Insurance

July 23, 2021

Denial of Tennessee uninsured motorist coverage affirmed.

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.

February 24, 2021

Statutory presumption of insurance acceptance applies in action against insurance agent.

by The Law Offices of John Day, P.C.

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.

November 23, 2020

Prejudgment interest included in “all damages” language in uninsured motorist insurance policy.

by The Law Offices of John Day, P.C.

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.

April 16, 2020

Arbitration Right in Underinsured Motorist Statute Not Triggered

by The Law Offices of John Day, P.C.

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.

November 25, 2019

Injuried Party Need Not Be Included in Declaratory Judgment Action Between Defendant and Defendant’s Insurer

by The Law Offices of John Day, P.C.

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.

October 1, 2018

Injury Plaintiff Indispensable Party in Insurer / Insured Dispute

by The Law Offices of John Day, P.C.

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.

May 3, 2018

Release in Probate Court Barred Later Claims Against Uninsured Motorist Insurer

by The Law Offices of John Day, P.C.

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.

October 17, 2017

UM Carrier Obtains Dismissal Because of Failure to Obtain Service on Driver

by The Law Offices of John Day, P.C.

Where plaintiff failed to have service issued for over a year against the defendant driver in a car accident case, her claim against her uninsured motorist insurance carrier was barred.

In Davis v. Grange Mutual Casualty Group, No. M2016-02239-COA-R3-CV (Tenn. Ct. App. Sept. 28, 2017), plaintiff filed suit on March 20, 2015 after a car accident, naming both the defendant driver and her uninsured motorist carrier. The suit was filed within the one-year statute of limitations for personal injury actions, but plaintiff “did not cause a summons to issue to either defendant” until April 19, 2016, which was thirteen months after the complaint was filed. The summons was issued to the driver at his last known address and was returned unserved on April 21^st by the sheriff with a notation that the driver was “not to be found in my county.”

On April 25^th, “the trial court sua sponte dismissed the action for failure to prosecute.” Plaintiff filed a motion to set the dismissal aside on May 24^th, and on the same day process for the insurance company was returned unserved. Second summonses were issued for both defendants on June 6^th and 7^th, and the driver’s was returned unserved indicating that he had died.

August 31, 2017

Tennessee Uninsured Motorist Claims Subject to Six-Year Statute of Limitations

by The Law Offices of John Day, P.C.

While a case for personal injuries resulting from a car accident must be filed within one year, a claim against an insurance company for uninsured motorist coverage arising from the same incident is not subject to that one-year statute of limitations.

In Bates v. Greene, No. W2016-01868-COA-R3-CV (Tenn. Ct. App. July 27, 2017), plaintiff had been injured in a car accident. Plaintiff filed a timely suit less than one year after the accident against the driver of the other car, but the civil warrant was returned unserved. An “alias civil warrant was issued for [the driver], but it was also returned unserved.” Two years after the accident, an amended warrant was issued, adding plaintiff’s uninsured motorist insurance carrier as a defendant.

Defendant insurance company filed a motion for summary judgment, “asserting that the claim against it was barred by the one-year statute of limitations applicable to personal injury actions.” Plaintiff responded that “she was asserting a contract claim…, subject to a six-year statute of limitations, rather than a tort claim…” The trial court granted the motion for summary judgment, but the Court of Appeals reversed.

July 28, 2014

Lawsuit Against Agent for Inadequate Insurance Limits

by The Law Offices of John Day, P.C.

The case of Barrick v. State Farm Mut. Auto. Ins. Co. and Jones, No. M2013-01773-COA-R3-CV (Tenn. Ct. App. June 27, 2014) first begins in 2008, when the Barrick family was sued after their minor son accidentally killed a motorcyclist in a tragic crash while driving his father’s car. For over 20 years, the Barricks had been insured with State Farm through their insurance agent Thomas Jones. Unfortunately, however, at the time of the crash their policy limits for auto liability coverage was only $100,000 per person. The family of the deceased motorcyclist ultimately settled their lawsuit against the Barricks for a total sum of $200,000, with State Farm paying $100,000 and the Barricks paying the remaining $100,000 in excess of their policy limits.

Thereafter, the Barricks sued State Farm and their insurance agent, Mr. Jones, and asserted claims of negligence, negligent training and supervision (of Mr. Jones by State Farm), assumption of duty (because Mr. Jones had taken additional duties beyond those of an insurance agent by recommending and also selecting the Barricks’ insurance coverage limits), and violation of the Tennessee Consumer Protection Act (“TCPA”). The trial court eventually dismissed all of the Barricks’ claims by granting State Farm’s and Mr. Jones’ motions for summary judgment, and the Barricks appealed.

On appeal, the Barrick court affirmed dismissal of the negligence claim, based on consideration of two undisputed facts: (1) that the Barricks had procured State Farm insurance through Mr. Jones for over 20 to 25 years, and (2) that the Barricks received copies of their insurance policies, declarations pages, and renewal notices during this time period. Relying on Tennessee precedent from Weiss v. State Farm Fire & Casualty Company, 107 S.W.3d 503, 506 (Tenn. Ct. App. 2001) – which holds that an agent’s duty ends when the agent obtains insurance for plaintiffs and properly provides copies, notices, and declarations – the Barrick court held that State Farm and Mr. Jones did not owe a duty to the Barricks and therefore could not be liable for negligence.