The Tennessee Court of Appeals has released its opinion in Sanders v. Higgins, No. M2022-00892-COA-R3-CV (Tenn. Ct. App. Aug. 29, 2023). The syllabus from the opinion reads:
This appeal involves the disbursement of settlement proceeds proffered by an insurance
company in resolution of a claim against it. The plaintiff is the surviving spouse of the
decedent, who was killed when she was struck by a vehicle while riding her bicycle. The
plaintiff filed a wrongful death action against the vehicle’s driver and the driver’s parents,
all of whom were subsequently dismissed from the lawsuit following a settlement
unrelated to this appeal. Within the same action, the plaintiff asserted a claim against his
and the decedent’s insurer for negligent misrepresentation and negligent failure to
procure insurance. The insurer had previously paid a pre-suit settlement to the plaintiff
related to uninsured/underinsured motorist coverage. In the complaint, the plaintiff
alleged that the insurer had misrepresented additional coverage under an “umbrella
policy,” leading the plaintiff and decedent to believe they were covered while failing to
actually reinstate the umbrella policy when it had been temporarily cancelled months
before the decedent’s death. The plaintiff and the insurer eventually reached a
confidential settlement. To facilitate the release of claims by both the plaintiff and the
decedent’s estate and upon the estate’s motion, the trial court entered an agreed order
allowing the estate to intervene. The plaintiff then filed a motion to disburse the
settlement proceeds to him, and the estate filed an intervening complaint and opposition
to the plaintiff’s motion, asserting that the estate was entitled to one hundred percent of
the settlement proceeds related to the umbrella policy claim. Following a hearing, the
trial court entered an order granting the plaintiff’s motion to disburse the settlement
proceeds to him upon finding that the cause of action against the insurer had not vested in
the decedent prior to her death. The court subsequently denied the estate’s motion to
alter or amend the judgment. The estate has appealed. Determining that the cause of
action against the insurer was based in tort, rather than wrongful death, and accrued to the
decedent at the time of her fatal injuries, we conclude that the right to the resulting
settlement proceeds belongs to the decedent’s estate. We therefore reverse the trial
court’s judgment and remand for entry of an order granting disbursal of the settlement
funds to the estate.
Here is a link to the slip opinion: Majority Opinion - M2022-00892-COA-R3-CV.pdf (tncourts.gov).
NOTE: This opinion does a good job of explaining the difference between wrongful death proceeds and tort proceeds as to how they are distributed, which is confusing to a lot of lawyers in my experience.