Opinion ID: 525699
Heading Depth: 2
Heading Rank: 2

Heading: the uninsured motorist carrier

Text: 10 Tennessee has enacted an uninsured motorist statute which provides, in pertinent part: 11 Service of Process--Actions by Insurers--John Doe Warrants--Arbitration.-- 12 (a) Any insured intending to rely on the coverage required by this part shall, if any action is instituted against the owner and operator of an uninsured motor vehicle, serve a copy of the process upon the insurance company issuing the policy in the manner proscribed by law, as though such insurance company were a party defendant; such company shall thereafter have the right to file pleadings and take other action allowable by law in the name of the owner and operator of the uninsured motor vehicle or in its own name; provided, however, that nothing in this subsection shall prevent such owner or operator from employing counsel of his own choice; provided further, that the evidence of service of process upon the insurance carrier shall not be made part of the record. 13 T.C.A. Sec. 56-7-1206. Tennessee courts construing this statute have held: 14 The whole intent and purpose of the uninsured motorist act, is, in essence to provide protection by making the insurance carrier stand as the insurer of the uninsured motorist, with two necessary consequences. (1) The suit has to be brought against the uninsured motorist, with the fact of insurance excluded as a possible prejudicing factor, as in any other such case; and (2) the insurance company is bound by the judgment rendered in that suit, to the extent of its limits, where it is afforded the statutory opportunity to defend the uninsured motorist. 15 Glover v. Tennessee Farmers Mutual Ins. Co., 225 Tenn. 306, 313, 468 S.W.2d 727, 730 (1971) (emphasis added). See also Thearp v. Travelers Indemnity Company, 504 S.W.2d 763, 766 (Tenn.App.1972). Furthermore, Tennessee's uninsured motorist statute does not allow direct actions to be brought against the uninsured motorist carrier for another party's negligence. Under normal circumstances, suit may not be brought directly against the uninsured motorist insurance company. Webster v. Harris, 727 S.W.2d 248, 251 (Tenn.App.1987). Apparently, Tennessee contemplates that the uninsured motorist carrier will stand in the same position as the defendant's own insurance company would stand if the defendant had one (or in the same position as the defendant's insurance company, which has insufficient policy limits, actually stands). 16 This conclusion requires us to reject the opinion of Hillis v. Garner, 685 F.Supp. 1038 (E.D.Tenn.1988) on which the district court in this case heavily relied. In Hillis, the district court reasoned that because the Tennessee uninsured motorist statute gives an uninsured motorist carrier the legal right to defend itself in the tort action and because the Tennessee courts consider the uninsured motorist carrier legally a party defendant, the carrier's residency must be considered in determining diversity. Id. at 1040. We do not agree that an insurance company's legal right to be a party in a lawsuit, without more, confers real party in interest status upon that company. Although Tennessee procedurally recognizes the uninsured motorist as a party defendant in liability actions, this recognition does not automatically make the carrier a real party to the action. 17 For instance, in White v. Wright, 566 F.2d 990 (5th Cir.1978), we recognized that under the Georgia uninsured motorist statute, a statute very similar to the one in Tennessee in that it requires service of process on the uninsured motorist carrier and allows the carrier to defend in its own name or in the name of the defendant, a carrier is not automatically a real party to the action. 18 The uninsured motorist carrier is not a defendant as such in this litigation.... [W]hile not actually a defendant, though it could defend the case in its own name, the uninsured motorist carrier has a strong financial interest in the litigation. As such, it is entitled to notice of the pendency of the action on the same basis as though a defendant. 19 Id. at 991 (citations omitted). Likewise, under the Tennessee statute, an insurance carrier does not necessarily enjoy the status of a real party. Because the Tennessee courts place the uninsured motorist carrier in the same position as that of the tortfeasor's own insurer, Tennessee Farmers' status as a party turns on the same principles as are generally applied in liability insurance law.