Court Opinion

ID: 9957992
Source: CourtListenerOpinion
Date Created: 2024-04-05 22:11:14.106095+00
Date Added: 2024-06-11T08:17:39.002285
License: Public Domain

04/05/2024
               IN THE COURT OF APPEALS OF TENNESSEE
                            AT JACKSON
                              February 13, 2024 Session

               MURALI PONNAPULA v. IMMANUEL WRIGHT

                  Appeal from the Circuit Court for Shelby County
                    No. CT-004704-17 Valerie L Smith, Judge
                     ___________________________________

                           No. W2023-00703-COA-R3-CV
                       ___________________________________

Following a motor vehicle accident, Appellant/the insured brought a breach of contract
claim against Appellee/the automobile insurer. In a motion for summary judgment,
Appellee argued that Appellant materially breached the duty to cooperate clause of the
insurance policy, which barred his recovery. The trial court granted summary judgment in
favor of Appellee, finding that there was no genuine issue of material fact that Appellant
materially breached the insurance policy by failing to submit to an examination under oath.
The trial court concluded that the material breach barred Appellant from recovery under
the policy. Appellant appeals. Discerning no error, we affirm and remand.

       Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
                            Affirmed and Remanded

KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN STAFFORD,
P.J., W.S., and JEFFREY USMAN, J., joined.

Regina A. Guy, Memphis, Tennessee and Sheila F. Campbell, North Little Rock, Arkansas,
for the appellant, Murali Ponnapula.

Andrew H. Owens and Ashleigh C. Kiss, Memphis, Tennessee, for the appellee, Tennessee
Farmers Mutual Insurance.

                                       OPINION

                                     I. Background

      On November 16, 2016, Appellant Murali Ponnapula was involved in a motor
vehicle accident with Immanuel Wright.1 At the time of the accident, Mr. Ponnapula had
an automobile insurance policy with Appellee Tennessee Farmers Mutual Insurance
Company (“Tennessee Farmers”), which provided him with uninsured/underinsured
motorist coverage. After the accident, Mr. Ponnapula and his wife, Dhana Ponnapula,
made an uninsured/underinsured motorist claim with Tennessee Farmers. Tammie Nichols
was the adjuster assigned to the Ponnapulas’ claim. Tennessee Farmers settled the property
damage claim with the Ponnapulas. On May 1, 2017, Ms. Nichols, on behalf of Tennessee
Farmers, proposed a $34,000.00 settlement offer for Mr. Ponnapula’s bodily injury claim
based on the initial information he had provided. On June 28, 2017, Mr. Ponnapula
responded to the settlement offer requesting additional compensation for his pain and
suffering. On July 7, 2017, Mr. Ponnapula requested that his claim be closed, and
Tennessee Farmers closed the claim.

       On August 16, 2017, Mr. Ponnapula requested that his claim be re-opened, and
Tennessee Farmers re-opened the claim. That same day, Ms. Nichols sent Mr. Ponnapula
an email requesting that he complete and sign a HIPAA release to allow a third-party to
review his medical records. On August 17, 2017, Mr. Ponnapula replied to Ms. Nichols’
request, implicitly refusing to sign the release, claiming that Tennessee Farmers owed him
a remaining balance of $33,700.02 from the settlement, and stating that if his claim was
not settled in 30 days he would take legal action.2 By email of August 18, 2017, a second
representative from Tennessee Farmers, Randy Caldwell, explained to Mr. Ponnapula that
he had a duty to cooperate with Tennessee Farmers during the investigation of his claim
and that his failure to do so could result in the denial of his claim. On August 21, 2017,
Tennessee Farmers sent a letter to Mr. Ponnapula reiterating its understanding that Mr.
Ponnapula was refusing to sign the HIPAA release and stating that examinations under
oath would be forthcoming to obtain the information needed to process the claim.

       On August 30, 2017, Tennessee Farmers’ attorney, Andrew Owens, sent a letter to
the Ponnapulas explaining that the examinations under oath were scheduled for September
28, 2017. Also, in the letter, Mr. Owens requested copies of Mr. Ponnapula’s federal
income tax returns for 2014, 2015, and 2016.

       On September 6, 2017, Mr. Ponnapula sent a letter to Ms. Nichols stating that the
balance owed him on the settlement was $33,700.02, and that he would take legal action if
his claim was not settled in 60 days. On September 9, 2017, Mr. Ponnapula provided
Tennessee Farmers with a signed HIPAA release.

        By email of September 12, 2017, Mr. Owens advised Mr. Ponnapula that there was

1
  Mr. Wright did not file an appellate brief in this matter, and the issues in this appeal do not concern him.
2
  As explained, infra, Tennessee Farmers previously paid Mr. Ponnapula $299.98 as part of his policy,
leaving $33,700.02 as the balance that would have been owed had there been an enforceable settlement
agreement between the parties.
                                                    -2-
no settlement offer currently extended to him and that he would see the Ponnapulas at their
examinations under oath. On September 21, 2017, Mr. Ponnapula sent a letter to Mr.
Owens wherein he argued that he had already given statements under oath and that his tax
returns had no relevance to the claim. Mr. Ponnapula stated that he would “take necessary
action” after receiving a copy of the transcripts from his previous statements. The
Ponnapulas did not appear for the September 28, 2017 examinations under oath.

       On October 12, 2017, Mr. Owens replied to Mr. Ponnapula, explaining that Mr.
Ponnapula had never given an examination under oath. Mr. Owens again reminded Mr.
Ponnapula of his duty to cooperate with Tennessee Farmers in the processing of his claim,
which included providing relevant tax information and examinations under oath. Mr.
Owens informed Mr. Ponnapula that the examinations under oath had been rescheduled for
October 24, 2017. The Ponnapulas did not appear for the rescheduled examinations.

        On November 14, 2017, Mr. Ponnapula filed a complaint against Mr. Wright in the
Circuit Court of Shelby County (“trial court”) and issued a summons to Tennessee Farmers
as his uninsured/underinsured motorist carrier. On November 30, 2017, Tennessee
Farmers sent a letter to the Ponnapulas, denying their remaining claim due to their failure
to cooperate with the investigation. Tennessee Farmers answered the complaint and raised
as a defense Mr. Ponnapula’s refusal to cooperate and resulting breach of the insurance
policy.

      On August 2, 2022, Tennessee Farmers filed a motion for summary judgment,
arguing that Mr. Ponnapula could not recover under the insurance policy because he
materially breached it when he refused to cooperate with the investigation of the claim.

       On November 9, 2022, Mr. Ponnapula amended the complaint and alleged breach
of contract and bad faith because Tennessee Farmers failed to honor the alleged $34,000.00
settlement agreement. On December 14, 2022, Tennessee Farmers filed an answer to the
amended complaint, again alleging Mr. Ponnapula’s material breach of the insurance
policy as a complete bar to recovery.

        On April 12, 2023, the trial court heard Tennessee Farmers’ motion for summary
judgment. By order of April 18, 2023, the trial court granted the motion. In pertinent part,
the trial court concluded that: (1) there was no evidence of an offer and acceptance that
would have created an enforceable settlement agreement between Mr. Ponnapula and
Tennessee Farmers; (2) there was no genuine issue of material fact as to Mr. Ponnapula’s
noncompliance with the terms of the insurance policy; and (3) by failing to answer
questions under oath, Mr. Ponnapula materially breached the insurance policy and was
precluded from seeking recovery under it. Mr. Ponnapula filed a timely appeal.

                                           -3-
                                         II. Issues

      Mr. Ponnapula raises two issues for this Court’s review, as stated in his brief:

   1. The trial court erred in finding that there were no genuine issues of material fact
      whether the plaintiff-appella[nt] breached his duty under the insurance policy to
      cooperate in giving an examination under oath.

   2. The trial court erred in finding that there were no genuine issues of material fact
      whether the plaintiff-appella[nt] accepted the offer to settle that had not been
      withdrawn by defendant-appellee.

                                III. Standard of Review

        A trial court’s decision to grant a motion for summary judgment presents a question
of law. Therefore, our review is de novo with no presumption of correctness afforded to
the trial court’s determination. Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997). This
Court must make a fresh determination that all requirements of Tennessee Rule of Civil
Procedure 56 have been satisfied. Abshure v. Methodist Healthcare-Memphis Hosps.,
325 S.W.3d 98, 103 (Tenn. 2010). When a motion for summary judgment is made, the
moving party has the burden of showing that “there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law.” Tenn. R. Civ. P. 56.04. When
the party moving for summary judgment does not bear the burden of proof at trial, “the
moving party may satisfy its burden of production either (1) by affirmatively negating an
essential element of the nonmoving party’s claim, or (2) by demonstrating that the
nonmoving party’s evidence at the summary judgment stage is insufficient to establish the
nonmoving party’s claim or defense.” Rye v. Women’s Care Center of Memphis,
MPLLC, 477 S.W.3d 235, 264 (Tenn. 2015) (italics omitted). Furthermore,

      “[w]hen a motion for summary judgment is made [and] . . . supported as
      provided in [Tennessee Rule 56],” to survive summary judgment, the
      nonmoving party “may not rest upon the mere allegations or denials of [its]
      pleading,” but must respond, and by affidavits or one of the other means
      provided in Tennessee Rule 56, “set forth specific facts” at the summary
      judgment stage “showing that there is a genuine issue for trial.” Tenn. R.
      Civ. P. 56.06. The nonmoving party “must do more than simply show that
      there is some metaphysical doubt as to the material facts.” Matsushita Elec.
      Indus. Co., [Ltd. v. Zenith Radio Corp.], 475 U.S. [574,] 586, 106 S. Ct.
      1348 [(1986)]. The nonmoving party must demonstrate the existence of
      specific facts in the record which could lead a rational trier of fact to find in
      favor of the nonmoving party.

Rye, 477 S.W.3d at 265.
                                            -4-
                                       IV. Analysis

       Mr. Ponnapula argues that the trial court erred when it concluded that there was no
genuine issue of material fact that: (1) he breached his duty under the insurance policy to
cooperate in giving an examination under oath; and (2) there was no enforceable settlement
agreement between the parties. Because the question of whether there was an enforceable
settlement agreement between the parties would dispose of the case, we address it first.

                       A. No Enforceable Settlement Agreement

        The Tennessee Supreme Court has explained that “settlement agreements are
contracts between the parties, and the rules governing the interpretation of contracts apply
to settlement agreements.” Perkins v. Metro. Gov’t of Nashville, 380 S.W.3d 73, 80
(Tenn. 2012) (citing Waddle v. Elrod, 367 S.W.3d 217, 222 (Tenn. 2012)). An enforceable
contract “must result from a meeting of the minds, must be based upon sufficient
consideration, and must be sufficiently definite to be enforced.” Peoples Bank of Elk
Valley v. ConAgra Poultry Co., 832 S.W.2d 550, 553 (Tenn. Ct. App. 1991) (citing
Johnson v. Cent. Nat’l Ins. Co. of Omaha, 356 S.W.2d 277, 281 (Tenn. 1962)); see also
Moody Realty Co., Inc. v. Huestis, 237 S.W.3d 666, 675 n.8 (Tenn. Ct. App. 2007) (“The
legal mechanism by which parties show their assent to be bound is through offer and
acceptance.”); Restatement (Second) of Contracts §§ 17, 22 (explaining that a valid,
enforceable contract requires consideration and mutual assent, manifested in the form of
an offer and an acceptance). There is a “meeting of the minds” when the parties are in
mutual assent to the terms. In re Estate of Josephson, No. M2011-01792-COA-R3-CV,
2012 WL 3984613, at *2 (Tenn. Ct. App. Sept. 11, 2012). As this Court has explained,

       [t]he contemplated mutual assent and meeting of the minds cannot be
       accomplished by the unilateral action of one party, nor can it be
       accomplished by an ambiguous course of dealing between the two parties
       from which differing inferences regarding continuation or modification of
       the original contract might reasonably be drawn.

Jamestowne on Signal, Inc. v. First Fed. Sav. & Loan Ass’n, 807 S.W.2d 559, 564 (Tenn.
Ct. App. 1990) (citing Batson v. Pleasant View Utility Dist., 592 S.W.2d 578, 582 (Tenn.
App. 1979); Balderacchi v. Ruth, 256 S.W.2d 390, 391 (Tenn. Ct. App. 1953)).
Furthermore, when an offer is extended but the offeree “places conditions on his or her
acceptance or varies the terms of the offer,” there is no acceptance of the original offer.
Grace v. Grace, No. W2016-00650-COA-R3-CV, 2016 WL 6958887, at *4 (Tenn. Ct.
App. Nov. 29, 2016) (citing Westfall v. Brentwood Serv. Grp., Inc., No. E2000-01086-
COA-R3-CV, 2000 WL 1721659, at *5 (Tenn. Ct. App. Nov. 17, 2000)). Rather, the
offeree’s “‘expression constitutes a rejection of the original offer and initiation of a new
offer.’” Id. (quoting Westfall, 2000 WL 1721659, at *5). Indeed, “a proposal to accept,
                                            -5-
or an acceptance, upon terms varying from those offered, is a rejection of the [original]
offer, and puts an end to the negotiation unless the party who made the original offer renews
it, or assents to the modification suggested.” Canton Cotton Mills v. Bowman Overall
Co., 257 S.W. 398, 402 (Tenn. 1924) (internal citation omitted); see also Restatement
(Second) of Contracts § 59 (“A reply to an offer which purports to accept it but is
conditional on the offeror’s assent to terms additional to or different from those offered is
not an acceptance but is a counter-offer.”).

        The parties do not dispute that Tennessee Farmers extended a $34,000.00 settlement
offer to Mr. Ponnapula through its adjuster, Ms. Nichols, on May 1, 2017. In the email to
Mr. Ponnapula, Ms. Nichols wrote:

       With the information you have provided[,] I can offer settlement of
       $34,000.00. I will have to take out what I have already paid under your Med
       pay part of your policy which is $299.98. The balance I could pay is
       $33,700.02.

It is undisputed that this offer was made to settle Mr. Ponnapula’s bodily injury claim. On
June 28, 2017, Mr. Ponnapula responded to Ms. Nichols’ settlement offer, to-wit:

       I received a statement from Aetna. Total charges are $3[,]872.00. I paid
       $1[,]024.28. It is my responsibility to pay medical bills to Aetna. In final
       settlement please include amount for pain and suffering. . . .

(Emphasis added).

      In the final order, the trial court concluded that there was “no evidence of an offer
and acceptance which would have created an enforceable settlement agreement between
[Mr. Ponnapula] and Tennessee Farmers.” In reaching this conclusion, the trial court
determined that Mr. Ponnapula’s request for pain and suffering was a counter-offer. We
agree. Mr. Ponnapula’s request for pain and suffering was a request for additional
compensation, despite Mr. Ponnapula not assigning a numerical value to it. Such request
changed the terms of the original offer, making it a counter-offer. See Grace, 2016 WL
6958887, at *4; Westfall, 2000 WL 1721659, at *5. The counter-offer acted as a rejection
of Tennessee Farmers’ original offer. Id. Thus, Mr. Ponnapula’s request for additional
compensation, i.e., pain and suffering, ended the parties’ negotiations unless Tennessee
Farmers renewed its original offer or agreed to Mr. Ponnapula’s counter-offer. See Canton
Cotton Mills, 257 S.W. at 402; Restatement (Second) of Contracts § 59. The evidence
shows that Mr. Owens, Tennessee Farmers’ attorney, sent an email to Mr. Ponnapula on
September 12, 2017, advising him that there was no settlement offer currently extended to
him. Thus, the record shows that Tennessee Farmers neither renewed its original offer nor
agreed to Mr. Ponnapula’s counter-offer. Accordingly, Mr. Ponnapula’s counter-offer
ended the settlement negotiations. As such, the trial court correctly concluded that there
                                             -6-
was no enforceable settlement agreement between Mr. Ponnapula and Tennessee Farmers.
We now turn to Mr. Ponnapula’s second issue, i.e., whether the trial court erred when it
found that there was no genuine issue of material fact that Mr. Ponnapula materially
breached his duty to cooperate under the insurance policy.

                             B. Breach of Insurance Policy

       The insurance policy between Tennessee Farmers and Mr. Ponnapula contained a
clause titled “Duty to Cooperate with Us.” This clause provided, in pertinent part:

       Following any loss, accident, claim or suit, any persons and entities seeking
       coverage under this policy and any designee must:

              1. Cooperate with [Tennessee Farmers] and anyone [Tennessee
              Farmers] name[s] in the investigation, settlement or defense of
              any loss, accident, claim or suit; and

              2. Answer questions in person, under oath in Tennessee when
              asked by anyone [Tennessee Farmers] name[s], as often as
              [Tennessee Farmers] ask[s], while being videorecorded and/or
              audiorecorded if requested, and sign the transcript of the
              answers (before a notary), and return; and

              3. Promptly provide [Tennessee Farmers] with, allow
              [Tennessee Farmers] to copy, and give [Tennessee Farmers]
              written authorization to obtain all information, pertinent
              documents, tangible items, records, tax returns, receipts and
              invoices which [Tennessee Farmers] may request; and

                                            ***

              6. Authorize [Tennessee Farmers] to obtain medical and other
              relevant records[.]

The insurance policy also contained a clause titled “Legal Action Against Us,” which
provided that “No legal action may be brought against [Tennessee Farmers] until there has
been full compliance with all the terms of [the] policy.” In short, the foregoing provisions
provided that Mr. Ponnapula had a duty to cooperate with Tennessee Farmers during the
investigation of his claim, including submitting to an examination under oath when
requested, and he could not bring a legal action against Tennessee Farmers until he fully
complied with all terms of the insurance policy.

       This Court previously analyzed a similar breach of contract claim concerning an
                                         -7-
almost identical insurance policy. In Spears v. Tennessee Farmers Mutual Insurance
Company, 300 S.W.3d 671, 673 (Tenn. Ct. App. 2009), the Spearses, i.e., the insureds/the
appellants, had a policy with Tennessee Farmers, i.e., the insurer/the appellee, on a 2004
Chevrolet C15 Tahoe. While still insured with Tennessee Farmers, the Tahoe was “burned
from the inside,” and the Spearses filed a claim for loss on the vehicle. Id. at 674. Mr.
Spears was questioned twice at the beginning of the investigation but never under oath. Id.
Thereafter, Mr. Spears filed a sworn statement in proof of loss with Tennessee Farmers
seeking $38,900.00 in money damages under the insurance policy. Id. On suspicion of
fraud, Tennessee Farmers requested that the Spearses submit to examinations under oath,
as provided in their insurance policy, and bring certain documents to same. Id. The
Spearses appeared for the examination under oath and brought most of the requested
documents. Id. However, Mrs. Spears was the only party to answer questions under oath.
Id. During the examination, Mrs. Spears became upset, and her examination ended early
because the Spearses had another appointment to attend. Id. Because her examination was
incomplete, Mrs. Spears did not sign the transcript of her answers. Id. at 675. The Spearses
did not attend their next appointment and instead visited their local Tennessee Farmers’
agent’s office to express their disagreement with the examinations under oath. Id.
Thereafter, the Spearses retained an attorney who provided Tennessee Farmers with
additional documentation and coordinated subsequent examinations under oath. Id.
Before attending the examinations under oath, the Spearses retained another attorney who
informed Tennessee Farmers that the Spearses would not participate in the scheduled
examinations under oath and intended to bring a legal action against Tennessee Farmers.
Id. Tennessee Farmers sent another letter requesting that the Spearses attend subsequent
examinations under oath. Id. The Spearses did not attend these examinations. Id.

       The Spearses filed suit, alleging, inter alia, that Tennessee Farmers breached the
insurance policy. Id. Tennessee Farmers filed a motion for summary judgment seeking to
dismiss the Spearses’ breach of contract claim, which the trial court granted. Id. 676. On
appeal, this Court analyzed Tennessee Farmers’ argument that the Spearses breached the
insurance contract by: (1) failing to answer questions under oath when required by
Tennessee Farmers; and (2) prematurely bringing a legal action against Tennessee Farmers
prior to fully complying with the terms of the contract. Id. at 678. Tennessee Farmers
argued that the foregoing breaches relieved it of its obligation to perform under the
insurance policy. Id.

       In resolving Spears, we first explained that “insurance policies are contracts and,
thus, subject to the same rules of construction that are used to interpret other types of
contracts.” Id. (citing McKimm v. Bell, 790 S.W.2d 526, 527 (Tenn. 1990)). Accordingly,
when construing an insurance policy, a court must first determine whether the language in
the policy is ambiguous. Spears, 300 S.W.3d at 678 (citing Planters Gin Co. v. Federal
Compress & Warehouse Co., Inc., 78 S.W.3d 885, 890 (Tenn. 2002)). “Summary
judgment is appropriate in contract cases where the terms of the contract are not ambiguous
making the issue a pure question of law.” Id. As with other contracts, “[t]he respective
                                           -8-
rights of an insured and an insurance company are governed by their contract of insurance,”
and “courts must give effect to the parties’ intentions as reflected in their written contract
of insurance.” Id. at 678-79 (internal citations omitted). If the language in the insurance
policy is unambiguous, courts should enforce the policies as written. Id. at 679 (citing
Quintana v. Tennessee Farmers Mut. Ins. Co., 774 S.W.2d 630, 632 (Tenn. Ct. App.
1989)). “Absent fraud, overreaching, or unconscionability, the courts must give effect to
a provision in an insurance policy when its terms are clear and its intent certain.” Id. On
this Court’s review, the language in the insurance policy at issue was not ambiguous, and
Mr. Ponnapula does not argue otherwise. “Given that the terms of the policy were clear
and unambiguous,” Mr. Ponnapula was bound by them. Id.

       Having concluded that Mr. Ponnapula was bound by the terms of the policy, we turn
to examine whether such terms acted as a pre-condition to Mr. Ponnapula’s right to recover
under the policy. In Spears, this Court explained that “Tennessee courts have upheld
similar duty to cooperate clauses as a pre-condition to exercising an insured’s rights under
the contract.” Id. at 680 (internal citations omitted). One such case, Shelter Insurance
Companies v. Spence, held that the cooperation clause of an insurance policy entitled the
insurer to take sworn statements from each insured privately and out of each other’s
presence. 656 S.W.2d 36, 38 (Tenn. Ct. App. 1983). This Court explained that the
“obtaining of true and accurate information about the type and extent of damage to the
insured premises and its contents is relevant and material.” Id.

        The Spears Court also examined cases from other jurisdictions, including Watson
v. National Surety Corporation of Chicago, Illinois, 468 N.W.2d 448 (Iowa 1991), an
Iowa Supreme Court case with facts similar to Spears. Citing Watson, the Spears Court
concluded that other jurisdictions “have consistently held that failure to submit to questions
under oath is a material breach of the policy terms and a condition precedent to an insured’s
recovery under the policy.” Spears, 300 S.W.3d at 680 (citing Watson, 468 N.W.2d at
451). The Spears Court likewise concluded that “submission to answer questions under
oath when requested as provided for in the insurance policy at issue is a condition precedent
to an insured’s recovery under that policy.” Spears, 300 S.W.3d at 681. However, the
Spears Court noted that the Watson Court held that “an insured need only substantially
comply in order to preserve his or her rights under the policy.” Spears, 300 S.W.3d at 681
(citing Watson, 468 N.W.2d at 451) (emphasis added).

       Ultimately, the Spears Court determined that the Spearses “materially breached the
contract of insurance by refusing to answer questions under oath when [Tennessee
Farmers] requested in accordance with the policy.” Spears, 300 S.W.3d at 683. In reaching
this conclusion, the Spears Court considered that Mr. Spears gave two recorded, unsworn,
interviews shortly after the fire, and that the Spearses gave depositions during the discovery
portion of the underlying litigation. Id. at 682. However, the Spears Court distinguished
an unsworn interview and a discovery deposition from an examination under oath. Id.
Finally, the Spears Court concluded that Tennessee Farmers had the right to question the
                                               -9-
Spearses under oath, as stated in the policy, even if Tennessee Farmers’ decision to seek
an examination under oath was discretionary. Id. at 683. Once Tennessee Farmers made
such a request,

        Mr. Spears was under an obligation to answer any questions under oath posed
        by an agent of [Tennessee Farmers]. Any other efforts the Spears[es] made
        toward cooperating with [Tennessee Farmers’] investigation, such as giving
        statements shortly after the fire and providing certain documents, does not
        alter the fact that they materially breached the contract of insurance by
        refusing to answer questions under oath when [Tennessee Farmers] requested
        in accordance with the policy.

Id. For the foregoing reasons, the Spears Court concluded that the Spearses materially
breached the insurance policy and were barred from seeking recovery under it. Id.

       In Farmers Mutual of Tennessee v. Atkins, No. E2014-00554-COA-R3-CV, 2014
WL 7143292 (Tenn. Ct. App. Dec. 15, 2014), this Court interpreted the holding in Spears.
In Atkins, this Court opined that

        . . . the Spears Court did not hold that every failure to fully submit to
        questioning would be considered a material breach of the insurance contract.
        Instead, the Court considered the attendant circumstances of the insureds’
        failure to submit to questioning under oath, including Mr. Spears’ early
        cooperation, and the insured’s failure to submit to full questioning on not
        one, but three separate occasions. Under these circumstances, the Court
        concluded that the insured’s behavior constituted a material breach of the
        insurance policy, which breach precluded their recovery.

        The Spears Court’s suggestion that substantial compliance with an
        Examination Under Oath provision may be sufficient to preserve an insured’s
        ability to recover under an insurance policy is consistent with the general
        contract principle that: “[I]n order for a contractual breach to be sufficient to
        relieve the non-breaching party of its contractual obligations, the initial
        breach must be ‘material.’” DePasquale v. Chamberlain, 282 S.W.3d 47,
        53 (Tenn. Ct. App. 2008).

Atkins, 2014 WL 7143292, at *8.3

3
  For completeness, we note that the facts in Atkins are distinguishable from both Spears and the case before
us. In Atkins, this Court concluded that there was a factual dispute concerning Ms. Atkins’ failure to submit
to the examination under oath. Atkins, 2014 WL 7143292, at *8. Specifically, this Court considered the
fact that Ms. Atkins informed her insurer that she was not planning to pursue her insurance claim while
there were criminal charges pending against her, and she declined to participate in the examination under
oath due to the pending criminal charges. Id. This Court also noted that Ms. Atkins filed her initial
                                                   - 10 -
        On appeal, Mr. Ponnapula does not dispute that he failed to appear for the scheduled
examinations under oath. Although somewhat difficult to understand, we deduce that his
first argument is that he “conformed his conduct to the terms of the policy by cooperating
with the adjuster where she believed that she had sufficient information to make him an
offer of $34,000.00 on his claim.” Concerning this argument, it appears that Mr. Ponnapula
was operating under the mistaken belief that there was an enforceable settlement agreement
of $34,000.00 between the parties. Mr. Ponnapula argues that Tennessee Farmers did not
require additional medical records/information because it had already offered him a
settlement based on medical bills Mr. Ponnapula previously provided. As discussed at
length, supra, when Mr. Ponnapula extended a counter-offer to Tennessee Farmers on June
28, 2017, and when Tennessee Farmers neither accepted the counter-offer nor re-extended
the initial offer, that settlement negotiation ended. Thereafter, Mr. Ponnapula requested
that his claim be closed. At the re-opening of the claim, Tennessee Farmers determined
that more information was required to process the claim and asked that Mr. Ponnapula
execute a HIPAA release to obtain such information. Tennessee Farmers was under no
obligation to justify this request to Mr. Ponnapula, see Spears, 300 S.W.3d at 683, and, as
discussed above, the insurance policy required that Mr. Ponnapula cooperate with such
requests to facilitate his recovery under the policy. As explained more thoroughly below,
Mr. Ponnapula failed to comply with Tennessee Farmers’ requests.

        We deduce that Mr. Ponnapula’s next argument arises from Tennessee Farmers’
attempt to process Mr. Ponnapula’s claim for the second time. On appeal, Mr. Ponnapula
argues that there are genuine issues of material fact concerning whether Tennessee Farmers
had a “motive to deprive [Mr. Ponnapula] of his right under the insurance policy to be
compensated . . . .” Specifically, Mr. Ponnapula argues that Tennessee Farmers
“intentionally inhibited” him from having his claim processed in a timely manner.
Contrary to Mr. Ponnapula’s arguments, the record shows that Mr. Ponnapula’s own
actions (and inactions) delayed the processing of his claim and ultimately led to the denial
of it. First, Mr. Ponnapula refused to execute a HIPAA release so that Tennessee Farmers
could have his medical records reviewed by a third-party. Ms. Nichols testified in her
deposition that, although Mr. Ponnapula previously provided her with some of his medical
records, the third-party reviewer determined that it did not have all of the information
necessary to review Mr. Ponnapula’s claim. Thus, the reviewer required the HIPAA
release so it could obtain the remaining medical records necessary for review. Mr.
Ponnapula’s refusal to execute the HIPAA release and his threat of legal action caused his
claim to be escalated to Tennessee Farmers’ legal counsel. In her deposition, Ms. Nichols
testified that once she turned over Mr. Ponnapula’s file to the attorney’s office, the claims
process continued with the attorney from that point forward. Because Mr. Ponnapula

complaint solely to toll the statute of limitations, and she almost immediately voluntarily dismissed it. Id.
The Atkins Court concluded that the foregoing “circumstances [were] certainly relevant and material to the
question of whether Ms. Atkins materially breached the insurance policy.” Id.
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refused to cooperate with the HIPAA release, Tennessee Farmers scheduled examinations
under oath with their attorney to obtain the information it needed to process Mr.
Ponnapula’s claim. As discussed above, the Ponnapulas twice failed to appear for their
examinations. Soon after, Mr. Ponnapula filed this lawsuit. Thereafter, Tennessee Farmers
informed the Ponnapulas that it was denying the remaining bodily injury claim due to their
failure to cooperate in the investigation of the claim, as required under the insurance policy.

        Lastly, Mr. Ponnapula argues in his brief that “Tennessee law requires [a] showing
of prejudice for [an] insurance company to defeat liability, even if the insured individual
has failed to abide by [the] terms of [the insurance] policy.” Although this argument is
disorganized and difficult to understand, we deduce that Mr. Ponnapula asks this Court to
extend the Tennessee Supreme Court’s holding in Alcazar v. Hayes, 982 S.W.2d 845
(Tenn. 1998) to this case. Briefly, in Alcazar, an insured provided his insurer with notice
of an automobile accident one year after the accident. Id. at 847. The sole issue on appeal
was whether an insurance policy is automatically forfeited when the insured fails to comply
with the policy’s notice provision, regardless of whether the insurer was prejudiced by the
delay. Id. Citing certain public policy considerations, the Tennessee Supreme Court held
that courts must “take into consideration the degree to which [an] insurer has been
prejudiced by the delay in notice.” Id. at 853. Seemingly extending Alcazar to the facts
in this case, Mr. Ponnapula argues that there “is a genuine question of material fact whether
any prejudice occurred to [Tennessee Farmers] by [Mr. Ponnapula] not giving an
examination under oath . . . .” If Mr. Ponnapula desired this Court to consider whether an
insurance company must be prejudiced by an insured’s failure to cooperate before it could
be released from liability under an insurance policy, he should have designated this
question as an issue for this Court’s review, but he did not. Rather, Mr. Ponnapula’s stated
issue is whether there was a genuine issue of material fact that he “breached his duty under
the insurance policy to cooperate in giving an examination under oath.” Indeed, this is a
separate question from whether Tennessee Farmers must be prejudiced for it to be released
from liability under the insurance policy.

        The contents of appellate briefs are governed by Rule 27 of the Tennessee Rules of
Appellate Procedure, which requires an appellant’s brief to list “[a] statement of the issues
presented for review . . . .” Tenn. R. App. P. 27(a)(4). The statement of the issues is vitally
important to the appeal as it provides this Court with the questions that we are asked to
answer on review. The statement is also significant because our “[a]ppellate review is
generally limited” to those issues listed in it. Hodge v. Craig, 382 S.W.3d 325, 334 (Tenn.
2012) (citing Tenn. R. App. P. 13(b)). Indeed, “[c]ourts have consistently held that . . .
[a]n issue not included [in the statement of the issues] is not properly before the Court of
Appeals.” Hawkins v. Hart, 86 S.W.3d 522, 531 (Tenn. Ct. App. 2001). Accordingly,
appellants should endeavor to frame each issue “as specifically as the nature of the error
will permit,” Hodge, 382 S.W.3d at 335 (citing Fahey v. Eldridge, 46 S.W.3d 138, 143-
44 (Tenn. 2001); State v. Williams, 914 S.W.2d 940, 948 (Tenn. Crim. App. 1995)), as this
Court is not required to “search[] for hidden questions” in appellants’ briefs. Hodge, 382
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S.W.3d at 334 (citing Bryan A. Garner, Garner on Language and Writing 115 (2009);
Robert L. Stern, Appellate Practice in the United States § 10.9, at 263 (2d ed.1989)).
Having failed to include as an issue whether a showing of prejudice was required before
Tennessee Farmers could be released from liability under the policy, Mr. Ponnapula has
waived this issue.4

       In its final order, the trial court found that there was no genuine issue of material
fact concerning Mr. Ponnapula’s noncompliance with the terms of his insurance policy.
The trial court concluded that, “[b]y failing to answer questions under oath when requested
by Tennessee Farmers, [Mr. Ponnapula] has materially breached the insurance policy[.]”
As discussed above, Mr. Ponnapula was given multiple opportunities to comply with the
requests of Tennessee Farmers in processing his claim. During this time, he was informed
that there was no settlement agreement between the parties. Furthermore, two
representatives from Tennessee Farmers reminded Mr. Ponnapula of his duty to cooperate
under the insurance policy and that his failure to do so could result in the denial of his
claim. Much like the Spears appellants, although Mr. Ponnapula cooperated at first, i.e.,
provided certain medical bills, he initially refused to sign a HIPAA release, refused to
provide his tax returns, and repeatedly refused to submit to an examination under oath
before filing the underlying lawsuit, which led to the denial of his claim. See Spears, 300
S.W.3d at 682-83. Thus, based on the facts in this case, we conclude that the trial court
did not err in determining that Mr. Ponnapula’s refusal to submit to an examination under
oath constituted a material breach of the insurance policy. Accordingly, we affirm the trial
court’s grant of summary judgment.

                                         V. Conclusion

        For the foregoing reasons, we affirm the trial court’s order. The case is remanded
for such further proceedings as are necessary and consistent with this opinion. Costs of the
appeal are assessed to the Appellant, Murali Ponnapula, for all of which execution may
issue if necessary.

                                                           s/ Kenny Armstrong
                                                        KENNY ARMSTRONG, JUDGE

4
 We note that Spears was decided eleven years after Alcazar, and the Spears Court neither discussed
Alcazar nor required a showing of prejudice to deny recovery when the Spearses breached their duty to
cooperate under the insurance policy.
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