Dennis Michael Harris, et ux v. Mickey Deanne Haynes ( 2013 )

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
May 13, 2013 Session
DENNIS MICHAEL HARRIS, ET UX. v. MICKEY DEANNE HAYNES,
ET AL.
Appeal from the Circuit Court for Anderson County
No. BOLA0333 Donald R. Elledge, Judge
No. E2012-02213-COA-R3-CV-FILED-JULY 10, 2013
This appeal concerns whether certain exclusions in a coverage document are permissible.
Dennis Michael Harris (“Harris”), then a patrolman with the Anderson County Sheriff’s
Department, was injured when he was struck by a vehicle driven by Mickey Deanne Haynes
(“Haynes”). Harris and his wife, Judy A. Harris, (collectively, “the Plaintiffs”) sued Haynes
and the alleged owner of the vehicle, Richard H. Furrow, in the Circuit Court for Anderson
County (“the Trial Court”). The Plaintiffs also raised claims against Anderson County’s
motor vehicle liability coverage provider, Tennessee Risk Management Trust (“TRMT”), for
uninsured or underinsured motorist coverage. TRMT filed a motion for summary judgment,
arguing that under the relevant coverage document (“the Coverage Document”), Harris was
excluded from uninsured coverage as he was an employee of Anderson County who had
received workers compensation. The Trial Court granted TRMT’s motion. The Plaintiffs
appeal. We hold that Anderson County was self-insured through TRMT, and, therefore, the
uninsured/underinsured motorist statutes do not apply. The Coverage Document excluded
employees such as Harris from uninsured coverage. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed;
Case Remanded
D. M ICHAEL S WINEY, J., delivered the opinion of the Court, in which C HARLES D . S USANO,
J R., P.J., and T HOMAS R. F RIERSON, II, J., joined.
David A. Stuart, Clinton, Tennessee, for the appellants, Dennis Michael Harris and Judy A.
Harris.
Jonathan Swann Taylor, Knoxville, Tennessee, for the appellee, Tennessee Risk
Management Trust.
OPINION
Background
The material facts of this appeal are undisputed. On August 15, 2009, Harris
was working as a patrolman for the Anderson County Sheriff’s Department when he was
assigned to assist traffic control at the scene of a vehicular collision in Anderson County,
Tennessee. While attending to his duty at the scene of the collision, Harris was struck by a
pickup truck driven by Haynes and suffered personal injuries. Pursuant to the Coverage
Document issued by TRMT to Anderson County, Harris received workers compensation
benefits for the injuries he sustained in this incident. In October 2009, Harris returned to
work with the Anderson County Sheriff’s Department. In March 2011, Harris was promoted
to investigator.
The Coverage Document was issued by TRMT to Anderson County after the
Operations Committee of the Anderson County Board of Commissioners approved a motion
that sent out a request for proposals for County liability, property casualty, and workers
compensation insurance. On April 20, 2009, the Anderson County Board of Commissioners
renewed a one year contract with TRMT. Section III, Paragraph C of the Coverage
Document provides:
Liability for bodily injury to non-employees and other casual occupants of
owned vehicles other than drivers or operators is afforded in respect of any
CLAIM not to exceed the limits set forth in the Tennessee Tort Liability Act,
if applicable, or the limit set forth in the SCHEDULE OF LIMITS,
regardless of the number of claimants in any one OCCURRENCE. A
CLAIM for such coverage may be made to TNRMT only after all other
applicable coverage is exhausted and only for the amounts allowed by the
Tennessee Tort Liability Act inclusive of any recovery from any other
coverage available. This coverage shall not apply to employees, agents or
contractors acting on behalf of the MEMBER or to any injury covered by
Workers Compensation law. The intent of this coverage is to apply to vehicle
occupants only, excluding drivers. If coverage is afforded under this section
(Automobile Liability paragraph C), then coverage under Auto Liability
paragraph “A” does not apply.
Section III’s exclusions provide that coverage under Section III does not insure
against:
Any obligation for which the MEMBER may be held liable under any
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Worker’s Compensation, disability benefits law, employers liability or under
any similar law or to BODILY INJURY to any employee or to any liability
for indemnity or contribution brought by any party for BODILY INJURY to
any employee.
The parties also agree as to certain facts regarding the history and nature of
TRMT. TRMT was created in 1987 by local school boards and other public entities in
Tennessee pursuant to the Interlocal Cooperation Act, Tenn. Code Ann. § 12-9-101, et seq.
TRMT provides liability, workers compensation, and property coverage to more than 200
governmental entities and schools in Tennessee. TRMT is similar to an insurance company
in that it collects premiums, provides coverage and loss control, and pays claims. TRMT,
however, asserts that it is not an insurance company. TRMT asserts that it allows
governmental entities and school systems to come together as one to share risks and losses.
Members receive customized coverage, rates and services, and avoid underwriting cycles
experienced with traditional carriers.
We next review the relevant procedural history in this case. The Plaintiffs filed
their complaint in July 2010. The Plaintiffs sued Haynes, the driver of the vehicle, and
Richard H. Furrow, the vehicle’s owner, alleging negligence and vicarious liability claims,
and asserting injuries to Harris stemming from the incident. TRMT was involved in the case
as the county’s vehicle liability carrier. TRMT filed an answer in opposition. TRMT also
filed a motion for summary judgment in March 2012.
In August 2012, the Trial Court entered an order granting summary judgment
to TRMT. In its oral ruling, the Trial Court explained its reasoning:
[I]t’s clear that this is strictly a contract case as it pertains to whether or not
this is insurance, and as it pertains to whether or not Tennessee Risk
Management Trust should have provided uninsured motorist insurance for the
Plaintiff in this case. It is further clear, totally clear, no question of fact that
on or about January 12, 2009, the subcommittee of Anderson County approved
their liability coverage. And on April 20, 2009, they approved and renewed
their contract with Risk Management Trust. The Court finds that Risk
Management Trust is an entity created under TCA 29-20-401, et seq. It’s a
governmental pool. There is no question it’s a government pool as it addresses
liability.
***
And under the self-insurance provisions of TCA 29-20-401, because
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he is an employee of the insured and because he was covered by workers’
compensation insurance, and this Court so finds, then the Tennessee Risk
Management does not have to defend Mickey Deanne Haynes; is not liable for
damages because it’s specifically excluded. And there’s no question of fact
that Anderson County is in the risk management pool. There’s no question of
fact that they provide their own coverage. They pool to limit their liability.
There’s no question of fact when Anderson County met, that they accepted the
contract, and they rejected uninsured motorist coverage for an employee,
which Mr. Harris was, or for someone covered by insurance. It’s also a matter
of law that a governmental entity acts through its minutes, and its minutes
reflect that. That’s it. A governmental entity acts through its minutes, and its
minutes reflect that. And that’s what they accepted; that’s what they rejected.
And unfortunately for Mr. Harris, that’s what we have in this case. (format
modified)
In October 2012, the Trial Court entered judgment in favor of the Plaintiffs against Haynes
in the amount of $1,000,000 for Harris and $250,000 for his wife. Harris appeals to this
Court.
Discussion
Though not stated exactly as such, the Plaintiffs raise one issue on appeal:
whether the Trial Court erred in granting summary judgment to TRMT.
Our Supreme Court reiterated the standard of review in summary judgment
cases as follows:
The scope of review of a grant of summary judgment is
well established. Because our inquiry involves a question of
law, no presumption of correctness attaches to the judgment, and
our task is to review the record to determine whether the
requirements of Rule 56 of the Tennessee Rules of Civil
Procedure have been satisfied. Hunter v. Brown, 955 S.W.2d 49,
50-51 (Tenn. 1997); Cowden v. Sovran Bank/Cent. S., 816
S.W.2d 741, 744 (Tenn. 1991).
A summary judgment may be granted only when 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; Byrd v.
Hall, 847 S.W.2d 208, 214 (Tenn. 1993). The party seeking the
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summary judgment has the ultimate burden of persuasion “that
there are no disputed, material facts creating a genuine issue for
trial . . . and that he is entitled to judgment as a matter of law.”
Id. at 215. If that motion is properly supported, the burden to
establish a genuine issue of material fact shifts to the
non-moving party. In order to shift the burden, the movant must
either affirmatively negate an essential element of the
nonmovant’s claim or demonstrate that the nonmoving party
cannot establish an essential element of his case. Id. at 215 n.5;
Hannan v. Alltel Publ’g Co., 270 S.W.3d 1, 8-9 (Tenn. 2008).
“[C]onclusory assertion[s]” are not sufficient to shift the burden
to the non-moving party. Byrd, 847 S.W.2d at 215; see also
Blanchard v. Kellum, 975 S.W.2d 522, 525 (Tenn. 1998). Our
state does not apply the federal standard for summary judgment.
The standard established in McCarley v. West Quality Food
Service, 960 S.W.2d 585, 588 (Tenn. 1998), sets out, in the
words of one authority, “a reasonable, predictable summary
judgment jurisprudence for our state.” Judy M. Cornett, The
Legacy of Byrd v. Hall: Gossiping About Summary Judgment
in Tennessee, 69 Tenn. L. Rev. 175, 220 (2001).
Courts must view the evidence and all reasonable
inferences therefrom in the light most favorable to the
non-moving party. Robinson v. Omer, 952 S.W.2d 423, 426
(Tenn. 1997). A grant of summary judgment is appropriate only
when the facts and the reasonable inferences from those facts
would permit a reasonable person to reach only one conclusion.
Staples v. CBL & Assocs., Inc., 15 S.W.3d 83, 89 (Tenn. 2000).
In making that assessment, this Court must discard all
countervailing evidence. Byrd, 847 S.W.2d at 210-11.
Recently, this Court confirmed these principles in Hannan.
Giggers v. Memphis Housing Authority, 277 S.W.3d 359, 363-64 (Tenn. 2009). Issues
involving the scope of coverage present questions of law, which may be resolved by
summary judgment if the facts are undisputed. Victoria Ins. Co. v. Hawkins, 31 S.W.3d 578,
580 (Tenn. Ct. App. 2000). Here, the material facts are undisputed.
Initially, it is useful to review portions of the law governing self-insurance
pools for trusts such as TRMT:
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(a) Any governmental entity may create and maintain a reserve or special fund
for the purpose of making payment of claims against it payable pursuant to this
chapter or for the purpose of purchasing liability insurance to protect it from
any and all risks created by this chapter.
(b)(1) Any two (2) or more governmental entities are hereby granted the
power, any provision of law to the contrary notwithstanding, to enter into an
agreement or agreements with one another for joint or cooperative action to
pool their financial and administrative resources for the purpose of providing
to the participating governmental entities risk management, insurance,
reinsurance, which is defined to mean reinsurance by an entity created under
this section, self-insurance, or any combination thereof for any and all of the
areas of liability or insurability, or both, for such governmental entities,
including, but not limited to, the liabilities created by this chapter (including
general and professional liabilities), liabilities under the workers'
compensation law, liabilities under the unemployment compensation law, and
motor vehicle insurance. All such agreements shall be made pursuant to title
12, chapter 9.
***
(c)(1) Any governmental entity choosing to create and maintain a special fund,
or to enter into an agreement, as authorized in this section for the purpose of
insuring against the liabilities created by this chapter, shall be deemed to be
electing to self-insure against the liabilities established in this chapter and
shall, therefore, have the same limits of liability as if the minimum limits of
liability established in § 29-20-403 had been purchased.
***
(d)(1) No special fund established by an agreement authorized under this
section and under title 12, chapter 9, shall be considered as an “insurance
company” nor shall any contribution of financial or administrative resources
to such a special fund be considered a “premium” or “gross premium” under
title 56 for any purpose, including regulation and taxation.
Tenn. Code Ann. § 29-20-401 (2012).
The Plaintiffs argue that Anderson County and TRMT were required to comply
with the uninsured/underinsured motorist statutes at Tenn. Code Ann. § 56-7-1201, et seq.,
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and that they failed to do so. TRMT, for its part, contends that the uninsured/underinsured
motorist statutes are inapplicable. TRMT points to the case of Maines v. Hill, 190 F. Supp. 2d
1072 (W.D. Tenn. 2002) as persuasive authority. In Maines, the plaintiffs were injured in
a vehicular collision. Id. at 1071. The Maines court held:
Under Tennessee law, “[e]very automobile liability insurance policy
delivered, issued for delivery or renewed in this state ... shall include uninsured
motorist coverage ...” Tenn. Code Ann. § 56-7-1201(a). The State permits a
named insured, however, to reject in writing such coverage completely or to
select lower limits of such coverage. Tenn. Code Ann. § 56-7-1201(a)(2).
In this case, Carriers was insured by a general commercial liability
insurance policy issued by The Insurance Company of the State of
Pennsylvania. Although Carriers was given the option of accepting UM
coverage, it rejected such coverage in writing. It is clear, therefore, that
Carriers validly rejected UM coverage under the insurance policy issued by
The Insurance Company of the State of Pennsylvania.
Plaintiffs argue that even if the Court finds the rejection of UM
coverage under that policy to be valid, Plaintiff Maines was not bound by that
rejection. Specifically, Plaintiffs point to a Contract Hauling Agreement, and
assert that in order to bind Plaintiff Maines by contract, Carriers needed to
have specifically provided authority.
The Court need not address the terms of the Hauling Agreement
because Plaintiffs' argument is incorrect under Tennessee law. “Any document
signed by the named insured or legal representative which initially rejects
[uninsured motorist coverage] shall be binding upon every insured to whom
such policy applies ...” Tenn. Code Ann. § 56-7-1201(a)(2). In construing this
section of the Tennessee Code, the Supreme Court of Tennessee determined
that the “rights of an additional or omnibus insured can rise no higher than, but
are clearly controlled by, the choices and selections of coverage made by the
named insured ...” Burns v. Aetna Casualty & Surety Co., 741 S.W.2d 318,
323 (Tenn. 1987). Therefore, despite Plaintiffs' protestations to the contrary,
Plaintiff Maines, as an additional or omnibus insured of the named insurer,
Carriers, was bound by Carriers' rejection of UM coverage under the insurance
policy issued by The Insurance Company of the State of Pennsylvania.
Carriers argues next that it is not required to provide UM coverage with
respect to its self-insured retention. Under Tennessee law, as was set forth
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above, every “automobile liability insurance policy” issued in the State must
provide UM coverage. Tenn. Code. Ann. § 56-7-1201(a). The insurance
policy issued by The Insurance Company of the State of Pennsylvania
provided coverage for liability claims in excess of one million dollars
($1,000,000), while Carriers had a self-insured retention of up to one million
dollars ($1,000,000) per occurrence. The issue is whether the self-insured
retention held by Carriers is an automobile liability insurance policy, making
it subject to the provisions of Section 56-7-1201 of the Tennessee Code.
Unfortunately, no Tennessee court has addressed the issue of whether
a self-insured retention is subject to the UM coverage requirement set forth in
Section 56-7-1201 of the Tennessee Code. Carriers cites decisions from
numerous other jurisdictions with similar statutory language as persuasive
authority for its contention that a self-insured retention is not governed by
Section 56-7-1201. The majority of those decisions hold that self insurance
is not an “automobile liability insurance policy.” See e.g. O'Sullivan v.
Salvation Army, 85 Cal. App. 3d 58, 147 Cal. Rptr. 729, 731-32 (1978);
Hoffman v. Yellow Cab Co. of Louisville, 57 S.W.3d 257, 261 (Ky. 2001);
Grange Mutual Cas. Co. v. Refiners Transp. & Terminal Corp., 21 Ohio St. 3d
47, 487 N.E.2d 310, 313-14 (1986). The Court is persuaded by the reasoning
set forth in those decisions. The Court is also persuaded by Carriers' assertion
that the legal definition of self insurance does not fit within the definition of
a “contract of insurance” or “motor vehicle liability policy” as set forth in the
Tennessee Code. See Blacks' Law Dictionary at 806 (6th ed.1991); c.f. Tenn.
Code Ann. §§ 56-7-101(a), 55-12-202(7). Moreover, “To read [a rejection
requirement] into the law under the pretext of public policy would be to
impose a greater burden on a self-insured than is imposed on the named
insured of an insurance policy.” Hoffman, 57 S.W.3d at 261.
The Court therefore determines that Carriers' one million dollar
($1,000,000) self-insured retention is not subject to Section 56-7-1201 of the
Tennessee Code. As a result, Carriers was not obligated under Tennessee law
to provide UM coverage as part of its self-insured retention. With respect to
Tennessee, Carriers did not possess any UM coverage under any insurance
policy.
Maines, 190 F.Supp.2d at 1075-76 (some citations omitted). We find the reasoning in
Maines to be sound when the court held that the “UM coverage requirement set forth in
Section 56-7-1201 of the Tennessee Code...” does not apply in a self-insured situation. Id.
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TRMT has been described in a Tennessee Attorney General’s Opinion as
follows:
The Trust was created through an interlocal agreement of school boards under
Tenn. Code Ann. § 12-9-104. It was formed to create and operate a
self-insurance pool for school systems under the authority of the Tennessee
Governmental Tort Liability Act, Tenn. Code Ann. § 29-20-401. The risk pool
allowed members to share risk as an alternative to purchasing commercial
insurance policies. At some point, coverage was expanded to include county
government and public utilities in Tennessee in addition to school systems.
According to information available to this Office, the Trust is an
intergovernmental agency that provides claims management, loss control
services and insurance coverage to school systems, county government and
public utilities in Tennessee.
Tenn. Op. Atty. Gen. No. 06-066, 2006 WL 1197460 (April 11, 2006).
TRMT is a risk pool. As the statutes authorizing the creation and existence of
TRMT provide, TRMT is not an insurance company, and it would be incorrect to treat it as
such for legal purposes. Further, the statute provides that because Anderson County has
chosen to participate in TRMT, it is deemed to be self-insured. We hold, as did the Trial
Court, that the uninsured/underinsured statutes simply do not apply in this self-insurance
situation. Anderson County decided to reject uninsured/underinsured motorist coverage
though its adoption of the Coverage Document. Arguing further, the Plaintiffs raise a
provision of the Coverage Document which provides that should the terms of the document
conflict with any Tennessee statutes, the terms are amended to conform with the statutes.
However, for the reasons already discussed, the terms of the Coverage Document do not
conflict with Tennessee law. The very statutes governing the existence of TRMT, Tenn.
Code Ann. § 29-20-401, et seq., control. The statutes specifically provide that TRMT may
not be considered an insurance company. The statutes further provide that Anderson County,
having chosen to participate in TRMT, “shall be deemed to be electing to self-insure....”
Tenn. Code Ann. § 29-20-401 (c)(1) (2012). There is no conflict between any terms of the
Coverage Document and the Tennessee uninsured/underinsured statutes.
We, therefore, must look to the pertinent terms of the Coverage Document to
determine whether coverage extended to Harris under the Coverage Document. The
Coverage Document provides that “coverage shall not apply to employees, agents or
contractors acting on behalf of the MEMBER or to any injury covered by Workers
Compensation law.” Our Supreme Court has stated regarding contract interpretation:
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When we interpret a contract, our role is to ascertain the intention of the
parties. The intention of the parties is based on the ordinary meaning of the
language contained within the four corners of the contract. The interpretation
of a contract is a matter of law, which we review de novo with no presumption
of correctness.
84 Lumber Co. v. Smith, 356 S.W.3d 380, 383 (Tenn. 2011) (citations omitted). According
to the plain terms of the Coverage Document, Harris, an employee acting on behalf of
Anderson County and who received workers compensation benefits, is not covered.
To reiterate, TRMT is not an insurance company. Rather, Anderson County
is deemed to be self-insured, and the uninsured/underinsured statutes are not applicable to
or in conflict with the Coverage Document. The question of whether Anderson County
should provide uninsured/underinsured motorist coverage to its employees, such as Harris,
is a policy decision to be decided by the legislative body of Anderson County and not this
Court. The Anderson County legislative body made that policy decision, and it is not the role
of this Court to second guess that policy decision. With no material facts in dispute, TRMT
is entitled to judgment as a matter of law. We affirm the judgment of the Trial Court in its
entirety.
Conclusion
The judgment of the Trial Court is affirmed, and this cause is remanded to the
Trial Court for collection of the costs below. The costs on appeal are assessed against the
Appellants, Dennis Michael Harris and Judy A. Harris, and their surety, if any.
_________________________________
D. MICHAEL SWINEY, JUDGE
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