Justia Insurance Law Opinion Summaries

The Supreme Court answered a question of law certified by the United States District Court for the Western District of Tennessee by holding that Tenn. Code Ann. 56-7-111 does not provide for a private right of action.Section 56-7-111 states that when an insured property owner's home or other structure sustains more than $1,000 in damages, the casualty or property insurance company shall name the general contractor of an uncompleted construction contract as a payee when issuing payment to the property owner. In the instant case, the insurance company issued a check to the owner but did not name the general contractor as a payee. The general contractor brought this suit alleging that the insurance company did not comply with section 56-7-111. The federal court certified to the Supreme Court the question of whether a general contractor has a private right of action against an insurance company for violating section 56-7-111. The Supreme Court held that the statute does not expressly grant such a private right of action and that the legislature did not intend to imply a private right of action. View "Affordable Construction Services, Inc. v. Auto-Owners Insurance Co." on Justia Law

The Supreme Court reversed the judgment of the court of appeals reversing the trial court's grant of summary judgment for an insurance agent on Plaintiffs' claim that the insurance agent negligently failed to procure excess uninsured motorist coverage in accordance with Plaintiffs' instructions, holding that Tenn. Code Ann. 56-7-135(b) applies to create a rebuttable presumption in actions against an insurance agent for negligent failure to procure an insurance policy as directed.In granting summary judgment for the insurance agent, the trial court concluded that Plaintiffs had failed to rebut the statutory presumption that they had accepted the provided coverage, which did not include excess uninsured motorist coverage. The court of appeals reversed, determining that the rebuttable presumption in section 56-7-135(b) does not apply to actions against an insurance agent. The Supreme Court reversed, holding (1) the rebuttable presumption articulated in section 56-7-135(b) applies to actions against an insurance agent by insureds under the insurance policy for negligent failure to procure an insurance policy as directed; and (2) Plaintiffs failed to rebut the statutory presumption in this case. View "Parveen v. ACG South Insurance Agency, LLC" on Justia Law

In this declaratory judgment action, the Supreme Court reversed the judgment of the court of appeals reversing the judgment of the trial court denying a claimant's motion to set aside a default judgment in favor of an insurance company and allow the claimant to intervene as a necessary party, holding that, under the circumstances of this case, the claimant was not a necessary party and the trial court could decide the coverage dispute between the insurance company and its insured without the claimant's participation in the action.The claimant sued the insured for damages arising from an automobile accident. The insurance company sought a declaratory judgment that the company was not required to provide liability coverage to the insured. The trial court awarded the insurance company a default judgment. The claimant moved to set aside the default judgment and allow her to intervene on the basis that she was a necessary party. The trial court denied the motion. The court of appeals reversed. The Supreme Court reversed, holding (1) the claimant had no interest affected by the dispute between the insurance company and its insured; and (2) therefore, the trial court had authority to grant declaratory relief because all necessary parties were before the court. View "Tennessee Farmers Mutual Insurance Co. v. Debruce" on Justia Law

In this case in which the district court certified a question of law to the Supreme Court regarding the interpretation of two insurance policies the Supreme Court answered that, under Tennessee law and based on the language in the policies at issue, the insurer, in making an actual cash value payment, may not withhold a portion of repair labor as depreciation.The policy defined actual cash value as "the cost to replace damaged property with new property of similar quality and features reduced by the amount of depreciation applicable to the damaged property immediately prior to the loss" and stated that "actual cash value includes a deduction for depreciation." The Supreme Court held (1) the language in the policies was ambiguous and must be construed in favor of the insured parties; and (2) therefore, labor may not be depreciated when the insurance company calculates the actual cash value of a property using the "replacement cost less depreciation" method. View "Lammert v. Auto-Owners (Mutual) Insurance Co." on Justia Law

The Supreme Court’s decision in West v. Shelby County Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014), holding that “reasonable charges” for medical services under Tennessee’s Hospital Lien Act are the discounted amounts a hospital accepts as full payment from patients’ private insurer and not the full, undiscounted amounts billed to patients, does not apply in personal injury cases. Further, the collateral source rule applies in this personal injury case, in which the collateral benefit at issue is private insurance. Therefore, Plaintiffs may submit evidence of the injured party’s full, undiscounted medical bills as proof of reasonable medical expenses, and Defendants are precluded from submitting evidence of discounted rates accepted by medical providers from the insurer to rebut Plaintiffs’ proof that the full, undiscounted charges are reasonable. The Supreme Court thus affirmed in part and reversed in part the decision of the court of appeals, which concluded that West did not apply to personal injury cases but that evidence of discounted amounts accepted by the injured’s medical providers may be admissible to rebut Plaintiffs’ expert testimony on the reasonableness of the amount of the full, undiscounted bills. View "Dedmon v. Steelman" on Justia Law

Defendant drove a car he had rented from Enterprise Rent-A-Car (Enterprise) into Plaintiff’s knee. At the time of the incident, Plaintiff was insured under a policy issued by IDS Property Casualty Insurance Company (IDS), which provided uninsured/underinsured motorist coverage. Plaintiff filed a complaint against Defendant, Defendant’s automobile liability insurer, and Enterprise. Plaintiff also served IDS with a copy of the summons and complaint for the purpose of bringing a claim under his uninsured motorist coverage policy. The trial court granted summary judgment in favor of IDS, concluding that the rental car did not qualify as an “uninsured motor vehicle” under the policy. The court of appeals affirmed. The Supreme Court reversed, holding that the rental car was an “uninsured motor vehicle” under the policy. Remanded. View "Martin v. Powers" on Justia Law

Five separate groups of Pennsylvania-domiciled insurance companies (collectively, “Claimants”) were authorized to provide workers’ compensation coverage in Tennessee. As a result of an audit conducted by the State of Tennessee, Claimants were required, under Tennessee’s retaliatory tax statute, to recalculate their Tennessee taxes to include certain Pennsylvania workers’ compensation charges, file amended tax returns, and remit payment of the additional taxes totaling over $16 million. Claimants paid the taxes under protest. Each Claimant subsequently filed a complaint with the Tennessee Claims Commission (the “Commissioner”) seeking a refund of the retaliatory taxes paid under protest. The Commissioner issued five identical judgments, each granting summary judgment in favor of the State. The Court of Appeals affirmed. The Supreme Court reversed, holding that because the Pennsylvania workers’ compensation assessments were no longer paid by the insurance companies but were imposed on the employer-policyholders in conjunction with their premium payments, the administrative task of collecting and remitting those payments did not qualify as a burden on the insurance companies for purposes of the retaliatory tax. View "Chartis Casualty Co. v. State" on Justia Law

Employee worked for Employer from 1977 through the date of the trial of this matter. Employee began having problems with his arms and hands in 2005. In 2009, Employee had carpal tunnel release surgery performed on his arms. Employee began having problems with his right thumb shortly after his surgeries. A surgical procedure to release the thumb was performed in 2010. In 2013, the trial court awarded permanent partial disability benefits to Employee but ruled that Employee’s injury should be apportioned to the arm, which was subject to an impairment “cap.” Employee appealed, arguing that the award should have been apportioned to the thumb, which was not subject to the cap. The Supreme Court affirmed, concluding that the trial court correctly chose to apportion Employee’s injury to the arm. View "Evans v. Fidelity & Guar. Ins. Co. " on Justia Law

Plaintiff was the minor beneficiary of a $100,000 life insurance policy. Plaintiff filed a complaint against his financial guardian and the insurance company after the guardian misappropriated the insurance proceeds. The trial court entered judgments in favor of Plaintiff. The insurance company appealed. The court of appeals affirmed, concluding that, by entrusting the proceeds to the guardian, the insurance company breached its contractual duties. The Supreme Court reversed, holding (1) the insurance company acted in good faith when it relied upon the validity of a juvenile court order establishing a financial guardianship in making payment of the life insurance proceeds, and (2) therefore, the insurance company could not be liable for breach of contract. View "Hood v. Jenkins" on Justia Law

Employee injured his back while working for Employer. Employee and the Department of Labor and Workforce Development (Department) agreed upon a settlement that provided for a lump sum payment to Employer for his injuries. The settlement and SD-1 form were signed by Employee and both parties' attorneys. Two years later, Employee filed a petition to set aside the settlement. The trial court granted Employee's petition. The Special Workers' Compensation Appeals Panel vacated the trial court's judgment on a procedural issue, finding the SD-1 form was not "fully completed." The Supreme Court reversed the judgments of the Panel and of the trial court and dismissed Employee's petition, holding (1) when the Department approves a settlement, it implicitly approves the accompanying SD-1 form, and a court has no authority to set the settlement aside based on its independent finding that the SD-1 form was not "fully completed"; and (2) the evidence preponderated against the trial court's finding that Employee was not represented by counsel, and the court erred in granting relief based on Tenn. R. Civ. P. 60.02(5) as well as its inherent authority. View "Furlough v. Spherion Atlantic Workforce, LLC" on Justia Law