Bates v. Greene

• Decision Date: 27 July 2017
• Docket Number: No. W2016–01868–COA–R3–CV,W2016–01868–COA–R3–CV
• Citation: 544 S.W.3d 345
• Court: Tennessee Court of Appeals
• Parties: Larrystine BATES v. Michael J. GREENE, et al.

544 S.W.3d 345

Larrystine BATES

v.Michael J. GREENE, et al.

No. W2016–01868–COA–R3–CV

Court of Appeals of Tennessee, AT JACKSON.

June 29, 2017 Session

FILED July 27, 2017

Application for Permission to Appeal Denied by Supreme Court November 17, 2017

Cornelius Bostick, Memphis, Tennessee, for the appellant, Larrystine Bates.

Samantha Erin Bennett, Memphis, Tennessee, for the appellee, Shelter Insurance Company.

Brandon O. Gibson, J., delivered the opinion of the court, in which J. Steven Stafford, P.J., W.S., and Kenny Armstrong, J., joined.

OPINION

Brandon O. Gibson, J.

This appeal involves the appropriate statute of limitations applicable to a claim against an insurance company for uninsured motorist coverage. The plaintiff-driver filed this lawsuit against the defendant-driver but was unable to serve him with the civil warrant despite repeated attempts. Over a year after the lawsuit was filed, the plaintiff had an additional alias civil warrant issued adding her insurer as the uninsured motorist carrier, and she served the amended civil warrant on the insurer. The insurer moved for summary judgment based on the statute of limitations. The trial court concluded that the plaintiff's claim against the insurer in accordance with her uninsured motorist coverage arose out of the alleged negligence of the uninsured motorist, and therefore, it was governed by the one-year statute of limitations applicable to personal injury claims. Accordingly, the trial court granted summary judgment to the insurer based on the expiration of the one-year statute of limitations. Finding the one-year statute of limitations inapplicable, we reverse and remand for further proceedings.

I. FACTS & PROCEDURAL HISTORY

The motor vehicle accident giving rise to this litigation occurred on May 5, 2011. Within one year of the accident, on April 24, 2012, Plaintiff Larrystine Bates filed a civil warrant in general sessions court against Defendant Michael Greene, seeking to recover for losses allegedly caused by Defendant Greene's negligent driving. The civil warrant was returned unserved. On January 25, 2013, an alias civil warrant was issued for Defendant Greene, but it was also returned unserved. An affidavit from the process server indicates that he was not to be found. On July 22, 2013, an amended alias civil warrant was issued for Defendant Greene with Shelter Insurance Company, Plaintiff's uninsured motorist carrier, added as a defendant. Shelter Insurance Company ("Shelter") was served on July 31, 2013, two years after the accident occurred.

Shelter filed a motion for summary judgment, asserting that the claim against it was barred by the one-year statute of limitations applicable to personal injury actions. The general sessions court denied the motion and entered judgment in favor of Plaintiff for $9,000. Shelter appealed to circuit court, where it renewed its motion for summary judgment based on the one-year statute of limitations. In response, Plaintiff argued that she was asserting a contract claim against Shelter, subject to a six-year statute of limitations, rather than a tort claim subject to the one-year statute of limitations. Plaintiff noted that she timely filed her lawsuit against Defendant Greene and then pursued a claim against Shelter when it became apparent that she could not obtain service on Defendant Greene.

After a hearing, the trial court entered an order granting Shelter's motion for summary judgment. The court reasoned that "this cause of action is a personal injury action arising from an automobile accident and is, therefore, governed by the one-year statute of limitations set forth in Tennessee Code Annotated section 28–3–104(a)." The court rejected Plaintiff's argument that she was asserting a contract claim against Shelter and instead concluded that Plaintiff's claim "sounds in tort."

Plaintiff filed a motion to alter or amend, which the trial court denied, again reasoning that Plaintiff was "seeking to hold Shelter liable for the alleged tortious acts of the uninsured motorist," and therefore, her claim against Shelter "arises out of the alleged negligence of the uninsured motorist." Plaintiff timely filed a notice of appeal to this Court.

II. ISSUES PRESENTED

The issue raised by Plaintiff on appeal is whether her claim against Shelter was governed by the one-year statute of limitations for personal injury actions or the six-year statute of limitations for contract actions. For the following reasons, we conclude that the one-year statute of limitations is inapplicable, and we reverse and remand for further proceedings.

III. STANDARD OF REVIEW

Determining the applicable statute of limitations is an issue of law that we review de novo. Gunter v. Lab. Corp. of Am. , 121 S.W.3d 636, 638 (Tenn. 2003).

IV. DISCUSSION

Uninsured motorist coverage "compensates for damages caused by owners or operators of motor vehicles who either lack insurance coverage or carry coverage insufficient to pay for the damages occasioned by their negligent operation of a motor vehicle." Sherer v. Linginfelter , 29 S.W.3d 451, 454 (Tenn. 2000).

It has been noted many times [ ] that the uninsured motorist features of liability insurance policies pose unusual and difficult questions, both substantively and procedurally. In one sense, the insured's own insurance carrier is placed in the role of a liability carrier for the uninsured motorist. Yet the insured has a direct contract with the insurance carrier for the payment of his damages....

It was clearly the intention of the General Assembly to permit the insured to pursue, insofar as possible, his ordinary tort remedy against the uninsured motorist, and at the same time to have the benefit afforded by the "family protection" or uninsured motorist coverage of his own insurance policy, up to its limits.

Cavalier Ins. Corp. v. Osment , 538 S.W.2d 399, 403 (Tenn. 1976). "The uninsured motorist carrier does not insure the uninsured motorist against liability. Rather, it protects the insured against inadequate compensation." Estate of Kirk ex rel. Kirk v. Lowe , 70 S.W.3d 77, 80 (Tenn. Ct. App. 2001) (citing 15 Tenn. Juris., Insurance , § 141).

In Tennessee, an action for personal injuries generally must be commenced within one year of the date the plaintiff sustained injury. McCullough v. Vaughn , 538 S.W.3d 501, 504-05 (Tenn. Ct. App. 2017) (citing Tenn. Code Ann. § 28–3–104(a)(1) ; Sims v. Adesa Corp. , 294 S.W.3d 581, 585 (Tenn. Ct. App. 2008) ). However, a six-year statute of limitations applies to "[a]ctions on contracts not otherwise expressly provided for." Tenn. Code Ann. § 28–3–109(a)(3).

In jurisdictions where the statutes relating to uninsured motorist insurance do not contain a specific provision governing the period within which claims based on such insurance must be advanced, either by suit against the uninsured motorist or against the insurer issuing the uninsured motorist coverage, or by a demand for arbitration under the policy, the issue has arisen as to the applicable general statutory limitation period for taking such action.

The argument has been made that the applicable limitation period should be that governing actions sounding in tort, which argument is based upon the fact that despite the contractual nature of the agreement between the insurer and the insured, the suit is essentially one for the tort allegedly committed by the uninsured motorist, and the resulting injury. Thus, as no liability could be imposed upon the insurer in an action under the policy unless all the elements of a tort action are established, the limitation period applying to tort actions should control. The contrary argument has been made, however, and generally accepted by the courts , that despite the necessity that the insured establish that a tort was committed by the uninsured motorist, and that injury resulted, the action is nevertheless one based upon the insurance contract, on which the liability of the insurer depends, and that the contract limitation period therefore controls.

A.S. Klein, Annotation, Automobile insurance: time limitations as to claims based on uninsured motorist clause , 28 A.L.R.3d 580, § 3 (Most Recent Cases from 2015) (emphasis added); see also 7A Am. Jur. 2d Automobile Insurance § 601 (noting the split of authority on this issue). "[T]he vast majority of jurisdictions to have considered this precise question have held that, because any recovery of the insured is based upon the insurance policy, without which no liability could be imposed upon the insurer, the statute of limitations for contract actions controls." Shelter Mut. Ins. Co. v. Nash , 357 Ark. 581, 184 S.W.3d 425, 427 (2004) ; see, e.g. , Allstate Ins. Co. v. Spinelli , 443 A.2d 1286, 1290 (Del. 1982) ("We hereby adopt the view held by the majority of jurisdictions—that actions based on uninsured motorist coverage claims are actions ex contractu and as such are controlled by the applicable contract statute of limitations."); Murphy v. U.S. Fid. & Guar. Co. , 120 Ill.App.3d 282, 75 Ill.Dec. 886, 458 N.E.2d 54, 56 (1983) ("In other jurisdictions where courts have considered the applicable statute of limitations for making a claim based upon uninsured motorist insurance, it has been generally held that such claims are governed by the contract rather than the tort statute of limitations."); Royal–Globe Ins. Co. v. Craven , 411 Mass. 629, 585 N.E.2d 315, 319 n.10 (1992) ("most, if not all, courts that have considered the question have applied the contract statute"); Uptegraft v. Home Ins. Co. , 662 P.2d 681, 685 n.4 (Okl. 1983) ("Our view is in accord with that of other jurisdictions in which the courts have held that actions by insureds against their insurers under an uninsured motorist endorsement ... are ex contractu and thus are governed by the principles and procedures applicable to contract actions generally"); Franco v. Allstate Ins. Co. , 505 S.W.2d 789, 791–92 (Tex. 1974) ("the great weight of authority is that the...