Car Wreck – Choice of Law in Insurance Policy

Plaintiffs were involved in a car wreck in Tennessee while driving a vehicle they borrowed from North Carolina residents.  The car owners had selected an insurance policy with a Missouri choice of law provision because their daughter principally used the car in Missouri where she attended college. The issue before the Court of Appeals was whether the law of Missouri or North Carolina controls. Unlike North Carolina, Missouri law did not provide for underinsured motorist coverage.  Plaintiffs contended that the laws of North Carolina governed the insurance policy.  The trial court disagreed, finding that the Missouri choice of law provision was valid and enforceable because the choice of law provision was not contrary to a fundamental policy of North Carolina.

Citing Ohio Cas. Ins. Co. v. Travelers Indem. Co, 493 S.W.3d 465, 476 (Tenn. 1973), the Court of Appeals noted that Tennessee’s conflict of law doctrine provides that a contract is presumed to be governed by the law of the jurisdiction in which it was executed absent a contrary intent. If the parties manifest an intent to instead apply the laws of another jurisdiction, then that will be honored provided that the provision was executed in good faith and the jurisdiction whose law is chosen bears a material connection into the transaction.

In this case, although the car was registered in North Carolina, it was seldom used there. The principle location and use of the insured vehicle was in Missouri, therefore, the principle risk associated with the vehicle was in Missouri.  Because North Carolina’s interest in the regulation of an insurance policy of an automobile primarily operated in Missouri does not constitute a fundamental policy, the choice of law provision was valid and enforceable.

Williams v. Smith, No. M2013-02606-COA-R3-CV (Tenn. Ct. App. Nov. 6, 2014)

Discrimination Case of Interest

Plaintiff worked as a “full-fledged carman” for Defendant, Norfolk Southern Railway.  During his employment, Defendant issued six job bulletins; three of the bulletins created new carman positions inside the shop, and three of the bulletins eliminated carman positions in the yard.  Shortly thereafter, all six bulletins were canceled. Plaintiff had bid on one of the positions inside the shop before the bulletins were withdrawn.  The bulletins were eventually reposted but included the additional requirement that applicants possess a commercial driver’s license (CDL).  As justification for the new requirement, Defendant argued that it needed a carman with CDL to operate a large truck in case of emergencies. Plaintiff did not apply for the new position because he did not have a CDL.

Plaintiff brought suit alleging that his former employer, Norfolk Southern Railway, discriminated against him based on his race when they removed the job posting and later re-posted the job with an additional requirement that he did not satisfy.  The district court granted summary judgment in favor of the Defendant.  The Court ultimately found NSRC had a legitimate business reason for adding the CDL requirement, and therefore, the Plaintiff could not show that it was pretext.    Accordingly, the judgment of the district court was affirmed and Plaintiff’s claims were dismissed.

Stephen Lewis, Jr. v. Norfolk Southern Railway Company


Constitutionality of City Ordinance

This action involves the constitutionality of a city ordinance regulating beer sales by establishments operating twenty-four hours a day.  In 2006, the City of Chattanooga amended its beer ordinance, providing that no establishment remaining open for business of any type between the hours of 3:00am and 8::00am is permitted to simultaneously maintain a beer permit. The plaintiff restaurant is located within a Chattanoogan hotel and serves a variety of food items 24-hours per day. The restaurant also served beer during the hours allowed under the unamended version of the code until it received a letter alleging a code violation from the Chattanooga Police Department. Upon hearing, the restaurant lost its license.

Plaintiff brought this action in the trial court, alleging that the city code violated the restaurant’s due process rights pursuant to the Fourteenth Amendment of the US Constitution and Article 1, Section 8 of the Tennessee Constitution. The trial court ruled in favor of the city, finding that the code subsection was rationally related to a legitimate government interest.  On appeal, the Court of Appeals found that the code was not rationally related to a legitimate government interest, thereby reversing the judgment of the trial court.  More specifically, the court found that “An amendment forcing establishments such as G & N to choose between providing twenty-four-hour food service without a beer permit and operating during specific times for the privilege of selling beer during permissible hours imposes arbitrary limits on those establishments, the parameters of which are not a reasonable exercise of a municipality’s police power.”

G and N Restaurant Group, Inc. d/b/a City Cafe Diner v. City of Chattanooga, E2013-02617-COA-R3-CV (Tenn. Ct. App. Oct. 8, 2014)


Underinsured Motorist Coverage

The plaintiff, a detective with the Polk County Sheriff’s Department, was seriously injured when the Polk County vehicle in which he was riding as a passenger was struck in the rear by a vehicle owned by one of the two named defendants. Plaintiff and his wife sued the two named defendants and served process and a copy of the complaint upon two unnamed parties, Tennessee Risk Management Trust (“TRMT”) and Markel Corporation. The suit against named defendants was settled for the full amount of liability limits.

The plaintiffs then sought to recover uninsured motorist benefits from the unnamed parties, arguing that TRMT is subject to the uninsured motorist coverage requirements of the Code, and, hence, required to make such coverage available to the plaintiffs. The undisputed facts revealed that the Polk County Government insured the vehicle in which Plaintiff was a passenger pursuant to the terms of the Coverage Document. The Certificate of Liability and/or Declarations page regarding the “Coverage Document” provided for 1 million in liability coverage and 1 million in uninsured/ underinsured motorist coverage on the vehicle involved in the accident in question. The named member of the Certificate of liability insurance is Polk County Government.

The trial court granted Defendant’s motion for summary judgment, finding that TRMT is not subject to those requirements. The Court of Appeals affirmed, holding that the insurance policy before the Court did not extend uninsured coverage to employees of Polk County. Ultimately, the Court of Appeals, relying on the recently decided Supreme Court decision Harris v. Haynes, found that a governmental fund established in accordance with T.C.A. § 29-40-201-408 is exempt from the requirements of Tennessee’s insurance statutes and therefore need not comply with the requirements of the uninsured motorist state, T.C.A. § 56-7-1201. Because the Coverage Document TRMT issued to Polk County specifically excluded employees from uninsured motorist coverage and TRMT is not otherwise required to offer such coverage, Plaintiff may not recover from TRMT.  Waters v. Pendergrass, E2013-00431-COA-R3CV, 2014 WL 4412337 (Tenn. Ct. App. Sept. 9, 2014)

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Statutory Caps

Tennessee is one of several states that has adopted legislation capping damages on tort suits. Under the Civil Justice Act of 2011, noneconomic damages are capped at $750,000 and punitive damages at either $500,000 or twice the amount of compensatory damages, whichever is greater. There are some limited exceptions to these caps.

Across the nation, there are numerous pending cases where plaintiffs have challenged the constitutionality of tort reform statutory caps. Legal challenges involve aspects of constitutional law, namely the right to trial by jury, equal protection, due process, and the separation of powers. Tennessee is no exception. The state’s cap statute has been subject to litigation, however, a Tennessee appellate court has yet to render an opinion reaching the merits of the claim. All constitutional challenges to this point have been dismissed for ripeness.

As it stands, 36 states currently have cap statutes, 9 states have no statutory caps, and 5 states have constitutional amendments barring statutory caps. Of the states with cap statutes, 16 hold that statutory caps are constitutional, 8 hold that the caps are unconstitutional, 9 are undecided or unchallenged, and 3 states have mixed results.


Illegal Alien – Filing Lawsuit

The Western District Court of Appeals recently opined on the issue of whether an unauthorized alien has standing to pursue a retaliatory discharge claim against his or her employer. Torres, an undocumented worker, alleged that his employer terminated his employment as a direct result of the employee asserting a workers’ compensation claim. The employer moved for summary judgment arguing that Torres could not bring a claim for retaliatory discharge because he was incapable of employment in Tennessee. The trial court granted summary judgment based solely on the illegal status of Torres.

On appeal, the court noted that a retaliatory discharge action does not seek to protect a person’s legal claim to a job, but rather seeks to protect an “employee’s” right to file a workers compensation claim if deterred by an employer’s action. Citing both judicial and legislative authority, the Court of Appeals found that unauthorized aliens working for employers are considered “employees” and thus have standing to bring a workers compensation claim.

Having found that Torres had the right to file a workers’ compensation claim, the court then turned to the issue of whether Torres retained the ability to protect the right to by filing a retaliatory discharge claim. Although this was an issue of first impression, courts in Tennessee and across the country routinely permit unauthorized aliens to sue when their rights are injured in other ways, including bringing causes of action in tort or contract. Based on this, the court found illegal status was insufficient to bar an unauthorized alien from bringing a claim for retaliatory discharge against an employer to protect his or her right to file a claim for workers’ compensation.  Torres v. Precision Industries, et al., No. W2014-00032-COA-R3-CV (Tenn. Ct. App. Aug. 5, 2014).

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Premises Liability – Duty to Customers

Jolyn Cullum et al v. Jan McCool, et al [Walmart], S. Ct. of Tennessee-12/18/13-No. E2012-00991-SC-R11

Plaintiff was a customer of Walmart at the same time as another customer who tried to purchase some prescriptions there. The customer attempting to purchase the prescriptions was intoxicated and Walmart employees refused to fill her prescriptions. She became belligerent and was required to leave the store by its employees. When the intoxicated customer was backing her car to leave, she ran over the plaintiff in the Walmart parking lot.

This case creates an additional duty on business owners for injuries of its customers by other customers on its premises by holding that if a place of business knows that a potential customer of that place of business is intoxicated, it has a duty to another customer to protect the innocent customer.  The Supreme Court suggests the defendant place of business could have placed a 911 call to police or “to protect her (the innocent customer) from foreseeable risks of harm on its property provided that any action that its duty may have required was not overly burdensome.”

The court goes on to state that “our holding does not require store employees to restrain belligerent, intoxicated patrons by physical force.”

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Cat & Compensability

The Supreme Court of Tennessee Special Workers’ Compensation Appeals Panel affirmed the lower court’s finding of compensability when an employee fell from a stack of soft drinks while attempting to climb a wall to rescue and remove a feral cat from employer’s premises.  The court found that the employee, although she violated a safety rule by not using a ladder while climbing, was taking action in benefit of her employer in trying to remove the cat from the premises.  The benefit being that the presence of the cat in the building was likely a violation of food safety regulations, the cat could have damaged equipment, and the cat could have contaminated products in the food storage area.  The employee had 20 cats of her own at home and the court wondered if she might have been acting in furtherance of her own benefit, but even if she had been, her actions satisfied the “mutual benefit test.”  The breed of the purrpatrator is unknown.


Auto Insurance; Rental Car

Tenn. Code Ann. 56-7-1110 states

Any rental car company, offering for sale insurance coverage or collision damage waivers, shall state clearly on the front page of the rental contract that the purchaser of the insurance coverage or collision damage waiver offered may be covered for such claims on the purchaser’s personal motor vehicle insurance policy, and that if such insurance coverage exists under the renter’s personal insurance policy, and the coverage is confirmed, the renter may require the rental car company to submit any claims to the renter’s personal insurance carrier as the renter’s agent. The rental car company shall not make any written or oral representations that it will not present claims or negotiate with the renter’s insurance carrier. As used in this section, “confirmation of coverage” includes telephone confirmation from an insurance company representative. 

It is important to read and retain a copy of the rental car agreement.


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Three Members of O’Neil, Parker & Williamson selected to 2013 Edition of Mid-South Super Lawyers

The firm is pleased to announce that three members of O’Neil, Parker & Williamson have been selected to the 2013 Edition of Mid-South Super Lawyers. Howard Vogel and Bill Young were selected in the category of Alternative Dispute Resolution and Jeff Thompson was selected in the category of Civil Litigation-Defense.

According to the magazine, Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process is multi-phased and includes independent research, peer nominations and peer evaluations.