Alcazar v. Hayes ( 1997 )

IN THE COURT OF APPEALS OF TENNESSEE
FILED
DAVID ALCAZAR, ) C/A NO. 03A01-9707-CV-00285
) October 30, 1997
) Cecil Crowson, Jr.
) Appellate C ourt Clerk
v. )
)
)
)
)
CHRISTOPHER HAYES, ) APPEAL AS OF RIGHT FROM THE
) BRADLEY COUNTY CIRCUIT COURT
Defendant, )
)
)
and )
)
)
GOVERNMENT EMPLOYEES )
INSURANCE COMPANY, )
)
Uninsured Motorist ) HONORABLE EARLE G. MURPHY,
Carrier-Appellee. ) JUDGE
For Appellant For Appellee
JIMMY W. BILBO DONALD W. STRICKLAND
Logan, Thompson, Miller, Bilbo, Grant, Konvalinka & Harrison, P.C.
Thompson & Fisher, P.C. Chattanooga, Tennessee
Cleveland, Tennessee
OPINION
AFFIRMED AND REMANDED Susano, J.
1
This appeal causes us to focus on the uninsured
motorist provisions of an automobile insurance policy issued by
Government Employees Insurance Company (“GEICO”) to Deborah
Wheatley, the mother of the plaintiff David Alcazar. When this
action was commenced, process was issued and served on GEICO
pursuant to the provisions of T.C.A. § 56-7-1201, et seq., the
Tennessee uninsured motorist statutes. The trial court granted
GEICO’s motion for summary judgment, finding that the plaintiff
had failed to comply with the notice requirements of GEICO’s
policy. Plaintiff appealed, arguing, in his words, that the
trial court “err[ed] in granting [GEICO’s] motion for summary
judgment, on the basis that timely notice was a condition
precedent to recovery under the policy, absent a finding of
unreasonable delay or prejudice to the insurer.” We affirm.
The accident at issue in this case occurred in Bradley
County on November 3, 1995. The plaintiff was riding “on the
trunk of [the defendant Christopher Hayes’] car.” He was riding
there because Mr. Hayes had refused to let him ride inside the
car.1 Because of the alleged negligence of the defendant Hayes,
the plaintiff “was flung from the trunk of the car onto White
Road where he hit his head on the paved roadway.” At the time of
the accident, the plaintiff, who was then 18 years old, was
living with and working for his mother on the farm owned by her
and her husband. He was a high school graduate.
1
This was because the plaintiff was dirty, having worked that day in the
chicken houses on his mother’s farm.
2
As a result of the accident, the plaintiff was
transported to Erlanger Hospital in Chattanooga, where he was
admitted to the intensive care unit of that facility. He
remained in intensive care for three days. Thereafter, he was
transferred to a room, where he stayed for one or two more days.
When he was released from the hospital, he returned to his
mother’s house, where he remained until he moved out in January,
1996.
The plaintiff’s answers to interrogatories reflect that
he claims the following injuries from the accident:
I have permanent brain damage, fractured
skull, bruised brain two bilateral cerebral
contusions, back strain, muscle spasms and
neck pain. I also suffer from left wrist
pain.
On October 28, 1996, the plaintiff and his mother first
met with the attorneys who later filed this action. The
complaint was filed on October 30, 1996. The only named
defendant was Christopher Hayes. As previously indicated, Mrs.
Wheatley’s insurance company -- GEICO -- was brought into this
action pursuant to the Tennessee uninsured motorist statutes.
The policy of insurance issued by GEICO to Mrs.
Wheatley contains the following pertinent provisions in its
uninsured motorist section:
1. NOTICE
3
As soon as possible after an accident notice
must be given us or our authorized agent
stating:
(a) the identity of the insured;
(b) the time, place and
details of the accident;
and
(c) the names and addresses
of the injured, and of
any witnesses.
* * *
3. ACTION AGAINST US
Suit will not lie against us unless the
insured or his legal representative have
fully complied with all the policy terms.
(Italics in original). The plaintiff was a named driver in Mrs.
Wheatley’s policy. He was an “insured” under the policy.
Mrs. Wheatley testified by deposition that “around the
same time” the lawsuit was filed, she spoke to a representative
of GEICO and told that person that she “did not want to make a
claim.” She also testified that she changed her mind when she
later learned that her son had suffered a serious brain injury.
GEICO was served with process in this case on November
4, 1996. By letter to Mrs. Wheatley dated November 12, 1996,
with a copy to her attorneys, GEICO “acknowledge[d] receipt of an
accident report dated November 6, 1996,2 in regard to an auto
accident in which, David Alcazar, was involved.” Apparently, the
accident report was mailed to GEICO by Mrs. Wheatley or the
2
It is unlikely the accident report was dated “November 6, 1996,” since
the accident occurred on November 3, 1995. The date of November 6, 1996, may
represent a “slip of the pen.”
4
attorneys who filed this suit. While the record does not clearly
reflect the precise date on which GEICO received the accident
report, it is clear that it was sometime around the time the
lawsuit was filed on October 30, 1996.
When asked why the requisite notice was not given to
GEICO at an earlier time, both the plaintiff and his mother
testified that it was because the plaintiff was not driving.
An appellate court, when reviewing a grant of summary
judgment, must decide anew if judgment in a summary fashion is
appropriate. Cowden v. Sovran Bank/Central South, 816 S.W.2d
741, 744 (Tenn. 1991). We must affirm the grant of summary
judgment “if 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.” Rule 56.03, Tenn.R.Civ.P.3
“Insurance contracts are subject to the same rules of
construction and enforcement as apply to contracts generally.”
McKimm v. Bell, 790 S.W.2d 526, 527 (Tenn. 1990); see also
Allstate Ins. Co. v. Wilson, 856 S.W.2d 706, 708 (Tenn.App.
1992); Whaley v. Underwood, 922 S.W.2d 110, 112 (Tenn.App. 1995).
Therefore, generally speaking, courts must enforce contracts as
written, absent fraud or mistake. Id.
3
This principle is now found in Rule 56.04. The change was effective
after the hearing below.
5
In Lee v. Lee, 732 S.W.2d 275 (Tenn. 1987), the Supreme
Court addressed notice provisions that are conceptually identical
to the one at issue in this case. That court held that such
provisions require “notice within a reasonable time under the
circumstances of the case.” Id. at 276. The Supreme Court
further expounded on this notice requirement by stating that it
...impos[es] a duty on an insured to give
notice when he becomes, or should become
aware of, facts which would suggest to a
reasonably prudent person that the event for
which coverage is sought might reasonably be
expected to produce a claim against the
insurer.
Id. The Lee case also examines those situations where a claimant
contends that he or she did not know, until shortly before giving
notice, that a policy of insurance existed that provided
uninsured motorist coverage, or did not know that the alleged
tortfeasor was uninsured:
...it is...a general rule that in order for
ignorance of coverage to excuse an insured or
additional insured from following the
procedures set out in an insurance policy, it
must be shown that the claimant exercised due
diligence and reasonable care in ascertaining
that there was coverage under the policy.
Id. The Supreme Court in Lee also held that “[w]here the facts
and inferences are undisputed that notice was not given within
the time required by the policy, the reasonableness of the delay
becomes a question of law for the court.” Id.
6
The plaintiff admits that notice as required by the
policy was not given to GEICO until some 12 months after the
accident occurred. On its face, notice given 12 months after the
fact is not prompt notice. Therefore, we must determine if the
delay in giving notice in this case was reasonable “under the
circumstances of [this] case.” Id.
The plaintiff offers a number of reasons for his delay
in giving GEICO the requisite notice. As previously indicated,
he claims, as does his mother, that he did not give notice
because he was unaware that the uninsured motorist coverage
applied to him since he was not driving a vehicle at the time of
the accident. This claimed lack of knowledge of coverage is not
a legal justification for failing to give the requisite notice in
this case because there is nothing in the record to indicate that
the plaintiff “exercised due diligence and reasonable care in
ascertaining that there was coverage under the policy.” Lee, 732
S.W.2d at 276.
The plaintiff also argues that he suffered “permanent
brain damage” in the accident and that this should excuse the
delay in giving notice. The record before us does not disclose
the nature and extent of the plaintiff’s brain damage; nor does
it reflect how, if at all, this damage affected the plaintiff’s
cognitive functions. We do know from the plaintiff’s answers to
interrogatories that he had worked and attended school since the
accident. The plaintiff’s “bare bones” statement that he
suffered permanent brain damage is insufficient, standing alone,
7
to excuse his compliance with the notice provisions of the
subject policy.
The facts supporting GEICO’s motion make out its claim
for relief. On the other hand, the facts presented by the
plaintiff in opposition to GEICO’s properly supported motion for
summary judgment do not establish a legal basis for excusing the
late notice in this case.
The type of notice at issue in this case has been
labeled by the courts of this state as “a vital and indispensable
condition precedent to recovery under the policy.” Hartford
Accident and Indemnity Co. v. Creasy, 530 S.W.2d 778, 779 (Tenn.
1975). “The general purpose of a notice provision is to make the
insurer aware that a claim may be forthcoming and provide an
adequate opportunity for investigation.” Allstate Insurance Co.
v. Fitzgerald, 743 F. Supp. 539, 542 (W.D. Tenn. 1990).
The plaintiff argues that his failure to give GEICO the
requisite notice should not defeat coverage in this case because
the insurance company failed to show that it was prejudiced by
the late notice. It is true that there is no showing of actual
prejudice in the record; but it is clear that controlling
precedent does not require a showing of such prejudice. Phoenix
Cotton Oil Co. v. Royal Indemnity Co., 205 S.W. 128, 130 (Tenn.
1918); Hartford Accident and Indemnity Co., 530 S.W.2d at 779
(Tenn. 1975) (“there need not be any showing of prejudice.”)
8
The Eastern Section of the Court of Appeals has
previously expressed its feeling that the plaintiff’s “no
prejudice” argument is “appealing,” North River Ins. Co. v.
Johnson, 757 S.W.2d 334, 335-36 (Tenn.App. 1988) (Franks, J.);
however, as we expressed in the North River Ins. Co. case, the
arguments supporting the plaintiff’s position on the question of
prejudice “are based on public policy considerations, which are
to be declared by the Supreme Court and the legislative branch.”
Id. at 336. It is not our prerogative to overrule controlling
Supreme Court precedent.
We have examined all of the Tennessee authority4 cited
by the plaintiff. We do not find that any of it supports the
plaintiff’s position in this case. His authority from other
jurisdictions,5 while supportive of his basic argument regarding
prejudice, does not express the law of this State; in fact, they
are all contrary to controlling Supreme Court precedent holding
that an insurer does not have to show a lack of prejudice in a
case such as the one before us.
The judgment of the trial court is affirmed. Costs on
appeal are taxed to the appellant and his surety. This case is
4
Tennessee Farmers Mutual Insurance Co. v. Anderson, 1989 WL 22698(Tenn.App. 1989); Nationwide Mutual Insurance Co. v. Shannon, 701 S.W.2d 615(Tenn.App. 1985); White v. Tennessee Farmers Mutual Insurance Co., 1996 WL
219674 (Tenn.App. 1996); McKimm v. Bell, 1988 WL 126835 (Tenn.App. 1988),
affirmed by the Tennessee Supreme Court at 790 S.W.2d 526 (Tenn. 1990);
Reliance Insurance Co. v. Athena Cablevision Corp., 560 S.W.2d 617 (Tenn.
1977).
5
Canron, Inc. v. Federal Insurance Co., 82 Wash.App. 480, 918 P.2d 937(1996); General Accident Ins. Co. v. Scott, 107 Md.App. 603, 669 A.2d 773(1996); Schroth v. New Mexico Self-Insurers Fund, 113 N.M. 708, 832 P.2d 399(1992); Weaver v. State Farm Mut. Auto. Ins. Co., 936 S.W.2d 818 (Mo. 1997).
9
remanded to the trial court for the collection of costs assessed
below, pursuant to applicable law.
__________________________
Charles D. Susano, Jr., J.
CONCUR:
_______________________
Herschel P. Franks, J.
_______________________
William H. Inman, Sr.J.
10