### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE MORRIS SLUTSKY, ET UX 

### v. CITY OF CHATTANOOGA Direct Appeal from the Circuit Court for Hamilton County No. 97C2663 W. Neil Thomas, III, Judge

No. E1999-00196-COA-R3-CV - Decided June 30, 2000

Thi s case aros e out of a two-vehicle accident involving an automobile owned by the City of C hattanooga

(“the City”). The plaintiffs sued the City for damages arising out of that ac cident

. Process was also served on the plaintiffs’ uninsured motorist carrier. The claim against the latter seeks to recover

the portion of the plaintiffs’ damages that exceed the City’s limit of liability under the Governmental Tort Liability Act (“the GTLA”). The trial court granted the insurance company’s motion to dismiss, holding that the plaintiffs’ suit did n ot implicate their u ninsured motorist coverage. The plaintiffs appeal, arguing that they are entitled to re co ver under the uninsured motorist coverag

e of their automob

ile insurance pol

icy. We affirm. Tenn. R. App. P. 3 Appeal as of Rig ht; Judgme nt of the Circuit C ourt Affirmed;

Case Remanded S USANO , J., delivered the opinion of the court, in which G ODDARD , P.J., and F RANKS , J., joined. Marvin Berke, Chattanooga, Tennessee, for the appellants, Morris Slutsky and Anetha Slutsky. Michael A. McMahan, Chattanooga, Tennessee, for the appellee, City of Chattanooga. Daniel M. Gass, Knoxville, Tennessee, for the appellee, St. Paul Guardian Insurance Company.

OPINION

I. The plaintiffs, Morris Slutsky and Anetha Slutsky, were injured when their ve hi cle was struck head-on by a police vehicle owned by the City. Th e tria l court awarded each plaintiff a judgmentfor $130,000 against the City, in accordance with the limit of liability s e t forth in the1 See T.C.A. § 29-20-311 (1980); T.C.A. § 29-20-403(b)(2)(A) (Supp. 1999).

2 The plaintiffs’ uninsu

red motorist cove

rage had a single

limit of $1,000,000 per occurrence.

3 T.C.A §§ 56-7-1201 and 56-7-1202 (1994). 

### -2- GTLA. 1 The plaintiffs se ek to recover additio

nal amounts

under the uninsured motorist coverage of their automobile insurance po licy. That policy was issued by St. Paul Guardian Insurance Company (“the insurance company”). 2 The trial court granted the insurance company’s motion to dismiss, finding that, pursuant to the uninsured motorist statutes in effect at the time of the accident 3 , the insurance company was not liable for damages in excess of the City’s limited liability under the GTLA. The court further determined that th

e application of a

mendments to the uni

nsured motorist statutes -- amendments that became ef fective after the acci

dent -- to the fac

ts of this case woul

d unconstitutionally

impair the insurance compa ny’s vested contr

actual rights. The

plaintiffs appea

l, arguing (1) that the amen

dments should

apply retrospec

tively so as to permi

tthem to recover under their uninsured motorist c

overage and (2)

that even if

those amendments do not apply, the plaintiffs are entitled to recover unde r their uninsured motorist coverage pursuant to the statutes in effect at the time of the acc

ident. II. The s ubject ac cident occurred on October 28, 1997. At that time, T.C.A. § 56-7-1201(d) provided as follow

s: The limit of liability for an insur er pr oviding uninsured mo torist coverageunder this section is th e amount of that coverage as specified in the policy less the sum of the limits collectible under all liability and/or primary uninsured motorist insurance policies, bonds, and securities applic

able tothe bodily

injury or death of the insured. On the same date, T.C.A. § 56-7-1202 provided that a vehicle owned by a governmental entity was notan “uninsured motor vehicle” for the purposes of uninsured motorist coverage. As pertinent here, the then-e

xisting version of T .C.A. § 56-7-1202 p rovided as follows: (a) For the purpose of [uni ns ured motorist] coverage, “uninsured motor vehicle” means a motor vehicle whos e own ership, maintenance, or use has resul te d in the bodily injury, death, or damage to property of an insured, and for which the sum

of the limits of liability available to the insured under all va lid and collectible insurance poli cie s, bonds, and secu rities applicable

to the bodily injury, death, or damage

to property

is less than the app

licable limits of uninsured motorist coverage provide d to the insured under the policy against which the claim is made.

### -3- (b) “Uninsured motor vehicle” does not include a motor vehicle:

* * * (4) Owned by any governmental unit, political subdivision or agency thereof.... (Emphasis added).
In 1999, the Legislat

ure passed Chapte

r 196 of the Pu

blic Acts of 1999, which amended T.C.A. §§ 56-7-1201 and 56-7-1202. T.C.A. § 56-7-1201(d), as amended, includes the following provision: With

regar d to a claim against a governmental unit, political subdivision or agency thereof, the limitations of liability established under applicable law sh

all be considere

d as li mits c ollectible under a liability insurance policy. Chapter 196 also repealed T.C.A. § 56-7-1202(b)(4), which, as previously indicated, had excluded a vehicle owned by a governmental entity from the definition of “uninsured motor vehicle.” Finally, subsection (c) w

as added to T.C.A.

§ 56-7-1202 and pr

ovides as follows: (c) Notwithstanding any other provision of law, the applica

ble limits of liability for a gove

rnmental unit, po litical subdivision or agency thereof for claims arisin

g out of the opera

tion of a motor vehi

cle shall be considered as liability cover age available under a valid and collectible insurance policy. The trial court in the instant case found that under the law in effect at the time of the subject accident,the plaintiffs we re not entitled to recover under their uninsured motorist coverage. The court further concluded

that retrospective application of the pertinent amendments would impair the insurance company’s vested rights under the insurance contract. It thereforegranted the insurance company’s motion to dismiss. This appeal followed. III. The 1999 amendments to T.C.A. §§ 56-7-1201 and 56-7 -1202 b ecame effect ive after the da

te of the subject accident. The plaintiffs argue that these amendments should apply retrospectively, thereby enabling t he p laintiffs to reco ver under their u

ninsured motorist c

overage for amo

unts in excess of the liability limit imposed by the GTLA. We disagree. Although statutes are presumed to operate prospectively, State Dep’t of Human Services v. Defriece, 937 S.W.2d 954, 957 (Tenn. Ct. App. 1996), statutes tha t are remedial or procedural in nature may be retrospectively applied. Nutt v. Champion Int’l Corp., 980 S.W.2d 365, 368 (Tenn.

### -4-

1998); Saylors v. Riggsbee, 544 S.W.2d 609, 610 (Tenn. 1976) . A procedu ral statute defines the manner by which a party may enforce a legal right. Doe v. Sundquist, 2 S.W.3d 919, 923 (Tenn. 1999). A remedial statute “provides the means by which a cause of action may be effectuated, wrongs addressed, and relief obtained.” Id. A statute that cre ates a new right of recovery, however, is not considered remedial in nature. Shell v. State, 893 S.W.2d 416, 420 (Tenn. 1995). If a remedial or pr

ocedural statute

impair s a vested right or contractual obligation, retrospective application of that statute is constitutionally impermissible. Kee v. Shelter Ins., 852 S.W.2d 226, 228 (Tenn. 1993). The primary a uthority is found at

Arti cle I, Section 20, of the Tennessee Constitution, which provides that “no retrospective law, or law impairing the obligations of contracts,shall be made.” T he Supreme Court ha

s construed Artic

le I, Section 20 as prohibiting laws “which take away or impair vested rights acquired under e xisting law s or create a new obligation, impose

a new duty, or attach a new disability in respect of transactions or considerations already passed.” Doe, 2 S.W.3d at 923 (quoting Morris v. Gross, 572 S.W.2d 902, 907 ( Ten n. 1978)). The rights of parties to a contract of automobile insurance accrue “on the date of th e accident.” Crismon v. Curtis s, 785 S.W.2d 353, 354 (Tenn. 1990). To retrospectively apply a statutory amendment that impa irs these vested c

ontractual rights

would violate Article I, Section 20 of the TennesseeConstitution. See Kee, 852 S.W.2d at 229 (holding ame ndment to Savings Stat

ute could not be retrospec

tively applie

d); Cr ismon, 785 S.W.2d at 354-5 5 (holding amendme nt to uninsured motorist statute limit ing kinds of damages r

ecoverable co

uld not be retrospe

ctively applied). IV. In the instantcase, the application of the amendments to the facts of this case would have the effect of br oadening the insur

ance company’s

liability beyond tha

t as it existed on the

date of th

e accident. O n the d ate of the accident, the insurance company was not liable, under its uninsured motorist coverage, for

any portion of the damages that exceeded the City’s limited liability of $130,000. After the subjec t amendments, and a

ssuming, for the pur

pose of discussion,

their applicability

to the facts of this

case, the insura

nce company’s lia

bili ty for un insured motorist coveragewould extend to damages in excess of the City’s statutory liability. This analysis requires that we f

ind that the applic

ation of the 1999 a

mendments to the sub

ject accident w

oul d impermissibly

impair the insurance company’s vested contractual rights that accrued as of October 28, 1997, the date of the accident, in violation of Article I, Section 20, of the Tennessee Constitution. Therefore, we

must apply the law th

at was in effect

on the date of the p

laintiffs’ acci

dent. As an alternative argument, the plaintiffs contend that at the time of the accident, T.C.A. §§ 56-7-1201 and 56-7-1202 permitted recov ery under the uni nsured motorist co

verage of amoun

ts above the limit imposed by the GTLA. The crux of the plaintiffs’ argument is that although T.C.A. § 56-7-1202(b)(4

) excludes a gove

rnment vehicle f

rom the defin

ition of an “uninsured motor v ehi cle,” this provision only applies to an uninsured vehicle and not to an underinsured vehicle.4 Our decision in this case renders moot the other issues raised by the insurance compa ny . Accordingly, they are pretermitted. 

### -5- Hence, so the argument goes, T.C.A. § 56-7-1202(b)(4) does not apply because this case involves a claim for underinsured

motorist coverage. We addressed a similar argument in Hempy v. City of Chattanooga Parks & Recreation, C/A No . 03A01-9412-CV-00435, 1995 WL 309986 (Tenn. Ct. App. E.S., filed May 22, 1995), a case involving nearly identical facts. In Hempy, the plaintiff was injured in anaccident involving a truck owned by the

Ci ty of Chattan ooga. The plaintiff sought to recover under her uninsured motorist coveragefor damages she incurred in excess of the $130,000 statutory limit. We affirmed a grant of summary judgment to the insurance company, re jecting the same argument being advanced in the instant case:

The statute provides no judgment in excess of $130,000 could be entered against the City of Ch

attanooga in this c

ase, and the city

was “self-insured” for that amount. See T.C.A. § 29-20-311; T.C.A. § 29- 20-403(b)(2)(A). Ms. Hempy argues the above statute, T.C.A. § 56- 7-12 02(b)(4), does not apply to the situation at bar because t he cit y vehicle was not “uninsured,” but rather “under in sured.” This argument is not persuasive, since the statut ory def inition of an “uninsured motor ve hicle” clearly encompa sses “underinsured” moto r vehicles as well. “It

appears to us the Legislature simply combined those two c ategories in a single paragraph....” Dockins v. Balboa Insurance Co., 764 S.W.2d 529, 532 (Tenn. 1989). Hempy, 1995 WL 309986, at *2. Hempy controls the resolution of the second issue argued by the plaintiffs. Acco

rdingly, that issue

is found adverse

to the plaintiffs. 4
V. The judgment of the trial court is affirmed. Costs on appeal are taxed to the appellants. This case is remanded for collection of costs assessed below, pursuant to applicable law.