Tennessee Court Reaffirms Individual’s Duty to Take Care for His Own Safety

The Tennessee Court of Appeals recently ruled on a curious case of slip-and-fall.  In the case of Petros Goumas v. Jimmy Mayse, et al., the Tennessee Court of Appeals in Knoxville found that the Trial Court correctly granted summary judgments to the defendants.  The plaintiff was the fiancé of the daughter of the defendants, Jimmy Mayse and wife, Barri Mayse.  Goumas was staying with his future in-laws when he slipped on a rock and broke his arm.  It was daylight and dry at the time of the accident.  Goumas had worked on the property before and knew where the rock was located.

Both the trial court and the court of appeals made quick work of dismissing this case on summary judgment.  The court of appeals reiterated that liability in premise liability cases stem from superior knowledge of the condition of the premise.  Under the circumstances of the case, the court found that plaintiff had as much knowledge of the condition of the premise as the owners.  The court also restated two, long-standing principals in Tennessee.  First, an individual has the duty to take care for his or her own safety.  And second, negligence is not to be presumed by the mere happening of an injury or an accident.

Chief Judge Susano’s opinion does not necessarily present a novel legal precedent, but the facts of the case and the affirmation of some long-standing principals favorable to owners of property warrant some comment.  Also, I can’t help but wonder whether Goumas wed the daughter of Jimmy Mayse.  Sources confirm Goumas was forced to sue his future in-laws because the homeowners’ insurer denied coverage for the incident.  So maybe the facts as presented do not tell the whole story.  Rumor is Goumas and fiancé moved away from Tennessee to Elk River, Minnesota.

Riad Decision Sheds Light on Tennessee Statutory Bad-Faith Claims

I recently wrote about a recent Court of Appeals decision on an insurance contract claim concerning several issues that come up in first-party bad faith claims against insurers, including the admissibility of evidence that would ordinarily amount to hearsay and excluded from introduction at trial.  See John Riad v. Erie Insurance Exchange, E2013-00288-COA-R3CV, (Tenn. Ct. App. Oct. 31, 2013).  The Court also examined whether the trial court erred in allowing the jury to consider the plaintiff’s claim for bad faith pursuant to T.C.A. §56-7-105 for failure to give the required 60 day notice.

In order to maintain a statutory bad faith claim against an insurer on a first party claim, T.C.A. §56-7-105 and case law require a formal demand for payment to be made, and that the insured must wait 60 days after making the demand before filing suit.  In Riad, several e-mails were sent from the insurance agent to Erie concerning the plaintiff’s desire to sue both the insurance agency and Erie, including for bad faith, if the claim was not paid.  The Riad court admitted precedence on this issue was conflicting as some cases have held “that a simple form of demand for payment is required, while others provide that an explicit threat of litigation is required.”  Id.  See also Heil v. Evanston Co., 690 F.3d 722, (6th Cir. 2012).  However, the Court of Appeals recognized the plaintiff provided some form of notice to the insurance agent he intended to file a civil suit that would likely raise bad faith claims, and accordingly, the Court of Appeals found that applying either rationale, the plaintiff provided a formal demand as required by statute.  Id.

After the Court found plaintiff could seek the bad-faith penalty, Erie asserted that the Plaintiff’s recovery was limited to the insured loss under the policy’s coverage and the statutory 25% bad-faith penalty.  The Riad Court disagreed and found the bad faith statute could be used as an additional form of recovery for an insured and was not a limitation of recovery. Id.  The Riad Court explained the purpose of assessing damages in breach of contract suit is to place the plaintiff in the same position he would be if the contract had been performed.  Id.  Here, because of Erie’s alleged non-performance of the policy, the insured lost rental income but his policy contained no coverage for lost rents.  Id.  The Court discussed the bad-faith statute and allowed recovery of the loss rents, though it may be argued such damages would be more likely constitute consequential damages as opposed to bad-faith damages.  Id.  An application for appeal to the Tennessee Supreme Court has been filed.