State Auto. Mut. Ins. Co. v. Cummings

• Decision Date: 18 February 1975
• Citation: 519 S.W.2d 773
• Parties: STATE AUTOMOBILE MUTUAL INSURANCE COMPANY, Petitioner, v. Barry CUMMINGS, Respondent.
• Court: Tennessee Supreme Court

Page 773

519 S.W.2d 773

STATE AUTOMOBILE MUTUAL INSURANCE COMPANY, Petitioner, v. Barry CUMMINGS, Respondent.

Supreme Court of Tennessee.

Feb. 18, 1975.

Hunter K. Cochran, Cochran, Carey, Fleischer & Mullikin, Memphis, for petitioner.

J. B. Cobb, Memphis, for respondent.

OPINION

FONES, Chief Justice.

Barry Cummings sued State Automobile Mutual Insurance Company in the Chancery Court, seeking to recover $10,000 under the uninsured motorist coverage of a policy issued by that company to plaintiff's father. Defendant appealed from an adverse decision and, while there is no real dispute as to the facts, oral testimony adduced in the Chancery Court and preserved by a bill of exceptions, vested jurisdiction in the Court of Appeals.

That Court affirmed the Chancery Court and defendant petitioned for the writ of certiorari, which was granted.

Plaintiff was a passenger in a car being driven by Jerry Smith at the time it was involved in an accident with a vehicle owned by Turner Allen and driven by Henry Benson. Allen and Benson were uninsured and insolvent.

Plaintiff sued Allen and Benson in the Circuit Court of Shelby County and was awarded a jury verdict of $28,000. Smith's insurance carrier paid the sum of $10,000 under its uninsured motorist coverage.

Both the Chancellor and the Court of Appeals were of the opinion that the decision of this Court in State Farm Mutual Automobile Insurance Company v. Barnette, 485 S.W.2d 545 (Tenn.1972), controls the disposition of this case.

In Barnette, the plaintiff was a guest passenger of one Noel. Dickinson, the driver of the other vehicle in the accident, had liability coverage. Barnette sued Dickinson and Noel. Dickinson's liability carrier paid $9,500 under an instrument that permitted Barnette to pursue his suit against Noel, wherein he was awarded a judgment of $170,000. He sought recovery of $10,000 under the uninsured motorist provision of his own liability policy with State Farm Mutual. State Farm asserted that a provision in its policy authorizing an offset against the $10,000 uninsured motorist coverage of sums received by Barnette, its insured, from any person jointly and severally liable, entitled it to offset the $9,500 Barnette received from Dickinson, thus limiting its liability to $500. Conceding that to be the effect of the policy provision, the Court considered the critical issue in the case to be whether or not such a provision was valid under T.C.A. § 56--1152.

Said section reads as follows:

'56--1152. Minimum policy limits not increased.--Nothing contained in §§ 56--1148--56--1153 shall be construed as requiring the forms of coverage provided pursuant to §§ 56--1148--56--1153, whether alone or in combination with similar coverage afforded under other automobile liability policies, to afford limits in excess of those that would be afforded had the insured thereunder been involved in an accident with a motorist who was insured under a policy of liability insurance with the minimum limits described in § 59--1206. Such forms of coverage may include such terms, exclusions, limitations, conditions, and offsets, which are designed to avoid duplication of insurance and other benefits.'

The 1974 amendment to this section is inapplicable.

The Court, in Barnette, interpreted the basic purpose of the statute to be the providing of protection from injury or death caused by a financially irresponsible motorist in an amount no less than the minimum required by the Financial Responsibility Act; that the word 'duplication' in the last sentence of T.C.A. § 56--1152 was intended merely to prevent a total collection of insurance and other benefits in excess of the insured's actual damage. The conclusion was reached that the offset provision of the State Farm policy was in conflict with our uninsured motorist statute and Barnette was awarded the policy limit of $10,000.

The policy provision relied upon by defendant in the instant case reads as follows:

'Other Insurance. With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance under Part IV shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance.'

Part IV of the policy provides the uninsured motorist coverage. The effect produced by the application of this provision is identical with the offset provision in the insurance policy involved in Barnette. Contrary to the insistence of the...