1 Ten n. R. Ct. App . 10 states:
Th is Co urt, with the c onc urren ce of a ll judge s partic ipating in the cas e, may affirm, rev erse o r mo dify the act ions of t

he t ria l cou rt by memorandu m opini on when a for mal opi nion woul d h ave no preceden tial

value. When a case is decided by memo randum opinion it shallbe design ate d “MEMORANDU M OPIN IO N,” shall not be published, and shall not be cited or relied on for any reason i n any un relat ed case. 

### IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE Assigned on

Briefs M ay 14, 2002 JAM ES E . WI LLI AMS v. S ALV ADO RE V ALD EZ V 

### . TAPCO

UNDERWRITERS, INC., ET AL 

### . Appeal from the Circuit Court for Davidson County No. 00C-646 Carol Soloman, Judge

No. M2001-00666-COA-R3-CV - Filed Septem ber 12, 2002

In an actio n brought by

an insure d again st his insurer for indemnity, the trial court entered judgment after the defendant

insurer moved for

involunta ry dismissal u

nder Te nn. R. Civ. P. 41.02 . We vaca te the judgment and remand.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court

Vacated and Remanded
P AT RICIA J. C OTT RELL , J., delivered the opinion of the court, in which B EN H. C ANT RELL , P.J., M.S., and W IL LI AM C. K OCH , J R ., J., joined.
Peter B. Murphy, R.R. Ruth, Jr., Chattanooga, Tenne ssee, for the appe llants, TA PCO Under

writers , Inc., and Certain I

nterested Underwriters at L loyds, L ondon.
Bobb y D . Davis, Ma

dison , Ten

ness ee, f or the appellee , Salv ador

e Val dez.
James B. L

ewis, Na shville, T ennesse e, for the appell ee, James E. Williams.

MEMORAN

DUM OP

INION 1

This case started as an action by one neig

hbor, Mr. Williams, against another, Mr. V alde z, for damage from a falling tree. Mr. Williams obtained adefault judgment in gene ral sessi ons court ,2 Another order was entere d Se ptem ber 2 2 whic h was id entical e xcep t for the trial c ourt’s hand- wri tt en not ati on

taxing c osts to D efend ant.

3 At the begi nning of

the t rial of th e indemni ty compla int , counse l for Mr. Valde z stated the t rial court ha d indica ted he should “bring in the insura nce c omp any.”

4 The comp laint alleged that TA PC O U nderwriters, Inc. is the u nde rwriter fo r the insur ance carrier , Lloyd ’s of London. It also alleged that the corresp onde nce dec lining coverage w as from T enco S ervices, Inc., an independent adj us ti ng f

irm wo rk in g o n b eh al f of th e u nde rw ri te r, TAPCO.
5 T he answe r also d enied neglige nce o n the p art of M r. Va ldez, d ema nde d strict p roo f of M r. W illiams’s dam ages, a nd alle ged M r. W illiams’s auto mob ile insuran ce wa s prim ary. -2- and Mr. Valdez appealed and obta ined a tr ial de novo in circu

it court. T

he trial w as held

August 9, 2000, and an order was ente red S eptember

5 awa rding a jud gme nt of $ 6500 a

gai nst Mr . Val dez. 2
After the trial but before entry

of the order, Mr. Valde z joined TAPCO Underwriters, Inc. as Third Pa

rty Defend ant seek

ing inde mnificat ion for the $6500 ju dgment. 3
The Third Party Compliant filed by Mr. Valdez alleged that a storm had caused a tree in his yard to fall on his neighbor’s property causing damage to Mr. Williams’s car. Mr. Valdez alleged he had made demand upon TAPCO as holder of an insuranc e policywhich co vered th e loss. 4 He alleged that six months after the accident he received corre spondence advising him that the insurance carrier had no dut

y to provide coverage bec ause the carrier was not timely notified. The complaint did not allege the date upon which Mr. Valdez made the de mand on the carrier.
TAPCO a nswered and, first, denied it was a proper de fendant in an action to recover insurance procee ds becau se it was not an insurer and otherwise had no privity of contract with Mr. Vald ez
. While admit

ting tha t TAPCO unde

rwrote a contract of insura

nce for Mr. Valdez with Certain Interested Under

writers at Lloyds, London, the answer furthe r alleged that

Mr. Valdez failed to c omply with the conditions of the insurance r elating to reporting of alleg ed losses to the extent the insurer’s interests had been prejudiced. Certain I nterested Underwriters at L loyds, L ondon was addedas a Def

endant by agreed order. Certain

Interested

Underwr iters ans wered, admitting that a contract of insura nce wasissued to M

r. Valde z providing

liabilit y c overage. 5 The answer alleged that Mr. Valdez breach

ed the pol icy provision s b y f

aili ng to timely repor

t the loss claimed to the prejudice of the insurer. Theanswer also asserted that under the facts and circumstances, pre judice is presume d and the burden to r ebut the p

resumptio n of prej u d ice lay with Mr. V aldez. Cer

tain Interested Under

writers asserted TAPCO was not a proper defe ndant and should be dismissed.
The matter came to trial, and at the beginning , counsel for the insurer acknowledged that the proceeding was only

on the con

tract. T he parti es and the

court ag reed the judgmen t on liability agains tMr. Valdez was final. The parties and the court also ag reed that the single issue to be tried was notice. Co

unsel als o argu ed that if

notice wa s not timely

given then the insured has the burden of pr ov in g t ha t t he in su re r w as no t p re ju di ce d b y th e d el ay.-3-

Mr. Valdez testified about the storm, the tree falling, and the resulting damage. He testified that the day af ter the storm he had called the mortgage holde r and then had a friend call the insurance company at the number give n him by the mo rtgag e holder . He iden tified a l etter wr

itten by his former attorney to the

insurer’s representative dated September 24, 1999, a fter the general sessions suit was br

ought, a dvising t hem of the

loss.
Alth ough the stormoccurred on May 2, 1999, Mr. Valdez was unaware of any intent to make a claim ag ainst him un

til he wasserved with the g eneral sessions w arrant

on Augu st

13, 1999. Two months after the storm, he began cutting up the fa llen tree witha chainsaw and repaired the fe nce. He testified that someone representing the insurer c ame t o look at the scene approximately e ight months after the accident. By that time the fenc e had been rep aired and only a stump of the tree remained.
Mr. Williams testified that the tree remaine d on his ca

r for one and a ha lf to two mo nths until Mr. Valdez cut it up with a chainsaw. An insuranc e adjuste

r came to see Mr. Williams at work and went to see the car, which had not been re paired.
The plaintiff

rested h is case w ith the testimony of Mr. Valdez and Mr. Williams. Counsel for the insured moved for dismissal on the basis that the in surance contract had not been enter ed into evidence, that its terms had not been proved, and that plaintiff had not overcome the presumption of prejudice from delay

in notification. Counsel for both plaint iffs a rgued against gr

ant of the motion. After argument, the court found that Mr. Va ldez had acted in good faith and that the insurer had a y ear’s n otice before th e t rial on the merits and did not participate. The court then gra nted judgment in favor of Mr. Valdez agai nst the “proper insurance party .” The trial court entered an order finding that the p

roof show ed that notice was given in a timely fashion by Mr. Va

ldez and prejudice to the insurer had not been proved. The court awa rdedjudgmen

t again st the insur

er in the same amount as the judgment entered “in the orig inal case.”
The insurer appeals asserting that judgment on the insura nce contract

could not be rendered withoutproof of the contract and its terms by introduction of the policy . Insurer also asser ts it was improper to grant judgment in the case be fore it had the opportunity to pre sent its case in defense.
The insurer admitted in its answer that a policy contra

ct of insurance had been issued to Mr. Valdez provi ding l iability cov erage, subject to its terms and conditions. No issue was raised regarding covera ge , and the insurer agreed the only issues were delay

in notice and resulting prejudice. The insurer defended on the basis of the terms of the contract, asserting Mr. Valdez breached the condition of prompt notice. Thus, it was up to the insurer to prove the terms and conditions it alleged were breac hed. However, the insurer had no opportunity to provide such proof because the trial court

granted judgment on the entire ca se after the defendant’s motion for dismissal on the plaintiff’s proof.
In a nonjury

case, a motio n for dismi ssal under Tenn. R. Civ. P. 41.02(2) is proper as opposed to a motion for directed verdict under Tenn. R. Civ. P. 50, although both motions test the-4-

sufficiency

of the plaintiff’s proof. Rule 41.02(2) of the Tennessee Rules of Civil Procedure, gover ning invo luntary

dismissals , provide s: After the plai ntif

f, in an action tried by

the court without a jury, ha s completed the presentation of plaintiff’s evidence, the defendant, without waiving the right to offer evidence in the event the motion is not granted, may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court shall reserve ruling u

ntil all parties alleging fault ag ainst any other pa rty have presented their respective proof-in-chief. The court as trier of the facts may then deter mine

them an d render j udgment against the

plaintiff or m

ay declin e t o renderany judgment until the close of all the evidence ; in the event judgmen t is rendered at the clo se of plaintiff’s evidence, the court shall make finding s of fact if requested in writing within three (3) day s after the an nouncement of the court’s decision.
The Advisory

Commission Co mments r ega rding th at para

graph make it cl ear tha

t these provisions were designed to eliminate the prior rule in chancery cases to the effect that a defendant could not move for dismissal at the end of the complainant’s proof without resti ng his case and waiving his right to offer evidence

. We have examined the transcript of the entire hearing and find nothi ng ther

ein to indic ate the insurer rested its case, announced any intention not to procee d with its de fense, o r otherw ise waivedits right

t o present evidence in its defense. The transc ript also reveals that the trial court proceeded immediately

from argument on the motion to judgment on the merits of the case.
The trial court erred in granting f inal judgment

for the plaintiff after the defendant’s motion for involuntary dismissal. Consequently , we must vacate the judgment herein and re mand.
Costs of this appeal are taxed against Appellee, Salvadore Valdez, for which execution may is su e i f n ec es sa ry.

___________________________________ PATRICIA J. COTTREL L, JUDGE