Yesterday, the Court of Appeals issued yet another decision concerning when a lawsuit must be filed in order to be timely.  In a well-reasoned and fair opinion authored by Judge Gibson, the Court of Appeals made clear once again that the question of when a claim accrues is fact intensive and requires a knowledge and understanding of all of the subject insurance policy’s provisions, including the immunity clause.  Most importantly, the Court emphasized that in a case requiring submission of a “satisfactory proof of loss,” an insurer would be wise to let the insured know when it deems a proof of loss satisfactory in order to be sure the immunity period begins to run.

In Riggs v. Farmers Mutual of Tennessee, the insurance policy provided that payment would be due 45 days after submission of “a satisfactory proof of loss is received and the amount of the loss has been established by written agreement . . . or the filing of an appraisal award with us.”  The policy also provided that suit must be “commenced within 1 year after the loss.”   The facts reveal that the fire occurred on May 29, 2011, that Riggs provided an executed proof of loss form to the insurer on October 3, 2011, that the insurer conducted an examination under oath of Riggs on November 10, 2011, that the insurer denied the claim on September 24, 2012, and Riggs then filed suit on December 11, 2012.

As a prefatory matter, the Court noted the established rule that suit must be filed within the contractual limitations period following the accrual of the cause of action, not the date of the loss.  When the insurance policy provides a period of immunity in which the insurer cannot be sued, the accrual of the claim occurs upon expiration of the immunity period or when the claim is denied, whichever comes first.  In the Riggs case, the issue was when the immunity period began, which in this case was the 45 day period that the policy allowed the insurer to make payment after submission of a “satisfactory proof of loss.” Riggs claimed the immunity period did not begin until after she fully complied with the insurer’s investigation by examination under oath and re-submission of a completed contents inventory as requested.  On the other hand, the insurer argued that the immunity period began when Riggs sent in her proof of loss form on October 3, 2011.  This, in turn, led to a dispute about what the policy meant when it referred to a “satisfactory proof of loss.”

In a great opinion, the Court ultimately held that the insurer’s position was illogical because it did not stop requesting additional information from Riggs until November 10, 2011.  Accordingly, any “proof of loss” submitted before that time was necessarily not “satisfactory.”  Thus, because suit was filed within one year and 45 days after that date, the suit was timely.

But the Court did not stop there.  Focusing in further on the language requiring that payment be made “within 45 days after a satisfactory proof of loss is received,” the Court noted that because the insurer declined to pay then it necessarily did not consider Riggs’ proof of loss satisfactory.  This circumstance would leave an insurer “with no way of knowing when her proof of loss was satisfactory or when the immunity period began to run.”  So, the clear take-away from this opinion is that submission of a “proof of loss” form may not necessarily be considered submission of a “satisfactory proof of loss,” particularly when the insurer continues to investigate and request information after submission of the form.

You can view the opinion here.

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Photo of Brandon McWherter Brandon McWherter

J. Brandon McWherter is a Nashville-based lawyer and member of McWherter Scott & Bobbitt PLC, which has offices across the State of Tennessee and elsewhere across the Southeast.  Licensed in Tennessee, Arkansas, and Mississippi, he has dedicated his practice to assisting insurance…

J. Brandon McWherter is a Nashville-based lawyer and member of McWherter Scott & Bobbitt PLC, which has offices across the State of Tennessee and elsewhere across the Southeast.  Licensed in Tennessee, Arkansas, and Mississippi, he has dedicated his practice to assisting insurance policyholders with their claims against insurance companies, including claims for bad faith.

For well over a decade, McWherter’s practice has been focused almost exclusively on the prosecution of first party property insurance claims for policyholders.  His interest in this area of the law first started around 2003 when a tornado struck Jackson, Tennessee, where he lived and worked at the time.  Since then, McWherter has represented hundreds or thousands of policyholders whose claims have been underpaid or denied.  He advises and advocates for owners of commercial properties, industrial facilities, residential properties, churches, business owners, and other insurance policyholders.

Since he started counting in 2013, McWherter has assisted his clients in obtaining well in excess of One Hundred Million Dollars ($100,000,000) in settlements, awards, and jury verdicts against insurance companies.

In 2018, McWherter was inducted as a fellow in the American College of Coverage Counsel, which is an invitation-only organization designed to facilitate and encourage the association of lawyers who are distinguished for their skill, experience, and high standards of professional and ethical conduct in the practice or teaching of insurance coverage and extra-contractual law and who are dedicated to excellence in this area of practice.

McWherter has been featured as a “Super Lawyer” or “Rising Star” by SuperLawyers every year since 2010.  Since 2013, he has been selected each year  for inclusion in U.S News and World Reports’ The Best Lawyers in America in the field of Insurance Law.  He also enjoys an AV Preeminent ranking by Martindale-Hubbell for legal ability and ethical standards.

Mr. McWherter is a lifelong Tennesseean and received his law degree from the University of Memphis. While in law school, he was a member of the University of Memphis Law Review, and served on the Editorial Board as Notes Editor.

In advocating for clients, McWherter has trudged through fire scenes and crawled storm-damaged roofs, quizzed consulting construction experts and experts for hours on end, and deposed and cross-examined hundreds of adjusters, experts, consultants, and other professionals within the insurance industry.  He reads insurance policies nearly every day and has a working knowledge of the customs and practices of insurance companies in investigation, estimating, and payment of claims.  McWherter counsels clients on presentation of claims, assists in compiling the evidence necessary to validate the amounts owed, and then enforces his clients’ rights, if necessary, via the judicial system and other alternative dispute resolution options, such as appraisal.

Several of McWherter’s cases have developed the law governing insurance disputes in the State of Tennessee, most recently including the Tennessee Supreme Court’s 2019 decision in Lammert et al. v. Auto-Owners Ins. Co., which held that insurers may not depreciate the costs of labor in determining their actual cash value payment obligations when the policy does not clearly allow it.

When not working, you will usually find Mr. McWherter with his wife, Angela, and his two daughters. He is an avid golfer and a lifelong bass fisherman, neither of which he does as often as he would like.

Practice Areas

  • Representation of policyholders in claims and litigation against insurance companies
  • Bad faith insurance litigation
  • Insurance-based consumer class actions

Professional Associations

  • Tennessee Bar Association
  • Arkansas Bar Association
  • Mississippi Bar Association
  • Tennessee Trial Lawyers Association
  • American Trial Lawyers Association (past member)
  • American Bar Association (past member)

Education

  • B.S.B.A. – Union University (1998)
  • J.D. – University of Memphis (2001)

Bar Admissions

  • Tennessee
  • Mississippi
  • Arkansas
  • Fifth Circuit Court of Appeals
  • Sixth Circuit Court of Appeals
  • United States District Court for the Western District of Tennessee
  • United States District Court for the Middle District of Tennessee
  • United States District Court for the Eastern District of Tennessee
  • United States District Court for the Northern District of Mississippi
  • United States District Court for the Southern District of Mississippi
  • United States District Court for the Eastern District of Arkansas