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Description: Little Rock, Arkansas insurance law lawyer represented Plaintiff, which sued Defendant on a bad faith breach of contract theory.


McCarn's is suing Nationwide for denying its fire loss claim. The insurance policy required McCarn's to maintain a “P-2 Automatic Fire Alarm” protecting the entire building and that is “connected to a central station or reporting to a public or private fire alarm station.” Pl.'s Resp. Def.'s F. ¶¶ 2-6. The policy bars claims against Nationwide unless McCarn's fully complied with its terms. Id. ¶ 9. McCarn's filed a fire loss claim and Nationwide denied it because McCarn's building did not have the required fire alarm.


In Arkansas, an insurer may not void a policy based on a mistake in the application that is attributable to the agent. Neill v. Nationwide Mut. Fire Ins., Co., 355 Ark. 474, 139 S.W.3d 484 (2003) (“an insurer will not be allowed to use misstatements in the application to avoid liability where the misstatements are the result of fraud, negligence, or mistake by the insurer's agent.”) (emphasis added). Although Nationwide argues that it is not attempting to void the contract, its denial of McCarn's claim is essentially an attempt to void the portion of the policy relating to the fire loss. Accordingly, whether there was a misstatement in the application attributable to the agent and whether Nationwide would have issued the policy were the application correct are questions of fact for the jury.

Outcome: For the foregoing reasons, summary judgment is granted on McCarn's bad faith claim, and denied on its breach of contract claim.

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