McKimm v. Bell, 57

• Decision Date: 02 April 1990
• Docket Number: No. 57,57
• Citation: 790 S.W.2d 526
• Parties: Edward E. McKIMM and Doris D. McKimm, Appellees, v. Mary M. BELL, Defendant. Appeal of ALLSTATE INSURANCE COMPANY. 790 S.W.2d 526
• Court: Tennessee Supreme Court

Page 526

790 S.W.2d 526

Edward E. McKIMM and Doris D. McKimm, Appellees, v. Mary M. BELL, Defendant Appeal of ALLSTATE INSURANCE COMPANY.

No. 57.

790 S.W.2d 526

Supreme Court of Tennessee at Jackson.

April 2, 1990.

Rehearing Denied May 29, 1990.

Jill Menuskin Steinberg, Heiskell, Donelson, Bearman, Adams, Williams & Kirsch, Memphis, for appellant.

Alan Bryant Chambers, Memphis, for appellees.

OPINION

COOPER, Justice.

This is an action to recover damages under the uninsured motorist provisions of an automobile liability policy issued Edward E. McKimm and wife, Doris McKimm, by Allstate Insurance Company. The trial court found that the plaintiffs' delay in giving notice of their claim was excusable, but held that their subsequent failure to supply various items of proof requested by Allstate amounted to a failure of cooperation, and dismissed plaintiffs' action. A divided Court of Appeals reversed the judgment of the trial court and entered judgment declaring that plaintiffs were "entitled to the uninsured motorist coverage provided by the Allstate policy." In doing so the court agreed with the trial court's finding that the delay in giving notice of claim was excusable. The majority also held that the "proof of claim" provisions of the policy were not conditions precedent to uninsured motorist coverage, and, if so, would be in conflict with the uninsured motorist statute in that they restrict the insureds' right to pursue and prove their claim against Allstate. We disagree with these latter conclusions by the Court of Appeals, but do concur in the holding that plaintiffs' claim is covered under the uninsured motorist provisions of the policy issued by Allstate.

Insurance contracts are subject to the same rules of construction and enforcement as apply to contracts generally. See Draper v. Great American Insurance Company, 224 Tenn. 552, 458 S.W.2d 428 (1970).

Section II of the automobile liability insurance policy issued the McKimms by Allstate provides protection against bodily injury and optional property damage by uninsured automobiles. Key provisions of the policy, under the heading "Conditions" provide that:

3. Proof of Claim. As soon as practicable, the insured or other person making claim shall give to Allstate written proof of claim, under oath if required, including full particulars of the nature and extent of the injuries, treatment, and other details entering into the determination of the amount payable hereunder. The insured and every other person making claim hereunder shall submit to examinations under oath by any person named by Allstate and subscribe the same, as often as may reasonably be required....

The injured person shall submit to physical examinations by physicians selected by Allstate when and as often as Allstate may reasonably require and he, ... shall upon each request from Allstate execute authorization to enable Allstate to obtain medical reports and copies of records.

The insured or other person making claim for damage to property shall file proof of loss with Allstate within sixty days after the occurrence of loss, unless such time is extended in writing by Allstate, in the form of a sworn statement setting forth the interest of the insured and all others of the property affected, and encumbrances thereon, the actual cash value thereof at time of loss, the amount, place, time and cause of such loss, and the description and amounts of all other insurance covering such property. Upon Allstate's request, the insured shall exhibit the damaged property to Allstate.

4. Assistance and Cooperation of the Insured. After notice of claim under this coverage, Allstate may require the insured to take such action as may be necessary or appropriate to preserve his right to recover damages from any person or organization alleged to be legally responsible for the bodily injury or property damage; and in any action against Allstate, Allstate may require the insured to join such person or organization as a party defendant.

* * * * * *

10. Action against Allstate. No action shall lie against Allstate unless, as a condition precedent thereto, the insured or his legal representative has fully complied with all the terms of this coverage.

We see no conflict in the above conditions to coverage, and the expressed intent of the legislature that automobile liability insurance carriers must make uninsured motorist coverage available to every insured in this state, or with the expressed intent that the courts of this state be open for prosecution of uninsured motorist claims without the necessity of first submitting the claim to arbitration. See T.C.A. Secs. 56-7-1201 and 56-7-1206. Most courts have recognized the validity of conditions precedent to uninsured motorist coverage, such as those set out above. See, for example, Temple v. State Farm Ins. Co., 548 S.W.2d 838 (Ky.1977); Frager v. Pennsylvania Gen. Ins. Co., 161 Conn. 472, 289 A.2d 896 (1971); Martinson v. American Family Mut. Ins. Co., 63 Wis.2d 14, 216 N.W.2d 34 (1974); Couch 2d, Insurance Sec. 45:629; 2 Widiss, Uninsured and Underinsured Motorist Insurance, (2d ed. 1981) Secs. 16.1-16.6.

In Hartford Accident and Indemnity Company v. Creasy, 530 S.W.2d 778 (Tenn.1975), this Court enforced "a closed-in time limitation governing notice to the insurer" as a condition precedent to coverage. In our opinion, reasonable conditions regarding proof of claim and cooperation of the insured with the insurer to protect the claim against the party causing the damage are no more repugnant to legislative intent than is the condition that requires the insured to give notice of an accident to the insurer. The requirements are not onerous, and do not conflict, in any way, with T.C.A. Sec. 56-7-1206, which speaks only to a suit, not to preliminary matters necessary to perfect coverage.

This brings us to the question of whether the plaintiffs sufficiently complied with the policy conditions of notice, proof of loss, and cooperation. Defendant insists they did not, that notice was too late, that no written proofs of loss were filed, and that the plaintiffs consistently refused to cooperate by failing to execute medical authorization forms on request, and by failing to supply Allstate with evidence of the defendant motorist's uninsured status.

The accident that is the predicate of the uninsured motorist claim occurred on October 1, 1984. An automobile driven by Mary Bell struck the rear of the automobile driven by Mr. McKimm. A police officer was called to the scene. Mrs. Bell told both the officer and Mr. McKimm and his passenger, Sally Tripp, that she had automobile liability insurance coverage under a policy issued through the Jetway Insurance Agency. The next day, Mrs. Tripp called the Jetway Insurance Agency and verified that Mrs. Bell had been issued an automobile liability insurance policy. It later turned out that the policy had expired two days before the accident with Mr. McKimm and a new policy was issued Mrs. Bell on the day of the accident, a few hours after the accident had occurred.

In November, 1984, Mr. McKimm retained an attorney to represent him in his claim for personal injuries and property damage. On or about April 18, 1985, the attorney learned from an adjuster with Memphis Fire Insurance Company that Mrs. Bell had no liability insurance coverage at the time of the accident. Her policy had expired either on September 28th or 29th, and she had renewed her coverage on October 1, 1984, after the accident.

McKimm's attorney notified Allstate on April 22, 1985, by telephone of his clients' potential uninsured motorist claim. The telephone notice was followed-up by letter, and a copy of the police report of the accident was enclosed.

Allstate responded by sending a reservation of rights letter to Mr. McKimm. The basis of the reservation of rights was the apparent delay in notifying Allstate of a possible uninsured motorist claim. Allstate also instructed Mr. McKimm's attorney to have the insured call to report the accident so that an adjuster employed by Allstate could get full details. Mr. McKimm called Allstate on April 24, 1985, and answered all questions put to him about the accident and his losses. No request was made for the filing of a written proof of claim.

After the telephone interview, several letters passed between Allstate adjuster Dwayne Taylor and the insured's attorney. In these letters Allstate did request (1) an affidavit from the alleged uninsured motorist stating she was uninsured; (2) evidence that the Tennessee Department of Safety had begun license revocation proceedings against the allegedly uninsured motorist; (3) proof of injury; and (4) proof of property damage. Allstate advised Mr. McKimm's attorney in a letter dated August 12, 1985, regarding damages documentation that "Mr. McKimm's policy does (as a condition of coverage) require cooperation and assistance, supplying of medical authorizations, etc., and that...