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Brooks v. Tennessee Farmers Mutual Insurance Co.

Court of Appeals of Tennessee, Nashville

November 26, 2014


Session August 20, 2014

Appeal from the Chancery Court for Macon County No. 4476 C. K. Smith, Chancellor No. M2013-02326-COA-R3-CV - Filed November 26, 2014

Jack O. Bellar and Jamie D. Winkler, Carthage, Tennessee, for the appellant, Tennessee Farmers Mutual Insurance Company.

William L. Moore, Gallatin, Tennessee; and Edgar Taylor, Hartsville, Tennessee, for the appellees, Eric D. Brooks and Tonia D. Brooks.

Richard H. Dinkins, J., delivered the opinion of the court, in which Frank G. Clement, Jr., P. J., M. S., and Robert Wedemeyer, Sp. J., joined.



I. Factual Background

On February 5, 2008, a tornado struck in Macon County, Tennessee, causing damage to the home of Eric and Tonia Brooks ("Plaintiffs"); they notified their property insurer, Tennessee Farmers Mutual Insurance Company ("Defendant"), of the damage and made a claim under their homeowner's policy. Defendant engaged Jim Gandee, an independent claims adjuster from Texas, who inspected the damage and met with Plaintiff's contractor; thereafter Defendant offered Plaintiffs $56, 788.74 to resolve their claim. Plaintiffs did not accept the offer and, following unsuccessful negotiations, filed suit in Macon County Chancery Court on January 22, 2009.

Plaintiffs alleged that Defendant breached the terms of the insurance policy by refusing to make payment for their loss; that Defendant's actions amounted to an unfair and deceptive act or practice in violation of the Tennessee Consumer Protection Act ("TCPA"); and that Defendant willfully and knowingly violated the TCPA. Plaintiffs sought general and consequential damages, as well as treble damages, attorneys fees and costs pursuant to the TCPA. Defendant answered on April 24, 2009, denying liability for breach of contract or violation of the TCPA; as an affirmative defense, Defendant asserted that the initial offer of $56, 788.74 was "fair and reasonable in all respects" and admitted liability to Plaintiffs in that amount.

The case was heard before a jury from December 17 through 20, 2012. At the close of Plaintiffs' proof, Defendant moved for a directed verdict; the court denied the motion and Defendant proceeded to put on its witnesses. The case was submitted to the jury on the breach of contract and TCPA causes of action. Following their deliberations, the jury returned a verdict holding that Defendant did not breach the insurance contract and that Defendant violated the TCPA; the jury awarded Plaintiffs $85, 265.00 in damages. Following the discharge of the jury, Plaintiffs moved the court for an award of "multiple damages up to treble damages" and attorneys fees pursuant to the TCPA; Defendant opposed the motion. The court held that Defendant's conduct was willful and knowing, and stated its findings of fact, at the conclusion of which it doubled the damages assessed by the jury; it awarded attorneys fees in an amount to be determined on the basis of Plaintiffs' counsel's affidavits. The court entered its judgment on March 1, 2013, awarding Plaintiffs damages of $170, 530.00 and attorneys fees of $94, 847.50.[1]

Thereafter, the parties filed various motions pertinent to the issues on appeal: Plaintiffs filed a motion for discretionary costs, and a motion and supplemental motion for post-trial attorneys fees; Defendant filed a motion pursuant to Tenn. R. Civ. P. 50.02 and 59 for judgment notwithstanding the verdict or, alternatively, to alter, amend or set aside the judgment and to grant a new trial. In due course, the court denied Defendant's motion and granted Plaintiffs' motions, awarding discretionary costs in the amount of $6, 018.73 and additional attorneys fees in the amount of $18, 810.00.

Defendant appeals, raising the following issues:

1. Whether the trial court erred in denying Tennessee Farmers Mutual Insurance Company a directed verdict or judgment notwithstanding the verdict.
2. Whether the trial court erred in failing to grant Tennessee Farmers Mutual Insurance company a new trial.
3. Whether any material and substantial evidence supports the jury verdict.
4. Whether the trial court erred in enhancing the damages for a willful or knowing violation of the Tennessee Consumer Protection Act.
5. Whether the trial court erred in awarding attorneys fees and costs.

Plaintiffs request an award of attorneys fees for this appeal.

II. Analysis

A. Motion for Directed Verdict and Motion for Judgment Notwithstanding the Verdict

At the close of Plaintiffs' proof, Defendant moved for a directed verdict on Plaintiffs' breach of contract and TCPA claims; the court denied the motions.[2] After the jury rendered its verdict, Defendant moved for judgment notwithstanding the verdict, which was overruled; the court held that there was "ample proof" for the jury to find that Defendant violated the TCPA.

Motions for directed verdicts are governed by Tenn. R. Civ. P. 50.01[3] and are appropriate at the close of evidence offered by an adverse party or at the close of all the proof; it should be granted when the court determines that the evidence does not raise an issue of fact for the jury to resolve. See 4 Nancy Fraas MacLean, Tennessee Practice Series–Rules of Civil Procedure Annotated § 50:1 (4th ed. 2008). A motion for judgment notwithstanding the verdict pursuant to Tenn. R. Civ. P. 50.02[4] is made after the jury has returned a verdict, and may be granted where the court determines that the evidence can lead to only one conclusion. Id. at § 50:4. The motion is available to a party who has earlier moved for a directed verdict. Id.

A succinct statement of the standards to be applied in the trial court's consideration of either motion, as well as our standard of review, was set forth in Holmes v. Wilson:

A post-trial motion for the entry of judgment in accordance with a motion for a directed verdict made during the trial must be gauged by the usual rules relating to directed verdicts. Those rules require that the trial judge, and the appellate courts, take the strongest legitimate view of the evidence in favor of the opponent of the motion, allow all reasonable inferences in his or her favor, discard all countervailing evidence, and deny the motion where there is any doubt as to the conclusions to be drawn from the whole evidence. A verdict should not be directed during, or after, trial except where a reasonable mind could draw but one conclusion. Vaughan v. Shelton, 514 S.W.2d 870 (Tenn. Ct. App. 1974); Keller v. East Tennessee Producton Credit Ass'n, 501 S.W.2d 810 (Tenn. Ct. App. 1973). See also Silverii v. Kramer, 314 F.2d 407 (3rd Cir. 1963).

551 S.W.2d 682, 685 (Tenn. 1977).

We begin our analysis of the court's ruling on the motion for a directed verdict by summarizing the evidence at the time the motion was made. In addition to their testimony, Plaintiffs' proof-in-chief consisted of the testimony of Mike Rogers, a Macon County Codes Enforcement Officer; Keith Scruggs, the Codes Director for the City of Lafayette and a director for the Tennessee Emergency Management Agency; Tim Driver, a contractor who, at Plaintiffs request, assessed the damage and prepared an estimate of the cost of repair; William Lamb, a structural engineer hired by Plaintiffs to assess the structural integrity of the home and the damage caused by the tornado; and Darrell Partin, Defendant's representative, who testified to the manner in which Plaintiffs' claim was handled and relative to an estimate of the cost of repair he prepared. Plaintiffs also introduced numerous exhibits, including photographs of the home and copies of correspondence between Plaintiffs and Defendant and/or their respective counsel.

Mr. Brooks testified that he reported the damage to his home a week and a half after the storm when he met with Mr. Partin at Defendant's office; that Jim Waller, a structural engineer, and John Gandee, a claims adjuster, both of whom had been engaged by Defendant, assessed the damage; that he received an estimate from Defendant in the amount of $56, 788.74, which Mr. Gandee had prepared; that he engaged Mr. Driver to assess the damage and that Mr. Driver's estimate of the cost of repair totaled $85, 265.00; that he, Mr. Gandee, and Mr. Driver had a meeting to discuss the difference in the estimates at which time he and Mr. Driver pointed out matters which Mr. Gandee had overlooked; that Mr. Gandee told him "not to worry about a thing. He had missed some stuff and he would make it right"; that he subsequently asked Mr. Rogers to inspect the house and that Mr. Rogers spent over an hour and a half doing so; that Mr. Rogers inspected the house a second time, along with Mr. Scruggs, after which they prepared a letter summarizing their observations; that he met with Mr. Partin again after Mr. Rogers and Mr. Scruggs wrote their letter; that Mr. Partin did not acknowledge that Mr. Gandee missed some things; that Mr. Gandee's estimate did not change; and that he was presented with a check from Defendant for $56, 788.74 which he refused to endorse because he believed certain language on the check operated to release his claim.

Mr. Partin testified that he sent Mr. Waller to assess the damage; that Mr. Gandee was hired to estimate the cost of repair; that he was aware of the meeting that Mr. Gandee, Mr. Driver and Mr. Brooks had at the property; that he and Mr. Vitolins, a general contractor specializing in insurance damage restoration, each inspected the property and prepared an estimate of the cost of repair; that, notwithstanding the language that Mr. Brooks testified caused him not to sign the check, Defendant would have supplemented the claim if other damages were owed; that he received the letter Mr. Scruggs and Mr. Rogers wrote; that nothing was done by Defendant and Defendant did not reconsider Mr. Waller's assessment on the basis of information in the letter; and that he was aware of the letter and of the differences in the estimates of Mr. Gandee and Mr. Driver when he presented the $56, 788.74 check to Mr. Brooks.

Mr. Rogers testified that he inspected Plaintiffs' property on two occasions, once by himself and a second time with Mr. Scruggs because of some "hidden" issues with the house; that he and Mr. Scruggs took notes on their observations of the property and authored a letter summarizing their findings that he hand-delivered to Defendant's office; that he was not contacted by Defendant with regard to the letter; and that in order to issue a permit to repair the home, the house would have to be ...

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