Spires v. Russell

David Newbern, Justice.

On July 20,1987, Act 70 of 1987 came into effect. Section 1 of the act has been codified as Ark. Code Ann. § 27-53-402 (Supp. 1989) as follows:

(a) In all cases wherein loss or damage occurs to property resulting from motor vehicle collision amounting to one thousand dollars ($1,000) or less, and the defendant liable, without meritorious defense, shall fail to pay the loss or damage within sixty (60) days after written notice of the claim has been received, then the defendant shall be liable to pay the person entitled thereto double the amount of the loss or damage, together with a reasonable attorney’s fee, which shall not be less than two hundred fifty dollars ($250), and courts costs.

(b) This liability, which is limited to damage to property, attaches when liability is denied and suit is filed.

The act was an amendment of the previous law which had applied in cases where the property damage from a collision had amounted to $300 or less. The effect of the amendment was to raise the limit on the statute’s applicability from $300 to $1000. The question on this appeal is whether the statute applies where liability for damages, arising from an automobile accident which occurred before the statute came into effect, was denied and suit was filed after the statute came into effect. We hold the statute applies.

On March 11,1987, a car owned by appellee Wayne Russell and driven by appellee Shawna Russell (Tucker) struck a parked pickup truck owned by appellants William and Betty Ruth Spires. The Spireses brought suit on April 20,1988, for $828.24 plus attorney fees and court costs. On May 4,1988, the Russells filed an answer and third-party complaint in which they denied liability. Shortly before the case came to trial, but well after the 60-day period had passed, the Russells offered to pay the amount of the Spires’s stipulated damages, $414.12. The offer was refused.

The trial court found in favor of the Spireses but refused to double the damages because the statute had come into effect after the occurrence of the accident.

The Spireses argue that the language of subsection (b) of the statute makes it clear that liability attaches upon the denial and filing of suit which came after the statute became effective. They contend that, because subsection (b) is clear and unambiguous in that respect, it is not subject to another interpretation, citing Biship v. Linkway Stores, Inc., 280 Ark. 106, 655 S.W.2d 426 (1983).

The Russells counter that in order for the statute to apply in this case, we would have to deem it to operate retroactively and that we should not do so because the law is a penalty subject to strict construction and is a change in the substantive rather than procedural law. While we agree with the general propositions of law, we cannot help but observe that this case presents no question of retroactive application of the statute, and thus it is irrelevant whether the amendment imposed a penalty or is a procedural or substantive change in the law.

The cases cited by the Russells are thus also irrelevant. First, they cite Lucas v. Handcock, 266 Ark. 142, 583 S.W.2d 491 (1979), which concerned Act 714 of 1981 which was passed to cure constitutional defects in the Arkansas statute governing inheritance by “illegitimate” children. We held the act was not to apply retroactively because it dealt with the substantive rather than procedural rights. In that case, we had been asked to apply the new act to an inheritance which was pending when the act went into effect. Unlike this case, there was a question of retroactivity because the event, the decedent’s death, to which the statute was argued to apply, occurred before the effective date of the statute.

The same is true of Huffman v. Dawkins, 273 Ark. 520, 622 S.W.2d 159 (1981), where we considered whether Act 714 of 1981 was passed to cure the constitutional defects in the dower law. The question of retroactivity arose because the event, which was the death of a testator, occurred before the constitutionally curative amendment came into effect.

Again, these cases were correctly decided, but the statutes being considered in them came into effect subsequent to the dates of the events which, by the terms of the statutes, made them applicable. The statute in this case provides that the additional liability “attaches when liability is denied and suit is filed.” These events occurred well after the statute came into effect.

The statute in question in this case clearly provides when it shall apply. The events which made it applicable here, i.e., denial of liability and filing of suit, both occurred after the statute came into effect. By applying it in this case, the trial court would not have been applying it retroactively but to an event which occurred after it went into effect.

Reversed and remanded for orders consistent with this opinion.

Hickman and Glaze, JJ., dissent.