IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

Assigned on Briefs November 14, 2011

JAMES WATRY v. ALLSTATE PROPERTY AND CASUALTY

INSURANCE COMPANY, AN ILLINOIS CORPORATION

Appeal from the Circuit Court for Davidson County

No. 10C3628 Barbara N. Haynes, Judge

No. M2011-00243-COA-R3-CV - Filed December 28, 2011

Insured was injured by an automobile driven by an uninsured motorist. Insured filed a claim

with Insurer seeking uninsured motorist coverage benefits and settled for an amount that was

less than his actual damages. Insured then sued Insurer seeking damages for fraudulent

misrepresentation, breach of contract, and violation of the Tennessee Consumer Act. Insurer

filed a motion for judgment on the pleadings which the trial court granted. We affirm the

trial court’s judgment because Insured failed to allege sufficient facts to support any of his

causes of action.

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

PATRICIA J. COTTRELL, P.J., M.S., delivered the opinion of the Court, in which FRANK G.

CLEMENT, JR. and ANDY D. BENNETT, JJ., joined.

Robert L. Whitaker, Brentwood, Tennessee, for the appellant, James Watry.

Alan Sowell, Nashville, Tennessee, for the appellee, Allstate Property and Casualty

Company, an Illinois Corporation.

OPINION

I. BACKGROUND

James Watry suffered injuries from an automobile accident with Richard Dewayne

Davenport on March 2, 2009. Mr. Davenport drove into Mr. Watry’s automobile, causing

him to suffer damages. The police report stated:
As Mr. Watry got out of his truck, he saw Davenport turn his wheel hard and

almost run over a bystander. Davenport narrowly missed the bystander but

then struck Mr. Watry with the front end of his truck. Davenport’s truck drove

up the front of Mr. Watry’s left leg leaving tire marks, and slamming Mr.

Watry to the ground by the force of the vehicle.

Mr. Watry had an automobile insurance policy with Allstate Property and Casualty

Company (“Allstate”) that included uninsured motorist coverage with policy limits of

$100,000 per person. Mr. Davenport was uninsured and was operating an uninsured

automobile, as that term is used in the insurance policy.

Mr. Watry asserted his damages resulting from the accident totaled $32,207.30 in

medical bills and expenses for necessary and reasonable medical services and $3,000 in lost

income. Allstate sent Mr. Watry a letter dated June 9, 2009, which stated the following:

This letter is to confirm our offer of settlement for James Watry’s injury claim.

Our total offer is $25,500.00. The medical bills considered in this settlement

came to $24,512.00. We did subtract all bills related to the nasal fracture as

we do not see that this was part of the “auto accident.” That reduced the

hospital bill from $25,409.82 to $19,833.00. We also paid $5,000.00 to the

hospital under the Medical Payments coverage which reduced the total amount

of bills owed to $19,512.00.

I have sent you the information from BCBS and I have to pay their subrogation

of $1,363.09. After I pay the subrogation demand out of the $25,000.00, this

would leave a balance of $24,136.91 that would be payable to you. You would

be responsible for any bills out of this settlement.

Mr. Watry entered into a Receipt and Release with Allstate (the “Release”) on

September 22, 2009, in which he agreed to accept $29,512 in full satisfaction of his claim

for coverage against Allstate. The Release included the following language:

In consideration of the payment of Twenty Nine Thousand Five Hundred

Twelve Dollars ($29,512.00) by Allstate Property and Casualty Insurance

Company, the undersigned hereby forever releases and discharges the Allstate

Property and Casualty Insurance Company from any and all liability and from

and all contractual obligations whatsoever under the bodily injury Coverage

of Policy No. 000935917077 issued to JAMES WATRY by the Allstate

Property and Casualty Insurance Company, and arising out of bodily injury,

sustained by me due to an accident on or about the 2nd day of March, 2009.

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Following his execution of the Release and receipt of the settlement proceeds, Mr.

Watry filed a Complaint against Allstate in which he asserted the following causes of action:

fraudulent misrepresentation, breach of contract, and violation of the Tennessee Consumer

Protection Act. Allstate filed an Answer and asserted as an affirmative defense that Mr.

Watry’s Complaint failed to state a claim upon which relief could be granted.

Allstate filed a Motion for Judgment on the Pleadings pursuant to Tennessee Rule of

Civil Procedure 12.03, which the trial court granted. The trial court wrote:

After statement of counsel for the parties and, in consideration for the entire

record, the Court is of the opinion the Motion was well taken and granted

same.

IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED that

the Defendant’s Motion for Judgment on the Pleadings is hereby granted and

this matter dismissed.

Mr. Watry appealed the trial court’s judgment dismissing his claims. On appeal Mr.

Watry claims the trial court erred in dismissing his Complaint because he alleged sufficient

facts to withstand a motion for judgment on the pleadings.

II. ANALYSIS

A. Standard of Review

The standard of review on a motion for judgment on the pleadings is as follows:

In reviewing a trial court’s grant of judgment on the pleadings under Rule

12.03 of the Tennessee Rules of Civil Procedure, we construe the complaint

in favor of the plaintiff “by taking all factual allegations in the complaint as

true and by giving the plaintiff the benefit of all the inferences that can be

reasonably drawn from the pleaded facts.” Satterfield v. Breeding Insulation

Co., 266 S.W.3d 347, 352 n.1 (Tenn. 2008) (citing Lanier v. Rains, 229

S.W.3d 656, 660 (Tenn. 2007); Cherokee Country Club, Inc. v. City of

Knoxville, 152 S.W.3d 466, 470 (Tenn. 2004)). Conclusions of law are not

admitted and judgment on the pleadings should not be granted “unless the

moving party is clearly entitled to judgment.” Cherokee Country Club, Inc.,

152 S.W.3d at 470 (Tenn. 2004) (quoting McClenahan v. Cooley, 806 S.W.2d

767, 769 (Tenn. 1991)). This determination is a question of law, and we

review the trial court’s conclusions of law de novo with no presumption of

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correctness. Frye v. Blue Ridge Neuroscience Ctr., P.C., 70 S.W.3d 710, 713

(Tenn.2002) (citing Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91

(Tenn.1993)); Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn. 2000) (citing

Myint v. Allstate Ins. Co., 970 S.W.2d 920, 924 (Tenn. 1998)).

Duffer v. Lawson, 2010 WL 3488620, at *4 (Tenn. Ct. App. Sept. 3, 2010)(quoting Harman

v. Univ. of Tenn., 2010 WL 2432049, at *2 (Tenn. Ct. App. June 16, 2010)).

B. Mr. Watry failed to state a Claim for Fraudulent Misrepresentation.

An actionable claim for fraudulent misrepresentation must state (1) the defendant

intentionally misrepresented a material fact, (2) the defendant knew the representation was

false, (3) the plaintiff reasonably relied on the representation, (4) the misrepresentation

involved a past or existing fact, and (5) the plaintiff was damaged by relying on the

representation. Henderson v. SAIA, 318 S.W.3d 328, 338 (Tenn. 2010) (citing Walker v.

Sunrise Pontiac-GMC Truck, 249 S.W.3d 301, 311 (Tenn. 2008)); Kincaid v. SouthTrust

Bank, 221 S.W.3d 32, 40 (Tenn. Ct. App. 2006) (citing Dobbs v. Guenther, 846 S.W.2d 270,

274 (Tenn. Ct. App. 1992)).

Additionally, Rule 9.02 of the Tennessee Rules of Civil Procedure requires the

following:

In all averments of fraud or mistake, the circumstances constituting fraud or

mistake shall be stated with particularity. Malice, intent, knowledge, and other

condition of mind of a person may be averred generally.

In his Complaint, Mr. Watry alleges the following in support of his fraudulent

misrepresentation claim:

14. Defendant Allstate, by and through its authorized representatives,

employees and agents, after receiving Plaintiff’s medical records and bills and

other documentation, which were part of Plaintiff’s U.M. Claim referred to

hereinabove, offered Plaintiff a total settlement of only $25,500.00. . . . This

settlement offer was less than Plaintiff’s medical expenses incurred as a direct

and proximate result of the incident.

. . . . .

20. Defendant Allstate, by their letter of June 9, 2009, and other acts and

omissions schemed, contrived, planned and designed to exert pressure upon

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Plaintiff to settle Plaintiff’s U.M. Claim for an amount vastly below the

reasonable and fair value of said claim and to misrepresent the full extent of

coverage under The Policy applicable to Plaintiff’s U.M. Claim.

21. Thereafter, Allstate, by and through their authorized representatives, and

in furtherance of their scheme to deprive Plaintiff of the full and fair value of

Plaintiff’s U.M. Claim, represented to Plaintiff and his spouse Cathy Watry

that Plaintiff was only entitled to $5,000.00 for all his general damages under

the Policy.

22. Plaintiff, in fear of collection efforts by Skyline Medical Center for their

$25,000.00 plus in medical bills, and reasonably believing that the

representations made to Plaintiff by Allstate, by and through their authorized

representatives, were true and based upon a good faith evaluation of Plaintiff’s

U.M. Claim, Plaintiff accepted Defendant Allstate’s offer of $29,512.00 and

signed an “ALLSTATE PROPERTY AND CASUALTY INSURANCE

COMPANY RECEIPT AND RELEASE UNDER UNINSURED MOTORIST

INSURANCE – COVERAGE SS SUBROGATION AGREEMENT”.

. . . . .

24. Plaintiff was, in fact, induced to sign The Release due to the fraudulent

misrepresentations of fact by ALLSTATE, by and through their authorized

representatives, as described herein, which were statements, both written and

oral, of existing or past material facts, made with knowledge of its falsity or

with reckless disregard for the truth.

25. As a direct and proximate result of the fraudulent misrepresentations of

Defendant ALLSTATE, by and through their authorized representatives,

Plaintiff suffered monetary damages, consequential damages, loss of paid [sic]

for monetary benefits under The Policy, costs and general damages all

according to proof.

26. The fraudulent misrepresentations of Defendant Allstate, by and through

their authorized representatives were wanton, willful and made with

knowledge of their falsity or with reckless disregard for the truth wherefore

punitive damages are appropriate.

The only representation of material fact Mr. Watry alleges Allstate made is set forth

in paragraph 21 of his Complaint: “Plaintiff was only entitled to $5,000.00 for all his general

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damages under the Policy.” Mr. Watry does not assert that this statement is false or allege

that his reasonable reliance on this statement caused him to suffer damages as he must to

state an actionable claim for fraudulent misrepresentation. Further, Mr. Watry did not

include the declarations portion of his policy with Allstate with his Complaint, so we cannot

determine whether the policy is contrary to the representation Mr. Watry alleges Allstate

made to him.

Mr. Watry attached as Exhibit B the letter from Allstate to Mr. Watry dated June 9,

2009, in which Allstate set out its offer of settlement. In reviewing this letter, the substance

of which is set forth above, we can find no representation that could qualify as a

misrepresentation of a material fact. Moreover, Mr. Watry does not contend he relied on any

statement of material fact included in the letter.

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Mr. Watry has failed to allege sufficient facts in his Complaint in support of his claim

for fraudulent misrepresentation. Accordingly, we affirm the trial court’s judgment

dismissing his claim for fraudulent misrepresentation.

C. Mr. Watry Failed to State a Claim for Breach of Contract.

The insurance policy Mr. Watry had with Allstate is a contract between Mr. Watry and

Allstate. National Ins. Ass'n v. Simpson, 155 S.W.3d 134, 138 (Tenn. Ct. App. 2004)

(insurance policies are contracts between the insured and the insurer). Mr. Watry asserts the

following in connection with his claim for breach of contract:

28. The acts and omissions of Defendant ALLSTATE by and through their

authorized representatives constitute material breach of The Policy which is

an insurance contract and also constitutes bad faith breach of contract.

29. As a direct and proximate result of the acts and omissions of Defendant

as alleged herein, Plaintiff suffered monetary damages, consequential damages

and incurred costs, all according the proof.

Mr. Watry states in his brief that he is not alleging a statutory bad faith claim pursuant

to Tenn. Code Ann. § 56-7-105. However, “Tennessee does not recognize a general common

law tort for bad faith by an insurer against an insured; the exclusive remedy for such conduct

is statutory, provided by Tennessee Code Annotated § 56-7-105.” Cracker Barrel Old

Country Store v. Cincinnati Ins. Co., 590 F. Supp. 2d 970, 972 (M.D. Tenn. 2008) (citing

The Release indicates Mr. Watry settled his claim with Allstate for a different (higher) amount than

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Allstate offered in its June letter in any event.

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Fred Simmons Trucking v. U.S. Fidelity Guar. Co., 2004 WL 2709262, at *5 (Tenn. Ct. App.

Nov. 29, 2004); Chandler v. Prudential Ins. Co., 715 S.W.2d 615, 619-20 (Tenn. Ct. App.

1986)). In light of Mr. Watry’s insistence that he is not stating a statutory bad faith claim,

we must assume he is asserting a simple breach of contract claim against Allstate.

To state a claim for breach of contract, Mr. Watry must describe some conduct by

Allstate that was inconsistent with one or more provisions of the insurance policy and that

he suffered damages as a result. However, Mr. Watry does not allege Allstate violated any

terms of its policy in its dealings with him or that it took any actions that contradicted any

of its terms. Accordingly, we hold Mr. Watry has failed to state a claim for breach of

contract and therefore affirm the trial court’s dismissal of his breach of contract cause of

action.

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D. Mr. Watry Failed to State a Claim Entitling Him to Relief under the

Tennessee Consumer Protection Act.

In support of his claim for violation of the Tennessee Consumer Protection Act, Mr.

Watry alleged the following in his Complaint:

32. Pursuant to the Tennessee Consumer Protection Act (TCPA) insurance

companies, such as Defendant Allstate may not engage in any “unfair or

deceptive act or practice” and/or refuse to pay a claim under the terms of the

policy. (See, TCPA Section 47-18-104(b)(27).)

33. Pursuant to the Tennessee Unfair Claims Settlement Act of 2009

(TUCSA) insurance companies, such as Defendant Allstate, must adopt and

implement reasonable standards for the prompt settlement of claims arising

under its policies (T.C.A. 56-8-105(3).) Defendant ALLSTATE failed and

refused to comply with this statute and/or enforce said mandatory standards.

34. Insurance companies, including Defendant ALLSTATE must attempt to

effectively prompt, fair and equitable settlement of claims submitted in which

liability is reasonably clear (T.C.A. 56-8-105(4).) Defendant ALLSTATE

failed and refused, by the acts and omissions alleged herein, to comply with

Mr. Watry cites Myint v. Allstate Ins. Co., 970 S.W.2d 920 (Tenn. 1998), in support of hisstatement 2

that “Tennessee’s Bad Faith refusal penalty statute and its InsuranceTrade Practices Act were not exclusive.” 

Mr. Watry is correct that he is permitted to assert a claim against Allstate pursuant to Tennessee’s Consumer

Protection Act even if he does not assert a statutory bad faith claim against Allstate. Myint, 970 S.W.2d at

925-26. However, he cannot assert a common law claim for bad faith breach of contract against Allstate.

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said Statute.

35. The acts and omissions of Defendant ALLSTATE, by and through their

authorized representatives as alleged herein, constitute violations of the TCPA

and TUCSA which directly and proximately caused monetary damages, costs

and attorney fees to Plaintiff all according to proof.

In support of his consumer protection claim, Mr. Watry asserts in his brief that he

signed a release of his uninsured motorist claim “based upon an adjuster’s

misrepresentations.” However, the only representation Mr. Watry mentionsin his Complaint

is that Allstate told him he was entitled to no more than $5,000 for his general damages under

the policy. Mr. Watry settled with Allstate for $29,512, which is $4,000.00 more than

Allstate offered in its June 9 letter. It is not clear from the Release or from the Complaint

how much of this, if any, was for “general damages.”

Mr. Watry makes conclusory allegations in his Complaint about Allstate’s failure to

comply with the Tennessee Consumer Protection Act and the Tennessee Unfair Claims

Settlement Act, but he fails to allege any particular action Allstate took that could be

construed as violating either one of these statutes as required by Tenn. R. Civ. P. 9.02. See

Western Exp. v. Brentwood Services, 2009 WL 3448747, at *10 (Tenn. Ct. App. Oct. 26,

2009) (plaintiff must meet particularity requirement of Rule 9.02 when alleging violation of

Consumer Protection Act); see also Myint v. Allstate Ins. Co., 970 S.W.2d at 927 (plaintiff’s

Consumer Protection Act claim was dismissed where plaintiff was unable to show insurer

violated terms of policy, deceived the plaintiff about its terms, or otherwise acted unfairly).

We question whether Mr. Watry even meets the less stringent pleading standards set forth

in Tenn. R. Civ. P. 8.01. See Western Exp., 2009 WL 3448747, at *10 (plaintiff’s vague

assertions of the defendant’s violation of the Tennessee Consumer Protection statute do not

meet the pleading requirements of either Rule 9.02 or Rule 8.01).

Allstate engaged in settlement negotiations with Mr. Watry, and Mr. Watry ended up

settling for an amount in excess of the amount Allstate initially offered. Not only has Mr.

Watry failed to allege with specificity any act by Allstate that rises to the level of an unfair

act or practice as he must to state a claim under the Tennessee Consumer Protection Act, he

also fails to allege how he was harmed by anything Allstate allegedly did or said. We

therefore hold Mr. Watry has failed to state a claim for which relief may be granted under

the Tennessee Consumer Protection Act and affirm the trial court’s judgment dismissing this

cause of action.

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III. CONCLUSION

For the reasons stated above, we affirm the trial court’s judgment granting Allstate’s

motion for judgment on the pleadings and dismissing Mr. Watry’s Complaint. Costs of this

appeal shall be taxed to James Watry, for which execution shall issue if necessary.

____________________________

PATRICIA J. COTTRELL,JUDGE

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