*1 Cox MORRISON Kristen et ALLEN al.
Paul Tennessee,
Supreme Court of
at Nashville.
June 2010 Session.
Feb. 2011. Denied
Rehearing March 2011.
fits, which also company, the second was suit, named as a defendant settled plaintiff. with the At the conclusion of liability agents, bench trial as substantial dam- plaintiff awarded upon various ages as to each based recovery: agents’ theories of failure directed, life procure a misrepresentation, negligence, negligent *4 and of fiduciary duty, breach of violation Act. the Protection Tennessee Consumer but Appeals part, of affirmed in Court relating in damages held that the contract to the failure to should be offset by of plaintiffs pre-trial the amount the with com- settlement the second insurance of of pany. Because the nature the issues presented, permission granted Court Hannah, Ray William John Gerald Jack- policy which appeal. As to the son, Bethea, Love, Richard W. David A. compa- the benefits were denied second Barker, Chattanooga, and M. Ten- William (1) may ny, hold that a cause of action we nessee, Curry, and Peter Harwood Nash- agents pro- the the arise for failure of ville, Tennessee, appellants, for the Paul contest; cure a policy Roberts, Allen, Wiley Jody Bros.-Ain- to procure claim for failure be action- tree Capital, LLC. able, notwithstanding policy holders’ not read insur- admission did Farrar, Capparella, Amy J. Donald N. (3) because the set- application; ance Nashville, Henry, and Candi Renee Ten- by the second life insurance com- tlement nessee, appellee, Kristen Mor- Cox pany specifically was not resolved based rison. contract, upon agents are not entitled against damages to a credit caused OPINION procure. As to policy their failure WADE, J., R. GARY delivered the we plaintiff, terminated hold that Court, opinion in M. of which JANICE against any preponderates evidence LEE, JJ., G. HOLDER and SHARON upon negligence, award of based CLARK, joined. A. CORNELIA C.J. misrepresentation, breach of fi- negligent KOCH, JR., J., filed WILLIAM C. duty, or violations of Tennes- duciary separate concurring part in opinions Finally, Act. we see Consumer Protection part. in dissenting ad hold that damnum clause husband, After the death of her provided agents suffi- complaint plaintiff against agents/fi- filed suit their damage in support cient notice to award planners upon $1,000,000 nancial based several theo- plus pre-judg- amount recovery regard ries of to the termi- judgment ment interest. The the Court nation of a life insurance from one part is affirmed in and reversed company acquisition replace- and the of a part, and the cause is remanded to company. ment from a Af- trial post-judg- second court for determination initially ter the award of bene- ment interest. contesting Background inadequate. part profession- As Facts and Procedural services, al Allen and Roberts agreed to (the “Plaintiff’), Scott Morrison Kristen arrange alternatives to the existing policy (“Morri- the widow Howard Morrison and to otherwise offer planning financial son”), suit the defendants filed February advice to the Morrisons. On (“Rob- (“Allen”), Jody Paul Allen Roberts later, less than two weeks Roberts met erts”), Capi- Wiley Brothers-Aintree with the tal, Brothers”), Morrisons second time and rec- (“Wiley LLC Nashville (referred $1,000,000in firm ommended life planning financial collec- insurance cov- “Defendants”), tively alleging as the vari- erage for Morrison and a life two recovery regard ous theories Plaintiff, for the who had policies life insurance to Morrison issued no upon life insurance at that time. Based prior to death. American General Life his provided information Morrison had General”) (“American Company Insurance January meeting, ac- Roberts had was also named as a but defendant settled quired quotes from various life insurance prior the Plaintiffs’ claims to trial. The companies, including American General. *5 proceeded case the to Defendants $1,000,000 The proposed premium for the jury. trial without a $250,000 “Renewable Level Benefit 2000, proof established that Mor- policies Term” with American General was $300,000 rison obtained a term life insur- $300,000 the premium less than for the Colony, ance with the policy naming First term with Colony. First Al- While beneficiary. the Plaintiff as This len Roberts the advised Morrisons to clause,” “incontestability contained the Colony maintain First coverage until meaning years that after two the insurance acquired the American General company deny coverage could not because policy, recommendation was not misrepresentations in the applica- made incontestability the based on clause the tion other to any comply or failure with Colony policy. First conditions insurance contract.1 Allen, who the responsibility undertook Shortly the the anniversary after second preparing for the insurance Colony policy, applications First Morrison was convict- (“DWI”), driving impaired ed of while based on information received Rob- which resulted restrictions on his license meeting erts at the initial with Morri- operate vehicle. sons, Plaintiff, telephoned asking Plaintiff, According additional data. to the 2003, early In late 2002 or Morrison her only Allen asked driver’s license began play golf regularly with Roberts number and her son’s Social num- Security Eventually, at Country the Richland Club. ber. specifically She recalled that Allen joined club Morrisons and devel- any questions pertaining did not ask to her Allen, oped friendship with Roberts and record, use, driving her tobacco or her together Wiley who as worked Brothers medical records and further testified that planners. January certified financial On 29, neither Allen nor Roberts directly contact- Morrison met Allen and meeting. ed after second At Morrison seeking counseling family’s Roberts on his February expressed point finances. He some between 11 and Feb- particular concern Colony policy ruary shortly that his con- telephone First was after Co., Searcy raising 1. See Fid. Bankers Ins. of the defense that an insurance Life (Tenn.Ct.App.1983) (stating invalid”). policy is incontestability "preclud[es] that an clause Allen, signed also several additional Morrison the Plaintiff and between versation documents, including Regarding “Notice mailed several docu- and Roberts Allen Replacement,” provides which as follows: Morrisons, the two including ments to applications. life completed buying a new life you thinking about Are cov- that no instructional Plaintiff testified discontinuing an al- applications, accompanied letter er are, you your If decision existing one? Allen, no having recollection though while a mistake. You good could be a one—or Morrisons, cover letter you make a will not know sure unless practice to typical that it his claimed was existing ben- comparison your careful “Sticky one. notes” attached provide the proposed efits and benefits. Morrisons paperwork directed you sure understand facts. Make explained here.” The Plaintiff “sign company ask the You should out .... “[e]verything just filled [s]o give you your existing policy that sold Jody and Paul had it was obvious urged you it. You are information about all for us and we needed everything done terminate, assign, action not to take sign.” February do was On cov- your existing or alter life insurance directed. The signed the Morrisons you issued erage until have been acknowledged at trial that neither Plaintiff it policy, new examined found nor her read content of she husband it acceptable. applications. Roberts claimed While you Hear both sides before decide. This signing appli-
to have witnessed you making can be are way you sure *6 cations, the insisted Roberts Plaintiff is in your decision best interest. so, having never to her had not done been lettering: included bold completed until he delivered the residence QUALI- IF YOU SHOULD FAIL TO sometime later. policies FY FOR THE LIFE INSURANCE “Part A” of page appli- On four of APPLIED, FOR WHICH YOU HAVE $1,000,000 policy, form cation for MAY FIND UN- YOU YOURSELF signed lengthy au- series of Morrison LIFE ABLE TO PURCHASE OTHER acknowledgments, which thorizations and OR TO ABLE PUR- INSURANCE statement: following included IT ONLY AT CHASE SUBSTANTIAL- LY HIGHER RATES. I have read the above statements or notify your required We are law to They have to me. are been read company you may be re- existing my complete true and best policy. their placing knowledge I and belief. understand (1) will application: that this consist in list lengthy Unlike the items A, B, Part if applicable, Part and related acknowledgments and in authorizations (2) forms; any and shall be basis for application, “Part A” of the the “Notice any I understand that separate issues. Regarding Replacement” was ap- misrepresentation contained language. with no paper sheet of additional form, plication Company and relied on On four of Part A to the Allen’s page deny be used reduce or a claim signature appears, attesting following (1) certify it or void the if: is within its “I that the information statements: insured(s)/owner (2) misrep- supplied by proposed contestable and such period; accurately truthfully has record- materially accep- resentation affects the A application.” of the ed on the Part tance risk. 7, 2004, Hinds, (2) May Dywanna cure an policy; On enforceable insurance nurse, traveled to the Morrison residence tort claims the breach of fiduciary history, their medical to con- ascertain duty, negligence, negligent misrepresenta- examinations, physical duct and to other- tion; a claim under the Tennessee complete applications wise for life Consumer Protection Act “reckless and She re- American General. unfair deceptive practices.” weight, blood height, corded Morrison’s trial, In a Plaintiff bench described rate, and pressure, pulse also obtained honest, her husband as scrupulously con- urine asked samples. blood and When record, if tending Nurse Hinds about his that Allen and Roberts had in- driving “yes” following quired, Morrison answered Morrison would have answered question: years, you “In the have past question truthfully. 17E She testified that moving your had a violation or driver’s Morrison, although embarrassed about his restricted, suspended license or revoked?” record, driving candidly had both informed Ultimately, employer his friends of American General issued the his his DWI then policies, permitted and Morrison his As support conviction. for her contention Colony policy lapse. First Two months that Morrison would have answered hon- later, critically injured Morrison was record, estly if driving asked about his single-car accident. the next He died on pointed Plaintiff to the answers that he day. claim When Plaintiff made a given response questions posed benefits, American General denied cover- by during Nurse Hinds the medical exami- age because an incorrect answer to nation prior she conducted to the issuance Question application: 17E in “In years, past five in- proposed errors, pointed Plaintiff other inac- also charged sureds been with or convicted of curacies, applica- and misstatements in the driving under the influence of alcohol tion process. example, For Allen ac- drugs any driving or had violations?” knowledged he not ask did Morrison *7 “No” the on appearing was answer the Question 15, which the required disclosure form. any existing of policies, life insurance but Later, Plaintiff against the filed this suit he his simply described omission as General, alleging breach “mental Allen “not ap- block.” answered contract, life insurance of the violation plicable” this question, despite to the fact Tennessee Consumer Protection Act fully that he that was aware Morrison had (“TCPA”), §§ Ann. TenmCode 47-18-101 existing policy Colony. an with First Fur- (2001 to Supp.2010), general -130 & and ther, question in the application another indicated, negligence. As the Plaintiff also was whether Morrison had used tobacco Allen, Roberts, Wiley named and Brothers products; though even Roberts had seen trial, as defendants.2 to Plaintiff Prior cigars, sup- Morrison smoke the answer settled claim against her American Gener- “No.” plied pointed was The Plaintiff out $900,000. al for proceeded The Plaintiff that had to a responded Morrison “Yes” Defendants, trial against asserting question similar in the he following recovery: application theories of pro- Colony policy. breach of contract claim for failure to made for First existed, 2. The undisputed Plaintiff also sued Allen and Roberts and it is that Allen and Group, a title listed busi- Defendants’ employed Wiley Roberts were Brothers. cards; however, entity legal ness no such $600,000, see court the award to that he had doubled Allen claimed response, 47-18-109(a)(3) (2001), 17E and Ann. question Tenn.Code twice asked Morrison each “no” on occasion. interest granted pre-judgment he answered that $74,135.38, question was first attor- contended that and awarded He amount of $198,285.47. of their initial ney’s totaling conclusion and costs asked fees 29. Allen asserted meeting January comparative The court found no fault trial telephone in a later again he asked of the or American part on the Morrisons Morrison. While Rob- with conversation General. first to have witnessed the erts claimed note, specific made Of the trial court with and answer session Morrison question credibility of fact as findings had aware that Allen later talked and was Defen- Allen the recklessness of the he by telephone, Morrison conceded dants’ conduct: Allen ask question he did not hear The must find Mr. Allen is Court occasion.3 There during 17E the second regard credible witness in question either the no reference to applications process. and application to 17E in the office file main- the answer Rob- must find that both Mr. Court Wiley tained at Brothers. Allen reckless in their erts and Mr. were proceedings, At the conclusion of the their processing court, finding that the Defendants trial attempt purchase life insurance for collectively employ- their breached Morrison, pro- in the sales Howard failing ment contract in which fiduciary process and the cess policy, life enforceable awarded relationship was established. their $1,000,000, plus Plaintiff damages Mr. had a duty Mr. Allen and Roberts for a pre-judgment interest total to Morrisons and failed to fulfill $1,247,120.94. The trial court also award- and fell below the standard of ed the Plaintiff tort agents for insurance and fiduciaries care for the loss of the First amount buy for their clients. hired Colony life insurance based on theo- affirmed, part, Court fiduciary negli- duty,
ries of breach of that, holding misrepresentation. gence, negligent preponderate evidence did not policy, the “the actions of the defen- Because tortious finding trial reckless, court’s knowingly dants were willful and had failed Defendants to ask deceptive, and in violation the Ten- Morrison *8 Act,” 17E:4 question the trial answer nessee Consumer Protection Appeals agreed the correctly find- Appeals 3.The Court of noted that if 4.The Court answered, ings regarding Allen’s credi- had he have of the trial court Morrison so would correct, bility technically issue of and because he was con- and the Robert's Allen’s impaired separate agency. Both of these determinations are driving victed of while —a See, Talley, questions e.g., driving from the of fact. State v. offense under influence. See (Tenn.2010) 418(a) (stating that §§ S.W.3d is- Tenn.Code Ann. 55-10-401 & (2008); involving credibility witness are to be Humphreys, 70 sues State v. S.W.3d judge fact); the trial as the trier of (Tenn.Crim.App.2001). trial court resolved Inc., Ctrs., Drug Disc. to relevant White v. Reveo did not consider the distinction be (Tenn.2000) (noting that the claimed when or material. Roberts asked, agency question of fact "that not existence of "is a Morrison answered he did influence) particular of the (driving a DUI under the circumstances under case”). preponderate The evidence does past.” not duty, if he ciary negligence, negligent asked mis- Mr. Morrison was *8-9, driver’s license. nurse representation, restricted id. at upheld and also correctly “yes.” marked the answer as ruling the trial court’s “that the tortious Mr. is a clear indication that Morri- This of the actions defendants were willful his conviction trying reckless, son was not hide knowingly and deceptive” in vio- led the conviction is what TCPA, since holding doubling lation Furthermore, restricted license. ev- award was appropriate under the entire shows that idence *9, at denying statute. Id. *11. While inattention to process was marked an request attorneys’ the Plaintiffs for fees and casual attitude toward accura- detail appeal, not Court did of Allen cy part and Roberts. attorneys’ disturb the tri- fees awarded at example, Roberts had seen Mr. For al, but ordered a remand for a recalcula- cigars, yet the Morrison smoke brokers pre- post-trial tion of interest and the application question marked “no” on attorneys’ fees. Id. at *11. products. regarding use tobacco granted ap- This Court the Defendants’ Roberts and Allen knew that Mr. Morri- plication permission appeal for in order an and intend- policy son had insurance (1) following to address the issues: wheth- replace policy, ed to it with the new but er a cause action arise failure to application they on the indicated that insurance not existing no coverage. Mr. Morrison had (2) contest; whether the claim is action- never Mrs. Morrison Allen asked notwithstanding able holders’ questions application except from the admission did read their phone during a brief call which he asked (3) applications; whether license social her drivers securi- by American prop- settlement General was ty got numbers. He the rest of her erly damages applied as a credit Yet, information from Mr. Morrison. by the for their caused Defendants failure Allen that he saw personally certified (4) procure; whether the pre- evidence on the date of proposed insured ponderates against any award each and ac- application, question asked upon negligence, misrep- based negligent curately recorded answers. resentation, fiduciary duty, breach of Allen, No.
Morrison M2007-01244- violations of the Tennessee Consumer Pro- COA-R3-CV, *3 2009 WL at Act as the tection terminated 2009). (Tenn.Ct.App. Jan. The Court Plaintiff; and whether the ad dam- precedent, of Appeals, citing controlling complaint provided num clause in the failure of specifically observed sup- Defendants with sufficient notice to applica- Morrisons read port damage award the amount tion not absolve the Defendants did $1,000,000 pre-judgment interest. *4, agents, liability id. but trial disagreed with the court’s failure ANALYSIS *9 permit a credit the settlement Amer- as Standard of Review General, reducing ican the award a $900,000. a civil case heard without judgment As of Id. at *7. to the findings trial of fact are Colony jury, court’s for the loss of the First to policy, presumed be correct unless evidence the Court of ruled P. R.App. of otherwise. Tenn. preponderates Defendants were liable breach fidu- 13(d). findings. against R.App. these See Tenn. P.
426 that he or she is Langschmidt, procure theory 81 “on the
13(d); v. Langschmidt (Tenn.2002). negotiating of the insured in 741, agent credi- 744 When S.W.3d a principal are a and owes to weight given testimony policy, to be bility and care, skill, involved, be and dili- deference must to exercise reasonable considerable when trial 43 gence effecting to the trial court in insurance.” Am. afforded (citations omitted). § to observe Jur.2d Insurance 163 opportunity judge jurisdictions secondary to hear in-court While other witness’ demeanor Young, authority recognize v. 950 S.W.2d failure testimony. generally Walton (Tenn.1997) v. 956, (quoting Randolph procure may be based on either 959 claim (Tenn. 815, contract, Eddy 937 819 or breach of see Randolph, negligence S.W.2d 1996)). Co., trial courts are able v. 290 N.W.2d Republic Because Nat’l Ins. Life (Minn.1980); witnesses, 174, assess de- v. 177 Geico observe Herdendorf 277, meanor, Co., 1461, other indicators of Ins. 77 A.D.3d 909 N.Y.S.2d evaluate credibility will credibility, (N.Y.App.Div.2010); Cheryl an of 279 Robin assessment Annotation, Miller, clear appeal Liability overturned on absent Insurance not be convincing contrary. Agent Inadequacy evidence on Ground or Broker 779, Procured, 783 Regents, Coverage v. Bd. Liability-Insurance Wells (1998), (Tenn.1999). Questions of law are 60 we limit A.L.R.5th 179-85 presumption with no of our in this case to the latter. to de novo review discussion F, Inc., v. H & 301 correctness. Seals never Although has de Court (Tenn.2010); 237, 241 Colonial S.W.3d requisite out the elements of finitively laid v. Morgan, 263 Pipeline Co. S.W.3d procure, of action failure to cause (Tenn.2008) (citing Gaylord Perrin v. 836 Jurisprudence 2d lists them as (Tenn. Co., Entm’t follows: 2003)). (1) undertaking agreement an or insurance; agent broker to procure I. FAILURE TO PROCURE (2) agent’s or broker’s failure use Applicable A. Law diligence attempting reasonable for failure to procure A cause action place notify the insurance and failure to separate is and distinct from failure; any such promptly the client of action an insurer or cause insurer; a failure procure proposed agent’s or broker’s actions claim, agent, “the rather than insur- [the] assumption the client’s warranted company, independently liable.” ance properly he was insured. or she (2003); § 163 43 Am.Jur.2d Insurance cf. (citation Am.Jur.2d Insurance II, Can-Do, Inc., Haeuber F.2d omitted). adopt as We these criteria es- Cir.1982) (5th (quoting Karam v. St. support sential to a claim for failure to Co., & Marine Ins. 281 So.2d Paul Fire procure insurance. (“The (La.1973) [insured] 730-31 consistently recognized have agent from the the loss he sustains Our courts recover failure to recover based agent’s procure right a result of the as agent’s wrongful procure if the failure to insur- the desired actions Damages the .ance authorized or directed. assumption by warranted an theory upon he based of failure properly client that insured when coverage.”)). An awarded Tennessee no desired amount *10 agent acquired by to was as or broker is liable for failure insurance agent Stone, Tenn.App. Appeals In v. Court of a judgment directed. Glisson affirmed in Stone, (1926), Glisson contracted with agent, favor of Bell because the directed to solicitor,” and “licensed insurance theft, banker policy obtain a acquired for to obtain fire insurance three tobacco $1,000. coverage only Our intermediate he providing barns. After assurances that court appellate rejected a claim later, fill Stone would out the agent that the superficial Bells’ examina- signature on a blank obtained Glisson’s policy recovery, tion of the barred holding form, but failed to include one of the three failure “[m]ere to read and under- coverage. on the for Before request barns stand a to policy be utilized other- copy received a of his Glisson insurance a policy-holder’s wise defeat claim [and] the barn had not policy, been included the in cases of only issue this nature is not destroyed in a fire. application was policy what but provides, what Id. 71-72. The Court of ruled (citations agent promised.” Id. at 154 coverage that Glisson entitled to the was omitted). intended, interest, he, plus because an “amateur,” “lack opportunity had a for upon principles Based an application] [the examination when was cases, nounced these hold that we if an signed” properly and had “relied agent undertakes to obtain an insurance knowledge who much more had [Stone] insured, an policy for ob the matter in hand.” Id. at Simi- 79. tained is contestable due to the or acts Hicks, larly, in Massengale agent, applicant omissions then the (Tenn.Ct.App.1982), the insurance right has the same for recover failure to agent Massengale on separate assured two procure as he or she if would no procure replace- occasions that he would policy had issued at all. For the identical ment insurance He automobile reason, only a portion if the insurance so, failed to do and less than twenty-four policy is to forfeiture due to the policy expired, Massengale hours after the agent, acts or omissions of the then the was involved in an automobile accident. has applicant right the same to recover for at 660. of Appeals permit- Id. The Court procure failure to as he or she would have recovery agent Mas- ted from because if coverage had the had been less than that sengale upon the agent’s prom- had relied sought. procure ise full insurance Id. coverage. (recognizing general the “universal rule separate Justice opinion, his Koch who, an agent or broker of insurance asserts that there be evidence that must compensation a view ser- for his an an insured contracted for “immediate vices, procure undertakes to insurance clause,” incontestability that an insur- another, unjustifiably his through represented ance an agent so, neglect, fault or fails to do will be held incontestable, in policy would be order to any damage there- resulting liable support a failure to claim under procure from”). similar those before us. circumstances We If an insured contracts with disagree. Recovery a failure procure under an claim has also extended to instances reasonably agent, upon in- relies acquired,
where
but was
upon
expertise,
based
his or her
to suc-
adequate
agreement
be-
light
cessfully complete
groundwork
pro-
agent.
and the
For
tween
insured
example,
curing
policy,
is success-
Agen-
Bell v. Wood Insurance
cy,
(Tenn.Ct.App.1992),
fully
company
due to the acts
omissions
fact,
not,
[driving
the
the influence]
the
has
received
under
convictions
insured
death,
that
a
bargain.
higher
especially
the
Insurance
is have
risk of
benefit of
accidents,”
of
by
later voided because
acts
obtained but
deaths caused
automobile
just
is
worth-
by
agent
and, therefore,
an
as
or omissions
the
answer would be
false
as
or
insur-
inadequate
less
no insurance
v.
material. Smith
Tenn. Farmers Life
Co.,
ance.
210 S.W.3d
Reassurance
This
that
(Tenn.Ct.App.2006).
suggests
pro
for
to
A cause of action
failure
false
to
material-
Question
the
answer
17E
cure, therefore,
coverage
may arise where
loss,
ly
thereby
the risk
ren-
increased
of
insurer on a
that is
by
is denied
the
dering
the
the
contestable under
a
of the acts or omis
contestable as
result
statute.
agent.
of
There is no distinction
sions
the
be-
acknowledging
While
the distinction
agent’s
of cover
procurement
between an
against
tween a direct claim
an insurer
the
by
contestable
insurer and
age that is
procure,
and a
for
to
the
claim
failure
all.
agent’s
procure
an
failure to
Cf.
ask
in Beas-
holding
Defendants
that our
v.
Falls Ins.
Bill Brown Constr. Co. Glens
Co.,
(hold
(Tenn.1991)
ley Metropolitan
v.
Co.,
Insurance
429
comprehend,
therein that
in
17E
misrepresentations
question
quite
rial
is
clear:
See
years,
creased the insurer’s risk of loss.
also
“In the past five
have any proposed
Co.,
Tenn.
Reassurance
charged
Farmers
insureds been
with or convicted of
Life
591;
v.
Montgomery
S.W.3d at
Reserve
driving under the influence of alcohol or
(Tenn.
Co.,
Ins.
drugs or
any driving
violations?” Had
Life
But
Ct.App.1979).
Berryhill
see
Mut.
question
Morrison seen this
and corrected
Ass’n, Omaha,
&
Health Accident
answer,
litigation might
the
this
have been
Benefit
Neb.,
Tenn.App.
Our is that observation completed application and seek clarifica- practice always every best is to read word terms, any tion the Plaintiffs every signing. ap- document before An testimony that “it was that [the obvious plicant who embraces the but im- tedious everything had done for us portant Defendants] of reviewing task terms of an all sign” and we needed do was and that to avoid likely dis- Furthermore, putes questions “had no of this nature. she idea there were while many application” particular appli- the terms accredited cation layperson would be difficult for a court. trial if the insured had
Further, ample asking proposed that there is we conclude policies, again life de- existing trial court’s deter- support evidence to *13 scribing the as a “mental block.” was never asked mistake mination that Morrison question regarding the driving his and that the De- Allen claimed that about record application, use on the Plaintiffs in a tobacco failure to do so resulted fendants’ in, a mis- “just which was not filled was successfully that was contested policy “yes” He another take.” answered Although Allen American General. question Agent’s Report asking on the question claimed to have asked Morrison applicants had on whether he seen the the 17E, the court chose not specifically trial application, ques- the each date of asked testimony, that finding to believe Allen’s answers, accurately tion and recorded the Further, was a witness. he not credible unequivocally admitted that he did not but trial the Plaintiffs the court accredited day they signed see the the Morrisons on her contention that husband would have the that applications. Roberts admitted asked, honestly if observing answered he the about her did not ask Plaintiff candidly he had informed his friends driving history tobacco use her the about conviction the employer his the February meeting, and that he “made honestly license. That Morrison restricted assumptions about her” and should have driving a his his- question answered about evi- questions. instead asked the This examination, tory during the medical dence lends further credence to the trial the issuance of required which was before court’s determination that the erroneous Plaintiffs policy, the bolstered the account due to the application answer was of the events. The evidence demonstrated failure of Allen and Roberts to ask the filled the out the application, as necessary questions.5 Defendants, was so in a done careless manner information known facts, and contained accredited, These even as would Allen to them to be false. admitted While satisfy the not standard established in the knowing Morrisons had an Beasley. The for our in basis decision this existing however, actual policy, case, life insurance a be- is breach of contract had a line through he drawn applicant and the for fail- tween question asking if an applicant procure ure to a not existing describing the as with for- policy, Beasley omission contest. dealt contract “just a also mental block.” He answered mation and decided on the basis of question Agent’s Report misrepresentation “no” to a on the in the contract between findings, 5. Justice Koch determines that the Plaintiff's extensive nature of the court's we recovery justified of one million dollars is all find that related to of the court’s fiduciary duty theory a breach of rather than liable, finding stated bases the Defendants procure. one of failure to While Justice Koch merely negligence. not based in And those many supporting characterizes of the facts while, asserts, as Justice Koch the facts "specific findings procure failure claim as may very support finding record well regard of fact ... with to [the Plaintiff's] duty procure- fiduciary breach claims,” negligence fiduciary and breach of policy, General the trial ment of American interpreted we do not think the record can be fiduciary duty court found breach of based nrling in this In manner. the trial court's Colony policy. upon the loss of the First Ad- bench, pri- from the it announced the first ditionally, the has asked Plaintiff decision, mary finding the Defendants liable ac- Court to address whether Defendants’ contract, negligence, for breach of and under support finding fiduciary of breach of tions court then that it would TCPA.The stated duty procurement relation to findings,” "talk the fact but did not about any particular claim. Based on the reference result, gence the insurer. As a insured and one of the asking key questions holding apply does not to the circum- used American General to determine today. type stances before us it would issue was a duty breach their contractual light agree foregoing, we Morrisons. the trial court and Court of Plaintiff, regardless stated, failure to As we agent’s duty read the an ac- applications, established an insurance distinct tionable agents claim for fail- from the pay *14 of insurer to under ure to The procure. sup- and, result, record includes its a duty that gives porting requisite evidence for each of the right independent to an of cause action. Initially, as their part profes- elements. We decline the Defendants’ invitation to Morrisons, relationship sional with the apply reasoning Giles, of Beasley, Defendants undertook to life in- procure similar an involving cases insurer’s denial surance; secondly, the Defendants’ failure of benefits to this claim for the failure to to diligence use reasonable in procuring Moreover, procure. we with disagree the life insurance resulted in issuance an agent Defendants that can negligent be of a policy challenge by in filling out an insurance application and insurer; and, finally, the Defendants’ ac- yet be any liability by shielded from tions warranted assumption Morrison’s signature applicant. “[I]nsurance that he life insurance professionals and other fiduciaries [must sought. be higher held] standards.” Aden v. Fortsh, 169 N.J. 776 A.2d true,
While it is as Justice Koch notes in (2001). Lastly, disagree we with the De separate opinion, his that an insurance pol- fendants’ contention that fail obtained, Morrison’s icy we disagree was that this was proofread ure to his application interfered the policy for which the con- Morrisons ability their to perform their own tracted. It form places over substance to contractual obligations. Moody See Real claim that because an Haestis, ty Co. v. obtained, the contractual be- agreement (Tenn.Ct.App.2007) (discussing tween the Morrisons and the Defendants party a to a bilateral contract not inter could not have breached. The Morri- party’s ability fere with the expected by truthfully per sons that other answering duties). questions posed Defendants, form its The Defendants’ failure by the driving to ask about they history a Morrison his upon would receive based they provided. By employed is the core As failing agents information concern. 17E, question which, ask the answer to if expertise, Morrisons their recorded, accurately possibly any greater would have Defendants not claim changed poli- duty part anticipate the nature of the Morrisons’ their clients’ cy Thus, by raising rectify with American General their trial errors. court premium, the Defendants not obtain not err granting judgment did did Therefore, $1,000,000 promised. what was the De- plus pre-judgment amount fendants’ failure to use reasonable dili- interest.6 (10%) percent Myint
6. Pursuant per to Tennessee Code Annotated sec- annum.” In v. All- 47-14-123, Co., pre-judgment "may tion interest state we Insurance observed "[i]n decision, reaching equitable be awarded courts ... in accordance with an court must principles equity keep purpose awarding rate not in in mind that the fully compensate plaintiff excess of a maximum effective rate of ten the interest is to $900,000 point, depending what the FROM at some II. CREDIT does, opportu- I will an have SETTLEMENT Court nity. That’s all. argue also The Defendants that the properly you’ll held an Appeals Court THE COURT: I think failing Plaintiffs award it. MR. CUR- opportunity to address enforceable life valid I RY: Yes. That’s what mean. by the have been reduced policy should right. All THE COURT: Gener- from American settlement added). (Emphasis disagrees. Before decid- al. Plaintiff the trial en- On March court correctly the Court of ing whether final judgment. tered order of were enti- that the Defendants determined alter or Defendants filed a motion to however, credit, to a we must address tled proof, contending and reopen amend is, That the Plaintiff a threshold issue. judg- credit were entitled to a the Defendants argue continues to *15 Cmty. Simpson ment. See Frontier failing to relief waived entitlement (Tenn. Union, Credit the timely during make a offer of proof to 1991) closed, proof the (noting that after is course of the trial. discretionary au- trial court has the the trial, to the Plaintiff moved Prior to The thority permit proof). to additional exclude of the settlement amount evidence motion, that noting trial court denied the The trial court paid by American General. the opportunity the Defendants “had day On third of granted the motion. the during trial ... proof make an offer of the trial, counsel, suggesting the Defendants’ mitigat- to contend that the had [P]laintiff necessary proof likely that an was offer of by settling ed her with issue, revisit on the asked the court ... chose not so.” Fur- General do exchange then following motion. ther, Defen- the trial court found that the place: took legal dants did not have a basis for is THE issue of credit [T]he COURT: credit, they “independently were liable real be addressed issue which should own for their acts and omissions.” trial along with the settlement after that the Appeals The Court of observed judgments is over and are rendered. obviously trying was “Defendants’ counsel saying going ... I’m not that I’m very he now to avoid situation which grant or a contribution. I’m credit right why made no just justifying that the doesn’t arise finds he saying himself— over, Morrison, judgments proof.” case is WL until offer after rendered, judgments. there noting are are at better *6. While that the if point, And at looks Court the Defen- practice would have credits and contributions.... proof an offer dur- dants have made trial, [attorney ing appellate our intermediate MR. for Defendants]: CURRY about, had protected. pointed I’m That’s I care is court out that trial court all for the to which he or tion.” Id. We have determined that the trial loss of the use funds entitled, legally penalize was pre-judgment she not inter- court’s decision to award wrongdoing.” defendant for starting thirty percent est at the rate of ten (Tenn.1998). The whether to decision of death, days after which was Morrison’s prejudgment the dis- award interest is within expected the Plaintiff would have date cretion court will not be of the trial funds, was well use appeal record re- disturbed on "unless the within the bounds of its discretion. palpable of discre- veals manifest and abuse insurance, present directed Defendants even where the insured has set- ended, after the trial which proof insurer, is with the tled but if liability is exactly they Ap- what did. Court contract, us, based as in the case before that, peals ruled under these circum- is have damages entitled to re- stances, not the issue could be treated as by the duced settlement amount. Id. waived, and then examined the settlement In appeal, the Plaintiff maintains document, which filed had been under that because the liability Defendants’ view, seal.7 our the Court of separate failure to is and distinct ruled that the issue had not been properly from liability American General’s for fail- waived and that the trial court should have to pay, ure are not Defendants entitled considered settlement document. to a credit for the settlement amount. Ini- substance, course, The issue of tially, we acknowledge the Defendants were entitled whether Defendants to a Morrisons, agents were agents credit the amount of the Plaintiffs set of American General. The trial spe- court tlement American General. The De cifically found that Allen and Roberts argue that Plaintiff only fendants “owe[dj their loyalty” undivided damaged “to the extent she did not Morrisons at the applied time for the proceeds the American receive Gen policies. The Court of Appeals and, policy,” eral she because received concurred, observing that Roberts and Al- $900,000 of the one million dollar policy, *16 by len were employed the Morrisons to only is an she entitled to additional acquire a new one million dollar life insur- $100,000. See Metro. Gov’t Nashville & of policy, ance that the Morrisons had relied Cnty. Cigna Davidson v. Healthcare of their “superior on knowledge,” and that Tenn., Inc., (Tenn.Ct. 28, 195 S.W.3d 35 duty Defendants had breached their (“The App.2005) purpose assessing of dam an procure enforceable insurance policy. in the ages event of a breach of contract is view, at In Id. *4. our clearly evidence place injured party the same duty demonstrates that the Defendants’ position it would have been in had the separate the Morrisons was and distinct been fully performed.”). contract any duty from them owed American of Appeals agreed, relying The Court “ indicated, General. As the Defendants’ ‘[wjhere general upon principle liability stemming independent from this against action an insurer is duty separate is also distinct and from that with an joined against action an insurance American of General. See Pack- Clear-Vu agent procure or broker for failure to cov- Co., aging, Inc. v. Nat’l Union Fire Ins. erage, establishing liability of either 212, Ill.App.3d 105 61 Ill.Dec. 434 generally defendant will exonerate the oth- N.E.2d (determining 368 Morrison, er.’” 2009 WL at *7 insurance company’s pay failure to Ey, Robert 14 (quoting Michael Causes of (2008)). the insurance injury caused to the 881 3 Ap- Action Court of that was from plaintiff separate that which peals agent held that an who owes a may insured resulted from the failure personally agent’s pro- remain lia- procure ble in tort for his or her policy). failure cure the costs, fees, Receipt” every The "General expenses 7. Release and releases and of kind and claims, any American General and all "from relating nature ... to claims in the matter of suits, action, proceedings, demands causes of the arbitration” in this case. actions, liabilities, debts, damages, judgments, persuasive, apparent this is it is authority of separate liabilities Despite the circumstances, an ordinary in- Defendants and under recognize purpose we that the setting, who is sued on dependent agent insurance contract is to breach of damages for failing contract claim for breach of place he or injured party place the an enforceable insurance had the contract occupied would have she an offset in entitled to Healthcare, Cigna fully performed. pol- on the company’s insurance settlement jurisdictions typi at 35. Other icy. company the insurance cally hold that if cited, however, In the instances each of policy, on the plaintiff with the has settled companies were sued for insurance damages may prop or agent’s broker’s within breach the contractual terms the settlement amount. erly be reduced upon policies insurance settled (finding at 177 Eddy, 290 N.W.2d See at Eddy, N.W.2d basis alone. insurance broker liability independent company (settling claims “limited to the difference between to be based breach of contract and reforma- received set plaintiffs [per what contract); Schurmann, tion 624 N.W.2d company] with the insurance tlement com- (settling claim with insurance face value which demanding performance under the pany Neau, entitled”); were Schurmann was sued on policy). General & n. 4 624 N.W.2d Wis.2d theories: violations of the TCPA multiple (Wis.Ct.App.2000) (noting (which damages),8 result treble liability, stating but agent’s independent contract,10 breach and re- negligence,9 provides insurer the same that “when the superior,11 entered into a spondeat with the in coverage through settlement “full, complete total release no action requested, sured as all claims asserted assertable.” ad- he has not failed exists because settlement, dition, time of the no promised”). Because *17 at the produce what was alleged "American alleged Plaintiff The Plaintiff that Gen- 8. The that American Gener- 10. inquire pre- by accepting al’s failure to into Morrison's motor eral their contract breached records, despite receipt vehicle its of conflict- knew from ... Morrison when it miums driving ing regarding con- answers his record known ... that the answer should have and Hinds' tained Nurse Question inaccurate,” was No. 17E report, medical "caused American General answer result in inaccurate could illusory coverage, what for issue was in effect void, being thereby allowing declared premium accepted which it without Fur- American General refuse benefits. providing corresponding requirement of cov- ther, complaint stated that American Gen- erage.” complaint The further asserted eral’s failure corroborate information "reckless, unfair, and tírese acts constituted policy application supplied on the insurance deceptive acts and omissions” violation of $300,000 policy the loss of caused the TCPA. Colony and the denial of benefits under First $1,000,000 complaint alleged 9. The that "American Gen- by care eral breached its of reasonable failing inquire governmental into the motor 11. Plaintiff claimed that American Gener- vehicle records” in order "to corroborate any al and omissions on was liable acts verify ... in- the answers on Morrison's life Allen and and that if part of Roberts policy” surance "direct TCPA, were found liable under the proximate that the was result” was Plaintiff Plaintiff] would be "liable to [the General left without effective life insurance in damages attorneys' fees.” treble $1,000,000 and amount of allowed the policy to lapse. incontestable determination had been made regarding future environmental claims. Trans- independent whether the Defendants were america did not demonstrate part, what if agents. complaint alleged any, of the settlement was attributable to fact, were, agents Id.; Defendants for Amer- cleanup Weyerhaeuser costs.” accord Therefore, Co., ican General. American Gener- Co. v. Commercial Union Ins. al contemplating potential liability was for Wash.2d 15 P.3d 126-27 its own acts as well as those of the Defen- (applying the Pederson’s rationale under similar, dants. complex, albeit more factual cir- cumstances).12 distinguishable level, While on a factual an opinion rendered the Washington We find analysis the Pederson’s on the Court of provides instruction on credit issue to be helpful analysis. our Farms, this issue. Fryer case, Pederson’s In the Pederson’s the settlement doc- Co., Inc. v. Transamerica Insurance ument released the other compa- plaintiff, who owned an underground gaso- nies past, from all present, and future storage line tank nature, insured Transamerica claims of kind or and Trans- (“Transamerica”), Company Insurance dis- america could not offset its own covered that the tank leaking. 83 by the settlement amount because it was (1996). Wash.App. 922 P.2d unable to portion demonstrate what plaintiff After the expenses had incurred settlement clean-up related costs at in cleaning up Here, the contamination caused issue. the Plaintiffs settlement leak, it submitted a claim agreement to Trans- also released American General america for the costs. Id. at 131. The from all past, present, and future claims. plaintiff, apparently who While the nature of the claims here and in insurers, with two other are, settled with course, them. Pederson’s distinguishable, claim, When Transamerica denied the the American potential General’s “present” lia- plaintiff cleanup sued for the bility costs. Id. at the time of settlement was extin- The trial court declined to extend a guished credit as to the Plaintiffs multiple theo- to Transamerica settlement recovery, ries of just the breach of amount, and Transamerica challenged this theory. contract If American General had ruling, arguing that the plaintiff would “re- solely been sued on a breach of contract cover more than expended it in cleaning up theory, the Defendants would clearly have the contamination and thus receive an in- been able to demonstrate that the settle- *18 ” appropriate recovery.’ ‘double Id. at and, 139. ment solely was made on that basis Court of affirmed the trial accordingly, would be entitled to an off- court, observing that settlement ... assume, however, “[t]he set.13 We cannot from was not payment mere plaintiffs] the agreement, [the nature of this that Ameri- costs; cleanup it was in exchange for a can General solely settled on the basis of liability release of past, present for all its pay failure to on the insurance policy. issue, 12. In her dissent on this Chief Justice analysis note that the Pederson’s has also been "Weyerhaeuser Clark that by Washington’s highest states does not utilized court. that, proposition stand by suing for the theories, multiple settling and then without holding Beasley suggests 13. Our that be- identifying legal theory underpinning the the cause an insured who fails to read an insur- settlement, plaintiff the is not ance contract be held accountable for a general regarding rule misrepresentation, offsets.” We do not might American General Weyerhaeuser claim that explicitly subjected liability states such not have been to on a claim principle. Weyerhaeuser merely We cite to for breach of contract. 436 (Tenn.Ct. 92652, CH00358, at *3 characterizes 1999 WL Clark Chief Justice
While (same). 1999) 24, stemming sole- The terms of App. Feb. the Plaintiffs settlement pay, failure to ly Receipt,” from American General’s Release and “General claims that ignores document, the Plaintiffs The Defen- control. settlement duty of breached its point anything dants are unable failing to reconcile the by reasonable care Ameri- demonstrating that that document in Mr. conflicting Morrison’s statements extinguish payment can General’s report re- by nurse’s application and the of con- liability solely its under the breach searching prior vehicle records motor that theory. tract Because we find relates this claim issuing policy. While have failed to meet their bur- Defendants of the one million to the successful contest not den of we hold that were proof, Gen- policy part American dollar by judgment a reduction entitled to eral, separate wrong it is addresses settlement amount. General’s fail- and distinct from American should damages The Defendants’ involves an “unfair pay, ure to and instead reduced have been deceptive practice” act or under General; there settlement with noted, As treble based damages TCPA. fore, damages measure of appropriate have far upon violations of the TCPA could for the should procure failure to insurance dollar limit. exceeded the one million be the value of the American General result, face say with the same As a we cannot Lanier & v. Se. See J. Smith Co. Justice that there confidence as the Chief 404, Inc., 508, $900,000 Forge, 280 Ga. 630 S.E.2d mystery no about what the “is that, (2006) Georgia proceeds represent.” (holding think under settlement We law, plausible assumption the more to be that broker damages against liability to avoid company sought costly procure failure to an insur negligent upon at trial that have been based could ance are limited to the amount recovery.14 multiple theories of Ridge, L.P. v. Acor policy); Autumn 83, Inc., Agency, dia 270 Va. Ins. Va. claiming that parties As the their dam- (2005) (holding S.E.2d ages should have been reduced “the failure to measure amount, the Defendants had settlement is the amount establishing right the burden policy”); would have been due under Torrence, Polk v. such a reduction. Cf. Nemerovski, Ill.App.2d Gothberg v. 218 Tenn. (1965) (“The 208 N.E.2d measure of rule to be “where (finding general damages for the breach of a contract one claims a the burden establish- setoff procure insurance is be determined right upon one ing the of this setoff Bronze, it”); which the broker terms of claiming Midwest Inc. v. Out- Inc., Sales, Capital Mgmt. procure.”); No. 01A01-9707- failed to Site law Aircraft *19 showing long litigant makes 14. While Chief Justice Clark contends that so as a a ruling complaint re- encourage "a that he or she "entitled to our will 'kitchen sink’ is 8, lief”); Sup.Ct. approach complaints,” RPC 3.1 filing we do not see also Tenn. R. ("A bring pro- procedural lawyer are defend a share these concerns. There shall or place prevent ceeding, or an issue and ethical rules in that will or assert controvert therein, inquiry attorneys attempting advantage take after unless reasonable from doing by including lawyer law so ruling our a basis in and fact for of on this issue base- has frivolous, good a complaint. See Civ. which includes less claims in a Tenn. R. is not modification, extension, "[rjelief (allowing argument faith an P. 8.01 in the alternative or law.”). existing types be or of several different demanded” reversal of [to]
437 Agen v. Inland Ins. must establish Assocs. Underwriters ‘that defendant sup Ltd., 14, 806 cy, Mass.App.Ct. 61 N.E.2d plied plaintiff; information to the the in (2004) (same). 959, judgment The false; 964 formation was the defendant did not $900,000 Appeals granting Court in exercise reasonable care or obtaining is, therefore, reversed, judg and the credit communicating the information and the against ment of the trial court is reinstated plaintiffs justifiably relied on the informa ” the Defendants for the full amount tion.’ Walker v. Sunrise Pontiac-GMC $1,000,000. Truck, Inc., (Tenn. 301, 249 311 S.W.3d 2008) (quoting Williams v. Berube & As NEGLIGENCE,
III. NEGLIGENT MIS- socs., 26 S.W.3d 645 (Tenn.Ct.App. REPRESENTATION AND 2000)). has adopted “Tennessee Section BREACH OF DUTY FIDUCIARY (Second) the Restatement Torts guiding ‘as the in principle negligent mis Applicable A. Law representation profes actions ... Plaintiff also received persons.’” sionals and business Robinson theory on the based Morrisons Omer, (Tenn.1997) v. their life insurance allowed (quoting Corp. Bethlehem Steel v. & Ernst due to the lapse negligence, Defendants’ (Tenn. Whinney, 822 S.W.2d misrepresentation, and negligent breach of 1991)). (Second) pro Restatement fiduciary duty. The challenge Defendants vides as follows: Whether propriety award. lia- bility appropriately can be based on one or who, business, One in the course of his of these on a depends more theories con- profession or or in employment, any oth- requisite sideration of the elements for er transaction in he pecuni- which has a each cause of action. interest, ary supplies false information guidance others in their busi- Giggers Memphis Housing
In v. Au- transactions, liability ness is thority, this Court confirmed elements for pecuniary caused to loss them recovery general essential to a based on justifiable upon reliance the infor- negligence: mation, if he to exercise fails reasonable prima order establish a facie claim care or competence obtaining or com- negligence, defined as basically municating the information. care, failure exercise reasonable plaintiff following must establish the es- (Second) 552(1) Restatement of Torts “(1) a duty sential elements: of care (1977). (2) plaintiff; owed defendant to con- fiduciary Finally, relationship applicable below the standard of duct that amounts breach of care to a arises when person reposes special one (3) (4) loss; injury or duty; cause trust person and confidence another fact; proximate, legal, cause.” fiduciary— and that person other —the (Tenn.2009) (quoting 277 S.W.3d responsibility undertakes to assume Wilder, McCall party. the affairs of The per- the other (Tenn.1995)). upon son trust and whom the confidence imposed is under act for and
Negligent misrepresentation, hand, give *20 to advice for benefit of the applies a narrower other to class person other on matters within the of claims. succeed a claim for “[T]o scope relationship. a negligent misrepresentation, plaintiff 438 have been Steering you life until v. TRW Commercial
Overstreet (Tenn.2008) it and Din, policy, issued the new examined 641-42 256 S.W.3d omitted) (footnotes acceptable,” have the content does (Koch, J., found it concurring) of con- specifically not address the issue v. Estate Marianel (citing McRedmond policy with to the li, testability, regard either (Tenn.Ct.App.2000); (Second) being policy. or the replaced replacement § of Torts emt. Restatement (1979)). Regs. R. & Comp. is Tenn. 0780-01-24-12 an essen “Proof (1985). claim, as a a review the evidence fiduciary duty Upon tial element of’ whole, however, it have that v. we concluded Bank Middle Tenn. Planters Union M1999-01268-COA-R3-CV, Choate, necessary is not to decide whether such No. De- sufficient to absolve the (Tenn.Ct.App. warning at *3 was 2000 WL 31, 2000), liability negli- damages. negligence, is causation of fendants of Aug. as (Second) § of fidu- gent misrepresentation, of Torts or breach See Restatement (“One fiduciary in a relation with standing ciary duty. liability to subject is the other another fact, “Causation, or in cause resulting for harm breach of from injury or harm would not means that (emphasis add
imposed the relation.” have for’ occurred ‘but the defendant’s ed)); Practice 23 Tennessee Elements of negligent Kilpatrick Bryant, conduct.” (including damages an Action 8:1 (Tenn.1993). The real to the proximate and cause elements therefore, question, proof is whether the duty). fiduciary cause of action for have that the Morrisons would establishes $300,000 “but policy lapse allowed Analysis B. Hale v. for” the Defendants’ conduct. See argue ev Defendants that the (Tenn.2005). Ostrow, 166 S.W.3d preponderates idence the trial view, simply the Plaintiff failed to our they to ade finding court’s failed that the Defendants’ conduct demonstrate quately advise the Morrisons about the loss of caused cancelling poli risks of their incontestable trial, the During the Plaintiff testified in favor of to contest. The cy one purchase she and her husband intended argument hinges Defendants’ initial in replace General part Regarding “Notice Re large She Colony policy. to the First never contended placement” application, attached husband, Department they from she her had known taken Tennessee Colony policy incontestable “regu- Insurance Rules First was Commerce and not, lat[ing] the activities of insurers the American General replacement pay premiums of would have continued agents respect incontestability until existing policies life Tenn. R. on both Comp. insurance.” (1985). Regs. poli- & An clause effective on the latter 0780-01-24-.01 became 0780-01-24-.05(2)(a) Plaintiff, cy. argues required Rule appeal, is a reasonable inference from present Regarding Replace a “Notice it “[i]t that had the Morrisons been told prescribed by ment” the form Rule facts Colony dropping the First 0780-01-24-12 or some “other substantial true risks a new contest- starting year two ly approved similar form Commis speaks ability probably sioner.” the notice would more generally period, While place kept policies than both about the to “understand the facts” need year contestability peri- urges “not to action until the new two applicant take terminate, your od assign existing elapsed.” or alter *21 practice While individuals or disagree. We some is one that causes or tends to extra might pay premi- have chosen to cause a consumer to believe what is false security ums for the of a non-contestable or that misleads or tends to mislead a infer, policy, we are not inclined to absent consumer a as to matter of fact.” Id. An “ persuasive either direct or circumstantial practice act or is unfair where ‘the act or contrary, evidence the Morri- or practice likely causes is to cause sub- sons would have done so this instance. injury stantial to consumers which is not the primary The evidence establishes that reasonably avoidable consumers them- $1,000,000 goal of this transaction was a outweighed selves and not by countervail- life insurance on Morrison. While ing competi- benefits to consumers or to ” the Plaintiff has established convincingly tion.’ Id. at 116-17 (quoting 15 U.S.C.A. damages that she incurred from the De- 45(n)). fendants’ failure to an enforceable 47-18-109(a)(1) Section a creates cause $1,000,000policy, she has not demonstrat- of action for those who suffer damages as ed of the negligence Defendants the result of practices violation of sec $300,000 in damages caused an additional tion 47-18-104: upon the cancellation the First based Colony In that regard, the evi- Any person who suffers an ascertain- preponderates against findings dence able money real, loss or property, the trial judgment court. The personal, mixed, article, or or any other be cannot sustained under theo- commodity, thing or of value wherever ry of tort. situated, as a result the use or em- ployment by person another an un-
IV. TENNESSEE CONSUMER or deceptive practice act or declared fair PROTECTION ACT may to be unlawful part, bring Applicable A. Law individually action to recover actual trial court damages. held Defendants also violated the TCPA as to added.) (Emphasis Section 47-18- Colony policy. the First Tennessee Code 109(a)(3)-(4) provides enhanced prohibits Annotated section 47-18-104 knowing” for “willful or violations of the deceptive or practices “[u]nfair acts or af TCPA: fecting the conduct of trade or com (3) merce,” classifying such B If acts Class the court finds that use or §Ann. misdemeanors. Tenn.Code 47-18- employment deceptive unfair or 104(a). 47-18-104(b) provides Section act or practice knowing or was a willful lengthy, practices non-exclusive list of part, may violation of this the court deceptive” “unfair are under the TCPA. award three times the actual dam- to be used in determining “[T]he standards ages and may provide sustained such representation whether a is ‘unfair’ or ‘de necessary other it relief as considers ceptive’ legal under the TCPA are matters proper. However, be decided the courts. (4) In determining whether treble dam- representation specific par
whether awarded, ages trial court should be ‘deceptive’ ticular case ‘unfair’ or is a consider, among things: other Tucker v. Build question fact.” Sierra (A) ers, competence of the consumer (Tenn.Ct.App. 2005) (citations omitted). deceptive person; “A act or other *22 of
(B) only or the value the deception damages the terms of The nature of fact, upon Colony policy. the consumer Given this we practiced First coercion person; or other inclined to whether TCPA are not address (C) damages might alternatively be available or damage the consumer The any knowing acts person; upon based willful and of other American Defendants the (D) regarding the good person of the faith General have provisions found to violated the part.
of this FAULT V. COMPARATIVE Analysis
B. compar- The trial court determined that A claim the based on under TCPA fault should be allocated the ative not Defendants’ advice to allow or American General with re- Morrisons $300,000 lapse fails Colony policy First to the various tort gard Plaintiff’s Plaintiffs the same reason that claims. of TCPA The Court did upon negligent based negligence, actions appeal, In this holding. not disturb fiduciary misrepresentation, breach of Defendants that the failure to argue A action under private fail. cause of comparative to Morrison attribute fault only plain where a the TCPA available is erroneous. and/or money tiff can show “ascertainable loss we have that causa- Because determined ... as of the use or property or a result by not established tion were an un employment person another Plaintiff as to tort her various theories deceptive or act or Tenn. practice.” fair 18—109(a)(1). view, claim, recovery, or her TCPA and the Ann. our Code 47— Court, only evi produce the Plaintiff was unable to is based modified support theory contract, that she and necessary dence it is not for us to ad- pay would continued to her husband this contention. dress policy, premiums Colony the First thereby maintaining policies separate two AD VI. DAMNUM CLAUSE $1,300,000. totaling with death benefits The Defendants that the trial argue the evidence of their supportive While was $1,300,000 in compensato- court’s award failure to claim as to the American ry damages exceeded the amount policy, that allowed General the Morrisons clause, ad Plaintiffs damnum and there- Colony policy lapse their First does not judgment fore the was void. Defen- money property” a “loss constitute fact resulting deceptive from “unfair or dants further contend that “[t]he part of Appeals subsequently acts” on the the Defendants. modi- the Court ... awarding amount fied the owed fact Despite judgment $900,000 credit ... the settlement the trial court claim addressed TCPA award does breach-of-contract only Colony in the context First ad damnum problem, cure or moot not the Plaintiff that the Defen- policy, argues void judgment because the remains.” The engaged also in various TCPA viola- dants of Ap- Defendants assert the Court conjunction tions in recognized “first peals should have $1,000,000 poli- for the General void as judgment the trial court’s cy. includes references While record and then $300,000, $1,000,000 proceeded the excess as a violation of TCPA, clearly adjust the trial calculated the breach of contract award based court claim”), credit.”15 the Defendants on the are enti- *23 tled to relief. held that It is true that this Court has or decree in excess of the judgment “[a] Conclusion void,” only is is so pleaded amount but that A procure cause of action for failure to Gaylor of the v. “to the extent excess.” an insurance policy poli- arise when a Miller, 502, 504 166 Tenn. cy is due wrongful contestable to the con- (1938). conclude that the Court of We agent. duct omission the Notwith- $900,000 of the credit Appeals’ application standing the Morrisons’ failure to read adequately to of contract the breach claim applications, their insurance the acts of the issues, in ad damnum any remedied Defendants, the as determined trial the total to damages modified court, to a gave rise claim for failure to interest, plus post-judgment pre- procure. judgment damages for damages which fell within the amount well against failing the pro- Defendants sought complaint.16 in the Because the an cure enforceable life insurance is Court of dealt with the credit Appeals not offset the settlement with American first, issue found that it was “unneces- it in General and is not conflict ad sary argu- of the other address complaint. damnum Finally, clause appellants.” ments raised Morri- preponderates the evidence the tri- son, agree 2009 WL at *11. We court’s that the holding al Defendants’ ac- that, which negligence, based on order in tions constituted mis- negligent issues, representation, fiduciary court it breach intermediate addressed and violations of Tennessee unnecessary matter in Consumer discuss the thus, Act; Protection is Plaintiff not further detail. attorney’s entitled to fees or pre-judgment judg- Although we modified interest as to this claim. The Court of ment Appeals, of the ad dam- Court part in is reversed and affirmed in clearly num the complaint sought clause in part, and the case remanded to the trial $1,000,000,” “damages in amount of post-trial court determination of inter- plus prejudgment interest from the Defen- appeal est. Costs of the shall be taxed award, modified, dants. does one-half to the Plaintiff and to the one-half exceed that amount. Because the Defen- Defendants. dants notice the amount had sufficient claim, DaimlerChrysler Flax see CLARK, CORNELIA A. C.J. and (Tenn.2008)
Corp.,
KOCH, JR., J„
548 n. 1
S.W.3d
WILLIAM C.
filed
(Wade, J., concurring) (noting
separate
that “the
opinions concurring
part
in
purpose
complaint
in
provide
dissenting
part.
of a
is to
notice
any supporting
complaint
sought
explicitly
15. The Defendants do not cite
16. The Plaintiff's
result,
authority
their claim.
As
following;
be award-
[P]laintiff
"[t]hat
technically
$1,000,000”;
issue has
been waived. See Tenn.
damages
ed
in the amount of
27(a)(7)
R.App.
(requiring
appellants
P.
"[t]hat
receiv[e]
treble
[PJlaintiff
...
...
"include
citations
authorities
relied
”;
attorneys’
under
fees
[TCPA]
briefs);
arguments
on” in
asserted in
see also
"[tjhat
prejudgment
be
awarded
[P]laintiff
Responsibility,
Sneed v. Bd.
of Profl
interest.”
(Tenn.2010) (holding
appellant’s
authority
sup-
failure to cite to
in
port
argument
pursuant
waived
issue
27(a)(7)).
R.App.
Tenn.
P.
which,
view,
C.J.,
result,
CLARK,
my
pro-
with this
A.
CORNELIA
Plaintiff;
dissenting
part.
concurring
part
vides a
encour-
windfall
approach
filing
ages a “kitchen sink”
majority opin-
I of
I concur in Part
complaints;
unnecessary
bone
and adds
ion,
the Plaintiff is entitled to
holding that
parties trying
negoti-
of contention for
the Defendants based
judgment against
is, moreover, contrary
It
ate
settlement.
a life insur-
their failure to
upon
rule
that “an
to the well-settled
of law
*24
to
I also
ance
not
contest.
injured
pi-ofit
not
from a defen-
party
III,
reversing
in
the trial
concur
Part
Memphis,
Adams
dant’s breach.”
TV
De-
the
against
court’s award of
of
Tenn., Inc.,
v.
969 S.W.2d
ComCorp
Inc.
the First
fendants for the cancellation of
of
917,
also
(Tenn.Ct.App.1997).
922
See
IV,
Colony
declining
in Part
policy;
Inc.,
Ents.,
Group
816
Hennessee v. Wood
damages under the Ten-
address whether
might
Action
(Tenn.Ct.App.1991);
nessee Consumer Protection Act
be S.W.2d
Ads,
Co.,
the
available based on
Defendants’ actions
Inc. v.
B. Tanner
William
policy;
American General
regarding
the
(Tenn.Ct.App.1979).
V, declining
com-
Part
to address
recognizes
or-
majority
that “under
However,
respectfully
parative fault.
I
circumstances,
dinary
an
in-
independent
majority’s
dissent from the
conclusion in
agent who is sued
a breach of
surance
Part II
are not enti-
Defendants
failing
an
contract claim for
$900,000. Accordingly,
to a
tled
credit of
I
enforceable insurance
is entitled
unnecessary
find
would
it
to address the
damages by
an offset in
the insurance
issue of the ad damnum clause in Part VI.
company’s
policy.”
settlement on the
majority recognizes,
As the
a successful
majority
goes
then
on to
that this
conclude
of
action
plaintiff
a breach
contract
presents something
than ordi-
case
other
entitled to
which
her in
place
an award
will
nary
the Plaintiff
circumstances because
position
same
if the
contract
not
not only
sued American General
for breach
See, e.g.,
been breached.
Simonton v.
contract,
re-
negligence,
but also
Huff,
(Tenn.Ct.App.
(which
imputes
spondeat superior
simply
2000) (“It
purpose
is well settled that the
conduct),
liability
for another’s tortious
action
awarding
in an
the Ten-
violating
provisions
and for
place
breach of
is to
the non-
contract
(which
nessee
Act
Consumer Protection
breaching
party
position
same
potential
in an award
resulting
has
or
he
she would have been in if the con-
damages),
compensatory
over
above
Thus,
fully performed.”).
tract had been
upon
which
record does
reveal
wrongfully
where an
insurer
breaches
parties
these
theories
settled
dollars,
pay
contract
one million
conclu-
litigation.
support
In
this novel
insured is
dam-
compensatory
entitled
sion, the
relies on two cases from
majority
ages in
the amount
one million dollars.
Washington:
the State of
Pederson’s
Yet, the majority holds that the Plaintiff in
Farms,
Fryer
Inc. v. Transamenca Insur-
substantially
case
is entitled
more
Co.,
Wash.App.
ance
Pederson’s
As noted
footnote
majority
to recover
costs 7
clean-up
opinion,
per-
insured’s efforts
the release
“
after it discovered environmental contami-
tains to causes of action etc.
‘relating to
gaso-
leaking underground
nation from a
claims in the matter of the arbitration’ in
insured,
Pederson’s,
line tank.
had this case.” The “matter of the arbitration”
policies with
three
com-
at least
is the one million dollar
insurance poli-
life
panies.
It
with two of
insurers
cy
settled
issued
behalf of Mr. Morrison. The
jury
obtained a
verdict
release is therefore
very
limited
its
third,
single subject
Transamerica.
Transamerica
terms to the
particu-
of this
sought a
for the
credit
amount
lar
the policy
lawsuit:
on Mr. Morrison’s
settlement
other two insurers.
life
upon
issued
judg-
The trial court refused to reduce
documents
prepared
De-
ment and
error.
This
simply
Transamerica averred
fendants.
release is
not com-
*25
Washington
parable
The
Court of
found
the
in
release obtained
the Ped-
case,
no error because the settlement released
reasoning
erson’s
and the
underlying
the
only
two insurers from not
the claim at
the denial of an offset in Pederson’s is not
issue,
liability
but from all
for
here.
past
applicable
environmental claims.1 Pederson’s
future
majority
also asserts that
can-
“[w]e
Farms,
Fryer
According-
I. conversation, Messrs. Roberts and J. Howard Kristen Cox Morrison told Mr. Allen Morrison that would Morrison were married 1997. March present recommendations 2000, purchased Mr. Morrison meeting. Morrisons a later term life insurance from First policy Colo- Mr. Roberts met both Mr. Morri- ny Company. policy, Life Insurance This son and Ms. on February Morrison policies, like most life insurance contained 2004, to present planning financial rec- incontestability stating standard clause ommendations he and Allen pre- Mr. had policy would be contestable Among things, pared. other he recom- respect to made in “[w]ith statements mended Mr. Morrison replace his application” after had policy “been $300,000 term life with a during force lifetime for Insured’s $1,000,000 term life insurance from period of two years beginning with the Insurance Compa- Life Date of Issue shown Schedule.” ny and that also obtain Morrisons was born on Morrisons’ son March $250,000American term General life insur- contestability period 2002. The for Mr. ance on Ms. Morrison. The annual Colony policy expired Morrison’s First premiums policies ap- these two were days four later on March 2002. Later proximately premiums the same Mr. Mr. Morrison arrested and paying Morrison for his existing charged with while driving intoxicated. $300,000 life Mr. Rob- pled guilty driving He while impaired in erts cautioned Mr. against drop- Morrison December required 2002 and was *27 his ping existing life insurance drive with a year. restricted license for one until his new policy was issued. son, Following the of their birth The Morrisons decided to obtain the pre- Morrisons decided that should new American poli- General life insurance pare a plan financial enable them to though cies. Even Roberts did Mr. begin putting money for their aside son’s applications policies new college education and for their retirement. 10, him February with at the 2004 meet- They eventually profes- decided obtain ing, he obtained some of basic informa- Roberts, Jody sional assistance from one from tion the Morrisons that was needed buddies, of Mr. golfing Morrison’s complete applications. these Mr. Rob- Paul Allen. Messrs. Roberts and Allen passed along erts this information to Mr. Wiley worked for Capital, Bros.—Aintree responsibility Allen who assumed planners LLC financial and stockbro- completing applications for the Morri- They kers. were also licensed life and policies. sons’ new life insurance Accord- health agents, although neither Allen, ing separate to Mr. he had tele- experience them had selling extensive Mr. phone conversations with Morrison life insurance. Ms. Morrison to obtain additional Mr. Morrison met with Messrs. Rob- complete appli- information needed to erts and Allen for first time on Janu- cations. 29, time, ary 2004. At Mr. Morrison discussed Mr. family’s goals objectives February his late Allen mailed with packet them and informed them that he to the Morrisons documents health personal to obtain their can General ap- life insurance completed
containing the samples of bodi- and to collect Re- information Regarding “Notice and a plications appli- BPart of them ly complete fluids to application contained Each placement.” process Part of this where for insurance. flag indicating cation message adhesive Ref- sign applica- completion their of Clinical were included the Morrisons In his answer Laboratory estimated that she form.3 Morrison erence tions. Ms. form, this Mr. questions these documents received to one and her husband license February that his driver’s February 23 Morrison stated between past that she five also testified restricted within Morrison had been 2004. Ms. evi- applications record does not contain signed years.4 The and Mr. Morrison 27, 2004, with- February disposition the ultimate regarding dence for insurance Mr. Morri- scanning applica- signed by it was or even this form once reading out examining nurse. accompanying documents.1 son and the tions or the and Allen obtained Roberts Messrs. life insurance cover- The Morrisons’ new for- for insurance and applications signed became effec- with American General age Life to American General them warded 8, 2004, 2004. On June May tive on Mr. Unfortunately, Company. Insurance acknowledged writing Morrisons signifi- contained a Morrison’s new copies of their they had received the fact that Mr. Mor- Despite cant error. On June policies. driving while convicted of rison had been Mr. Allen forwarded to 22, 2002, appli- his on December impaired check for the first General the Morrisons’ charged been that he had not cation stated policies. for both year’s premiums driving under the convicted of with or their new not read or review Morrisons did drugs or had influence of alcohol they received them. Both of after policies five past within the driving violations a standard clause policies these contained years.2 “Ex- contestability that stated: relating to we will nonpayment premiums, 7, 2004, cept the Morrisons met May On has been in after it by Ameri- not contest been retained a nurse who had charged with or convicted of testimony, the fol- insureds Despite Morrison’s 1. Ms. driving alcohol or under the influence of lowing appears above the Morri- certification *28 (If yes, drugs any driving applications in- or had violations? signatures on their sons' name, date, state, li- proposed insured's list surance: violation.)” specific The box no. and cense or I have read the above statements stating was checked that the answer was “no” They true and me. are have been read to application. Mr. Morrison's on my knowledge and complete to the best of application: I that this belief. understand apparently had contract- 3. American General A, B, (1) if Part Part and will consist of Laboratory Le- Reference in ed with Clinical forms; (2) shall be related and applicable, urine, Kansas, blood, nexa, process and any policy I under- issued. the basis for apply- samples persons from oral fluid taken misrepresentation any contained stand that ing for insurance. application and relied on in this deny a Company may be used to reduce or Question Labo- the Clinical Reference 4. on (1) policy if: it within void the claim or asked, years, past ratory "In the form misrep- period; and such its contestable your moving or driver's you had a violation accep- materially affects resentation restricted, suspended or revoked?” license tance of the risk. form, stating that the box On Mr. Morrison's Question asked, "yes” and the 17(E) was checked application the answer was 2. was circled. any proposed word “restricted” years, have past “In the five during the lifetime of the insured for American in return payment force General for a years $900,000. from the date of issue.” two Ms. signed gener- Morrison 2, 17, May al release on 2006. On May seriously Morrison was injured Mr. court the trial entered an agreed 11, 2004, vehicle accident on single July dismissing order all of Ms. Morrison’s than receiving little more one month after against claims American General with his new American General life insurance prejudice. He July died on 2004. Messrs. and Allen assisted Morrison Roberts Ms. claims Messrs. Roberts a claim for benefits with American filing remaining and Allen and the defendants5 28, 2004, On October after inves- General. jury were tried without a from January claim, in- tigating January through 2007. The trial court Ms. Morrison that it had rescinded formed shortly ruled from the bench after Mr. had stat- Morrison’s because he proof close of arguments and the ed on his that he insurance court counsel. The concluded that the de- charged had not with or convicted fendants breached contract with the under the alcohol or driving influence of by failing Morrisons an enforce- that he drugs driving violations $1,000,000 able life on the past years, though five he within even life of Morrison. Accordingly, Mr. driving had been convicted of while intoxi- $1,000,000 court awarded Ms. Morrison cated in December 2002. plus prejudgment interest. The trial court 9, 2005, On Ms. filed suit June Morrison also concluded that the defendants were Chancery Court for Davidson Coun- liable to Ms. Morrison for breach of fidu- Allen, ty against Messrs. Roberts and ciary duty, negligence misrepresenta- General, Wiley American Bros.—Ain- tion for of the coverage the loss under Mr. Capital, tree She amended LLC. filed an in- Colony Morrison’s First life complaint on June 2005 and second policy. Accordingly, surance the court complaint amended on March 2006. awarded Ms. Morrison an additional complaints These asserted claims sound- $300,000. Finally, negligence, the trial court deter- ing negligent misrepresen- tation, contract, breach of breach of fidu- mined defendants violated ciary duty, and violation of the Tennessee Tennessee Protection Act and Consumer sought Consumer Protection Act recklessly by submitting “faulty acted in- $1,000,000 recovery of amount of cov- formation” American General —the on behalf erage under Mr. Morrison’s finding, of the Morrisons. Based life General treble —and the trial court awarded Ms. her Morrison attorney’s fees under recovery attorney’s fees doubled6 her Tennessee Consumer Protection Act. for the provided loss *29 $300,000 order, Mr. relatively Colony short First life Ms. Morrison Morrison’s to settle all agreed policy. her claims 18—109(a)(3)(2001); other § 5. The defendants were and Rob- see Allen Code Ann. but 47— Group Howerton, Wiley Capital, erts Bros.—Aintree Keith v. No. E2002-00704-COA- 31840683, LLC. R3-CV, (Tenn.Ct. WL *3 19, 2002) (award App. Dec. of less than three 6. The Tennessee Consumer Act ex- Protection permissible damages times based on "such permits trebling plicitly damages for will- language other relief” in Tenn. Ann. Code knowing but ful or violations of the Act does 47-18-109(a)(3)). doubling damages. permit See Tenn. contract, tort, Con- and Tennessee court en- son’s the trial On March claims. After Act sumer Protection in for Ms. Morrison judgment tered a final permis- granted regard Court $2,119,541.17. With amount of 19, 2009, Ms. on October claim, appeal sion to trial of contract breach Morrison, R.App. Tenn. P. pursuant $1,000,000— Morrison Ms. court awarded relat- 13(a), additional issues raised three coverage that would of the amount Appeals of the decision of Court ing to Morrison’s under Mr. provided the defen- judgment against to offset her policy— life insurance American General of her settlement by the amount dants interest. $247,120.94 prejudgment in deny her and to with (breach claims to the tort regard With attorney’s fees on additional request for negligent negligence, and fiduciary duty, appeal. the trial court awarded misrepresentation), $800,000 amount of
Ms. Morrison the award upheld has now —the The Court have been available that would coverage $1,000,000 breach of con- damages Colony First lapsed Morrison’s under Mr. Roberts failure of Messrs. tract for the this amount af- then doubled defendants Allen and the other —and the defendants’ “tor- concluding that ter subject to contest.” “not knowing- willful and ... were tious actions However, the decision of it has reversed reckless, and in violation deceptive, ly that these Appeals the Court Protection $900,000 the Tennessee Consumer recov- should be reduced awarded Ms. Morri- The court also Act.” from American ery Ms. Morrison received interest on her tort prejudgment son also vacated the The Court has General. $74,135.38. Final- amount of $872,420.85 claims in the to Ms. Mor- judgment awarded awarded Ms. Morrison ly, fiduciary the trial court on her breach of rison based $198,285.47 attorney’s fees misrepresenta- an additional negligent duty, negligence, relating to her tort claims. and costs tion, Protection and Tennessee Consumer Act claims. the other and Allen and Messrs. Roberts January On decision appealed. I concur with Court’s defendants opinion judg- filed an of Ms. Morrison’s Appeals portion vacate the Court $300,000 modi- judgment part relating to the loss of the affirming the ment Allen, No. available under part. it in Morrison that had been fying M2007-01244-COA-R3-CV, Colony 2009 WL First insur- lapsed Morrison’s Mr. 2009). (Tenn.Ct.App. Jan. ance judgment Appeals affirmed Court conclu- I not concur with the Court’s do judgment of contract and for breach Allen and Messrs. Roberts and sion that However, the Court for the tort claims. con- breached their the other defendants also determined by failing pro- tract with the Morrisons $1,000,000 of contract judgment for breach Mr. Morri- life insurance cure a reduced should be —the I “not to contest.” son that was of Ms. Morrison’s settlement amount because this record reach this conclusion Allen, General. Morrison v. evidence, absolutely no direct contains 230220,at *5-7. 2009 WL circumstantial, request- the Morrisons Allen Roberts and or that Messrs. Allen and the other ed Roberts and
Messrs. *30 immediately incontestable ap- to obtain R.App. a Tenn. P. offered defendants filed it is policies and because with life insurance taking issue plication with this Court received the Morrisons undisputed that of Morri- disposition courts’ Ms. the lower coverage they mendations, the insurance requested. Messrs. Roberts and Allen However, I have also concluded Ms. then assisted their clients in obtaining the $1,000,000 recovery of Morrison’s can be requested insurance coverage from the sustained based on Mr. Roberts’s and Mr. company approved by the client. fiduciary Allen’s breach their duties as Most transactions in the in insurance agents insurance to exercise reasonable dustry between insurance companies and skill, care, diligence in obtaining insur- insureds are through conducted intermedia coverage ance for their clients.7 ries.9 Whether insurance agent is the Clark, Finally, agent like Justice Chief I do the insurance company, the agent insured, not concur with the of the agent both, Court’s conclusion that or the as well $1,000,000 Ms. judgment scope Morrison’s as the agency relationship, against Messrs. depends Roberts and Allen should on the particular facts of the rela not be reduced tionship Ms. Morrison’s in question. 1 Jeffrey E. Thomas settlement with American Mootz, III, General. & Francis J. New Appleman Law, on Insurance Essentials Insur 2.03[1]-[2], §§ ance -12, Law at 2-10 to
II. 2.03[7], 2010) at 2-21 to (Library -23 ed. Messrs. Roberts and Allen were licensed (“1 Appleman Law”); New on Insurance in Tennessee as “insurance producers” al., 1 Leo Martinez et New Appleman which means that were authorized to Guide, Insurance Law Practice Coverage “sell, solicit, negotiate8 or insurance.” Analysis 2.04[1], §§ Pre-litigation 2-19, 56-6-102(6) (2008). § Tenn.Code Ann. (2011) (“1 2.07[4][a], at 2-26 New Apple- They directly did not work for or on behalf Guide”). man Insurance Law Practice of a particular insurance company. Rath- er, they acted as middlemen between the In the typical factual scenario involving persons seeking insurance and a agent licensed insurance and a client number of different insurance companies. desiring to obtain or maintain insurance fact, the record shows that Messrs. coverage, agent’s obligations may arise Roberts and Allen general used a insur- First, from two distinct sources. when an ance agent quotes Florida to obtain insurance agrees to do something many from different companies insurance with regard to a client’s insurance cover- and then used these quotes prepare age, agent’s obligations are contractu- recommendations to their clients. al. 3 Lee R. Segalla, Russ & Thomas E. - When their accepted 46:46, clients their recom- § Couch on Insurance at 46-60 to contract; Supreme 7. The Tennessee Court affirm a provided, tions of the per- that the judgment lower court’s that reaches the cor- engaged son in that act either sells insurance different, rect result even if it is based on or pur- obtains insurance from insurers for incomplete, grounds. or erroneous Cont'l 56-6-102(14) chasers." Tenn.Code Ann. Smith, (Tenn. Cas. Co. v. 720 S.W.2d (2008). 1986); Hopkins Hopkins, 572 S.W.2d (Tenn.1978); Senators, Inc., Martin v. 9.Treatises often make a distinction between 465, 474-75, Tenn. "agent” and a "broker” under the law of (1967). insurance, but there are no facts in this case delving that necessitate into the differences Negotiating 8. “conferring insurance involves Thus, agents. between sepa- brokers and directly offering directly or advice to a opinion purchaser "agent" rate prospective purchaser par- uses term of a general concerning ticular contract of encompass any sense to benefits, of the substantive intermediary. terms or condi- *31 450 it.”). 2005) (“3 fiducia (3d to an account for Insur render ed. Couch on
61 ance”). Second, agents, like re agent’s obligations ry nature of the duty owe to professionals, licensed other prin loyally to act quires agent the the consistent with perform clients to interest, principal’s as well on the cipal’s as profession. of of their See care standards (Third) Agency Restatement of behalf. 1 on Insurance Appleman New generally 23; e, 8.01, §§ at at 249. 1.01 cmt. -27; 2.05[1]-[2], to also § at 2-26 see Law fiduciary An to his or her duties agent’s Practice Appleman Insurance Law 1 New parties’ the vary depending on 1][b][i], principal 2.01[2], 2-11, at §§ at 2.09[ Guide 46:30, 2-31; agreement scope §§ at the of their relation- Insurance and 3 Couch on 46:33, 46-35, (Third) Agency at 46-42. of ship. Restatement minimum, c, an § at 254. At a 8.01 cmt. agent agrees to ob After an insurance act with agent duty to in accordance has client, he is insurance for a or she tain any con- implied terms of express the Thus, agent.10 the be acting as client’s agent principal, in a the agent generally operating tract between cause rights, (Third) 8.07, capacity, powers, § at representative Agency Restatement agent gov are responsibilities faithfully the instruc- carry and to out and controlled rules and laws erned Apple- tions his or her client. 1 New Appleman 1 New on Insur agency. 2.05[1], § Law at 2-26. man on Insurance 2.03[2], § Agen at 2-11 to -12. ance Law “Subject any agreement princi- with the fiduciary relationship that arises cy is a principal pal, agent an has to the principal manifests assent when care, act and dili- competence, with the act on agent prin that the shall agent gence normally by [insurance] exercised principal’s behalf and cipal’s agents in similar circumstances.” Restate- control, and agent manifests or other (Third) 8.08, § at 343 Agency ment the principal’s wise consents to act on be (2006). Thus, agent if an undertakes (Third) Agency half. Restatement as a of a perform practitioner services 17; 1.01, v. § at Knox-Tenn Rental Co. “ ‘is re- profession, agent trade or Ins., Inc., 755 36 S.W.2d Jenkins knowledge quired exercise the skill and (“An (Tenn.1988) agent fiduciary is a of that normally possessed members within respect scope to the matters standing trade profession good or Am., v. Ins. Co. agency.”); his Miller of N. agent rep- similar communities’ unless 620, 625, 211 Tenn. agent possesses greater that the resents Dictionary’s Law (quoting Bouvier’s (Third) of or skill.” Restatement lesser agent of an as who under “[o]ne definition 8.08, c., (quoting § cmt. Agency at 346 business, or to takes transact some (Second) 299A, § at 73 Restatement Torts affair, another, by some manage (1965)). latter, authority and account of on 26; (Third) Agency § agent may 3.14 An insurance act for and on Restatement 10. c, (2006). Tenn. company at 264-65 The fact that behalf of both the insurance cmt. 56-6-115(b) (2008) doing provides § transaction Code Ann. insured the same unless appli- agent negotiates an who an requires creates a of interest or so conflict agent regarded incompatible take insurance is duties. Insur- cation for Servs., Wood, prevent company Inc. v. Tenn. of the insurance does ance Premium 514, 525-26, pursuing agent's client from a contract App. (1967); Campbell agent. Appleman Law a tort claim See New Insurance Inc., 2-23; 2.03[7], Agency, Appleman § & Assocs. 1 New Insur- White (W.D.Tenn.2002). 2.07[4][c][ii], F.Supp.2d at 2- 1108-09 ance Law Practice Guide
451 46:43, 46-57; agreement § once agent’s pro- An insurance at Glisson v. cf. Stone, 71, (1926).12 gives cure insurance for a client rise to a 4 74-75 Tenn.App. legally obligation. agent’s enforceable Neither the contract nor the tort theory of recovery to a client to insurance is a promise agent obtain treats the as an “insurer” gives It also obligation. requested contractual rise to coverage pro will be skill, care, duty Rather, a to act with reasonable cured. both theories view the diligence by obtaining agent professional either the re- as a who has breached quested by notifying duty insurance or or obligation procure to either timely requested client in a that the manner insur- insurance to notify the client ance cannot be so that the client that the requested obtained coverage has not been will not feeling security be lulled into a obtained. 1 generally See New Appleman or put prejudicial delay seeking 2.05[3][c], on § Insurance Law at 2-41. desired insurance elsewhere.11 An agent duty insurance has no pro
An insurance who cure agent undertakes to insurance client the absence procure agent’s insurance for client but fails to agreement to do so. Nidif circumstances, may, Co., do so in proper 242, be v. Ry. 600 S.W.2d fer Clinchfield held liable for the resulting (Tenn.Ct.App.1980) from 246 (noting that “[o]ne the failure procure the insurance. Mas is not liable to an insured for failing to Hicks, 659, sengale v. 639 S.W.2d 660 procure insurance where there is no bind (Tenn.Ct.App.1982); Appleman ing 1 New creating duty”); on contract gen see - 2.05[2][e], § Insurance Law at erally 2-33 to 1 New Appleman on Insurance 34; 1 2.05[3][a], § New Appleman Insurance Law Law at agent 2-35 -36. An 1], 2-37; § 2.10[ Practice Guide at 3 will not be procure held liable for failure to 46:46, § Couch on at the proper Insurance 46-60. coverage insurance when the Thus, client, at the agent election of client failed to the agent inform about the who procure type fails to promised insurance 1 required. New Cf. may be Appleman 2.05[3][a], § sued for breach of contract or for on Insurance Law negligence in performance Accordingly, at 2-35 to -36. in order to agent’s professional duties. State establish the existence of a contract Kosloff v. Co., 89-152-11, Auto. Mut. Ins. No. procure coverage, 1989 the client 144006, 1, WL (Tenn.Ct.App. produce at *5 Dec. must evidence that establishes 1989) (No (1) certainty Tenn. P. 11 R.App. reasonable the existence filed); 15 Tenn. of the agent’s legally agree Jur. Insurance enforceable (2009); Appleman procure 179-80 1 New ment to Insur the insurance and 2.05[2][a], -28, §§ ance Law at 2-26 to terms of the agreement. and conditions 2.05[e], -34; at 2-33 to 3 Couch on Insur- See 1 New Appleman Insurance Law agent recognized 11. An who is unable to ob- 12. The Court of has agent’s an insurance failure to insur- coverage requested by tain the insurance coverage gives ance to both a rise contractual client has a to make reasonable efforts to negligence claim and a claim. See Waddell v. agent inform the client that the has not been Davis, (Tenn.Ct.App. 571 S.W.2d 848 able to requested obtain the insurance. See 1978) (noting "negligently Newman, Hayes Agency, Woodv. & Dixon Ins. breached” the to obtain uninsured contract (Tenn.1995); Ezell erred, coverage). court howev- motorist Capital Corp., Assocs. S.W.2d er, by conflating the claims. two Tennessee (Tenn.1974); Appleman 1 New on Insurance recognize negligent does not breach of con- 2.05[3][c], §Law at 2-41. Co., Publ’g tract claim. Hannan v. Alltel (Tenn.2008). n.10 *33 8, (“[P]roof 2004. policy on June 2.05[2][e], that § [the] at 2-34 containing agreement In the of an absence definitely directed the prospective insured an insurance continuing responsibilities, policy, intermediary particular a to obtain agent’s procure to insurance obligation to policy the the essential elements and established.”). the agent a when the obtains client ends be When procured be must requested. insurance client coverage the clear insurance it is not what Co., Farm 107 obtain, Weiss v. State Fire & Cas. to requested client 503, (Tenn.Ct.App.2001). agent’s fail S.W.3d may not recover client delivery poli- Upon the Mr. Morrison’s Sys., See insurance. Coble procure ure to discharged Co., 359, cy, Roberts and Allen Inc., Messrs. v. Gifford Morri- obligation contractual (Tenn.Ct.App.1981). $1,000,000 insurance sons a term to obtain III. Mr. Morrison’s life. policy on affirmed trial court’s The Court has agreement of an explicit the absence Al- Roberts and conclusion that Messrs. policy, to an incontestable insurance obtain contract with the Morri- len breached their an in- inappropriate imply it to would be an insurance by failing son to of law. contestability feature a matter life “not that was policy on Mr. Morrison’s com- practice It is common for insurance agree I cannot with subject to contest.” deny cover- panies right reserve their to to the record contains this conclusion because in an age on material misstatements based support evidence to it. no However, virtu- application for insurance. defin- ally all have enacted statutes states proving the burden of Ms. Morrison had contestability ing and grounds that requested and that the Morrisons be period grounds these must within which agreed pro- Allen Messrs. Roberts and most com- Today, life insurance Mr. asserted. on Morrison’s policy cure an insurance statutory panies, voluntarily either was “not contest.” life that incontestability compulsion, include an in record There is evidence abundant policies preserves clause in their that agreed and Allen that Messrs. Roberts validity of right to $1,000,000 defines their contest American General term obtain v. Suskind N. Am. & Cas. life. life on Mr. Morrison’s policy insurance Life Co., (3d Cir.1979); 16 F.2d However, no evidence the record contains Lord, A. Williston on Contracts Richard requested policy that that the Morrisons (4th ed.2000). 49:92, Likewise, at 663 from absent was incontestable. the record is evidence that Messrs. incontestability purpose represented to the Mor- Roberts Allen purchas- protect rights clause is to Gen-
risons that Mr. Morrison’s American ers of and their beneficiaries would incon- policy eral life insurance be to act with requiring companies testable. promptness they if wish reasonable however, is, deny coverage based on misstatements undisputable The evidence application Allen an for insurance. See Clement that Messrs. Roberts and obtained Co., $1,000,000 Ins. 101 Tenn. life insurance New York term Life 29-30, (stating obtain. American Gen- 46 S.W. promised the in- incontestability “prevents clause Mr. Morrison’s life took eral’s pre- lying by receiving May 11, Mr. Morrison also surer from effect on 2004. insured, and life of the during received acknowledged writing he miums ... contesting after possession copy took of a of his new his death policy relating the insurer’s conditions upon ground [sic] naval false”); military Norman v. services in time of representations were war. Co., 88-242-11, Ins. No. 1989 WL Plateau statute, Consistent 1989) (Tenn.Ct.App. Mar. at *8 provision General included the insur- (No filed) P. 11 R.App. Tenn. covering ance policy Mr. Morrison’s life (holding incontestability clauses and limiting right its the policy contest *34 them the statutes “are intended requiring other than ground nonpayment pre- to foreclose stale defenses insurers years following two miums to issuance protect pur- the interests of insurance of the The record evi- policy. contains no chasers and the beneficiaries of insurance objected dence that Morrisons to this & Co. policies”); Vulcan Accident Ins. Life provision. Davidson, 1, 24, 395 Tenn.App. record, of this light there is no sound (1965) (quoting Humpston legal reading basis or factual imme- Co., Assur. Tenn. v. State Mut. Life incontestability into diate clause Mr. Mor- (1923)) 439, 448, (noting 256 S.W. policy. rison’s insurance The Morrisons incontestability of an purpose that request or bargain did not for such a a short limi- clause is “to create statute of There is clause.13 no evidence that insured, tations in of the favor within Roberts right Messrs. and Allen had the must, if period, which limited insurer right American waive General’s to con- ever, validity of policy”). test the Sub- test Morrison’s policy Mr. based on the requirement applicable of the
ject application. misstatements his Reading statute, contestability length of the into provision policy such a Mr. Morrison’s is within the discretion of the insur- period contrary would be inconsistent with and company. Union Ins. ance See Cent. Life practice of the insurance business. Fox, 347, 354, v.Co. 106 Tenn. 61 S.W. (1901). IV. Tennessee, states, like other has enacted though Even the record does not sup- governing right a statute of insurance port recovery Ms. Morrison’s based on her companies poli- life to contest insurance claim, contract breach of Ms. Morrison 56-7-2307(3) § Ann. cies. TenmCode provides still recover if her a evidence (2008) provides poli- no life insurance awarding a on one of judgment basis for cy can be this state issued without alleged the other causes of action in her provision stating that Ms. complaint. complaint Morrison’s al- af- policy leges against ... shall be incontestable causes of action Messrs. negligence
ter life- Allen for during it has been in force Roberts and specified peri- fiduciary duty. time of for a Based on my the insured breach of od, record, two I years not more than from its examination would find date, except nonpayment amply judg- that the evidence premi- supports ums and for violations of the ment Messrs. and Allen except against Roberts agreed 13. The record no evidence that would have to issue the contains thoroughly investigated offered for life Mr. Mor- General sale term until it had immediately investigation policies application. in- would were rison’s This did, or, produced contestable if it that the Morrisons have the same information on willing pay would have or able which American General later contested the been policies According- premiums validity increased that such would of Mr. Morrison’s required. ly, likely avail- have Had such a been American General would most never Morrisons, agreed to able to the insure Mr. Morrison's life. to let the be their interest discharge of their negligence soon as Colony policy lapse to the Morrisons. First as fiduciary obligations the American General agent performs his When an insurance Gener- the American issued because negligently to a client’s her or services al be contested. policy could negli- is liable for injury, Mr. Mr. box on E. Allen checked the attorney, be an archi- just would gence tect, Morrison’s other who engineer, professional he had not stating services for client. negligently performs driving charged with or convicted of on Insurance Law Appleman 1 New Cf. influence, 2.05[2][a], though to -27. A claim based even at 2-26 under the fiduciary tort Mr. on the breach of neither he nor Roberts Inc., Grp., v. Po Mr. Morri- posed question claim. Mike *35 (Tenn.1996). Thus, if an insur- son. insurance agent ance obtains negli- Allen F. Messrs. Roberts and subsequently rescinded a client that is warn gently failed to the Morrisons company insurance because an an- danger inaccurate may agent’s pursue the client negligence, could in- applications swers on them agent. New against tort claim Cf. poli- their new validate insurance 2.05[3][a], § Appleman Insurance Law on cies. “liable ... at 2-35 is if insurance (Agent and failed to G. Messrs. Roberts Allen way”). in some materially ... deficient explain truthfully, or ac- adequately, remedy This is distinct from contract curately the characteristics of the client have. New claim Cf. policies, particularly new insurance 2.05[2][f], Law Appleman on Insurance Colony policy that the First fact at 2-34. new was incontestable while the absence of contrast marked not. was in findings of fact the trial contract-related provided H. Messrs. Roberts Allen fact, findings of the trial court court’s oral American “faulty information” to numerous, specific findings made fact of Morrisons. General on behalf law regard Ms. conclusions I. Roberts Allen acted Messrs. and breach of fidu- negligence Morrison’s recklessly processing in the Morri- ciary These and conclu- findings claims. applications. sons’ sions include: Roberts and Allen breached J. Messrs. he A. Mr. Allen understood that fiduciary Morri- their duties to the agent. Mr. Morrison’s by failing adequately sons B. Allen had a Messrs. Roberts and ap- Mr. Morrison’s properly provide the Mor- fiduciary relationship with plication for insurance to American and owed them risons General. loyalty. undivided The conduct of Messrs. Roberts K. were C. Roberts and Allen un- Messrs. and Allen fell below the standard when on they truthful stated agents. care for insurance agent’s they personally report on the date of saw Morrisons pre- in the record does not The evidence the application. and con- against findings these ponderate supports finding D. Roberts Allen failed to clusions. It Messrs. Allen fell it conduct of Messrs. Roberts and the Morrisons that could advise of care it insurance company. below the standard of insurance Should an (1) following agents particulars: company insurance later seek to contest they infor- manner in which obtained the on policy based the appli- misstatements they mation included Mr. Morrison’s cation, “I didn’t read it” defense will be (2) they inac- application; placed insurance when application no avail contains a curate or unsubstantiated information provision certifying that the statements (3) application; Mr. insurance Morrison’s application are Beasley correct. See they to advise the failed Morrisons Co., Metropolitan Ins. 190 Tenn. Life the First Colony was incontestable (1950); Smith v. policies while their were new Co., Farmers Tennessee Reassurance Life years being contested for two 591 (Tenn.Ct.App.2006). (4) issued; they they after were failed to However, fiduciary because of the rela- advise the Morrisons that Gen- tionship an between and a poli- eral right rescind the new client, traditionally it has held that a cies for material misstatements in failure to client’s read the insurance; applications failed is not a to a defense client’s to advise the Morrisons to review and failure to claim insur- verify accuracy of the information *36 ance See agent. Nat’l Old Line Ins. Co. v. them; applications they their before signed Lane, 519, 707, Ga.App. 172 323 S.E.2d 710 (6) they and failed to advise the Morrisons (1984); Fortsh, 64, Aden v. N.J. 169 776 they to review their after received policies 792, (2001); 802 A.2d Insurance Network them. Kloesel, 456, Tex. v. 266 S.W.3d 477-78 negligent The conduct of Rob- Messrs. (Tex.Ct.App.2008); 3 Insurance Couch on erts and Allen caused informa- erroneous 46:69, at 101. When a client entrusts tion to be on Mr. in- included Morrison’s on an agent and relies insurance to obtain application, materially surance and this insurance, the to read client’s failure provided erroneous information or fatal application is not grounds General with to refuse honor to Agen- client’s claim. See Bell v. Ins. Wood Ms. claim hus- following Morrison’s her 153, cy, (Tenn.Ct.App. band’s death. American General’s contest 1992); Stone, Tenn.App. v. at 79. Glisson deprived of her insurance policy husband’s Thus, while the failure of a to read client Ms. Morrison of the benefits would application his or her be paid poli- otherwise have been under the regard fatal with to the client’s claim cy. Accordingly, Ms. has Morrison against the insurance it is company, not proved all the elements of a negligence regard procure fatal to a with failure claim. claim against agent. insurance argue Messrs. Roberts and Allen did not fill their own Morrisons out they liability should be excused from applications. insurance Messrs. Roberts their negligence because the Morrisons took on responsibility. and Allen failed to applications read their for insur- experi- did not have ance before them Morrisons extensive signing and because the insurance, obtaining ence with and so it Morrisons failed examine their new unreasonable, policies receiving relying after was not Messrs. them. applying professed expertise, Persons for insurance are Roberts’s Allen’s agents properly well-advised to review their to assume their would carefully signing it submitting completely complete applica- before (1996); v. Milgrim 273-74 Thus, the Morrisons were S.E.2d when
tions.14 Co., Ins. 75 A.D.3d applications Royal with & completed Sunalliance presented with them, 574 (N.Y.App.Div. 906 N.Y.S.2d simply sign stating instructions Oleson, 2010); SD complied these Kobbeman fact ¶ 5, 635. reviewing applica- N.W.2d instructions without undermine Ms. Morrison’s tions does not rule, general As a the measure of dam- fiduciary claims and breach negligence cases, ages procure failure to whether and Allen. against Messrs. Roberts tort, on contract or is the claim is based client would have been
the amount that the V. pol- entitled receive under Thus, has the deci- Finally, icy the Court reversed had it an insur- procured. that Messrs. a failure agent’s liability pro- sion of the Court ance are a credit and Allen entitled to cure claim limited to the amount of the Roberts is $1,000,000 against judg- Ms. Morrison’s Robinson v. J. Smith proposed policy. Co., of Ms. ment them amount Lanier 470 S.E.2d 273-74. & $900,000settlement with Amer- Morrison’s is in this case that Amer- dispute There no Clark, ican Like Chief Justice I required General. have been ican General would only $1,000,000 that this pay have concluded credit is Ms. had Messrs. Morrison required. it is appropriate, Roberts and Allen not breached their applications to fill Morrisons’ out the jurisdictions, agent when an In most accurately completely.15 undertakes to obtain insurance Thus, the of Messrs. limit Roberts’s so, but liable fails to do becomes liability Allen’s of failure to for the amount that would the client $1,000,000. requested under the payable have been *37 It is in cases of Appleman 1 New on Insurance not uncommon this sort policy. 2-34; 2.05[2][f], § Law 3 In- to sue both the insurance com Couch on clients 46:74, Many pany agent. at 46-109 to-111. and the insurance When the surance procure company in failure to client settles with the insurance explain courts liable, cases, for the of the under agent, steps when found full amount company requested policy, pro into the client cannot the shoes insurance with claim pay procure against liable to the uninsured ceed a failure to becomes See, because the has e.g., loss. Commercial Ins. Consul- client See, Enters., Inc., tants, fully e.g., compensated. v. Frenz 696 So.2d been Schei Inc. Assocs., Inc., 871, v. 206 (Fla.Dist.Ct.App.1997); Robinson deler Smith & Wis.2d Co., 480, Ga.App. (Wis.Ct.App. v. J. & Smith Lanier N.W.2d policy. no preponder- 14. does The record contains evidence that Because the evidence finding against the trial court’s keep ate both planned the First Morrisons and Allen ask Mr. Messrs. Roberts did not Colony policy poli- and the American General charged he had been Morrison whether contrary, cy undisputed it is force. To the driving under the influence convicted of planned that the to allow First Morrisons past years, this does not within the five case Colony lapse policy to after the American circumstance in which the client involve a Thus, no General was issued. there is gave agent. information to the false basis to conclude that Ms. Morrison would have been entitled to death benefits under the $1,000,000 15. Had Mr. Morrison's Colony policy, First as well as benefits under properly General term life ob- the American General tained, Ms. Morrison would not have received Colony in benefits under the First 1996). However, when the amount of the er damages for the coverage under the client’s settlement with the insurance com First Colony policy. I concur with Section pany is less than the full amount of the IV of the opinion. Court’s I concur with anticipated coverage, the client may pur the Court’s conclusions in Section V of the procure sue a failure to against claim opinion, Court’s although on different See, agent. e.g., Schurmann v. grounds. Finally, I concur with Section ¶ Neau, 4, 19, App. WI 624 N.W.2d VI of the opinion. Court’s 157,163-64. When a client obtains a judg against
ment an insurance agent on a fail claim,
ure the amount of the recovery
client’s from the insurance com
pany should be deducted from the judg See, against
ment the agent. e.g., Johnson Alaska, Higgins & Inc. v. Blomfield, (Alaska 1371, 1375-76 1995). 907 P.2d FOUST, Charles E. Jr. Ms. Morrison’s against claims both American General and Messrs. Roberts Larry $1,000,000 E. Allen arise from the METCALF et al. on Mr. Morrison’s life. Ms. Morrison set- Court of Appeals Tennessee, tled against her claim Section, Middle at Nashville. $900,000. While the trial proper- court ly concluded that Messrs. Roberts and April 2010 Session.
Allen were liable to Ms. Morrison on her Nov. 2010. claim, failure to procure the trial court Published Pursuant to R. Tennessee should have deducted the amount of Ms. Appeals. Court of Morrison’s settlement with American Gen- eral from awarded
them. I Accordingly, would affirm the of Appeal’s
Court decision point. on this
VI.
In summary, I concur with the Court’s
decision in opinion Section I of its that Ms.
Morrison is entitled recovery on her claim,
failure to although on dif- grounds
ferent than upon by those relied However,
the Court. I do not concur with
the Court’s decision in Section II of its
opinion to reverse the decision of the
Court of that Ms. Morrison’s
judgment against Messrs. Roberts and
Allen should be reduced amount of
Ms. Morrison’s settlement with American
General. I portion concur with the
Section III of the opinion finding Court’s
that Ms. Morrison is not entitled to recov-