Title: Harvey v. Birchfield

State: tennessee

Issuer: Tennessee Supreme Court

Document:

535 S.W.2d 334 (1976) Patricia Elaine HARVEY, Petitioner, v. Jerry BIRCHFIELD, Respondent. Supreme Court of Tennessee. March 29, 1976. Charles B. Dungan, Jr., Meares & Dungan, Maryville, for petitioner. D.K. Thomas, Maryville, for respondent. FONES, Chief Justice. This case arises under the uninsured motorist provision of T.C.A. § 56-1153. The issue presented is whether an insurer served with process pursuant to said code section is required to raise the defense of lack of insurance coverage in the tort action and upon failure to do so is bound by the judgment, or whether the plaintiff can only obtain judgment against the uninsured motorist in the tort action and must bring a *335 second lawsuit against the insurer wherein the insured is permitted to litigate the issue of coverage. We hold that the insurer must raise the defense of absence of coverage under the insurance policy in the tort action or be estopped from later relying on it as a defense. On November 13, 1972, Patricia Harvey was riding as a passenger in her automobile being driven by one Larry Wilson. The Harvey automobile was struck by an automobile driven by Jerry Birchfield, an uninsured motorist. Petitioner filed suit against Jerry Birchfield on December 20, 1972, for damages arising out of that collision, and pursuant to T.C.A. § 56-1153, caused a summons to be issued against respondent, State Farm Mutual Insurance Company, as the uninsured motorist carrier. Neither Birchfield nor respondent filed an answer within the thirty (30) days after service of summons, and a default judgment was entered against both parties on February 13, 1973. Respondent's claim superintendent did notify petitioner's attorney by letter dated January 23, 1973, that respondent would not defend petitioner's claim against Birchfield: "It is our position that the uninsured motorist coverage carried by our named insured, Truman Wilson, under which is son, Larry Wilson, would have protection, would not provide any benefits to Patricia Harvey under the uninsured motorist provisions." On May 7, 1973, the trial court, sitting without a jury, found damages for plaintiff in the amount of nine thousand ($9,000) dollars personal injury and one thousand five hundred ($1,500) dollars property damage. This judgment was entered on May 8, 1973. Respondent filed a motion to set aside judgment on August 14, 1973, which was overruled by the trial court on May 7, 1974. The Court of Appeals reversed the trial court, holding that in the tort action, the insurer is bound by the judgment only as to the liability of the uninsured motorist; that the insurer may raise the issue of coverage either in the tort action or at a later date. The applicable code section is T.C.A. § 56-1153, which reads in part: Three Tennessee cases have construed this section. In the first, Glover v. Tennessee Farmers Mutual Insurance Company, 225 Tenn. 306, 468 S.W.2d 727 (1971), the insured brought an action directly against the insurer. The Court held this was not authorized by the statute, and in response to the insurer's argument that any other construction would require that two lawsuits be maintained, said: The Glover case held that the act does not require a suit against the insurance company after recovery of a judgment against the uninsured motorist and that the insurance company is bound by the judgment to the extent of its policy limits. No distinction was made between being bound as to coverage or as to liability. The insurance carrier in Thearp v. Travelers Indemnity Company, 504 S.W.2d 763 (Tenn. App. 1972), maintained that no coverage was provided by either of two policies issued by it, pursuant to which the plaintiff's might claim, and made a motion for severance in order to litigate the coverage issue separately. This motion was denied, and the Court of Appeals held the motion for severance should have been granted so that the presence of insurance coverage would not be brought before the jury. The Court then looked to the effect of the Glover decision: In McCall v. Maryland Casualty Company, 516 S.W.2d 353 (Tenn. 1974), the appellants were unable to obtain service of process upon the uninsured motorist, and alleged that because the insurance carrier had been served with process, it was under an obligation to appear and defend on behalf of the uninsured motorist. This Court rejected that contention and summarized, but in no way limited, the holding of Thearp: The quoted language in McCall merely points out that the statute does not make it mandatory that the insurance carrier defend the uninsured motorist; it may do so in its discretion. If, however, the carrier chooses not to defend, it is bound by the judgment. Glover and Thearp make that clear. We hold that respondent had sufficient notice that it would be bound by the judgment in the trial court as to any additional defenses that it might assert. The decision in Thearp v. Travelers Indemnity Company, supra, was released five (5) months before respondent received service of process from the Commissioner of Insurance. Glover v. Tennessee Farmers Mutual Insurance Co., supra, had been decided approximately one and one-half years prior to the service of process. Additionally, the summons itself required respondent to answer the complaint within thirty (30) days, or "[i]f you fail to do so, judgment by default will be taken against you for the relief demanded in the complaint." Our holding today that an insurance carrier served with process under T.C.A. § 56-1153 must assert any defenses in the trial court that it might have, or be estopped from later raising them comports with equitable principles. See Staunton v. Clark, 56 Tenn. 669 (1872); Evans v. International Trust Co., 59 S.W. 373 (Tenn.Ch.App. 1900). The proper procedure in the instant case would have been for the respondent to have filed a motion or an answer denying coverage under the uninsured motorist provision of the policy, and a motion for severance to try the issues separately. Having sustained petitioner's first assignment of error, we pretermit the second assignment asserting that respondent's motion for relief under Rule 60 T.R.C.P. was untenable. The judgment of the Court of Appeals is reversed and that of the trial court is reinstated. Costs are adjudged against respondent, State Farm Mutual Insurance Company. COOPER, HENRY, BROCK and HARBISON, JJ., concur. [*] This was amended by Acts 1975, ch. 164 § 1. That Act provides that when service of process on an uninsured motorist is returned unserved, "... the service of process against the uninsured motorist carrier, pursuant to this section, shall be sufficient for the court to require the said insurer to proceed as if it is the only defendant in such case." T.C.A. § 56-1153.