Fewell v. Pickens

39 S.W.3d 447, 344 Ark. 368, 2001 Ark. LEXIS 215
CourtSupreme Court of Arkansas
DecidedApril 5, 2001
Docket00-1279 & 00-1272
StatusPublished
Cited by8 cases

This text of 39 S.W.3d 447 (Fewell v. Pickens) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fewell v. Pickens, 39 S.W.3d 447, 344 Ark. 368, 2001 Ark. LEXIS 215 (Ark. 2001).

Opinions

ROBERT L. Brown, Justice.

The appellants in this case, Bob E. Fewell and Holdingsco, Inc., appeal from an order by the Pulaski County Circuit Court appointing a receiver for American Investors Life Insurance Company (American Investors) and enjoining the appellants from transacting business for the company. They further appeal from an order denying their motion to vacate the appointment of the receiver and the injunction and from an order denying their motion to strike an affidavit of service. The appellee in this case is Mike Pickens, who is the Arkansas Insurance Commissioner and who was appointed receiver for American Investors. Fewell and Holdingsco raise multiple points in this appeal in which they contend that the circuit court erred in its various orders. We hold that the issues raised are without merit, and we affirm.

American Investors is a life insurance company domiciled in Arkansas. Its parent company is Holdingsco, although Fewell owns a fractional interest in the company. Fewell is the owner of Holdingsco. In 1999, following a review of American Investors’s financial solvency, Pickens found a $2,935,000 capital surplus deficiency in the company.1 As a result, on May 28, 1999, the Arkansas Insurance Department, American Investors, Holdingsco, and Fewell entered into an Agreement to cure the deficiency. The purpose of the Agreement was to enable American Investors to be considered solvent as of December 31, 1998. The Agreement provided that in consideration of the Insurance Department’s forbearance in putting American Investors into receivership, American Investors, Holdingsco, and Fewell would make up the $2,935,000 capital surplus deficiency with deposits and promissory notes. The Agreement also contained a personal guaranty by Fewell that American Investors would meet the minimum capital surplus requirement of $115,000 as of December 31, 1999. The Agreement further provided that upon the breach of any of its covenants, American Investors, Holdingsco, and Fewell consented to the immediate commencement of receivership proceedings, the entry of an order granting receivership, and waiver of prior notice to the entry of such an order.

On December 30, 1999, the same parties entered into a First Amended and Substituted Agreement. Under the First Amended Agreement, Fewell executed a promissory note dated the same day in the amount of $1,407,802.63, which was payable in full to American Investors on or before June 30, 2000. Additionally, Fewell reaffirmed his personal guaranty that American Investors would meet the minimum capital surplus requirement of $115,000 as of December 31, 1999. The First Amended Agreement included a provision that unless modified therein, all other portions of the prior, original agreement remained in effect and “[were] hereby ratified, and incorporated herein by reference.”

The First Amended Agreement also contained a provision that Fewell’s ultimate liability under the $1,407,802.63 promissory note and his personal liability for American Investors’s operations ending December 30, 1999, might be adjusted downward following the calculation of the “1999 Reserve True-Up,” which would determine the amount needed to pay incurred claims for 1999. Reserves on hand for 1999 claims totaled $7,713,920. A “Review of Claims Reserves for American Investors Life Insurance Company” was issued on June 28, 2000 by a consulting actuary, Martin F. Gibson. The Gibson Review calculated the total claims reserve for American Investors as of December 31, 1999, at $12,183,000, which exceeded the $7,713,920 figure by over $4 million. Correspondence between the parties followed, and Fewell failed to pay the amount owed under his promissory note by June 30, 2000. As a result, on July 11, 2000, Pickens, as Insurance Commissioner, commenced receivership proceedings against American Investors pursuant to the Uniform Insurers Liquidation Act, Ark. Code Ann. § 23-68-101 through 132 (Repl. 1994, Supp. 1999) (Uniform Act), by filing a petition for the appointment of receiver and injunctive relief.

On that same day, a hearing was held before the Pulaski County Circuit Court. At its conclusion, the court entered an order entitled Permanent Injunction and Order Appointing Receiver for Rehabilitation. On July 31, 2000, Fewell and Holdingsco moved to intervene in the action. On August 4, 2000, a hearing was held before the circuit court and appellants’ intervention motion was granted. The appellants also moved at this hearing that the order of receivership and the injunction be set aside and dismissed. The circuit court denied appellants’ petition. This appeal followed.

I. Motion to Dismiss

As a preliminary matter, we consider Pickens’s motion to dismiss, which is based on his allegation that the record in this appeal was untimely filed. On November 3, 2000, Pickens filed his motion to dismiss which was submitted with this case for resolution. In it, he urges that the Permanent Injunction and Order Appointing Receiver for Rehabilitation issued by the circuit court on July 11, 2000, “was an interlocutory order within the meaning of Rules 2(a)(6), 2(a)(7), and 5(a) of the Arkansas Rules of Appellate Procedure — Civil.” Thus, he maintains that Fewell and Holdingsco were required to lodge the record on appeal within thirty days of the order’s entry pursuant to Ark. R. App. P. — Civ. 5(a). This, he contends, the appellants failed to do. Furthermore, Pickens asserts that the order establishing the “permanent” injunction and receivership clearly contemplated additional actions by the circuit court and, thus, was interlocutory.

We disagree with Pickens’s characterization of the July 11, 2000 order in this case. The Uniform Act has this to say about the finality of orders:

An appeal shall he to the Supreme Court from an order granting or refusing rehabilitation, liquidation, or conservation, and from every other order in delinquency proceedings having the character of a final order as to the particular portion of the proceedings embraced therein.

Ark. Code Ann. § 23-68-103(d) (Supp. 1999). There are two aspects of § 23-68-103(d), which we believe are important. First, the section contemplates more than one final order in delinquency proceedings. Second, the order in question in this case is entitled Permanent Injunction and Order Appointing Receiver for Rehabilitation. We have no doubt that over the course of the delinquency proceedings, other orders might be entered by the circuit court which touch and concern this order. But on its face, the character of the order appointing the receiver and providing permanent relief is clearly that of finality. The motion to dismiss is denied.

II. Standing

Pickens further raises the question of the appellants’ standing to appeal.2 He advances the argument that they are non-parties to the order of receivership and injunction and, thus, should be precluded from taking this appeal unless pecuniarily affected. See In the Matter of Allen, 304 Ark. 222, 800 S.W.2d 715 (1990). Far from being pecuniarily affected, Pickens contends that any claim for relief by the appellants merely derives from the rights of American Investors.

We disagree with Pickens on this question. Holdingsco is the parent company of American Investors, and Fewell is the owner of Holdingsco.

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Bluebook (online)
39 S.W.3d 447, 344 Ark. 368, 2001 Ark. LEXIS 215, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fewell-v-pickens-ark-2001.