Articles Posted in Insurance

What is the consequence of a refusal to give an examination under oath to your  Tennessee automobile insurance insurer?  Your policy can be rendered void.

The facts.

Ponnapula was in a car wreck with Mr. Wright.  It appears there was not any liability insurance on the vehicle being driven by Mr. Wright.  Mr. Ponnapula made a claim against his own uninsured/underinsured motorist insurer, Tennessee Farmers Mutual Insurance Company.

You have undoubtedly read about (and perhaps even used)  a personal vehicle sharing program (also known as a peer-to-peer car sharing program) like Turo, which allows you to rent another person’s car for a defined period of time.  Turo puts car owners together with people who have a short-term need for a vehicle.  Need a 2018 Porsche Macan in Chicago?  $312, unlimited miles.

But what happens if the driver of that vehicle causes a wreck?  Does the car owner’s liability insurance apply?  Is there liability on behalf of Turo?  Does the liability insurance of the driver apply?

And what if the wreck is caused by the driver of another vehicle?  Does the UM/UIM coverage on the shared vehicle apply?   Or will coverage be denied because the car owner received money for sharing the vehicle?

After decedent was killed when hit by a vehicle while riding her bicycle, her surviving spouse brought claims against various parties, including a claim against decedent’s insurance provider for negligent misrepresentation and negligent failure to procure insurance. Because these claims were based in tort rather than wrongful death, the Court of Appeals ruled that they accrued to the decedent at the time of her fatal injuries and the settlement proceeds should have been distributed to her estate, not to her surviving spouse.

In Sanders v. Higgins, No. M2022-00892-COA-R3-CV (Tenn. Ct. App. Aug. 29, 2023), plaintiff was the surviving spouse of decedent, who was killed when she was hit by a vehicle while riding her bicycle. Plaintiff brought various claims against several defendants, but the one at issue in this appeal was a claim for negligent misrepresentation and negligent failure to procure insurance against decedent’s insurance company. According to plaintiff, the insurer had misrepresented to plaintiff and decedent that an umbrella policy had been reinstated, and plaintiff did not learn until after decedent’s death that the policy reinstatement never occurred.

The parties reached a settlement on the negligence claims, and the trial court ordered disbursement of the settlement proceeds to plaintiff as surviving spouse. The trial court ruled that the settlement proceeds were compensatory damages to plaintiff, “encompassing the amount of coverage [plaintiff] would have received as a result of the Decedent’s death had an umbrella policy been in place.” Decedent’s estate appealed this ruling, arguing that the tort claim proceeds should have been distributed to the estate. On appeal, the trial court was reversed.

Where plaintiff sought to recover against her car insurance company pursuant to uninsured motorist coverage after being in a car accident with an uninsured driver, the trial court’s ruling that plaintiff’s “non-owner” policy did not cover the accident because the car she was driving was “furnished or available for her regular use” was affirmed.

In Medders v. Newby, No. M2020-01094-COA-R3-CV (Tenn. Ct. App. July 6, 2021), plaintiff was driving a Jetta when she was struck by another car. Neither the owner nor the driver of the other car had insurance, so plaintiff served her insurance company in an attempt to recover under uninsured motorist coverage.

Plaintiff did not own the Jetta she was driving at the time of the accident. Plaintiff was engaged to Samuel Todd Tinnin, who worked for a used car company. Mr. Tinnin had his employer purchase the Jetta at an auction in June 2016, and he then bought the car from the employer on July 5, 2016. The accident occurred on July 11, and Plaintiff and Mr. Tinnin were married on July 12, 2016. On that same day, a title to the Jetta was issued in Mr. Tinnin’s name. In his deposition, Mr. Tinnin stated that he bought the car for plaintiff, he intended it to be a wedding present for plaintiff, and that he purchased it for her personal use. Mr. Tinnin changed his testimony at trial and stated that he bought the car with the intention of flipping it, but the trial court did not credit this testimony. Plaintiff began driving the car on July 5.

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The statutory presumption created by Tenn. Code Ann. § 56-7-135(b) that payment of an insurance premium “creates a rebuttable presumption that the coverage provided has been accepted by all insureds under the contract” applies in claims against insurance agents for negligent failure to procure an insurance policy.

In Parveen v. ACG South Insurance Agency, LLC, 613 S.W.3d 113 (Tenn. Dec. 4, 2020), plaintiffs lived in Georgia and had an umbrella insurance policy that included $2,000,000 in excess uninsured motorist coverage. When plaintiffs moved to Tennessee, they worked with defendant agent to obtain new insurance, and they alleged that they provided him with a copy of their old policy and asked for the exact same coverage. Defendant agent obtained an umbrella policy for plaintiffs, but the policy did not include any excess uninsured motorist coverage. There was no “separate line item” for uninsured motorist coverage on the quote given to plaintiffs, the policy premium did not “reflect the inclusion of such coverage,” and the declarations page did not include uninsured motorist coverage. Further, the policy itself specifically excluded uninsured or underinsured motorist coverage.

Plaintiffs initially paid for the policy obtained by defendant in 2013, and they renewed the policy in 2014 and 2015. In 2015, plaintiff wife was involved in an accident with an underinsured motorist. After this accident, plaintiffs added uninsured motorist coverage to their policy, but because such addition was not retroactive, the insurance company was found not liable for damages from the accident.

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Where plaintiff’s uninsured motorist insurance policy stated that it covered “all damages” and prejudgment interest was not listed as a specific exception to coverage, the Court of Appeals ruled that the policy language was “sufficiently broad to include prejudgment interest.”

In Lewis v. State Farm, No. W2019-01493-COA-R3-CV (Tenn. Ct. App. Nov. 5, 2020), plaintiff was in an accident caused by an unknown driver who left the scene. Plaintiff was driving his brother’s car, and the company insuring the car settled with plaintiff. Plaintiff was also personally insured by defendant State Farm, with uninsured motorist coverage of up to $500,000 per accident.

Plaintiff filed this suit pursuant to Tenn. Code Ann. § 56-7-1206. After both settlement negotiations and mediation failed to produce a resolution, the case was tried in front of a jury, and the jury found the unknown motorist 100% at fault, awarding $275,000 in damages to plaintiff. Plaintiff filed a post-trial motion seeking prejudgment interest, which the trial court denied, finding that the insurance policy did not include prejudgment interest. This appeal followed, and the trial court was reversed.

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When a person allegedly liable for the injury of a claimant “offers the limits of all liability insurance policies available to the party,” the Uninsured Motorist (UIM) statute provides an avenue through which the claimant may accept the offer but also “preserve the right to seek additional compensation from his or her UIM insurance carrier…” (internal citations omitted). In order to trigger the portion of the UIM Statute that requires a claimant’s insurance company to “elect to either participate in binding arbitration or decline arbitration and preserve its subrogation rights…,” the requirement that the insurance company of the person responsible for the injury notify the UIM carrier that the party is willing to cooperate with arbitration is mandatory, and the UIM carrier is not required to request this assurance.

In White v. State Farm Mutual Automobile Insurance Company, No. W2019-00918-COA-R3-CV (Tenn. Ct. App. Feb. 24, 2020), plaintiffs were injured in a car accident. The other driver was insured by USAA, who offered the limits of the driver’s policy as settlement for plaintiffs’ claims. Plaintiffs had car insurance with defendant State Farm, which included UIM coverage.

In April 2018, plaintiffs informed State Farm by letter that they intended “to settle with USAA for the liability insurance policy limits…[and that they] were willing to submit their UIM claim to arbitration and that they hoped to work amicably toward a settlement with State Farm.” The next month, State Farm responded that plaintiffs had permission to settle with USAA and that it was still evaluating the UIM claim. Two weeks later, State Farm told plaintiffs that “it would not offer a settlement for their UIM bodily injury coverage because State Farm believed [plaintiffs] had been fully compensated for their injuries.” Plaintiffs responded by invoking Tenn. Code Ann. § 56-7-1206 and stating that State Farm should “tender $25,000 to each insured in order to proceed to a jury trial or waive jury and go to arbitration.” State Farm responded that the provisions of the UIM statute had not been triggered.

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An injured person who had sued an insured but did not yet have a judgment against the insured was not an indispensable party in a declaratory action between the insurance company and the insured regarding coverage of the accident.

In Tennessee Farmers Mutual Insurance Company v. DeBruce, No. E2017-02078-SC-R11-CV (Tenn. Ct. App. Oct. 16, 209), Christina Wright (“claimant”) had been injured when her vehicle was rear-ended by a car driven by Brandon DeBruce (“insured”). The claimant sued the insured, but the insured failed to inform his insurance company of the suit, which was a requirement of his policy. According to the insurance company, the insured also failed to cooperate in the investigation of potential claims.

Based on his failure to cooperate, the insurance company filed a declaratory judgment action seeking a declaration that it “did not have to provide a defense to DeBruce in the personal injury suit or indemnify him for any damages awarded to Wright.” The claimant was not a party to this suit. The insured failed to respond to the complaint, and the trial court granted a default judgment declaring that the insurance company was not obligation to defend or indemnify the insured in connection with the accident.

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A person who was injured in a car accident with an insured party and who had filed suit against the insured party was an indispensable party in a declaratory judgment action between the insured and his insurer regarding coverage of the accident.

In Tennessee Farmers Mutual Insurance Company v. DeBruce, No. E2017-02078-COA-R3-CV (Tenn. Ct. App. Aug. 9, 2018), plaintiff was injured in a car accident with defendant and filed a personal injury claim against defendant. Plaintiff’s counsel notified defendant’s insurance company of the pending lawsuit in January 2015, but defendant never notified the insurer that the lawsuit was filed. In March 2015, the insurer filed a declaratory judgment action against defendant, asserting that his failure to inform them of the claim and cooperate in an investigation amounted to a breach of his policy. Insurer sought a declaratory judgment that “it was no longer required to defend or indemnify defendant in [plaintiff’s] lawsuit against him because of his breach of the policy’s requirements.”

Defendant never responded to the declaratory judgment complaint, and a default judgment was entered in June 2015. In March 2017, plaintiff filed a motion to set aside the declaratory judgment on the basis that “she was an indispensable party to the declaratory judgment action because she had a direct interest in its outcome, as the judgment leaves [defendant] without the means to satisfy or defend himself in the [personal injury] proceedings.” Plaintiff asked that the judgment be set aside as void. The trial court denied plaintiff’s motion, finding that plaintiff was “at most, an incidental beneficiary,” and that while she “had an interest affected by the outcome of the case,” her “rights rise no higher than the rights of [defendant] which were negated by his failure to cooperate.” The Court of Appeals disagreed and vacated the declaratory judgment.

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When an ATV accident plaintiff executed a release of her claim against the personal representative of the estate and filed that release in probate court, that release “served to release [her uninsured motorist insurance carrier] from any liability arising from [plaintiff’s] personal injury claim stemming from the ATV accident.”

In Johanssen v. Sharber, No. M2017-00639-COA-R3-CV (Tenn. Ct. App. Feb. 12, 2018), plaintiff was injured in an ATV accident. The driver of the ATV died, and plaintiff filed a tort claim in circuit court against the personal representative of the driver’s estate. Plaintiff’s uninsured motorist carrier, GEICO, was also served and joined as a party. Plaintiff also filed a claim against the estate in probate court “for medical bills and personal injury.”

While the circuit court case was pending, plaintiff “executed a release of claim in the Probate Court without GEICO’s consent.” The release stated:

The undersigned, [plaintiff], acknowledges full and complete satisfaction of the claim filed against the Estate and releases the Personal Representative from any further liability on the claim of $150,000.00 that the undersigned filed against the Estate.

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