Allstate Insurance Company v. Mary Louis Davis, John Rasnic, Carolyn Rasnic, and Tennessee Farmers Mutual Insurance Companies
Opinion
I N THE COURT OF APPEALS OF TENNESSEE
EASTERN SECTI ON FILED April 3, 1996
Cecil Crowson, Jr. ALLSTATE I NSURANCE COMPANY, ) C/ A NO. 03A01-Appellate C - 00426 9512- C ourt Clerk ) Pl a i nt i f f - Appe l l a nt , ) CLAI BORNE LAW ) v. ) HON. CONRAD TROUTMAN, ) J UDGE M ARY LOUI SE DAVI S, J OHN ) RASNI C, CAROLYN RASNI C, a nd ) TENNESSEE FARM ERS M UTUAL ) I NSURANCE COM PANI ES, ) REVERSED ) AND De f e nda nt s - Appe l l e e s . ) REMANDED
PAUL E. DUNN, DUNN M ACDONALD & COLEMAN, P. C. , Knoxvi l l e , f o r Pl a i nt i f f - Appe l l a nt .
J AM ES D. ESTEP, I I I , ESTEP & ESTEP, Ta z e we l l , f or De f e nda nt - Ap p e l l e e , Te nne s s e e Fa r me r s M ua l I ns ur a nc e Compa ni e s . ut
O P I N I O N
Fr a nks . J .
I n t hi s de c l a r a t or y j udgme nt a c t i on, pl a i nt i f f ,
i n s u r a nc e c ompa ny, s ough t a de c l a r a t i on t ha t i t s i ns ur e d, J o h n
H. Ra s ni c , wa s not a n i ns ur e d unde r i t s pol i c y f or t he
a c c i d e nt oc c ur r i ng be t we e n t he Ra s ni c a nd Da vi s mot or
ve hi c l e s . Spe c i f i c a l l y, t h e c ompl a i nt a l l e ge d t ha t Ra s ni c h a d
v i o l a t e d t he pol i c y pr ov i s i on:
?W mus t be not i f i e d pr ompt l y of how, whe n a nd e whe r e t he a c c i de nt or l os s ha ppe ne d. Not i c e s ho u l d a l s o i nc l ude t he na me s a nd a ddr e s s e s of a ny i nj u r e d pe r s ons a nd of a ny wi t ne s s . ? Al l s t a t e woul d a s s e r t t ha t whi l e t he a c c i de nt oc c ur r e d on De c e mbe r 1, 1993, t he y di d not r e c e i ve not i c e unt i l J une 24, 1994.
Th e i s s ue wa s t r i e d be f or e a j ur y, a nd a t t he c onc l us i on of
a l l t h e pr oof , t he Cour t ?di r e c t e d a ve r di c t i n f a vor of t he
d e f e n d a nt s ? a nd ?f ound t ha t t he c ont r ol l i ng i s s ue wa s a s t a t e
o f mi n d of t he i ns ur e d, J ohn Ra s ni c . W t h r e ga r d t o s uc h i
i s s u e , t he Cour t f ound t ha t M . Ra s ni c r e a s ona bl y be l i e ve d r
t ha t t he c ol l i s i on i n q ue s t i on wa s a t r i vi a l ma t t e r a nd t ha t ,
b a s e d upon s uc h be l i e f , M . Ra s ni c wa s j us t i f i e d i n not r
i m d i a t e l y r e por t i ng t he a c c i de nt t o Al l s t a t e . me The Cour t
f u r t h e r f ound t ha t , due t o hi s s t a t e of mi nd, M . Ra s ni c ’ s r
d e l a y i n r e por t i ng t he a c c i de nt t o Al l s t a t e unt i l a f t e r he ha d
b e e n s ue d, c ompl i e d wi t h t he pr ompt not i c e pr ovi s i ons of
Al l s t a t e ’ s i ns ur a nc e p ol i c y. ?
On a ppe a l , Al l s t a t e doe s not que s t i on t he Tr i a l
Co u r t ’ s t a ki ng t he i s s ue a wa y f r om t he j ur y, but i ns i s t s t ha t
a s a ma t t e r o f l a w i t i s e nt i t l e d t o a j udgme nt i n i t s f a vo r .
I t i s c l e a r f r om t he Tr i a l Cour t ’ s a na l ys i s t ha t i t
e r r o n e ous l y a ppl i e d a s ubj e c t i ve t e s t r a t he r a n obj e c t i ve
t e s t , whi c h i s whe t he r a r e a s ona bl e a nd pr ude nt pe r s on woul d
b e l i e ve t ha t t he a c c i de nt mi ght gi ve r i s e t o a c l a i m f or
d a ma ge s . Nat i onwi de M ual I ns ur anc e Company v . Shannon , 7 0 1 ut
S. W 2 d 615 ( Te nn. App. 1985) . .
Ra s ni c t e s t i f i e d t ha t he ?bumpe d? t he r e a r of t he
Da vi s c a r a nd t ha t t he oc c upa nt s a ns we r e d ?no? whe n a s ke d i f
t he y we r e h ur t . He t e s t i f i e d t ha t he a dvi s e d i f t he ve hi c l e
wa s d a ma ge d t o l e t hi m know. M s . Da vi s i ns i s t e d t ha t t he y r
s h o u l d ?c a l l t he l a w?. A pol i c e ma n c a me a f t e r t he ve hi c l e s h a d
2 b e e n move d, a nd r e f us e d t o pr e pa r e a wr i t t e n a c c i de nt r e por t .
?Two t o s i x we e ks l a t e r ? t he owne r of t he ot he r ve hi c l e t ol d
Ra s n i c a t a c onve ni e nc e s t or e t ha t ?t he y t ot a l e d t he c a r ? whi c h
Ra s n i c unde r s t ood t o me a n t he i ns ur a nc e c ompa ny. Ra s ni c ma d e
n o r e por t of t he a c c i de nt unt i l J une 23, 1994, a f t e r he
r e c e i ve d s ui t p a pe r s f r om t he Da vi s e s . The mos t t e l l i ng
a d mi s s i on by M . Ra s ni c c a me on c r os s - e xa mi na t i on a f t e r he h a d r
t e s t i f i e d t ha t he ha d ma de pi c t ur e s of t he f r ont e nd of hi s
v e hi c l e , s ome t wo we e ks a f t e r t he a c c i de nt :
Q. M . Ra s ni c , i f you di dn’ t c ons i de r t hi s r a c c i de nt wor t h r e por t i ng wha t woul d be your oc c a s i on f or t a ki ng phot ogr a phs of t he f r ont o f your v e hi c l e t wo we e ks a f t e r t hi s a c c i de nt t o s how t he r e wa s no da ma ge t o i t ? I di dn’ t unde r s t a nd.
A. I t c oul d’ ve be e n f our we e ks , but I s a i d I bought a ne w c a me r a , Pol a r oi d I ns t a ma t i c , a nd t ha t ’ s t he f i r s t pi c t ur e s I ’ ve t a ke n wi t h i t . And I ’ ve got s ome ot he r ve hi c l e s I t ook pi c t ur e s of I c a n s how you.
. . .
Q. I s n’ t i t a f a c t , s i r , t h a t you j us t ma de t he de c i s i on t o t r y t o ha ndl e t hi s your s e l f a nd g o out s i de your i ns ur a nc e c ompa ny a nd ha ndl e i t ?
A. I t hough t t he da ma ge wa s mi nor e nough. Ye s , si r.
Th e ma t e r i a l f a c t s a r e not i n di s put e a nd t he i s s ue i s a
q u e s t i on of l a w. Ra s ni c ha d a dut y t o gi ve not i c e t o hi s
i n s u r a nc e c ompa ny of t he a c c i de nt , c e r t a i nl y no l a t e r t ha n t h e
t i me t he owne r of t he o t he r ve hi c l e a dvi s e d hi m t ha t t he
v e hi c l e ha d b e e n ?t ot a l e d?. Our l a w i s c l e a r t ha t t he
c o n t r a c t ua l r e qui r e me nt of not i c e t o t he i ns ur e r i s a
c o n d i t i on pr e c e de nt t o r e c ove r y unde r t he pol i c y. Le e v . Le e ,
7 3 2 S. W 2d 275 ( TN 1987 ) ; Phoe ni x Cot t on Oi l Company v . Roy a l .
I n d e mn i t y Company , 140 Te nn. 438, 205 S. W 128 ( 1918) . .
3 Thi s i s e s s e nt i a l l y a di s put e be t we e n t wo i ns ur a n c e
c o mp a n i e s , a nd we not e t ha t a n i ns ur a nc e c ompa ny woul d
s o me t i me s b e ne f i t i f t hi s i ne qui t a bl e r ul e wa s c ha nge d, i . e . ,
d e c l a r e f or f e i t ur e s of p ol i c y c ove r a ge s onl y i n c a s e s whe r e
t h e l a t e r e por t i ng o f t he a c c i de nt r e s ul t e d i n a c t ua l
p r e j u d i c e t o t he i ns ur a n c e c ompa ny. As we obs e r ve d i n Nor t h
Ri v e r I ns ur anc e Company v . J ohns on, 757 S. W 2d 334 ( Te nn. Ap p . .
1 9 8 8 ) , i ns ur a nc e pol i c i e s , unl i ke ot he r c ont r a c t s , a r e not
p u r e l y pr i va t e a gr e e me nt s but a f f e c t t he publ i c ge ne r a l l y.
Our r ul e r e pr e s e nt s t he mi nor i t y vi e w. Se e
Ho s p i t al Unde r wr i t i ng Gr oup, I nc . , v . Summi t He al t h Lt d. , 6 3
F. 3 d 4 86 ( 6t h Ci r . 1995) . Cons ume r s a nd i ns ur a nc e c ompa ni e s
a l i k e woul d be ne f i t i f t he Supr e me Cour t woul d ove r t ur n t he
mi n o r i t y r ul e i n f a vor of t he e qui t a bl e ma j or i t y vi e w.
W a r e c ons t r a i ne d t o r e ve r s e t he j udgme nt of t h e e
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Allstate Insurance Company v. Mary Louis Davis, John Rasnic, Carolyn Rasnic, and Tennessee Farmers Mutual Insurance Companies (Allstate Insurance Company v. Mary Louis Davis, John Rasnic, Carolyn Rasnic, and Tennessee Farmers Mutual Insurance Companies) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.