Opinion ID: 4564893
Heading Depth: 3
Heading Rank: 3

Heading: Tennessee Public Policy

Text: The jury awarded Falls $2,500,000 as the amount of insurance he was owed, up to his policy limit, for Business Personal Property coverage and $250,000 as the balance of the Business Income insurance he was owed. (Along with the $250,000 he was already advanced and under the verdict would not have to pay back, this amount brought the BI payout up to his policy maximum of $500,000.) The BPP payment covers the loss of the gear in Falls’s studio. However, Brown is the ultimate owner of the lost gear, on which Falls had a perpetually renewable leasehold. Therefore, Hanover argues, payment of the $2,500,000 would violate public policy, because Brown would ultimately benefit from his own wrongdoing. It is an “ancient equity maxim that no one should benefit from his own wrongdoing.” K & T, 97 F.3d at 178. The Supreme Court of Tennessee recognized the application of this principle in insurance cases in Box v. Lanier, 79 S.W. 1042, 1045 (Tenn. 1904). “No one shall be permitted to profit by his own fraud, or to take advantage of his own wrong, or to found any claim upon his own iniquity, or to acquire property by his own crime.” Ibid. The public-policy argument, however, even if accepted, does not mean that Falls takes nothing of the $2,500,000 BPP award. Falls had a property interest in the “gear,” in the form of his leasehold with unlimited renewal options.15 Leaseholds have been held to be insurable 14 See also Eveland v. Star Bank, N.A., 188 F.3d 507, 1999 WL 644346, at  (6th Cir. 1999) (table) (Plaintiff failed to make “a motion for a directed verdict at the end of evidence. By failing to make this motion, plaintiff did not preserve her right to challenge the sufficiency of the evidence supporting the jury verdict.”); Morganroth & Morganroth v. DeLorean, 123 F.3d 374, 383 (6th Cir. 1997) (holding that defendant had waived his sufficiency-of-the-evidence arguments “by failing to raise them below in a timely motion for judgment as a matter of law pursuant to Rule 50 of the Federal Rules of Civil Procedure.” (citing 9A WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 2536 (2d ed. 1995))). These cases predated Unitherm and the 2006 Amendment to Fed. R. Civ. P. 50, but neither authority changes the logic of these rulings; indeed, the subsequent developments are consonant with our precedents. 15 As Falls stated at trial: “[T]here’s the unresolved matter of the fact that I had a lease for equipment and a space. That equipment had monetary value to me that I have been out now for three years.” Cf. State of Tenn. ex Nos. 19-5483/5550/5551/5562 Hanover Am. Ins. Co. v. Tattooed Page 31 Millionaire Ent’mt, et al. interests. More to the point, Hanover clearly accepted at trial that Falls had at least an arguable property interest: Barkman testified at trial that the payment for BPP under the Falls policy would go to Falls and Brown jointly. Thus, Barkman said, it would have to be endorsed by Brown to be cashed by Falls. As Falls’s counsel explained to us at oral argument, the proceeds will become the subject of an interpleader action between Falls, Brown, Hanover, and Brown’s other creditors. This was the district court’s plan for how to handle the issue: Falls and TME would “sue each other” in the event of a win, but not fight it out during the main trial. Though Falls and Hanover both make interesting legal arguments as to the dispositions of the funds, we see no reason to short-circuit that plan. Such arguments can be made in whatever subsequent proceedings arise over this payment.