Shepherd v. Fregozo

CourtSupreme Court of Tennessee
Citation175 S.W.3d 209
PartiesDennis R. SHEPHERD v. Ignacio FREGOZO and Nationwide Mutual Insurance Co.
Decision Date13 June 2005

Page 209

175 S.W.3d 209
Ignacio FREGOZO and Nationwide Mutual Insurance Co.
Court of Appeals of Tennessee, at Nashville.
February 8, 2005 Session.
June 13, 2005.

Jonathan Lavoy Griffith, Jeffrey Shane Roberts, Nashville, Tennessee, for the appellant, Dennis Shepherd.

Parks Tedford Chastain, Michael K. Smith, Nashville, Tennessee, for the appellee, Nationwide Mutual Insurance Co.


WILLIAM B. CAIN, J., delivered the opinion of the court, in which WILLIAM C. KOCH, JR., P.J., M.S., and PATRICIA J. COTTRELL, J., joined.

Appellant, a Metropolitan Nashville police officer was seriously injured in an on-duty automobile accident when Defendant's vehicle crashed into the rear of his patrol car. Defendant was uninsured. Metropolitan Nashville was self-insured and did not provide uninsured motorist coverage for its patrol officers. Plaintiff named Nationwide as a defendant in an effort to recover under the uninsured motorist provision of the policy issued to him insuring his personal vehicle. Nationwide defended under a policy exclusion involving non-insured vehicles made available for his regular use. The trial court granted summary judgment to Nationwide, and we affirm the action of the trial court.

There is little factual dispute in this case. On February 4, 2002, Dennis R. Shepherd, a patrol officer with the Metropolitan Police Department since 1996, was on duty and driving his patrol car when he was struck from the rear by an automobile driven by the defendant, Ignacio Fregozo, and seriously injured. The patrol car which Shepherd was operating at the time of the accident was one of a fleet of twelve patrol vehicles maintained by the Department's Hermitage substation for use by patrolmen. These vehicles were assigned at random to various patrolmen, and the records of Metro for the 33 days prior to the accident indicate that Shepherd had used or operated eight of these patrol cars. Metropolitan Government of Nashville and Davidson County is self-insured and does not maintain uninsured or underinsured

Page 210

motorist coverage as to any of its patrol vehicles.

Nationwide Mutual Insurance Company had issued a policy of automobile insurance to Dennis and Elizabeth Shepherd as to their personal vehicles which was in effect on February 4, 2002. Because Fregozo was uninsured, Shepherd sought recovery from Nationwide under the policy's uninsured motorist provisions. Nationwide filed a motion for summary judgment, relying on various exclusions in its policy with particular reliance on the "regular use" exclusion of other motor vehicles under its uninsured motorist coverage. This exclusion provides:


3. (b) This does not apply to losses involving a motor vehicle:

(1) Used in the business or occupation of you or a relative. However, it does apply to a private passenger auto used by you, your chauffeur, or your household employees;

(2) Owned, rented, or leased by an employer or an insured;


(4) Furnished to you or a relative for regular use. Furnished for regular use does not include a motor vehicle rented from a rental company for less than twenty-eight (28) days.

The trial court granted the motion for summary judgment based on the "regular use" exclusion. Thereafter, Shepherd took a default judgment against Fregozo and recovered a judgment against him for $250,000 compensatory damages and $100,000 punitive damages. Fregozo neither appeared nor appealed, and following the final judgment, Shepherd appealed as to the summary judgment granted to Nationwide.

Standards governing appellate review on summary judgment are familiar and well-settled. Since only issues of law are presented and no disputed fact questions are involved, review on appeal is de novo with no presumption as to the correctness of any findings of the trial court. Gonzales v. Alman Const. Co., 857 S.W.2d 42 (Tenn.Ct.App.1993). The moving party on summary judgment has the burden of showing to the court that there are no disputed material facts creating a genuine issue for trial and that he is entitled to judgment as a matter of law. The court must take the strongest legitimate view of the evidence in favor of the non-moving party, allow all reasonable inferences in favor of that party, discard all countervailing evidence, and, if there is a dispute as to any material fact or if there is any doubt as to the existence of a material fact, summary judgment cannot be granted. Byrd v. Hall, 847 S.W.2d 208 (Tenn.1993); EVCO Corp. v. Ross, 528 S.W.2d 20 (Tenn.1975). Issues as to interpretation and application of unambiguous contracts are likewise issues of law, the determination of which enjoys no presumption of correctness on de novo appellate review. Doe v. HCA Health Services of Tenn., Inc., 46 S.W.3d 191, 196 (Tenn.2001).

The sole issue presented on appeal is "whether the Nationwide `regular use' uninsured motorist exclusion, under the circumstances of this particular case under consideration, operates to deprive the Plaintiff of the protections required under the Tennessee Uninsured Motorists Statute?"

Uninsured motorist insurance coverage first appeared in Tennessee following the passage of chapter 371 of the Public Acts of 1967. In 1974, our supreme court interpreted the uninsured motorist statute to provide "limited" rather than "broad coverage".

Page 211

Under our research there appears to be two theories in regard to offset provisions in policies containing uninsured motorist coverage based on the legislative intent in the enactment of uninsured motorist statutes. The first theory is based on a finding the legislative purpose of such statutes is to provide full coverage up to the policy limits so long as payments under the uninsured motorist coverage, plus any payments received from other sources, do not exceed insured's actual damage. This is termed broad coverage and any offsets in the policies inhibiting such full coverage are held void. The second theory is based on a finding the legislative purpose of such statutes is to provide insured a recovery only up to the statutory minimum required without regard to insured's actual damages, unless such be less than the statutory minimum. This is termed limited coverage and under such, by virtue of set-off provisions in a policy, an insured's statutory minimum coverage can be reduced by amounts received from other sources.


It results, and we so hold, by enactment of T.C.A. s 56-1152 as a section of our uninsured motorist statutes, it is the legislative purpose to provide an insured motorist a right of recovery under the uninsured motorist provisions of his policy only up to the statutory required minimum (T.C.A. s 56-1148), and provisions in such policies, approved by the Commissioner of Insurance, operating to reduce such coverage where other coverage or benefits are available to the insured arising from accident causing the loss, are valid if such provisions do not operate to deny payments to an insured of less than the statutory minimum.

Terry v. Aetna Casualty & Surety Co., 510 S.W.2d 509, 513 (Tenn.1974).

Justice Harbison provided further guidance in Hill v. Nationwide Mutual Ins. Co., 535 S.W.2d 327 (Tenn.1976).

Authorities accepting the rationale of the case just cited point out that vehicular liability insurance is ordinarily written upon and follows particular scheduled vehicles. It is not written upon named individuals, and it is not like general health or accident insurance coverage. The liability policy covers a scheduled vehicle, and extends its protection, through omnibus clauses, not only to the named insured but to members of his family and other persons using the vehicle with permission, subject to prescribed conditions and exclusions.

Other authorities, holding that exclusions such as that involved in the present case are not valid, have reasoned that uninsured motorist coverage should be analogized to broad personal insurance, and that it should not be geared to or limited by coverage on particular scheduled vehicles. They emphasize that the statutes speak in terms of "protection of persons" rather than vehicles.

Both lines of authority are supported by cogent reasons. By statute, uninsured motorist insurance coverage is appended to or made supplemental to vehicular liability insurance, so that the concepts of vehicular coverage do have relevance; on the other hand, the statutes refer to the protection of persons, not vehicles.

Faced with these somewhat mixed concepts, the courts have had to construe statutory language in an attempt to carry out legislative policy. Each case, in the last analysis, turns upon the terms and provisions of a particular state statute and its language with respect to uninsured motorist coverage.


Page 212

The uninsured motorist statutes of most states do not contain provisions similar to those contained in T.C.A. § 56-1152. [Now Tenn.Code Ann. § 56-7-1205.] In previous cases, this Court has noted the difference in statutory provisions, and has construed T.C.A. § 56-1152 [Now Tenn.Code Ann. § 56-7-1205.] as denoting "a legislative purpose to provide less than broad coverage." Terry v. Aetna Casualty and Surety Company, 510 S.W.2d 509, 513 (Tenn.1974). In the latter case, the Court sustained a policy provision providing an offset against the uninsured motorist coverage for any amount recovered under workmen's compensation.

Hill, 535 S.W.2d 327, 330 (Tenn.1976). (footnotes omitted.)

The precise issue which controls the disposition of this case involves an exclusion for

bodily injury suffered while occupying a motor vehicle:

(a) owned by;

(b) furnished to; or

(c) available for the regular use of;

you or a relative, but not insured for auto liability coverage under this policy. It also does not apply to bodily injury from being hit by any such motor vehicle.

This standard "regular use" exclusion predates the advent of uninsured motorist coverage, it being born...

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  • Shempert v. Cox, W2015-02161-COA-R3-CV
    • United States
    • Court of Appeals of Tennessee
    • August 24, 2016 automobile insurance policies within the broader context of Tennessee's uninsured motorist statutes. In Shepherd v. Fregozo , 175 S.W.3d 209 (Tenn. Ct. App. 2005), a police officer who was injured while driving his department-assigned patrol car brought suit against his automobile insure......
  • Craig v. Loving, No. M2005-02216-COA-R3-CV (Tenn. App. 3/13/2007), M2005-02216-COA-R3-CV.
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    • March 13, 2007
    ...Mut. Ins. Co., 701 S.W.2d 621 (Tenn.Ct.App.1985); Poper, ex rel. Poper v. Rollins, 90 S.W.3d 682 (Tenn.2002) and Shepherd v. Fregozo, 175 S.W.3d 209 (Tenn.Ct.App.2005) make it clear that without legislative intervention, Tennessee remains, as held in Terry, a less-than-broad coverage jurisd......
  • Gillard v. Taylor
    • United States
    • Court of Appeals of Tennessee
    • March 18, 2009
    ...this Court has held that a “regular use” exclusion in insurance policies does not contravene public policy. Shepherd v. Fregozo, 175 S.W.3d 209, 217 (Tenn.Ct.App.2005) (citing Sandoz v. State Farm Mut. Auto. Ins. Co., 620 So.2d 441 (La.App. 3 Cir.1993)). In Shepherd, this Court addressed a ......
  • Gillard v. Taylor, No. W2008-00937-COA-R9-CV (Tenn. App. 3/18/2009), W2008-00937-COA-R9-CV.
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    • Court of Appeals of Tennessee
    • March 18, 2009
    ...this Court has held that a "regular use" exclusion in insurance policies does not contravene public policy. Shepherd v. Fregozo, 175 S.W.3d 209, 217 (Tenn. Ct. App. 2005) (citing Sandoz v. State Farm Mut. Auto. Ins. Co., 620 So.2d 441 (La.App. 3 In Shepherd, this Court addressed a factually......
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