Stevenson v. Am. Cas. Co. of Reading
| Decision Date | 27 January 2016 |
| Docket Number | No. W2015–00425–COA–R3–CV,W2015–00425–COA–R3–CV |
| Citation | 496 S.W.3d 762 |
| Parties | Dr. Robin M. Stevenson v. American Casualty Company of Reading, Pennsylvania |
| Court | Tennessee Court of Appeals |
Thomas D. Yeaglin, Memphis, Tennessee, for the appellant, Dr. Robin M. Stevenson.
Carl Knoerr Wyatt, Memphis, Tennessee, for the appellee, American Casualty Company of Reading, Pennsylvania.
BRANDON O. GIBSON
, J., delivered the opinion of the court, in which ARNOLD B. GOLDIN and KENNY ARMSTRONG, J.J., joined.
This appeal involves a lawsuit filed by an insured against his insurer due to the insurer's failure to pay a claim for a theft loss. The trial court granted summary judgment to the insurer, finding no coverage under the policy. We affirm.
On April 24, 2014, Dr. Robin M. Stevenson (“Plaintiff”) filed this lawsuit against his insurer, American Casualty Company of Reading, Pennsylvania (“Insurer”). According to the complaint, Plaintiff is a resident of Memphis, Tennessee, but he and another doctor leased a building in Southaven, Mississippi, and maintained a policy of insurance on the premises to insure against perils including theft. The physicians used the insured premises for “metal work purposes as [they] both enjoyed that type of activity.” The complaint alleged that on or about April 27, 2012, while the coverage was in effect, Plaintiff's “trailer and certain expensive antique fencing components” located in the bed of the trailer were stolen from the insured premises. According to the complaint, Insurer paid the claim for the loss of the trailer but denied coverage for its cargo, i.e., the antique fencing material. Plaintiff alleged bad faith and sought to recover compensatory and punitive damages for breach of the insurance contract. Insurer filed an answer admitting the existence of a dispute over whether Plaintiff's claim was for a covered loss.
Plaintiff filed a motion for summary judgment, contending that Insurer engaged in bad faith by denying coverage for the fencing cargo when it paid the claim for the stolen trailer under the same policy and factual circumstances. Plaintiff submitted an affidavit in which he estimated that the stolen fencing material was worth $10,000.
Insurer filed a cross-motion for summary judgment, denying the existence of coverage under its policy. Insurer claimed that it paid the claim for the loss of the trailer because the policy specifically provided coverage for trailers. However, Insurer maintained that the policy did not provide coverage for the fencing material. Insurer noted that the policy covered “Business Personal Property” but claimed that the fencing material did not qualify as such because Plaintiff admitted in his statement to Insurer that he personally owned the fencing material and that no business was performed at the insured premises. Insurer also acknowledged that the policy provided coverage for “Personal Effects,” but again, Insurer claimed that the fencing material did not qualify. The policy endorsement entitled “Personal Effects” stated:
Insurer claimed that courts in other jurisdictions had construed “personal effects” to mean items typically worn or carried about a person or otherwise personal to the individual. According to Insurer, fencing material did not meet that definition.
Plaintiff filed a response to Insurer's motion. Although he did not cite any authority to support his position, he claimed that the phrase “personal effects” is commonly interpreted to include “any and all property that is owned by a person individually but not jointly with others.”
Following a hearing, on February 6, 2015, the trial court entered an order denying Plaintiff's motion for summary judgment and granting Insurer's motion for summary judgment. The trial court found as a matter of law that the insurance policy did not provide coverage for Plaintiff's fencing material. The trial court acknowledged the principle that ambiguities in an insurance policy are to be resolved against the drafter. However, the court concluded that “the plain meaning of words should not be ignored, including the plain meaning of ‘personal effects.’ ” Based on the undisputed facts, the trial court found that Plaintiff's fencing material did not constitute business “personal property” or “personal effects” under the policy. As such, the court concluded there was no coverage for the fencing material. Plaintiff timely filed a notice of appeal.
The issues presented on appeal, as we perceive them, are:
.
For the following reasons, we affirm the decision of the circuit court and remand for further proceedings.
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, 250–51 (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) ).
. Thus, the terms of an insurance policy “ ‘should be given their plain and ordinary meaning, for the primary rule of contract interpretation is to ascertain and give effect to the intent of the parties.’ ” Clark, 368 S.W.3d at 441 (quoting U.S. Bank, 277 S.W.3d at 386–87 ). The policy should be construed “as a whole in a reasonable and logical manner,” Standard Fire Ins. Co. v. Chester–O'Donley & Assocs., 972 S.W.2d 1, 7 (Tenn.Ct.App.1998), and the language in dispute should be examined in the context of the entire agreement, Cocke Cty Bd. of Hwy. Comm'rs v. Newport Utils. Bd., 690 S.W.2d 231, 237 (Tenn.1985).
In addition, contracts of insurance are strictly construed in favor of the insured, and if the disputed provision is susceptible to more than one plausible meaning, the meaning favorable to the insured controls. Tata v. Nichols, 848 S.W.2d 649, 650 (Tenn.1993) ; VanBebber v. Roach, 252 S.W.3d 279, 284 (Tenn.Ct.App.2007). However, a “strained construction may not be placed on the language used to find ambiguity where none exists.” Farmers–Peoples Bank v. Clemmer, 519 S.W.2d 801, 805 (Tenn.1975).
Garrison, 377 S.W.3d at 663–64
. The “ordinary meaning” envisioned is the meaning that the average policy holder and insurer would attach to the policy language. Artist Bldg. Partners v. Auto–Owners Mut. Ins. Co., 435 S.W.3d 202, 216 (Tenn.Ct.App.2013) (citing Swindler v. St. Paul Fire & Marine Ins. Co., 223 Tenn. 304, 444 S.W.2d 147, 148 (1969) ).
Again, the policy at issue provided coverage for “personal effects” of the insured located at the described premises. The limited issue before us is whether the fencing material located on Plaintiff's trailer constituted “personal effects.”
The term “effects” means movable property or goods. Merriam–Webster's Collegiate Dictionary (11th ed.2014); Black's Law Dictionary (10th ed.2014). However, when coupled with the word “personal,” the term takes on a much more limited meaning. Merriam–Webster's Collegiate Dictionary defines “personal effects” as “privately owned items (as clothing and jewelry) normally worn or carried on the person.” Merriam–Webster's Collegiate Dictionary (11th ed.2014). Black's Law Dictionary defines “personal effects” as “Items of a personal character; esp., personal property owned by a decedent at the time of death.” Black's Law Dictionary (10th ed.2014).
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