FILED

July 9, 1997

Cecil W. Crowson

Appellate Court Clerk

CAROLYN R. FRANKLIN and )

EDWARD J. FRANKLIN, )

 ) Maury County Circuit

Plaintiffs, ) Case No. 6232

 ) 

VS. )

 ) 

REBECCA A. KIMBERLY and ) Appeal No. 

RAY KIMBERLY, ) 01A01-9701-CV-00009

 )

Defendants, )

 )

SERVED AS UNINSURED MOTORIST )

CARRIERS: )

 )

ST. PAUL INSURANCE COMPANY, )

a/k/a ECONOMY FIRE AND CASUALTY )

COMPANY, )

 )

Appellant, )

 )

TENNESSEE FARMERS MUTUAL )

INSURANCE COMPANY, )

 )

Appellee. )

IN THE COURT OF APPEALS OF TENNESSEE

MIDDLE SECTION AT NASHVILLE

APPEALED FROM THE CIRCUIT COURT OF 

MAURY COUNTY, TENNESSEE

HONORABLE WILLIAM B. CAIN, JUDGE

Kurtis J. Winstead #13084

CORNELIUS & COLLINS

2700 Nashville City Center

511 Union Street

Nashville, TN 37219

ATTORNEY FOR APPELLANT, ST. PAUL INSURANCE COMPANY

Lawrence D. Sands #11667 Edward Lawwell #3063

SANDS & SANDS LAWWELL DALE & GRAHAM

P.O. Box 1660 P.O. Box 1017

Columbia, TN 38402-1660 Columbia, TN 38402-1017

ATTORNEYS FOR PLAINTIFFS, ATTORNEY FOR APPELLEE

CAROLYN R. AND EDWARD J. FRANKLIN TENN. FARMERS MUT. INS. CO. 

AFFIRMED AND REMANDED

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

BEN H. CANTRELL, JUDGE,

WILLIAM C. KOCH, JR., JUDGE
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CAROLYN R. FRANKLIN and )

EDWARD J. FRANKLIN, )

 ) Maury County Circuit

Plaintiffs, ) Case No. 6232

 ) 

VS. )

 ) 

REBECCA A. KIMBERLY and ) Appeal No. 

RAY KIMBERLY, ) 01A01-9701-CV-00009

 )

Defendants, )

 )

SERVED AS UNINSURED MOTORIST )

CARRIERS: )

 )

ST. PAUL INSURANCE COMPANY, )

a/k/a ECONOMY FIRE AND CASUALTY )

COMPANY, )

 )

Appellant, )

 )

TENNESSEE FARMERS MUTUAL )

INSURANCE COMPANY, )

 )

Appellee. )

O P I N I O N

This is an appeal from an interlocutory ruling which the Trial Judge rendered final as

provided by TRCP Rule 54.02. The controversy on appeal is between St. Paul Insurance Company,

a/k/a Economy Fire and Casualty Company, (hereafter St. Paul), and Tennessee Farmers Mutual

Insurance Company (hereafter Tennessee Farmers). The plaintiffs have filed a brief in support of

their interest in the disposition of the appeal.

The background of the controversy is as follows:

On May 11, 1993, St. Paul issued to Edna Franklin, a policy of automobile insurance on a

1980 Chevrolet Malibu providing uninsured/underinsured motorist coverage expiring on November

11, 1993. The policy contained the following provisions pertinent to this appeal:

B. Insured as used in this part means: You or any member of your family.
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- - - -

Other insurance:

A. If there is other applicable bodily injury liability or

property damage liability insurance we will pay only our share

of the loss. Our share is the proportion that our limit of

liability bears to the total of all applicable limits. Any

insurance we provide for a vehicle you do not own shall be

excess over any other collectible insurance -

D. Transfer of your interest in this policy.

Your rights and duties under this policy may not be assigned

without our written consent. However, if a named insured

shown in the Declarations dies, coverage will be provided

until the end of the policy period for:

- - - -

2. the legal representative of the deceased person as if a

named insured shown in the Declarations. This applies only

with respect to the representative’s legal responsibility to

maintenance or use of your covered auto.

- - - -

3. Automatic Termination. If you obtain other insurance on

your covered auto, any similar insurance provided by this

policy will terminate as to that auto on the effective date of

the other insurance.

On July 28, 1993, the insured, Edna Franklin expired, and her son, Edward J. Franklin, took

possession of the 1980 Chevrolet Malibu.

On August 18, 1993, Edward J. Franklin caused Tennessee Farmers to add the 1980

Chevrolet Malibu to his existing policy on another motor vehicle owned by him. The Tennessee

Farm policy contained the same provisions as those quoted above from the St. Paul policy.

However, the amounts payable under the two policies were not the same.

On October 21, 1993, while both policies remained in force, and while the 1980 Chevrolet

Malibu was in the possession and control of Carolyn R. Franklin, wife of Edward J. Franklin, the

1980 Chevrolet Malibu was struck by a vehicle operated by Rebecca A. Kimberly.
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PROCEEDINGS IN THE TRIAL COURT

On September 1, 1994, Carolyn R. And Edward J. Franklin sued Rebecca A. Kimberly and

Edward J. Kimberly for personal injuries, serving St. Paul and Tennessee Farmers as unnamed

uninsured motorist insurers.

On September 22, 1994, Tennessee Farmers answered admitting uninsuredmotoristcoverage

of $100,000.00 for injury to one person and maximum coverage of $300,000.00 for all bodily

injuries, but denying liability.

On April 4, 1996, St. Paul answered denying liability and asserting the automatic termination

clause quoted above, admitting the existence of uninsured motorist coverage of $250,000.00 for one

injury and $500,000.00 coverage for all injuries, and claiming credit for $30,000.00 advance

payment to the plaintiffs.

On August 12, 1996, St. Paul filed a “Petition for Declaratory Judgment and/or Summary

Judgment,” supported by authenticated copies of the two policies mentioned above and a deposition

as to the facts.

On September 11, 1996, Tennessee Farmers filed a response in opposition to St. Paul’s

petition for summary judgment and requesting a declaration that the liability of the two insurers be

proportioned 2/7 to Tennessee Farmers and 5/7 to St. Paul.

On October 30, 1996, the Trial Judge entered judgment as follows:

For the reasons specified in its letter dated October 2, 1996,

which is hereby incorporated into this decree of judgment by

reference, the court holds that the ONE HUNDRED

THOUSAND DOLLARS ($100,000.00) uninsured motorist

coverage by Tennessee Farmers Mutual Insurance Company

reduced the uninsured motorist coverage provided by St. Paul
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Insurance Company to the extent of ONE HUNDRED

THOUSAND DOLLARS ($100,000.00) leaving St. Paul

Insurance Company providing ONE HUNDRED FIFTY

THOUSAND DOLLARS ($150,000.00) uninsured motorist

coverage and Tennessee Farmers Mutual Insurance Company

ONE HUNDRED THOUSAND DOLLARS ($100,000.00)

underinsured motorist coverage. The court further finds that

the proration clause in both policies is applicable and

therefore, the applicable underinsured motorist coverage is to

be prorated on the basis of 1.5 by St. Paul Insurance Company

to one by Tennessee Farmers Mutual Insurance Company

(60% to 40%) up to the full extent of TWO HUNDRED

FIFTY THOUSAND DOLLARS ($250,000.00) if necessary.

There being no just reason for delay, the court directs entry of

this judgment as a final judgment on the declaration of rights

of the underinsured motorist policies of St. Paul Insurance

Company and Tennessee Farmers Insurance Company in

accordance with Rule 54.02 of the Tennessee Rules of Civil

Procedure.

CONTENTIONS OF THE PARTIES ON APPEAL

St. Paul states the issue on appeal as follows:

I. Did the Trial Court err in finding that the automatic

termination provision in the St. Paul policy did not operate to

relieve St. Paul of underinsured motorist liability for the

accident which occurred on October 21, 1993?

In amplification, St. Paul states:

St. Paul is appealing the Circuit Court’s declaration that the

automatic termination provision of its automobile insurance

policy did not apply to totally relieve St. Paul of underinsured

motorist coverage in this case.

No applicable Tennessee authority is cited or found. In Taxter v. Safeco Insurance Company

of America, Wash., (Wash. Ct. App. 1986), 721 P.2d 972, cert. Denied, 108 Wash.2d 1037 (1987),

the Taxter’s held a Safeco automobile policy which expired on November 25, 1983, but a grace

period allowed 30 days for renewal. On December 2, the Taxters procured a similar policy from

Ranier, another insurer. They intended to cancel the Safeco policy, but did not do so. On December
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13, 1983, the Taxter’s vehicle was involved in a collision with a vehicle operated by a Mr. Russell.

At the suggestion of the Safeco agent, the Taxters paid the premium for renewal of the Safeco policy.

Safeco paid the Taxters $3,997.70 property damages but declined further payment, relying upon its

policy which provided for proration of liability of insurers where coverages overlapped. The

Washington appellate courts granted summary judgment to Safeco stating:

[1] Here, while the insures did not communicate their intent

to replace the policy, Safeco’s policy terms provide the

necessary mutual consent. These terms provide:

If you ([the insured] obtain other insurance on

your covered auto, any similar insurance

provided by this policy will terminate as to

that auto on the effective date of the other

insurance. 

(Italics ours.) We cannot ignore the language in the contract

nor revise the contract under the theory of construing it.

Farmers ins.. Co. v. Miller, 87 Wash.2d 70, 73, 549 P.2d 9 126

(1976). The Taxters consented to these terms when they

obtained the Safeco policy. They cannot claim lack of notice

when they had either actual or constructive knowledge of it.

We conclude the Safeco policy terminated to the extent the

Rainier policy provided similar coverage.

 - - - -

The insurer and insured have the right to specify in their

insurance contract the method by which it can be terminated.

Department of Labor & Indus. v. Northwestern Mut. Fire

Ass’n., 13 Wash.2d 288, 291, 124 P.2d 944 (1942).

We note, however, that both policies in the Taxter case provided the same amount of

uninsured motorist coverage. The coverage was not only similar but identical. So, even under the

rule we adopt today the result in Taxter would be the same. 

We diverge from the holding in Taxter, however, to the extent that the Washington court’s

decision stands for the proposition that coverage in any amount cancels the entire amount of that

coverage in the original policy. St. Paul’s policy says “coverage” in its policy will terminate when

“any similar insurance” is obtained on the same automobile. We think similar in this context may

have more than one meaning. It may mean “similar in kind” or “similar in kind and amount.” One
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standard reference defines similar as “nearly corresponding; resembling in many respects; somewhat

like; having a general likeness.” (citing authorities). Black’s Law Dictionary, 4th Ed. The same

source, however, cites other authorities for the meaning of “exactly like; identical; exactly

corresponding” (at least in all essential particulars). ld. 

A contract of insurance is strictly construed in favor of the insured. Gridig v. Tennessee

Farmers Mutual Ins. Co., 891 S.W.2d 909 (Tenn. App. 1994). Where one meaning of a policy term

provides coverage and another meaning would defeat coverage, we will adopt the meaning that

preserves the coverage for the insured. Tata v. Nichols, 848 S.W.2d 649 (Tenn. 1993). Therefore,

we hold that the insurance coverage in the two policies is similar only to the extent of the amount

of coverage in the second policy .

Although the St. Paul policy was issued in Indiana, it is not argued that Indiana law differs

from Tennessee law in any material respect.

The judgment of the Trial Court is affirmed and the cause is remanded to the Trial Court for

further proceedings in conformity with this opinion. 

Judgment is rendered against St. Paul Insurance Company for costs of this appeal for which

execution may issue.

AFFIRMED AND REMANDED

_____________________________________

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

_____________________________________

BEN H. CANTRELL, JUDGE

_____________________________________

WILLIAM C. KOCH, JR., JUDGE
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