IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

June 18, 2008 Session

CINDY GOODSON HARVEY, ET AL. v. FARMERS INSURANCE

EXCHANGE, ET AL.

Appeal from the Chancery Court for Hamilton County

No. 05-0132 W. Frank Brown, III, Chancellor

No. E2007-02152-COA-R3-CV - FILED SEPTEMBER 29, 2008

Ronald W. Harvey, Jr., was involved in an automobile accident while driving a 1999 Dodge Caravan

in the course of his employment with B&W Wholesalers. At the time of the accident, Mr. Harvey

and his wife, Cindy Goodson Harvey (collectively “the Harveys”), had an automobile insurance

policy with Farmers Insurance Exchange (“Insurance Company”) that listed the Caravan as the

covered vehicle. However, the policy included an exclusion for any vehicle “[w]hile used in

employment by any person whose primary duties are the delivery of products or services[.]”

Insurance Company refused to defend the Harveys in a lawsuit regarding the accident, claiming that

the exclusion applies. The Harveys sought a declaratory judgment that the accident was covered by

the policy. After a bench trial, the court dismissed the case and declared that the exclusion applied.

The Harveys appeal, arguing that “delivery of products or services” was not among Mr. Harvey’s

“primary duties,” and that, in any event, Insurance Company should be estopped from denying

coverage because it knew how Mr. Harvey intended to use the van and provided coverage anyway.

We affirm.

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

Affirmed; Case Remanded

CHARLES D.SUSANO,JR.,J., delivered the opinion of the court, in which HERSCHEL P.FRANKS,P.J.,

and D. MICHAEL SWINEY, J., joined.

Richard Korsakov, Chattanooga, Tennessee, for the appellants, Cindy Goodson Harvey and Ronald

W. Harvey, Jr.

Gordon C. Aulgur, Nashville, Tennessee, for the appellee, Farmers Insurance Exchange.

OPINION

Pursuant to Tenn. R. App. P. 13(d), “review of findings of fact by the trial court in civil

actions shall be de novo upon the record of the trial court, accompanied by a presumption of the

correctness of the finding, unless the preponderance of the evidence is otherwise.” As for the trial
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court’s conclusions of law, the review remains de novo, but with no presumption of correctness.

Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). “In general, the

interpretation of an insurance policy is a question of law and not fact.” Charles Hampton’s A-1

Signs, Inc. v. American States Ins. Co., 225 S.W.3d 482, 487 (Tenn. Ct. App. 2006). 

“Insurance contracts are subject to the same rules of construction and enforcement as apply

to contracts generally.” McKimm v. Bell, 790 S.W.2d 526, 527 (Tenn. 1990). They should be

“construed as a whole in a reasonable and logical manner.” Standard Fire Ins. Co. v. Chester

O’Donley & Assocs., Inc., 972 S.W.2d 1, 7 (Tenn. Ct. App. 1998). Disputed contractual language

must be examined in the context of the entire agreement. Cocke County Bd. of Highway Comm’rs

v. Newport Utils. Bd., 690 S.W.2d 231, 237 (Tenn. 1985). Words must be given their “usual,

natural, and ordinary meaning.” St. Paul Surplus Lines Ins. Co. v. Bishops Gate Ins. Co., 725

S.W.2d 948, 951 (Tenn. Ct. App. 1986).

Most of the facts in the instant case are undisputed. The parties stipulated as follows: 

[T]he policy was issued to the plaintiffs here by Farmers Insurance

Exchange . . . It was amended to cover the vehicle in question . . .

[T]hat vehicle[,] driven by plaintiff Ronald W. Harvey, Jr., was

involved in an accident in Polk County with Mr. [Terry] Burchfield,

and Mr. Burchfield and his wife have filed suit in Polk County, which

Farmers Insurance Exchange was notified [of] and . . . denied

coverage based on [the] policy provision [excluding coverage for

vehicles “[w]hile used in employment by any person whose primary

duties are the delivery of products or services”] . . . and we’re all in

agreement that’s the dispositive policy provision.

The full text of the policy provision at issue – which is actually an exception within an exception

from a more general exclusion – reads as follows:

This coverage does not apply to: . . . Bodily injury or property

damage arising out of the ownership, maintenance or use of any

vehicle by any person employed or otherwise engaged in a business

other than the business described in Exclusion 5 [relating to various

automative industries].

This exclusion does not apply to the maintenance or use of a:

a. Private passenger car.

b. Utility car that you own, if rated as a private passenger car, or

c. Utility trailer used with a vehicle described in a. or b. above.

However, this exclusion does apply to any vehicle:

1. While used in employment by any person whose primary duties are

the delivery of products or services[.]
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(Formatting omitted; emphasis added.) 

It is undisputed that the accident occurred while the vehicle was being “used in employment.”

Thus, the key issue for purposes of ascertaining whether the accident was covered under the policy

is the nature of Mr. Harvey’s “primary duties.” The trial court, in its memorandum opinion and

order, aptly summarized the facts relating to this issue:

Mr. Harvey’s employment [is] as a route salesman for B & W

Wholesalers (“B & W”). Mr. Harvey solicits orders for and delivers

mostly tobacco products, candy, novelties and like items. Normally,

Mr. Harvey would drive to his customers’ stores each morning and

solicit orders from them. Then, each afternoon, he would deliver the

ordered-product to each customer. Mr. Harvey used the Caravan for

all aspects of his business. Mr. Harvey’s compensation was based

upon a commission for the products he sold. B & W also paid him an

allowance for gasoline as well as the wear and tear on his personal

vehicle [i.e., the Caravan].

The dispositive question is whether Mr. Harvey’s “primary duties are the delivery of products or

services,” or whether, instead, the “delivery of products or services” was an secondary, incidental,

or non-primary duty. The court summarized the parties’ arguments, and stated its holding, as

follows:

The attorneys asked questions concerning, and argued about, which

duty was primary – soliciting orders or delivery. The Plaintiffs took

the position that Mr. Harvey’s primary duty was soliciting orders.

[They pointed out that] [i]f he did not solicit and obtain orders, then

he would have no goods to deliver. [Insurance Company] argued that

he would not be able to solicit orders if he did not deliver the

products.

It seems to the court that Mr. Harvey’s soliciting orders was a service.

It was a service to the customer because Mr. Harvey came to the

customer and solicited orders. The customer did not have to call or

go to B&W’s office or the warehouse and order merchandise. Mr.

Harvey’s soliciting orders could also be said to be a service to B & W

[as opposed to a service to the customers]. Regardless, Mr. Harvey

clearly delivered in the afternoon the product that was ordered that

morning. The court concludes that Mr. Harvey’s “[p]rimary duties”

was “[t]he delivery of products or services”.

* * *
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The court does not read the contract to require [Insurance Company]

to prove that Mr. Harvey’s use of the vehicle involved, for example,

60% delivery and 40% solicitation. Mr. Harvey’s sole business use

of the van was on both sides of the “or”: “delivery of products or

services.” Mr. Harvey’s use of the van primarily for services would

exclude coverage. So would his primary use of the van for deliveries.

Either way, the policy exclusion applies and there is no coverage for

the Plaintiffs with respect to the Burchfields’ claim and lawsuit.

Further, during his cross-examination, Mr. Harvey said he [bought]

the van for making deliveries of product he sold. He said the van was

better suited for delivery of product [than his previous vehicle, a

Chevrolet pickup truck] because there was inside storage (and

protection) compared to an open bed of a pickup truck. Mr. Harvey

would not need a van to solicit orders but he wanted the van to

deliver orders. Thus, it is the holding of the court, based on his

specific testimony as to why he purchased the van and his use of the

van, that Mr. Harvey’s use of the van would bar coverage because the

van was used primarily for deliveries.

We do not necessarily agree with all aspects of the court’s reasoning. We are skeptical that

soliciting orders constitutes a “service” within the plain meaning of the exclusionary clause, and

even more skeptical that it constitutes “delivery of . . . services.” However, we concur with the

court’s holding. See Shutt v. Blount, 249 S.W.2d 904, 907 (Tenn. 1952) (“if the Trial Judge reached

the right result for the wrong reason, there is no reversible error”). In our view, the use of the plural

form in the phrase “primary duties” is key. It clearly contemplates the possibility that a job may

have more than one “primary” duty, and we believe that is true in this case. At trial, the Harveys

emphasized that, unless he solicited orders, Mr. Harvey would have nothing to deliver, while

Insurance Company emphasized that his employment as a salesman was contingent on his ability

and willingness to deliver the products he took ordersfor. Both sides are correct. Based on the facts

in this record, we find that solicitation of orders was a “primary” duty, and that “delivery of

products” was also a “primary” duty. The evidence clearly demonstrates that both duties were

wholly central and fundamental to Mr. Harvey’s job. That sets them apart from the examples cited

by Mr. Harvey’s attorney at trial:

He also probably had to file paperwork and, you know, pay income

taxes and, you know, shine his shoes and do lots of things, all of

which I suppose may have been duties, but not the primary duty, and

that’s the language in this policy.

Actually, again, the language is not “primary duty,” singular, but rather “primary duties,” plural.

Thus, counsel’s argument that “to extend the word ‘primary’ to one of a group of duties . . . is to

stretch the word beyond its ordinary English meaning” falls flat. It is not just a single word that we

are interpreting, but a whole phrase, and more than that, an entire clause within a lengthy contract.

Taking a big-picture view, we think the work done by Mr. Harvey, which requires the delivery of
 Two statements by the Harveys’ attorney at trial, as reflected in the transcript, indicate that Agent’s first name

1

is “Andre.” However, the Harvey’s complaint, the trial court’s order, and Insurance Company’s brief state that Agent’s

first name is “Andrea.” All sources refer to Agent as “Mr. Busby.”

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products as an essential, core component of his job description, is precisely the type of employment

that this clause was intended to cover, particularly given that Mr. Harvey purchased this van with

the delivery component of his job specifically in mind. We see no genuine ambiguity here, and thus

the general rule that “exceptions, exclusions and limitations in insurance policies must be construed

against the insurance company and in favor of the insured,” Allstate Ins. Co. v. Watts, 811 S.W.2d

883, 886 (Tenn. 1991), does not apply. Accordingly, we conclude that Mr. Harvey’s accident was

not covered under the terms of the policy.

The Harveys also argue that, even if the accident was not covered on the policy’s face,

Insurance Company should be estopped to deny coverage because it agreed to cover the vehicle even

after one of its agents (“Agent” or “Mr. Busby” ) was told how Mr. Harvey intended to use it. Agent 1

was not deposed or called to testify by either party. However, Mr. Harvey testified as follows on

direct examination:

Q. [S]ometime during the term of the policy, did you make a change

in vehicles?

A. Well, yeah. We had the truck first and then we bought the van,

yeah.

Q. All right. And were you present when switching coverage to the

van was discussed?

A. Yes, sir.

* * *

Q. Did you or your wife . . . advise Mr. Busby why the van was

being acquired in place of the pickup truck?

A. . . . Yes.

Q. And did you advise him what it would be used for?

A. Sales and deliveries.

Q. And what did Mr. Busby tell you about getting coverage on the

van?
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[At this point, Insurance Company made a hearsay objection, and a

lengthy discussion between the trial court and the attorneys followed.

The court finally decided to reserve the question for a later decision,

and allowed Mr. Harvey’s attorney to proceed with the examination.]

Q. What, if anything, did Mr. Busby tell you . . . about whether

Farmers Insurance Exchange would provide coverage for the van in

the use you described to him?

A. He gave us the insurance. That’s all I understood about it. I

mean, if I couldn’t have used it that way, then he would had to have

said something to me about it or he wouldn’t have give[n] me the

insurance for it.

Q. And did he say, “Well, this insurance won’t cover your use of the

van”?

A. No.

As an initial matter, we must address the hearsay issue, which the trial court ultimately did not rule

upon. As can be seen, Mr. Harvey did not actually testify about anything Agent said. Mr. Harvey

testified only about what Agent did (issued the coverage) and what Agent did not say (that “this

insurance won’t cover your use of the van”). To whatever extent these actions and omissions may

be deemed “nonverbal conduct . . . intended . . . as an assertion,” Tenn. R. Evid. 801(a)(2), and thus

“statements” for purposes of the hearsay rule, they are clearly nonhearsay statements. Indeed, even

if Mr. Harvey had directly testified that Agent said the van would be covered, that still would not

have been hearsay, at least with regard to the estoppel issue. Hearsay is third-party testimony

regarding a declarant’s prior statement, “offered in evidence to prove the truth of the matter asserted”

by the declarant. Tenn. R. Evid. 801(c). In this case, Mr. Harvey’s attorney was attempting to elicit

third-party testimony regarding a “matter [allegedly] asserted” by Agent, but he was not doing so

in order to prove the truth of that alleged assertion. Rather, he was trying to prove simply that the

assertion was made, regardless of its truth or falsity. In other words, the evidence was intended to

demonstrate that Agent said the policy would cover Mr. Harvey’s intended use of the van, not

necessarily that the policy actually did cover such use. Eliciting such testimony in support of an

estoppel defense does not implicate the hearsay rule, because it is not offered “to prove the truth of

the matter asserted.”

Having said that, although the testimony in question is not hearsay, it is also insufficient to

prove the Harveys’ case on the issue of estoppel. As the trial court correctly noted, the elements of

estoppel were set forth by this court in Callahan v. Town of Middleton, 292 S.W.2d 501 (Tenn. Ct.

App. 1954), as follows:

The essential elements of an equitable estoppel as related to the party

estopped are said to be (1) Conduct which amounts to a false

representation or concealment of material facts, or, at least, which is
 If Mr. Harvey’s uncontradicted testimony is accepted as true (and the court never held otherwise, though it 2

did refer twice to the testimony as “self-serving”), we think it is at least plausible that Agent’s silence in the wake of

Mr. Harvey’s statement that he intended to use the van for “sales and deliveries,” coupled with Agent’s decision to

proceed with the policy change, could potentially be seen as nonverbal conduct conveying the impression that the van

would be covered for those purposes. However, the court apparently did not consider this possibility, and we do not

find it necessary to make a factual finding on this point, one way or the other.

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calculated to convey the impression that the facts are otherwise than,

and inconsistent with, those which the party subsequently attempts to

assert; (2) Intention, or at least expectation that such conduct shall be

acted upon by the other party; (3) Knowledge, actual or constructive

of the real facts. As related to the party claiming the estoppel they are

(1) Lack of knowledge and of the means of knowledge of the truth as

to the facts in question; (2) Reliance upon the conduct of the party

estopped; and (3) Action based thereon of such a character as to

change his position prejudicially[.]

Id. at 508. The trial court dismissed the Harveys’ estoppel claim on the basis of the first and fifth

elements, misrepresentation and reliance:

[T]here was no testimony as to what [Agent] Busby said, if anything,

to [the Harveys]. . . . Looking at the case at bar, we note several

items. First, there was no evidence that Busby said anything. There

was no proof that Busby promised the Plaintiffs any particular type

of coverage. Certainly, there was no testimony that Busby made any

representations or misrepresentations to the Plaintiffs. Second, the

customer must prove reliance under the agent’s statements. Here, Mr.

Harvey tried to state indirectly his reliance upon Busby. However,

Mr. Harvey also testified that he reviewed the contract when received.

When asked if he had read the contract after receipt, Mr. Harvey

stated: “Briefly”. When asked if he had read the exclusions, Mr.

Harvey said “Yes”.

Again, we do not necessarily agree with the trial court’s reasoning in toto, but we agree with its

holding. Although it is true that “there was no evidence that Busby said anything,” this is not

necessarily dispositive vis a vis the misrepresentation element, since an estoppel claim need not be

grounded in a verbal statement. As Callahan says, such a claim can also be based on nonverbal

conduct “which amounts to a false representation or concealment of material facts, or, at least, which

is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those

which the party subsequently attempts to assert.” Id. We express no opinion on whether that less

stringent burden was met on these facts, but we do not believe the misrepresentation element is the

clearest example of the Harveys’ failure to prove estoppel. Likewise, on the reliance element, we 2

agree with the trial court that Mr. Harvey was trying “to state indirectly his reliance upon Busby”

when he testified that “if I couldn’t have used it that way, then he would had to have said something

to me about it or he wouldn’t have give[n] me the insurance for it.” Again, we do not hold that the
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Harveys successfully established reliance, but we think a failure to prove reliance is not the most

solid ground on which to reject their claim. 

Instead, we hold – again quoting Callahan – that the Harveys failed to demonstrate a “lack

of knowledge and of the means of knowledge of the truth as to the facts in question.” As we have

already held, the written policy exclusions unambiguously state the “truth as to the facts” regarding

the coverage of the Harveys’ Caravan when used in Mr. Harvey’s employment. Certainly,

therefore, the Harveys had access to the means of obtaining the requisite knowledge, and it seems

Mr. Harvey utilized that access. As the court noted, he testified that he had read the insurance

policy’s “exclusions,” the very portion at issue. The policy language is unambiguous in excluding

coverage for the sort of use that Mr. Harvey said he had in mind – in his words, “sales and

deliveries.” If he still harbored any doubts about this point, even after reading the policy, he could

have asked Agent, or another employee of the Insurance Company, for a clear answer. This would

have imposed only a trivial burden upon the Harveys. Instead, taking Mr. Harvey’s testimony at face

value, it appears that he and his wife relied upon their interpretation of Agent’s ambiguous silence

rather than clarifying the matter, whether by asking questions or by re-reading the unambiguous

terms of the policy itself. The law of estoppel tells us that this is not a proper case for equitable

relief, and common sense concurs. The evidence in this record does not preponderate against the

trial court’s refusal to declare that Insurance Company is estopped to deny coverage.

For all of these reasons, we find no error in the court’s decision to dismiss the Harveys’

declaratory judgment claim. The judgment of the trial court is affirmed. Costs on appeal are taxed

to the appellants, Cindy Goodson Harvey and Ronald W. Harvey, Jr. This case is remanded to the

trial court for collection of costs assessed below, pursuant to applicable law.

_______________________________

CHARLES D. SUSANO, JR., JUDGE