the $8,000.00 from the date of the fire loss.

We only need examine one allegation of error by Farm Bureau on appeal: whether Paladino was entitled to an attorney’s fee and the 12% penalty pursuant to Ark. Stat. Ann. § 66-3238 (Repl. 1966). We hold he was not and modify the judgment accordingly.

Paladino, in his complaint against Farm Bureau, asked for the $8,000.00 policy limits, a 12% penalty, attorney’s fee, and interest from the date of the loss. The court awarded $8,-000.00, a penalty, an attorney’s fee, and $238.67 as interest computed from the date of the loss. Paladino concedes on appeal that the interest should have been calculated from 60 days after the filing of the proof of loss and should be reduced to interest for 19 days for a total of $25.27. Interest may only be awarded from the expiration of the period of time allowed the company in the loss payable clause of a policy to investigate, consider and pay a claim — in this case sixty days after the proof of loss.

We have consistently held that the 12% penalty and attorney’s fee, as provided for in Ark. Stat. Ann. § 66-3238 (Repl. 1966), can only be awarded when the exact amount sued for is recovered. Ford Life Insurance Co., et al v. Jones, 262 Ark. 881, 563 S.W. 2d 399 (1978); Southwestern Ins. Co. v. Camp, 253 Ark. 886, 489 S.W. 2d 498 (1973).

Since Paladino sued for and obtained judgment in excess of a legal amount, the court erroneously awarded the penalty and attorney’s fee.

Therefore, the judgment is modified to $8,000.00, plus interest from the correct date and costs.

Affirmed as modified.

We agree.

Harris, C.J., and Fogleman and Byrd, JJ.