STATUTE OF LIMITATIONS
- Personal Property3 YearsT.C.A. § 28-3-105
- Personal Injury/Death1 YearT.C.A. § 28-3-104
- Breach of Contract/Written6 YearsT.C.A. § 28-3-109(a)(3)
- Breach of Contract/Oral6 YearsT.C.A. § 28-3-109(a)(3)
- Breach of Contract/Sale of Goods4 YearsT.C.A. § 47-2-275
- Statute of Repose/Products10 YearsT.C.A. § 29-28-103*
- Statute of Repose/Real Property4 YearsT.C.A. § 28-3-202**
- Breach of Warranty/U.C.C.4 YearsT.C.A. § 47-2-725(1)
- Workers’ Compensation1 YearT.C.A. § 50-6-112
- Strict Product Liability/Personal Injury1 YearT.C.A. § 28-3-104
- Strict Product LiabilityProperty Damage3 YearsT.C.A. § 28-3-105
Statute of Limitations Exceptions
*Shorter of 10 years from first purchase date or use or within 1 year from expiration of useful life. T.C.A. § 29-28-103.
**4 years from substantial completion of improvement to real property. If injury occurred during 4th year after substantial completion, action must be brought in one (1) year after injury. Action involving real estate must be brought within five (5) years after substantial completion. T.C.A. § 28-3-202.
Contributory Negligence/Comparative Fault
Modified Comparative Fault: 50% Bar. McIntyre v. Balentine, 833 S.W.2d 52 (Tenn. 1992). Damaged party cannot recover if it is 50% or more at fault. If 49% or less at fault, it can recover, although its recovery is reduced by its degree of fault. Plaintiff’s right to damages may be reduced by his own liability, but he will not be barred from recovering. McIntyre v. Balentine, 833 S.W.2d 52 (Tenn. 1992).
Med Pay/PIP Subrogation
Med Pay: Yes. Hubble v. Dyer Nursing Home, 188 S.W.3d 525 (Tenn. 2006). Carrier entitled to reimbursement only if so provided for in policy. Subrogation is simplest when the policy provides for complete assignment of the insured’s claim against third-party tortfeasor. When the policy doesn’t accomplish insured’s entire claim against tortfeasor, the insurer has a right to reimbursement from any recovery the insured obtained in suit instituted by insured against tortfeasor and any subrogation agreement isn’t void as an unlawful assignment of a personal injury cause of action. Wilson v. Tenn. Farms’ Mut. Ins. Co., 411 S.W.2d 699 (Tenn. 1966).
The one (1) year personal injury statute of limitations runs from the date of the insured’s accident. T.C.A. § 28-3-104 (2000).
PIP: Coverage not available.
Automobile and Property: No applicable statute, Administrative Code provision or case law exists.
Made Whole Doctrine
Tennessee adheres and subscribes to the Made Whole Doctrine. Wimberly v. American Cas. Co. of Reading, Pa., 584 S.W.2d 200 (Tenn. 1979); York v. Sevier County Ambulance Auth., 8 S.W.3d 616 (Tenn. 1999); Abbott v. Blount County, 207 S.W.3d 732 (Tenn. 2006). An insurer’s contractual right to subrogation and reimbursement are both subject to the Made Whole Doctrine. York, supra. The Supreme Court in Wimberly established that the right of an insured to be made whole before subrogation rights could be enforced could not be waived or modified by the insurance policy. Whether an insurer’s right of subrogation is contractual or equitable only comes into play to determine “whether there is a right of subrogation in the first instance, rather than in the enforcement of such right.” Id. While an insurer can not contractually modify the common law Made Whole Rule, a failure on the part of the insured to obtain contractually required permission of the insurer to a settlement preserves the latter’s subrogation rights even if the insured is not made whole. Eastwood v. Glens Falls Ins. Co., 646 S.W.2d 156, 158 (Tenn. 1983); Rader v. Traylor, No. 03A01-9403-CV-00079, 1994 Tenn. App. LEXIS 418, at *4-5 (Aug. 1, 1994). Thus, where the insurer does not participate in the settlement negotiations between its insured and the tortfeasor or does not waive any subrogation rights, such rights must be honored and the Made Whole Doctrine is inapplicable. This exception to the Made Whole Rule is subject however, to a further caveat which provides that if the parties agree that the insured has not been made whole or the underlying facts make clear that the recovery is for less than full compensation, the insurer’s subrogation claim is extinguished. Doss v. Tenn. Farmers Mut. Ins. Co., No. M2000-01971-COA-R3-CV, 2001 Tenn. App. LEXIS 906, at *10-11 (Dec. 10, 2001).
However, it is the insured in Tennessee who has the burden of proving that he is not made whole by a particular settlement or recovery. Hamrick’s, Inc. v. Roy, 115 S.W.3d 468 (Tenn. App. 2002); Nelson v. Innovative Recovery Services., Inc., 2001 WL 1480515 (Tenn. App. 2001) (unreported decision); Abbott, supra. An insured must be made whole for damages before an insurer is entitled to either subrogation or reimbursement, even if the insurer claims that it made a payment because it did not know of a third-party’s liability. Healthcost Controls, Inc. v. Gifford, 108 S.W.3d 227 (Tenn. 2003). This is true regardless of the language in the insurance policy. Id.; Blount, supra. It is also true regardless of whether the insurer is asserting a right of subrogation or a right of reimbursement. Simpson v. Doe, 2006 WL 1627292 (Tenn. App. 2006). Whether an insured has been made whole is a matter of fact, upon which the insured has the burden of proof. Gillford, supra. Furthermore, whether or not an insured has been made whole must be determined by considering all benefits and recoveries received as a result of an incident. Id. Basically, this case means that if the insured recovers $100,000 and there is a lien of $101,000, it is not presumed that the insured has not been made whole. Instead, the court would say that the plaintiff suffered a minimum of $101,000 in damages but received $201,000 in compensation, improving the chances of recovery in spite of the made whole argument.
It should be noted that where an insured settles directly with a tortfeasor, with full knowledge of an insurer’s subrogation rights, and that settlement, together with the benefits paid under the insurance policy, do not make the insured whole, no subrogation will be allowed because the insured was not made whole. Wimberly, supra; Farmer, supra. In the absence of a judgment or jury verdict establishing a specific dollar value of each element of an injury, a court can make an equitable determination as to whether an injured party has been made whole. Farmer, supra. Ordinarily, the injured party may make such determination by settlement. Failing that, it may be made by the jury or by the judge. Id. In extraordinary circumstances, equity may intervene and make such a determination. Id.
In the absence of a judgment or jury verdict establishing a specific dollar value of each element of an injury, a court can make an equitable determination as to whether an injured party has been made whole. Id. Ordinarily, the injured party may make such determination by settlement. Failing that, it may be made by the jury or by the judge. Id. In extraordinary circumstances, equity may intervene and make such a determination. Id.
The Made Whole Doctrine applies in both legal and conventional subrogation or reimbursement disputes between insurers and their insureds. Gifford, supra; York, supra.; Wimberly, supra. Thus, where the issue of whether the insured has been made whole is raised at the trial level the insurer’s subrogation claim is stayed until this issue is resolved.
Tennessee recognizes two methods for determining the subrogation rights of insurers in the context of statutory subrogation disputes. The primary objective of the court under both frameworks is to identify and give effect to the intent and purpose of the legislature. Blankenship v. Estate of Joshua, 5 S.W.3d 647, 651 (Tenn. 1999); Castleman v. Ross Eng’g, Inc., 958 S.W.2d 720, 724 (Tenn. 1997); Graves v. Cocke County, 24 S.W.3d 285, 289 (Tenn. 2000). Under one analysis, if the statute merely creates a subrogation right without embracing or abandoning the made whole rule the court is prone to conclude that the legislature “intended for the statute to reflect the equitable principle that subrogation is subject to the Made Whole Doctrine.” Blankenship, supra. This method is based on the idea “that subrogation is founded upon principles of equity and ‘not dependent upon statute or custom or … contract.”’ Wimberly, supra. The second method is used when the statute provides an insurer with a statutory lien, such as in workers’ compensation. Pursuant to this analysis, a statutory lien is not subject to the equitable requirement that the insured be made whole. Castleman, supra; Graves, supra.
In Abbott, the Tennessee Supreme Court determined that insurers may not bind the insured’s rights to settlements by using artful contract terms because “[c]ontract terms that require the consent of the insurer would allow the insurer to withhold consent from any settlement that does not make the insured whole and thereby compel the insured to seek a larger award at trial.” Abbott, supra.
Economic Loss Doctrine
Majority Rule In a contract for the sale of goods where the only damages alleged are damages to the product itself, the rights and obligations of the buyer and seller are governed exclusively by the contract. Trinity Indus., Inc. v. McKinnon Bridge Co., Inc., 77 S.W.3d 159 (Tenn. Ct. App. 2001). Tennessee accepts the ELD as a “crude proxy” for the dividing line between what is tort and what is not. The Tennessee Supreme Court decided a case involving a farmer who had used a product on tomato plants in attempt to protect plants from frost damage, resulting in economic loss in the form of lost profits due to damage to the tomatoes. Because the plaintiffs sued for “lost profits” instead of damage to the tomatoes, the Court held they could not proceed on tort theories – only warranty and contract. Ritter v. Custom Chemicides, Inc., 912 S.W.2d 128 (Tenn. 1995). In Ritter, the door appears to have been left open to pursue a tort action for damages to the product only when “the plaintiff has been exposed to an unreasonable risk of injury to his person or his property” as opposed to mere failure of the product to perform as expected. However, the Tennessee Supreme Court more recently announced that Tennessee does not adopt exceptions for unreasonably dangerous products or sudden, calamitous events. Lincoln Gen. Ins. Co. v. Detroit Diesel Corp., 293 S.W.3d 487 (Tenn. 2009).
The Tennessee Products Liability Act governs product liability in Tennessee. It says that a “product liability action” includes all actions brought for or on account of personal injury, death or property damage caused by or resulting from the manufacture, design, and marketing of any product. “Product liability action” includes, but is not limited to, all actions based upon the following theories: strict liability in tort; negligence; breach of warranty, express or implied; and breach of or failure to discharge a duty to warn or instruct. Tenn. Code Ann. § 29-28-102(6).
The ELD prevents recovery under tort law of (1) direct economic losses, i.e., injuries to the defective product itself, and of (2) consequential economic losses, i.e., losses stemming from the inability to use of the defective product as expected. Charter Oak seeks to distinguish these two types of non-recoverable economic loss from lost profits, which stem from tangential circumstances, i.e., from harm to “the plaintiff’s property other than the defective product itself.” When a defective product causes no personal injury and no property injury other than to the product itself, only purely economic loss has been sustained. However, Tennessee recognizes the “other property” exception to the ELD, noting that although tort victims cannot recover for physical damage caused to the defective product itself, they can recover for physical damage the product caused to “other property.” Charter Oak Fire Ins. Co. v. Broan Nutone, LLC, 2006 WL 8435269 (W.D. Tenn. 2006). However, it uses the “integrated package” approach in labeling the entire “product itself” defective if an integrated component part is defective. Tennessee Farmers Mut. Ins. Co. v. Ford Motor Co., 2002 WL 1332492 2002 WL 1332492 (Tenn. App. 2002). However, in Corporate Air Fleet of Tennessee, Inc. v. Gates Learjet, Inc., 589 F. Supp. 1076 (M.D. Tenn. 1984), the court allowed the plaintiff jet owner to sue in strict liability for faulty repairs to the jet after it had crashed, noting that although the only damage was to the defective product itself, recovery based on a theory of negligence.
In Charter Oak Fire Ins. Co., subrogee Charter Oak sued for damages to a building and lost profits, maintaining that losses resulting from the tortious failure of a product which are unrelated to the functional purpose of the product, such as lost profits due to business interruption caused by the inability to use one’s premises, can be recoverable under tort law. It noted that a bathroom fan is not an integrated component of the entire building. The court allowed recovery, noting that the fan was not a mechanical part of the building that was critical to its function. Instead, it was an addition, separate from the building, which independently constituted “other property.”
According to a U.S. Federal District Court, a tenant’s liability to the landlord’s insurer for negligently causing a fire depends on the intent and reasonable expectations of the parties to the lease as ascertained from the lease as a whole. Tate v. Trialco Scrap, Inc., 745 F.Supp. 458, 467 (M.D. Tenn. 1989) (subrogation was denied because the lease required the lessor to purchase insurance coverage on the building). In 2007, however, the Tennessee Court of Appeals decided that the case-by-case review of the lease terms to determine the intent and expectations of the parties is not the best approach, and indicated that absent an express agreement to the contrary, a tenant should be considered a co-insured under the landlord’s property casualty insurance policy, and the insurance carrier should therefore be precluded from asserting subrogation rights against the tenant. Dattel Family Limited Partnership v. Wintz, 250 S.W.3d 883 (Tenn. App. 2007).
Adverse Inference: The doctrine of spoliation of evidence permits a court to draw a negative inference against a party that has intentionally, and for an improper purpose, destroyed, mutilated, lost, altered, or concealed evidence. Foley v. St. Thomas Hosp., 906 S.W.2d 448, 453-54 (Tenn. Ct. App. 1995); Bronson v. Umphries, 138 S.W.3d 844, 854 -855 (Tenn. Ct. App. 2003). In Tatham v. Bridgestone Americas Holding, Inc., 473 S.W.3d 734 (Tenn. 2015), the Tennessee Supreme Court addressed whether intentional misconduct is a prerequisite to imposing sanctions for spoliation of evidence. The Supreme Court held that a finding of intentional misconduct is not a necessary prerequisite to imposing sanctions. Its presence, however, is a relevant factor in the totality of the circumstances to consider when determining whether to impose sanctions.
Willful Misconduct. Liability imposed on parents when child willfully or maliciously injures person or property. T.C.A. § 37-10-101. Cap on damages does not apply when parents know, or should know, of child’s propensity to commit injurious acts. T.C.A. § 37-10-103.
Minor’s Driving. Adult or guardian signing minor’s drivers’ license application will be jointly and severally liable for the motor vehicle negligence of the minor, and must also file proof of financial responsibility on behalf of minor. T.C.A. § 55-50-312.
The limit of liability is $10,000.00 unless there is a propensity to commit injurious acts. Child must be under 18-years-old.
Pure Several Liability. Generally several liability, except when defendants act in concert or for products liability cases. Banks v. Elks Club Pride of Tenn., 1102, 301 S.W.3d 214 (Tenn. 2010).
Where two (2) or more persons are jointly or severally liable in tort for the same injury to person or property, joint tortfeasors have a right of contribution, unless intentional. The right of contribution exists only in favor of a tortfeasor who has paid more than the proportionate share of the shared liability between two (2) or more tortfeasors for the same injury or wrongful death, in accordance with the procedure set out in § 29-11-104, and the tortfeasor’s total recovery is limited to the amount paid by the tortfeasor in excess of this proportionate share. Contribution action can be brought in original action or in a separate action. T.C.A. § 29-11-102; Velsicol Chem. Corp. v. Rowe, 543 S.W.2d 337, 340 (Tenn. 1976). A tortfeasor who enters into a settlement with a claimant is not entitled to recover contribution from another tortfeasor whose liability for the injury or wrongful death is not extinguished by the settlement nor in respect to any amount paid in a settlement which is in excess of what was reasonable. A liability insurer, who by payment has discharged in full or in part the liability of a tortfeasor and has thereby discharged in full its obligation as insurer, may be subrogated to the tortfeasor’s right of contribution to the extent of the amount it has paid in excess of the tortfeasor’s proportionate share of the shared liability between two (2) or more tortfeasors for the same injury or wrongful death, in accordance with the procedure set out in § 29-11-103. This provision does not limit or impair any right of subrogation or assignment arising from any other relationship and causes of action for contribution or indemnity are fully assignable and transferable. T.C.A. § 29-11-102(d)(e). The statute of limitations is one year after payment (judgment or settlement). Security Fire Protection v. City of Ripley, 608 S.W.2d 874 (Tenn. App. 1980).
Suspension of Drivers' Licenses
Administrative Suspension: If the driver fails to provide proof of financial responsibility in the form of proof of insurance, their license may be suspended. T.C.A. § 55-12-115. License may be reinstated if the driver provides proof of financial responsibility and pays the appropriate fee. T.C.A. § 55-50-115.
Judgment: If a judgment is not satisfied within 60 days, the Commissioner will suspend the license of the judgment debtor until the judgment is paid, discharged, or satisfied. T.C.A. § 55-50-501(8)(b). Suspension will last until the judgment has been completely paid and/or discharged. T.C.A. § 55-50-501(8)(b).
Contact Information: State of Tennessee, Department of Safety, Financial Responsibility Section, 1150 Foster Avenue, P.O. Box 945, Nashville, TN 37202, (866) 903-7357, http://www.tn.gov/main/topic/drivers-and-driving.
Prohibits Broad Indemnity. Applies to Construction Contracts or Agreements. Tenn. Code § 62-6-123.
Not only applicable to architects and engineers.
Diminution of Value
First Party: The Tennessee Court of Appeals refused to apply diminution in value in Tennessee auto policies finding the wording unambiguous and limiting the insured to repairs. Black v. State Farm Mut. Auto. Ins. Co., 101 S.W.3d 427 (Tenn. App. 2002); Senter v. Tennessee Farmers Mut. Ins. Co., 702 S.W.2d 175 (Tenn. App. 1985).
Third Party: The measure of third-party damages is either repair costs or the difference in market value immediately before and after the accident. It is not both. There is no definitive case law indicating that a diminution in value measured after the repair is a recognized element of allowable damages in Tennessee. GEICO v. Bloodworth, 2007 WL 1966022 (Tenn. App. 2007). Although Bloodworth did not specifically pronounce that post-repair diminution in value claims are viable in Tennessee (it was a class action suit and the issue had to do with certification as such), it did say that in in order to prove residual diminution in value, the owner has to prove (1) the vehicle’s pre-accident condition and value (taking into consideration, e.g., other damage to the vehicle); (2) the vehicle’s post-accident value; and (3) proof that the repair did not restore the vehicle to substantially the same value it had before the accident. Government Employees Ins. Co. v. Bloodworth, 2007 WL 1966022 (Tenn. App. 2007).
One-Party Consent: It is not unlawful for an individual who is a party to or has consent from a party of an in-person or electronic communication to record and or disclose the content of said communication unless the person is doing so for the purpose of committing a tortious or criminal act. An individual may also disclose the content of any electronic communication that is readily accessible to the general public. Tenn. Code Ann. § 39-13-601; Tenn. Code Ann. § 39-13-604; Tenn. Code Ann. § 40-6-303.
Under the Tennessee statute, a court can award restitution to a “victim” of criminal defendant’s conduct. T.C.A. § 40‐35‐304 However, appropriate Tennessee case law has determined that an insurer will not qualify as a victim for purposes of restitution recovery. State v. Alford, 970 S.W.2d 944 (Tenn. 1998).
Health and Disability Insurance
Statute of Limitations: 1 Year. T.C.A. § 28-3-104.
Subrogation of Medical and Disability Benefits are allowed. York v. Sevier County Ambulance Auth., 8 S.W.3d 616 (Tenn. 1999). Made Whole and Common Fund apply. Health Cost Controls, Inc. v. Gifford, 239 S.W.3d 728, 731 (Tenn. 2007); Kline v. Eyrich, 69 S.W.3d 197 (Tenn. 2002).
Funeral Procession Traffic Laws
Tennessee law gives the procession the right-of-way if the lead vehicle has a flashing amber light or is led by a “properly identified” escort. The lead vehicle must comply with traffic lights and signs, and the other vehicles may follow without stopping if their headlights are on. Also, the procession must yield to emergency vehicles or when directed by a police officer. The procession must drive on the right side of the roadway and be as closely spaced as safely possible. It must proceed at no less than 45 miles per hour on a limited access highway and no less than five miles per hour below the posted limit on other roads. Vehicles following the procession on a two-lane road are prohibited from attempting to pass it. Other drivers are prohibited from driving between vehicles in the procession, unless directed by a police officer. Tenn. Code Ann. § 55-8-183.
Statute of Limitations: 1 Year. T.C.A. § 50-6-112.
Can Carrier Sue Third Party Directly: Yes, after 1 year. A carrier has an additional 6 months to file for a total of 18 months.
Recovery from UM/UIM Benefits: No.
Subrogation Against Medical Malpractice: Yes.
Subrogation Against Legal Malpractice: Undecided.
Recovery Allocation/Equitable Limitations: No Special Formula. First Money.
Employer Contribution/Negligence: No, a defendant can introduce evidence to show employer cause in fact.
Attorney’s Fees/Costs: Pro-rata if no active participation by carrier.
Future Credit: Yes, but no credit against unknown or incalculable future med benefits, unless carrier proves likelihood and the amount of future medicals.
Auto No-Fault: No.
Dog Bite Laws
Dog owner is liable for all damages, regardless of prior knowledge of dog’s vicious propensities. Trespass is a defense. Tenn. Code Ann. § 44-8-413.
Employee Leasing Laws
Tennessee has a specific statute dealing with employee leasing. Both the employee leasing company and the client company are entitled to the exclusive remedy protection based on a worker’s compensation policy secured by either entity. T.C.A. § 62-43-113.
Condominium Waiver of Subrogation Laws
Associations shall maintain property insurance and general liability insurance as to the common elements. Additionally, the insurer must waive rights to subrogation against any unit owner or member of their household unless it can be shown that the individual intended to cause the loss. T.C.A. § 66-27-413.
Automobile Total Loss Thresholds
Percentage of Value: 75%
Damage to vehicle equal to or more than 75% of retail market value as determined by current published retail costs. T.C.A. § 55-3-211(9)(A).
Sudden Medical Emergencies While Driving
Sudden Loss of Consciousness Defense. The operator of a vehicle has a defense to a negligence action when the sudden loss of consciousness was not reasonably foreseeable to a prudent person. Beasley v. Amburgy, 70 S.W.3d 74 (Tenn. App. 2001); Schwandner v. Higdon, 2011 WL 1630982 (Tenn. App. 2011).
Defendant’s blackout was not reasonably foreseeable after taking Tylenol and two or three shots of Novocain for a tooth infection. Beasley v. Amburgy, 70 S.W.3d 74 (Tenn. App. 2001).
State Sovereign Immunity And Tort Liability
Tort Claims Act: None applicable to the State.
Tennessee Claims Commission created to hear and adjudicate claims against State. T.C.A. §§ 9-8-301 to 307 (1984). Established State’s liability in tort based on traditional concepts of duty and reasonably prudent persons’ standard of care. Act restricts State to the defense of absolute immunity only as an exception to Act’s broad abrogation of sovereign immunity. Lucas v. State, 141 S.W.3d 121 (Tenn. App. 2004).
Notice Deadlines: Written notice of claim must be filed (on Claim For Damages Form) with Division of Claims Administration (DCA) within applicable statute of limitations. DCA has 90 days to approve or deny. Then that jurisdiction transfers to Tennessee Claims Commission. T.C.A. § 9-8-402.
Claims/Actions Allowed: Claims Commission has exclusive jurisdiction to hear claims against State, it is limited to those claims listed in § 9-8-307(a). Common law negligence rules apply. Otherwise State is immune.
(1) operation of motor vehicle;
(3) dangerous conditions on real property (foreseeable and notice);
(4) legal/medical malpractice;
(5) negligent care of persons or property;
(6) negligent construction of sidewalks/buildings;
(7) design and construction of roads;
(8) highway conditions;
(9) negligent operation of Machinery; and
(10) many others.
Comments/Exceptions: Purchase of liability insurance does not waive sovereign immunity. 1984 Tenn. Pub. Acts 972; Op. Tenn. Atty. Gen. 85-087 (1985). Tennessee Governmental Tort Liability Act (§ 9-8-307) not applicable to State. Lucas v. State, 141 S.W.3d 121 (Tenn. App. 2004). If State is liable, employee is immune, unless outside scope of employment, intentional, or done for personal gain. T.C.A. § 29-20-310(b).
Damage Caps: $300,000 for bodily injury or death of any one person in any one accident, occurrence or act. $700,000 for bodily injury or death of all persons in any one accident. T.C.A. § 9-8-307(3)(e). No punitive damages. Bowden Bldg. Corp. v. Tennessee Real Estate Comm’n, 15 S.W.3d 434, 446 (Tenn. App. 1999). If claim exceeds $25,000, Tennessee Claims Administration turns it over to State Attorney General to investigate.
Recovery of Sales Tax After Vehicle Total Loss
First-Party Claims: Sales tax is payable on the value of the damaged auto at the time the loss is owed on all losses. TN Bulletin 9-1-89 (#3).
Third-Party Claims: Third-party insurers must follow the same rules as first-party insurers. TN Bulletin 9-1-89 (#3).
Damage to Property Without Market Value
Service Value: “…the only value … placed on such equipment is the reasonable cost of replacing it with like equipment which will perform the same function, less the salvage value of the replaced equipment, and does not involve any depreciation.” Middle Tennessee Elec. Membership Corp. v. Barrett, 410 S.W.2d 914 (Tenn. Ct. App. 1966).
Intrinsic Value: “One criterion of damages is the actual value to who owns it, and this is the rule when the property is chiefly or exclusively valuable to him; such articles, for instance, as family pictures, plate, and heirlooms.” Bateman v. Ryder, 64 S.W. 48 (Tenn. 1901).
Sentimental Value: “…the primary measure of damage for loss of property is the cost of replacement on the open market if the article is obtainable in the open market, but, if not, the useful value to the owner, as distinguished from “sentimental value.” Merritt v. Nationwide Warehouse Co., Ltd., 605 S.W.2d 250 (Tenn. Ct. App. 1980).
Municipal/County/Local Governmental Immunity and Tort Liability
Tennessee Governmental Tort Liability Act: Tenn. Code § 29-20-201, et seq. (1973). General immunity granted to counties, municipalities, and other local governmental agencies, unless waived.
Notice Deadlines: None. Action must be brought within twelve (12) months. Tenn. Code § 29-20-305.
Claims/Actions Allowed: Exceptions to immunity: (1) Negligent operation of motor vehicles; (2) Negligent construction or maintenance of streets, alleys or sidewalks; (3) Negligent construction or maintenance of public improvements; (4) Discretionary functions; and (5) Failure to make or negligent inspection. Tenn. Code §§ 29-20-202 to 29-20-205.
Comments/Exceptions: Local government employees may be individually liable. If government liable, employee is immune, unless intentional. Tenn. Code § 29-20-310(b)(c). City responsible for keeping streets and sidewalks in safe repair and is liable for injuries caused by negligence. Shepherd v. City of Chattanooga, 76 S.W.2d 322 (Tenn. 1934).
Damage Caps: Damages may not exceed local government’s insurance coverage. Tenn. Code § 29-20-311.
Governmental entity must purchase insurance with minimum limits of:
Personal Injury: $300,000 Per Person. $600,000 Per Occurrence.
Property Damage: $100,000 per act or occurrence.
Tenn. Code § 29-20-403.
Laws Regarding Using Cell Phones/Headphones/Texting While Driving
Cell Phone/Texting: Effective July 1, 2019, drivers may not do the following while driving: Hold a cell phone or mobile device with any part of your body while driving; Send, write or read any messages; Reach for a device in a way that requires the driver to no longer be in a seated position or properly restrained by a seat belt; Watch a movie or video; or Record or broadcast video. T.C.A. § 55-8-199
Other Prohibitions: No Applicable Laws.
Comments: No driver possessing a learner’s permit or intermediate license shall operate a motor vehicle in motion while using a hand-held cell phone, cell car phone, or other mobile phone, unless there is a bona fide emergency. T.C.A. § 55-50-311
Workers’ Compensation Claims by Undocumented Employees
Statute: The statute expressly includes illegal workers. Tenn. Code Ann. § 50-6-102(10)(A).
Case Law: Undecided
Comments/Explanation/Other: Although Dickey did not deal with an illegal alien, it did deal with the issue of “employment which has been obtained by the making of false statements…is still employment…illegality will not …destroy compensation coverage.” Fed. Copper & Aluminum Co. v. Dickey, 493 S.W.2d 463 (Tenn. 1973).
Admissibility of Expert Testimony
Admissibility Standards: Daubert
Case/Statutory Law: Tenn. R. Evid. 702
Imputing Contributory Negligence of Driver to Vehicle Owner
Imputed Contributory Negligence Law: Contributory negligence of driver should not be imputed to an owner/passenger, absent a showing of a master/servant relationship or a joint enterprise. Cole v. Woods, 548 S.W.2d 640 (Tenn. 1977).
Vicarious Liability/Family Purpose Doctrine: No Vicarious Liability Statute.
Tennessee recognizes the Family Purpose Doctrine. In order for the Family Purpose Doctrine to apply in Tennessee (1) the head of the household must maintain the vehicle for the purpose of providing pleasure or comfort to his or her family and (2) the driver must have been using the motor vehicle at time of the injury in furtherance of that purpose with permission, either express or implied, of owner. Droussiotis v. Damron, 958 S.W.2d 127 (Tenn. Ct. App. 1997).
Sponsor Liability for Minor’s Driving: T.C.A. § 55-50-312: Adult or guardian signing minor’s drivers’ license application will be jointly and severally liable for the motor vehicle negligence of the minor, and must also file proof of financial responsibility on behalf of minor.
Product Liability Law
Statute of Limitations/Repose: 1 year for personal injury and wrongful death. T.C.A. § 28-3-104. Property damage is 3 years. T.C.A. § 28-3-105. Breach of Warranty is 4 years. T.C.A. § 47-2-725(1). Discovery Rule Applies. Statute of Repose is 10 years. T.C.A.§ 29-28-103.
Liability Standards: Negligence, Strict Liability, Warranty.
Fault Allocations: Modified Comparative. McIntyre v. Balentine, 833 S.W.2d 52 (Tenn. 1992).
Non-Economic Caps/Limits On Actual Damages: Yes.
Punitive Y/N and Limits: Yes (Limits).
Heeding Presumption?: No. Payne v. Novartis Pharmaceutical Corp., 767 F.3d 526 (6th Cir. 2014).
Innocent Seller Statute: Yes, T.C.A. § 29-28-106.
Joint and Several Liability: Limited.
Available Defenses: Misuse; Alteration; Learned Intermediary; State of the Art; Compliance With Government Standards; Seatbelts; Alcohol/Drugs.
Restatement 2nd or 3rd?: Restatement 2nd
Owner Liability For Stolen Vehicles
Key In The Ignition Statutes: T.C.A. § 55-8-162.
Common Law Rule: A vehicle owner can be held liable for injuries to a third party caused by a thief who stole the car if the owner left the keys in the car. McClenahan v. Cooley, 806 S.W.2d 767 (Tenn. 1991); Newman v. Jarrell, 354 S.W.3d 309 (Tenn. Ct. App. 2010).
An insurer cannot subrogate against a wrongdoer if the wrongdoer is an insured under the same policy. Dattel Family, Ltd. Partnership v. Wintz, 250 S.W.3d 883 (Tenn. App. 2007) If a policy is taken out by the mortgagor for the mutual benefit of the mortgagor and mortgagee, mortgagor and mortgagee are co-insured parties and, therefore, subrogation is forbidden against either party. Miller v. Russell, 674 S.W.2d 290 (Tenn. Ct. App. 1983). The ASR does not prevent an insurer from bringing a subrogation claim against its own insured if the underlying policy does not cover the risk at issues. Phoenix Co. v Estate of Garnier, 212 S.W.2d 270 (Tenn. Ct. App. 2006). In Certain Underwriters at Lloyds, London v. Sunbelt Rentals, Inc., 790 Appx. 723 (6th Cir. 2019), the 6th Circuit ruled that in a builder’s risk policy, where the policy was ambiguous and could be understood in two ways as to whether Lloyd’s could sue the tortfeasor (additional insured under the policy), the question must be resolved in favor of the insured. Therefore, the court held that pursuing Sunbelt Rentals would violate the anti-subrogation rule.
Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Authority: Tenn. Comp. R. & Regs. 0780-01-59-.01 to .06.
Summary: All non-OEM parts specified for use by the insurer must be marked with either the logo or name of the part manufacturer and the logo or name should remain visible after installation whenever possible. The written estimate must identify which parts are non-OEM parts and include a statement informing the insured that the part’s manufacturer, not the auto manufacturer, warrants the part. Lastly, non-OEM parts may not be used on vehicles from the current model year or the previous model year unless express permission is given from the insured to the insurer.