John Riad v. Erie Insurance Exchange
2013 Tenn. App. LEXIS 712
| Tenn. Ct. App. | 2013Background
- Plaintiff purchased three buildings in 2007 for $540,000 and financed with First National Bank; Erie insured the Property via agent Walker.
- Policy issued to the Perrys after sale; Plaintiff was not listed on the policy; attempts were made to add him as additional insured.
- In 2009 property damaged by vandalism/theft; claim filed December 2009; claim remained unpaid, prompting litigation in 2011.
- Plaintiff alleged breach of contract, bad faith, and TCPA violations; jury awarded compensatory and punitive damages and statutory penalties.
- Court admitted the policy as evidence after reopening proof; jury found in Plaintiff’s favor; trial court awarded treble damages and fees; Erie appealed.
- Plaintiff sought damages for lost rents and costs; court addressed whether Tripling damages and punitive damages were proper; appeal affirmed the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of evidence and reopening proof | Evidence rulings supported admission of policy; reopening justified | Rulings were erroneous and prejudicial | No reversible evidentiary error; no new trial required |
| TCPA claim viability post-56-8-113 | TCPA claim valid despite 56-8-113; accrual pre-dates act | 56-8-113 bar applies; claim improper | TCPA claim accrual prior to act; statute not applying to this action |
| Bad faith claim and 60-day demand | Formal demand evidenced in Walker's emails; notice satisfied | No proper demand or improper timing | Notice satisfied; statutory requirement met |
| Damages: insured loss, treble damages, punitive damages, and election of remedies | Damage recovery broader than insured loss; TCPA treble; possible punitive | Damages limited to insured loss plus 25%; punitive improper | Damages properly trebled under TCPA; punitive damages allowed; must elect between remedies |
| Directed verdict and Plaintiff's interest in property | Evidence supported Plaintiff's interest; directed verdict improper | Insufficient proof of interest | No directed verdict; Plaintiff had proof of interest to submit to jury |
Key Cases Cited
- White v. Vanderbilt Univ., 21 S.W.3d 215 (Tenn. Ct. App. 1999) (evidentiary rulings reviewed for abuse of discretion)
- Eldridge v. Eldridge, 42 S.W.3d 82 (Tenn. 2001) (abuse of discretion standard in evidentiary rulings)
- Trau-Med of America, Inc. v. Allstate Ins. Co., 71 S.W.3d 691 (Tenn. 2002) (statutory pleading prerequisites; proof requirements)
- Chandler v. Prudential Ins. Co., 715 S.W.2d 615 (Tenn. 1986) (exclusive remedy interpretation of bad faith statute)
- Wilson Estate v. Arlington Auto Sales, 743 S.W.2d 923 (Tenn. Ct. App. 1987) (damages in breach-of-insurance-contract context; third-party beneficiary)
- Myint v. Allstate Ins. Co., 970 S.W.2d 920 (Tenn. 1998) (TCPA applicability and pre-56-8-113 interpretation)
- Rice v. Van Wagoner Companies, Inc., 738 F. Supp. 252 (M.D. 1990) (treats insured loss plus 25% under bad faith statute; not binding authority)
- Concrete Spaces Inc. v. Sender, 2 S.W.3d 901 (Tenn. 1999) (election of remedies; double recovery prohibition)