IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
FILED
February 25, 1999
DONALD E. GRIFFIN, ) Cecil Crowson, Jr.
) Appellate Court Clerk
Plaintiff/Appellant, )
) Appeal No.
) 01-A-01-9712-CH-00700
VS. )
) Davidson Chancery
) No. 97-1104-I(II)
SHELTER MUTUAL INSURANCE )
COMPANY, )
)
Defendant/Appellee. )
APPEALED FROM THE CHANCERY COURT OF DAVIDSON COUNTY
AT NASHVILLE, TENNESSEE
THE HONORABLE CAROL L. McCOY, CHANCELLOR
CHARLES PATRICK FLYNN
MICHAEL K. RADFORD
214 Centerview Drive, Suite 233
Brentwood, Tennessee 37027
Attorneys for Plaintiff/Appellant
THOMAS W. HARDIN
KIM B. KETTERING
102 W. Seventh Street, Suite 100
Columbia, Tennessee 38402-0692
Attorneys for Defendant/Appellee
AFFIRMED IN PART; REVERSED IN PART;
AND REMANDED
BEN H. CANTRELL,
PRESIDING JUDGE, M.S.
CONCUR:
KOCH, J.
CAIN, J.
OPINION
The Chancery Court of Davidson County granted summary judgment to
appellant’s underinsured motorist carrier because appellant failed to comply with the
notice provisions of the policy and the service provisions of Tenn. Code Ann. § 56-7-
1206(a). The appellant contends that he did comply with the policy provisions and
that Tenn. Code Ann. § 56-7-1206(a) does not apply under the facts of this case. We
affirm the trial court on the failure to follow the statute. We reverse the dismissal on
the failure to follow the policy’s notice provisions.
I.
The appellant, Donald E. Griffin, sued Richard Vaughn for $500,000 for
injuries the appellant sustained in an automobile accident in Maury County. Mr. Griffin
had underinsured motorist coverage with Shelter Mutual Insurance Company
(Shelter), but he did not serve Shelter with any of the suit papers. Shelter did,
however, pursue a subrogation claim for the payments made to Mr. Griffin under the
policy. Mr. Griffin’s lawyer agreed to handle the subrogation claim without cost to
Shelter.
Mr. Griffin obtained a judgment against Mr. Vaughn for $225,000, only
$50,000 of which was covered by the defendant’s insurance. Mr. Griffin then
demanded that Shelter pay the difference between the $50,000 and the limits of
Shelter’s underinsured coverage. When Shelter refused, this action followed. The
chancellor granted summary judgment to the defendant.
II.
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Shelter resisted Mr. Griffin’s claim on two grounds. The first is found in
Tenn. Code Ann. § 56-7-1206(a) which requires an insured intending to rely on his
uninsured motorist coverage to serve a copy of the process issued against the
uninsured tortfeasor on the insurance company “in the manner prescribed by law, as
though such insurance company were a party defendant.” We have said that an
insured must strictly comply with the statute’s requirements. Eyman v. Kentucky
Central Ins. Co., 870 S.W.2d 530 (Tenn. App. 993).
In Eyman, we said that a letter to the insurance company enclosing a
copy of the summons and the complaint served on the tortfeasor was not sufficient
to satisfy the statutory mandate. In Glover v. Tennessee Farmers Mutual Ins. Co.,
468 S.W.2d 727 (1971), our Supreme Court held that an insured must follow the
statute and cannot ordinarily file a direct action against his uninsured motorist carrier.
In Bolin v. Tennessee Farmers Mutual Ins. Co., 614 S.W.2d 566 (Tenn.
1981), however, the Supreme Court recognized an exception to the strict application
of the statute, where the plaintiff pursued his tort claim against an apparently insured
defendant without serving his own carrier, but after obtaining a judgment, the plaintiff
discovered that the defendant was in fact uninsured. The plaintiff then sued his own
carrier and our Supreme Court allowed him to succeed, although the Court adhered
to the holding in Glover “as a general rule.” The Court found it significant that the
plaintiff’s uninsured carrier had been actively involved in the litigation because the
carrier had to defend the plaintiff from some adverse claims arising out of the same
accident. The Court said:
It is obvious that under some circumstances an insurance
carrier becomes subject to a claim under these statutes at
a fairly late stage, or even after the conclusion, of litigation
against the tort-feasor.
* * *
The rule laid down by the Court of Appeals in the present
case would be a harsh one and would require every
plaintiff, suing an apparently insured defendant, also to
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implead his own uninsured motorist carrier or otherwise
lose the benefit of his coverage in the event the tort-
feasor should prove to be uninsured for some reason
unknown to the plaintiff.
Bolin at 568, 569.
The appellant insists that his case comes within the Bolin exception. We
do not think, however, that the exception goes that far. If it did, the exception would
soon swallow the rule. There are two facts that distinguish this case from Bolin. The
first is the fact that this defendant was not completely uninsured. The second is the
fact that the uninsured carrier actively participated in the Bolin trial because it was
required to defend its client from the claims arising out of the same accident. Thus,
the carrier was not prejudiced by being left out of the litigation.
The appellant’s case is a more typical case where the plaintiff asserts
a large claim ($500,0000) and the defendant apparently has liability insurance. Under
these circumstances, is the plaintiff justified in assuming that he will not need to rely
on his uninsured motorist coverage? Or does it make more sense to follow the
statutory mandate and serve the uninsured motorist carrier so that the carrier may
determine how to protect its own interests? We think the answer is obvious.
It is true that the carrier in this case pursued its subrogation claim; but
that participation was through the appellant’s counsel, who assured the carrier that its
subrogation interest would be protected. There is nothing in this record to indicate
that the carrier was otherwise involved in this case.
We conclude that the claim against the carrier was properly dismissed
because of the failure to serve the carrier according to Tenn. Code Ann. § 56-7-
1206(a).
III.
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The second ground on which the chancellor granted summary judgment
concerns the policy language. In the general provisions the policy says:
A person claiming coverage under this policy must . . . (1)
Cooperate with us and assist us in any matter concerning
a claim or suit; (2) Send us promptly any legal papers
received or relating to any claim or suit . . .
Part IV, titled Uninsured Motorists, contains the provision:
If, before we make payment of loss, the insured or the
insured’s legal representative institutes any legal action
for bodily injury against any other person or organization
legally responsible for the use of an auto involved in the
accident, a copy of the summons and complaint or other
process served in connection with the legal action shall be
forwarded immediately to us. (Emphasis in original.)
Without any showing of prejudice to Shelter, the chancellor dismissed
the complaint on the failure to comply with these provisions also. The appellant
makes a strong argument that neither provision applies under the facts of this case,
but we take no position on that argument because of a change in the law since the
decision below.
When the chancellor decided this case an insurance company was
entitled to the dismissal of a claim under an insurance policy if the policy’s notice
provisions were not complied with. Our courts recognized that noncompliance with
the notice provisions was a complete defense, regardless of any prejudice to the
insurance company. Hartford Acc. & Indem. Co. v. Creasy, 530 S.W.2d 778 (Tenn.
1975). On December 21, 1998, however, our Supreme Court decided that the failure
to give notice only raised a presumption of prejudice, and that the insured could rebut
the presumption by proving that the insurance company was not prejudiced. Alcazar
v. Hayes, ____ S.W.2d ____ (Tenn. 1998).
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The issue of prejudice to the company has not been raised in this case;
consequently the plaintiff has not had a chance to rebut it. We hold, therefore, that
the judgment dismissing the complaint on this ground should be reversed.
We affirm the court’s dismissal of the complaint on the ground that the
plaintiff failed to comply with Tenn. Code Ann. § 56-7-1206(a). We reverse the
dismissal on the ground that the plaintiff failed to comply with the policy requirements.
We remand the case to the Chancery Court of Davidson County for any further
necessary proceedings. Tax the costs on appeal to the appellant.
_________________________________
BEN H. CANTRELL,
PRESIDING JUDGE, M.S.
CONCUR:
_____________________________
WILLIAM C. KOCH, JR., JUDGE
_____________________________
WILLIAM B. CAIN, JUDGE
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