IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

March 13, 2018 Session

GRADY EUGENE DUTTON v. TENNESSEE FARMERS MUTUAL 

INSURANCE COMPANY

 Appeal from the Circuit Court for Hawkins County

No. CC16CV277 Alex E. Pearson, Judge

No. E2017-01322-COA-R9-CV

We granted the Rule 9 application for an interlocutory appeal filed by Tennessee Farmers 

Mutual Insurance Company (“TN Farmers”) to consider whether material 

misrepresentations made on an application for a policy of insurance may become not 

material by virtue of later changes made to the policy. We find and hold that the 

misrepresentations made on the policy application increased the risk of loss and voided 

the policy or prevented its attaching pursuant to Tenn. Code Ann. § 56-7-103 and that 

subsequent changes to a void policy did not render the misrepresentations not material. 

We, therefore, reverse the June 22, 2017 order of the Circuit Court for Hawkins County 

(“the Trial Court”) denying TN Farmers’ motion for summary judgment and remand this 

case to the Trial Court for entry of an order granting summary judgment to TN Farmers.

Tenn. R. App. P. 9 Interlocutory Appeal; Judgment of the Circuit Court Reversed

Case Remanded

D. MICHAEL SWINEY, C.J., delivered the opinion of the court, in which FRANK G.

CLEMENT, P.J.M.S. and THOMAS R. FRIERSON, II, J., joined.

Thomas L. Kilday, Greeneville, Tennessee, for the appellant, Tennessee Farmers Mutual 

Insurance Company.

Floyd W. Rhea, Sneedville, Tennessee, for the appellee, Grady Eugene Dutton.

06/25/2018
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OPINION

Background

Grady Eugene Dutton (“Plaintiff”) sued TN Farmers with regard to a property 

insurance policy (“the Insurance Policy”) insuring a house (“the House”) located at 187 

Little Pumpkin Valley Road in Edison, Tennessee (“the Property”). The House was 

destroyed by fire on May 28, 2016, and TN Farmers refused to pay the claim after it 

discovered that Plaintiff and his ex-wife Sheila Brock (“Brock”) had made 

misrepresentations when answering questions on the application for the Insurance Policy.

Plaintiff, who was 73 years old at the time of the fire, has been married multiple 

times. He met Brock in 1994, and they were married in December of 1995 and divorced 

in 2002. Brock had drug problems, and on one occasion in 1998 Plaintiff placed Brock in 

drug rehabilitation for 30 days. After they divorced, Plaintiff and Brock reconciled and 

began living together again for a time. They later had another falling out, and Plaintiff 

moved to Missouri where he remarried, and then later divorced, his first wife. After that 

divorce, Plaintiff returned to Tennessee and reconciled with Brock. 

On April 29, 2008, Brock was arrested on multiple drug charges, some of which 

were felony charges. Specifically, Brock was arrested on charges of felony possession of 

drug paraphernalia, possession of Schedule II drugs (cocaine) for resale, and possession 

of Schedule III and Schedule IV drugs. Plaintiff was living in Missouri at that time, but 

Brock told him about her arrests when they spoke on the telephone. Plaintiff returned to 

Tennessee around Christmas of 2008, and he and Brock began living together again. 

The Property was acquired by deed dated March 10, 2009 with Brock listed as the 

sole grantee. Plaintiff testified that he does not know why the deed does not list him as a 

grantee as he and Brock purchased the Property together. A deed of trust dated 

approximately one month after the purchase of the Property listed both Brock’s name and 

Plaintiff’s name. Plaintiff testified that he and Brock purchased the Property for 

$130,000 and that the mortgage was for $55,000. He testified that he and Brock both 

contributed their own monies toward the remainder of the purchase price, and that he and 

Brock moved on to the Property as soon as they purchased it. On April 21, 2009, 

Plaintiff and Brock met with a TN Farmers’ agent and executed an application to insure 

the Property. 

On the application, Plaintiff and Brock answered ‘no’ to questions about whether 

they had ever been charged with, convicted of, or pled guilty to a felony and whether they 

had ever been charged with, convicted of, or pled guilty to arson, fraud, theft, or drug 

related crime. On the page containing these questions and answers and Plaintiff’s and 
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Brock’s signatures, the application also states: “I(We) understand that any 

misrepresentations or failure to answer questions truthfully, correctly and completely will 

void this insurance.” Furthermore, the application for the Insurance Policy states that the 

applicants had a previous total fire loss of $10,000 in December of 2006. When 

questioned during deposition, Plaintiff could not remember this fire loss, but could 

remember being insured by TN Farmers and living with Brock in Sneedville, Tennessee 

at that time.

Additionally, the Insurance Policy contains the following language:

ACTS WHICH AUTOMATICALLY VOID THE POLICY

Concealment or Fraud

The policy shall be automatically void as to all insureds if any 

insured, whether before or after a loss or occurrence:

1. conceals or misrepresents any material fact or circumstance relating to 

this policy or loss;

Brock negotiated a plea and was convicted in August of 2009 of charges including 

felony drug charges. Plaintiff testified that he could not recall if he and Brock were 

living together at the time that she was convicted. He stated: “she’s had quite a history, 

and it’s so hard for me to remember everything that she - - she was involved in 

shoplifting and stuff like that as well.” 

A Quit Claim Deed dated June 23, 2010 states that Brock was incarcerated in the 

Tennessee Department of Corrections and that Plaintiff held her Power of Attorney. 

Plaintiff executed this deed on Brock’s behalf using a Power of Attorney. The deed 

conveyed to Plaintiff a life estate in the Property with a remainder interest to Catherine 

Dawn Sexton (“Sexton”), Brock’s daughter. Plaintiff is not Sexton’s father, but he 

claims to have a “[v]ery good. . . . Very close” relationship with Sexton. Plaintiff 

testified that this deed was prepared and executed because Brock was in jail and a credit 

card company had a judgment lien against her. Plaintiff testified that he settled the debt 

with the credit card company and had the judgment lien released. Plaintiff recorded the 

deed, but never recorded the Power of Attorney. He produced a copy of the Power of 

Attorney as an exhibit to his deposition. The Power of Attorney is signed by Brock and 

witnessed and notarized, but a space for Plaintiff’s signature on this document is blank.

Another Quit Claim Deed dated September 9, 2014 deeded the Property from 

Sexton to Plaintiff. Plaintiff testified that this deed was executed because he gave Brock
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property on Marie’s Lane in exchange for her interest in the Property. He further stated 

that he actually gave the property on Marie’s Lane to Sexton, but it was for Brock. He 

then further explained that the transaction was even more complicated because Plaintiff 

traded property he owned at Big Springs Road to another man for the property at Marie’s 

Lane by Plaintiff giving the Big Springs Road property to the man’s son and having the 

man give the Marie’s Lane property to Sexton. Plaintiff testified all of this was to 

“release [Brock] from any and all ownerships of [the Property], her and Catherine 

[Sexton] both.” 

On January 7, 2014, Plaintiff requested that TN Farmers take Brock off of the 

Insurance Policy because he “was breaking relationships with her, and we were doing this 

deed swap thing and everything at the time.” Plaintiff requested that Sexton be added as 

an insured at that time. Plaintiff testified that Sexton’s interest in the Insurance Policy 

was deleted in September of 2014. 

Another Quit Claim Deed dated May 14, 2015 deeded the Property from Plaintiff 

to Jeanette Mikel Johnson (“Johnson”), Plaintiff’s daughter. Plaintiff testified he 

executed this deed for tax purposes. He stated: “It was nothing special. It was just that 

she has my Power of Attorney and everything. Whenever I die, she has my soul, and I 

thought it would be simpler to transfer the properties over to her for tax purposes, but 

then after a little consideration, I thought it might be best to bring it back to my name.” 

Plaintiff testified that Johnson lives in Missouri and has not been back to this area 

since he deeded the Property to her. So Plaintiff mailed Johnson a deed, which is dated 

November 15, 2015 and purports to deed the Property back to Plaintiff. Johnson signed 

the deed and mailed it back to Plaintiff. Johnson’s signature on the deed, however, was 

not notarized, and Plaintiff never recorded this deed. Plaintiff seemed to think the deed 

had to be notarized before it was recorded, and he testified that he was waiting for 

Johnson to come to Tennessee so they could have the deed notarized. Plaintiff gave a 

copy of the November 15, 2015 deed to the investigators when they were conducting the 

fire investigation on the Property.

The House was destroyed by fire on May 28, 2016. Plaintiff was asked who he 

believed had an interest in the Property at the time of the fire, and he stated: “I owned the 

house and property. According to this being registered, Janette [sic] Mikel would have 

been the owner of the property. . . . Sheila Brock is not a party to this.”

At the time of the fire, Plaintiff and his 38 year old girlfriend were living in the 

House, but were on vacation in Missouri for Plaintiff’s daughter’s wedding. Plaintiff 

testified that he has lived in the House continuously from the time Brock purchased the 

Property in April of 2009 through the time of the fire. Plaintiff’s current girlfriend
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moved in a few months before the fire. Brock had last lived in the House in 2014. 

Plaintiff stated that Brock moved out because “the drug situation, it was unbearable, and I 

couldn’t take it anymore.” 

Plaintiff testified that while he and his girlfriend were in Missouri, Brock was 

driving Plaintiff’s truck, which he had loaned to her. On the weekend of the fire, Brock, 

who knew the combination to the gate lock on the Property, returned Plaintiff’s truck to 

the Property with Plaintiff’s permission. Plaintiff testified that he and Brock spoke on the 

telephone, and she requested permission to go into the House to take a shower. Plaintiff 

denied Brock permission to enter the House. Brock then entered the House through an 

unlocked window and got some water jugs from the House. Plaintiff testified that Brock

later told him she had done this. 

Plaintiff denied having anything to do with the fire. When asked if it had occurred 

to him that Brock had something to do with the fire, he stated: “Oh, absolutely. . . . I

don’t know that she would, but like you said, it’s possible that she could have, but I don’t 

know, and we don’t have no reason why she would. So I don’t know.” He was asked if 

he thought Brock started the fire, and he stated: “I don’t know. I honestly don’t know. I 

can’t point a finger at something I don’t know, and I don’t think you could either.” 

Plaintiff testified that a baseboard heater in the bathroom may have started the fire 

because he thought the thermostat “might have been defective or something . . . .” 

Plaintiff currently is living on the Property in his RV. He also has a single-wide 

trailer on the Property, but is not staying there. The last person to use the single-wide 

trailer was Plaintiff’s cousin, who recently got out of jail. The cousin was in jail for 

trying to shoot Brock. Plaintiff testified that no one is staying in the single-wide trailer at 

this time.

TN Farmers filed a motion for summary judgment alleging that the material 

misrepresentations made by Plaintiff and Brock on the Insurance Policy application 

increased the risk of loss causing the policy to be void. In response to the motion for 

summary judgment, Plaintiff filed his own affidavit, but failed to respond to TN Farmers’ 

statement of undisputed material facts. After a hearing, the Trial Court entered its order 

denying TN Farmers’ motion for summary judgment after finding and holding, inter alia:

The misrepresentations made on their application by Grady Dutton 

and Sheila Brock regarding Sheila Brock’s criminal record are not material 

misrepresentations pursuant to the requirements of T.C.A. 56-7-103 

because the defendant insurer, for purposes of its present Motion, has not 

asserted that the misrepresentations were made with the intent to deceive 

and the misrepresented facts did not increase the risk of loss to the 
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defendant insurer because the insurance contract was renewed several times 

during the seven-year period from the date of application until the fire, 

during which time Sheila Brock was deleted from coverage and Sheila 

Brock’s daughter, Catherine Sexton, was first added, then deleted from the 

coverage, thereby changing the contract.

The Trial Court then granted TN Farmers permission to file for interlocutory appeal. We 

granted the Rule 9 application by order entered September 5, 2017.

Discussion

We granted this Rule 9 application to consider the sole issue, as stated by the Trial 

Court:

[W]hether an insurance application misrepresentation may become not

material, i.e., not increase the risk of loss to the insurer pursuant to the 

provisions of T.C.A. 56-7-103, after the passage of time from the 

application misrepresentation until the date of loss by reason of successive 

renewals of the policy and other intervening changes in the policy coverage 

by reason of persons being deleted and added as insureds.

As pertinent to this appeal, Tenn. Code Ann. § 56-7-103 provides:

56-7-103. Misrepresentation or warranty will not void policy –

Exceptions.

No written or oral misrepresentation or warranty made in the 

negotiations of a contract or policy of insurance, or in the application for 

contract or policy of insurance, by the insured or in the insured’s behalf, 

shall be deemed material or defeat or void the policy or prevent its 

attaching, unless the misrepresentation or warranty is made with actual 

intent to deceive, or unless the matter represented increases the risk of loss.

Tenn. Code Ann. § 56-7-103 (2016).

In Freeze v. Tennessee Farmers Mut. Ins. Co. this Court discussed the material

misrepresentations made on insurance policy applications and explained how pursuant to 

Tenn. Code Ann. § 56-7-103 such misrepresentations may render the policy void. Freeze 

v. Tennessee Farmers Mutual Ins. Co., 527 S.W.3d 227 (Tenn. Ct. App. 2017). As we 

noted in Freeze: “[D]etermining whether a particular misrepresentation increases an 

insurance company’s risk of loss is a question of law for the court.” Freeze, 527 S.W.3d 
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at 232 (quoting Smith v. Tennessee Farmers Life Reassurance Co., 210 S.W.3d 584, 589 

(Tenn. Ct. App. 2006)). 

It is well settled in Tennessee that regardless of what caused the loss, “[i]f the

policy is obtained through fraud or misrepresentation which materially ‘increases the risk 

of loss,’ it is voidable from its inception.” Day v. Mut. of Omaha Ins. Co., 534 S.W.2d 

859, 864 (Tenn. Ct. App. 1975); see also, e.g., Volunteer State Life Ins. Co. v. 

Richardson, 244 S.W. 44, 49 (Tenn. 1922) (holding that insurance company was entitled 

to have policy canceled due to misrepresentations and stating: “Of course, the matter 

represented in the Dibrell Case did not enter into the death of the insured as a 

contributing cause, either directly or indirectly but it was, nevertheless, material and 

increased the risk of loss within the meaning of our statute, for the reason that it was 

information which would naturally and reasonably have influenced the judgment of the 

insurer with respect to the application. The principle is just as applicable to the situation 

presented here as in that case . . . .”); Montgomery v. Reserve Life Ins., 585 S.W.2d. 620, 

622 (Tenn. Ct. App. 1979) (stating: “No recovery will be allowed on a policy issued in 

reliance on a misrepresentation in the application which increased the risk of loss. . . . It 

matters not what caused the death of the insured.”). 

In Day, this Court further elucidated:

It is not material to the validity of coverage whether the disability 

suffered by the insured was related to the misrepresentations. Regardless of 

what may cause the death or disability of the insured after the issuance of a 

voidable policy, it has no bearing on whether or not the policy is 

enforceable. If the policy is obtained through fraud or misrepresentation 

which materially “increases the risk of loss,” it is voidable from its 

inception.

In the case of Brotherhood of Railroad Trainmen v. Daniels, 18 

Tenn. App. 264, 75 S.W.2d 1019, the insured died from an illness other 

than the one he failed to disclose in his application for insurance. In 

passing upon the issue, the court said:

“The fact that the applicant did not die of the ailment 

he had had, and suppressed, is not controlling, as the 

defendant in error insists is the case. For, if the attacks 

‘evidenced a material impairment of the applicant’s 

constitution’ (Harris v. Insurance Co., supra) then the 

warranties were material warranties, and the contract was 

avoided at its inception.”
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Also, in the case of Mutual Life Ins. Co. v. Dibrell, 137 Tenn. 528, 

536, 194 S.W. 581, 583, the court, in addressing itself to this question, said:

“It cannot be that the matter misrepresented should 

necessarily relate to the hazard of loss by the death of the 

insured. Such a construction might prevent the company’s 

rescinding the contract because of a misrepresentation that 

actually induced the contract, in an action begun promptly 

after the making of the application and the issuance of the 

policy. What will not avail to ‘void the policy,’ under the 

statute, it seems equally will not ‘prevent its attaching,’ as a 

contract. We cannot adopt the harsh and radical construction 

that the Legislature meant to deprive the insurer of the right to 

rescind the policy contract for inducing fraud.”

Day, 534 S.W.2d at 864.

In the case now before us the Trial Court found that Plaintiff and Brock made 

misrepresentations on the application for the Insurance Policy. There is no question that 

these misrepresentations were material when made. See Freeze, 527 S.W.3d 227 

(holding that similar misrepresentations were material and rendered the policy at issue 

void). In his brief on appeal, Plaintiff concedes that he “does not rebut the trial court’s 

finding that a misrepresentation was made, and that drug use would affect the insurer’s 

decision to extend coverage.” 

Plaintiff argues, however, that the later changes made to the Insurance Policy by 

successive renewals and the deletions and additions of insured persons render the

misrepresentations made by Plaintiff and Brock not material as they no longer would 

increase the risk of loss. Specifically, Plaintiff asserts that Brock has been removed from 

the Policy and no longer has an ownership interest in the Property and that TN Farmers 

recorded these changes and accepted them through multiple renewals of the Insurance 

Policy. Plaintiff asserts that the “deletions, transfers” and the fact that Brock no longer 

lives on the Property create a “distance” between Brock and the Property, and therefore, 

the misrepresentations no longer have a bearing on risk. 

We find Plaintiff’s arguments unavailing. There is no question that Plaintiff and 

Brock made misrepresentations on the Insurance Policy application and that those 

misrepresentations were material and would increase the risk of loss. As such, the 

Insurance Policy was defeated, voided, or prevented from attaching at its inception 

pursuant both to the plain, clear, and unambiguous language of Tenn. Code Ann. § 56-7-
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103 and the Insurance Policy itself. Given the fact that the Insurance Policy was void 

from its inception, the attempted changes to the Insurance Policy by virtue of renewals 

and changes to the named insureds that Plaintiff relies upon in this case were of no effect. 

With regard to renewals of insurance policies, this Court has stated: 

When an insurance policy renewal is made, unless otherwise 

provided and called to the attention of the insured, the terms of the original 

policy become a part of the renewal contract of insurance. See 13A 

Appleman, Insurance Law and Practice, § 7648; 17 Couch on Insurance

2nd, §§ 64:40, 68:61. When renewing an insurance policy, the insurer must 

call attention to any changes in the terms and, if it fails to do so, such 

change is no part of the contract. Where the parties to a contract of 

insurance agree to a renewal, it is presumed that the same terms, conditions, 

premiums and subject matter obtain in the new contract as in the old. 13A 

Appleman, supra, § 7648. “An accurate definition of renewal cannot be 

made until it is first determined whether the renewal takes effect as an 

extension or continuation of the original policy or whether it represents the 

formation of a new although identical contract of insurance.” 17 Couch on 

Insurance 2nd, § 68:2 at 659. Whether a renewal insurance policy is a new 

and independent contract or whether it is an extension or continuation of 

the original contract depends primarily upon the intention of the parties as 

ascertained from the instrument itself. Lewis v. Western Assur. Co., 175 

Tenn. 37, 130 S.W.2d 982 (1939); 17 Couch, supra, § 68:39.

Brewer v. Vanguard Ins. Co., 614 S.W.2d 360, 363 (Tenn. Ct. App. 1980).

The record on appeal reveals that the renewals of the Insurance Policy were 

intended to extend or continue the term of the Insurance Policy, not to form a whole new 

and independent contractual agreement.1 Given this, the renewals in the case now before 

us were dependent upon the original Insurance Policy, which, as discussed above, was 

void from its inception due to the material misrepresentations which increased the risk of 

loss made by Plaintiff and Brock on the application for the Insurance Policy.

 

1

It is not the role of this Court “to make a different contract than that executed by the parties.” Posner v. 

Posner, No. 02A01-9710-CV-00249, 1997 WL 796216, at *2–3 (Tenn. Ct. App. Dec. 30, 1997), no appl. 

perm. appeal filed. See also, e.g., Central Drug Store v. Adams, 184 Tenn. 541, 201 S.W.2d 682 (1947). 

“In the absence of fraud or mistake, a contract must be interpreted and enforced as written even though it 

contains terms which may be thought to be harsh or unjust.” Tenpenny v. Tenpenny, No. 01A01-9406-

CV-00296, 1995 WL 70571, at *6 (Tenn. Ct. App. Feb. 22, 1995), appl. perm. appeal denied July 3, 

1995.
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Additionally, in its brief on appeal, TN Farmers points us to cases from Georgia 

and Illinois wherein appellate courts in those states rejected arguments similar to the ones 

made by Plaintiff in this case and found that renewals to insurance policies made prior to 

the insurer’s discovery of misrepresentations did not cure the misrepresentations or 

destroy the insurer’s right to defeat or avoid the policy. Lively v. Southern Heritage Ins. 

Co., 568 S.E.2d 98, 102 (Ga. App. 2002) (stating: “The Livelys also assert that Southern 

Heritage’s renewal of the insurance policy corrected the misrepresentations contained in 

the application. We find no merit in this argument.” [In part, because] “[t]he parties 

apparently continued to rely upon the application submitted [initially] for the renewal.”); 

American Country Ins. Co. v. Mahoney, 560 N.E.2d 1035, 1043 (Ill. App. 1990) (stating: 

“Finally, we reject Mahoney’s argument that American’s decision to renew her insurance 

policy, well before it learned of her misrepresentations, eliminated any right to defeat or 

avoid the policy. Mahoney has not cited authority, and our own research had disclosed 

no authority, that supports this novel claim. And the text of [the Illinois statute] imposes 

no time limitation on the right, which it grants the insurer, to defeat or avoid a policy; that 

is, [the Illiniois statute] does not prohibit an insurer from seeking to defeat or avoid a 

policy . . . after it decides to renew a policy, in ignorance of the insured’s material 

misrepresentations. Mahoney’s application itself clearly provided that American would 

rely upon the misrepresentations therein when considering whether to renew her 

policy.”). 

We find the reasoning employed in Liveley and Mahoney to be persuasive. We 

note that as was the case with the Illinois statute in Mahoney, our statute, Tenn. Code 

Ann. § 56-7-103, also contains no time limitation within which an insurer who is ignorant 

of an insured’s misrepresentations must take steps to avoid or defeat the policy. The 

decision whether to include such a time limitation in the statute was a policy decision 

made by our General Assembly.

Given all of the above, we hold that the material misrepresentations made by 

Plaintiff and Brock on the Insurance Policy application rendered the Insurance Policy 

void or prevented its attaching from its inception and that the subsequent renewals and 

attempted additions and deletions of named insureds did not operate to render the 

misrepresentations not material. We, therefore, reverse the Trial Court’s June 22, 2017 

order denying TN Farmer’s motion for summary judgment and remand this case to the 

Trial Court for entry of an order granting summary judgment to TN Farmers.

Conclusion

The judgment of the Trial Court denying summary judgment to TN Farmers is 

reversed, and this cause is remanded to the Trial Court for entry of an order granting 
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summary judgment to TN Farmers and for collection of the costs below. The costs on 

appeal are assessed against the appellee, Grady Eugene Dutton.

_________________________________ 

D. MICHAEL SWINEY, CHIEF JUDGE