Braddock v. Memphis Fire Ins. Corp.

• Decision Date: 18 April 1973
• Citation: 493 S.W.2d 453
• Parties: Hezeskiah BRADDOCK et al., Appellants, v. MEMPHIS FIRE INSURANCE CORPORATION et al., Appellees.
• Court: Tennessee Supreme Court

Page 453

493 S.W.2d 453

Hezeskiah BRADDOCK et al., Appellants, v. MEMPHIS FIRE INSURANCE CORPORATION et al., Appellees.

Supreme Court of Tennessee.

April 18, 1973.

H. L. Feibelman, Jef Feibelman, Memphis, for appellants.

Armistead F. Clay, Leo Bearman, Jr., James F. Eggleston, W. Frank Crawford, Jerre G. Duzane, Hunter K. Cochran, Don Owens, James D. Causey, Stephen H. Biller, R. Gratton Brown, Jr., J. Heiskell Weatherford, Timothy A. Ryan, Albert McRae, Eric Babendreer, Edward W. Kuhn, Henry T. V. Miller, Carroll C. Johnson, James E. Leary, John S. Porter, Max D. Lucas, Jr., John J. Thomason, Memphis, James Clarence Evans, Charles Carter Baker, Jr., W. E. Herod, Nashville, for appellees.

OPINION

JOHN W. WILSON, Special Justice.

On September 3, 1971, the plaintiffs, on behalf of themselves and all others similarly situated, brought this action against the defendants, 154 in number, all being insurance companies alleged to be doing business in Shelby County, Tennessee. The complaint was amended on October 8, 1971, so as to make Elnora Rodgers a party plaintiff.

Plaintiff Braddock alleges that he had an insurance contract or policy with the defendant Memphis Fire Insurance Corporation, insuring the real property known as 2002 Amity, Memphis, Tennessee; the plaintiff Ethel Golden alleges that she is the owner of an insurance policy issued by the defendant Universal Security Insurance Company, a subsidiary of the defendant Thomas Jefferson Insurance Company, on property known as 257 Lucerne, Memphis, Tennessee. The plaintiff Elnora Rodgers alleges that she is the owner of an insurance policy issued by defendant Republic Insurance Company, insuring the property known as 1184 Hollywood Street, Memphis, Tennessee.

Each of the three aforementioned plaintiffs allege that the insurance policies insured the property mentioned against loss by fire or other perils, including lightning, windstorm and hail, explosions or smoke; that each plaintiff sustained a loss by windstorm on April 23, 1971; that each policy contains the following provision in event of loss:

'. . . to the extent of the actual cash value of the property at the time of loss, but not exceeding the amount which it would cost to repair or replace the property with material of like kind and quality within a reasonable time after such loss, without allowance for any increased cost of repair or reconstruction by reason of any ordinance or law regulating construction or repair, and without compensation for loss resulting from interruption of business or manufacture, nor in any event for more than the interest of the insured . . .'

The plaintiff Braddock alleges that damages to the roof of his property was estimated at $247.00 and after deducting $185.00 for depreciation and $50.00 deductible provided in the policy, he was tendered a draft for $11.75, by the Memphis Fire Insurance Corporation, with release attached, and that the insurance company has breached its contract by failing to pay him the amount to which he is entitled; the plaintiff Golden alleges the damage to the roof of her house was in the sum of $725.00 and that she has been offered the sum of $421.00 in payment of the loss, after deducting $254.00 for depreciation and $50.00 which is the deductible from the loss, and that the defendant Thomas Jefferson Insurance Company breached its contract in failing to pay the amount to which she was entitled; the plaintiff Rodgers alleges the damage to the roof of her property was $600.00 and that the defendant Republic Insurance Company, after deducting depreciation and $50.00 deductible for any loss, tendered her a draft for $458.00, with a release attached, which she accepted.

The plaintiffs further aver in the complaint as follows:

'The plaintiffs Hezeskiah Braddock and Ethel Golden bring this action as a class action on behalf of themselves and all others similarly situated. The plaintiffs are members of a class which includes all residents of Shelby County who have contracted with any of the defendants herein for payment in the event of loss resulting from fire or other perils, including, but not limited to, lightning, windstorm, hail, explosions or smoke, and who, within the period of 12 months immediately prior to the filing of this cause, have suffered a loss caused by any of the said perils and against whom any of the defendants has claimed or will claim a deduction for depreciation in the payment of damages for such loss.

The plaintiffs Hezeskiah Braddock and Ethel Golden would show to the Court that the class which they represent is so numerous that joinder in this action of all members of the class is impracticable.

The plaintiffs Hezeskiah Braddock and Ethel Golden would show that there is a question of law common to the class and, further, that this question of law predominates over any questions affecting only individual members. The plaintiffs would show that the question of law common to the class which they represent is whether the defendants are entitled to a deduction for depreciation in the payment of damages for losses covered by the insurance policies in question.

The plaintiffs, allege, on behalf of the class which they represent, that the insurance policies of all of the defendants herein contain a provision identical with the provision of the plaintiffs' policies which is set forth in Paragraph II hereinabove. The plaintiffs allege, on behalf of the class which they represent, that all of the defendant sherein construe the term 'actual cash value' to allow a deduction for depreciation in the payment of damages for losses under their policies and the plaintiffs further allege, in behalf of the class which they represent, that such a deduction for depreciation is contrary to the specific terms of the insurance contracts with the defendants and contrary to the law of the State of Tennessee.

The plaintiffs, on behalf of the class which they represent, allege that any releases or settlements obtained by any of the defendants from the members of the class herein are unconscionable contracts of release which were obtained through misrepresentation, and are against the public policy of this County and State. The said releases are unconscionable and are not supported by any consideration. . . ..'

The prayer in the complaint is as follows:

'. . .

2. That the defendants be required, upon their oaths, to set forth and disclose:

(a) An exact copy of each defendant's standard fire insurance policy.

(b) All documents or information in the defendants' possession relating to claims made within the period of 12 months immediately prior to the filing of this cause by any member of the class herein, including the settlements and payments of such claims and what, if any, deductions were made from such payments for depreciation.

3. That the Court order that this action be maintained as a class action pursuant to Rule 23 of the Tennessee Rules of Procedure.

4. That the Court determine and declare the respective rights and duties of the parties under and by virtue of the contracts of insurance in question herein, and that the Court declare that the deduction for depreciation claimed by the defendants under the insurance contracts in question is contrary to the terms of such policies and contrary to the law of the State of Tennessee.

5. That a Temporary Writ of Injunction issue, by order of the Court, restraining and prohibiting any of the defendants from settling any claims for payment of damages to property caused by fire and other perils under the contracts of insurance in question when such settlements include a deduction for depreciation of such property.

6. That any and all settlements and releases between the plaintiffs and members of the class which they represent and the defendants herein of claims arising under the policies of insurance in question within the past twelve months be rescinded, vacated and set aside.

7. That the plaintiffs and the members of the class which they represent recover of the defendants the amounts to which they are justly entitled under their insurance contracts with the defendants, in such manner as shall be provided by this Honorable Court.

9. That the attorneys for the plaintiffs and the members of the class which they represent be awarded reasonable attorneys' fees for the presentation of this cause and for the recovery of damages for the plaintiffs and the members of the class which they represent. . . ..'

The defendants have all filed motions to dismiss. A number of the defendants joined in the same motion and others filed separate motions to dismiss. On account of the great number and length of each and the conclusions we have reached as to a disposition of the matter, we will make no further discussion of the various and many motions, other than to say they came on to be heard before the trial court.

On December 22, 1971, the trial court filed a written opinion stating its findings and conclusions, from which we quote in part, as follows:

'The joinder of multiple defendants is somewhat novel, but how else can the desired results be obtained--that is, to see that the plaintiffs and the class they represent are afforded an avenue of relief through a class action suit.

All that has been said presupposes that there have been wrongs perpetrated by defendants. The Court has given a lot of consideration to that proposition and has come to the conclusion that the statement relied on by plaintiffs in the Third National Bank case must be considered as dictum.

Even though the Court properly refused to break down the issues submitted to the jury regarding depreciation, it is apparent that the reason for the refusal was because the issue of depreciation was presented to the jury through the one broad issue submitted.

The Court charged the jury to consider depreciation in arriving at the loss.

It is permissible in a chancery jury case to submit pure issues of fact to the jury or, if impractical to do so, to...