Court Opinion

ID: 1080736
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:43:08.702089+00
Date Added: 2024-06-11T13:13:41.832753
License: Public Domain

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:                       )
                                          FILED
                                )
ST. PAUL INSURANCE COMPANY,     )             July 9, 1997
a/k/a ECONOMY FIRE AND CASUALTY )
COMPANY,                        )         Cecil W. Crowson
                                )        Appellate Court Clerk
       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
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.

                                                   -2-
                                              ----

       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 uninsured motorist coverage

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

                                                -5-
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

                                                -6-
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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