Oral argument was heard in this case on February 23, 2007, in Madisonville, Tennessee as part of the Court’s 1

C.A.S.E. (Court of Appeals Affecting Student Education) project.

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

February 23, 2007 Session heard at Madisonville1

TERESA D. SHERLIN v. SANDRA G. HALL

Appeal from the Circuit Court for Bradley County

No. V-99-912 John B. Hagler, Jr., Judge

No. E2005-2745-COA-R3-CV - FILED APRIL 10, 2007

Teresa D. Sherlin (“Plaintiff”) sued Sandra G. Hall in the Circuit Court for Bradley County (“Trial

Court”) seeking compensation for personal injuries and property damage sustained when a vehicle

driven by Ms. Hall collided head-on with a vehicle being driven by Plaintiff while Plaintiff was

acting in the course and scope of her employment. At the time of the accident, Ms. Hall did not have

a driver’s license and was an uninsured motorist. Plaintiff’s uninsured/underinsured motorist carrier,

Farmers Insurance Exchange (“Farmers”), answered Plaintiff’s complaint and filed a motion for

summary judgment. The Trial Court granted Farmers summary judgment finding and holding, inter

alia, that Plaintiff was receiving workers’ compensation benefits, these workers’ compensation

benefits exceeded the limits of liability of Plaintiff’s uninsured motorist policy, and because the

limits of liability of the uninsured motorist policy are reduced by the amount of the workers’

compensation benefits pursuant to the insurance policy, Farmers had no liability to Plaintiff.

Plaintiff appeals to this Court. We affirm. 

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

Case Remanded

D.MICHAEL SWINEY,J., delivered the opinion of the court, in which HERSCHEL P.FRANKS,P.J., and

SHARON G. LEE, J., joined.

James F. Logan, Jr., Cleveland, Tennessee for the Appellant, Teresa D. Sherlin.

Parks T. Chastain and Michael K. Smith, Nashville, Tennessee for the Appellee, Farmers Insurance

Exchange.
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OPINION

Background

In October of 1998, a vehicle being driven by Plaintiff while in the course and scope

of her employment was struck head-on by a vehicle driven by Ms. Hall. Ms. Hall did not have a

driver’s license, was an uninsured motorist, and admitted in an affidavit that she “failed to yield the

right of way to [Plaintiff].” Plaintiff sued Ms. Hall and, pursuant to Tenn. Code Ann. § 56-7-1206,

served process upon Plaintiff’s uninsured/underinsured motorist carrier, Farmers. Plaintiff also filed

a separate lawsuit seeking workers’ compensation benefits in the Chancery Court for Bradley

County. Farmers answered the complaint against Ms. Hall and filed a motion for partial summary

judgment as to the issue of the amount of uninsured motorist insurance coverage available to

Plaintiff. 

The motorist insurance policy issued to Plaintiff by Farmers provides, in pertinent

part:

Limits of Liability

The limits of liability shown in the Declarations apply subject to the following:

* * *

4. The amount of Uninsured Motorist Coverage we will pay shall be reduced by the

amount of anyWorkers’ Compensation benefits payable or paid in the same accident

to an insured person.

The Trial Court granted Farmers partial summary judgment and found that the

workers’ compensation suit still was pending. The Trial Court held that further proceedings in

Plaintiff’s case against Ms. Hall would await final resolution of the workers’ compensation action.

In December of 2004, the Chancery Court for Bradley County entered a judgment in

Plaintiff’s workers’ compensation action finding and holding, inter alia, that Plaintiff suffered and

sustained severe injuries as a result of the accident that occurred while Plaintiff was acting within

the course and scope of her employment, and that Plaintiff was entitled to a judgment against her

employer on her worker’s compensation claim. 

After further hearings on Farmers’ motion for summary judgment and Plaintiff’s

motion to require Farmers to be held liable for the sum of $100,000, the Trial Court entered an order

November 7, 2005, finding and holding, inter alia, that the limits of liability of Plaintiff’s motorist

policy are $100,000.00; Ms. Hall was discharged by bankruptcy; the Trial Court had previously

granted Farmers partial summary judgment holding that “the limits of liability of the uninsured

motorist policy at issue in this case shall be reduced, dollar for dollar, by the amount of any workers’
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compensation benefits payable or paid to Plaintiff...;” and, because the amount of workers’

compensation benefits paid to Plaintiff exceeded the limits of Plaintiff’s motorist policy, Farmers

had no liability to Plaintiff. The November 7, 2005, order dismissed Farmers from the case and also

dismissed Plaintiff’s claims against Ms. Hall because Ms. Hall had been discharged by bankruptcy.

Plaintiff appeals to this Court.

Discussion

Although not stated exactly as such, Plaintiff raises one issue on appeal, whether the

Trial Court erred in holding that Farmers was entitled to offset its policy limits by the amount of

workers’ compensation benefits paid or payable to Plaintiff, and based upon this holding granting

summary judgment to Farmers. 

In Teter v. Republic Parking System, Inc., 181 S.W.3d 330 (Tenn. 2005), our Supreme

Court reiterated the standards applicable when appellate courts are reviewing a motion for summary

judgment. The Court stated: 

The purpose of summary judgment is to resolve controlling issues of law

rather than to find facts or resolve disputed issues of fact. Bellamy v. Fed. Express

Corp., 749 S.W.2d 31, 33 (Tenn. 1988). Summary judgment is appropriate only

when the moving party demonstrates that there are no genuine issues of material fact

and that he or she is entitled to judgment as a matter of law. See Tenn. R. Civ. P.

56.04; Penley v. Honda Motor Co., 31 S.W.3d 181, 183 (Tenn. 2000); Byrd v. Hall,

847 S.W.2d 208, 210 (Tenn. 1993). In reviewing the record, the appellate court must

view all the evidence in the light most favorable to the non-moving party and draw

all reasonable inferences in favor of the non-moving party. Staples v. CBL &

Assocs., Inc., 15 S.W.3d 83, 89 (Tenn. 2000). And because this inquiry involves a

question of law only, the standard of review is de novo with no presumption of

correctness attached to the trial court's conclusions. See Mooney v. Sneed, 30 S.W.3d

304, 306 (Tenn. 2000); Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn. 1995).

Teter, 181 S.W.3d at 337.

As pertinent to this appeal, Tenn. Code Ann. § 56-7-1205, provides:

56-7-1205. Minimum policy limits not increased. – Nothing contained in this part

shall be construed as requiring the forms of coverage provided pursuant to this part,

whether alone or in combination with similar coverage afforded under other

automobile liability policies, to afford limits in excess of those that would be

afforded had the insured thereunder been involved in an accident with a motorist who

was insured under a policy of liability insurance with the minimum limits described

in § 55-12-107, or the uninsured motorist liability limits of the insured’s policy if
T.C.A. § 56-1152, currently is codified at Tenn. Code Ann. § 56-7-1205,and T.C.A. § 56-1148, currently is 2

codified at Tenn. Code Ann. § 56-7-1201. 

Terry v. Aetna Cas. and Sur. Co. has been superceded in part by amendments to Tenn. Code Ann. § 56-7-1201. 3

See, Albin v. Memphis, 1998 Tenn. App. LEXIS 537, at *5 (Tenn. Ct. App. Aug. 24, 1998), no appl. perm. appeal filed;

 Weir v. Glens Falls Ins. Co., 1987 Tenn. App. LEXIS 2808, at *11 (Tenn. Ct. App. July 16, 1987), no appl. perm.

appeal filed. These statutory amendments have no effect upon the issue involved in this appeal.

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such limits are higher than the limits described in § 55-12-107. Such forms of

coverage may include such terms, exclusions, limitations, conditions, and offsets,

which are designed to avoid duplication of insurance and other benefits.

Tenn. Code Ann. § 56-7-1205 (2000). 

Our Supreme Court construed our uninsured motor vehicle coverage statutes in Terry 2

v. Aetna Cas. & Sur. Co. , instructing: 3

It results, and we so hold, by enactment of T.C.A. § 56-1152 as a section of

our uninsured motorist statutes, it is the legislative purpose to provide an insured

motorist a right of recovery under the uninsured motorist provisions of his policy

only up to the statutory required minimum (T.C.A. § 56-1148), and provisions in

such policies, approved by the Commissioner of Insurance, operating to reduce such

coverage where other coverage or benefits are available to the insured arising from

accident causing the loss, are valid if such provisions do not operate to deny

payments to an insured of less than the statutory minimum.

Terry v. Aetna Cas. & Sur. Co., 510 S.W.2d 509, 513-14 (Tenn. 1974). 

This Court relied upon Terry in holding in Dwight v. Tennessee Farmers Mut. Ins.

Co. that the uninsured motorist insurer was entitled to set off the amount of workers’ compensation

benefits available to the plaintiff despite the fact that the plaintiff had chosen not to pursue workers’

compensation benefits and the time for plaintiff to pursue the workers’ compensation benefits had

expired. Dwight v. Tennessee Farmers Mut. Ins. Co., 701 S.W.2d 621, 622 (Tenn. Ct. App. 1985).

Our Supreme Court discussed Terry and Dwight in Hudson v. Hudson Mun.

Contractors, Inc., and reiterated: 

Under the holdings in Terry v. Aetna Cas. & Sur. Co. and Dwight v.

Tennessee Farmers Mut. Ins. Co., it is clear that an insured party’s right to recover

under an uninsured motorist policy that contains a setoff provision such as the one

involved in this case may be reduced by the amount that the insured has collected, or

could collect, under the Workers’ Compensation Law.

Hudson v. Hudson Mun. Contractors, Inc., 898 S.W.2d 187, 189 (Tenn. 1995). 
-5-

In 2002, in Poper v. Rollins, our Supreme Court discussed Terry in light of the

comparative fault principles that the Supreme Court adopted in McIntyre v. Balentine, 833 S.W.2d

52 (Tenn. 1992), stating:

Our decision in McIntyre did not address the specific provisions of

Tennessee’s uninsured motorist statute. Prior to the adoption of comparative fault,

however, we construed Tennessee’s uninsured motorist statute in Terry v. Aetna

Casualty and Surety Co., 510 S.W.2d 509 (Tenn. 1974), and State Auto. Mutual

Insurance Co. v. Cummings, 519 S.W.2d 773 (Tenn. 1975). In Terry, this Court

discussed the two general types of uninsured motorist statutes - those providing broad

coverage and those providing only limited coverage. In a “broad coverage”

jurisdiction, the insured plaintiff may recover up to the policy limits so long as the

sum of plaintiff’s recovery under the uninsured motorist coverage and any other

payments do not exceed the insured’s actual damages. Such coverage does not allow

offsets which limit the insured plaintiff’s full damage recovery. In contrast, a

“limited coverage” jurisdiction allows the insured plaintiff to collect damages only

up to a statutory minimum notwithstanding the actual damages. In such a

jurisdiction, all sums collected can be credited towards reaching the statutory

minimum. Terry, 510 S.W.2d at 513. We found that Tennessee’s statute falls within

the limited coverage category and held that the specific purpose of the statute is “to

provide an insured a right of recovery under the uninsured motorist provisions of his

policy only up to the statutory required minimum....” Id.

* * *

Accordingly, Poper’s argument that Tenn. Code Ann. § 56-7-1201(d)

provides broad coverage for the insured and that adherence to McIntyre requires that

he receive payments up to his actual damages even if the total exceeds the statutory

minimum, conflicts with the limited language of the statute and its narrow purpose

as described in Terry and reinforced in Cummings. We therefore conclude that Tenn.

Code Ann. § 56-7-1201(d) is not affected by the principles of comparative fault

outlined in McIntyre.

Poper v. Rollins, 90 S.W.3d 682, 686-87 (Tenn. 2002) (emphasis in original).

Our discussion is by no means exhaustive on the subject, but rather is intended to

show that the law in Tennessee is well-settled on the issue involved in this appeal. Although our

Supreme Court has not dealt directly with the issue as raised in this appeal in many years, the

Supreme Court has reiterated its holding in Terry numerous times and has done so in recent years.

It is clear that Terry still is the law in Tennessee as to the issue raised in this appeal.

 

Plaintiff recognizes that the law is as discussed, but argues that this Court should

revisit the issue, re-evaluate Tenn. Code Ann. § 56-7-1205, depart from the current rule, and fashion
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a new rule that would allow for setoff only to avoid duplication of benefits. In support of her

argument advocating change, Plaintiff cites, among other things, Broadwell v. Holmes, and quotes:

This Court has a continuing duty to consider whether the common-law, as

created and developed through case law, is obsolete. “‘[W]e abdicate our own

function, in a field peculiarly non-statutory, when we refuse to consider an old and

court made rule.’” Hanover v. Ruch, 809 S.W.2d 893, 896 (Tenn.), cert. denied, –

U.S. –, 112 S.Ct. 381, 116 L.Ed.2d 332 (1991) (quoting Kilbourne v. Hanzelik, 648

S.W.2d 932, 934 (Tenn. 1983)[)]. 

Broadwell v. Holmes, 871 S.W.2d 471, 473 (Tenn. 1994). Plaintiff fails to acknowledge, however,

that Broadwell is inapplicable in this situation because the issue at hand is governed not just by case

law, but also by statute. 

As this Court stated in English v. Pretti: 

[T]he holding of Terry clearly remains the law of this state. We additionally note

that the legislature has had nearly thirty years to revise the statute in light of the

supreme court’s holding in Terry, and has declined to do so. In the absence of a

legislative directive, the holding of the supreme court is controlling precedent which

may not be disturbed by this Court. 

English v. Pretti, No.W2001-01657-COA-R3-CV, 2002 Tenn. App. LEXIS 752, at *15 (Tenn. Ct.

App. Oct. 24, 2002), Rule 11 appeal voluntarily dismissed April 11, 2003. Such a change in this

settled law as requested by Plaintiff must come, if at all, from a source other than this intermediate

appellate court.

In the case now before us, Plaintiff’s motorist policy contains a clear and

unambiguous provisions that states: “The amount of Uninsured Motorist Coverage we will pay shall

be reduced by the amount of any Workers’ Compensation benefits payable or paid in the same

accident to an insured person.” (emphasis deleted). The record on appeal shows that Plaintiff has

received or is entitled to receive workers’ compensation benefits in excess of the limits of liability

of her uninsured motorist policy. There are no genuine issues of material fact and, under the law as

it exists, Farmers is entitled to summary judgment as a matter of law. Given this, we affirm the Trial

Court’s November 7, 2005, order. 
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Conclusion

The judgment of the Trial Court is affirmed, and this cause is remanded to the Trial

Court for collection of the costs below. The costs on appeal are assessed against the Appellant,

Teresa D. Sherlin, and her surety. 

___________________________________ 

D. MICHAEL SWINEY, JUDGE