# FILED

February 27, 1998 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE

DAVID LEE WALKER, ) HAMILTON CIRCUIT ) Plaintiff/Appell

ant ) NO. 03A01-9709-C V-00402 ) v. ) HON. SAMUEL H. PAYNE ) JUDGE EXCHANGE INSURANCE ) COMPANY and CHATTANOOGA ) INSURANCE AGENCY, INC., ) ) Defendants/Appellees ) REVERSED

R. Dee Hobbs, C

hattanooga, for A

ppellant. David P. Hawley, Chattanooga, for Chattanooga Insurance Agency, Appellee. W. Gerald Tidw

ell, Jr., Chatt

anooga, for Excha

nge Insurance Compa

ny, Appellee. 

### O P I N IO N INMAN, Senio

r Judge

This action to reco

ver on a policy of fir

e insurance was r

esisted on the ground that the policy w

as void ab initio because the plaintif f denied in his application that a prior policy had been canceled, and because the damaged property had been vacant for more than 60 days in violation of the policy. The defendants move

d for summary judgme

nt and filed the aff

idavits of (1) Jean Rice, adjustor, who testi fied that the plainti

ff stated the prope

rty had been vacant for five months before the fire; (2) Richard Wilson, an officer of Excha

nge Insurance Compa

ny, who testified t

hat the company did not insure dwellings un

occupied for longer than 30 days; (3) Donni tta Scruggs, independe

nt agent, who testif

ied that the plaintif

f contacted theChattanooga Insuran ce Agency about a po

licy of insurance an

d when asked if a policy had ever bee

n canceled responde

d, no; further, w

hen asked about occupancy, he responded that a tenant occupied the property. Scruggs further testified that she inspected the propert y on August 16, 1994, th e date the plaintiff applied f

or the policy, and tha

t the windows wer

e draped and lights were on, indicat

ing occupancy. A countervailing affi davit was filed by th e plaintiff. Janice Long, office manager for the plaintiff, testified that coverage had previously been provided by Shelter I

nsurance Company,

which canceled it

s policy on account of an unsatis

factory credit re

port it received on t

he plaintiff. She testified that she c

ontacted the Chatta

nooga Insurance Age

ncy on behalf of the plaintiff, and advised them that his p rior policy had been canceled. The plaintiff testifie

d during discovery that

he told the Chattanooga

Agency the house was being renovated and eventually rented, but no time frame was mentioned; that he signed the application with knowledge that he had represented the house as tenant occupied, but assumed a tena nt would be living there. Spec

ifically, he testi

fied: A: “The only part I filled out on this was my signature. Q: Okay. Do you recall being asked a series of questions which constitutes the information on there? A: Yes. Q: Do you remember being asked whether you had ever had insurance cancele

d, non renewed or r

evoked? A: I don’t recall. Q: Okay. If you would look on that applicatio

n about the mid point, that question appears

. A: Yes, it does. Q: There’s a check mark under - - or I believe there’s a box there that says no and it’s ch

ecked no, so you don’t r

ecall whether youhad told them you had not b een canceled or r

evoked or non renewed? A: I did not tell her that

. Q: What did you tell her? A: I do not recall the exact particulars, but that - - I do not recall her asking the question. Q: Okay. Do you reca ll discussing the issue o

f revocation, cancellation or non r

enewal at all? A: With her, no.

. . . . . Q: . . . that appears to be your signature? A: Yes. Q: Did you read this appl ication before you si

gned it? A: Yes. Q: Okay. Why didn’t you correct this if you knew that you had been canceled? A: That was not fille

d in on the form that I

signed. Q: So you’re saying this i sn’t the form you signe d? A: No. I’m saying tha t this part was not f

illed in on the form th

at I signed. Q: So, are you saying that this part on Exhibit One that says Policy History was blank completely, or just this word ‘no’ that’s written in here? A: Just the word ‘no’ that’s written right there. Q: Did you think to inquire as to why nothing was listed there? A: No, I did not. Q: Okay. Well, you knew you had been canceled. I mean, didn’t you think that was important to know, for them to know, if it was on the application? A: It was my understan ding that she was in f

ull understanding of that fact, that my

policy had been canc

eled, and that’s my

whole reason for going to them.Q: I’m going to ask you to loo k at something that’s p

reviously got an Exhibit C on it, but

it’s actually going to need to be marked, too. It’s something f

rom a summary judgme

nt motion. Would you look at this, an d if we could, let’s jus t let you mark that Two right now . . . O

kay. Take a good loo

k at that and see if yo

u recognize it. A: Yes, I do. Q: Okay. That’s the

letter from Shel

ter Insurance Com

pany notifying you of your ca

ncellation. Right? A: Correct. Q: And that was - - you got that before you applied for insurance through Chattanooga or

Acuff-Wirz to get Exchange on the J ohn Ross property. Is t

hat correct? A: Yes. This arri

ved the 24th of June. I

t wasn’t until August

that I applied. Q: Okay. Do you know why they canceled you at Shelter? A: What they say in their letter is in whole or part on the consumer credit report.

. . . . . Q: Okay. Under the portion which is a lit tle lower under the Cancellation Histo

ry that talks about the

- - it says Underw

riting Information, it says occupancy or occupied and it’s checked ‘tenant.’ Is that

correct? A: Yes. Q: Now, that was there when you signed the application. Is that right? A: Correct. Q: Okay. When you were - - I assume you were asked who was going to be living there.

Right? A: Correct. Q: And who and what did you say? A: I explained my situat ion, that the house was in the process of being renovated, and that as soon as that was completed there would be a tenant in there. Q: And did you give any time frame for when there would be a tenant in there?A: I do not recall a giving a time. Q: And is it your testimon y today that nobody asked y ou when it would be occupied? A: That would be corr ect. Q: Okay. Have you ev er bought insurance on

an unoccupied or vacant house before

this? A: No.

. . . . . Q: Okay. What did you t hink that meant when you signed the application, that sh

e checked tenant oc

cupied? A: That eventually a tenant would be living there. Q: That’s what you re ad that to mean? A: Yes.

. . . . . Q: Did you read this polic y when you got it? A: I read part of it. Q: Did you ever read a ll of it? A: No, I did not read a ll of it. Q: Okay. Did you rea d this page here that in bold type says: ‘Conditions Suspending/

Restricting Insura

nce. Unless other

wise provided in writing a

dded hereto, this co

mpany shall not be liable for loss occur

ring . . .’ a fe

w . . jump down he

re to (b) it says ‘. . . whil

e a described buildin

g, whether intende

d for occupancy by owner o

r tenant, is vacan

t or unoccupied beyond a period of 30 consecutive days.’ Did you ever read that clause? A: I do not recall. Q: You don’t recall? A: (Whereupon, witness mo ves head from side to side.) Q: What part of the policy did you read? You don’t have to tell me page by page, but wha

t part were you inte

rested in? A: I was interested in the policy as a whole. The specifics are beyond my understanding o f law, how they w

ere going to apply to my case, this being of course the second policy I’ve ever seen in my life.Q: So I understand your testimony today, you don’t recall whether or not vacancy or occ

upancy was discussed

when you bought the insurance? A: This is correct. Q: Okay. And you don’t know whether you eve r read the part of the policy about vacan

cy or occupancy. I s that correct? A: Correct.” MR. TIDWELL: “That’s all I have.” Our review of the

findings of fact ma

de by the trial Court

is de novo upon the record of the

trial Court, acc

ompanied by a presumpt

ion of the correctness of the

finding, unless the pr

eponderance of the

evidence is otherwise. T ENN . R. A PP . P., R ULE 13(d). There is no presumption of the correctness of the dec ision of the trial Co urt on a question o f law. NCNB Nat’l. Bank v. Thrailkil l, 856 S.W.2d 150 (Tenn. Ct. App. 1993). The plaintiff argues, as to the issue of vacancy, that the defendants had knowledge of the fa

ct that the property was unoccupied, an d that it would be rented, thereby creating an issue of fact beyond the reach of summary judgment, and that he

is entitled to prove,

if possible, a wai

ver by the defendants of the vacancy provision. As to the issue of a material misrepresentation,

the plaintiff argues that since he furni shed the agent a copy of the Shelter lett

er canceling his poli

cy, an issue is ther

eby presented as to whether the defe

ndants are estopped t

o rely upon his “no” answ er in the application. It is made clear i

n Cashen v. Camden Fire Ins urance Ass’n., 348 S.W.2d 883 (Tenn. App. 1961) that vacancy provisions together with other provisions can be wa

ived by the insurer. But it is equally cle ar under well settled principles th

at unless it can be es

tablished by a preponde

rance of theevidence that the pol icy provisions were

waived by the defen

dants, the plaintiff cannot recover. But summary judgment may not be substituted for a trial, and a trial cannot be conducted by affidavit. If a factual dispute exis

ts creating a genuine issue for t rial, summary judgmen t is inappropriate

. Byrd v. Hall, 847 S.W.2d 208 (Tenn. 1993). Wh ether the defendants had actual notice, prior to the application, of the Shelter ca ncellation, and of t

he fact that the dw

elling would be unoccupied for longer than 30 days, are disputed issues of fact properly to be resolved at a trial. Accordingly, the judgment of the trial court is reversed and the case is remanded f or trial.

____________________________ William H. Inma

n, Senior Judge CONCUR:

_______________________________ Houston M. Goddard, Presiding Judge

_______________________________ Herschel P. Fr

anks, Judge