### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE Fe br uary 6, 200 8 S es sio n PHY LLIS T . C RA IGHEA D v. BLU ECR OSS B LUE SHIELD OF

TENNES SEE, I NC., ET AL 

### . Appeal f romthe Circ uit Court for Wilson County No. 12,289 Clara W. Byrd, Judge

No. M2007- 01697-COA-R 10-CV - F iled Jul y 31, 2008

We reve rse the tr ial court’s f inding that the immunity

g rante d in the s econd sentence of Tenn. Code Ann. § 56-53-110 applied only wher e ther e wa s proof that a ctual malice was a bsent. Wit h reg ard to the statute of l imitations g overning claims related t o diminuti on in value to a busine ss, where the g rava men of the c omplaint is for brea ch of c ontrac t, the six -y ear period of T enn. C ode Ann. § 28-3- 109 g overns, but whe re the g rava men of the complaint is for injury to property , the three -y ear period of Te nn . Co de Ann. § 2 8- 3- 10 5 g ov e rn s. Tenn. R. App . P . 10 Extraordinary Appeal; Judgme nt of th e Circ uit Court Reve rsed and Rem anded
P ATR I C I A J. C O T T RE LL , P.J ., M.S., de livered the opinion of the court, in which F RAN K G. C L EME NT , J R ., and R I C HAR D H. D I NK I NS , J J ., joined.
Ga ry C. Sh oc kle y , Samue l T . B ow man, Na sh vil le , T e nn ess ee, for th e a pp e lla nts , B lue Cr os s Blue Shield of Tennesse e, Inc., and V olunteer State H ealth Plan, Inc. Rob e rt E. Coo pe r, Jr., Attor

ne y Ge ne ra l and

Re po rt e r, De nn is J. Ga

rv e y , De puty

Attor ne y Ge ne ra l, Jer e my E. Py

pe r, As sis tant Attor

ne y Ge ne ra l, N a sh vil le , T e nn e sse e , a s Amicus Curiae in support of appellants, B lueCross Blue Shield of Tennesse e, Inc., and V olunteer State H ealth Plan, Inc. Robert L . Huskey , J ason L . Huskey , Manche ster, Te nnessee , for the appellee , Phy llis T. C raig head.
OP IN ION This court g rante d defe ndant’s Tenn. R. A pp. P. 10 application for

an extraordinar

y appea l to reviewthe trial cour

t’s denial of defe ndant’s reque st f or partial summary

judgme nt of plaintiff’s c la im f or ma lic iou s p ro se c uti on

and to r e vie w whic h sta tu te of limitatio ns a pp lie s to a

c la im pe rt a ini ngto d imi nutio n in va lue to a

bu sin e ss.I t i s n ot di s pu t ed f or pu r pos es of

t h i s a ppea l t h at K i ds a n d N u r s es , I n c. w as sol d t o Pedi at r i c Se r v i ce s of 1 A meri ca on N ovemb er 21, 1 99 7, i ncl udi ng M s
. C r ai gh ead’ s i nt er es t i n K & N

. I t ap pear s t hat M s
. Crai gh ead was as s i gn ed by K & N i t s i nt er es t i n t he l aws ui t ag ai ns t B C B S, al t houg h t he t er ms a nd ext ent of t hi s as s i gn ment ar e nei t her ch al l eng ed
n or c l e a r
. F or pu r po s e s of t h i s opi n i on , i t i s as s u me d t h a t K &N as s i g n e d t o M s
. Cr a i g h e a d a n y br e a c h of c on t r a c t c l a i ms K & N ma y h av e h ad ag ai n s t B CB S.

I ncl uded as def

endan t wer e t he af

f i l i at ed comp ani es of

B C B S, i ncl udi ng V ol un t eer Stat e H ea l t h P l an, I nc. 2 wh i ch i s a ma n ag ed ca r e or g an i za t i on t h at c on t r ac t ed wi t h t h e St at e of T en n es s ee , T en n Car e B u r ea u , i n t h e Cont r ac t or R isk A g re e m e n t t o p ro v id e se rv ic e s fo r T e n n C a re , t h e sta te ’s M e d ic a id p la n
. T h e d e fen d a n t is c o llec tive ly re fer re d to a s “B C B S .” -2- In J uly of 2002, Phyllis Craighead, individually and as a n assig nee of

Kids and Nurse s, Inc. 1 (“K &N ”), sue d Blue Cross BlueShield of Te nnessee (“BCBS”) for br eac h of contra ct, malicious 2 pr os e c uti on , a

nd outr a g e ou s c on du c t. The followingfac ts are not disputed. K&N, as the na me implies, provided nursingservice s for chi ld ren w it h s peci al h eal th pro bl ems . I n M ay of 1 99 3, K&N en ter ed i nt o a con tr actwi th BCBS to provide these se rvice s to BC BS enrollee s. In Fe bruar y of 1996, the pa

rties enter ed into an amendment of

their contract such that K&N provided the service s as a subc ontrac t to BCBS under the Te nn Care pr og ra

m. T he c ontr a c t be tw e e n B CB S and K&N g ave e it her pa

rt y the ri g ht t o termi nat e th e con tr act wi th ou t caus e up on 90 day s writ ten no ti ce. O n S ept emb er 11 , 1 99 7, BCBS g ave K &Nnotice of its intent to terminate the c ontrac t which was e ffe ctive 90 day s therea fter. All parties ac knowledg e that the c ontr ac t betwee n BCB S and K&N was subjec t to the TennCar e Cont ractor Risk Agr eeme nt betwee n BCB S and the TennCar e B urea u. The Contrac tor Risk Agr eeme nt betwee n BCB S and the State of Tenne ssee for TennCar e ser vices provide s in § 1.5 a s f oll ow s: Al l ma na g e d c are or g anizatio ns sh a ll im me diate ly re po rt to t he TB IMF CU [Tennessee B urea

u of Investig ation Medica id Fra ud Control Unit] any

suspicion or knowledg e of fra

ud and/or abuse, including but not limit ed to the false or fra udulent filings of claims and/or the acc eptanc e or failure to re turn monies allowed or paid on c la ims kn own to be fa lse or fr a ud ule nt. Th e re po rt ing e nti ty sh a ll n ot a

tte mpt to investigate or resolve the repor ted suspicion, know ledg e or action without informing the TB IMFCU and must coope rate fully in any investigation by the TBI MFCU or subsequent leg al ac tion that may result from suc h an investig ation. TennCar e manag ed ca

re or g aniza t i o n s and hea lth care providers sha ll, upon request, make available to the TBI

MFCU any

and all administrative, financ ial and medica l rec ords relating to the de livery

of items or ser

vices for which Te nnCare monies a re e x pended. In a dd iti on , th e TB IMF CUmus t be a llo we d a c c e ss t o th e pla c e of bu sin e ss a

nd to all rec ords of a

ny TennCar e mana g ed ca

re or g anization or heal th

car e provide r during normal business hours, ex ce p t u nder spe cial cir cumstance s when a fter hour adm is si onsh all be al lo wed . S peci al c ir cum st ances sh all be det erm in ed by th e TBI MFCU.E a rlie r th e trial c o u rt d e n ie d B C B S ’s m o tio n fo r su m m a ry ju d g m e n t o n th e b re a c h o f co n tra c t cla im w h ic h is 3 like w ise no t sub je c t t o this a p p e a l. C o n se q u e n tly, the c la im tha t B C B S b re a c h e d it s c o n tra c t with K & N b y it s d e la ys an d f ail ure t o p ay f

o r service s rend ere d b y K & N rem ains. -3- In Ms. C ra i ghead’ s Response to the def endant’ s Rule 56.03 Statement of Undisputed Fa cts, the pa rt ie s a g re e d a s f

oll ow s: 2

. B C B S w a s un d e r

a c o n tr a c tu a l d

u ty t o r e p o rts u s p e c t e d

f r a u d t o th e T B I.
Source : Contractor Risk Ag ree ment § 1-5.
Re spo nse : Admit, but thi s require men t to admit does not give

them the license t o m i s repr esent the f acts to TB Ifor Blue Cross’s financ ial g ain.
3. B CB S wa s und e r a c ontr act ual dut

y to c oo pe rate wi th t

he TB Iin i ts investigation of suspected f raud.
Source : Deposition of Patricia Sche rmerhor n, pag e 107, lines 1-19;
Re spo nse : Ad

mit
In her c omplaint, Ms. C raighead a lleg es that B CBS wrong fully repor ted ac ce pted billing prac tices as M ed i ca i d fra ud to the Tenne ssee B urea u of Investig ation (“TB I ”) which prompted a criminal investig ation and that durin g t h e course of the criminal investig ation BCB S provided “slanted” and “inc omplete” infor mation to authorities. Ms. Craighe ad also a lleg es that BCB S “slow wa lke d a nd int e nti on a lly

e va de d th e ir

ob lig atio n und e r t

he c ontr a c t to tim e ly pr oc e ss t he pa y me nts ” in v iol atio n o f t

he ir c ontr a c t w hic h r e su lte d in a c a shfl owpr ob le m f or K&N. As a

re su lt o f t

he se a c tio ns , M s. Cr a ig he a d a lle g e s that the va lue of K&N wa s dim ini sh e d wh e n it wa s late r so ld. Ms. Craig head a lleg es that she wa s tried on thirty -six (36) counts of TennCar e insurance fra ud in fede ral court a nd was ultimately

acquitted. As a

result of t h es e al l eged actions, Ms. Craig head a lleg ed B CB S is l ia

ble fo r o utr a g e ou s c on du c t, m a lic iou s p ro se c uti on and br e a c h o f c ontr a c t. The de fenda

nt filed a motion for pa rtial summary

ju d g ment seekingdismiss al of the malicious prosec ution claim and the outra g eous conduc t claim

. T h e t ri al cour t dismi ssed the outr a g e ou s c on du c t c la im, and that dis mis sa l is no t a pp e a le d. Th e ru lin g s whic h a re su bje c t to thi s 3 a pp e a l are the tr ia l c ourt ’s de nia l of summ ary jud g me nt o n th e ma lic iou s p ro se c uti on c la im a nd its ref usal to find that rec overy for dimi nution in value to K&N i s barr ed by the three -y ear

limit ations period of T enn. Code Ann. § 28- 3-105.
Th e tr ia l c ourt g ave tw o re a so ns fo r i ts r e fu sa l to dis mis s th e ma lic iou s p ro se c uti on c la im. First, t he trial c ourt found that ther e we re issues of materia l fac t surroundingelements of the malicious prosec ution claim. The trial cour t declined to g rant B CBS dismiss al of the malicious-4-

pro secu t i o n c l a i m f

in di ng th at t here was a genui ne i ss ue o f m ate ri al f actas t o wh eth er BC BS provided fa lse information or omitted information when it re ported suspec ted fra ud to the TBI . The court a lso found that rea sonable minds could diffe r as to whether there was proba

ble ca use to suspect fra ud. Second, the tria l court further found that BCB S did not enjoy the i mmunity offe red by Tenn. Code Ann. § 56-53- 110 since it “doe s not apply in case of actual malice, and that there is a g enuine issue as to the existence of ma lice under the fa cts and be fore the cour t.”
BCB S also argues on appe al that the trial c ourt err ed when it he ld that diminut ion in value to K&Nis not an injury

to property

g overne d by

the th ree-year

limit ations period of Te nn. Code Ann. § 28-3-105. T he court found t hat pl aintiff’s “attempt to rec over f or dama g es in value to Kids & Nurs e , Inc . is an e le me nt of the dama g e s of the br e a c h of c ontr a c t [c la im] a nd no t a se pa ra te c la im for pr operty

damag es.”
We will first address whe ther the tria l co u rt err ed whe n it denied def endant’ s reque st for su mm ary ju dgmen t o f pl ain ti ff’s mal ici ou s p ros ecut io n cl aim . S i n c e th e qu est io n wh eth er BC BS is imm une under

Tenn. Code Ann. § 56- 53-110 would pre termit any other issues ra ised on appe al about the malicious prose cution matter, we will start our inquiry with the immunit y

issue.
I. I M M UNI T Y U NDE R T E NN . C OD E A NN . § 56-53-110
In 2001, the Gene ral Assembly enac ted Chapter 53 of Title 56 of Tenne ssee Code Annotated e nti tle d “ Ins ur anc e F ra

ud ” to co mba

t, as the tit le su g g e sts , insu ra nc e fr a ud

. B y vir

tue of thi s a c t, i t beca me a c riminal violation to participate in a “fr audulent insurance act” as def ined by Tenn. Code Ann. § 5 6- 53 -1 02

. Inc lud e d wi th t he de fi nit ion

of a “ fr a ud ule nt i ns ur anc e a c t,” amon goth e r t hin g s, i s th e f o l l o wi n g: (a) Any person who, know ingly

and with inten t to defra

ud, and for

the purpose of de pr ivi ngano the r o f p ro pe rt y or fo r p e c un ia

ry g a in, c omm its , p art ic ipate s in or a ids , a be ts, or c on sp ir e s to c omm it o r s oli c its ano the r p e rs on to c omm it, or

int e nti on a lly p er m i t s its employ ees or its ag ents to commit any of the followingacts, ha s c omm itt e d a

fr a ud ule nt i ns ur anc e a c t: (1 ) P re se nts , c a

us e s to be pr e se nte d, or

pr e pa re s w ith know le dg e or

be lie f t hat it will be prese nted, by

or on beha lf of an insured, claimant or applicant to an insurer , insurance profe ssional or premium financ e compa ny in connec tion with an insurance tr ans a c tio n o r p re mium f ina nc e tr ans a c tio n, any info rm atio n whic h c onta ins fa lse repr esentations as to any materia l fac t, or which withholds or conc eals a materia l fac t co n ce rn i n g an y

o f t h e f o l l o wi n g:

. . . ( B ) Ac l a i mf

o r p aym e n to r

b e n e f i tp ur s u an tt o an y i n s ur an c e p o l i c y; ( C ) P aym e n t s m a d e i na c c o r d an c e w i thth e t e r m s o f an y i n s ur an c e p o l i c y;-5- . . . Civil liability

was c reated for a

ny one who c ommits an “unlawful insuranc e ac t” as de fined by Tenn. Code Ann. § 56-53-103. I f a party is c onvicted of a fra udulent insurance a ct , co u rt s are a uth or ize d to or de r re sti tut ion of dama g e s und e r T e nn . Co de Ann. § 5 6- 53 -1 05 . T his a c t a lso g rante d civil immuni ty

for those pe rsons coope ratingunder the Act. Tenn. Code Ann. § 56- 53-110 pr ov ide s a s f

oll ow s:
In the abse nce of

actua l ma l i ce, no person fur nishing, disclosingor re questing inf or matio n p ur su ant t o § 56 -5 3- 10 9 sh all be su bje c t to c ivi l li a

bil ity fo r l ibe l, slander, or

any other c ause of

action ar ising fr om the fu rn i s h ing, disc losing or reque sting of such information. No person providi ng in form ation pu rsuant to § 56-53-109( a) shall be sub jec t to civil liabi lity for any cause of action arising f rom th e pe r so n’ s pr ov isi on o f re que st e d infor m at ion
. Any person a g ainst whom any a c tio n is br ou g ht wh o is fo un d to be immun e fr om l ia bil ity un de r t his se c tio n, sh a ll be e nti tle d to re c ov e r r e a so na ble atto rn e y s’ fe e s a

nd c os ts f ro m th e pe rs on

or pa rt y who brought the action. This sec tion does not abrog ate or modify in any way any common law or statutory privileg e or immunity

heret o fore enjoy ed by

any person. (empha sis added).
The c ode sec tion refe renc ed above, Tenn. Code Ann. § 56-53- 109, entitled “Cooperation,” pr ov ide s a s f

oll ow s: (a ) Wh e n a

ny law e nf or c e me nt o ff

ic ia l or autho ri ty , any

ins ur anc e de pa

rtme nt, state divis io n o f i ns ur anc e fr a ud , o r s tate or

fe de ra l r e gulator

y or lic e ns inga

uth or ity reque sts info rm at ion from an insure r or insura nce pr ofessional for

the purpose of detec ting, prosec uting or preve nting insurance fra ud, the insurer o r i nsuranc e pr o f e s s io n a l s h a ll ta

k e a ll r e a s o n a

b le a c ti o n s to p r o v id e th e in f o r mati o nr e qu e s ted, subject to any

leg al privileg e prote ctingsuch information. (b) Any insurer or

i n s u ra n ce p rofe ssional who has re asonable belief that an ac t vio latin g§ 5 6- 53 -1 02 or

§ 5 6- 53 -1 03 wi ll be , is be ing , o r h a s b e e n c omm itt e d s ha ll furnish and disclose any

information in such insuranc e prof essional’s possession c o n c e r n i n gs u c ha c tt o th e ap p r o p r i at e l awe n f o r c e m e n to f

f i c i a l o r a u th o r i ty, insurance depar

tment, state division of insurance fra ud, or state or

fede ral re gulatory o r l i c e n s i n ga

u th o r i ty , s u

b j e c tt o an y l e g a l p r i v i l e g e p r o t e c t i n gs u c hi n f o r m at i o n
. In no case shall the information be r equire d by subpoena or

otherwise to be g iven to the person a lleg ed to have committed a violation, unless in possession of an insure r and that in sure r u se d th e inf

or matio n to de ny

a c la im o f t

he pe rs on , in

wh ole or in p art

. (c) All documents or other informa t i o n submitt ed to or g ener ated by a law e nf or c e me nt, re gulator

y , li c e ns ingor

oth e r g ov e rnme nta l a g e ncy purs ua nt t o subsection (a ) or ( b) shall not be subjec t to disclosure pursuant to the Te nn es s ee-6-

Pub lic Re c or ds Ac t, c od if ie d in tit le 10 , c ha

pte r 7 , a nd sh a ll b e c on fi de nti a l un le ss d is c lo s e d b y s u c hla we n f o r c e me n t, r e gu lato r

y , li c e n s in go r

o th e r g o v e r n me ntal ag ency at such a g ency ’s sole discre tion. (d) Any person who ha s a re asonable belief that an act violating this cha pter will be, is being , or has be en commit ted, or a ny person who c ollects, revie ws or ana ly zes inf or matio n c on c e rn ingins ur anc e fr a ud ma y fu rn ish and dis c los e any

inf or matio n in such person’s possession conce rning such act to an authorized re prese ntative of a n insurer who reque sts the inf o rm ation for the pur

pose of de tecting , prosec uting or preve nting insura

nce f raud. (e ) F a ilure to c oo pe rate wi th a re qu e st fo r inf or matio n fr om an a

pp ro pr iate loc a l, s tate or fe dera l gove rnmental a uthority shall bar a person’ s elig ibilit y for r estitution from any pr oc e e ds re su lti ngfr om s uc h g ov e rnme nta l inve sti g atio n an d pro se c uti on . T his su bs e c tio n s ha ll n ot b e c on s t r u e d a s li mit ingthe a

bil ity of any g ov e rnme nta l a

uth or ity fr om i mpo sin glawf

ul ci vil dis c ipl ine up on a pe rs on or e nti ty that f a ils to c oo pe rate with a re quest for infor

mation as delineated in this subsection.
Whether B CBS is shielded by this statutory immunit y is a matter of st atutory construction. Construction of a statu t e i s a question of law which appe llate cour

ts review de novo , w ith out a presumption of correc tness of t he trial court’s f indings. Barge v. Sadle r , 70 S.W .3d 683, 686 (Tenn. 20 02 ); Hi ll v . Ci ty

of G e rm an tow n , 3 1 S. W.3 d 2 34 , 2 37 (T e nn . 2 00 0) ; Gleave s v. Checke r Cab Transit Corp., Inc. , 1 5 S. W.3 d 7 99 , 802 (T e nn . 2 00 0) ; Exx onmobil Oil Corp. v. Metro. Gov’ t. of Nas hv ille an d D av ids on Cou nty , 246 S.W .3d 31, 35 (Tenn. Ct. App. 2005). The primary rule of statutory construction is “to ascertain and g ive effec t to the i ntention and p urpose of

the leg islature.” Le ns Cra fte rs, In c . v . S

un dq uis t , 3 3 S. W. 3 d 7 7 2 , 7 7 7 ( T e n n . 2000); Carson Cr eek

Vacation Resorts, Inc. v . Dept. of Rev enue , 865 S.W .2d 1, 2 (Tenn. 1993) ; Ex x on mo bil , 2 46 S.W. 3d

at 35 ; Mc Ge e v . B est , 106 S.W .3d 48, 6 4 (T en n. Ct. App. 2002). To deter mine leg islative intent, one mus t look to the natura l and ordinar y meaningof the languag e used in t he statut e its e lf

. We mus t e xami ne any pr ov isi on wi thi n th e c onte xt of the e nti re statut e and

in li g h t o f it s o v e r - ar c h in g p ur p o s e an d th e g o a ls it serve s. St a t e v. Flemming , 19 S.W .3d 195, 197 (T e nn . 2 00 0) ; Cohen v. Cohen , 93 7 S.W. 2d 82 3, 82 8 ( Te nn . 1 99 6) ; Ex x on mo bil , 246 S.W .3d at 35; T.R

. Mi lls Con tra c tor

s, In c
. v
. W

RH En te rp ris es, L L C, 93 S.W .3d 861, 867 (Tenn. Ct. App. 2002). Th e statut e sh ou ld b e re a d “ wi tho ut a ny fo rc e d o r s ub tle c on str

uc tio n whic h wo uld e xten d or lim it its meaning .” Nat ’l

Ga s D ist

ribu to rs , Inc. v. Sta te , 804 S.W .2d 66, 67 (Tenn. 1991) . As our Sup re me Court

ha s sa id, “ [w]e mus t se e k a re a so na ble c on str

uc tio n in light o f t

he purp os e s, objectives, a

nd spirit of the statute based on g ood sound rea soning.” Sc ott v . A sh lan d H

e alt hc ar e Center, Inc

. , 4 9 S

. W

. 3 d 2 8 1 , 2 8 6 (T en n
. 2 0 0 1 ) ( ci t i n g State v. Turner , 913 S.W .2d 158, 160 (Tenn. 1995)).P resu m ab l y, i f o ne i s ac t i ng o n b eh alf

o f a n i nsur er suc h as an e m p l o yee o r ag en t t he i m m un i t y wo uld l i ke w i se 4

a p p ly. -7- Courts a re also instructed to “g ive ef fec t to every

word, phra se, cla

use and se ntence of the act in order to c arr

y out the leg islative intent.” Tidw ell v. Collins , 522 S.W .2d 674, 676-77 (Te nn. 19 75 ); In re Estate of Dobbins , 987 S.W. 2d 30 , 34 (T e nn . Ct. App . 199 8)

. Court s must pr e sume that the Gene ral Asse mbly selec ted these w ords deliberately , Tenn. Manufactured Housing Ass'n. v
. M e tro
. G o v 't ., 7 9 8 S

. W.2d 254, 257 (Tenn. Ct. App. 1990), and that the use of these w ords c onve y s so me int e nt a

nd c arr ie s me anin gan d

purp os e . TennesseeGrowers, Inc. v . King, 682 S.W .2d 20 3, 20 5 ( Te nn . 1 98 4) ; Clark v. Crow, 37 S.W .3d 919, 922 (Tenn. Ct. App. 2000).
Whe n c on str

uin gstatut e s th at ar e pa

rt of a statut or

y sc he me , we are a lso dir e c te d to lo ok to the context of the particula r provision. Our Supre me Court has made the followingobservation:
Wh e n s tatuto r

y p r o v is io n s ar e , a s in th is c a s e , e n a c te d a s p art o f a la r g er A ct, ‘we examine the entire Act with a view to a rrive at the true intention of eac h section and the ef fec t to be g iven, if possible, to the entire Act and ever y section there of. Where differ ent s ections ar e appa rently in conflict we must harmonize them, if practica ble, and lea n in favor of

a construc tion which will render ever y word ope rative.’
Hi ll , 3 1 S

. W

. 3 d

at2 3 8 (qu o t i n g Bible &Godwin Const r. Co. v. Faene r Corp. , 504 S.W .2d 370, 371 (Tenn. 1974) ).
T h e tr i a l c o urtf

o un d th at i no r d e r f o r th e i m mun i ty o f

T e n n
. C o d e A n n
. § 5 6

- 5 3

- 1 1 0 t o a p p l y, the re mus t be an a

bs e nc e of ma lic e . T his is c le arl y

a pr e re qu isi te in o rd e r t o c la im the immun ity g rante d in the first sentenc e of the statute. Cons eq uently , absent a ctual malice , no person who furnishes, discloses, or requests information pursuant to the fir st sentenc e of Te nn. Code Ann. § 56- 5 3

- 1 0 9 m ay b e s u

b j e c tt o c i v i l l i a

b i l i ty. We do not believe, howe ver, the i m m u nity available in the se c ond sentenc e re quires an absenc e of a ctual malice for sever al rea sons. First, the plain languag e of the sec ond sentenc e, which a p p li e s o n ly

if a p e r s o nis p r o v id in gin f

o rmation u p on r e que st , contains no such r equire ment of actua l malice. Second, to imply such a r equire ment would make the second se ntence redunda nt and us e le ss. W e mu s t g i v e m e an i n g t o th e s e c o n d s e n t e n c e an d r e c o g n i z e th e l e g i s l atur e ’ s i n te nt t o c re ate a di fferent kin d o f i mmunit

y in a sp e c if ic sit uatio n. Al so , th e se c on d s e nte nc e re fe rs to subsection (a ) of Te nn. Code Ann. § 56-53-109 which only applies to information re quested fr om an insu rer . Th e re fe re nc e to T e nn . Co de Ann. § 5 6- 53 -10 9 in th e fi rst se nte nc e is n ot l imi te d to subsection (a ), b u t als o applies to one fur nishing infor

mation under Te nn. Code Ann. § 56-53- 109(b), ( c), ( d) an d (e ). There fore , the meaningof Tenn. Code Ann. § 56-53-110 be comes c lear

. The de terminative distinction betwee n the two sentenc es is whether one is an i n s u rer responding 4 to a re qu e st f or inf or mation. I f s o, the n o ne is i mmune fr om c ivi l li a bil ity . I f n ot, the n o ne is immune from civil liability only if there is an absenc e of a ctual malice

.-8-

Omitting the abse nce of

actua l malice re quirement while grantingimmunit y to insure rs who respond to re quested infor mation is also an expression of public poli cy within the leg islature’s domain. I f a person intentionally provides investigating authorities with f alse information and e v i d e n c e th e nth e a

u th o r i ty i n v o l v e d m ay t ak e w h at e v e r l aw f u l r e c o ur s e i s av a i l a

b l e
. C o n s e qu e n t l y, there exis ts incentive to preve nt such behavior. The legislature has clearly decide d that exposi ngand eliminating insura

nce f raud is important and that to be succe ssful one must secure the coope ration of insurer s. To that en d, immunit y is gr anted without re servation to ins urer s who provide information upon re quest to proper authorities, including the TBI

. Whether one cooper ates with the purest of motives or the darke st of hear t is irreleva

nt under the second se ntence of Tenn. Code Ann. § 5 6- 53 -1 10 . T he le g isl atur e is r e sp on sib le fo r b a lanc ingthe int e re sts inv olv e d a nd ha s c le arl y decide d that secur ing the cooper ation of insurer s in respondingto reque sted information to r oot out fr a ud ov e rr ide s th e int e re st o f a pe rs on to r e c ov e r d ama g e s in

a c ivi l su it f

or tor tio us c on du c t.
In addition to the gr ound relied upon by the t rial court requiring an abse nce of actua l malice, Ms. C ra i gh ea d offe rs an a dditional reason why BCB S may

not claim the immunity

g rante d in the se c ond sen ten c e of

Te nn . Co de Ann. § 5 6- 53 -1 10 . A c c or din gto M s. Cr a ig he a d, the a lle g e dly tortious behavior of BCB S occurr ed in 1996, 1997 and 1998, year s befor e the immunity statute was enac ted in 2001. Ms. Craig head w as indicted on J u l y 1 0 , 2 001 and ac quitted in April of 2002. Acc ordingto Ms. Craighe ad, apply ing T enn. Code Ann. § 5 6 -53-110 to these fac ts would be an inappropriate re troac tive application.
I n o rd er to be succ essful in a c laim for malicious prose cution, the plaintiff must show: (a) that a prior lawsuit or j udicial proceeding was brought ag ainst the pl aintiff withoutprobable cause , (b) that the pr ior lawsuit or judicial proceeding was brought ag ainst the plaintiff with malice, a nd (c) that the prior law suit or judicial proce eding s terminated in the plaintiff’ s favor

. Pa rri sh v . M arqu is , 1 7 2 S

. W

. 3 d 5 2 6 , 5 3 0 (T en n
. 2 0 0 5 ) ( ci t i n g Christ ian v. Lapidus , 833 S.W .2d 71, 73 (Tenn. 1992) ); Roberts v. Fe deral Expre ss Corp. , 842 S.W .2d 246, 247-48 (Te nn. 1992).
Since the suit was not terminated in Ms. C raighead’ s favor until April of 2002, she did not have a c a us e of a c tio n f

or ma lic iou s p ro se c uti on

until that ti me . A t th e tim e he r c a us e of a c tio n a ro se in A pr il o f 2 00 2, the statut or

y immun ity

ha d b e e n in e ff

e c t si nc e July

of 20 01 . T he re fo re , e ve n if Te nn . Co de Ann. § 5 6- 53 -1 10 is g ive n a pr os pe c tiv e a

pp lic atio n o nly , it

is a pp li cabl e to Ms. Craig head’ s action.
Neither party raises the issue in their brief s of whethe r the c ontrac tual repor ting r equire ment in Section 1.5 of t he C ontrac t betwee n BCB S and TennCare is the ty pe of “ reque st” contemplate d by th e s e c o n d

s e n te n c e o f

T e n n
. Co d e A n n
. § 5 6

- 5 3

- 1 1 0

. I t i s r e qu ir e d th at t h e p e r s o ns e e king immunit y be providing “requeste d information.” I n turn, Tenn. Code Ann. § 56-53-109( a) pr ovides “whe n any

law enf orce ment officia l or authority , any insurance depar

tment, state division of insurance fra

ud, or state or

fede ral re gulatory

or licensing authority” reque sts infor mation f rom an insurer the n the insurer

must “take a ll reasona

ble ac tions to provide the information re quested.”T he i nq uiry w he t he r d i m i nu t i o n in va l ue t o K & N i s a co nse q ue ntia l d a m a g e t h a t m ay b e a ssessed ag ainst 5 B C B S fo r b re a c h o f c o n tra c t h a s n o t ye t ta k e n p la c e in th is c a se . Ju d g e C a n tre ll su c c inc tly d e sc rib e d the issu e thu sly:

C o nsequenti al o r “s p eci al ” d am ages are d ef i ned i n B l a ck’s a s “[s ]u c h d a m a g e a s d o e s n o t f lo w d ire c tly and i mm edi at el y f

r om t he act of t he part y , but onl y f r om s om e of t he cons equen ces or r es ul t s of s uch
a c t.” T h e r u le fro m th e v e n e ra b le a n d fa m ili a r c a se o f H a d le y v . B a x e n d a le , 9 Ex. 341, 156 Eng

. Rep. (c o n tinu e d ...) -9- First, it is clear

from the rec ord that while BCB S may have initially broug ht suspe cted f raud to t he atte nti on of the TB I , the re a ft e r, a ll inf or matio n wa s pr ov ide d by

B CB S to the TB Iup on

the ir re qu e st b y

su bp oe na or oth e rw ise . Se c on d, it i s c le ar t hat B CB S wa s c ontr a c tua lly ob lig ate d to repo rt su sp e c te d f

ra ud to t he TB I . Co ns e qu e ntl y , it wa s c le arl y

up on re qu e st. Th ir d, sin c e thi s objection to the application of the statutory immunit y

has not bee n raised by Ms. Cra ighe ad either be low or in h e r b ri e f on a

pp e a l, the n Ms. Cr a ig he a d may no t no w ra ise it fo r the fi rs t tim e on a pp e a l.
Since we f

ind that BCB S i s aff

orded immunity

under the second se ntence of Tenn. Code Ann. § 56-53-110, w e re verse the trial c o u rt ’s denial of summary

judgme nt to BCBS on the ma lic iou s p ro se c uti on

c la im.
II. S TA TU TE O F L IM ITA TIO N S O N C L A I M T HAT K& N S UF F E RE D D I M I NUT I ON I N V AL UE BCB S argu es on appeal that Ms. Craig head’ s claim that she is entitled to rec over f or diminuti on in value to K &Nshould be dismissed as barr ed by the three -y ear

limit ations period of Te nn . Co de Ann. § 28- 3- 10 5. Un de r T e nn . Co de Ann. § 2 8- 3- 10 5, any dama g e to p ro pe rt

y is g overne d by

a thre e-year

statute of limit ations. On the other ha nd, Ms. Craig head a

rgues that since diminuti on in value to K&N is a dama g e under her br eac h of contra ct ac t i o n , t h en t h e si x -y ear limitatio ns pe ri od

of Te nn . Co de Ann. § 2 8- 3- 10 9 g ov e rn s “ a c tio ns and c ontr a c ts n ot o the rw ise expressly provided for .”
Th e y are bo th c or

re c t. T his c a se is u

nu su a l si nc e Ms. Cr a ig he a d is suin g bo th i n h e r c a pa c ity a s a ssi g ne e of

K&N’ s c ontr a c tua l r ig hts a g a ins t B CB S and a s an in div idu a l w ho se owne rs hip i nt e re st in K&Nwas damag ed. In order to dec i d e t h e ap p l i cable limit ation period, we must look t o the “g rava men” of the complaint. Gunter v. Lab. Corp. of America , 121 S.W .3d 636, 638 (Tenn. 2003) ; Tip’s Pac kage Store, Inc. v . Commercial Ins. M anagers, Inc

. , 86 S.W .3d 543, 551 (Tenn. Ct. App. 2001). The “ g rava

men” of the complaint is determined on the basis of the claimed damag e. Gunter , 12 1 S. W.3 d at 64 1- 42 ; Tip ’s Pa c k age Sto re , 86 S.W .3d at 551.
We w ill fi rs t a dd

re ss Ms . Cra ig he a d’ s c la im a g a ins t B CB S a s a ssi g ne e of K&N’ s c la im a g a ins t B CB S. F or purp os e s of thi s a pp e a l, we a ssu

me that a s a ssi g ne e , M s. Cr a ig he a d s te ps int o the shoes of K &N

. The grava men of K&N’s suit ag ainst BCB S is t hat B CBS brea ched its contra ct and K&N is entitled to da mag es resulting from that bre ach. O ne of the possible ty pes of damag es that m ay be re cover ed for

brea ch of K &N ’s contra ct is diminut ion in value, if such damag e wa s fore s e e a b le at th e ti me th e p arti e s e n te r e d into th e c o n tr a c t. Co n s e qu e n tl y , in h e r c a p acity as 5(

. . . con t i n u ed) 5 145 ( 1854) s t at es t h at c on s equ en t i al da mag es w i l l on l y be a wa r ded i f t h ey c ou l d r ea s on abl y be
su p p o se d to h a v e b e e n w ithin th e c o n te m p la tio n o f th e p a rtie s a t th e tim e o f co n tra c ting , as a p ro b a b le
cons equen ce of

a br eac h of

cont r act

. T he B a x e n d a le rul e has been seco nd ed m any t i m es by o ur T e n n e sse e c o u rts. See , f o r ex a m p l e, L a n e v
. A sso cia t ed H o u si n g D ev elo p ers , 7 6 7 S

. W

. 2 d 64 0 (T enn. C t. A p p . 1 9 8 8 ); Tur ner v
. Bens on , 67 2 S.W

. 2 d 75 2 (T enn. 19 8 4 ).
Se veral T enness ee cases have st at ed t hat our co urt s m ay al l o w reco very of al l da m ages whi ch are t he
n o rm a l an d fo re se e a b le re su lts o f a b re a c h o f co n tra c t. M o o re C o n stru c tio n C o . v. C la rksv ill e D e p t. o f E le c tricity , 7 0 7 S .W .2 d 1 (T e n n . C t. A p p . 1 9 8 5 ); B ush v. Ca t hey , 598 S. W

. 2d 777 ( T en n
. Ct

. App. 1 9 7 9 ); Wilso n v . D e a ly , 434 S. W

. 2d 835 ( T enn
. 19 68 )

. Suc h resul t s woul d i ncl ude bot h i nci dent al dam age s an d t hos e c ons equen t i al damages t hat meet t he B a x e n d a le tes t. F o r p u rp o se s o f a n a lysis, t o s ay t h at c er t ai n r es u l t s w er e f or es ee abl e at t h e t i me of c on t r ac t i n g , or t h at t h ey c ou l d r ea sonab l y be
su p p o se d to h a v e b e e n w ithin the c o n te m p la tio n o f t h e p a rtie s w o u ld se e m to b e fun c tio n a lly
e q u iva le n t.
Wi l ls E l ec t r i c Co. , Inc

. , v. M i r s ai di , M 2000- 02477- CO A- R3- CV , 2001 W L 1589119, at * 4 ( T en n
. Ct

. App. , D ec
. 13, 20 01 )

. O n a t l eas t one occ as i on t he T enn esse e Supreme Co ur t ha s r ecogn i zed t hat di mi nu t i on i n v al ue can be a
c o n se q u e n tial d a m a g e su b je c t t o re c o v e ry. B V T Leba no n Sh op pi ng C ent er, L t d. v. W al

- M art St ore s , I

nc. , 48 S. W

. 3d 1 3 2 , 13 5

- 3 6 (T enn. 20 0 1 ) ( f i nd i ng diminut io n in va l ue a m easure of da m ages f

o r breach o f

a co venant of co nt i nuo us o ccup ancy)

. If the trial c o u rt fi n d s tha t un d e r th e c ir c u m s ta n c e s p re se n te d in this c a se tha t d im inu tio n in K & N ’s va lue is
r ec ov er abl e f

or t h e al l eg ed br ea ch by B CB S, t h en t h e t r i al cou r t m u s t al s o c on s i der “ al l f ac t or s i mpac t i n g t h e di mi n u t i on i n va l ue, ” 4 8 S

. W

. 3 d a t 1 3 6 , a nd no t just the b reach. Fa ct s t hat m ay have d i m i ni shed K & N ’ s val ue b ut f o r whi ch t here
can be no r ecove r y i ncl ude but ar e not l i mi t ed t o t he t er mi nat i on of t he cont r act wi t h B C B S whi ch M s
. Crai gh ead ag r ees w as no t i n vio l ati o n o f

t he co ntrac t an d wa s wit hin B C B S ’s c o n tr a ctua l ri gh t s and a n y a ct i on t h at da mag ed K & N f or wh i ch B CB S i s i mmun e u n der T en n
. Code An n
. § 56- 53- 110. -10- assig nee of

K&N’s contr actua l rig hts, the g rava men of her

complaint is for bre ach of contra ct and the six- y e ar l imi tatio ns a

pp lie s. The same is not true of Ms. Craig head’ s claim for diminution in value to K& N i n her individual capac ity

. As a former owner, Ms. Craig head is a lleg ing that due to wrong ful ac tions of BCB S, he r prope rty , i.e. , her ownership i ntere st in K&N, was damag ed. The grava men of this action is clear ly one for injury to pr operty under Te nn. Code Ann. § 28-3- 105 and is barr ed since the ac tion was brought in J uly

of 2002, nea

rly 4 1/2 y ear s after

she suffere d t h e dama g e, i.e. , whe n s he so ld K&N at an a lleg edly

diminis hed value

. This matter is rema

nded to the trial c ourt to proce ed on the r emainingb re ach of contra ct c la im in ac c or da

nc e wi th thi s opin ion

. Cos ts of thi s app e a l ar e a sse sse d ag a ins t the a pp e lle e , M s. P h yl l i s C r a i g h e a d , f

o r w h i c he x e c u t i o nm ay i s s u e i f n e c e s s ar y.

____________________________________ PAT RI CIA J. CO TT REL L , P. J., M. S.