Court Opinion

ID: 9684175
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:49:15.681778+00
Date Added: 2024-06-11T18:17:53.723130
License: Public Domain

*753HENRY, Justice
dissenting.
I dissent from so much of the Court’s opinion as affirms the Court of Appeals’ reversal of the trial judge’s award of a ten percent “bad faith” penalty.
The majority ignores the correct standard of review and, in so doing, falls into the same error as was committed by the Court of Appeals of substituting its judgment for that of the trial judge. Sec. 27-303, T.C.A. provides that in “[a]ll cases tried in a court of record without the intervention of a jury”, the hearing in the appellate court “shall be de novo upon the record of the trial court, accompanied by a presumption of the correctness of the judgment or decree of the trial court, unless the preponderance of the evidence is otherwise.” (Emphasis supplied.) I cannot find from the record in this case that the evidence preponderates against the correctness of the conclusion reached by the trial judge. To the contrary, I find that the record amply supports the trial judge’s conclusion that the insurer was consciously indifferent to the insured’s repeated pleas for a settlement and that once the insurer began negotiations, it conducted them in less than good faith.
The record in this case shows no reason for withholding payment on the Johnsons’ loss. Although the insurer’s Answer denies all allegations except that the company insured the car in question, there was never any doubt that it was stolen and that the insurer was liable on the loss. The insurer’s case before the trial court was aimed at avoiding any interest or penalties on the loss, not on avoiding liability. While the Court of Appeals found that the insurer was not required to pay the loss because the Johnsons had demanded more than the car was worth, the trial court evidently found and the record shows that the figure was an off-hand estimate of the car’s value by Bobby Johnson to an adjustor, not a demand for a specific amount. Even if the estimate were a demand for payment, an excessive demand by the insured does not relieve the insurer of the obligation to bargain in good faith. State Automobile Ins. Co. of Columbus, Ohio v. Rowland, 221 Tenn. 421, 427 S.W.2d 30 (1969). Similarly the majority here finds the insurer justified in withholding payment because of “a genuine dispute between the parties . . . as to the fair value of the vehicle on the date of the theft.” But the trial court found that there could have been no dispute — at least not until the Johnsons became so exasperated at being ignored by their insurer that they hired an attorney to extract an offer from the company. Even after the insurer made the offer, which was $300.00 lower than the company’s own adjustor recommended and $900.00 lower than the “bluebook” price, the insurer made no new offer and broke several appointments to show Bobby Johnson possible replacement cars.
The Majority Opinion concedes that Sec. 56-1105, T.C.A. “allows a penalty in the discretion of the trier of fact . . . .” (Emphasis supplied.) Many years ago this Court, in Daugherty v. Stuyvesant Ins. Co., 169 Tenn. 300, 86 S.W.2d 1095 (1935), speaking through Justice McKinney, spoke of this discretion thusly:
It will be observed that this discretion is conferred upon the trial court and not upon the appellate courts, and the action of the trial court in this matter can only be reviewed or altered where he has abused his discretion. (Emphasis supplied.) 169 Tenn. at 303, 86 S.W.2d at 1096.
The majority, in effect, holds that the trial judge abused his discretion. I disagree.
This insurer’s conduct in such a clear case of liability could properly be found to be “not in good faith.” While the trial court might have refused to so find, I think it inconceivable that we should hold that awarding a ten percent penalty on these facts was an abuse of discretion.
BROCK, J., concurs.