Hanna v. Johnson

Citations: 233 Ark. 409; 344 S.W.2d 846; 1961 Ark. LEXIS 414; 48 L.R.R.M. (BNA) 2531Docket: 5-2308

Court: Supreme Court of Arkansas; April 3, 1961; Arkansas; State Supreme Court

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Naomi Hanna, the widow of S. H. Hanna, appeals a decree denying her damages from the Teamsters Union, its officials E. F. Johnson and W. M. Hayes, and her late husband's employer, Gibbon Petroleum Transport, for failure to secure life and accident insurance benefits. S. H. Hanna, a truck driver for Gibbon since September 1955, initially did not belong to the Brotherhood. Gibbon began paying insurance premiums to the Union's insurance company for Hanna 30 days after his employment. On January 19, 1956, Hanna applied for a group policy with the Equitable Assurance Society, which took effect retroactively on December 14, 1955. He paid premiums until his accidental death on August 7, 1956.

In March 1956, Hanna sought reinstatement in the Union and was informed by Hayes that employees could not be covered under both the Union and employer insurance plans simultaneously. Although Hanna was issued a certificate under the Union policy, he failed to notify Gibbon's personnel office to transfer from the employer's plan, and no premiums were paid for the Union policy after 1955. Following Hanna's death, his widow received $4,000 under the employer’s policy, but the Union insurance company denied her claim under the Union policy, citing non-payment of premiums. Gibbon's bookkeeping system omitted Hanna’s name from the monthly premium list sent to the Union insurance company.

Appellant filed a lawsuit against the Union Insurance Company in the United States District Court after the company refused to pay a claim of $5,250 plus penalties and attorney’s fees. The court found that there was a mistake in issuing the insurance certificate, as Gibbon had not paid premiums on behalf of appellant’s deceased husband since 1955, resulting in the policy lapsing before his death in 1956. This ruling was upheld by the United States Circuit Court of Appeals.

Subsequently, appellant brought a new suit against the Brotherhood, its agents, and her husband's employer, claiming an oral agreement was made at a Union meeting in March 1956 to provide insurance coverage under the Union plan. Appellant alleged that the defendants failed to secure this coverage, and sought to recover the total of $10,000, which included $5,250 for insurance coverage and litigation expenses.

Defendants denied the existence of such an oral agreement and claimed no obligation to secure coverage. During the proceedings, the court dismissed the Brotherhood from the case and quashed appellant's interrogatories aimed at the defendants, which included requests for information related to specific allegations in the complaint. Appellant's appeal argues primarily the insufficiency of evidence presented in the lower court and the error in quashing the interrogatories.

Appellees moved to quash the interrogatories, arguing they were irrelevant, immaterial, and not likely to lead to admissible evidence, and that they would impose undue burden and expense. The trial court granted the motion after a hearing. Appellant contended that affirming the quashing would undermine the discovery statute related to interrogatories. However, the court noted that the Arkansas Discovery Statutes mirror the Federal Rules of Procedure, which allow for a liberal interpretation of interrogatories but grant trial courts discretion in their enforcement. Citing cases, the court emphasized that interrogatories deemed immaterial or burdensome can be quashed without abuse of discretion. The court found that all questions had previously been answered in federal proceedings and were not likely to uncover new information. 

Regarding the sufficiency of evidence, appellant needed to prove an oral agreement existed between appellees to provide coverage under the Union plan. Citing relevant case law, the court reiterated that establishing a valid contract requires a meeting of the minds on all terms. After reviewing the evidence, the court upheld the Chancellor's decree that appellant did not meet the burden of proof, affirming the trial court’s decision.