Sandra Prewitt v. Kamal Brown
2017 Tenn. App. LEXIS 52
| Tenn. Ct. App. | 2017Background
- Plaintiff Sandra Prewitt purchased a 2008 Mitsubishi under an installment sales contract with DriveTime; DriveTime retained title and repossessed the car after it was totaled in a collision.
- Defendant Kamal Brown was the other driver and admitted 100% fault; Plaintiff was not in the car and did not suffer personal injuries in this accident.
- Allstate (Brown’s insurer) paid DriveTime $7,852.57 and received the vehicle title; DriveTime applied that sum to Plaintiff’s loan and informed her she still owed $4,667.53.
- Plaintiff sued Brown for property damage and loss of use and asserted a direct claim against Allstate alleging bad-faith/ premature settlement with DriveTime.
- The trial court dismissed the direct claim against Allstate under Tenn. R. Civ. P. 12.02(6) (no direct action against insurer before insured is legally obligated) and later granted summary judgment to Brown on the remaining claims for property damage and loss of use.
- On appeal the Court of Appeals affirmed: Allstate claim barred as a direct action; Plaintiff presented no evidence that fair market value exceeded Allstate’s payment and no loss-of-use damages were proven.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiff may sue Allstate directly for failing to adequately settle | Prewitt alleged Allstate settled with DriveTime without exploring her full damages and coerced an unfair payout | Tennessee does not permit direct actions against a tortfeasor’s liability insurer before the insured is legally obligated to pay | Dismissed: direct action barred; plaintiff must first establish insured’s legal obligation |
| Whether Plaintiff proved property-damage entitlement beyond the insurer’s payment | Prewitt argued fair market value exceeded $7,852.57 and she remains liable under her installment contract | Allstate paid DriveTime $7,852.57, DriveTime held title and applied payment; Plaintiff offered no evidence the car’s fair market value exceeded that amount | Summary judgment for Brown: no evidence to show FMV > insurer payment, so no recovery |
| Whether Plaintiff may recover contractual deficiency from Defendant | Prewitt asserted Defendant should be liable for the balance owed to DriveTime | Defendant argued plaintiff had no equity and insurer’s payment satisfied DriveTime’s claim | Held: Plaintiff showed no basis to recover the contractual deficiency from Defendant; claim dismissed |
| Whether Plaintiff proved loss-of-use damages | Prewitt sought loss-of-use for her destroyed vehicle | Defendant argued loss-of-use unavailable for irreparably damaged personal property absent replacement expense or proof of loss | Summary judgment for Brown: vehicle totaled, plaintiff did not rent/ incur costs, and no loss-of-use evidence presented |
Key Cases Cited
- Ferguson v. Nationwide Prop. & Cas. Ins. Co., 218 S.W.3d 42 (Tenn. Ct. App. 2006) (insurer cannot be sued directly until insured is legally obligated to pay)
- Seymour v. Sierra, 98 S.W.3d 164 (Tenn. Ct. App. 2002) (Tennessee is not a direct-action state for liability insurers)
- Tire Shredders, Inc. v. ERM-N. Cent., Inc., 15 S.W.3d 849 (Tenn. Ct. App. 1999) (measure of damages for personal property—repair cost vs. fair market value differential; loss-of-use rules)
- Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235 (Tenn. 2015) (standard and burden-shifting for summary judgment)
- Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303 (Tenn. 2014) (trial-court obligations under Tenn. R. Civ. P. 56.04 regarding stating grounds before adopting party-prepared orders)
- BancorpSouth Bank, Inc. v. Hatchel, 223 S.W.3d 223 (Tenn. Ct. App. 2006) (proof of damages must enable fair and reasonable assessment)