Shempert v. Cox

• Decision Date: 24 August 2016
• Docket Number: No. W2015-02161-COA-R3-CV,W2015-02161-COA-R3-CV
• Citation: 513 S.W.3d 469
• Parties: Mark A. SHEMPERT, et al. v. Kim Wright COX, Personal Representative ad Litem for the Estate of Robert Davis
• Court: Tennessee Court of Appeals

513 S.W.3d 469

Mark A. SHEMPERT, et al.

v.Kim Wright COX, Personal Representative ad Litem for the Estate of Robert Davis

No. W2015-02161-COA-R3-CV

Court of Appeals of Tennessee, AT JACKSON.

August 17, 2016 Session

Filed August 24, 2016

Application for Permission to Appeal Denied by Supreme Court December 15, 2016

Robert A. Cox and Ronna D. Kinsella, Memphis, Tennessee, for the appellants, Mark A. Shempert and Deborah A. Shempert.

Bradford Box and Jonathan David Stewart, Jackson, Tennessee, for the appellee, Farmers Insurance Exchange.

Brandon O. Gibson, J., delivered the opinion of the court, in which Arnold B. Goldin and Kenny Armstrong, JJ., joined.

OPINION

Brandon O. Gibson, J.

This is an appeal of an order granting the unnamed defendant's motion for summary judgment. After being involved in an accident with an uninsured motorist, the plaintiff brought suit against his uninsured motor vehicle insurance carrier seeking coverage under the policy. The insurance carrier moved for summary judgment, arguing that the plaintiff was operating a vehicle not insured under the policy but available for his regular use, and therefore, was not covered under the policy. We affirm.

Background & Procedure

This lawsuit arises from a September 2007 automobile accident in which Plaintiff Mark A. Shempert ("Mr. Shempert") was injured when his vehicle, a 2004 Sterling "Bobtail," owned by his employer, collided with a vehicle operated by an uninsured motorist, who died at the scene of the accident. We recounted the salient facts of this case in a related matter, Farmers Ins. Exchange v. Shempert , No. W2013-01059-COA-R3-CV, 2014 WL 407903 (Tenn. Ct. App. Feb. 3, 2014) (Shempert II ):

In September 2008, Mr. Shempert and his wife, Deborah A. Shempert (Ms. Shempert; collectively, "the Shemperts") filed an action for damages arising from the accident against [the uninsured motorist] and his personal representative ad litem in the Circuit Court for Shelby County (Shempert I ). They also served unnamed Defendant Farmers Insurance Exchange (Farmers), their under-insured/uninsured motor vehicle insurance carrier, seeking benefits pursuant to the terms of their policy of insurance. Shempert I was assigned to Division 7 of the circuit court. Farmers answered in February 2009, asserting nine affirmative defenses and generally denying coverage under the policy. Although it denied coverage under the policy, Farmers did not dispute that the Shemperts' policy of insurance was effective when the accident occurred.

Following discovery in Shempert I , Farmers filed a declaratory judgment action against the Shemperts, Mr. Davis, and Mr. Davis's representative (Shempert II ) in December 2011. Shempert II was assigned to Division 6 of the Circuit Court for Shelby County. In its complaint, Farmers recited that the Shemperts had filed their September 2008 complaint bearing docket number CT004612-08; that the Shemperts prayed for damages in excess of $500,000; that the allegations arose out of the September 2007 automobile accident; and that the Shemperts were covered under a policy of insurance issued by Farmers with effective dates of May 29, 2007 through November 29, 2007. Farmers asserted that it "owe[d] no coverage under its Policy ... under the facts alleged in the Complaint filed by [the Shemperts in Shempert I ] against it, and the corresponding investigation into those facts." Farmers further recited facts discovered during discovery in Shempert I , and prayed for "[f]or a declaration that no coverage is afforded under the insurance policy issued to [the Shemperts] ... with regard to the litigation pending in the Circuit Court of Shelby County.

In February 2012, the Shemperts filed a motion to dismiss in Shempert II , asserting the action was barred where a previously filed lawsuit between the parties involving the identical issue was pending in another court in the same district. The Shemperts asserted that dismissal was proper pursuant to the doctrine of prior suit pending. Following a hearing on February 24, 2012, the trial court denied the Shemperts' motion to dismiss, finding that the subject matter in Shempert I differed from the matter asserted in Shempert II , namely whether Farmers must "afford insurance coverage to [the Shemperts] under the circumstances[.]" The Shemperts filed an answer to Farmers' complaint in April 2012, and Shempert I was stayed pending resolution of Shempert II . The parties filed cross-motions for summary judgment in Shempert II . The trial court heard the motions for summary judgment on March 1, 2013. By order entered April 5, 2013, the trial court awarded summary judgment in favor of Farmers and made the judgment final pursuant to Tennessee Rule of Civil Procedure 54.02. The Shemperts filed a timely notice of appeal to this Court.

Id. at *1-2. On appeal, this Court reversed the decision of the trial court and remanded Shempert II for dismissal on the basis of prior suit pending. Id. at *3.

On March 6, 2014, Farmers filed a motion for summary judgment in Shempert I , the case now before this Court. In its motion, Farmers argued that it was entitled to summary judgment because Mr. Shempert was operating an employer owned vehicle available for his regular use at the time of the accident. In support of its argument, Farmers pointed to the specific language of the Shemperts' insurance contract's uninsured motorist provision:

PART II—UNINSURED MOTORIST

Coverage C—Uninsured Motorist Coverage

(Including Underinsured Motorist Coverage)

We will pay all sums which an insured person is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured person and, if shown in the Declarations, property damage caused by an accident . The bodily injury must be caused by accident and arise out of the ownership, maintenance or use of the uninsured motor vehicle . Determination as to whether an insured person is legally entitled to recover damages or the amount of damages shall be made by agreement between the insured person and us. If no agreement is reached, the decision may be made by arbitration.

...

ENDORSEMENT ADDING REGULAR AND FREQUENT USE EXCLUSION TO PART II

It is agreed that the following exclusion is added to the Exclusions under Part II of your policy.

Uninsured Motorist Coverage (and Underinsured Motorist Coverage if applicable) does not apply to damages arising out of the ownership, maintenance, or use of any vehicle other than your insured car (or your insured motorcycle if this is a motorcycle policy), which is owned by or furnished or available for the regular use by you or a family member . This endorsement is part of your policy. It supersedes and controls anything to the contrary. It is otherwise subject to all other terms of the policy.

The insurance policy defined "your insured car" as:

Your insured car means:

1. The vehicle described in the Declarations of this policy or any private passenger car or utility car with which you replace it.

...

5. Any other private passenger car , utility car , or utility trailer not owned by or furnished or available for regular use by you or a family member . This includes such vehicles while rented by you on a daily basis or weekly basis. But no vehicle shall be considered as your insured car unless there is a sufficient reason to believe that the use is with permission of the owner, and unless it is used by you or a family member .

According to Farmers, because Mr. Shempert was not operating his insured car at the time of the accident and was instead operating a vehicle furnished or available for his regular use by his employer, there was no coverage under the insurance policy.

The trial court conducted a hearing on June 26, 2015, and entered an order granting Farmers' motion for summary judgment the same day. The court concluded that the vehicle driven by Mr. Shempert "[did] not fall within the definition of "your insured car" as set forth in the policy." Further, the court determined that based on the facts at bar, "the regular use exclusion of the policy obviates such coverage for Mr. Shempert as the vehicle was available for his regular use and did not meet the definition of ‘your insured car.’ " Lastly, the court found that "the regular use exclusion of the policy is clear and unambiguous and, under the foregoing facts, does not contravene the public policy of this State." The Shemperts appealed.

Issues Presented

The Shemperts present the following issues for review on appeal:

I. Whether, when read in light of the policy as a whole, the "Regular Use" exclusion contained within the Appellants' insurance policy is ambiguous such that it should be interpreted in favor of the Appellants.

II. Whether, under the stipulated facts of this case, application of the "Regular Use" exclusion contained within the Appellants' insurance policy defeats the purpose of T.C.A. § 56-7-1201 and as a result, violates public policy concerns such that the Trial Court's grant of summary judgment should be reversed.

Standard of Review

We review a trial court's ruling on a motion for summary judgment de novo with no presumption of correctness. Rye v. Women's Care Ctr. of Memphis, MPLLC , 477 S.W.3d 235, 250 (Tenn. 2015). Questions regarding the extent of insurance coverage also present issues of law as they involve the interpretation of contractual language. Garrison v. Bickford , 377 S.W.3d 659, 663 (Tenn. 2012) (citing Clark v. Sputniks, LLC , 368 S.W.3d 431, 436 (Tenn. 2012) ; Maggart v. Almany Realtors, Inc. , 259 S.W.3d 700, 703 (Tenn. 2008) ). Therefore, we afford no presumption of correctness to the trial court's interpretation. Id. (citing U.S. Bank, N.A. v. Tenn. Farmers Mut. Ins. Co. , 277 S.W.3d 381, 386 (Tenn. 2009) ).

"[I]nsurance policies are, at their core, contracts." Allstate Ins. Co. v. Tarrant , 363 S.W.3d 508, 527 (Tenn. 2012) (Koch, J., dissenting). As such, courts interpret insurance policies using the same tenets that guide

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