FILED

Jan. 13, 1997

Cecil Crowson, Jr.

Appellate Court Clerk

 I N THE COURT OF APPEALS OF TENNESSEE

WESTERN SECTI ON AT JACKSON

________________________________

)

MI CHAEL MORAT, i ndi vi dually, ) She l by Count y Ci r c ui t Cour t

and MORAT’ S I NSURANCE AGENCY, ) No. 25650 T. D.

I NC. , a Te nne s s e e Cor por a t i on, ) 

)

Pl a i ntif f s - Appe lla nt s , )

)

v. ) C. A. NO. 02A01- 9412- CV- 00270

)

STATE FARM MUTUAL AUTOMOBI LE )

I NSURANCE COMPANY, )

)

De f e nda nt - Appe l l ee. )

____________________________________________________________

_

Fr om t he Ci r c ui t Cour t of She l by Count y a t Me mphi s ,

Honor abl e Wye t h Chandl e r , Judge

Euge ne C. Gaeri g,

Me mphi s , Te nne s s e e

Attor ne y f or Pl a i ntif f s - Appe lla nt s .

Fr e d P. Wils on,

WI LSON, McRAE, I VY, Mc TYI ER AND STRAI N, Me mphi s , Te nne s s e e

a nd

Al an St r ai n, Me mphi s , Te nne s s e e

At t or ne ys f or De f e nda nt - Appe l l e e .

OPI NI ON FI LED:

AFFI RMED AND REMANDED

FRANKS, J.
2

FARMER, J. : ( Conc ur s )

TOMLI N, SR. J. : ( Conc ur s )

I n t hi s a c t i on f or ma l i c i ous pr os e c ut i on, t he

Tr i a l J udge gr a nt e d t he de f e nda nt s umma r y j udgme nt , a nd

pl a i nt i f f s ha ve appeal e d. 

Pl a i ntif f Mi c ha e l Mor a t is a n ins ur a nc e a ge nt with

t he Mor a t I ns ur a nc e Age nc y, I nc . , i n Me mphi s . The ge ne s i s

of t hi s di s put e oc c ur r e d i n 1981, whe n pl a i nt i f f s s e nt a

pol i c y c ha nge r e que s t f or m t o de f e nda nt t o c ha nge t he mot or

ve hi c l e i ns ur e d by de f e nda nt unde r t he a s s i gne d r i s k pl a n

t hr ough t hi s a ge nc y f or t he i ns ur e d, J . W. Whi t t e n. Whi t t e n

wa s i n t he pr oc e s s of pur c ha s i ng a 1981 Ca di l l a c a nd

pl a i nt i f f s , a f t e r e xpl or i ng t he pos s i bi l i t y of i ns ur a nc e

f r om ot he r c ompa ni e s , a gr e e d t o Whi t t e n’ s r e que s t t o a ppl y

t o s ubs t i t ut e t he 1981 Ca di l l a c f or t he mot or ve hi c l e on t he

e xi s ting a s s i gne d r i s k polic y. Mi c ha e l Mor a t f ille d out the

a ppl i c a t i on f or c ha nge , whi c h Whi t t e n s i gne d. The pl a i nt i f f

not e d on t he f or m t ha t i t wa s a r e pl aceme nt ve hi c l e and i n

t he a ppl i c a t i on i n t he s pa c e f or ?c os t ne w?, the pl a i ntif f

f i l l e d i n $25, 000. 00. I n a box on t he f or m, pl a i nt i f f not e d

t ha t t he ve hi c l e ha d not be e n a l t e r e d. Upon de f e nda nt ’ s

r e c e i pt of t he a ppl i c a t i on, t he c ha nge wa s pr oc e s s e d a nd t he

1981 Ca di l l a c be c a me t he i ns ur e d ve hi c l e . 

Le s s t ha n t wo mont hs l a t e r t he ve hi c l e bur ne d a nd

a c l a i m wa s ma de t o de f e nda nt . Upon i nve s t i ga t i on of t he

l os s , de f e nda nt de t e r mi ne d t ha t t he ve hi c l e ha d be e n
3

s ubs t a ntia lly a lte r e d, whi c h inc r e a s e d its va l ue to ove r

$40, 000. 00. De f e nda nt ul t i ma t e l y s e t t l e d wi t h t he l os s

pa ye e f or a n a mount i n e xc e s s of $24, 000. 00 a nd t he n br ought

a n a c t i on a ga i ns t t he a ge nt a nd a ge nc y on t he t he or y t ha t

ha d t he t r ue va l ue of t he ve hi c l e been r e pr e s e nt e d,

de f e nda nt woul d not ha ve i ns ur e d t he ve hi c l e , be c a us e t he

a s s i gne d r i s k pl a n doe s not r e qui r e a n i ns ur a nc e c ompa ny t o

i ns ur e a mot or ve hi c l e f or mor e t ha n $25, 000. 00, a nd i t wa s

de f e nda nt ’ s pol i c y not t o i ns ur e ve hi c l e s c os t i ng i n e xc e s s

of t ha t a mount .

The c a s e a ga i ns t pl a i ntif f s we nt to tr i a l with a

r e s ul t i ng j udgme nt i n t he i r f a vor , whe r e upon t he y br ought

t hi s a c t i on f or ma l i c i ous pr os e c ut i on.

Nume r ous a nd e xha us t i ve de pos i t i ons we r e t a ke n

a l ong wi t h e xhi bi t s f i l e d a nd de f e nda nt move d f or s umma r y

j udgme nt , whi c h t he Tr i a l J udge gr a nt e d on t he gr ound t ha t

de f e nda nt ha d r e a s ona bl y r e l i e d on a dvi c e of c ouns e l . On

t ha t ba s i s , t he Cour t c onc l ude d t he r e wa s ?pr oba bl e c a us e ?

t o f ile s uit a ga i ns t pl a i ntif f s he r e i n.

On a ppe a l, pl a i ntif f s ins i s t the r e a r e ge nui ne

i s s ue s of ma t e r i a l f act ?a s t o l a c k of pr oba bl e c a us e ,

ma l i ce, and advi ce of couns e l ?. Whi l e t he r e ar e mor e t ha n

4, 000 pa ge s i n t he r e c or d be f or e us , we do not f i nd a ny

ge nui ne i s s ue as t o any ma t e r i a l f act as cont e mpl a t e d i n

Rul e s of Ci vi l Pr oc e dur e , Rul e 56. For pur pos e s of a

s umma r y j udgme nt , t he pl a i nt i f f s ’ de pos i t i on i s t o be t a ke n

a s tr ue , a nd Mi c ha e l Mor a t te s tif i e d in pe r tine nt pa r t :

Q. We r e you a dvi s e d by Huf f ma n on Augus t 31,

1981 of t he va l ue of t he a ut omobi l e ?
4

A. My not a t i on s hows t ha t he ga ve me a c os t of

t he a ut omobi l e .

Q. Wha t di d he t e l l you?

A. $49, 900. 00.

. . .

Q. We ll, the n you ne xt c a lle d St a t e Fa r m, is

t ha t r i ght ?

A. Tha t ’ s cor r ect .

Q. Who di d you c a l l a t St a t e Fa r m?

A. I cal l e d and as ke d f or t he Te nne s s ee As s i gne d

Ri s k Unde r wr i t i ng De pa r t me nt .

. . .

Q. Di d you t e l l t hi s pe r s on you we r e s pe a ki ng t o

t he f i gur e Huf f ma n ha d t ol d you of

$49, 900. 00?

A. I di d.

Q. Wha t e xa c t l y di d you s a y?

A. I e xpl a i ne d t o t he ma n t ha t I s poke t o t ha t

t hi s ma n is - Mr . Whitte n is pur c ha s i ng thi s

a ut omobi l e , a nd be c a us e of t he va l ue , I

ne e de d t o know wha t t o do wi t h t hi s pol i c y,

whe t he r t he y woul d s ubs t i t ut e t he a ut omobi l e ,

or wha t t he y woul d do wi t h i t .

Q. Wha t we r e you t ol d?

A. He e xpl a i ne d t o me t ha t unde r t he i ns ur a bl e

i nt e r e s t of t he car unde r t he act ua l as f a r

a s t he va l ue of t he a ut omobi l e , l e s s a ny

c us t om e qui pme nt , t he y woul d pr ot e c t t he c a r

f or no mor e t ha n $25, 000. 00.

. . .

Q. Ca n you e xpl a i n i t t o me ? Ca n you e xpl a i n t o

me wha t you a r e s a yi ng t o me , c a n you e xpl a i n

wha t t he y t ol d you t he y woul d i ns ur e i t f or ?

A. The y s a i d t he y woul d onl y i ns ur e i t up t o t he

va l ue of t he a ut omobi l e , l e s s a ny c us t om

e qui pme nt f or a l i ke ma ke a nd mode l of a 1981

Ca dilla c Se ville .

Q. Wa s t he $25, 000. 00 f i gur e i n t he r e s ome whe r e ?
5

A. No, s i r . The pol i c y - t he y woul d not i ns ur e

a ve hi c l e ove r $25, 000. 00 l e s s a ny c us t om

e qui pme nt .

. . .

Q. So on Augus t 31 you di d not know t he c os t of

t he c us t om modi f i c a t i ons on t hi s ve hi c l e ?

A. No, s i r . The onl y c os t I kne w wa s t he c os t

of t ha t car , of wha t t he deal e r s hi p wa s

t r yi ng to s e ll tha t a ut omobile f or the

c us t ome r at .

Q. Tha t woul d be $49, 900. 00?

A. Ye s , s i r . 

Q. But you kne w t ha t t he r e we r e c us t om

modi f i c a tions ?

A. I kne w t he r e we r e c us t om modi f i c a t i ons on t he

a ut omobile . Ye s , s i r .

. . .

Q. Di d you know Whi t t e n wa s c omi ng i n on t he

4t h?

A. No, s i r . I di dn’ t .

Q. But he came i n?

A. He c a me i n on t he 4t h.

Q. Wha t di d he s a y, a nd wha t di d you s a y on t he

4t h whe n he c a me i nt o your of f i c e ?

A. He c a me i nt o my of f i c e , a nd I a dvi s e d hi m a t

t ha t t i me we ha ve got t o ma ke s ome c ha nge s on

your a ut o pol i c y, a nd he s a i d ?t ha t ’ s why I ’ m

he r e ?.

. . .

Q. Di d you c ompl e t e a n a ppl i c a t i on on t he 4t h?

A. I di d.

Q. And di d Whi t t e n s i gn i t ?

A. I c ompl e t e d a Te nne s s e e Aut omobi l e I ns ur a nc e

Pl a n Cha nge Endor s e me nt f or m, or Pol i c y

Cha nge Re que s t , as t he y cal l i t . 

We t ook down t he pe r t i ne nt i nf or ma t i on on t he

pol i c y. We c he c ke d of f t ha t t hi s wa s a
6

r e pl aceme nt ve hi c l e on t he pa r t i c ul a r pol i c y

numbe r , a n ‘ 81 Ca dilla c Se ville . We lis t e d

t he l i e nhol de r , c ha nge of a ddr e s s f or hi m.

He s i gne d i t a nd I wi t ne s s e d hi s s i gna t ur e .

. . .

Q. I s t hi s c ha nge f or m di f f e r e nt f r om t he

i nitia l polic y a pplic a tion?

A. Ye s , s i r . It is.

Q. Thi s f or m ha s a s pa c e on i t f or ?c os t ne w?,

a nd wr i t t e n i n t he s pa c e i s $25, 000. 00. I s

t ha t i n your wr i t i ng?

A. Ye s , it is .

Q. Why di d you put $25, 000. 00 i n t he ?c os t ne w?

bl a nk on t hi s c ha nge r e que s t f or m?

A. I put $25, 000. 00 be c a us e t hi s i s t he a mount

of wha t t he c ompa ny woul d pr ot e c t up t o f or

a n a ut omobi l e l i ke t he ma ke a nd mode l of a n

‘ 81 Ca dilla c Se ville , le s s a ny c us t om

e qui pme nt .

. . .

Q. Di d he [ unde r wr i t e r ] t e l l you t o put

$25, 000. 00 i n t hi s bl a nk?

A. I put $25, 000. 00 s i r , t o pr ot e c t a nd l i mi t

t he c us t ome r f r om c omi ng ba c k, a l s o, a nd

be i ng a bl e to c l a i m hi ghe r if thi s thi ng

s houl d be t ot a l e d out , a nd t he n i n a ddi t i on

t o it, I ha d hi m a l s o s i gn thi s le tte r he r e

s o t he r e woul d be no que s t i on a bout i t .

. . .

Q. I s e e a box f or ?a l t e r e d, ye s or no? on t he

pol i c y c ha nge r e que s t , a nd i s i t ma r ke d ?no?. 

I s t ha t your ma r k?

A. Ye s , s i r . I ma r ke d it.

Q. Why di d you ma r k i t ?no??

A. Be c a us e t he a ut omobi l e t ha t t he pol i c y

i ns ur e s goe s ba c k t o a 1981 Ca di l l a c Se vi l l e ,

l e s s a ny c us t om e qui pme nt .

Q. Wha t do you unde r s t a nd t ha t ?a l t e r e d? box t o

mean?

A. I t me a ns a ny a l t e r a t i ons done t o t he
7

a ut omobi l e or c us t om e qui pme nt .

De f e nda nt s ought a dvi c e of c ouns e l on br i ngi ng

s ui t a ga i ns t pl a i nt i f f s a nd t he l a w f i r m e mpl oye d by

de f e nda nt r e c omme nde d a nd ul t i ma t e l y br ought t he a c t i on.

The a t t or ne ys , i n r e a c hi ng t he i r c onc l us i on, ha d ot he r f a c t s

t o c ons i de r r e l a t i ve to pl a i nt i f f s ’ ha ndl i ng of the ma t t e r . 

Pl a i nt i f f di d not i nf or m de f e nda nt of hi s c onve r s a t i on wi t h

a n unde r wr i t e r unt i l t he f ol l owi ng s pr i ng, a nd de f e nda nt wa s

una bl e t o ve r i f y a ny c onve r s a t i on wi t h i t s unde r wr i t e r s

t hr ough i t s i nve s t i ga t i on. Shor t l y a f t e r t he l os s , a n

i nve s tiga t or took pl a i ntif f ’ s s t a t eme nt, whe r e i n pl a i ntif f

wa s as ke d:

Q. Anot he r t hi ng I wa nt t o que s t i on you on t he

a ppl i c a t i on I got a phot os t a t i c c opy of , you

put on t he r e c os t i ng you $25, 000. 00 i n a c t ua l

c os t wa s $42, 000. 00 s ome t hi ng. Wha t we r e t he

r e a s ons f or doi ng t hi s on t he a ppl i c a t i ons

i ns t e a d of put t i ng t he f ul l a mount ?

A. Becaus e Mr . Whi t t e n agr eed t ha t t hi s wa s t he

pr i c e he wa nt e d t o s how unde r t he t e r ms of

t hi s pol i c y c ha nge r e que s t , a ny t i me t ha t t he

c us t ome r a c knowl e dge s t hi s , t hi s i s wha t he

ha s wa nt e d t o do.

The Supr e me Cour t i n Robe r t s v. Fe de r al Ex pr e s s

Cor p. , 892 S. W. 2d 246 ( Te nn. 1992) , he l d t ha t t he

r e a s ona bl e ne s s of t he de f e nda nt ’ s c onduc t i n br i ngi ng a n

act i on ?s houl d be ma de by a j ur y?, a nd t he Cour t s a i d t ha t

pr oba bl e c a us e i s t o be de t e r mi ne d ?s ol e l y f r om a n obj e c t i ve

e xa mi na t i on of t he s ur r oundi ng f a c t s a nd c i r c ums t a nc e s . ?

Si nc e t he s ur r oundi ng f a c t s a nd c i r c ums t a nc e s i n t he c a s e

be f or e us a r e not i n di s put e , t he i s s ue t hus be c ome s whe t he r

?r e a s ona bl e mi nds c oul d di f f e r a s t o whe t he r pr oba bl e c a us e

e xi s t e d f or br i ngi ng? the a c t i on a ga i ns t pl a i nt i f f . Robe r t s ,
8

I d. 249.

We not e at t he out s e t , t ha t whi l e t he s a me ge ne r a l

r ul e s a nd l i mi t a t i ons a ppl y t o a n a c t i on f ounde d upon a

c i vi l pr oc e e di ng, vi s - a - vi s c r i mi na l pr oc e e di ngs , t he r e c a n

be s i gni f i cant di f f e r e nces : 

But obvi ous l y l e s s i n t he wa y of gr ounds f or

be l i e f wi l l be r e qui r e d t o j us t i f y a r e a s ona bl e

ma n i n br i ngi ng a c i vi l , r a t he r t ha n a c r i mi na l

s ui t . Some t i me s t hi s i s e xpr e s s e d by s a yi ng t ha t

wa nt of pr oba bl e c a us e mus t be ?ve r y cl ear l y

pr ove n? or ?ve r y pa l a t a bl e ? or t ha t ?gr eat e r

l a titude ? mus t be al l owe d t ha n i n a cr i mi na l cas e .

Appa r e ntly, wha t is me a nt is me r e l y tha t the

i ns t i ga t or ne e d not ha ve t he s a me de gr e e of

cer t a i nt y as t o t he f act s , or eve n t he s a me be l i e f

i n t he s oundne s s of hi s c a s e , a nd t ha t he i s

j us t i f i e d i n br i ngi ng a c i vi l a c t i on whe n he

r e a s ona bl y be l i e ve s t ha t he ha s a good c ha nc e of

e s t a blis hi ng it to the s a tis f a c tion of the c our t

or t he j ur y.

Pr os s e r and Ke e t on on Tor t s , 5t h Ed. §120, p. 893.

Our Supr e me Cour t i s i n a c c or d wi t h t hi s vi e w,

ha vi ng e xpr e s s e d i n Kauf f man v . A. H. Robbi ns Co. , 223 Te nn.

515, 448 S. W. 2d 400 ( 1969) t ha t i n c i vi l a c t i ons t he

pl a i ntif f ha s ?a he a vy bur de n of pr oof ? in e s t a blis hi ng

ma l i c e a nd l a c k of pr oba bl e c a us e . P. 523.

I n ma l i c i ous pr os e c ut i on a c t i ons , a dvi c e of

c ouns e l t o t he ef f ect t ha t t he r e i s a r eas ona bl e cha nce of

r ecove r y on a cl a i m can es t a bl i s h pr oba bl e caus e . Se e

Sul l i v an v . Young, 678 S. W. 2d 906 ( Te nn. App. 1984) . I n

t hi s c a s e , t he Tr i a l J udge c onc l ude d t ha t t he de f e nda nt ha d

a c t e d r e a s ona bl y i n i t s i nve s t i ga t i on a nd i n obt a i ni ng t he

a dvi c e of c ouns e l a s t o whe t he r i t s houl d a t t e mpt t o r e c ove r

f r om pl a i nt i f f . As we obs e r ve d ear l i e r , we ar e r e qui r e d t o

t a ke the pl a i ntif f ’ s s t a t eme nt s a bout the c a ll to a n

unde r wr i t e r as t r ue , but t he r e wa s ampl e evi de nce at t he
9

t i me f or t he a t t or ne ys t o c onc l ude t ha t de f e nda nt ha d a

r eas ona bl e cha nce t o r ecove r i n t he pr i or act i on. 

We c onc l ude on t hi s r e c or d t ha t r e a s ona bl e mi nds

woul d not di f f e r t ha t pr oba bl e c a us e e xi s t e d f or br i ngi ng

t he a c t i on. 

Pl a i ntif f s a r gue tha t ?di s c ove r y wa s i mpr ope r l y

wi t hhe l d by St a t e Fa r m?, i nc l udi ng f a i l ur e t o a ns we r

i nt e r r oga t or i e s a nd pr oduc e doc ume nt s . The Rul e s of Ci vi l

Pr oc e dur e pr ovi de pr oc e dur e s t o c ompe l di s c ove r y. A t r i a l

c our t s pe a ks t hr ough i t s mi nut e s a nd we f i nd no or de r i n

t hi s r e c or d of t he Tr i a l Cour t ’ s r e qui r i ng de f e nda nt t o

c ompl y wi t h a ddi t i ona l di s c ove r y unde r t he Rul e s . Pal me r v.

Pal me r , 562 S. W. 2d 833 ( Te nn. 1978) . A pa r t y wi l l not be

gr a nt e d r e l i e f whe r e he ha s f a i l e d t o t a ke wha t e ve r act i on

wa s r e a s ona bl y ne c e s s a r y t o pr e ve nt a n e r r or . T. R. A. P. Rul e

36( a ) .

Fi na l l y, t he r e i s ye t a not he r c ompe l l i ng r e a s on

t he j udgme nt s houl d be a f f i r me d. The unde r l yi ng c a us e of

t he cont r ove r s i e s be t ween t he s e pa r t i e s i s pl a i nt i f f ’ s own

a c tions . He f ille d in two a ns we r s in the a pplic a tion f or

i ns ur a nc e , known by hi m a t t he t i me t o be f a l s e . No pa r t y

s houl d be a l l owe d t o pr of i t f r om hi s wr ongf ul c onduc t . The

Nor t h Ca r ol i na Supr e me Cour t ha s s a i d i t we l l :

I t i s a ma xi m of l a w r ecogni zed and es t a bl i s he d,

t ha t ?no ma n s ha l l t a ke a dva nt a ge of hi s own

wr ong; a nd t hi s ma xi m, whi c h i s ba s e d on

e l e me nt a r y pr i nc i pl e s , i s f ul l y r e c ogni z e d i n

c our t s of l a w a nd e qui t y, a nd, i nde e d, a dmi t s of

i l l us t r a t i on f r om e ve r y br a nc h of l e ga l

pr oc e dur e . ? Br oom’ s Le gal Max i ms , 10t h Ed. , 191.

?Thi s ma xi m e mbodi e d i n t he c ommon l a w, a nd

c ons tituting a n e s s e ntia l pa r t the r e of , is s t a t e d

i n t he t e xt books a nd r e por t e d c a s e s . I t ha s i t s
10

f ounda t i on i n t he uni ve r s a l l a w a dmi ni s t e r e d i n

a ll c i viliz e d la nds , for without its r e c ognition

a nd e nf or c e me nt by t he Cour t s , t he i r j udgme nt s

woul d r i ght l y e xc i t e publ i c i ndi gna t i on. ? 

I n Re : Iv e s , 102 S. E. 2d 807, 811 ( NC. 1958) .

For t he f or e goi ng r e a s ons , we a f f i r m t he j udgme nt

of t he Tr i a l Cour t a nd r e ma nd wi t h c os t s of t he a ppe a l

a s s e s s e d t o t he appe l l a nt .

________________________

He r s c he l P. Fr a nks , J .

___________________________

Da vi d R. Fa r me r , J .

___________________________

He wi t t P. Toml i n, J r ., Sr . J .