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Weagreewiththetrialcourtsdeterminationthatsection566147doesnotapplytothefacts  presentedinthismatterandaffirmthetrialcourts_ruling.  _  Tenn.R.App.P.3AppealasofRight;JudgmentoftheChanceryCourt j AffirmedasModified V    WilliamB.Cain,J.,deliveredtheopinionofthecourt,inwhichWILLIAMC.KOCH,JR.and ."~ PATRICIAJ.COTTRELL,JJ.,joined. #j  _Karyn_ԀC.BryantandJohnM._Scannapieco_,Nashville,Tennessee,fortheappellant,Willis_Corroon_ $B " CorporationofTennessee. %.!# WilliamG._McCaskill_,Jr.,Nashville,Tennessee,fortheappellee,TheTravelersInsurance '#% Company. (#& JohnB.CarlsonandRobertE._Hoehn_,Nashville,Tennessee,fortheappellee,EbbtideCorporation. z*%(  >-(+ Ї  OPINION  I  FactualHistory t # S-X XA# XAX S-#XAXX XA# XAXXXA    Thismatterconcernsadisputebetweenaninsured(EbbtideCorp.,hereinafterEbbtide),an L  insurancebroker(Willis_Corroon_ԀCorp.,hereinafterWillis_Corroon_),andaninsurer(TheTravelers 8  InsuranceCo.,hereinafterTravelers). $ t   Startingin1986,EbbtideusedWillis_Corroon_Ԁastheirinsurancebrokertoassistthemin  L  obtainingallinsuranceexcepthealthinsurance.Ebbtidewasunabletoobtainworkers  8  compensationinsuranceintheopenmarket,soWillis_Corroon_Ԁassistedtheminobtainingthis $  insurancefromtheassignedriskpool.TravelerswasassignedtoinsureEbbtidethroughtheassigned   riskpoolbeginningin1986.     Overthecourseoftheirbusinessrelationship,acourseofdealingemergedwhereinpremiums   wereassignedbasedontheestimatednumberofemployeesEbbtidewouldemployfortheupcoming p year.Asaresultofusingestimates,disputeswouldoftenariseregardingtheamountsowedfor \ coverageandwouldrequireanauditofthepayrollrecordsattheendoftheyeartoadjustpremiums H paidforthepreviousyear.TravelerswouldissueaDirectNoticeofCancellation(_DNOC_)to 4 Ebbtidethatprovidedadateonwhichtheircoveragewouldexpire,althoughEbbtiderarelypaid  p Travelersbythatdatesincethesedisputeswereoftenpendingafterthedatepaymentwasrequired.  \ Afteraperiodoftime,whichcouldlastfromafewdaystoseveralmonths,thepartieswouldobtain H anauditofthepayrollsandagreeonapaymentplan;thepolicywouldthenbereinstatedwithout 4 lapse.ThiscourseofdealingwouldoccurwithWillis_Corroon_Ԁactingasintermediaryand   negotiatorbetweenEbbtideandTravelers.     ThecurrentdisputearoseafterTravelerssentEbbtidea_DNOC_ԀdatedJanuary20,1995,  effectiveFebruary4,1995.Travelerswasrequestingpaymentof$104,000.00representingamounts  allegedlyowedasaresultofunderestimatedpayrollsfor1993,1994,and1995.Theamountsowed l for1993and1994wereincontroversy,astherewasadisputeoverpriorpayrollrecordauditsfor X  thoseperiods.Noaudithadyetbeenperformedfor1995. D!   OnFebruary6,twodaysafterthepolicywascancelled,EbbtideprovidedWillis_Corroon_ #l! withdocumentationtotrytoresolvethepayrolldispute.ThisinformationwasfaxedtoTravelers $X" byWillis_Corroon_ԀwitharequestthatTravelersletthemknowtheamountofmoneythatcouldbe $D # paidbythenextdaytoallowcontinuation/reinstatementofthepolicy.TravelersrespondedtoWillis %0!$ _Corroon_ԀwithafaxcontainingapaymentplanandrequestedthatEbbtideovernight$32,168.00to &"% Travelers.ThisfaxwasonlysenttoWillis_Corroon_;Ebbtidewasnotsentacopyofthefaxbyeither '#& Willis_Corroon_ԀorTravelersanddidnotreceivethisinformation,norweretheyinformedofits (#' existenceortermsuntilJune23,1995. )$(   |*%)   Overtheensuingweeks,TravelersbegantryingtoarrangeanauditofEbbtidespayroll   records,referringtothisauditasacancellationaudit.(RepresentativesofEbbtidetestifiedto  believingthatthisauditwasmerelyanordinaryauditbeingperformedtoresolvethedisputedpayroll  amounts.) t   OnFebruary27,EbbtidereceivedacallfromTravelersregardingarecentlyreported L  workerscompensationclaim.Ebbtidewasinformedthatthepolicyofworkerscompensation 8  insurancehadbeencanceled.However,representativesofEbbtidetestifiedattrialthatworkers $ t compensationclaimshadbeenrefusedinthepastbutpaidafterreinstatementofthepolicyonce  ` payrollissueswereresolvedandapaymentplanwasworkedout.  L    TheauditwasconductedonMarch28,andthefollowingdayEbbtidesentapaymentto $  Travelers.Travelersappliedthispaymenttopastdueamounts,butrefusedtoreinstatethepolicy   withoutlapse.EbbtidehadbelievedthatTravelerswouldreinstatetheircoveragewithoutlapseas   theyhaddoneonnumerousoccasionsinthepast.TherewasnoothercompanyfromwhichEbbtide   couldobtainworkerscompensationcoverageatthattimeduetobeingintheassignedriskpool.     InAprilof1995,Ebbtidehaditsfirstopportunitytoobtainworkerscompensationcoverage \ outsideoftheassignedriskpoolwithacompanynamed_EBI_._EBI_ԀbegancoveringEbbtidefor H workerscompensationclaimsonApril17,1995.However,onMarch20,1995,duringthelapse 4 period,asignificantinjuryoccurredresultinginaworkerscompensationclaiminexcessof  p $140,000.00.  \   ThetrialcourtfoundthatTennesseeCodeAnnotatedsection56-6-147dealingwithagency 4 ofinsuranceagentsdidnotapplytothissituationandheldthatWillis_Corroon_Ԁwastheagentofthe   insured,Ebbtide.InfindingWillis_Corroon_ԀnegligentandliabletoEbbtidefordamages,the   substanceofthecourtsopinionstated:  8   ` Overtheirtenyearrelationship,acourseofdealingevolvedbywhichEbbtide  couldobtainreinstatementwithoutlapseincoverageofapolicywhichhadbeen l canceledfornon-paymentofpremium....X     X X?+ ` hp x X? ` X XE+ ` hp x X E8   ` Essentially,Travelershadwaivedthetimelypaymentofpremiums 0"  requirementofthecontractor,atleast,thepartieshadbytheirdealingsmodifiedthe #l! contracttoallowcontinuationofinsurancecoveragepastthecancellationdateby $X" EbbtidecomplyingwithTravelersreinstatementrequirements....$D #      @  @` ... &"% .?+ ` hp x X?8  Travelersnotonlyacceptedlatepremiumpayments,itcooperatedwithEbbtidein (#' arrangingthemethodandmannerofthelatepayments.Therefore,theprompt )$(  paymentprovisionoftheinsurancecontractwaswaivedandsubstitutedthereforwas |*%) a secondchanceprovision,whichmustbestrictlycompliedwithorthepolicy  wouldbecanceled.    ?+ ` hp x X?8   ` This secondchanceprovisionwasnotcompliedwithbyEbbtide.Inother t words,EbbtidedidnotmeetTravelersreinstatementrequirements.IfTravelershad ` noroleinEbbtidefailingtomeetthereinstatementrequirements,thecontractwas L  breachedbyEbbtideandTravelershasnofurtherliabilitythereunder.IfTravelers 8  (directlyorthoughtitsagent)failedtocomplywithitsrequirementsunderthe $ t  secondchanceprovision,thenTravelersbreachedthecontractandshouldbe  ` requiredtoextendcoverageduringthedisputedperiod.... L    ?+ ` hp x X?8  [_T]he_Ԁoutcomeofthatinquirydependsuponwhether_WC_Ԁ[Willis_Corroon_]wasthe $  agentofTravelersorofEbbtide.    E+ ` hp x X E   @  @` ...   5   ` Thefactsindicatethe_WC_ԀwastheagentofEbbtide.... p  X X?+ ` hp x X?E+ ` hp x X ETheagencyinquiryiscomplicatedby_T.C.A._Ԁ56-6-147which,Ebbtideinsists, H makes_WC_ԀtheagentofTravelersand,thus,Travelersisliableforbreachofcontract. 4  X XE+ ` hp x X E   @  @` ...  \ 8  Anexaminationofthepurposeofthestatuteishelpfulatthisjuncture. 4 8   ` ThepurposeoftheTennesseestatuteistopreventtheinsurancecompany   fromdenyingresponsibilityforrepresentationsandactionsfromtheagentfrom  whomapplicationsarevoluntarilyacceptedandtoprotectanapplicantwhorelieson  suchrepresentationsoractions....Thestatuteisperfectlylogicalanditsends  admirable[,]butitdoesnotapplyinthisfactualsituation.l    X X?+ ` hp x X? X XE+ ` hp x X E   @  @` ... D! 9<8   ` ThenextquestioniswhetherTravelerswasrequiredtosendtheir #l! reinstatementrequirementsdirectlytoEbbtideinsteadofjustto_WC_Ԁastheydid.$X"    X X?+ ` hp x X? X XE+ ` hp x X E   @  @` ... %0!$ D> X X?+ ` hp x X?Travelerswasrequiredbythecontractofinsuranceasmodifiedbythecourseof '#& dealingofthepartiestosenditsreinstatementrequirementstoEITHER_WC_ԀOR (#' Ebbtide,butnotboth. )$(  X XE+ ` hp x X E   @  @` ... h+&* c@   ` TheCourthashereinabovefound_WC_ԀanagentofEbbtide....   X X?+ ` hp x X? X XE+ ` hp x X E8   ` _WC_ԀhadadutytotransmitTravelersreinstatementrequirementstoEbbtide t withingareasonabletimeafterreceivingthem.`      ` _WC_Ԁbreachedthatdutybyfailingtosotransmit. 8     ` Becauseofthisbreach,Ebbtidewasdamaged.  ` 8   ` ThedamageincurredbyEbbtidebecauseof_WC_sbreachofitsdutywas  8  foreseeableby_WC_.$    8   ` Therefore,_WC_ԀisliabletoEbbtideforitsnegligence.      ThecourtwentontofindEbbtidewithoutfaultinthismatterbasedonthepasthistoryofthe   partiestransactions,andinaseparateorder,determinedthatEbbtidedidnotfailtomitigateits p damages.Ebbtidewasawardeddamagesintheamountof$144,111.32forpastamountsexpended \ asaresultofdeniedworkerscompensationclaims,andWillis_Corroon_Ԁwasorderedtopayanyfuture H reasonableandnecessaryexpensesincurredundertheprovisionsoftheTravelersworkers 4 compensationpolicythathadpreviouslyinsuredEbbtide.AllclaimsagainstTravelerswere  p dismissed.  \   Theissuespresentedonappealare:whetherWillis_Corroon_Ԁwasnegligent;whetherWillis 4 _Corroon_snegligencewastheproximatecauseofEbbtidesdamages;whetherEbbtidesrecovery   shouldbereducedforfailuretomitigatedamages;whetherTravelersproperlycanceleditsinsurance   contractwithEbbtide;whetherTravelershadadutytosendthereinstatementrequirementsto  Ebbtide;whetherEbbtidewasnegligent;whetherTennesseeCodeAnnotatedsection56-6-147  appliestomakeWillis_Corroon_ԀtheagentofTravelers.    II X  AnalysisofLaw D!     A.Applicationofsection56-6-147oftheTennesseeCode. #l! ?+ ` hp x X?  Theprincipalquestionthatmustfirstbeexaminediswhoistheagentofwhomunder $D # Tennesseelawandthefactsofthiscase.Thetrialcourtdecidedthiscasebasedonitsdetermination %0!$ thatWillis_Corroon_ԀwastheagentofEbbtideandthatTennesseeCodeAnnotatedsection56-6-147 &"% didnotapplytothissituation.Thus,thefirstquestiontobedeterminedistheapplicabilityofsection '#& 56-6-147underthefactsofthiscasetoWillis_Corroon_,aninsurancebrokerdoingbusinessinthe (#' StateofTennessee. )$(   1.StatutoryConstruction h+&* Ї  Ourcourtshavelaidoutsomebasicrulesforstatutoryconstruction.   X X?+ ` hp x X?Thebasicruleofstatutoryconstructionistoascertainandgiveeffecttothe  legislativeintent.Toascertainthisintent,weareprimarilytoderivethelegislative t purposeorintentfromthenaturalandordinarymeaningofthelanguagecontained ` inaspecificprovisionwithinthecontextofthewholestatute.NationalGas L  Distributors,Inc.v.State,804S.W.2d66,67(Tenn.1991);_Carroum_Ԁv.Dover 8  ElevatorCo.,806S.W.2d777,779(_Tenn.App_.1990);Davenportv.ChryslerCredit $ t Corp.,818S.W.2d23,27(_Tenn.App_.1991).Courtsshouldnotdisplacethe  ` commonlawanymorethanisnecessarilyrequired,Inre_Deskins_Estates,381  L  S.W.2d921,922(1964),andshouldnotrestrictthestatutescoverageorexpandit  8  beyonditsintendedscope._Carroum_,806S.W.2dat779.Wenote,however,that $  remediablestatutesshouldbeconstruedliberallytoaccomplishtheobjects,correct   theevils,andsuppressthemischiefatwhichtheyareaimed.Hollandv._Celebrezze_,   223_F.Supp_.347ed.(E.D.Tenn.1963).    X XE+ ` hp x X E_Merryman_Ԁv.CentralParking__Sys_.,_ԀInc.,No.01A01-9203-CH-0076,1992WL330404at*5(Tenn. p Ct.App.Nov.13,1992)(overruledonothergrounds). Ininterpretingstatutesthelegislativeintent \ mustbedeterminedfromtheplainlanguageitcontains,readinthecontextoftheentirestatute, H withoutanyforcedorsubtleconstructionwhichwouldextendorlimititsmeaning.NationalGas 4 _Distribs_.,Inc.v.State,804S.W.2d66,67(Tenn.1991).  p 8  [_O]ur_Ԁparamountresponsibilitiesaretoascertainthelegislativeintentandto H effectuateit.Statev.Bobo,727S.W.2d945,952(Tenn.1987);Longv._Stateline_ 4 _Sys_.,Inc.,738_S.W._Ԁ2d622,623(Tenn.1985).Initially,suchintentisgatheredfrom   thenatural,ordinary,andcommonlyacceptedmeaningofthelanguageusedinthe   statuteitself.Bobo,727S.W.2dat952;Weaverv.Woods,594S.W.2d693,695  (Tenn.1980).   8   ` InconstruingastatutetheCourtmustgiveeffecttoeveryword,phrase, l _clause,_Ԁandsentenceoftheacttoachievethelegislaturesintent.United_Canners,_ X  Inc.v.King,969S.W.2d525,527(Tenn.1985);Cityof_Caryville_Ԁv.Campbell D! County,660S.W.2d510,512(_Tenn.App_.1983). Everywordused[inastatute]is 0"  presumedtohavemeaningandpurposeandshouldbegivenfulleffectifdoingso #l! doesnotviolatetheobviousintentionoftheLegislature.Marshv.Henderson,221 $X" Tenn.42,424S.W.2d193,196(1968).Furthermore,astatuteshouldbeconstrued, $D # ifpracticable,sothatitscomponentpartsareconsistentandreasonable;inconsistent %0!$ phrasesshouldbeharmonized,wherepossible,soastoreachthelegislativeintent. &"% ...'#&   8   ` Furthermore,whenthelegislaturemakesasubstantialchangeinastatutethat )$( hasbeenthesubjectofjudicialconstruction,.._._Ԁthelegislatureispresumedtohave |*%) beenfullyawareofthejudicialconstructionandtohaveintendedtoalterthelaw. h+&* _Hamby_Ԁv._McDaniel_,559S.W.2d774,776(Tenn.1977).Whenthelegislature  amendsastatute,itpresumablydoessoeithertochangethelawortoclarifyit.   Statev._Odom_,928S.W.2d18,2930(Tenn.1996).Itisinlightoftheseprincipalsthatweexamine t thechangesinandprogressionofTennesseeagencylawsinceitsenactment. ` TheoriginalagencystatutewasenactedbytheTennesseelegislaturein1907andstated: 8    X X?+ ` hp x X?[_A]ny_Ԁpersonwhoshallsolicitanapplicationforinsuranceshallinallmatters  ` relatingtosuchapplicationandthepolicyissuedinconsequencethereofberegarded  L  asanagentofthecompanyissuingthepolicy,andnottheagentoftheinsured,and  8  allprovisionsintheapplicationandpolicytothecontraryarevoidandofnoeffect $  whatever;_Provided,_Ԁthis_Act_Ԁshallnotapplytolicensedfireinsurancebrokers.    X XE+ ` hp x X ETenn.CodeAnn.56-705,LawofApril12,1907,ch.442,1,1907Tenn.Pub.Acts1497(repealed   1975).# S-X XA# XAX S-#XAXX XA# XAXXXAԀThislegislationwasdesignedtoprotectconsumersbybindinginsurancecompaniestothe   representationsoftheiragents,preventinginsurancecompaniesfromdenyingresponsibilityforthe p representationsandactionsoftheiragents.TheintentoftheLegislatureinenactingtheoriginal \ agencystatutewastoprotectconsumersfromunethicalandcorruptinsuranceagents.IndustrialLife H &HealthIns.Co.v._Trinkle_,206S.W.2d414(Tenn.1947).#XAXX XAsh# XAXXXA# S-X XA1h# XAX S-Ԁ 4   ThepurposeofthisstatutehasbeendiscussedbythecourtsofTennesseeonnumerous  \ occasions.In1924thesupremecourtsaid: H  X X?+ ` hp x X?ItisapparentthattheLegislaturepurposedaffordingtotheinsuredaresponsible   connectionwiththeinsuringcompany,withwhichhewasdealing,oftentimesa   nonresidentcorporateentityofuncertainaddress,withitsidentity,forpurposesof  legalnotice,moreorlessobscure.   X XE+ ` hp x X E8   ` Theactcontemplatesthatonewhoisrecognizedbyaninsurerassuitableand l competenttohandleitsfundsanddeliveritspoliciesisalsosuitabletorepresentit X  inrespecttoothermattersarisinginconnection_therewith.D!   ____Maryland_Cas_.Co.v._McTyier_,266_S.W._Ԁ767,768(Tenn.1924)._ #l! ?+ ` hp x X?#XAXX XAj# XAXXXA# S-X XA:k# XAX S-  Asoriginallydrafted,section56705oftheCodeappliedto [_a]ny_Ԁpersonwhoshallsolicit $D # anapplicationforinsurance.In1975thecodewasamendedtoapplyto [_e]very_Ԁagentorlimited %0!$ insurancerepresentativewhosolicitsornegotiatesandapplicationforinsuranceofanykind.Tenn. &"% CodeAnn.566124,LawofApril21,1975,ch.68,4,1975Tenn.Pub.Acts103(repealed1988). '#& Thisshiftinapplicationfromanypersontoeveryagentorlimitedinsurancerepresentativeis (#' especiallysignificantbecausethe1975legislationalsoincludedadefinitionoftheterminsurance )$(  agent.Insuranceagentisdefinedas anindividualappointedbyaninsurertosolicitapplications |*%) forapolicyofinsuranceortonegotiateapolicyofinsuranceonitsbehalf.Tenn.CodeAnn.566  102,LawofApril21,1975,ch.68,3,1975Tenn.Pub.Acts102(repealed1988).   __  In1988theGeneralAssemblyagainchangedtheagencylaw#XAXX XAq# XAXXXA# S-X XATq# XAX S-Ԁandfurtherrefinedthe t definitionofinsuranceagent.#XAXX XAv# XAXXXA# S-X XAw# XAX S-ThecurrentCodesectionenactedin1988,whichdealswithagency ` inthecontextofinsurancesolicitationandnegotiation,providesasfollows: L    # S-X XAw# XAX S-#XAXX XAw#9X! XXXAԹ X X?+ ` hp x X? #9MP X9X!x#9X! X9MP#XAX X9X!#y# XAXXXAAgentasrepresentativeofinsurer.- Everyinsuranceagentorlimitedinsurance  n representativewhosolicitsornegotiatesanapplicationforinsuranceofanykind  ^ shall,inanycontroversyarisingfromtheapplicationforinsuranceoranypolicy  J  issuedinconnectiontherewithbetweentheinsuredandinsuredsbeneficiaryandthe  6  insurer,beregardedastheagentoftheinsurerandnottheinsuredorinsureds "  beneficiary.Thisprovisionshallnotaffecttheapparentauthorityofanagent.    X XE+ ` hp x X ETenn.CodeAnn.566147(2000).An_ insurance_Ԁ_agent_Ԁisnowdefinedas anindividualwhohad   anagencycontractoragreementwithaninsurertosolicitornegotiateapolicyofinsuranceonthe   insurersbehalf.Tenn.CodeAnn.566132(4)(2000).Thesetwosectionsmustbereadtogether, n andinaccordancewithpreviouslystated_principles_Ԁofstatutoryconstruction,inordertodetermine Z towhomtheagencystatuteapplies.Thus,agencyisimposedwhenthematterinvolves an F individualwhohasanagencycontractoragreementwithaninsurertosolicitornegotiateapolicy 2 ofinsuranceontheinsurersbehalfand whosolicitsornegotiatesanapplicationforinsuranceof n anykind.Assuch,thecontrollingquestionbecomeswhetherthereisanyevidenceintherecord  Z thatWillis_Carroon_ԀhadanagencycontractoragreementwithTravelerstosolicitornegotiatea F policyofinsuranceonbehalfofTravelers. 2   AlthoughtherecordcontainsagreatdealofinformationregardingEbbtidescontractand   relationshipwithWillis_Carroon_,therecordisdevoidofanyevidenceofacontract#XAXX XAz# XAXXXA# S-X XAy# XAX S-Ԁoragreementof  anykindbetweenWillis_Carroon_ԀandTravelers.Therefore,withoutthisproof,section566147  # S-X XA]# XAX S-#XAXX XA# XAXXXAdoesnotapplytothismatterandwearenotforcedtofindWillis_Carroon_Ԁtobetheagentof ~ Travelers.However,thisdeterminationdoesnotendtheanalysis,aswemustnowrelyoncommon j law_principles_Ԁtodetermineagency. V   P  2.AnalysisofCaseLaw ."~   P?+ ` hp x X?  Tennesseeagencylawalsoincludesalineofcaselawapplyingcommonlawrulesregarding $V" _brokerage_Ԁandagency.Inthecaseof_Glisson_Ԁv.Stone,4Tenn.App.71(1926),thisCourtdealtwith $B # thequestionofwhetherapartywasabrokeroranagent. %.!$  X X?+ ` hp x X?[_C]an_Ԁthedefendantbeconsideredinthistransactionwithcomplainantactingasa '#& broker.Wetakeitthathere,aselsewhere,thelawcareslittleaboutnames.The (#' questionis,whatwastherelationoftheparties. )$(  X XE+ ` hp x X E   ` ... f+&* Ї8  8`    Aninsurancebrokerisonewhoactsasamiddlemanbetween  theassuredandtheinsurer,andwhosolicitsinsurancefromthe  publicundernoemploymentfromanyspecialcompany,buthaving  securedanorderheeitherplacestheinsurancewithacompany t selectedbytheassured,orintheabsenceofanyselectionbyhim, ` thenwithacompanyselectedbysuchbroker.Abrokeristheagent L  fortheinsured,accordingtoallauthoritiesonthesubject,thoughat 8  thesametimeforsomepurposehemaybetheagentfortheinsurer, $ t andhisactsandrepresentationswithinthescopeofhisauthorityas  ` suchagentarebindingontheinsured.R.C.L.,868. L ` x` x    <(` ` hp u X< Everybrokeriswithinasenseanagent,buteveryagentis $  notabroker.Thechieffeaturewhichdistinguishesabrokerfrom   otherclassesofagentsisthatheisanintermediary,ormiddleman,   and,inacceptingapplicationsforinsurance,actsinacertainsenseas   theagentofbothpartiestothetransaction.Anotherdistinctionisthat   theideaofexclusivenessentersintoanemploymentofagency,while p inrespecttoabrokerthereisaholdingoutofoneself,generallyfor \ employmentinsecuringinsurance.Gayv._Lavina_ԀStateBank,18A. H L.R.,1208._ 4 _ Anagentwhotakeshisprincipalsmoneyunderanexpress  \ agreementtoprocureinsurance,andunjustifiablyfailstosecurethe H same,ormakeaneffortinthatdirection,therebyassumestheriskand 4 becomesliable,incaseofloss,topayasmuchorthesameaswould   havebeencoveredbytheinsurancepolicyforwhichhisprincipalhad   paid,providedthesamehadbeenprocuredasdirected.Gayv.  _Lavina_ԀStateBank,supra._  _ ....and,asbetweentheinsuredandhisownagentorbroker, l authorizedbyhimtoprocureinsurance,thereistheusualobligation X  onthepartofthelattertocarryouttheinstructionsgivenhimand D! faithfullydischargethetrustreposedinhim,andhemaybecome 0"  liableindamagesforbreachofduty.Ifheisinstructedtoprocure #l! specificinsurance,andfailstodoso,heisliabletohisprincipalfor $X" thedamagesufferedbyreasonofthewantofsuchinsurance.The $D # liabilityoftheagentwithrespecttothelossisthatwhichwouldhave %0!$ fallenuponthecompanyhadtheinsurancebeeneffectedas &"% contemplated.Negligenceonthepartoftheagent,defeatinginwhole '#& orinparttheinsurancewhichheisdirectedtosecure,willrenderhim (#' liabletohisprincipalfortheresultingloss.Gayv._Lavina_ԀState )$( Bank,supra. |*%)  h+&*   E+ ` hp x ` Xu[E_Glisson_,4Tenn.App.at74-5.The_Glisson_ԀcourtgoesontocitetheNorthCarolinacaseofElam  v._Smithedeal_ԀReality&Ins.Co.withapproval.  8  [_W]hile_Ԁtheagentorbrokerinquestionwasnotobligatedtoassumethedutyof t procuringthepolicy,whenhedidso,thelawimposeduponhimthedutyof ` performanceintheexerciseofordinarycare,andasamatterofcontractitissaidin L  someofthecasesonthesubjectthatthetrustandconfidencereposedinhimasagent 8  affordedsufficientconsiderationfortheundertakingandcarryingouttheinstructions $ t given. `   Id.at76;s?+ ` hp x X?eealsoBellv.WoodIns.Agency,829S.W.2d153,154(Tenn.Ct.App.1992);Farmer  8  v.Reed_Keras_ԀBuickCo.,1986WL2304(Tenn.Ct.App.Feb.20,1986);_Massengale_Ԁv.Hicks,639 $  _S.W._Ԁ2d659(Tenn.Ct.App.1982).     Afederaldistrictcourtistheonlycourtthathasattemptedtodeterminetheexactquestion   atissueinthiscase,andalthoughwearenotboundtofollow_its_Ԁopinion,_its_Ԁdecisionisworth   examinationasitcontainsthecommonlawprincipalsfordeterminingagency.Theopinionofthe p westerndistrictcourtheldasfollows: \   ThefirsttaskistodefinetherelationshipbetweenSedgwickand_SDG_. 4 8   ` TheanalysisoftherelationshipwhichexistsbetweenSedgwickand_SDG_Ԁis  \ complicatedsomewhatbyaTennesseestatute....H   ?+ ` hp x X?8  [_R]esearch_Ԁbythecourtrevealsthatthisstatutewasintendedtoprotectconsumers   bybindinginsurancecompaniestotherepresentationsoflocal,sometimesunethical,   solicitors.SeeIndustrialLife&HealthInsurancev._Trinkle_,30Tenn.App.243,204  S.W.2d827(1947)(decisionunderpriorstatute).Furthermore,theoverlapin  nomenclaturebetweeninsurancelawandprivilegelawshouldnotbeallowedto  cloudtheinquiry.Theterm agentisusedinamyriadofdifferentcontexts.What l theSmithcourtmeantby agentinthecontextofprivilegelawisclearlyquite X  differentfromwhatthestatuteisattemptingtoclassifyforthepurposesofinsurance D! law.Seee.g._Glisson_Ԁv.Stone,4_Tenn.App_.71(1926)(statinginthecourseof 0"  determiningwhetherthedefendantwasaninsurancebrokeroragent, thelawcares #l! littleaboutnames.Thequestionis,whatwastherelationoftheparties.)Id.at74; $X" seealsoUpjohn,449U.S.at392,101_S.Ct_.677(eschewinglabelswhenanalyzing $D # attorneyclientprivilegeincorporatecommunications)._%0!$   8  Both_ԀSedgwickand_SDG_ԀcharacterizeSedgwickas_SDG_s brokerorrepresentative. '#& CouchonInsurance3rd.45:4(1996)describesabrokerasa middlemanbetween (#' theinsuredandtheinsurer employedineachinstanceasaspecialagentforasingle )$( purposeusually involvedinwhatcanbeviewedasaseriesofdiscrete |*%) transactions.Id.Couchgoesontolistseveralfactorstoconsiderwhendetermining h+&* whetherapersonactsasabrokeroragent,(1)whofirstsettheagentinmotion;(2)  whocontrolledagentsactions;(3)whopaidagent;and(4)whoseinterestagentwas  attemptingtoprotect.Id.Asidefromthelackofevidenceregardingwhopaid  Sedgwickoncethecoveragewaswritten,itisclearthattheremainingfactorsweigh t heavilyinfavorofviewingSedgwickas_SDG_sbrokerforthepurposesofthis ` transaction.SeegenerallyCouchonInsurance3rd,Chapter45(1996).Becausethe L  courtfindsthatSedgwickwas_SDG_sinsurancebroker,ratherthaneitherpartys 8  insuranceagent,theTennesseestatuteisnotapplicabletotheinstantcase.#XAXX XA##S-XXAX#$ t   XAXS-RoyalSurplusLinesIns.Co.v._Sofamor_Ԁ_Danek_Ԁ_Gp_.Inc.,190_F.R.D._Ԁ463,47071(W.D.Tenn1988).  L  __XAXXXA__  #S-XXAw#XAXS-  ThatEbbtide,andparticularlyWillis_Corroon_,believedWillis_Corroon_Ԁtobetheagentof $  EbbtideisattestedtobythetestimonyofScottDavis,SeniorVicePresidentofWillis_Corroon_.He   testified:   8   ` A. Willis_Corroon_Ԁrepresentstheclientoryou,asyouhaveitidentified,   theinsured.Werepresentthatinsuredtoseveraldifferentinsurancecompanies p and/ormarkets,aswewouldcallthem,and_thenwewouldmarketonbehalfofthe \ clienttoassurethat_Ԁourclientwasreceivingtheappropriatecoverageandthemost H economicalpremiumsavailableforthosecoverages,andwewouldseekoutdifferent 4 insurancecompanies.WithEbbtidespecificallybeingintheassignedriskpool,that  p isadirectbillsituation. \   __8   `  Inourbusiness,wehavetwotypesofbills.Wehavewhatwecall H agencybill,whereitisbilledbytheagency,i.e.,Willis_Corroon_,totheclient.Willis 4 _Corroon_Ԁcollectsthatmoneyandpaystheinsurancecompany,i.e.,Travelers.Ina   directbillsituation,theinsurancecompany,beingTravelers,directlybillsandgets   paidbytheinsured,beingEbbtide,andinthiscaseandinassignedriskcases,they  aredirectbillsituations.     ...  8   ` Q. Andwithrespecttoallthedaytodaydealings,itsaclientservice l representativeorcustomerservicerepresentativethathandlesallofthedaytoday, X  nittygrittystuff.Isthatafairstatement?D!   8   ` A.0   Thatisafairstatement.0"      ` Q.0 AndthatwasMs.Ross?#l! (# (#    ` A.0 Yes.$X" (# (# 8   ` Q. Now,inthatkindofarelationshipthatWillis_Corroon_Ԁhadwith $D # Ebbtideduringthatperiodoftimethatyouweretheaccountmanager,howwould %0!$ youcharacterizeWillis_Corroon_srelationshipwithanobligationtoEbbtide,what &"% wereyou?'#&   8   ` A. Iwasinanoversightroleoftheentireboatprogram,andmyprimary (#' rolewastooverseetherenewalprocesstoassurethatwehadthemost )$( comprehensiveandcompetitiveprogramsavailabletoEbbtideandourotherboat |*%) builders.h+&*   8   ` Q.0   DidyouconsideryourselftobeEbbtidesbroker?     ` A.0 Yes,sir. (# (# 8   ` Q.0   Andinthatrelationship,whodidyouconsideryourclienttobe?     ` A.0 IconsideredmyclienttobeEbbtide.t (# (# 8   ` Q. Now,asIunderstandit,EbbtidesrelationshipwithWillis_Corroon_ ` inthiscasewasoneinwhichMs.Rosswouldfrequently,fromtimetotime, L  intercedeonEbbtidesbehalftoTravelersandhavediscussionswithTravelersabout 8  variousissuesthatpertainedtoEbbtidesbillsandpremiums.Areyouawareofthat?$ t      ` A.0 Iwasawarethatshedidhave. ` (# (# 8   ` Q. AndonoccasionswhenMs.Rosswouldbeactingonbehalfof  L  EbbtidetointercedewithTravelersandhavediscussionswithTravelers,itwouldbe  8  normal,woulditnot,forTravelerstorespondtoMs.Rosswhenshewastheone $  makingtheinquiry?       ` A.0 Thatiscorrect.  (# (# 8   ` Q. Andwhenshewouldreceiveresponsesandshewasactingonbehalf   ofEbbtide,youwouldcertainlyexpecthertopassalongtoEbbtidewhatever   informationshehadreceived,wouldntyou?p      ` A.0 Thatiscorrect.\ (# (# 8   ` Q. Letmereferyoutosomething.InfrontofyouisabookthatIput H togethersoIcouldkeepmyselforganizedwithallthesedocuments.Letmereferyou 4 topracticallythelastthinginthebook.Actually,itsNo.61inthebook,ifyoullsee  p mylittlestickersthereinthebottomrighthandcorner. \   8   `  Now,thedocumentthatsNo.61,ifyouwill,lookatitandtellmeif H yourecognizeit(indicating).4      ` A.0 Yes,Ido.  (# (# 8   ` Q. IsthatapagefromWillis_Corroon_sproposaltoEbbtidetorepresent   Ebbtide?   8   ` A.0   Thatisastandardpageinourtypicalproposalofinsurance.  ThedocumentreferredtobyMr.DavisasdocumentNo.61isaMarch1994proposalpresentedby l Mr.ScottDavisandGailRoss,ClientServiceRepresentative,onbehalfofWillis_Corroon_Ԁto X  EbbtideCorporation.Thisdocumentreads,inlargepart: D!   INTRODUCTION #l!   8  TheMarineIndustryTeamofWillis_Corroon_Ԁispleasedtohavetheopportunityto $D # presentthisproposal.Inouropinion,selectionofaninsurancebrokerwarrantsthe %0!$ samedegreeofattentionthatanorganizationdevotestoselectingitskeyexecutive &"% personnel,legalrepresentatives,oraccountingfirm.Thebrokerselectedshould '#& possessnotonlytechnicalexpertisewithinthemarineindustrybutalsotheability (#' andwillingnesstoperforminthemidstofchangingneedsandconditions. )$( RecognizingtheserequirementstheNationalMarineManufacturersAssociation |*%) selectedWillis_Corroon_ԀastheexclusiveBrokertoserveitsmembership.h+&*   Ї8  Throughtheinnovationandexpertiseofitspersonnel,Willis_Corroon_Ԁearnedits  positionasawidelyrespectedriskmanagementandinsurancebrokeragefirm.As  thefourthlargestinsuranceandreinsuranceintermediaryintheworld,Willis  _Corroon_Ԁmaintainsofficesworldwidestaffedby11,000professionals.t   8  Willis_Corroon_Ԁreflectsover100yearsofexperienceinrespondingtotherisk L  managementrequirementsofsomeofthelargestfirmsinthenation.Thoseclients 8  representtheentirespectrumofindustriesincludingmarine,transportation, $ t construction,healthcare,mercantile,andinstitutionalorganizations. `   8  Oursuccessasariskmanagementandinsurancebrokerageservicesfirmisnot  8  achievedbyfragmentedindividualperformances,butratherbythesynergisticeffects $  whichresultwhenWillis_Corroon_Ԁprofessionalsperformtogether.Teamworkis   viewedasourkeytosuccess,andWillis_Corroon_sapproachtoprogramdesign,   marketing,andserviceistodrawonthecompositeexpertiseofitsprofessionalstaff.   Throughcoordinatedteamwork,Willis_Corroon_Ԁisabletoprovideresponsiveand   professionalriskmanagementservicestoitsclients.Weareonyourstaffbutnoton p yourpayroll.\   8  Intheremainderofthisproposal,wehavedescribedWillis_Corroon_sservice 4 capabilitiesandthemembersofoutstaffwhohavebeenchosentocoordinateand  p deliverthoseservices.WeareproudofWillis_Corroon_sreputationforproviding  \ consistentlyhighqualityservicetoitsclientsinthemarineindustryandwelcome H yourcallstoanyofourcurrentclientstoinquireaboutus.4     ACCOUNTSERVICETEAM     8  Respondingtoriskmanagementserviceneedsrequirestheknowledgeandskillsof  avarietyofprofessionalswhoareexperiencedinallaspectsofriskmanagementin  themarineindustry.Consequently,theindividualschosenbyWillis_Corroon_Ԁfor l yourserviceteamhavediverseeducationandexperiencebackgroundswhich X  combineskillsformanumberofapplicabledisciplinesincludingmarketing,finance, D! losscontrol,underwriting,andadministration.0"    8  BrokerageserviceswillbeprovidedunderthedirectionofScottDavis.Mr.Davis $X" isVicePresidentandhasover10yearsofexperienceintheinsuranceindustry.He $D # isexperiencedinallaspectsoftheriskmanagementprocess.%0!$   #XAXXXA##S-XXA #XAXS- XAXXXA# S-X XA##S- S-5#XAXS- XAXXXAԀ____  # S-X XA##S- S-#XAXS- XAXXXAIn1990,thesupremecourt,insettlingacommissionquestionbetweenaninsurancebroker (#' andinsurancecarrier,foundthattheinsurancebrokerinthatcasewastheagentoftheinsurance )$( carrier.SeePolkandSullivan,Inc.v.UnitedCitiesGasCo.,783S.W.2d538(Tenn.1990). |*%) However,Polkisdistinguishableasthatinsurancecarrierhadissuedabinder,orcontractof h+&* temporaryofinsurance,evidencinganagreementbetweenthepartiesauthorizingthebrokertoact  ontheinsurersbehalf.Thereisnoevidenceofanycontractoragreementbetweentheinsurerand  brokerinthecaseatbar.   t # S-X XAm# XAX S-#XAXX XA# XAXXXA  3.Application `   L    WhenweapplytheanalysisofstatutoryhistoryandcaselawintheStateofTennesseewe 8  determinethatWillis_Corroon_ԀisabrokerwhowashiredbyEbbtidetoprocureinsurancefor $ t Ebbtide.TheonlyevidenceofagreementsandcontractswasofthosebetweenEbbtideandWillis  ` _Carroon_.NoevidenceofacontractoragreementbetweenWillis_Carroon_ԀandTravelerswas  L  introduced;thus,Willis_Corroon_Ԁdoesnotcomeundertheforcedagency_statute,_ԀTennesseeCode  8  Annotatedsection566147._# S-X XA##S- S-#XAXS-W____e_ԀrelyoncommonlawtodeterminewhetherornotWillis_Corroon_ $  isaninsuranceagentoraninsurancebroker.     Whenweapplytheanalysisof_Glisson_Ԁv.StonewecandeterminethatWillis_Corroon_Ԁwas   indeedabroker,actingasamiddlemanbetweentheinsuredandtheinsurer.Beingabroker,Willis   _Corroon_Ԁhelditselfout generallyforemploymentinsecuringinsurance.Assuch,Ebbtidehired p Willis_Corroon_Ԁtoprocureinsuranceinseveraldifferentareas,includingworkerscompensation. \ Willis_Corroon_Ԁcarriedouttheinstructionsoftheinsuredandnegotiatedontheinsuredsbehalfin H settlingdisputeswithregardtopayrollrecordsandpremiumpayments. 4   Inaddition,whenwelookatthefactorsreliedonbythefederalcourtandstatedinCouch  \ onInsurance3rd,45:4we,likethefederalcourt,findthat asidefromthelackofevidence H regardingwhopaid[Willis_Corroon_]oncethecoveragewaswritten,itisclearthattheremaining 4 factorsweighheavilyinfavorofviewing[Willis_Corroon_]as[Ebbtides]brokerforthepurposeof   thistransaction.RoyalSurplusLinesIns.Co.,90_F.R.D._Ԁat471.Itisapparentfromreviewofthe   recordthatEbbtidehiredWillis_Corroon_Ԁandsettheminmotion;Ebbtidecontrolledtheactionsof  Willis_Corroon_,andWillis_Corroon_ԀwasattemptingtoprotecttheinterestofEbbtide.Assuch,we  determinethatWillis_Corroon_,inthismatterandunderthefactsofthiscase,wasactingastheagent  ofEbbtide. l     @ III D! Willis_Corroon_ԀwasNegligentinPerformingitsDutiesasEbbtidesAgent  0"      Itisauniversalgeneralrulethatanagentorbrokerofinsurancewho,withaviewto $X" compensationforhisservices,undertakestoprocureinsuranceforanother,andunjustifiablyand $D # throughhisfaultorneglect,failstodoso,willbeheldliableforanydamageresultingtherefrom. %0!$ __Massengill___,_Ԁ639S.W.2d_at_Ԁ_660;_Ԁ_____see_Ԁalso_Bell______,_Ԁ829S.W.2d_at_Ԁ_154._____ԀFurther,_ [_t]he__Ԁmeasureof &"% damagesforbreachofacontracttoprocureinsuranceistheamountwhichmighthavebeen '#& recoveredundersuchinsuranceifprocuredasagreed._Farmer________,_Ԁ1986WL2304at_*4.__________We_Ԁfindthat (#' theevidencedoesnotpreponderateagainstthecourtsdeterminationthatWillis_Corroon_ )$( unjustifiablyandthroughnegligencefailedtoperformitsdutiesasabrokerandagentforEbbtide |*%) intheprocuringofinsurance.Willis_Corroon_Ԁfailedinitsobligationto faithfullydischargethetrust h+&* reposedin[it],andassuch, isliableto[its]principleforthedamagesufferedbyreasonofthewant  ofinsurance._Gleason_,410App.at75.Wethusaffirmthetrialcourtsawardofdamagesinthis  matter.     IV ` EbbtidesNegligence;ProximateCauseoftheInjury;andMitigationoftheDamages  L      WebelievethetrialcourtproperlyfoundthatEbbtidewasnotnegligentandwasnotliable $ t foranyofthedamagesresultingfromthebreachofinsurancecontractbetweenEbbtideand  ` Travelers.Theevidencedoesnotpreponderateagainstthetrialcourtsfindingthattheoriginal  L  insurancecontractbetweenEbbtideandTravelershadbeenmodifiedbycourseofdealingstoa  8  contractwhichprovidedasecondchanceprovision.Ebbtidehadeveryrighttorelyonthis $  contractualprovisionanditspastdealingswithTravelersintheirbeliefthatthiscurrent   disagreementwouldberesolvedandinsurancewouldbereinstatedinthesamemannerashad   occurredinpreviousyears.Assuch,Ebbtidesrelianceonthebeliefthatthe cancellationaudit   wasanauditofthesamemannerashadbeenperformedinpastyearstoassistinresolutiontothe   disputebetweenEbbtideandTravelerswasreasonableanditsactions,andlackofaction,inreliance p onthisbeliefwasalsoreasonable.Uponfindingthattheinsurancecoveragewouldnotbereinstated \ anduponreleasebyTravelerstoobtainnewinsurance,Ebbtidewasdiligentinobtaininginsurance H withEIB.ThecourtfoundthatnoinsurancecouldhavebeenobtainedatanearlierdatebyEbbtide 4 andthusEbbtidedidnotfailtomitigateitsdamagesinthisregard.  p   Wefurtherfindthattheevidencedidnotpreponderateagainstthecourtsdeterminationthat H Willis_Corroon_snegligencewastheproximatecauseofEbbtidesdamages.InthepastEbbtidehad 4 compliedwithTravelersdemandsforpartialpaymentsinordertoobtainreinstatementofcoverage.   Inaddition,Ebbtidehadspecificallyrequestedanamountforpaymenttobemadethefollowingday.   Thus,thecourtsdeterminationthatEbbtidewaswillingtomake,andwouldhavemade,such  paymentonceanamountwasprovidedbyTravelerswasnotagainstthepreponderanceofthe  evidence.TheonlyreasontherequestedpaymentwasnotmadewasduetoWillis_Corroon_sbreach  ofdutyinnotprovidingthepaymentinformationtoEbbtide.Hadthisinformationbeenprovided l toEbbtide,thepaymentwouldhavebeenmade,andinsurancecoveragewouldhavebeencontinued X  byTravelers. D!   AsEbbtidecommittednonegligenceofitsown,andTravelerswasnotnegligentinthis #l! matter,therewasnoruleorpolicythatrelievedWillis_Corroon_Ԁofitswrongdoing,andtheharm $X" whichresulted(theexpensetoEbbtideresultingfromaworkerscompensationclaimwhichwasnot $D # coveredbyinsurance)wasforeseeable.WefindthatWillis_Corroon_sbreachofdutywasthe %0!$ proximatecauseofEbbtidesdamages.See_McClenahan_Ԁv.Cooley,806S.W.2d767(Tenn.1991) &"% (threeprongtestforproximatecause). '#& ______ h+&*   V  TravelerswasNotNegligentandDidNotContributetotheBreachofInsuranceContract       Thetrialcourtdeterminedthat,throughcourseofdealings,TravelersandEbbtidehada t contractwhichcontaineda secondchanceprovision.ThisprovisionrequiredTravelerstoprovide ` Ebbtidewithtermsforthis secondchanceafterthepolicyofficiallylapsed,whichtermsmustbe L  strictlycompliedwithbyEbbtide.WeagreewiththetrialcourtthatTravelersfulfilleditsdutyunder 8  thecontractbyprovidingthesetermstoWillisCorroon,theagentforEbbtide,viafaxonFebruary $ t 6.TheinsurancecontractwasbreachedwhenEbbtide,asaresultofWillisCorroonsfailureto  ` forwardthepaymentterms,failedtocomplywiththesecondchanceprovisions.Thus,Travelers  L  waswithinitslegalrightstocanceltheinsurancecontractandnotprovideforreinstatement.  8     VI   Conclusion        Willis_Corroon_Ԁis,underthelawsoftheStateofTennessee,anagentofEbbtideinthiscase.   TheTennesseelegislaturerewrotetheagencylawinthisstatein1988makingsection566147 p applytoonlythoseindividualswhohaveanagencycontractoragreementtosolicitornegotiateon \ thatinsurersbehalf.Nosuchagreementorcontractexistsinthiscase.Commonlawofagencyin H TennesseemakesWillis_Corroon_ԀtheagentofEbbtideunderthefactsofthiscase.Willis_Corroon_ 4 breacheditsdutyinfailingtotransmittoEbbtidethereinstatementrequirementsprovidedtoWillis  p _Corroon_ԀbyTravelers.Asaresult,EbbtidebreachedthecontractofinsurancewithTravelers  \ allowingTravelerstocanceltheinsurancepolicy.Asthebreachofinsurancecontactbetween H EbbtideandTravelerswasproximatelycausedbythenegligenceofWillis_Corroon_,Willis_Corroon_ 4 isliableforallensuingdamagesaswouldhavebeencoveredunderthecontractofinsurance   betweenEbbtideandTravelersInsurance.Weaffirmthetrialcourtsruling_____and_Ԁremandforfurther   proceedings_notinconsistentwiththisopinion.     `     h     ____________________________________ X     `     h     WILLIAMB.CAIN,JUDGE