Yesterday, I wrote a bit about the recent Tuturea v. Tennessee Farmers Mutual Insurance Company case that was decided last week by the Western Section of the Court of Appeals.  Remember, this is the case where the plaintiff’s allegedly insane husband set fire to the house in an unsuccessful effort to commit suicide.  I saved the best part for today . . .

One of Mrs. Tuturea’s arguments in favor of coverage was that the innocent co-insured doctrine should allow her to recover. However, like pretty much all policies I read these days, Tennessee Farmers had contracted around that doctrine to prohibit an innocent insured from recovering when another insured intentionally causes the loss.  Accordingly, Mrs. Tuturea lost.  

What’s intriguing about this this case is that the Court of Appeals stepped outside of its scope of review and considered, without deciding, an issue that was not presented by Ms. Tuturea, i.e., whether the policy language excluding recovery by an innocent co-insured is enforceable at all. The Tuturea court stated,

We recognize that insurance companies have written policies in response to the proliferation of the innocent co-insured doctrine that often expressly exclude recovery by an innocent co-insured or, at the very least, more clearly impose joint responsibility on the co- insureds. An argument exists that these carefully written provisions return the relationship between insureds and the insurer to the former status quo previously deemed unacceptable, but it is not the duty of the judiciary to impose liability where none exists. See Certain Underwriter’s at Lloyd’s of London v. Transcarriers Inc., 107 S.W.3d 496, 499 (Tenn. Ct. App. 2002) (citations omitted) (recognizing that courts are not at liberty to rewrite an unambiguous insurance policy simply to avoid a harsh result). While courts in other jurisdictions have reformed or held unenforceable policies excluding recovery by an innocent co-insured where the policies did not comply with legislative limitations on liability exclusions, e.g., Sager v. Farm Bureau Mutual Insurance Co., 680 N.W.2d 8, 9 (Iowa 2004); Watson v. United Services Automobile Ass’n., 566 N.W.2d 683, 692 (Minn. 1997).  Mrs. Tuturea has not argued that similar limitations govern the enforcement of insurance agreements in Tennessee. Because the specific language of the policies before us clearly excludes recovery by an innocent co-insured, the trial court’s decision is affirmed.

Needless to say, I’ll be taking a hard look at the cases cited above as the Court’s dicta seems to be a clear invitation for someone to present the issue.  A favorable ruling would certainly be advantageous for policyholders, and I see plenty of opportunities to give the Court an opportunity to do just that.