Delores Conley v. Tennessee Farmers Insurance Company

07/24/2018
IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
February 20, 2018 Session1

DELORES CONLEY v. TENNESSEE FARMERS INSURANCE COMPANY

Appeal from the Circuit Court for Shelby County
No. CT-003609-15 Robert Samual Weiss, Judge
___________________________________

No. W2017-00803-COA-R3-CV
___________________________________

This appeal involves a dispute between an insurance company and one of its insureds.
Following a fire to her home, the insured brought suit requesting that the insurance
company be required to pay a claim for personal property damage. The insurance
company defended on the ground that the insurance policy was void because a
misrepresentation by the insured on her application for insurance increased the “risk of
loss.” See Tenn. Code Ann. § 56-7-103. The trial court agreed with the insurance
company and granted summary judgment in its favor. For the reasons stated herein, we
affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed and
Remanded

ARNOLD B. GOLDIN, J., delivered the opinion of the court, in which J. STEVEN STAFFORD,
P.J., W.S., and BRANDON O. GIBSON, J., joined.

Al H. Thomas and Aaron L. Thomas, Memphis, Tennessee, for the appellant, Delores
Conley.

Andrew H. Owens, Memphis, Tennessee, for the appellee, Tennessee Farmers Insurance
Company.

OPINION

BACKGROUND AND PROCEDURAL HISTORY

On May 21, 2013, a fire occurred at the Memphis residence of Appellant Delores
Conley (“Ms. Conley”), resulting in damage to both the home and personal property on
the premises. At the time of the fire, Ms. Conley was shown as an insured under a

1
Oral argument in this case was conducted at Union University, Jackson, Tennessee.
property insurance policy issued by Tennessee Farmers Insurance Company (“Tennessee
Farmers”). She filed a claim requesting that her real and personal property damage be
covered under the policy, but total relief from Tennessee Farmers was not forthcoming.
Although Tennessee Farmers paid for damages to Ms. Conley’s home, the personal
property claim eventually became a point of contention.

Eventually, in a letter sent to Ms. Conley in April 2015, Tennessee Farmers denied
Ms. Conley’s claim, citing a material misrepresentation made in her 2010 application for
insurance. The letter stated that the misrepresentation increased the risk of loss as
contemplated under Tennessee Code Annotated section 56-7-103 and therefore rendered
her policy void. Specifically at issue was Ms. Conley’s response to the question of
whether she “Ever had any property in foreclosure?” Although Ms. Conley’s answer to
this question on her insurance application was “No,” the facts reveal otherwise.

Previously, on September 27, 2005, Ms. Conley had taken title to property in
Mississippi under a warranty deed naming her and her then-husband as grantees. A few
years later, following a separation from her husband, a foreclosure occurred in relation to
the Mississippi property. Specifically, on November 4, 2008, a substitute trustee
executed a deed transferring the property to US Bank National Association as Trustee
HEAT 2006-1. In 2010, following a divorce from her husband, Ms. Conley purchased
the Memphis residence covered under the insurance policy at issue herein.

The present litigation ensued in August 2015, when Ms. Conley filed a complaint
in the Circuit Court of Tennessee for the Thirtieth Judicial District at Memphis. The
complaint averred that, while Tennessee Farmers had paid for damage to Ms. Conley’s
house, it had not paid for all personal property damage sustained as a result of the May
2013 fire. According to the complaint, Tennessee Farmers was obligated to honor Ms.
Conley’s policy and was liable to pay for her insurance claim. On August 29, 2016, Ms.
Conley filed an amended complaint. In addition to seeking recovery for her insurance
claim,2 Ms. Conley asserted claims for “extortion” and “racial discrimination.”
Regarding the latter matter, Ms. Conley alleged that Tennessee Farmers had committed
“an act of racial discrimination in violation of the United States and Tennessee
constitutions.”

In defending the lawsuit brought against it, Tennessee Farmers argued that Ms.
Conley’s insurance policy was void. Detailing its position in its answer to Ms. Conley’s
amended complaint, Tennessee Farmers stated as follows:

2
Ms. Conley prayed that, in addition to requiring Tennessee Farmers to honor her policy, the
court should find Tennessee Farmers liable pursuant to Tennessee Code Annotated section 56-7-105.
That statute provides for a 25% penalty where a refusal to pay a claim is not made in good faith.
Leverette v. Tenn. Farmers Mut. Ins. Co., No. M2011-00264-COA-R3-CV, 2013 WL 817230, at *17
(Tenn. Ct. App. Mar. 4, 2013) (citations omitted).
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 For affirmative defense, defendant asserts that the plaintiff made
misrepresentation on her application for insurance. The misrepresentation
is as follows:

10. “Ever had any property in foreclosure?” Your answer was
“No.”

In actuality, the plaintiff owned property located at 4121 Three Hawks
Drive, Olive Branch Mississippi foreclosed on at the end of 2008 with the
property being transferred from the plaintiff by substitute trust deed
recorded on November 5, 2008.

....

This misrepresentation on the application increased the risk of loss
as contemplated in TCA 56-7-103 and Tennessee case law construing same
and therefor[e] the insurance policy is void.

With the above argument at the forefront of its defense, Tennessee Farmers filed a
motion for summary judgment on December 6, 2016. An order granting its motion was
entered on March 22, 2017. Therein, the trial court held that Ms. Conley’s
misrepresentation on her insurance application “increased the risk of loss.” Whereas Ms.
Conley’s asserted racial discrimination claim was dismissed in connection with the entry
of the March 22 order, her extortion claim was formally dismissed pursuant to a later
entered order.3 This appeal follows the dismissal of Ms. Conley’s claims for relief.

ISSUES PRESENTED

Ms. Conley raises several issues for our review on appeal. Condensed and
restated, these issues are as follows:

(1) Whether the Circuit Court erred when it ruled that the 2008 foreclosure on the
Mississippi property (that Plaintiff did not disclose on her 2010 insurance
application) increased Defendant’s risk of loss in writing the insurance policy
within the meaning of Tennessee Code Annotated section 56-7-103.

(2) Whether the Circuit Court erred when it ruled that Plaintiff’s “No” answer to the
question “Ever had any property in foreclosure?” on the 2010 insurance
application was factually incorrect.

3
In dismissing the asserted extortion claim, the trial court noted that “Tennessee has yet to
recognize a civil claim of extortion.”
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 (3) Whether the Circuit Court erred when it ruled that Defendant’s contract of
insurance with Plaintiff gave Defendant the right to void the policy for an innocent
misrepresentation.

(4) Whether the Circuit Court erred when it ruled that an attorney’s memo advising
Defendant about the permissibility of voiding Plaintiff’s policy was protected from
discovery by the attorney-client privilege.

(5) Whether the Circuit Court erred by dismissing Plaintiff’s racial discrimination
claim.

(6) Whether the Circuit Court erred by dismissing Plaintiff’s extortion claim.

(7) Whether the Circuit Court erred when it ruled that, although Plaintiff’s policy was
voided for an impermissible reason, Defendant can shield itself from liability by
subsequently citing a different and permissible reason to void the policy.

STANDARD OF REVIEW

Summary judgment is appropriate when there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law. Robinson v.
Baptist Mem’l Hosp., 464 S.W.3d 599, 606 (Tenn. Ct. App. 2014) (citations omitted).
“The resolution of a motion for summary judgment is a matter of law, which we review
de novo with no presumption of correctness.” Id. at 607 (citing Martin v. Norfolk S. Ry.
Co., 271 S.W.3d 76, 84 (Tenn. 2008)).

DISCUSSION

Tennessee Farmers’ Right to Void the Policy

Because the first three issues presented for our review all concern the right of
Tennessee Farmers to void Ms. Conley’s policy, we deal with them together here. We
begin by addressing Ms. Conley’s alleged lack of knowledge pertaining to the
Mississippi property that was the subject of foreclosure in 2008. According to Ms.
Conley, at the time of her application for insurance in 2010, she did not know that she
had previously owned an interest in the Mississippi property or that the property had gone
into foreclosure. Even assuming this is true, we must reject Ms. Conley’s suggestion that
Tennessee Farmers could not, as a matter of contract, void the policy for an “innocent”
misrepresentation. In relevant part, the insurance policy at issue specifically provided
that the policy would be “automatically void” if an insured “misrepresents any material
fact or circumstance” relating to the policy. The policy also provided that the policy

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would be void if an insured made a false statement relating to the policy or a loss.4 As
observed by Tennessee Farmers in its appellate brief, the insurance policy did not state
that the underlying misrepresentation must be intentional, as opposed to innocent.
Inasmuch as no such distinction was made, we disagree with Ms. Conley that an innocent
misrepresentation could not serve as a predicate act for voiding the policy. Although
often accompanied by an intent to deceive, a misrepresentation simply involves the “act
of making a false or misleading assertion about something.” Black’s Law Dictionary
1022 (8th ed. 2004).

Nor is there any absolute legal barrier preventing an insurer from voiding a policy
based on an “innocent” misrepresentation. Notwithstanding Ms. Conley’s argument that
there was no contractual right to void her policy in the case at bar, she concedes that an
innocent misrepresentation could serve as the basis to void a policy pursuant to
Tennessee Code Annotated section 56-7-103. The text of that statute, which is pivotal to
the resolution of this appeal, reads as follows:

No written or oral misrepresentation or warranty made in the negotiations
of a contract or policy of insurance, or in the application for contract or
policy of insurance, by the insured or in the insured’s behalf, shall be
deemed material or defeat or void the policy or prevent its attaching, unless
the misrepresentation or warranty is made with actual intent to deceive, or
unless the matter represented increases the risk of loss.

Tenn. Code Ann. § 56-7-103.

As we have noted previously, the language of the statute is clearly disjunctive.
State Farm Gen. Ins. Co. v. Wood, 1 S.W.3d 658, 661 (Tenn. Ct. App. 1999). “[T]he
insurer may show either 1) that the misrepresentation was made with the intent to
deceive, or 2) that the matter represented increased the risk of loss.” Id. (citations
omitted). In this appeal, we are only concerned with the second part of the statute; at oral
argument, counsel for Tennessee Farmers conceded that his client’s motion for summary
judgment was not predicated on the existence of an intentional misrepresentation. Our
inquiry is therefore limited to whether Ms. Conley misrepresented a matter on her
application for insurance, and if so, whether the matter represented increased the risk of
loss for Tennessee Farmers.

Although Ms. Conley contests the matter on appeal, the record reveals no genuine
issue as to whether her insurance application misrepresented the fact that she previously
had a property in foreclosure. As noted earlier, the undisputed facts reveal that (a) she

4
We would further note that the application for insurance signed by Ms. Conley recited as
follows: “I . . . understand that any misrepresentations or failure to complete all questions truthfully and
fully will void this insurance.” (emphasis added).
-5-
had owned Mississippi property with her former husband and (b) that the Mississippi
property was transferred to US Bank National Association in 2008 as the result of a
foreclosure. Even Ms. Conley seems to relent to the impact that these facts have on the
truth/falsity of her insurance application answer. Indeed, notwithstanding multiple
arguments as to why the answer on her insurance application was not factually incorrect,
we observe the following passage from her brief’s “Statement of the Case”: “In this case,
the alleged misrepresentation was Ms. Conley’s ‘no’ answer in 2010 to the insurance
application’s question ‘Ever had any property in foreclosure?’. There is a technical
problem with her answer because a house was foreclosed on in 2008 that Ms. Conley did
own a partial interest in[.]” (emphasis added) This was more than a “technical problem.”
The answer was factually incorrect. The contention that her insurance application did not
contain a false assertion is simply without merit, and we reject her various arguments to
the contrary.

Returning to the statute mentioned above, however, it should be evident that
insurers are not given carte blanche to void a policy upon the establishment of a
misrepresentation. Assuming it is not accompanied by an actual intent to deceive, the
matter represented must increase the risk of loss. See Tenn. Code Ann. § 56-7-103. In
this appeal, this “risk of loss” question is the primary issue before us. Did the matter
represented on Ms. Conley’s insurance application increase the risk of loss for Tennessee
Farmers?

Whether a misrepresentation increases the risk of loss within the meaning of the
statute is a question of law. Sine v. Tenn. Farmers Mut. Ins. Co., 861 S.W.2d 838, 839
(Tenn. Ct. App. 1993) (citation omitted). Accordingly, a trial court’s determination on
the risk of loss issue is not entitled to a presumption of correctness on appeal. Smith v.
Tenn. Farmers Life Reassurance Co., 210 S.W.3d 584, 589 (Tenn. Ct. App. 2006). It is
well-settled law that a misrepresentation is deemed to increase the risk of loss “when it is
of such importance that it ‘naturally and reasonably influences the judgment of the
insuror in making the contract.’” Sine, 861 S.W.2d at 839 (quoting Seaton v. Nat’l
Grange Mut. Ins. Co., 732 S.W.2d 288, 288-89 (Tenn. Ct. App. 1987)). In explaining the
relevant considerations surrounding this inquiry, we have previously noted as follows:

Tenn. Code Ann. § 56-7-103 authorizes an insurance company to
deny a claim if the insured obtains the policy after misrepresenting a matter
that increased the company’s risk of loss. A misrepresentation in an
application for insurance increases the insurance company’s risk of loss if it
naturally and reasonably influences the judgment of the insurer in making
the contract. It need not involve a hazard that actually produced the loss in
question.

The courts may use the questions an insurance company asks on its
application to determine the types of conditions or circumstances that the
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 insurance company considers relevant to its risk of loss. Additionally, the
courts frequently rely on the testimony of insurance company
representatives to establish how truthful answers by the proposed insured
would have affected the amount of the premium or the company’s decision
to issue the policy. A finding that the insurer would not have issued the
policy had the truth been disclosed is unnecessary; a showing that the
insurer was denied information that it, in good faith, sought and deemed
necessary to an honest appraisal of insurability is sufficient to establish the
grounds for an increased risk of loss.

Smith, 210 S.W.3d at 590 (emphasis added) (internal citations omitted).

A helpful illustration of these principles is found in this Court’s decision in
Tennessee Farmers Mutual Insurance Co. v. Farrar, 337 S.W.3d 829 (Tenn. Ct. App.
2009). In Farrar, the insured’s house was damaged by a fire. Id. at 832. Although a
claim was filed with the insurer, coverage was denied based upon a misrepresentation on
the insured’s insurance application. Id. at 831-32. The application for homeowners’
insurance had specifically asked the insured whether any other party had an ownership
interest in the property, and the insured had answered this question in the negative. Id. at
832. However, as it turns out, another individual, one Gary Vollheim, had a life estate in
the property at the time the insurance application was signed. Id. In concluding that this
misrepresentation increased the insurer’s risk of loss under Tennessee Code Annotated
section 56-7-103, this Court noted as follows:

The [insurance company’s] witnesses clearly demonstrated that had Gary
Vollheim’s life estate been known, he would have been required to
complete a form entitled “Additional Named Insured Application for
Insurance” and the form would have been submitted to the [insurance
company’s] home office for evaluation. Mr. Vollheim is dead and we
cannot speculate as to what additional information the Company might
have obtained had he filled out the form. The point, however, is not what
he might have answered; the point is that because the life estate was not
disclosed, the [insurance company] never had an opportunity to ask him
questions so it might evaluate the risk associated with the dual ownership
interests of the Claimant and Mr. Vollheim.

Id. at 836.

What remains important is whether the insurer was denied information that it
sought in good faith and deemed necessary to an honest appraisal of insurability. Smith,
210 S.W.3d at 590. Again, if it was denied such information, an increased risk of loss
within the meaning of Tennessee Code Annotated section 56-7-103 has been established.
Id. (citations omitted).
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 Here, evidence submitted at summary judgment indicated that Tennessee Farmers
asks about past foreclosures in order to seek information about an applicant’s financial
stability. Ms. Conley did not dispute that this is the purpose of Tennessee Farmers’
question concerning prior foreclosures, nor did she dispute that the question is asked with
the expectation for a truthful answer in order that more questions can be asked if needed.
Moreover, Ms. Conley did not disagree with Tennessee Farmers’ contention that the
information concerning prior foreclosures is sought in good faith.

Like Ms. Conley, we also agree that Tennessee Farmers seeks the information
about prior foreclosures in good faith. Gauging an applicant’s history of past
foreclosures can assist the insurer in determining if it should inquire further as to whether
that party will be financially capable of making premium payments or maintaining the
property. It thus seems apparent to us that not accurately answering Tennessee Farmers’
question concerning prior foreclosures increased the risk of loss because Tennessee
Farmers was “denied information that it, in good faith, sought and deemed necessary to
an honest appraisal of insurability.” Id. (citations omitted). Indeed, we are of the opinion
that the knowledge that Ms. Conley previously had property in foreclosure would
“naturally and reasonably” affect the judgment of Tennessee Farmers. See Sine, 861
S.W.2d at 839 (quoting Seaton, 732 S.W.2d at 288-89) (“A misrepresentation increases
the risk of loss when it is of such importance that it ‘naturally and reasonably influences
the judgment of the insuror in making the contract.’”). As we have noted, there is no
dispute that the question regarding prior foreclosures is asked with the expectation for a
truthful answer and that further questions can be asked if needed. Had Tennessee
Farmers been informed of the prior foreclosure, it would have been able to ask questions
to explore and assess the risks associated therewith.

According to Ms. Conley, there was no increased risk of loss to Tennessee
Farmers because she was not on the loan associated with the Mississippi property that
went into foreclosure. By referencing this fact and by citing to Johnson v. State Farm
Life Insurance Co., 633 S.W.2d 484 (Tenn. Ct. App. 1981), Ms. Conley argues that an
insurer’s good faith practice to seek information will create a rebuttable presumption that
nondisclosure of that information increased the risk of loss. According to Ms. Conley,
she rebutted that presumption by presenting proof of her status as a non-borrower on the
Mississippi property. In her view, “her undisclosed foreclosure did not – and could not –
increase Defendant’s risk in any manner.”

As Tennessee Farmers has observed in its appellate brief, Johnson does not
contain any discussion of the rebuttable presumption test envisioned by Ms. Conley.
Moreover, the cases interpreting Tennessee Code Annotated section 56-7-103 clearly
indicate that a risk of loss is sufficiently established when the insurer is denied
information that it in good faith wanted to obtain for an honest appraisal. See id. at 488
(“It is only necessary to determine that the misrepresentation was sufficient to deny the
insurer information which they, in good faith, sought to discover, and which they must
-8-
have deemed necessary to an honest appraisal of insurability.”). Here, Ms. Conley did
not question that Tennessee Farmers sought information about prior foreclosures in good
faith, and although she may have not been responsible for the loan associated with the
Mississippi property, the fact remains that Tennessee Farmers was never given the
opportunity to ask questions to evaluate the risks associated with a disclosed foreclosure.
See Farrar, 337 S.W.3d at 836 (“The point, however, is not what he might have
answered; the point is that because the life estate was not disclosed, the Company never
had an opportunity to ask him questions so it might evaluate the risk associated with the
dual ownership interests of the Claimant and Mr. Vollheim.”). By not disclosing the
event of foreclosure, Ms. Conley did not afford Tennessee Farmers even a minimum
opportunity to investigate the circumstances attendant to her ownership of the Mississippi
property and those surrounding the property’s foreclosure. Had the fact of a prior
foreclosure been disclosed, Tennessee Farmers would have been able to explore the risks
that are implicated by foreclosures, and it would have been able to assess the actions Ms.
Conley had taken, or failed to take, to allow the Mississippi property to go into
foreclosure.5
Through the misrepresentation on her application, however, Ms. Conley increased
the risk of loss within the meaning of Tennessee Code Annotated section 56-7-103.
Knowledge that she previously had property in foreclosure would “naturally and
reasonably” affect the judgment of the insurer, because as we have noted, “[i]t is only
necessary to determine that the misrepresentation was sufficient to deny the insurer
information which they, in good faith, sought to discover, and which they must have
deemed necessary to an honest appraisal of insurability.” Johnson, 633 S.W.2d at 488.
Here, Ms. Conley does not dispute that Tennessee Farmers sought the information
concerning prior foreclosures in good faith. In view of the above discussion, we
accordingly affirm the trial court’s judgment on this issue and turn our attention to the
remaining matters raised on appeal.

Remaining Issues

Attorney’s Memorandum

During the trial court proceedings, Ms. Conley sought to discover a document
prepared by Tennessee Farmers’ attorney. Although she moved to compel production of
this document, she was met with resistance. In support of its opposition to Ms. Conley’s

5
Tennessee Farmers’ inquiry into a disclosed foreclosure could have, among other things, cast
light onto concerns related to Ms. Conley’s financial condition. Although Ms. Conley places much
emphasis in this appeal that she had no responsibility for the loan on the Mississippi property, it should be
noted that in her deposition testimony, she stated that she understood that she could not be on the
mortgage loan for the Mississippi property because of poor credit. This is something that Tennessee
Farmers could have uncovered and considered in exploring the risks associated with a disclosed
foreclosure.
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motion to compel, Tennessee Farmers maintained that the sought-after document was
protected by the attorney-client privilege and the work-product doctrine. The trial court
eventually denied Ms. Conley’s motion to compel.

On appeal, Ms. Conley asserts that the trial court’s ruling on this issue was in
error. Her brief includes some argument as to why the requested attorney memorandum
should not be legally protected by the attorney-client privilege, and to a lesser degree, by
the work-product doctrine, but there does not appear to be a clearly developed argument
as to why the requested document itself is relevant to any of Ms. Conley’s claims. As
such, even assuming that we agreed that the attorney-client privilege or work-product
doctrine otherwise did not apply,6 it is unclear on what basis there is reversible error in
excluding discovery access to the document. In her brief, Ms. Conley simply
conclusorily asserts that she “demonstrated through [her motions to compel production]
why the attorney’s memorandum was necessary,” but again, there is no clearly developed
explanation as to this point on appeal, at least insofar as we are able to discern.7 “It is not
the role of the courts, trial or appellate, to research or construct a litigant’s case or
arguments for him or her, and where a party fails to develop an argument in support of
his or her contention or merely constructs a skeletal argument, the issue is waived.”
Sneed v. Bd. of Prof’l Responsibility, 301 S.W.3d 603, 615 (Tenn. 2010).

6
We observe that the trial court’s order denying Ms. Conley’s motion to compel does not
specifically cite the attorney-client privilege or the work-product doctrine as a basis for its denial. Thus,
Ms. Conley’s stated issue—whether the trial court erred when it ruled that the document was protected
from discovery by the attorney-client privilege—technically seeks redress from a specific ruling not
found in the order she challenges.
7
We would further note that in places where a kernel of an argument appears to be included
concerning the need for the document, there are no citations to the record to substantiate the contentions
made. For example, in arguing that it would be “unfair” to allow Tennessee Farmers to “shield” the
document, Ms. Conley’s brief states that Tennessee Farmers justified and defended its denial letter by
invoking the attorney’s document. No citations to the record are offered in support of this proposition.
There is a similar failure to cite to the record concerning other asserted facts offered in support of Ms.
Conley’s argument about the inapplicability of the attorney-client privilege. For instance, in claiming that
no privilege exists, Ms. Conley’s brief references testimony of a “Mr. Caldwell.” The brief itself provides
no clarification about the identity of Mr. Caldwell, and there is no accompanying record reference
specifically signaling where this testimony may be found. Similarly, in claiming that the attorney-client
privilege was waived, Ms. Conley relies on “Defendant’s testimony.” No record references are given
concerning where such “Defendant’s testimony” supporting a finding of waiver can be found. The failure
to provide appropriate record references on these matters also supports a finding of waiver on appeal. See
Clayton v. Herron, No. M2014-01497-COA-R3-CV, 2015 WL 757240, at *3 (Tenn. Ct. App. Feb. 20,
2015) (citations omitted) (noting that the failure to make appropriate references to the record and to cite
relevant authority in the argument section of a brief as required by Rule 27(a)(7) of the Tennessee Rules
of Appellate Procedure constitutes a waiver of the issue); see also Tenn. Ct. App. R. 6 (requiring that
written argument shall contain “[a] statement of each determinative fact relied upon with citation to the
record where evidence of each such fact may be found”).
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 Regardless, we note that the argument found among the trial court papers is
unavailing. Ms. Conley argued to the trial court that it was imperative to obtain the
attorney’s document in order to prove that the denial of her insurance claim was reckless.
She noted that the Tennessee Farmers employee who sent the claim denial letter had
learned about the falsity of her application answer through the attorney’s document. It is
unclear to us how Ms. Conley can maintain that the denial of her claim was “reckless”;
Tennessee Farmers cannot be considered reckless for denying her claim on account of her
insurance application answer regarding prior foreclosures because there was no error in
concluding that her answer was a misrepresentation. As we have already noted, the
answer on Ms. Conley’s application for insurance was factually incorrect.

Racial discrimination and extortion claims

In her brief, Ms. Conley complains that the racial discrimination claim set forth at
paragraphs 15 and 21 of her amended complaint was erroneously dismissed. In support
of this grievance, she argues that the claim was not a specific subject of Tennessee
Farmers’ motion for summary judgment. Although it does appear to be the case that
Tennessee Farmers never specifically moved for summary judgment vis-à-vis the
asserted racial discrimination claim, the trial court evidently reasoned that dismissal of
the claim should legally follow from its conclusion on the risk of loss issue. In its order
granting summary judgment, the trial court stated: “[B]ecause the policy, being voided
ab initio, as though it never existed, the allegations of racial discrimination should also be
dismissed.” For the reasons stated below, we will not disturb the trial court’s dismissal of
the racial discrimination claim at summary judgment but affirm it on other grounds. 8 See
Hill v. Lamberth, 73 S.W.3d 131, 136 (Tenn. Ct. App. 2001) (noting that this Court is
permitted to affirm dismissal on grounds different than those cited by the trial court).

The dismissal of the asserted racial discrimination claim should be affirmed
because the claim lacks merit as a matter of law. Paragraphs 15 and 21 of the amended
complaint allege that Tennessee Farmers committed “an act of racial discrimination in
violation of the United States and Tennessee constitutions.” We would note that the
amended complaint does not separately raise any discrimination claims based upon
alleged violations of federal or state legislation. Ms. Conley’s attempt to hold Tennessee
Farmers liable for an alleged constitutional violation is legally infirm because Tennessee
Farmers is not a governmental entity. “It is well-settled that constitutional guarantees
restrain government conduct and generally do not restrain the conduct of private
individuals.” Stein v. Davidson Hotel Co., 945 S.W.2d 714, 718 (Tenn. 1997) (citations
omitted); see also Cagle v. Cass, No. W2001-00760-COA-R3-CV, 2001 WL 792644, at

8
We express no opinion regarding the specific reasoning adopted by the trial court in dismissing
the claim, nor do we express any opinion about the specific bases for dismissal argued by Tennessee
Farmers on appeal.

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*3 (Tenn. Ct. App. July 6, 2001) (noting that because the alleged violator was not an
employee of the state or federal government, nor could be said to be a state actor, he was
incapable of violating the adverse party’s constitutional rights).9

Similarly, the asserted extortion claim fails for lack of legal merit. We note that at
oral argument, Ms. Conley’s counsel acknowledged that he had found no Tennessee
authority recognizing a civil cause of action for extortion. Neither have we. See Perry v.
Conley, No. 02A019812CV00369, 1999 WL 270430, at *4 (Tenn. Ct. App. May 5, 1999)
(“We know of no statutory or common law authority-except in states where statutes
provide for civil penalties for the crime of extortion-which would allow Perry to recover
damages for ‘extortion.’”); In re Prebul, No. 1:11-CV-214, 2012 WL 5997927, at *6
(E.D. Tenn. Nov. 30, 2012) (“[T]here is no tort of extortion recognized in Tennesee.”).
Accordingly, we affirm the dismissal of Ms. Conley’s extortion claim.

Ms. Conley’s Issue #7

After Ms. Conley submitted her initial appellate brief, which raised six issues for
our review, she filed a motion requesting permission to file a supplement to her brief,
stating that she had inadvertently failed to include a seventh issue in her original appellate
submission. We granted the motion after giving it proper consideration, and on
December 5, 2017, a supplemental appellate brief raising “Issue #7” was filed. Taken
verbatim from Ms. Conley’s supplemental brief, Issue #7 is as follows:

Did the Circuit Court err when it ruled that even though Defendant voided
Plaintiff’s policy for an impermissible reason, Defendant can shield itself
from liability by subsequently citing a different and permissible reason to
void the policy even though Defendant would not have originally voided
the policy for that reason?

As an initial matter, we observe that Ms. Conley’s supplemental brief contains no citation
to any legal authorities supporting her position. This is sufficient to result in a waiver of
her issue. See Belardo v. Belardo, No. M2012-02598-COA-R3-CV, 2013 WL 5925888,
at *13 (Tenn. Ct. App. Nov. 1, 2013) (citations omitted) (“This Court has repeatedly held
that the failure to include citation to the record or to appropriate supporting authority in
the argument section of the brief is a waiver of the issue on appeal.”).

The issue of waiver notwithstanding, Issue #7 appears to be predicated on the
faulty premise that a permissible reason for voiding the policy was not originally
provided by Tennessee Farmers. As explained herein, it was permissible to deny Ms.

9
We would additionally note that Tennessee has not recognized any implied cause of action for
damages based upon violations of the Tennessee Constitution. Bowden Bldg. Corp. v. Tenn. Real Estate
Comm’n, 15 S.W.3d 434, 446 (Tenn. Ct. App. 1999) (citations omitted).
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Conley’s claim on the ground that her insurance application contained a
misrepresentation that increased the risk of loss, and the denial letter sent to Ms. Conley
clearly relied on this basis.10

CONCLUSION

For the reasons stated herein, the judgment of the trial court is affirmed. This case
is remanded to the trial court for such further proceedings as may be necessary and are
consistent with this Opinion.

_________________________________
ARNOLD B. GOLDIN, JUDGE

10
Additional issues were raised by Ms. Conley, with the Court’s permission, in a supplemental
brief filed following oral argument. The first two of these additional issues, which essentially re-argue
the same issue initially raised in the first supplemental brief, specifically challenge the trial court’s
decision to deny a motion to reconsider that was filed by Ms. Conley following the grant of summary
judgment. We find no error with respect to this mater. As previously noted, it was permissible to deny
Ms. Conley’s insurance claim on the ground that her insurance application contained a misrepresentation
that increased the risk of loss; the denial letter sent to Ms. Conley clearly relied on this basis. The other
issue raised in Ms. Conley’s second supplemental brief once again challenges the dismissal of her
asserted extortion claim. As we have already noted, we know of no Tennessee authority recognizing a
civil cause of action for extortion.
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