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Farmers Mutual of Tennessee v. Atkins

Court of Appeals of Tennessee, Knoxville

December 15, 2014

FARMERS MUTUAL OF TENNESSEE
v.
JENNIFER ATKINS

Session Date October 1, 2014

Appeal from the Chancery Court for Monroe County No. 16344 Jerri S. Bryant, Chancellor

Chad D. Wilson, Knoxville and Peter Alliman, Madisonville, Tennessee, for the appellant, Jennifer Atkins.

Christopher D. Heagerty and Lisa J. Hall, Knoxville, Tennessee, for the appellee, Farmers Mutual of Tennessee.

J. Steven Stafford, P.J., W.S., delivered the opinion of the Court, in which D. Michael Swiney, J., and Kenny Armstrong, J., joined.

OPINION

J. STEVEN STAFFORD, JUDGE

Background

This is the second appeal in this case. See Farmers Mut. of Tennessee v. Atkins, No. E2011-01903-COA-R9-CV, 2012 WL 982998 (Tenn. Ct. App. March 21, 2012) (hereinafter "Atkins I"). Accordingly, many of the facts involving this appeal are taken from our prior Opinion. According to Atkins I:

On July 26, 2008, Defendant/Appell[ant] Jennifer Atkins' residence was destroyed by a fire. Ms. Atkins' home was covered under a homeowner's insurance policy issued by Plaintiff/Appell[ee] Farmers Mutual of Tennessee ("Farmers Mutual"). It is undisputed that the insurance policy agreed to by Ms. Atkins contains the following provisions:
WHAT YOU MUST DO IN CASE OF LOSS
2. Cooperation—The insured must cooperate with us in performing all acts required by this policy;
b. At our request, the insured must also:
(2) submit to examination under oath in matters connected with the loss or claim as often as we reasonably request; . . . .

Atkins I, 2012 WL 982998, at *1. This requirement is generally referred to as an "Examination Under Oath." Further, the insurance policy states that: "No suit to recover for any property claim may be brought against us unless: . . . the terms of this policy have been fully complied with . . . ." Finally, the insurance policy specifically requires that: "No suit to recover for any property claim may be brought against us unless . . . the suit is commenced within 1 year after the loss."

The Examination Under Oath requirement was directly at issue in both our prior Opinion and in this appeal:

On January 15, 2009, Farmers Mutual sent a Notice of Examination Under Oath to Ms. Atkins, stating that the examination was scheduled for January 30, 2009. Due to scheduling conflicts, the parties agreed to reschedule the examination for February 6, 2009. Although no explanation is contained in the record, it is undisputed that the examination did not occur on February 6, 2009. Instead, on February 13, 2009, Ms. Atkins' counsel sent a letter to Farmers Mutual informing the insurance company that Ms. Atkins would not be pursuing her insurance claim as the result of criminal charges pending against her. The letter stated: "As you know, Ms. Jennifer Atkins has been indicted by the Monroe County Grand Jury of which said charges are pending at this time. Ms. Atkins will not pursue her claim at this time." According to the record, Ms. Atkins was indicted on December 2, 2008 on charges of arson, conspiracy and insurance fraud in connection with the fire that destroyed her residence.
On July 27, 2009, Ms. Atkins instituted an action against Farmers Mutual seeking to recover under the policy. The insurance company did not respond to the claim before it was voluntarily dismissed on August 4, 2009.[1] On August 14, 2009, Farmers Mutual filed a Complaint for Declaratory Judgment. The complaint sought a declaration that because Ms. Atkins failed to submit to an examination under oath, a condition precedent to recovery under the policy, she was thus barred from recovering under the policy. On October 15, 2009, Ms. Atkins filed a handwritten response to the complaint, stating: "I deny what is said in the complaint and I want my day in court."
On March 22, 2010, the criminal charges against Ms. Atkins were dismissed because the State determined that it did "not have sufficient evidence to proceed."
On June 10, 2010, Ms. Atkins' counsel filed a formal Answer to the complaint, denying the material allegations contained therein, and stating that Ms. Atkins "stands ready, willing, and able to perform all duties required of her under the contract of insurance." In addition to the Answer, Ms. Atkins also filed a Counterclaim against Farmers Mutual, seeking to recover under the policy.

Atkins I, 2012 WL 982998, at *1–*2. Ms. Atkins' Counterclaim for recovery under the policy was filed within one year of the voluntary dismissal of her original claim. See Tenn. Code Ann. § 28-1-105(a) ("If the action is commenced within the time limited by a rule or statute of limitation, but the judgment or decree is rendered against the plaintiff upon any ground not concluding the plaintiff's right of action, . . . the plaintiff . . . may . . . commence a new action within one (1) year after the reversal or arrest."). In addition, in her Counterclaim, Ms. Atkins stated that she "stands, ready, willing and able to perform all duties required of her under the contract of insurance and makes demand on [Farmers Mutual] to do likewise."

As our prior Opinion explained:

On June 13, 2011, Farmers Mutual filed a Motion for Summary Judgment, stating:
[Ms. Atkins] has failed to cooperate with [Farmers Mutual] in its investigation of this claim in violation of the terms and conditions of the policy issued to the defendant. As such, the actions of the defendant constitute the failure to perform a condition precedent to accrual of this cause of action under the terms of the policy, and, therefore, the defendant has no present and subsisting right to bring this cause of action.
Ms. Atkins responded in opposition to the motion on August 9, 2011, denying that she had ever failed to cooperate with Farmers Mutual. A hearing was held on August 17, 2011. At the conclusion of the hearing, the trial court took the matter under advisement. The following day, the trial court orally denied the motion.
An order reflecting the denial was entered on August 31, 2011, which stated that the motion for summary judgment was denied due to the divergence of opinion regarding whether the failure to submit to an examination under oath constitutes the nonoccurrence of a condition precedent to recovery under the insurance policy. The trial court also stated that "the Court finds that there are disputed issues of material fact." The order further stated that, due to the divergence of opinion on the condition precedent issue, the trial court granted an interlocutory appeal on that issue.
Farmers Mutual filed a Tennessee Rule of Appellate Procedure 9 application for an interlocutory appeal to this Court on September 9, 2011, which was granted by our order of October 6, 2011.

Atkins I, 2012 WL 982998, at *2. Upon review of the issue certified for appeal, however, this Court concluded that the Rule 9 interlocutory appeal was improvidently granted and remanded back to the trial court for further proceedings. See Atkins I, 2012 WL 982998, at *4–*5. Specifically, this Court concluded that the trial court never made an initial determination as to "whether an insurance company must prove that it was prejudiced by the insured's failure to submit to an examination under oath." Because this Court's jurisdiction is appellate only, the ...


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