James Fortune filed a lawsuit against Unum Life Insurance Company and its parent corporation, alleging wrongful denial of long-term disability benefits after becoming disabled in June 1999. Unum had initially paid benefits but terminated them on October 31, 2001, citing ineligibility. Fortune's claim was later subject to a Regulatory Settlement Agreement (RSA) with state regulators, which established a reassessment process for certain claims but clarified that it would not alter existing contractual terms. In January 2005, Fortune was notified that his claim could be reassessed under the RSA and subsequently participated in the process. He signed a waiver indicating that while the statute of limitations would be tolled during reassessment, it would not revive the limitations concerning the prior claim denial. Ultimately, on April 11, 2006, Unum's Claim Reassessment Unit upheld the original denial of benefits, concluding that Fortune did not meet the policy's definition of disability post-termination. The trial court granted summary judgment in favor of the defendants, affirming that statutory and contractual limitations barred Fortune's causes of action.
Fortune initiated legal action against Unum Life in October 2006, alleging multiple claims including violation of the Tennessee Consumer Protection Act (TCPA) for unfair practices, bad faith denial of his insurance claim, fraud, and breach of contract concerning a life insurance policy. Fortune claimed significant losses due to Unum’s actions, including loss of benefits and emotional distress, and sought compensatory and punitive damages, as well as treble damages and attorney's fees under the TCPA.
Unum responded with a motion for summary judgment, arguing that all claims were time-barred by the three-year statutory or contractual limitation period, noting that Fortune filed his complaint nearly five years after the claims accrued. The trial court granted summary judgment in favor of Unum, stating there were no genuine issues of material fact and that all claims were barred by applicable limitations. Following this, Fortune's bankruptcy trustee filed a motion to alter or vacate the judgment, which was denied, leading to a timely appeal.
The appellate court identified three key issues: 1) Whether Unum established undisputed facts that the three-year limitations period barred Fortune’s breach of contract claim, particularly regarding notice of the limitation; 2) Whether reassessment of Fortune’s claim constituted a revival or renewal of his policy, affecting the timing of the breach of contract claim; and 3) Whether Fortune's affidavit stating he learned of his statutory and tort claims within one year of filing was sufficient to counter Unum's argument regarding the statute of limitations.
The court emphasized that it conducts a de novo review of summary judgment decisions, favorably considering the nonmoving party's evidence, according to Tennessee Rules of Civil Procedure, Rule 56. The moving party must demonstrate that there are no genuine material facts in dispute to be entitled to summary judgment.
To shift the burden of production in a summary judgment motion, the moving party can either negate an essential element of the nonmoving party’s claim or demonstrate that the nonmoving party cannot prove an essential element at trial. If the moving party bears the burden of proof at trial, the analysis differs. For instance, a plaintiff seeking partial summary judgment must present undisputed facts that establish an essential element of their claim. A defendant invoking an affirmative defense similarly shifts the burden by presenting undisputed facts supporting that defense. Simply claiming that the nonmoving party lacks evidence is insufficient; the moving party must produce evidence or reference prior evidence that negates an essential claim or proves the nonmoving party's inability to establish a claim at trial. Merely casting doubt on the nonmoving party’s claim does not meet the moving party's burden; specific evidence disproving an essential factual claim is required.
If the moving party fails to meet its initial burden, the nonmoving party is not obligated to produce supporting evidence. Once the moving party establishes its burden, the nonmoving party must demonstrate facts that support its claim or defense or negate the moving party's claims. The Tennessee Supreme Court identifies four methods for the nonmoving party to defeat a summary judgment motion: 1) highlighting overlooked evidence establishing factual disputes, 2) rehabilitating evidence attacked by the moving party, 3) producing additional evidence showing genuine issues for trial, or 4) submitting an affidavit requesting further discovery. Courts must accept the nonmoving party's evidence as true and resolve doubts regarding material facts in their favor. A disputed fact is considered material if it is necessary to resolve the substantive claim or defense and presents a genuine issue if a reasonable jury could favor one side. The appeal involves determining whether Unum has established the relevant contractual or statutory limitations periods as defenses against Fortune’s claims, while the Trustee argues against the appropriateness of summary judgment.
The Trustee argues against Unum's entitlement to summary judgment on the breach of contract claim, asserting that Unum has not established undisputed facts indicating that the three-year limitations period has not been tolled. The Trustee posits that the reassessment of Fortune’s claim may have revived it, renewed the policy, or created a new policy, meaning the breach of contract claim did not arise until the Claim Reassessment Unit completed its review in April 2006. Additionally, the Trustee claims that Unum is not entitled to summary judgment on Fortune’s statutory and tort claims due to a factual dispute regarding when Fortune became aware of Unum’s alleged fraudulent conduct.
The Trustee acknowledges that the group long-term disability policy required any legal action to commence "until 60 days after proof of claim has been given" or "more than 3 years after the time proof of claim is required," and does not dispute the validity of the agreed limitations period. However, the Trustee contends that Unum has not demonstrated that Fortune or his attorney received notice of the policy at least three years before the complaint was filed. The Trustee cites Jackson v. Potomac Insurance Co. to support the argument that the limitations period in Tennessee is tolled until an insured is informed of a policy’s provisions, referencing a case where the insured was unable to file a claim due to not having received a copy of the policy. Ultimately, the court ruled that the limitations period was not barred due to the lack of information provided to the insured.
The Court acknowledged that the insured did not prove the elements of estoppel but held that if a statute's general limitation is shortened by contract, the insured should still have the full contract period once informed of the policy's provisions. The Trustee argued against summary judgment on his breach of contract claim, asserting that Unum failed to provide undisputed facts showing Fortune filed suit more than three years after receiving the policy. Unum contended that the Court should follow the Sixth Circuit's ruling in Jones v. Allstate Ins. Co., which rejected the principles established in Jackson. In Jones, Allstate denied a claim based on false information, and although the Joneses filed suit after receiving the policy, they did so outside the one-year limitation specified in the policy. The Sixth Circuit upheld the district court's decision, noting that Tennessee law allows for contractual limitations that are shorter than the statutory six-year period for contract actions. Citing previous Tennessee cases, the Court emphasized that the time to file suit begins when the insurance company denies liability. The Joneses argued for tolling the limitation period until they received the policy, but the Court found no compelling Tennessee case law supporting this claim and deemed the Jackson decision unpersuasive and non-binding.
The Tennessee Supreme Court is likely to rule that the lawsuit is barred by the one-year limitation in the insurance policy. This is consistent with rulings in other jurisdictions, such as Schoonover v. American Family Ins. Co., where the court held that the insured is responsible for knowing the policy's contents even without receipt of the policy. Similarly, Young v. Seven Bar Flying Service, Inc. determined that notice of coverage suffices to apply the one-year limit, regardless of the insurer's failure to provide the policy. Additionally, in Alfieri v. Monoghan Real Estate, Inc., the court ruled that failure to file within the contractual time frame, absent misconduct by the insurer, results in a barred claim.
In the current case, although the Joneses claim they did not receive the policy, they acknowledged receiving documents indicating coverage, including a denial of claim letter, which served as notice to obtain the policy. Their attorney received the policy in time to file within the one-year limit but failed to do so. The Joneses have not alleged that Allstate prevented their awareness of the policy's time limitation or engaged in misconduct to estop its application.
Consequently, their failure to comply with the policy's provisions bars their claim. Additionally, Fortune’s acceptance of policy benefits for two years prior to the denial indicates acknowledgment of the policy's obligations. The undisputed facts support summary judgment in favor of Unum regarding the breach of contract claim if Fortune's cause of action is considered to have accrued in October 2001. The Trustee's argument that the reassessment process revived, renewed, or constituted a new insurance policy, delaying the accrual of the breach of contract action until April 2006, does not negate the earlier findings.
The RSA (Reassessment Agreement) and related documents indicate that the RSA is an optional process that does not grant the claimant new rights beyond seeking reassessment. It clarifies that the reassessment process is voluntary, does not alter existing contractual terms of any policy, and does not revive claims or initiate new ones. Claims that were previously denied retain the right to pursue litigation, but the reassessment does not extend the statute of limitations for claims that have already expired. In this case, all relevant limitations periods had lapsed by October 2004, prior to the RSA's implementation and the claimant's participation in the reassessment. Consequently, the RSA cannot revive expired claims or create new claims for those who did not assert their rights in time.
The court affirmed that Fortune's breach of contract claim accrued no later than October 2001, when his benefits were terminated, and he filed suit beyond the three-year limitations period. The court also addressed the potential for summary judgment on Fortune's statutory and tort claims. Under the Tennessee Consumer Protection Act (TCPA), claims for damages must be filed within one year of discovering the unlawful act, while claims regarding fraud and misrepresentation must be brought within three years.
Fortune filed his complaint over three years after his claim for continued benefits was initially terminated. The Trustee argues there is a factual dispute regarding when Fortune discovered his claims, citing an affidavit that states he became aware of the improper denial of his long-term disability benefits within a year of filing the suit. The Trustee contends that the discovery rule tolls the limitations periods, suggesting that Fortune's claims did not accrue in October 2001. However, the court disagrees, stating that while Fortune's affidavit raises a factual dispute about his subjective awareness of the alleged wrongful conduct, it is irrelevant because he had enough information to alert a reasonable person to the injury when Unum denied his claim. The court referenced a similar case, Schmank v. Sonic Automotive, where a consumer's claims were dismissed due to the statute of limitations despite filing within a year of discovering her injury. The court reiterated that a claim accrues upon discovery of the unlawful act, and while the determination of reasonable diligence is typically a jury question, if undisputed facts show that a reasonable person would have known of the injury, dismissal is warranted.
The court determined that the consumer in Schmank did not timely file her action for a violation of the TCPA because she had sufficient knowledge of her injury linked to the defendants' conduct at the time she purchased her vehicles. Consequently, the court dismissed her claim for fraudulent concealment. Unum contended that Fortune's claim for violation of the TCPA began accruing when his long-term disability benefits were denied in October 2001, asserting that Fortune was aware of the necessary facts at that time to recognize his injury. Unum argued that it was irrelevant whether Fortune understood the specific legal claim or the nature of the alleged unlawful conduct under the TCPA. The court agreed, stating that Fortune should have discovered his injuries with reasonable diligence as of October 2001, which was five years prior to his lawsuit. The court also upheld the grant of summary judgment on Fortune’s other tort claims, referencing the “discovery rule” that triggers the statute of limitations upon the occurrence or discovery of an injury. The court affirmed the trial court's decision, finding the other issues raised by the appellant without merit. The Trustee argued against summary judgment based on Fortune's potential unsoundness of mind at the time of the claim denial, referencing Tennessee Code Annotated section 28-1-106, which allows for tolling of limitations for individuals of unsound mind. However, this argument was not raised at the trial court level and therefore was not considered on appeal.
The principle that parties cannot raise issues on appeal not previously addressed in the trial court is affirmed, with the burden on the invoking party to prove that the issue was not raised. The Trustee's claims that Unum should be equitably estopped from asserting limitations defenses and that the affidavit of Sharon Haas should be disregarded lack supporting legal citation and adequate explanation of how equitable estoppel applies. Consequently, these arguments are deemed waived. Additionally, arguments regarding fraudulent concealment and the admissibility of Mona Bombassi’s affidavit are similarly insufficient, as they fail to connect legal authority to the undisputed facts and did not raise these issues at trial. Unum is entitled to summary judgment for Fortune's claims, as notice of claim termination was provided to Fortune's prior attorney in 2001, which is imputed to Fortune. Despite Fortune's assertion of ignorance regarding Unum's practices, he should have been aware of his potential claims upon denial of his claim, and his suit filed in 2006 exceeds the statute of limitations. The trial court's summary judgment in favor of Unum is upheld, with costs of the appeal awarded to the appellant, Bettye Bedwell as bankruptcy trustee.
