Charles Clifton v. Tennessee Farmers Mutual Insurance Company
M2019-02193-COA-R3-CV
| Tenn. Ct. App. | Jun 23, 2021Background
- Charles Clifton owned a residence insured by Tennessee Farmers; the house burned on October 24, 2017.
- Clifton moved in with his fiancée in Sept/Oct 2016 and allowed Treva and Bobby Glenn to occupy the insured residence starting Feb 1, 2017, without Tennessee Farmers’ written consent.
- The policy contained an "ACTS WHICH AUTOMATICALLY VOID THIS POLICY" occupancy clause providing the policy "shall be automatically void as to all insureds if: 1. no insureds occupy the residence premises; and 2. any insured allows anyone to occupy the residence premises without our written consent."
- Tennessee Farmers denied the claim and returned premiums paid since Feb 1, 2017; it also filed a counterclaim alleging Clifton’s suit was in bad faith.
- Clifton admitted he had allowed the Glenns to occupy the home but contended he reoccupied the residence before the fire and that reoccupation would revive coverage.
- The trial court granted summary judgment for Tennessee Farmers, ruling the policy was automatically void when Clifton met both clause conditions and could not be revived by later reoccupation; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach of the occupancy clause is automatically voiding or only suspends coverage so that reoccupation revives it | Clifton: breach merely suspends coverage during vacancy; his later reoccupation revived the policy | Tennessee Farmers: clause’s plain language makes the policy a nullity once both conditions occur; it cannot be revived | The court held the clause is plain and unambiguous; once both conditions were met the policy was "automatically void" and could not be revived by reoccupation |
| Whether summary judgment was proper | Clifton: genuine issue of material fact (whether he reoccupied before the fire) precludes summary judgment | Tennessee Farmers: even if Clifton reoccupied, the policy was void as a matter of law so no factual dispute prevents summary judgment | The court held no genuine issue of material fact barred summary judgment because the policy was void as a matter of law and affirmed the dismissal |
Key Cases Cited
- Gredig v. Tenn. Farmers Mut. Ins. Co., 891 S.W.2d 909 (Tenn. Ct. App. 1994) (policy void where insured allowed others to occupy without insurer consent)
- Carolina Ins. Co. of Wilmington v. St. Charles, 98 S.W.2d 1088 (Tenn. Ct. App. 1936) (vacancy clause may suspend liability and be revived by reoccupation where policy contemplates temporary vacancy)
- Ridge v. Scottish Commercial Ins. Co., 77 Tenn. 507 (Tenn. 1882) (interpretation of vacancy clauses; context may affect whether temporary vacancy voids policy)
- Maggart v. Almany Realtors, Inc., 259 S.W.3d 700 (Tenn. 2008) (contract interpretation requires considering the entire contract)
- S. Trust Ins. Co. v. Phillips, 474 S.W.3d 660 (Tenn. Ct. App. 2015) (vacancy clauses in fire policies are valid and enforceable)