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Parveen v. ACG South Insurance Agency, LLC

Court of Appeals of Tennessee, Knoxville

November 5, 2019

TALAT PARVEEN, ET AL.
v.
ACG SOUTH INSURANCE AGENCY, LLC, ET AL.

         Session August 21, 2019

          Appeal from the Circuit Court for Washington County No. 36261 J. Eddie Lauderback, Judge

         This appeal arises from an action commenced by two insured parties against their insurance agent and the insurance agency where he was employed after the insureds' insurance carrier refused to provide excess uninsured motorist coverage because it was not included in the insureds' policy. The insureds alleged that their insurance agent failed to procure the requested insurance on their behalf and that they consequently had suffered monetary losses. The Trial Court applied a statutory rebuttable presumption that the insureds had accepted the provided coverage by paying their insurance premiums, pursuant to Tennessee Code Annotated § 56-7-135(b). Upon its finding that the insureds had not rebutted that presumption, the Trial Court dismissed the insureds' action. The insureds have appealed. Upon our determination that Tennessee Code Annotated § 56-7-135(b) does not apply to actions against an insurance agent for failure to procure insurance coverage as directed, we reverse the Trial Court's grant of summary judgment and remand for the action to proceed.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed; Case Remanded

          F. Braxton Terry, Morristown, Tennessee, and W. Lewis Jenkins, Jr., Dyersburg, Tennessee, for the appellants, Khurshid Shaukat and Talat Parveen.

          Charles W. Cook, III, and Rocklan W. King, III, Nashville, Tennessee, for the appellees, Jeffrey Norris and ACG South Insurance Agency, LLC.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Charles D. Susano, Jr., and John W. McClarty, JJ., joined.

          OPINION

          D. MICHAEL SWINEY, CHIEF JUDGE

         Background

         Upon relocation from Georgia to Tennessee, Talat Parveen and Khurshid Shaukat (collectively, "Plaintiffs") contacted Jeffrey Norris, an agent of ACG South Insurance Agency, LLC ("ACG"), to obtain a personal umbrella insurance policy. Mr. Norris was authorized to write insurance policies for several insurance carriers. Mr. Shaukat attended a meeting with Mr. Norris in 2013. According to Mr. Shaukat, he provided Mr. Norris with a copy of the couple's existing umbrella insurance policy with State Farm ("State Farm Policy") and requested the same coverage in a new policy in Tennessee. Although Mr. Norris denied ever seeing the State Farm Policy, he could not recall the exact conversation he had with Mr. Shaukat. The State Farm Policy, in effect from 2009 to 2013, had $2, 000, 000 excess uninsured motorist coverage. The State Farm Policy included a separate "line item premium" for the excess uninsured motorist coverage.

         Mr. Norris assisted Plaintiffs with obtaining a new umbrella insurance policy in Tennessee through Safeco Insurance Company of America ("Safeco"). The new umbrella insurance policy through Safeco ("Safeco Policy") had a cheaper premium than the State Farm Policy. The Safeco Policy was in effect from March 2013 through March 2014 and included no excess uninsured motorist coverage. Plaintiffs received a copy of the policy and were not charged for excess uninsured motorist coverage. The policy was renewed from March 2014 through March 2015, and again from March 2015 through March 2016. In February 2015, Plaintiffs received a letter from Safeco informing them that the renewed policy would be in effect from March 2015 through March 2016. Neither renewed policy included excess uninsured motorist coverage. Plaintiffs received a copy of their policy and declarations pages. The parties do not dispute that the Safeco Policy as written did not include excess uninsured motorist coverage. Plaintiffs paid their premiums for each policy period and had not inquired why the Safeco Policy was cheaper than the State Farm Policy.

         An automobile accident occurred on November 10, 2015, in which Dr. Parveen was injured and her vehicle was a total loss. The vehicle that struck Plaintiff's vehicle belonged to a wrecker service company. Mr. Shaukat subsequently learned from Mr. Norris that their Safeco Policy did not have excess uninsured motorist coverage. Thereafter, Plaintiffs filed a lawsuit against the towing company who owned the wrecker vehicle, seeking damages from the towing company.[1] Plaintiffs further served a copy of the complaint on "Safeco Insurance Company" pursuant to Tennessee Code Annotated § 56-7-1201. Safeco subsequently filed an answer and a motion for summary judgment stating that the Safeco Policy did not include excess uninsured motorist coverage. The Trial Court in that action granted summary judgment in favor of Safeco, ruling that the Safeco Policy did not include coverage for excess uninsured motorist coverage until January 4, 2016, nearly two months after the accident.

         In December 2016, Plaintiffs filed this action against Mr. Norris and ACG (collectively, "Defendants"), seeking damages for Mr. Norris's failure to procure excess uninsured motorist coverage on behalf of and as directed by Plaintiffs when assisting them to obtain the Safeco Policy.[2] The parties conducted discovery. Subsequently, Defendants filed a motion seeking summary judgment in May 2018. In their motion, Defendants argue that the action should be dismissed because Plaintiffs could not overcome the statutory presumption created by Tennessee Code Annotated § 56-7-135(b) that the Plaintiffs accepted the coverage provided in the contract upon payment of the insurance premiums. In addition to their motion, Defendants filed a memorandum of law in support of their motion and a statement of undisputed facts. They also included documentation from the previous action involving Plaintiffs, the wrecker company, and Safeco.

         In support of their motion for summary judgment, Defendants also provided a declaration by Bill Burke, a representative of Safeco, and the relevant Safeco Policy documents and letters. According to Mr. Burke, it was the business practice of Safeco to mail copies of declaration pages, correspondence, and policy documents to policyholders. Mr. Burke declared that Plaintiffs timely paid their premiums at all times while the policy was in effect through the accident in November 2015. Per Safeco's standard policy, Mr. Burke stated that a letter regarding renewal of the policy would ...


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