Cincinnati Insurance Company v. Josie Rochelle Malone
M2015-02362-COA-R3-CV
| Tenn. Ct. App. | Oct 7, 2016Background
- Defendant Josie Rochelle Malone was court-appointed conservator for her mother (1997–2012) and obtained a $125,000 fiduciary bond from Cincinnati Insurance requiring annual premiums ($560) and an indemnity agreement.
- Malone missed the November 2009 premium; Cincinnati notified the chancery court (Sept. 23, 2010) seeking payment or release; Malone paid the overdue premium on Oct. 18, 2010.
- In 2011 the Clerk and Master reported accounting irregularities; the chancery court entered judgment against Malone for $12,932.79 on May 9, 2012; Cincinnati paid that judgment after the court executed on the bond.
- Cincinnati sued Malone for indemnity and attorney’s fees in general sessions; Malone defaulted there and appealed to circuit court, where she raised affirmative defenses of failure to mitigate and laches.
- Malone failed to comply with Tenn. R. Civ. P. 56.03 (did not file a statement of additional material facts) in opposing Cincinnati’s summary-judgment motion; the circuit court granted summary judgment and awarded Cincinnati $24,180.89; Malone appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment was proper given Malone’s failure to comply with Tenn. R. Civ. P. 56.03 | Cincinnati: undisputed facts show breach of indemnity; Malone failed to identify material factual disputes per Rule 56.03 | Malone: factual disputes exist on her affirmative defenses (mitigation, laches) and summary judgment is inappropriate | Court: Malone failed Rule 56.03; summary judgment proper. Even on merits, no genuine dispute existed. |
| Whether Malone’s affirmative defenses (failure to mitigate; laches) bar indemnity recovery | Cincinnati: duty to mitigate/laches inapplicable because it sought relief from the court and promptly sued after paying judgment | Malone: Cincinnati should have terminated bond after missed premium; failure to do so failed to mitigate and constituted laches | Court: Cincinnati sought court permission to be released; court control made termination immaterial. No unreasonable delay or prejudice shown; defenses fail. |
Key Cases Cited
- Holland v. City of Memphis, 125 S.W.3d 425 (Tenn. Ct. App. 2003) (trial court may refuse to consider factual contentions of a party who fails to comply with Rule 56.03)
- Carolyn B. Beasley Cotton Co. v. Ralph, 59 S.W.3d 110 (Tenn. Ct. App. 2000) (duty to mitigate damages requires reasonable efforts to prevent or diminish loss)
- Memphis Light, Gas & Water Div. v. Starkey, 244 S.W.3d 344 (Tenn. Ct. App. 2007) (mitigation not required where it would be undue burden or impossible)
- Dennis Joslin Co., LLC v. Johnson, 138 S.W.3d 197 (Tenn. Ct. App. 2003) (laches bars relief when claimant unreasonably delays and that delay injures another)
- State ex rel. Elvis Presley Int’l Mem’l Found. v. Crowell, 733 S.W.2d 89 (Tenn. Ct. App. 1987) (elements of laches explained)
- Hartford Accident & Indem. Co. v. White, 115 S.W.2d 249 (Tenn. Ct. App. 1937) (whether to grant a surety relief from a bond is within the court’s discretion)