Martin v. Powers

505 S.W.3d 512

Edward MARTIN

v.Gregory POWERS et al.

No. M2014-00647-SC-R11-CV

Supreme Court of Tennessee, AT NASHVILLE.

February 10, 2016 Session

Filed October 24, 2016

Patrick Shea Callahan, Cookeville, Tennessee (on appeal), and Matthew C. Hardin, Nashville, Tennessee (at trial), for the appellant, Edward Martin.

W. Bryan Brooks and Amy V. Peters (on appeal), and Benjamin J. Miller (at trial and on appeal), Nashville, Tennessee, for the appellee, IDS Property Casualty Insurance Company.

JEFFREY S. BIVINS, C.J., delivered the opinion of the Court, in which CORNELIA A. CLARK and SHARON G. LEE, JJ., joined. HOLLY KIRBY, J., filed a dissenting opinion.

OPINION

JEFFREY S. BIVINS, C.J.

This case arises out of an incident in which the Defendant, Gregory Powers, drove a car he had rented from Enterprise Rent-A-Car ("Enterprise") into the Plaintiff, Edward Martin. The Plaintiff sued the Defendant, the Defendant's automobile liability insurer, and Enterprise. Additionally, the Plaintiff provided notice of the lawsuit to his own automobile liability insurance carrier, IDS Property Casualty Insurance Company ("IDS"), in order to recover through the uninsured motorist coverage provision of the Plaintiff's policy ("the Policy"). IDS denied coverage and moved for summary judgment, arguing that the rental car ("the Rental Car") did not qualify as an "uninsured motor vehicle" under the Policy. The trial court¹ granted IDS's motion, and the Court of Appeals affirmed. We granted review to determine whether the Rental Car qualified as an "uninsured motor vehicle" under the Policy. We hold that the Rental Car was an "uninsured motor vehicle" under the Policy. Accordingly, we reverse the grant of summary judgment to IDS and remand this matter for further proceedings.

Factual and Procedural Background

On July 20, 2012, the Plaintiff, a bar owner in Franklin, Tennessee, refused to serve alcohol to the Defendant, who appeared intoxicated, and asked the Defendant to leave the bar. The Plaintiff followed the Defendant out to the parking lot and watched him get into the driver's seat of the Rental Car, a Kia Sorento. The Defendant then drove the Rental Car into the Plaintiff's knee. According to the Plaintiff's Complaint, the Plaintiff incurred injuries and medical expenses from the collision.

At the time of this incident, the Plaintiff was insured under a policy of automobile insurance issued by IDS, which provided uninsured/underinsured motorist coverage in the amount of $250,000 per person or $500,000 per event. The Defendant had automobile liability insurance through Mountain Laurel Assurance Company ("Mountain Laurel"). According to the Enterprise receipts submitted by the Plaintiff, there was no indication that the Defendant purchased the optional automobile insurance through Enterprise for the Rental Car.

The Plaintiff filed a complaint on July 18, 2013, against the Defendant, Mountain Laurel, and Enterprise. The Plaintiff also served IDS² with a copy of the summons and complaint for the purpose of bringing a claim under his uninsured motorist coverage policy.

On August 1, 2013, Mountain Laurel filed a motion to dismiss pursuant to Rule 12 of the Tennessee Rules of Civil Procedure. Mountain Laurel previously had filed a complaint for a declaratory judgment requesting a judicial declaration that it had no obligation to indemnify the Defendant against any claims asserted by Plaintiff because the Defendant's act of striking the Plaintiff was intentional. Mountain Laurel was granted summary judgment in the separate declaratory judgment proceeding on January 22, 2014. Thus, on April 15, 2014, the trial court dismissed without prejudice all claims against Mountain Laurel in this case pursuant to Rule 41 of the Tennessee Rules of Civil Procedure.

On August 23, 2013, Enterprise filed an answer, asserting that, pursuant to 49 U.S.C. § 30106, it was not vicariously liable for any harm resulting from the use, operation, or possession of any of its rental vehicles, and requested the complaint to be dismissed with prejudice. The Plaintiff subsequently provided notice of his intent to voluntarily dismiss with prejudice his claims against Enterprise pursuant to Rule 41.01 of the Tennessee Rules of Civil Procedure. Accordingly, the trial court dismissed with prejudice the Plaintiff's claims against Enterprise on October 10, 2013.

On November 14, 2013, IDS filed an answer to the Plaintiff's complaint. IDS subsequently filed a motion for summary judgment pursuant to Rule 56 of the Tennessee Rules of Civil Procedure. In its memorandum of law supporting its motion, IDS argued that, because Enterprise is a self-insurer under the Tennessee Financial Responsibility Act, Tenn. Code Ann. §§ 55–12–101 to -140 (2012) ("the FR Law"), the Rental Car did not qualify as an "uninsured motor vehicle" under the Policy. As support, IDS provided a copy of Enterprise's Certificate of Self-Insurance issued on March 8, 2013, by the Director of Financial Responsibility for the Tennessee Department of Safety and Homeland Security ("the Certificate").³ The Certificate provides as follows:

This certifies the company named herein has established self-insurance with the Tennessee Department of Safety for all owned or leased vehicles, pursuant to § 55–12–111, Tennessee Code Annotated. This certificate of self-insurance is valid until March 24, 2014, unless cancelled by the Department. This certificate is sufficient to establish evidence of financial responsibility as compliance with the Tennessee Financial Responsibility Law of 1977.

IDS argued that, because the Plaintiff's alleged damages did not arise out of the ownership or use of an uninsured motor vehicle, the Plaintiff could not recover from IDS for this incident, and IDS was entitled to judgment as a matter of law.

The trial court held a hearing on IDS's motion for summary judgment, but that transcript is not included in the record on appeal. The trial court granted IDS's motion for summary judgment on February 19, 2014, and certified its judgment as final for purposes of appeal on March 5, 2014. On appeal, the Court of Appeals affirmed the trial court's grant of summary judgment. Martin v. Powers, No. M2014–00647–COA–R3–CV, 2015 WL 895336, at *6 (Tenn. Ct. App. Feb. 27, 2015), perm. appeal granted(Tenn. Aug. 13, 2015). The Plaintiff then requested permission to appeal to this Court, which we granted.

Analysis

Standard of Review

We review a trial court's decision on a motion for summary judgment de novo with no presumption of correctness. Parker v. Holiday Hospitality Franchising, Inc., 446 S.W.3d 341, 346 (Tenn. 2014). A trial court should grant summary judgment only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Tenn. R. Civ. P. 56.04.

Was the Rental Car an "Uninsured Motor Vehicle" as Defined in the Policy?

IDS has been granted summary judgment in this case based upon the lower courts' conclusion that the Rental Car does not meet the definition of an "uninsured motor vehicle" as that term is used in the Policy. The lower courts arrived at their conclusion based on their construction of Tennessee Code Annotated section 55–12–111, a provision of the FR Law. IDS maintains that the lower courts' conclusion was correct. The proper interpretation of the relevant Policy language, as well as the proper construction and application of Tennessee Code Annotated section 55–12–111, are issues of first impression before this Court.

We construe insurance policies "using the same tenets that guide the construction of any other contract." Garrison v. Bickford, 377 S.W.3d 659, 664 (Tenn. 2012). Accordingly, our primary goal is to ascertain and give effect to the parties' intent. Id. To that end, we endeavor to give the terms used in an insurance policy their plain and ordinary meaning. Id."The ordinary meaning envisioned is the meaning which the average policy holder and insurer would attach to the policy language." S. Trust Ins. Co. v. Phillips, 474 S.W.3d 660, 667 (Tenn. Ct. App. 2015) (internal quotation marks omitted). More precisely, "[t]he language of an insurance contract ‘must be read as a layman’ would read it." Id.(quoting Paul v. Ins. Co. of N. Am., 675 S.W.2d 481, 484 (Tenn. Ct. App. 1984) ); see also Harrell v. Minnesota Mut. Life Ins. Co., 937 S.W.2d 809, 814 (Tenn. 1996) (stating that "an insured should not have to consult a long line of case law or law review articles and treatises to determine the coverage he or she is purchasing under an insurance policy," and considering what "the average insured would understand").

"The policy should be construed as a whole in a reasonable and logical manner, and the language in dispute should be examined in the context of the entire agreement." Garrison, 377 S.W.3d at 664 (citations and internal quotation marks omitted). Importantly, however, "contracts of insurance are strictly construed in favor of the insured, and if the disputed provision is susceptible to more than one plausible meaning, the meaning favorable to the insured controls." Id.; see also Allstate Ins. Co. v. Watts, 811 S.W.2d 883, 886 (Tenn. 1991) (citing Travelers Ins. Co. v. Aetna Cas. & Sur. Co., 491 S.W.2d 363, 367 (Tenn. 1973) ) (emphasizing that "exceptions, exclusions and limitations in insurance policies must be construed against the insurance company and in favor of the insured").

When construing a contract of insurance, we also must consider any relevant statutes: "any statute applicable to an insurance policy becomes part of the policy and such statutory provisions override and supersede anything in the policy repugnant to the provisions of the statute." Hermitage Health & Life Ins. Co. v. Cagle, 57 Tenn.App. 507, 420 S.W.2d 591, 594 (1967). The construction of a statute presents a question of law, and this Court...