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Paul Vincent Giannini v. Amanda Proffitt

Citation: Not availableDocket: W2011-00342-COA-R3-CV

Court: Court of Appeals of Tennessee; April 27, 2012; Tennessee; State Appellate Court

Original Court Document: View Document

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The case involves Paul Vincent Giannini, who was injured while volunteering as a reserve police officer for the City of Memphis when struck by a vehicle driven by Amanda Proffitt. Giannini sustained serious injuries, leading to over $300,000 in medical expenses, which were covered by the City’s on-the-job injury (OJI) program, as the City is not subject to the Tennessee Workers’ Compensation Act. Giannini also held an uninsured motorist policy with SafeCo Insurance Company, which had a limit of $100,000. After Giannini filed a claim with SafeCo, the company denied coverage, citing policy language that reduces liability by amounts paid under laws similar to workers’ compensation, asserting that the OJI benefits were comparable. Giannini filed a lawsuit, leading to cross-motions for summary judgment. The trial court ruled in favor of SafeCo, affirming that the OJI benefits were similar to workers’ compensation, and this decision was upheld on appeal. The appellate court affirmed the trial court's judgment, concluding that the benefits received under the OJI program justified the denial of coverage under the SafeCo policy.

SafeCo invoked a limitation of liability from its policy regarding 'Uninsured Motorist Coverage,' which specifies that liability limits are reduced by any payments made under workers' compensation laws or similar programs. SafeCo argued that Giannini received such payments through the City's OJI program, which exceeded the policy limit, thus claiming no liability for further payments. Giannini initiated a lawsuit against Proffitt, with SafeCo not named as a defendant initially. SafeCo denied liability, stating that after accounting for the payments made under the City’s program, the policy limits were exhausted. 

Progressive settled with Giannini for $25,000, leading Giannini to dismiss claims against both Proffitt and Progressive, leaving only SafeCo as a defendant. The trial court severed the coverage issue from Giannini’s personal injury claims, and Giannini subsequently moved for summary judgment against SafeCo, asserting entitlement to the difference between the policy's face value of $100,000 and the amount received from Progressive. Giannini contended that the OJI benefits should not reduce SafeCo's liability. 

SafeCo countered with a cross-motion for summary judgment, citing the same policy provision. Both parties agreed there were no material facts in dispute, leading to a focus on legal interpretations of the insurance policy. On December 15, 2010, the trial court granted summary judgment to SafeCo, determining that the OJI policy is analogous to workers' compensation law, thereby reducing SafeCo's liability to zero after deducting the medical benefits paid by the City. Giannini appealed, arguing that the trial court erred in its judgment and interpretation of the policy, with the appellate review focusing on legal questions without a presumption of correctness.

In Travelers Indem. Co. of Am. v. Moore, the Tennessee Supreme Court addressed the applicability of a liability reduction clause in a SafeCo insurance policy concerning Giannini, who received $324,000 from the City's OJI program. The trial court determined that SafeCo's liability would be reduced by this amount, a decision not contested on appeal by Giannini. The court highlighted that issues must be included in the Statement of Issues Presented for Review in appellate briefs as per Rule 27(a)(4), noting that any unlisted issue is not before the court.

The primary issue on appeal concerned the interpretation of SafeCo's policy limit provision, which stipulates that liability is reduced by all sums paid for bodily injury under workers' compensation laws. Giannini argued that this reduction undermines the purpose of uninsured motorist insurance, which is to fully compensate innocent victims. However, the court referenced Tennessee statutes, indicating that the legislative intent is to limit recovery under uninsured motorist provisions to the statutory minimum. Specifically, Tennessee Code Annotated 56-7-1205 allows coverage forms that prevent duplication of benefits.

The distinction between 'limited coverage'—as applicable in Tennessee—and 'broad coverage' in other states was emphasized. In limited coverage jurisdictions, recovery is capped at the statutory minimum regardless of actual damages, and any sums received from other sources can reduce the recovery under the uninsured motorist policy. The court confirmed that Tennessee follows this limited coverage approach, consistent with prior rulings, including Terry v. Aetna Casualty.

Tennessee's statute allows for limited recovery under uninsured motorist provisions up to the statutory minimum, as established in Poper v. Rollins, with legislative intent clarified in Terry. The statute permits limitations of liability, which is central to the appeal at hand. Giannini argues that the City's OJI program should not be classified as "similar law" to workers’ compensation, asserting that it only covers medical expenses while workers’ compensation offers broader benefits. SafeCo maintains that the trial court correctly viewed the OJI program as similar to workers’ compensation, despite its limited scope regarding lost wages. Tennessee appellate opinions have often likened the OJI program to workers’ compensation, though specific cases have nuanced interpretations regarding the nature of benefits provided. Notably, the courts have drawn on workers’ compensation precedents when interpreting OJI benefits. However, the current appeal raises a novel question regarding the classification of the OJI program under the limitation of liability provision in the SafeCo policy. The Arkansas Supreme Court's ruling in Edmundson v. Comm. Union Ins. Co. of New York serves as an instructive precedent related to this issue.

The plaintiff received benefits from a state employee injury program established under an Arkansas statute, which, while separate from workers' compensation, conferred jurisdiction to the Arkansas Workers' Compensation Commission over personal injury claims by state employees during employment. The Arkansas Supreme Court equated the statutory program with workers' compensation laws for state employees. Other jurisdictions have analyzed benefits in relation to liability limitations in insurance policies, assessing the nature and purpose of benefits to determine their similarity to workers' compensation. Case law indicates that benefits, such as retirement and privately purchased disability insurance, were found not to be comparable to workers' compensation. Most states do not allow public employers to opt out of workers' compensation, with only Tennessee and Delaware permitting such options as of 1999. The City’s Occupational Injury (OJI) program is compared to workers’ compensation, with its purpose being to cover medical expenses and lost-time compensation for job-related injuries, paralleling the goal of Tennessee’s workers' compensation law, which aims to compensate for loss of earning capacity due to workplace injuries.

To receive benefits from the City’s OJI program, an employee does not need to demonstrate negligence by the City or its employees. Tennessee's workers’ compensation statutes establish a no-fault system that offers compensation for work-related injuries, requiring only that the injury occurred in the course of employment. Both the OJI program and workers’ compensation necessitate prompt notice of injury but do not require employee contributions for coverage. Giannini contends that the OJI program is distinct from workers’ compensation since he only received payments for medical expenses. However, he was acting as a reserve police officer in an unpaid capacity at the time of his injury, and the City’s manual specifies that lost-time compensation is available for full-time employees. The court concludes that Giannini's unpaid status does not negate the similarity between the OJI program and workers’ compensation. Thus, the trial court correctly determined that the OJI program qualifies as a similar law, and the payments made for Giannini’s medical expenses will reduce SafeCo's liability. The trial court's decision is affirmed, with costs on appeal assigned to Giannini and his surety.