Allstate Insurance Company v. Kaigler & Associates, Inc.
M2016-01003-COA-R3-CV
| Tenn. Ct. App. | Aug 31, 2017Background
- Kaigler & Associates sent mass unsolicited fax advertisements and was sued in a certified TCPA class action in Illinois; the trial court granted partial summary judgment on liability but left damages for later determination.
- Allstate issued Kaigler a Customizer Business Insurance Policy and sought a declaratory judgment in Tennessee on its duty to defend and indemnify Kaigler for the TCPA suit.
- Allstate moved for summary judgment asserting no coverage under the policy’s "accidental event" or "personal injury" provisions but that "advertising injury" coverage applied for defense.
- The chancery court held Allstate had no duty to indemnify under the accidental-event or personal-injury coverages, but had a duty to defend under advertising-injury and therefore to defend all claims.
- Kaigler moved to alter or amend, submitting two affidavits; the court denied the motion, finding the affidavits would not change the outcome and that liability had been established in the underlying suit.
- On appeal, the Tennessee Court of Appeals affirmed: the indemnity question was not premature given liability was resolved, the accidental-event exclusion applied, and the trial court did not abuse its discretion in denying the Rule 59.04 motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether declaratory judgment on indemnity was premature | Allstate: resolution appropriate because liability in underlying suit established | Kaigler: duty to indemnify is premature until damages determined | Affirmed: not premature because TCPA liability was resolved; declaratory relief authorized under Tenn. Code Ann. §29-14-103 |
| Whether "accidental event" coverage applies | Allstate: sending faxes was intentional/expected and excluded by "intended or expected" clause | Kaigler: did not intend to injure recipients; conduct was accidental as to injury | Affirmed: exclusion applies; sending faxes was intentional and foreseeable injury (paper/toner/use loss) was expected |
| Duty to defend under "advertising injury" coverage | Allstate: advertising-injury coverage triggered for defense | Kaigler: contended accidental-event could also trigger defense | Held: duty to defend exists under advertising-injury; hence duty to defend all claims |
| Whether trial court abused discretion denying Rule 59.04 motion | Kaigler: newly submitted affidavits create factual dispute and justify reconsideration | Allstate: affidavits were available earlier and wouldn’t change result | Affirmed: court properly considered factors, affidavits would not change outcome, no abuse of discretion |
Key Cases Cited
- Rye v. Women’s Care Ctr., MPLLC, 477 S.W.3d 235 (Tenn. 2015) (summary judgment standards and nonmoving party burden)
- Tenn. Farmers Mut. Ins. Co. v. Evans, 814 S.W.2d 49 (Tenn. 1991) ("intended or expected" exclusion requires intent to act and intent/expectation that injury would result)
- Stovall v. Clarke, 113 S.W.3d 715 (Tenn. Ct. App. 2003) (factors for considering newly proffered evidence on post-judgment motions)
- In re M.L.D., 182 S.W.3d 890 (Tenn. Ct. App. 2005) (standards for granting Rule 59.04 motions)
- Bain v. Wells, 936 S.W.2d 618 (Tenn. 1997) (de novo review of summary judgment legal determinations)