Steven Barrick v. State Farm Mutual Automobile Insurance Company

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
November 14, 2012 Session
STEVEN BARRICK, ET AL. v. STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, ET AL.
Direct Appeal from the Circuit Court for Williamson County
No. 09470 Derek K. Smith, Judge
No. M2012-01345-COA-R3-CV - Filed December 21, 2012
The trial court awarded summary judgment to Defendants, insurance company and its agent, on
Plaintiffs’ claims for negligence on the basis of duty. We dismiss for failure to appeal a final
judgment.
Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed
D AVID R. F ARMER, J., delivered the opinion of the Court, in which H OLLY M. K IRBY, J., and
J. S TEVEN S TAFFORD, J., joined.
William D. Leader, Jr. And Paul J. Krog, Nashville, Tennessee, for the appellants, Steven
Barrick and Janice Barrick.
Brigid M. Carpenter, Nashville, Tennessee, for the appellees, State Farm Mutual Automobile
Insurance Company and Thomas Harry Jones.
MEMORANDUM OPINION 1
This lawsuit was precipitated by a 2008 automobile accident in which the minor son
of Steven Barrick (Mr. Barrick) and Janice Barrick (Ms. Barrick; collectively, “the Barricks”)
1
Rule 10 of the Rules of the Court of Appeals of Tennessee provides:
This Court, with the concurrence of all judges participating in the case, may affirm, reverse
or modify the actions of the trial court by memorandum opinion when a formal opinion
would have no precedential value. When a case is decided by memorandum opinion it shall
be designated “MEMORANDUM OPINION”, shall not be published, and shall not be cited
or relied on for any reason in any unrelated case.
crossed the center road line while operating Mr. Barrick’s Nissan Maxima and collided with
a motorcycle operated by Ross Alderman (Mr. Alderman). Mr. Alderman died at the scene
of the accident. At the time of the accident, the Barricks’ vehicle was covered under a policy
of insurance issued by Defendant State Farm Automobile Insurance Company (“State Farm”)
that contained a liability limit in the amount of $100,000 per person and $300,000 per
occurrence. Mr. Alderman’s widow and son asserted a wrongful death claim against the
Barricks, seeking damages in the amount of $750,000. The Barricks settled the claim for
$200,000, paying $100,000 from their personal funds in addition to $100,000, the limit of
their automobile insurance policy, which was paid by State Farm. The Barricks did not have
an umbrella liability policy nor excess insurance policy on the Maxima.
On August 7, 2009, the Barricks filed an action against State Farm and its agent,
Thomas Harry Jones (Mr. Jones, collectively, “Defendants” ) in the Circuit Court for
Williamson County, alleging that Mr. Jones had negligently caused them to be under-insured.
The Barricks amended their complaint in September 2008 and again in October 2009. In
their second amended complaint (hereinafter, “complaint”), the Barricks asserted that they
had been clients of State Farm and Mr. Jones for more than twenty-five years; that the family
owned four vehicles for use by Mr. and Mrs. Barrick and two of their three sons; and that
each vehicle was covered under a separate policy of insurance issued by Defendants. They
further asserted that Defendants held themselves out as professionals and experts with respect
to selecting, issuing and servicing personal lines of insurance; that they “totally and
exclusively” relied on Defendants for advice and recommendations with respect to the
selection of the type, amount and scope of their personal insurance coverage; and that Mr.
Jones and his employees “often selected coverage amounts for the Barricks thereby
exercising broad discretion with regard to the Barricks’ insurance needs.” The Barricks
asserted that they had a “special relationship” with Defendants; that they reasonably relied
on Defendants to adequately maintain their insurance coverage; and that Defendants
appreciated their duty of giving advice. The Barricks alleged Defendants never
recommended or selected an umbrella policy or excess insurance policy, and never
recommended or selected higher liability limits for the Maxima. They further asserted that
Defendants selected the liability insurance limits of the Barricks’ policies. The Barricks
asserted that they did not direct Mr. Jones with respect to their insurance coverage; that they
did not choose their coverages; that they did not give Mr. Jones any specific instructions as
to their insurance coverages. They asserted that they relied exclusively on Mr. Jones to
choose and select their coverage.
The Barricks alleged that Mr. Jones assumed additional responsibilities beyond those
ordinarily attached to an insurance agent, and that Mr. Jones thereby obligated himself to
affirmatively act on their behalf to insure that they had adequate insurance coverage. They
alleged that Defendants had a duty to advise them regarding the kind and extent of coverage
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they needed, and to choose appropriate coverage. The Barricks alleged that Defendants
negligently failed to select adequate insurance coverage and to advise them that they should
obtain more or additional coverage, including an excess or umbrella policy. They further
alleged Defendants engaged in unfair and deceptive acts in violation of the Tennessee
Consumer Protection Act (“TCPA”). They also asserted additional claims against State Farm
for negligent training and supervision. The Barricks prayed for an award of compensatory
damages in the amount of $500,000; damages under the TCPA, including treble damages and
attorney’s fees; and punitive damages in an amount to be determined by the trier of fact.
In November 2009, Defendants answered and denied allegations of fault. State Farm
denied that it had a duty to select or recommend an insurance policy for the Barricks, and
denied that it had a duty to select liability limits for the policy of insurance applicable to the
Maxima. State Farm further denied that Mr. Jones did not recommend an umbrella or excess
policy, and generally denied that it had a duty to advise the Barricks. It further alleged that
the Barricks had received a quote for the premium of a personal liability umbrella policy
from Mr. Jones’s staff, and that they had chosen not to purchase the policy. State Farm also
asserted that, in May 2007, a member of Mr. Jones’s staff requested that the Barricks meet
with Mr. Jones for an insurance and financial review, and that the Barricks refused the
request.
State Farm asserted the affirmative defense of the failure to state a claim and asserted
that the Barricks’ claim was barred where their fault was at least equal to that of Defendants.
It also asserted that the Barricks’ breach of contract claim was barred by the statute of frauds
and that their TCPA claim was barred by the statue of limitations. State Farm also asserted
that it was entitled to attorney’s fees and expenses pursuant to the TCPA because the
Barricks’ claim under the act were without factual and legal merit. Mr. Jones admitted that
the Barricks had been customers for an extended period of time, but denied that he selected
the Barricks’ insurance. Mr. Jones admitted that he and his staff assisted the Barricks and
that he procured the insurance policies. He denied any special relationships and averred that
any inadequacy that might be found in the Barricks’ insurance coverage resulted from their
decision not to purchase additional insurance. Mr. Jones denied that he had any duty to select
additional insurance for the Barricks, and averred that the Barricks had received a quote for
an umbrella policy from his staff and had chosen not to purchase a policy. Mr. Jones also
relied on the affirmative defenses asserted by State Farm.
Defendants filed a joint motion for summary judgment in May 2011. In their motion,
Defendants asserted that, in the absence of a contractual obligation, an insurance agent has
no duty to suggest or recommend coverage other than that which the insured directs the agent
to obtain. They further asserted that any alleged contract that might create an ongoing
obligation was barred by the statute of limitations; that there was no special relationship
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between Mr. Jones and the Barricks that imposed a special duty on Mr. Jones; and that, under
Tennessee law, the Barricks were presumed to have read their insurance policies and were
bound by their terms.
Following a hearing in March 2012, the trial court awarded summary judgment to
Defendants on the Barricks’ claim for negligence. The trial court determined that Defendants
had affirmatively negated an essential element of the Barricks’ claim where it was undisputed
that the Barricks had received copies of their insurance policies, declarations pages, and
renewal notices from State Farm detailing their insurance coverages and limits. The trial
court concluded that, as a matter of law, Mr. Jones’s duty to the Barricks ended when he
obtained the insurance that the Barricks had in place for more than twenty years. The trial
court concluded that the Barricks’ direct claims against State Farm for failure to properly
supervise and train failed because “State Farm owed no duty to Plaintiffs that was breached.”
The trial court entered its judgment on June 14, 2012, and the Barricks filed a notice of
appeal to this Court on June 20, 2012.
Issues Presented
The Barricks present the following issues for our review:
I. Whether the trial court misapplied Tennessee Rule of Civil Procedure
56 as interpreted by Hannan v. Alltel Publishing Co.
a. Whether a genuine issue of fact exists as to whether Mr. Jones
selected and conducted periodic reviews of Plaintiffs’
automobile-liability-insurance coverages.
b. Whether a genuine issue of fact exists as to what manner of
offers or recommendations Mr. Jones made to the Barricks.
II. Whether the trial court erred by ruling that an insurance agent can never
owe a duty of care to a policyholder after the issuance of a policy.
III. Whether the trial court incorrectly concluded that Plaintiffs could not
prove at trial that an implied contract existed between Plaintiffs and Mr.
Jones/State Farm.
IV. Whether the trial court erred by holding that a special relationship did
not exist between the Plaintiffs and Mr. Jones.
V. Whether the trial court erred in concluding that Plaintiffs could not
show that Mr. Jones assumed a duty by selecting coverage limits and
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conducting periodic reviews.
VI. Whether the trial court erred in granting summary judgment on
Plaintiffs’ claims against State Farm.
Discussion
The Barricks have appealed the judgment of the trial court pursuant to Rule 3 of the
Tennessee Rules of Appellate Procedure. Although neither party raised the issue of whether
the order appealed is a final judgment, we must review the record sua sponte to determine
whether we have jurisdiction to adjudicate this appeal. E.g., Williams v Tennessee Farmers
Life Reassurance Co., No. M2010–01689–COA–R3–CV, 2011 WL 1842893, at *3 (Tenn.
Ct. App. May 12, 2011; Tenn. R. App. P. 13(b). Rule 3(a) of the Tennessee Rules of
Appellate Procedure provides, in relevant part:
In civil actions every final judgment entered by a trial court from which an
appeal lies to the Supreme Court or Court of Appeals is appealable as of right.
Except as otherwise permitted in rule 9 and in Rule 54.02 Tennessee Rules of
Civil Procedure, if multiple parties or multiple claims for relief are involved
in an action, any order that adjudicates fewer than all the claims or the rights
and liabilities of fewer than all the parties is not enforceable or appealable and
is subject to revision at any time before entry of a final judgment adjudicating
all the claims, rights, and liabilities of all parties.
Under certain circumstances, a judgment which adjudicates fewer than all of the
claims asserted by the parties may be made final and appealable pursuant to Rule 54.02 of
the Tennessee Rules of Civil Procedure. In order to enter judgment under Rule 54.02,
however, the trial court must make an explicit finding that there is “no just reason for delay”
and must expressly direct that a final judgment be entered. Tenn. R. Civ. P. 54.02. An order
is not properly made final pursuant to Rule 54.02 unless it disposes of an entire claim or is
dispositive with respect to a party. Bayberry Assoc. v. Jones, 783 S.W.2d 553, 558
(Tenn.1990). In the absence of an order meeting the requirements of Rule 54.02, any trial
court order that adjudicates fewer than all the claims or the rights and liabilities of fewer than
all the parties is not final or appealable as of right. Id.
Upon review of the record, we note that the Barricks’ TCPA claim was not addressed
in Defendants’ motion for summary judgment. It further appears that the trial court has not
adjudicated the Barricks’ claim under the TCPA, or Defendants’ counter-claim for costs and
attorney’s fees for a meritless TCPA claim. Thus, the trial court’s June 2012 order is not an
appealable final judgment.
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Holding
In light of the foregoing, this appeal is dismissed for failure to appeal a final
judgment. Costs are taxed to the Appellants, Steven Barrick and Janice Barrick, and to their
surety, for which execution may issue if necessary.
_________________________________
DAVID R. FARMER, JUDGE
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