I understand the reasoning of Magistrate Bryant, and the state court judges with whom I have debated this topic, but it just does not seem right that a person or entity not associated with the consumer transaction at all should be held liable under the Act. How was the independent adjuster involved in the consumer transaction of issuing the contract of insurance with the insured? He or she was not. How could someone not associated with the consumer transaction be liable under a statute designed to protect consumers from unfair or deceptive trade acts or practices by consumer entities? 


I certainly do not dispute that the Tennessee Consumer Protection Act was made applicable to insurance companiesunder Myint v. Allstate Insurance Company, 970 S.W.2d 920 (Tenn. 1998) under the premise that “the sale of a policy of insurance easily falls under this definition of “trade” and “commerce.” Id. at 926. But that premise should not apply to someone who did not contract or sell the insurance policy in question, should it? According to Myint, the Tennessee Consumer Protection Act is applied to insurance companies selling policies to Tennessee consumers when the insurance company is found guilty of unfair or deceptive trade practices. Id. at 926. It seems to me that the consumer entity may be liable for the actions of the independent adjuster, if the requisite elements of agency can be shown, but it does not seem appropriate to impose liability under the Act to an independent adjuster who was not a party to the formation of the contract of insurance and did not sell the insurance policy in question. Where would this stop? Could liability be imposed against the expert engineer retained by the insurance carrier to investigate the loss? Could it be imposed upon the lawyer hired by the carrier to take the Examination Under Oath?

I have some Tennessee case law support for my position. One case is Crossley Const. Corp. v. National Fire Ins. Co. of Hartford,  237 S.W.3d 652, 657 (Tenn.Ct.App.,2007). In this case, the Court held that the Tennessee Consumer Protection Act was not applicable to post transaction acts because none of the defendant’s actions complained of by plaintiff were a part of "the advertising, offering for sale, lease or rental, or distribution of any goods, services, or property…" Tenn. Code Ann. § 47-18-103(11) (2001). Id. Are the acts of an independent adjuster, handling a claim perhaps 5 or 10 years after the date of the consumer transaction, really part of the “advertising, offering for sale, or the distribution” of the contract of insurance? I understand the breadth of the Act, but simply believe the answer to this question must be an unequivocal “NO!”

Next, there has been no clear state law pronouncement of the duty owed by an independent adjuster. I tried to get the Court of Appeals to rule on this issue back in 2000, but the Court determined that our extraordinary appeal did “not present an appropriate vehicle for determining whether insureds may maintain either negligence or Tennessee Consumer Protection Act claims against adjusting companies because the Heatherlys’ claims, even if they had them, are clearly time-barred.” See Heatherly v. Merrimack Mut. Fire Ins. Co. , 43 S.W.3d 911, 915 (Tenn.Ct.App.,2000).


So I hope the issue is resolved by our state courts very soon. My concern over broadening the scope of this Act to persons not involved in the transaction itself – or since privity is not required, perhaps the better way to say it is broadening the scope of this Act to persons not even contemplated to be involved at the time of the transaction – is that there is no logical stopping point. If the Act truly does apply to an independent adjuster because an insurance carrier hiring that adjuster sold an insurance policy some years ago, the implications for potential “slippery slope” liability are simply unacceptable.