ÿWPC¶+ b %l^ r 0 ˆ~UNwT4Xl z{ÒõÇ mÉ 0DàÆ$Æêư Æv #Á< Ný 0Jÿ EI 0TK UNŸ í 0^õ 0hS 0r» 0|- 0†© 0/ 1u¿ 0d4U>˜U*Ö‚ ‚Y¢ëûbæØîv~ÆvÓD! 0ë' B( 0@( D3_( D-’( 0K¿( AS )Æ]) 0¤#* 0DÇ* A« +»Ñ¥‹+s (`£ª$¡¡Ñ€.ÑÑ8€½­»»d»»d8ÑÑ ý ÑÓ  Ó(í€"  Z6Times New Roman Regular‰Q‡+¢Ø+003|x ˜C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wptÿU‹ÿÀÀÀ(#Ã$òòÚ  Ú0Ú  ÚóóLevel 1Level 2Level 3Level 4Level 5‚Level 1Level 2Level 3Level 4Level 5„Level 1Level 2Level 3Level 4Level 5…Level 1Level 2Level 3Level 4Level 5˜HP LaserJet 8000 Series PSØÚØÚÚØØÚ02 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô(ÆúI Z‹6Times New Roman Regular 2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman< Œ 9p`(Times xÝ ƒ!ÝÑ#€d#ÑÔ€(ÔÔ€(¼ÔÑ#€d#ÑÑ ý ÑÓ  ÓÝ  ÝÝ ƒR$Ýà àòòÚ  ÚÚ  ÚóóÔ€(ôÔÝ  ÝÔ_Ô€Plaintiffs€also€had€an€umbrella€policy€through€American€States€Insurance€Company.€€American€StatesÏinitially€provided€a€defense€to€Plaintiffs€in€the€lawsuit€filed€by€the€parents€of€Ms.€Moberg€and€Ms.€Jordan.€€AmericanÏStates€then€obtained€a€declaratory€judgment€which€relieved€it€of€the€duty€to€defend€or€to€provide€coverage.€€ThatÏruling€is€not€at€issue€in€this€appeal.Ì Ý ƒ!ÝÑ#€d#ÑÔ€(ÔÔ€(¼ÔÑ#€d#ÑÑ ý ÑÓ  ÓÝ  ÝÝ ƒR$Ýà àòòÚ  ÚÚ  ÚóóÔ€(ôÔÝ  ÝÔ_Ô€Since€the€statute€of€limitations€defense€was€decided€on€the€merits€by€the€Chancery€Court€at€a€later€time,Ïwe€will€treat€the€Chancery€Courtððs€resolution€of€this€issue€as€an€implicit€rejection€of€Plaintiffs€argument€that€thisÏdefense€was€not€asserted€in€a€timely€fashion.Ì OÝ ƒ!ÝÑ#€d#ÑÔ€(ÔÔ€(¼ÔÑ#€d#ÑÑ ý ÑÓ  ÓÝ  ÝÝ ƒR$Ýà àòòÚ  ÚÚ  ÚóóÔ€(ôÔÝ  ÝÔ_Ô€€Several€jurisdictions€allow€claims€such€as€those€asserted€in€the€present€case€to€be€grounded€in€negligenceÏor€in€contract,€or€both.€€òòSeeóó€Robin€Cheryl€Miller,€J.D.,€Annotation,€òòLiability€of€Insurance€Agent€or€Broker€onÏGround€of€Inadequacy€of€Liability„Insurance€Coverage€Procuredóó,€60€A.L.R.5th€165€(1998)€at€ðð€4.€Ì áÝ ƒ!ÝÑ#€d#ÑÔ€(ÔÔ€(¼ÔÑ#€d#ÑÑ ý ÑÓ  ÓÝ  ÝÝ ƒR$Ýà àòòÚ  ÚÚ  ÚóóÔ€(ôÔÝ  ÝÔ_Ô€€Subsequent€to€the€òòBethlehemóó€decision,€Tenn.€Code€Ann.€ðð€28„3„104(a)€was€amended€to€specificallyÏprovide€that€malpractice€actions€against€attorneys€and€accountants€were€governed€by€a€one€year€statute€of€limitations.€ÏThe€legislature€did€not€include€professional€negligence€actions€against€insurance€agents€in€this€amendment.€€TheÏresult€in€òòBethlehemóó€reached€by€this€Court€and€affirmed€by€the€Supreme€Court€is,€therefore,€still€instructive€in€theÏpresent€case.€Ì- ù- ÎÝ ƒ!ÝÑ#€d#ÑÔ€(ÔÔ€(¼ÔÑ#€d#ÑÑ ý ÑÓ  ÓÝ  ÝÝ ƒR$Ýà àòòÚ  ÚÚ  ÚóóÔ€(ôÔÝ  ÝÔ_Ô€€In€the€òòRed€Giantóó€and€other€cases€cited€above,€an€issue€that€is€often€discussed€is€the€potential€for€fraud€andÏcollusion€between€the€insured€and€the€injured€party€when€agreeing€to€a€stipulated€judgment€which,€in€turn,€will€beÏused€against€the€insurance€carrier.€€This€issue€has€not€been€addressed€on€appeal,€and€even€if€it€had,€we€would€likewiseÏconclude€that€it€has€been€waived€by€not€being€asserted€and/or€appealed€in€Defendantððs€motion€to€intervene€and€setÏaside€the€judgment€filed€in€the€Circuit€Court€action.€€We,€therefore,€express€no€opinion€as€to€when€and€if€a€stipulatedÏsettlement€agreement€such€as€the€one€involved€in€this€case€can€be€collaterally€attacked€on€the€basis€of€fraud€orÏcollusion.ÌPtPtHHØ(ÿáÿâùFG(üHHØ(d'`Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  Serv Geneva ÒÒ  Serv Geneva Ò(|G2ÄÉ$¤¤Ý ƒ£ª!ÝÑ€.ÑÑ8€»»d XXdì8ÑÑ ý ÑÓ  ÓÝ  Ýà  àòòÚ  Ú0Ú  ÚóóÔ€ôfXò»»Ô d("ÿÿ$££Ò  ÒÒ  ÒVVVV'ÿÿdxd)!ÈÈÈÈdxdx( ±þ$’’ò òFigure€Ú  Ú1Ú  Úó ó^_X`YEþÿ<<CÿÿƒLevel 1Level 2Level 3Level 4Level 5(|3‰<$¢¢Ý ƒ£ª!ÝÑ€.ÑÑ8€»»d XXdì8ÑÑ ý ÑÓ  ÓÝ  Ý($$””ò òÚ  Ú1Ú  Úó óX[Z&OLE 2.0 Box <=8ÿÿÿÿÿÿÿÿÿÿCÿÿ HKKKKÝ ƒ!ÝÔ . ÔÔ€(ÔÔ€(¼ÔÑ#€))¼d#ÑÑ#€))¼d#ÑÑ ý ÑÓ  ÓÝ  ÝÑ  ÑÔ_ÔÔ_ÔÑ8€y XXdê»»d 8ÑÑ  Ñà@ àÔ€(îÔIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àAT€KNOXVILLEÔ€(¼ÔÌÓ  ÓOctober€16,€2001€SessionÌÔ€(XÔÌò òÔ€(¼ÔTIP'S€PACKAGE€STORE,€INC.,€òòet€al.óó€v.ÌCOMMERCIAL€INSURANCE€MANAGERS,€INC.,€òòet€alóó.ó óÌÌÔ€(XÔà@ àò òAppeal€from€the€Chancery€Court€for€Knox€CountyÌà@ àNo.€117251„3€€€€€€Sharon€J.€Bell,€ChancellorÌFILED€DECEMBER€11,€2001ÌßA€V) °°` d€÷E<÷` AßÌÌNo.€E2000„02070„Ô_ÔCOAÔ_Ô„R3„CVÌßA€V) °°` dE<Ê` AßÌÓ  Óó óÌPlaintiffs€H.€Wayne€Ô_ÔTiptonÔ_Ô€(ð ðÔ_ÔTiptonÔ_Ôðð)€and€Tipððs€Package€Store,€Inc.,€(Tipððs)€brought€this€lawsuitÏagainst€George€P.€Taylor€(ð ðTaylorðð)€and€Commercial€Insurance€Managers,€Inc.,€(ð ðCommercialðð)Ïseeking€indemnification€for€an€agreed€judgment€entered€against€Tipððs€in€a€lawsuit€involving€theÏtragic€deaths€of€two€young€University€of€Tennessee€students.€€Plaintiffs€claim€that€DefendantsÏimproperly€obtained€for€them€an€ð ðoccurrenceðð€liability€policy€as€opposed€to€a€ð ðclaims€madeððÏliability€policy,€thereby€resulting€in€a€lack€of€insurance€coverage€for€the€wrongful€death€claims.€ÏAfter€a€jury€trial,€the€Chancery€Court€entered€judgment€in€favor€of€both€Plaintiffs€in€the€amount€ofÏ$1,000,000€for€indemnification€based€on€the€juryððs€answers€to€interrogatories.€€Defendants€appeal,Ïarguing,€among€other€things,€that:€(1)€the€statute€of€limitations€had€run;€(2)€a€covenant€not€to€executeÏentered€into€between€the€families€of€the€deceased€young€women€and€Plaintiffs€extinguished€anyÏpotential€liability;€and€(3)€the€juryððs€responses€to€interrogatories€were€fatally€inconsistent.€€WeÏaffirm€in€part,€reverse€in€part,€and€remand.€€ÌÓ  ÓÌò òTenn.€R.€App.€P.€3€Appeal€as€of€Right;€Judgment€of€the€ChanceryÌÓ  Óà@ àCourt€Affirmed€in€Part€and€Reversed€in€Part;€Case€Remanded.ó óÌòòÌD.€Michael€Ô_ÔSwineyÔ_Ô,€J.óó,€delivered€the€opinion€of€the€court,€in€which€òòHouston€M.€Ô_ÔGoddardÔ_Ô,€Ô_ÔP.J.Ô_Ô,Ïóóand€òòHerschel€P.€Franks,€J.,€óójoined.ÌÌRonald€L.€Grimm€and€Stephen€W.€Gibson,€Knoxville,€Tennessee,€for€the€Appellants€CommercialÏInsurance€Managers,€Inc.,€and€George€P.€Taylor,€IV.ÌÌJames€S.€MacDonald,€Knoxville,€Tennessee,€for€the€Appellees€Rebecca€J.€Jordan,€deceased,€by€nextÏfriend€and€parents,€Marvin€H.€Jordan€and€Betty€J.€Jordan.ÌÌJohn€K.€Ô_ÔHarberÔ_Ô,€Knoxville,€Tennessee,€for€the€Appellee€Kathleen€M.€Ô_ÔMobergÔ_Ô,€deceased,€by€nextÏfriend€and€father,€Warren€D.€Ô_ÔMobergÔ_Ô.ÌÌM.€Robin€Ô_ÔRepassÔ_Ô€and€John€D.€Ô_ÔLockridgeÔ_Ô,€Jr.,€Knoxville,€Tennessee,€for€the€Appellees€TipððsÏPackage€Store,€Inc.,€and€H.€Wayne€Ô_ÔTiptonÔ_Ô.ÌÌà@ àò òOPINIONÌÌà@ àòòBackgroundóóó óÌÌà àà àOn€April€18,€1989,€a€tragic€incident€occurred€in€Knox€County.€€Two€University€ofÏTennessee€students,€Kathleen€Ô_ÔMobergÔ_Ô€and€Rebecca€Jordan,€were€struck€and€killed€by€an€automobileÍdriven€by€Gregory€Darren€Ô_ÔGuhyÔ_Ô€(ð ðÔ_ÔGuhyÔ_Ôðð).€€In€March€and€April€of€1990,€two€separate€lawsuitsÏwere€filed€in€the€Knox€County€Circuit€Court€by€the€parents€of€Ms.€Ô_ÔMobergÔ_Ô€and€Ms.€Jordan€as€nextÏfriends.€€Included€as€defendants€were€Tipððs€Package€Store€(ð ðTipððsðð)€and€H.€Wayne€Ô_ÔTiptonÔ_ÔÏ(ð ðÔ_ÔTiptonÔ_Ôðð).€€Tipððs€is€an€incorporated€retail€liquor€store€and€Ô_ÔTiptonÔ_Ô€is€a€shareholder,€officer,€andÏdirector€of€that€corporation.€€The€material€allegations€against€Tipððs€and€Ô_ÔTiptonÔ_Ô€involved€claims€ofÏnegligence€in€selling€alcohol€to€a€minor€who€allegedly€then€provided€the€alcohol€to€Ô_ÔGuhyÔ_Ô,€who€laterÏstruck€and€killed€Ms.€Ô_ÔMobergÔ_Ô€and€Ms.€Jordan€while€driving€intoxicated.€Ì€Ìà àà àThe€present€lawsuit€arises€from€a€series€of€events€which€occurred€shortly€before€theÏtragic€automobile€accident.€€This€action€was€filed€by€Tipððs€and€Ô_ÔTiptonÔ_Ô€(ð ðPlaintiffsðð)€againstÏCommercial€Insurance€Managers,€Inc.€(ð ðCommercialðð),€George€P.€Taylor€(ð ðTaylorðð),€and€GeorgeÏP.€Taylor€d/b/a€Consolidated€Insurance€Services€(ð ðConsolidatedðð).€€The€material€allegationsÏcontained€within€the€complaint€center€around€Plaintiffsðð€attempt€to€secure€liquor€liability€insuranceÏthrough€Commercial€and€Taylor€(ð ðDefendantsðð).€€Plaintiffs€allege€they€were€contacted€in€earlyÏsummer€or€fall€of€1989,€by€Defendants€who€inquired€into€selling€Plaintiffs€liability€insurance.€€AtÏthat€time,€Plaintiffs€already€were€insured€through€Lexington€Insurance€Company€(ð ðLexingtonðð),Ïwith€policy€limits€of€$300,000.€€The€insurance€policy€through€Lexington€was€a€ð ðclaims€madeððÏpolicy€with€effective€dates€of€12/22/88€through€12/22/89.€€Plaintiffs€claim€they€made€it€clear€toÏDefendants€that€there€was€to€be€no€gap€in€coverage€and€they€wanted€coverage€similar€to€that€whichÏwas€currently€in€effect.€€Plaintiffs€claim€they€were€assured€by€Taylor€that€there€would€be€no€lapse€inÏcoverage€and€the€new€coverage€would€be€identical€to€the€coverage€afforded€by€Lexington.€€RelyingÏon€these€assurances,€Plaintiffs€obtained€new€insurance€coverage€through€Great€American€InsuranceÏCompanies€(ð ðGreat€Americanðð),€with€an€effective€policy€date€of€12/19/89€through€12/19/90.€€TheÏpolicy€limits€on€this€insurance€policy€were€$1,000,000.€€The€policy€issued€through€Great€AmericanÏwas,€however,€an€ð ðoccurrenceðð€policy,€as€opposed€to€a€ð ðclaims€madeðð€policy.€€ÌÌà àà àThe€wrongful€death€suits€filed€against€Tipððs€and€Ô_ÔTiptonÔ_Ô€by€the€parents€of€Ms.ÏÔ_ÔMobergÔ_Ô€and€Ms.€Jordan€were€forwarded€to€both€Lexington€and€Great€American€for€coverageÏand/or€defense.€€Lexington€denied€any€coverage€or€obligation€to€defend€under€its€ð ðclaims€madeððÏpolicy€because€the€claims€by€the€parents€of€Ms.€Ô_ÔMobergÔ_Ô€and€Ms.€Jordan€were€made€after€theÏeffective€date€of€its€policy.€€Likewise,€Great€American€denied€coverage€or€an€obligation€to€defendÏunder€its€ð ðoccurrenceðð€policy€because€the€incident€which€resulted€in€the€deaths€of€Ms.€Ô_ÔMobergÔ_ÔÏand€Ms.€Jordan€did€not€occur€during€Ô_Ôthe€effective€date€of€its€policy.× ƒ* ××  ×€€Because€of€the€absence€ofÏcoverage,€Plaintiffs€brought€suit€against€Defendants€for€negligence,€breach€of€contract,€andÏfraudulent€misrepresentation.€€ÌÌà àà àOn€April€10,€1990,€after€discerning€that€there€might€not€be€any€applicable€insuranceÏcoverage,€Plaintiffsðð€attorney€sent€Taylor€a€letter€which€states€as€follows:ÌÌà8 àà8 àThis€will€confirm€our€telephone€conversation€this€morning€relative€toÏthe€liquor€liability€insurance€policy€obtained€by€your€company€forÏTipððs€Package€Store,€Inc.ÌÌà8 àà8 àAs€you€are€aware,€Tipððs€Package€Store,€Inc.€and€Wayne€Tipton,ÏIndividually,€along€with€others€has€(sic)€been€sued€in€the€captionedÍmatter€arising€out€of€an€alleged€sale€of€alcoholic€beverage€to€a€minorÏon€or€about€April€18,€1989.€€ÌÌà8 àà8 àIt€appears€that€you€acquired€a€liquor€liability€insurance€policy€forÏTipððs€Package€Store,€Inc.€with€effective€coverage€dates€fromÏDecember€19,€1989€to€December€19,€1990.€€This€policy€appears€toÏhave€been€issued€by€the€Great€American€Insurance€Company€andÏbears€Policy€Number€PAC€1„64„70„38„00.€€This€policy€is€anÏð ðoccurrenceðð€policy.€€As€you€are€aware,€Tipððs€Package€Store,€Inc.Ïpreviously€maintained€a€policy€of€liquior€(sic)€liability€insuranceÏpolicy€through€the€Lexington€Insurance€Company€with€effectiveÏdates€of€coverage€of€December€22,€1988€through€December€22,Ï1989,€Policy€Number€PC€559€0733€0262.€€This€policy€was€aÏð ðclaims€madeðð€policy.ÌÌà8 àà8 àIt€appears€that€at€the€time€Tipððs€Package€Store,€Inc.€moved€itsÏcoverage€from€the€Casey€C.€Jones€Insurance€Group,€Inc.€to€yourÏorganization,€you€were€given€copies€of€the€previous€policy€andÏadvised€in€a€meeting€between€yourself,€Wayne€Tipton€and€CharlesÏLaRue€that€Tipððs€Package€Store,€Inc.€desired€to€obtain€an€insuranceÏpolicy€that€would€provide€continual€liquor€liability€coverage.€€In€asÏmuch€(sic)€as€the€policy€that€you€issued€was€an€ð ðoccurrence€policyððÏand€the€previous€policy€was€a€ð ðclaims€madeðð€policy,€there€has€beenÏa€lapsed€(sic)€in€coverage€which€includes€the€time€frame€involved€inÏthe€captioned€suit.ÌÌà8 àà8 àI€respectfully€request€that€you€notify€your€errors€and€ommissionsÏ(sic)€carrier€of€this€situation€and€ask€that€they€contact€meÏimmediately.ÌÌà8 àà8 àI€am€enclosing€a€copy€of€the€captioned€suit.€€As€I€advised,€we€areÏunder€a€very€short€time€constraint€and€it€may€well€be€that€your€carrierÏwishes€to€defend€this€suit€on€behalf€of€Tipððs€Package€Store,€Inc.€andÏWayne€Tipton.€€Obviously,€if€someone€does€not€defend€this€suit€onÏbehalf€of€these€parties,€I€will€undertake€same€and€will€be€lookingÏtoward€your€carrier€for€payment€of€the€fees€and€expenses€involved€inÏsame€as€well€as€indemnification€of€any€judgment€that€may€beÏrendered€against€these€insureds.€€ÌÌà8 àà8 àI€appreciate€a€prompt€response€from€your€carrier.€€ÌÌà àà àThree€years€and€six€days€after€the€date€of€this€letter,€on€April€16,€1993,€the€presentÏlawsuit€was€filed€in€the€Knox€County€Chancery€Court.€€Defendant€George€P.€Taylor€d/b/a/ÏConsolidated€Insurance€Services€immediately€filed€a€motion€to€dismiss€or€for€summary€judgment,Ïclaiming€that€Consolidated€Insurance€Services€was€a€partnership€created€on€January€1,€1990,€andÏtherefore€could€not€possibly€have€had€any€involvement€with€Tipððs€or€the€events€complained€of€in€theÏcomplaint.€€Commercial€filed€an€answer€denying€the€pertinent€allegations€contained€within€theÏcomplaint€and€averring€that€Plaintiffs€were€fully€aware€that€the€policy€issued€through€GreatÏAmerican€was€an€ð ðoccurrenceðð€policy.€€Commercial€did€not€assert€a€statute€of€limitations€defenseÏin€its€answer.€€An€Agreed€Order€was€entered€in€August€of€1993,€by€the€Chancery€Court€grantingÏGeorge€P.€Taylor€d/b/a/€Consolidated€Insurance€Companyððs€motion€to€dismiss€or€for€summaryÍjudgment.€€Although€George€P.€Taylor€d/b/a/€Consolidated€Insurance€Company€was€no€longer€aÏdefendant,€George€P.€Taylor€remained€a€defendant€in€the€lawsuit€but€never€filed€an€answer.ÌÌà àà àOn€February€5,€1996,€the€Mobergs€and€Jordans€entered€into€a€Settlement€AgreementÏand€Release€(ð ðAgreementðð)€with€Tipððs€and€Tipton.€€In€that€Agreement,€Tipððs€and€Tipton€agreed€toÏthe€entry€of€a€judgment€against€Tipððs€for€compensatory€damages€with€a€stipulated€amount€ofÏdamages.€€The€Mobergs€and€Jordans€released€any€claims€for€punitive€damages€and€fully€releasedÏall€claims€they€had€against€Tipton€individually.€€The€parties€to€the€Agreement€also€agreed€that,Ïnotwithstanding€the€fact€that€a€judgment€for€compensatory€damages€would€be€entered€against€Tipððs,Ïthe€Mobergs€and€Jordans€would:ÌÌà8 àà8 àrelinquish€and€release€any€and€all€rights€to€execute€against€the€assetsÏof€Tipððs,€or€in€any€other€way€seek€to€legally€satisfy€the€judgment€forÏcompensatory€damages€to€be€rendered€against€Tipððs€with€the€soleÏexception€that€the€Mobergs€and€the€Jordans€retain€their€rights€asÏthird€party€beneficiaries€of€the€claim€currently€pending€in€theÏChancery€Court€for€Knox€County,€Tennessee,€against€the€errors€andÏomissions€carrier€of€the€insurance€agent€for€Tipððs€who€failed€toÏsecure€appropriate€liquor€liability€coverage.ð8ðÌÌà àà àFive€days€later,€on€February€15,€1996,€the€Knox€County€Circuit€Court€found€GuhyÏ66.67%€liable€for€the€injuries€and€deaths€of€Ms.€Moberg€and€Ms.€Jordan,€and€also€found€TipððsÏ33.33%€percent€liable.€€The€lawsuit€against€Tipton€was€dismissed€with€prejudice.€€AfterÏdetermining:€(1)€the€pecuniary€value€of€the€lives€of€the€deceased€young€ladies€based€on€stipulatedÏexpert€testimony;€and€(2)€the€amount€of€medical€and€funeral€expenses,€the€Circuit€Court€proratedÏthe€damages€based€on€the€respective€degrees€of€fault€of€the€defendants.€€The€Circuit€Court€thenÏentered€judgment€in€favor€of€the€Mobergs€against€Tipððs€in€the€amount€of€$812,226.06,€and€in€favorÏof€the€Jordans€against€Tipððs€in€the€amount€of€$547,806.40.ÌÌà àà àWith€the€Circuit€Court€judgment€in€hand,€the€Mobergs€and€Jordans€then€sought€toÏintervene€in€the€Chancery€Court€lawsuit,€claiming€they€had€a€direct€pecuniary€interest€in€this€lawsuitÏwhich€was€not€being€adequately€protected€by€the€existing€parties.€€They€also€claimed€they€wereÏintended€beneficiaries€and/or€otherwise€entitled€to€the€benefits€of€the€insurance€contract€which€TipððsÏand€Commercial€ð ðattemptedðð€to€enter€into.€€The€Chancery€Court€granted€the€motions€to€intervene.€ÏPlaintiffs€then€amended€their€complaint€to€substitute€new€counsel,€change€certain€allegationsÏregarding€costs€and€attorneys€fees,€and€bring€to€the€Chancery€Courtððs€attention€the€judgmentÏentered€in€the€Circuit€Court.€€Commercial€filed€an€answer€to€the€amended€complaint.€€Again,€noÏstatute€of€limitations€defense€was€asserted,€and€no€answer€was€filed€by€Taylor.ÌÌà àà àCommercial€filed€an€ð ðAmended€Answer€to€Amended€Complaintðð,€on€March€27,Ï1998,€almost€five€years€after€this€litigation€began.€€In€this€pleading,€Commercial€alleged€for€the€firstÏtime€that€Plaintiffsðð€claims€of€negligence€and€fraudulent€misrepresentation€were€barred€by€theÏapplicable€statute€of€limitations,€although€no€mention€was€made€as€to€what€that€statute€of€limitationsÏactually€was.€€Five€days€later,€Commercial€filed€a€motion€to€dismiss€the€claims€of€negligence€andÏfraudulent€misrepresentation,€asserting€that€the€allegations€of€negligence€and€fraudulentÏmisrepresentation€were€well€known€to€Tipððs€and€Tipton€on€April€10,€1990,€the€date€of€the€letter€setÏforth€at€length€above.€€According€to€Commercial,€the€ð ðStatute€of€Limitations€for€tort€actionsÏinvolving€negligence€or€fraudulent€misrepresentation€(T.C.A.€ðð€28„3„104€„€in€1997€Supplement)€isÏone€(1)€year€from€the€date€of€the€occurrence.ðð€€Commercial€averred€that€since€the€present€lawsuitÏwas€filed€three€years€and€six€days€after€April€10,€1990,€the€one€year€statute€of€limitations€on€theseÏclaims€had€long€since€expired,€thereby€leaving€the€breach€of€contract€claim€as€the€only€remainingÍviable€claim.€€Taylor€did€not€join€in€this€motion.€€Plaintiffs€filed€a€response€arguing,€inter€alia,€thatÏthe€motion€to€dismiss€should€be€denied€pursuant€to€Rules€8€and€12€of€the€Tenn.€R.€Civ.€P.€becauseÏCommercial€waived€any€statute€of€limitations€defense€since€it€was€not€timely€asserted.€ÏCommercialððs€motion€was€denied,€but€the€Chancery€Court€specifically€stated€that€this€defense€couldÏbe€raised€again€by€motion€at€an€appropriate€time€during€trial.× ƒ+ ××  ×ÌÌà àà àAfter€a€five€day€jury€trial,€the€Chancery€Court€issued€an€Opinion€based€in€large€partÏon€interrogatories€answered€by€the€jury.€€The€Chancery€Court€dismissed€the€breach€of€contractÏclaim€based€on€the€juryððs€conclusion€that€Taylor€agreed€to€obtain€continuous€liquor€liabilityÏcoverage€and€that€he€provided€this€coverage.€€In€a€subsequent€Opinion€issued€by€the€ChanceryÏCourt,€the€juryððs€conclusion€on€this€issue€was€discussed€in€more€detail.€€The€Chancery€Court€statedÏthat€the€jury€was€asked€to€determine€the€contractual€duty€assumed€by€Defendants€and€ð ðapparentlyÏbelieved€that€the€definition€submitted€by€defendants,€that€ððcontinuous€coverageðð€meant€coverageÏwith€no€break€in€time,€was€all€that€was€offered€by€the€defendants€and€ultimately€accepted€byÏTipton.ðð€€The€Chancery€Court€also€found€that€while€the€jury€concluded€Taylor€had€informedÏTipton€that€the€policy€to€be€issued€was€an€ð ðoccurrence€policyðð€and€not€a€ð ðclaims€madeðð€policy,€itÏalso€found€that€Taylor€had€failed€to€make€sure€Tipton€knew€and€appreciated€the€differences€betweenÏthese€two€types€of€policies.€€According€to€the€Chancery€Court,€this€was€sufficient€to€support€aÏjudgment€against€Taylor€and€Commercial€for€professional€negligence.€€The€Chancery€Court€alsoÏaddressed€the€one€year€statute€of€limitations€defense,€concluding€that€the€action€was€timely€filedÏbecause€the€statute€of€limitations€did€not€begin€to€run€until€the€judgment€was€entered€in€the€CircuitÏCourt€in€February€of€1996,€at€which€time€Plaintiffs€suffered€a€ð ðlegally€cognizableðð€injury.€€TheÏChancery€Court€then€determined€that€Plaintiffs€were€entitled€to€a€judgment€in€the€amount€ofÏ$1,000,000.00€for€the€professional€negligence€of€Taylor€which€was€imputable€to€Commercial€underÏagency€principles.€€A€Final€Judgment€was€entered€in€accordance€with€the€Chancery€CourtððsÏOpinions,€at€which€time€the€Chancery€Court€awarded€judgment€in€favor€of€Tipððs€and€Tipton€againstÏTaylor€and€Commercial€ð ðjointly€and€severallyðð€in€the€amount€of€$1,000,000.00€ð ðforÏindemnification€against€the€judgments€awarded€to€the€intervening€Plaintiffs,€the€Jordans€and€theÏMobergs,€by€judgment€entered€in€the€Circuit€Court€for€Knox€County,€Tennessee,€on€February€15,Ï1996.ðð€ÌÌà àà àBoth€Defendants€then€filed€a€motion€and€amended€motion€for€new€trial€and€motionÏto€alter€or€amend€the€final€judgment€and€findings€of€fact€and€conclusions€of€law.€€DefendantsÏasserted€there€were€approximately€seventy„eight€errors,€the€first€one€being:ÌÌà8 àà8 àThe€Court€erred€in€failing€to€dismiss€the€Plaintiffsðð€and€InterveningÏPlaintiffsðð€Complaints€on€the€issues€of€alleged€negligence,€on€theÏground€that€the€Complaints€were€filed€after€the€applicable€one€(1)Ïyear€Statute€of€Limitations€had€run.€€ÌÌà àà àSince€Taylor€had€neither€filed€an€answer€nor€joined€in€the€previous€motion€toÏdismiss€filed€by€Commercial€pertaining€to€the€statute€of€limitations€defense,€this€post„trial€motionÏwas€the€first€time€this€defense€was€raised€on€Taylorððs€behalf.€€In€addition€to€the€statute€ofÏlimitations€defense,€and€as€pertinent€to€this€appeal,€five€other€issues€were€raised€in€DefendantsððÏmotion€for€new€trial€and€motion€to€alter€or€amend€the€final€judgment€and€findings€of€fact€andÍconclusions€of€law.€€These€other€five€issues,€which€we€take€verbatim€from€Defendantsðð€brief€onÏappeal€are:ÌÌà8 àà8 à(1)€€The€Trial€Court€erred€in€not€dismissing€the€complaint€on€theÏbasis€that€the€Settlement€Agreement€&€Release€entered€into€by€theÏoriginal€Plaintiffs€and€Intervening€Plaintiffs€eliminated€the€liability€ofÏthe€Defendants;ÌÌà8 àà8 à(2)€€The€Trial€Court€erred€in€not€dismissing€the€claims€of€theÏIntervening€Plaintiffs€due€to€their€lack€of€standing€and€in€notÏordering€a€new€trial;€ÌÌà8 àà8 à(3)€€The€Trial€Court€erred€in€not€dismissing€the€complaint€on€theÏbasis€that€the€Knox€County€Circuit€Court€Final€Judgment€is€null,Ïvoid,€and€of€no€legal€effect;ÌÌà8 àà8 à(4)€€The€Trial€Court€erred€in€not€ordering€a€new€trial€on€the€basis€ofÏinconsistencies€in€the€juryððs€answers€to€the€special€interrogatories;ÏandÌÌà8 àà8 à(5)€€The€Trial€Court€erred€in€not€reducing€the€judgment€againstÏDefendants€to€Three€Hundred€Thousand€Dollars€($300,000).ÌÌà àà àPlaintiffs€also€appeal€the€amount€of€the€judgments€they€were€awarded,€claiming€thatÏDefendants€should€be€required€to€pay€the€entire€amount€of€the€Circuit€Court€judgment€as€tortÏdamages.ÌÌà@ àò òòòDiscussionóóó óÌÌà àà àFirst,€we€address€the€statute€of€limitations€issue.€€During€the€course€of€this€litigation,Ïat€least€until€this€appeal,€the€main€focus€on€this€argument€by€the€parties€was€when€the€one€yearÏstatute€of€limitations€began€to€run.€€Defendants€claimed€that€the€one€year€statute€of€limitations€beganÏto€run€no€later€than€April€10,€1990,€the€date€on€which€Plaintiffsðð€counsel€sent€Defendants€the€letterÏinforming€them€of€their€alleged€negligence€and€requesting€that€they€notify€their€errors€andÏomissions€carrier€of€the€situation.€€Plaintiffs€argued,€and€the€Chancery€Court€agreed,€that€the€statuteÏof€limitations€began€to€run€on€the€date€the€Circuit€Court€judgment€was€entered,€at€which€timeÏPlaintiffs€suffered€a€ð ðlegally€cognizableðð€injury.€ÌÌà àà àWe€believe€the€statute€of€limitations€issue€is€resolved€by€a€determination€of€whichÏstatute€of€limitations€applies,€as€opposed€to€when€it€began€to€run.€€The€applicable€statute€ofÏlimitations€is€determined€according€to€the€gravamen€of€the€complaint,€rather€than€its€designation€asÏan€action€for€tort€or€contract.€€òòKeller€v.€Colgems„EMI€Music,€Inc.óó,€924€S.W.2d€357,€359€(Tenn.€Ct.ÏApp.€1996).€€In€order€to€do€this,€the€court€must€look€to€the€basis€for€which€the€damages€are€sought.€ÏòòIdóó.€€In€Tennessee,€it€is€well€established€that€an€insurance€agent€employed€to€maintain€insuranceÏcoverage€for€a€client€ð ðmay€be€held€liable€on€a€negligence€theory€if€the€agent€fails€to€use€reasonableÏcare€and€diligence€in€continuing€the€insurance,€either€by€obtaining€a€renewal€or€replacement€policyÏor€by€properly€maintaining€an€existing€policy.ðð€€òòWood€v.€Newman,€Hayes€&€Dixon€InsuranceÏAgencyóó,€905€S.W.2d€559,€562€(Tenn.€1995).€€In€the€present€case,€relying€on€the€juryððs€answers€toÏinterrogatories,€the€Chancery€Court€concluded€that€Taylor€was€guilty€of€professional€negligence,€butÍthere€had€been€no€breach€of€contract.× ƒ, ××  ×€€The€judgment€against€the€Defendants€was€thus€predicated€inÏtort.€€ÌÌà àà àSince€there€is€no€specific€statute€of€limitations€governing€Plaintiffsðð€negligenceÏclaim,€we€must€decide€if€it€is€a€personal€tort€action€pursuant€to€Tenn.€Code€Ann.€ðð€28„3„104(a)(1)Ïwhich€has€a€one€year€statute€of€limitations,€or€a€property€tort€action€pursuant€to€Tenn.€Code€Ann.€ððÏ28„3„105(1)€which€has€a€three€year€statute€of€limitations.€€A€similar€situation€was€addressed€by€thisÏCourt€in€òòBethlehem€Steel€Corporation€v.€Ernst€&€Whinneyóó,€1989€WL€139701€(Tenn.€Ct.€App.ÏNov.€21,€1989),€which€involved€a€claim€of€professional€negligence€against€an€accounting€firm.€€InÏòòBethlehemóó,€the€plaintiff€claimed€it€reasonably€relied€on€a€year€end€audited€financial€statementÏprepared€by€the€defendant€with€regard€to€one€of€the€companies€to€which€the€plaintiff€supplied€steel.€ÏThe€plaintiff€claimed€this€report€was€negligently€prepared€and€it€relied€on€the€report€to€its€financialÏdetriment.€€The€jury€returned€a€verdict€for€the€plaintiff€in€the€amount€of€$500,000.€€On€appeal,€oneÏof€the€issues€was€which€statute€of€limitations€applied,€the€one€year€statute€of€limitations€in€Tenn.ÏCode€Ann€ðð€28„3„104(a),€or€the€three€year€in€Tenn.€Code€Ann.€ðð€28„3„105(1).€€In€concluding€thatÏthe€action€was€governed€by€the€three€year€statute€of€limitations,€this€Court€stated€as€follows:€€ÌÌà8 àà8 àà àThe€one€year€limitations€period€found€in€T.C.A.€ððÏ28„3„104(a)€is€not€restricted€to€bodily€injuries.€€The€TennesseeÏSupreme€Court€has€stated€that€"injuries€to€the€person"€includeÏactions€brought€for€injuries€resulting€from€"invasions€of€rights€thatÏinhere€in€man€by€reason€of€being€a€person€in€the€eyes€of€the€law."€ÏòòBrown€v.€Dunstan,óó€219€Tenn.€291,€295,€409€S.W.2d€365,€367Ï(1966).€€The€Supreme€Court,€however,€has€also€held€that€injury€toÏproperty€is€not€limited€to€physical€injury€to€property.€€òòVance€v.ÏSchulderóó,€547€S.W.2d€927€(Tenn.€1977).€€Appellant€contends€that€itÏis€claiming€an€injury€against€property€and€therefore€the€three€yearÏstatute€of€limitations€found€in€T.C.A.ðð€28„3„105(1)€is€controlling€inÏthis€case.ÌÌà8 àà8 àà à"The€applicable€statute€of€limitations€in€a€particular€cause€willÏbe€determined€according€to€the€gravamen€of€the€complaint."òò€€VanceÏv.€Schulderóó,€at€931.€€In€òòBrown€v.€Dunstanóó,€supra,€the€plaintiff€allegedÏthat€the€defendants€entered€into€a€conspiracy€to€defraud€and€discreditÏhim.€€The€court€held€that€the€gravamen€of€the€action€was€damages€toÏthe€plaintiff's€reputation€as€a€business€man,€father,€and€respected€manÏof€society€and€concluded€that€such€damages€were€for€injuries€"to€theÏperson."€€In€òòVance€v.€Schulderóó,€supra,€the€court€held€that€theÏgravamen€of€the€plaintiff's€action€was€fraud€in€the€inducement€of€aÏcontract€resulting€in€a€financial€loss€of€almost€$35,000.€€The€courtÏconcluded€that€the€loss€in€value€sustained€by€plaintiff€from€theÏalleged€tort€of€fraud€was€included€within€the€phrase€"injuries€toÏpersonal€property"€as€contemplated€by€the€three€year€statute€ofÏlimitations.ÌÌà8 àà8 àà àIn€light€of€the€Supreme€Court's€opinions€mentioned€above,Ïwe€are€required€to€examine€the€complaint€in€order€to€determine€if€theÏgravamen€of€appellant's€claim€is€one€of€injury€to€the€person€or€injuryÏto€personal€property.€€We€are€of€the€opinion€that€appellant's€claim€isÏfor€injury€to€personal€property€as€contemplated€by€the€court€inòò€VanceÏv.€Schulderóó,€supra€and€therefore€we€are€in€agreement€with€the€trialÏcourt€that€the€three€year€statute€applies€in€this€case.ÌÌòòBethlehemóó,€1989€WL€139701€at€*4€(Tenn.€Ct.€App.€1989).€€On€appeal€to€the€Tennessee€SupremeÏCourt,€the€decision€of€this€Court€as€it€pertained€to€the€applicable€statute€of€limitations€was€affirmedÏð ðfor€the€reasons€stated€in€its€opinionðð.€€òòSee€Bethlehem€Steel€Corporation€v.€Ernst€&€Whinneyóó,€822ÏS.W.2d€592,€596€(Tenn.€1991).€€ÌÌà àà àIn€the€present€case,€the€damages€alleged€by€Plaintiffs€are€economic€losses€resultingÏfrom€having€to€pay€a€judgment€which€they€would€not€have€had€to€pay€but€for€the€negligence€ofÏTaylor.€€In€our€opinion,€Plaintiffsðð€claim€is€for€injury€to€property€and€the€three€year€statute€ofÏlimitations€found€in€Tenn.€Code€Ann.€ðð28„3„105(1)€applies.× ƒ- ××  ×ÌÌà àà àSince€we€hold€the€one€year€statute€of€limitations€does€not€apply,€the€ChanceryÏCourtððs€conclusion€that€the€one€year€statute€of€limitations€had€not€run€is€of€no€consequence.€€We,Ïtherefore,€express€no€opinion€on€the€propriety€of€the€Chancery€Courtððs€conclusion€as€to€when€theÏone€year€statute€of€limitations€began€to€run.€€ÌÌà àà àIn€Commercialððs€motion€to€dismiss€and€again€in€Defendantsðð€motion€for€new€trial,€itÏwas€argued€that€the€negligence€claim€was€barred€by€the€applicable€statute€of€limitations,€and€that€theÏapplicable€statute€of€limitations€was€one€year.€€It€never€was€argued€by€Defendants€at€the€trial€courtÏlevel€that€the€negligence€claim,€or€any€other€claim€for€that€matter,€was€barred€by€the€three€year€statuteÏof€limitations.€€This€three€year€statute€of€limitations€argument€was€advanced€for€the€first€time€onÏappeal.€€ÌÌÌà àà àA€statute€of€limitations€defense€must€be€specifically€pled€or€generally€it€will€beÏconsidered€waived.€€òòSeeóó€Tenn.€R.€Civ.€P.€8.03.€€No€waiver€will€occur,€however,€if€the€opposing€partyÏis€given€fair€notice€of€the€defense€and€an€opportunity€to€rebut€it.€€òòGeorge€v.€Building€MaterialsÏCorporation€of€Americaóó,€44€S.W.3d€481,€486„87€(Tenn.€2001).€€Since€it€was€never€specificallyÏpled€or€argued€to€the€Chancery€Court€by€Defendants€that€the€three€year€statute€of€limitations€hadÏrun,€Defendants€cannot€assert€this€argument€for€the€first€time€on€appeal.€€òòSee€Smith€v.€HarrimanÏUtility€Board,óó€26€S.W.3d€879,€887€(Tenn.€Ct.€App.€2000)(ð ðOur€jurisdiction€is€appellate€only,ÏT.C.A.€ðð€16„4„108(a)(1),€and€thus€the€rule€has€long€been€well„settled€that€[t]his€Court€can€onlyÏconsider€such€matters€as€were€brought€to€the€attention€of€the€trial€court€and€acted€upon€orÏ[pretermitted]€by€the€trial€court.ðð).€€It€likewise€cannot€be€argued€that€Plaintiffs€had€fair€notice€of€thisÏdefense€because€it€was€never€pled€or€raised€by€Defendants€in€the€Chancery€Court.€€ÌÌà àà àWe€hold€the€one€year€statute€of€limitations€does€not€apply.€€We€further€hold€thatÏbecause€Defendants€never€pled€or€argued€in€the€Chancery€Court€that€the€three€year€statute€ofÏlimitation€had€run,€this€defense€is€waived.€€We,€therefore,€cannot€dismiss€this€suit€as€being€barred€byÏeither€the€one€year€or€three€year€statute€of€limitations.€€Plaintiffsðð€argument€that€Taylor€neverÏasserted€or€properly€raised€the€one€year€statute€of€limitations€defense€thus€becomes€moot.€ÏDefendantsðð€position€concerning€the€statute€of€limitations€is€without€merit.€€ÌÌà àà àThe€next€argument€advanced€by€Defendants€is€that€the€Chancery€Court€erred€in€notÏdismissing€the€complaint€because€the€Agreement€effectively€extinguished€any€liability€on€the€part€ofÏTipððs€and€Tipton.€€In€making€this€argument,€Defendants€rely€upon€several€cases€from€otherÏjurisdictions,€most€notably€òòFreeman€v.€Schmidt€Real€Estate€&€Ins.,€Inc.óó,€755€F.2d€135€(8òòthóó€Cir.Ï1985)(applying€Iowa€law).€€òòFreemanóó€involved€a€claim€against€Schmidt€Real€Estate€&€Ins.,€Inc.,€andÏothers€alleging€negligent€failure€to€procure€liability€insurance€for€Russell€Catron.€€Freeman€andÏCatron€were€in€an€automobile€accident,€and€in€settlement€of€that€litigation,€Catron€confessedÏjudgment€and€assigned€his€rights€against€the€insurance€agent€to€Freeman€in€exchange€for€a€promiseÏnot€to€execute€on€the€judgment.€€The€magistrate€granted€summary€judgment,€concluding€thatÏbecause€of€the€agreement€not€to€execute€and€the€ð ðindemnity€natureðð€of€insurance€generally,ÏFreeman€had€gained€no€enforceable€rights€through€the€assignment€from€Catron.€€òòIdóó.€at€136.€€ÌÌà àà àThe€United€States€Court€of€Appeals€for€the€Eighth€Circuit€affirmed.€€In€so€doing,€theÏEighth€Circuit€acknowledged€the€split€of€authority€among€the€various€states€which€have€addressedÏthis€issue.€€The€Eighth€Circuit€noted€that€some€states€hold€that€a€covenant€not€to€execute€is€merely€aÏcontract€and€not€a€release,€such€that€the€underlying€tort€liability€remains€intact€and€a€breach€ofÏcontract€action€lies€if€the€injured€party€seeks€to€collect€on€the€judgment.€€The€tortfeasor€is,€therefore,Ïstill€legally€obligated€to€the€injured€party,€and€the€insurer€must€make€good€on€its€contractualÏpromise€to€pay.€€755€F.2d€at€137,€138€(citing€òòState€Farm€Mutual€Automobile€Insurance€Co.€v.ÏPaynter,óó€122€Ariz.€198,€593€P.2d€948,€953€(Ct.€App.1979);€òòGlobe€Indemnity€Co.€v.€Blomfieldóó,€115ÏAriz.€5,€562€P.2d€1372,€1375€(Ct.€App.1977);€òòCritz€v.€Farmers€Insurance€Groupóó,€230€Cal.€App.2dÏ788,€41€Cal.€Rptr.€401,€410€(1964)(agreement€holding€tortfeasor€harmless€as€to€judgment€in€excessÏof€his€insurance€coverage€doesn't€foreclose€suit€against€insurer€for€bad„faith€failure€to€settle)).ÏUnder€this€theory,€an€uninsured€party€would€be€injured€by€the€insurance€agent's€negligence€inÏfailing€to€procure€a€policy€because€he€or€she€would€have€the€outstanding€"liability"€against€which€heÏor€she€sought€to€insure.€€755€F.2d€at€138.€€ÌÌà àà àThe€òòFreemanóó€Court€noted€that€other€states€reach€the€same€conclusion€utilizing€aÏdifferent€rationale.€€These€cases€focus€on€the€right€of€the€insured€to€protect€himself€from€bad€faithÏconduct€of€his€insurer:€ÌÌà8 àà8 àFor€example,€the€Nebraska€Supreme€Court€has€held€that€an€insured,Ïand€thus€the€insurer,€is€"legally€obligated€to€pay"€within€the€meaningÏof€the€policy€despite€an€agreement€not€to€execute€when€the€insuredÏenters€into€such€an€agreement€to€protect€himself€from€the€insurer'sÏdenial€of€coverage€and€refusal€to€defend€under€the€policy.€€òòMetcalf€v.ÏHartford€Accident€&€Indemnity€Co.óó,€176€Neb.€468,€126€N.W.2d€471Ï(1964).€€The€Nebraska€court€stressed€that€the€insurer€hadÏ"repudiated€its€obligation"€to€the€insured,€òòid.óó,€126€N.W.2d€at€476,Ïand€some€element€of€misconduct€by€the€insurer€generally€has€beenÏpresent€in€the€cases€in€which€courts€have€followed€òòMetcalfóó.€€òòE.g.óó,ÏòòAmerican€Family€Mutual€Insurance€Co.€v.€Kivelaóó,€408€N.E.2d€805,Ï813€(Ind.€Ct.€App.€1980)€(insurer€"abandoned"€insured€when€itÏrefused€to€defend€on€the€ground€that€the€policy€had€been€revoked€forÍfalse€statements€on€the€application);€òòGriggs€v.€Bertramóó,€88€N.J.€347,Ï443€A.2d€163€(1982)€(insurer€failed€to€promptly€notify€insured€thatÏit€was€denying€coverage).€€Even€those€courts€which€base€theirÏfindings€of€liability€on€the€distinction€between€a€release€and€aÏcovenant€not€to€execute€acknowledge€the€policy€implications€of€anÏopposite€conclusionð!ð€settlements€such€as€the€one€here€would€noÏlonger€serve€their€intended€purpose.€òòE.g.óó,€òòPaynteróó,€593€P.2d€at€953.ÌÌòòFreemanóó,€755€F.2d€at€138.€€ÌÌà àà àòòFreemanóó€also€discussed€the€cases€reaching€a€contrary€conclusion.€€These€courtsÏgive€the€ð ðlegally€obligated€to€payðð€language€the€practical€construction:€€ð ðAn€insured€protected€by€aÏcovenant€not€to€execute€has€no€compelling€obligation€to€pay€any€sum€to€the€injured€party;€thus,€theÏinsurance€policy€imposes€no€obligation€on€the€insurer.ðð€€Id.€(citing€òòStubblefield€v.€St.€Paul€Fire€&ÏMarine€Insurance€Co.óó,€267€Or.€397,€517€P.2d€262,€264€(1973)€(en€banc);€òòBendall€v.€Whiteóó,€511€F.ÏSupp.€793,€795€(N.D.€Ala.€1981);€òòHuffman€v.€Peerless€Insurance€Co.óó,€17€N.C.€App.€292,€193ÏS.E.2d€773,€774,€òòcert.€deniedóó,€283€N.C.€257,€195€S.E.2d€689€(1973)).€€An€individual€who€isÏuninsured€due€to€an€agent's€negligence€then€will€have€suffered€no€damages,€as€he€would€have€hadÏno€rights€under€the€policy€anyway.€€òòFreemanóó,€755€F.2d€at€138.€€òòSee€also€Far€West€Federal€Bank,ÏS.B.,€v.€Transamerica€Title€Insurance€Companyóó,€99€Or.€App.€340,€345,€791€P.2d€1259,€1262€(Or.ÏApp.1989)(a€promise€to€execute€only€to€the€extent€that€an€insurer€is€liable€terminates€the€insuredððsÏliability€and€there€is€no€loss€that€the€insured€could€sustain.).ÌÌà àà àThe€òòFreemanóó€decision€was€a€diversity€case€applying€Iowa€law.€€At€the€time€of€thatÏdecision,€the€issues€had€not€been€squarely€decided€by€the€Iowa€Supreme€Court.€€Unfortunately€forÏDefendants,€once€this€happened,€the€Iowa€Supreme€Court€reached€a€different€conclusion.€€In€òòRedÏGiant€Oil€Company€v.€Lawloróó,€528€N.W.2d€524€(Iowa€1995),€the€issue€was€whether€ð ðan€insurerÏmay€be€liable€to€the€injured€party€when€the€insured€before€judgment€is€protected€by€an€agreementÏnot€to€execute.ðð€€òòIdóó.€at€529.€€Rejecting€the€rationale€of€òòFreemanóó,€the€Iowa€Supreme€CourtÏconcluded€that€such€agreements€were€permitted€in€that€state.€€òòIdóó.€at€531.€€More€specifically,€the€òòRedÏGiantóó€court€determined€that€the€covenant€not€to€execute€was€ð ðmerely€an€agreementðð€and€ð ðnot€aÏreleaseðð.€€The€underlying€tort€liability€therefore€remained.€€òòId.óó€at€532.€€òòSee€also€Kobbeman€v.ÏOlesonóó,€574€N.W.2d€633,€636€(S.€D.€1998)(ð ðAfter€considering€the€gamut€of€decisions€.€.€.€we€findÏourselves€in€agreement€with€those€courts€upholding€assignments€of€a€cause€of€action€in€exchangeÏfor€a€covenant€not€to€execute€in€instances€of€failure€to€procure€requested€insurance.ðð).ÌÌà àà àIn€the€present€case,€there€is€no€applicable€insurance€policy,€so€we€are€not€directlyÏconfronted€with€ð ðlegally€obligated€to€payðð€policy€language.€€The€decisions€from€the€various€statesÏdo,€however,€provide€valuable€guidance.€€While€we€located€no€Tennessee€authority€directly€on€point,ÏòòWolff€&€Munier,€Inc.,€v.€Price„Waterhouseóó,€811€S.W.2d€532€(Tenn.€Ct.€App.€1991)€is€helpful.€€InÏanticipation€of€the€entry€of€a€judgment,€Wolff€&€Munier€entered€into€a€settlement€agreement€withÏSamuelson€whereby€Samuelson€agreed€to€pay€a€total€of€$175,000€in€a€series€of€monthly€payments.€ÏòòId.óó€at€533.€€In€return,€Wolff€&€Munier€agreed€to€refrain€from€executing€on€the€judgment€until€it€wasÏpaid€off,€at€which€time€a€release€in€favor€of€Samuelson€would€be€executed.€€òòId.óó€€Defendant€PriceÏWaterhouse€argued€that€the€settlement€agreement€precluded€recovery€against€all€defendantsÏpursuant€to€the€Uniform€Contribution€Among€Tort„Feasors€Act,€Tenn.€Code€Ann.€ðð€29„11„101.€ÏThe€trial€court€agreed€and€dismissed€the€lawsuit.€€In€vacating€the€dismissal,€this€Court€stated€thatÏunder€the€terms€of€the€settlement€agreement,€there€was€no€release€at€the€present€time.€€ð ðThe€onlyÏthing€in€effect€ð8ð€is€an€agreement€by€[Wolff€&€Munier]€not€to€execute€on€the€judgment€whileÏSamuelson€is€not€in€default€of€the€terms€of€the€settlement€agreement.ðð€€òòIdóó.€at€535.€€ÌÌà àà àAfter€considering€the€various€issues€and€ramifications€thereof,€we€agree€with€theÏconclusion€reached€by€Iowa€Supreme€Court€in€òòRed€Giantóó.€€We€hold€that€based€on€the€languageÏcontained€within€the€Agreement€at€issue€in€this€case,€the€covenant€not€to€execute€entered€intoÏbetween€the€Mobergs,€Jordans,€and€Tipððs€was€a€contract€between€these€parties€which€did€notÏextinguish€the€underlying€liability€of€Tipððs€for€compensatory€damages.€€Tipððs€is€thus€an€injuredÏparty€because€it€has€outstanding€liability€against€which€it€sought€to€insure.€€The€DefendantsððÏargument€on€this€issue€as€to€Tipððs€is€without€merit.€€ÌÌà àà àNotwithstanding€this€conclusion,€the€clear€language€of€the€Agreement€did€in€factÏrelease€any€and€all€claims€against€Tipton€individually,€and€Tipton€was€thus€dismissed,€withÏprejudice,€from€the€Circuit€Court€lawsuit.€€The€Agreement€did€operate€as€a€full€release€as€to€Tipton.€ÏSince€Tipton€was€fully€released€from€any€potential€liability€and€because€he€has€suffered€no€damagesÏsince€he€was€dismissed€from€that€lawsuit,€we€believe€the€Chancery€Court€was€in€error€in€entering€aÏjudgment€in€favor€of€Tipton.€€The€entry€of€the€judgment€in€favor€of€Tipton€is,€therefore,€reversed.€ÌÌà àà àThe€third€argument€advanced€on€appeal€by€Defendants€is€that€the€Mobergs€andÏJordans€are€not€third€party€beneficiaries€and€should€not€have€been€allowed€to€intervene€as€plaintiffsÏin€this€action.€€Defendants€assert€that€they€were€prejudiced€by€this€improper€intervention€becauseÏPlaintiffs€and€Intervening€Plaintiffs€were€thus€allowed€to€ð ðmarshal€their€combined€forces€againstÏthe€Defendantsðð€at€trial.€€ÌÌà àà àIn€resolving€this€issue,€we€are€guided€by€the€decision€of€this€Court€in€òòWaddell€v.ÏDavisóó,€571€S.W.2d€844€(Tenn.€Ct.€App.€1978).€€òòWaddellóó€involved€a€passenger€in€an€automobileÏsuing€the€automobile€ownerððs€insurance€agent€for€negligently€failing€to€obtain€uninsured€motoristÏcoverage€on€the€ownerððs€vehicle.€€The€òòWaddellóó€plaintiffs€claimed€they€were€third€party€beneficiariesÏto€the€contract€to€obtain€uninsured€motorist€coverage€between€the€insurance€agent€and€the€owner€ofÏthe€vehicle.€€In€concluding€that€the€passenger€òòcouldóó€be€a€third€party€beneficiary,€this€Court€stated€asÏfollows:ÌÌà8 àà8 àà àIt€must€be€here€noted€that€the€plaintiffs'€lawsuit€is€not€basedÏupon€a€contract€of€insurance;€no€policy€was€issued.€€The€plaintiffsÏsue€the€agent€Davis€for€damages€based€upon€his€negligent€failure€toÏhave€the€policy€issued.€€Plaintiffs€sue€Cotton€Belt€InsuranceÏCompany€under€the€theory€of€òòrespondeat€superioróó,€seeking€damagesÏas€a€result€of€the€negligent€failure€to€act€on€the€part€of€Cotton€Belt'sÏagent,€Davis.ÌÌà@ à*€*€*€*ÌÌà8 àà8 àà à€The€plaintiffs€argue€that€they€are€third„party€beneficiaries€toÏthe€contract€between€the€owner€of€the€vehicle€and€Davis€wherebyÏDavis€was€to€obtain€uninsured€motorist€coverage€for€the€owner.€ÏThird„party€beneficiary€contracts€are€recognized€and€enforced€inÏTennessee€at€the€suit€of€the€third„party€beneficiary.€€òòNational€SuretyÏCorp.€v.€Fischer€Steel€Corp.€€óó(1964),€213€Tenn.€396,€374€S.W.2dÏ372.€€Further,€we€hold€that€where€a€promise€is€made€to€benefit€aÏthird„party€on€the€happening€of€a€contingency,€the€third„party€mayÏsue€on€the€contract€upon€the€occurrence€of€the€contingency.€ÏCompareòò€Johnson€v.€Holmes€Tuttle€Lincoln„Mercuryóó€(1958),€160ÏCal.App.2d€290,€325€P.2d€193.ÌÌà8 àà8 àà àThis€cause€is€presently€being€considered€only€upon€theÏmotion€to€dismiss€which€was€filed€by€Davis.€€On€motion€to€dismissÏwe€take€the€averments€of€the€complaint€as€true,€therefore€for€theÏpurposes€of€the€motion€we€find€that€a€contract€did€exist€between€theÏowner€of€the€vehicle€and€Davis€whereby€the€latter€was€to€obtain€aÏcontract€of€uninsured€motorist€coverage€for€the€owner,€and€theÏdefendant€Davis€negligently€breached€that€contract.€€The€issue€isÏwhether€the€plaintiff,€an€injured€passenger€in€the€owner's€automobile,Ïcan€establish€that€she€is€a€third„party€beneficiary€to€the€contractÏbetween€the€owner€and€Davis.ÌÌà8 àà8 àà àThe€test€is€whether€the€plaintiff„passenger€would€have€beenÏan€"insured"€under€the€policy€had€it€been€issued€as€contracted€for.€ÏIn€12€Couch€on€Insurance€2d,€ðð€45:645€(2d€Ed.€1964);€it€is€statedÏthat€the€term€"insured"€under€an€uninsured€motorist€endorsementÏincludes€the€named€insured,€his€spouse,€relatives€living€in€the€sameÏhousehold,€operators€with€permission€and€occupants€of€the€insuredÏvehicle.€€The€policy€that€should€have€been€issued€is€not€before€theÏCourt.€€We€can€not€say€on€motion€to€dismiss€whether€theÏplaintiff„passenger€would€have€been€an€insured€under€the€policyÏcontracted€for,€had€it€been€issued.€€A€fact€question€is€presented€whichÏrequires€proof.ÌÌòòWaddell€v.€Davisóó,€571€S.W.2d€844,€847„48€(Tenn.€Ct.€App.€1978).ÌÌà àà àIn€the€present€case,€we€are€confronted€with€a€similar€dilemma€as€was€faced€inÏòòWaddellóó.€€Specifically,€we€are€called€upon€to€decide€whether,€as€a€matter€of€law,€the€Mobergs€andÏJordans€would€have€been€considered€third€party€beneficiaries€under€the€contract€of€insurance€whichÏòòshouldóó€have€been€issued€had€Taylor€not€negligently€failed€to€make€sure€Tipton€knew€andÏappreciated€the€differences€between€a€ð ðclaims€madeðð€and€an€ð ðoccurrenceðð€policy.€€The€policy€thatÏwould€have€issued€had€there€been€no€negligence€obviously€does€not€exist.€€ÌÌà àà àDefendants€argue€that€the€language€in€the€contracts€with€Lexington€and€GreatÏAmerican€do€not€support€the€conclusion€that€the€Mobergs€and€Jordans€were€third€partyÏbeneficiaries.€€The€problem€with€this€argument€is€that€these€insurance€policies€simply€do€not€affordÏany€coverage€in€this€case.€€We€cannot€rely€on€the€language€of€insurance€policies€which€do€not€applyÏwhen€ascertaining€whether€the€Mobergs€and€Jordans€would€have€been€third€party€beneficiariesÏunder€a€policy€that€should€have€been,€but€was€not,€issued.€€In€the€absence€of€such€a€policy,€we€agreeÏwith€the€conclusion€reached€by€the€òòWaddellóó€Court€that€such€a€determination,€at€least€to€some€extent,Ïpresents€a€fact€question€requiring€proof.€€Perhaps€if€this€precise€issue€had€been€litigated€at€trial€and,Ïif€necessary,€posed€to€the€jury,€the€facts€would€have€supported€a€holding€one€way€or€the€other€thatÏthe€Mobergs€and€Jordans€would€or€would€not€have€been€intended€third€party€beneficiaries.€€On€theÏrecord€before€us,€however,€we€are€unable€to€conclude€that€the€Chancery€Court€erred€as€a€matter€ofÏlaw€in€denying€Defendantsðð€motion€to€dismiss€the€claims€of€the€Intervening€Plaintiffs.€€SinceÏresolution€of€this€issue€would€have€involved€a€factual€determination,€the€Mobergs€and€JordansÏwould€necessarily€have€been€allowed€to€participate€in€the€trial€until,€or€unless,€either:€(1)€the€factsÏwere€sufficient€to€support€a€motion€for€summary€judgment€by€Defendants€on€this€issue,€or€(2)€theÏquestion€was€presented€to€the€jury€for€resolution.€€Accordingly,€Defendantsðð€argument€that€theyÏwere€prejudiced€by€the€trial€participation€of€the€Mobergs€and€Jordans€is€without€merit.ÌÌà àà àWe€also€note€that€even€though€the€Mobergs€and€Jordans€were€allowed€to€intervene,Ïthey€were€not€awarded€a€judgment€in€this€case.€€As€discussed€above,€judgment€was€awarded€in€favorÏof€only€Tipððs€and€Tipton.€€Our€reversal€of€the€judgment€in€favor€of€Tipton,€òòsupraóó,€does€not€changeÏour€analysis€in€any€material€manner,€and€neither€does€the€fact€that€the€judgment€awarded€to€TipððsÏwill€be€used€to€satisfy,€at€least€in€part,€Tipððs€outstanding€liability€to€the€Mobergs€and€Jordans.€€EvenÏif€they€improperly€were€allowed€to€intervene,€when€considering€the€record€as€a€whole,€we€cannot€sayÏthat€this€error€would€have€more€probably€than€not€affected€the€judgment€or€that€it€resulted€inÏprejudice€to€the€judicial€process.€€For€this€reason€alone,€we€would€not€reverse€or€vacate€the€judgmentÏbecause€of€the€Chancery€Courtððs€decision€to€allow€the€Mobergs€and€Jordans€to€intervene.€€òòSeeóóÏTenn.€R.€App.€P.€36(b).ÌÌà àà àNext,€Defendants€argue€that€the€Chancery€Court€erred€in€not€dismissing€theÏcomplaint€on€the€basis€that€the€judgment€entered€in€the€Circuit€Court€was€null,€void,€and€of€no€legalÏeffect.€€Defendants€argue€that€the€judgment€was€not€entered€in€compliance€with€Tenn€Code€Ann.€ððÏ57„10„101€and€102.€€These€statutes€provide:ÌÌà8 àà8 àðð€57„10„101.€Proximate€cause.ÌÌà8 àà8 àà àThe€general€assembly€hereby€finds€and€declares€that€theÏconsumption€of€any€alcoholic€beverage€or€beer€rather€than€theÏfurnishing€of€any€alcoholic€beverage€or€beer€is€the€proximate€causeÏof€injuries€inflicted€upon€another€by€an€intoxicated€person.Ì€Ìà8 àà8 àðð€57„10„102.€Standard€of€proof.ÌÌà8 àà8 àà àNotwithstanding€the€provisions€of€ðð€57„10„101,€no€judge€orÏjury€may€pronounce€a€judgment€awarding€damages€to€or€on€behalfÏof€any€party€who€has€suffered€personal€injury€or€death€against€anyÏperson€who€has€sold€any€alcoholic€beverage€or€beer,€unless€such€juryÏof€twelve€(12)€persons€has€first€ascertained€beyond€a€reasonableÏdoubt€that€the€sale€by€such€person€of€the€alcoholic€beverage€or€beerÏwas€the€proximate€cause€of€the€personal€injury€or€death€sustainedÏand€that€such€person:ÌÌà8 àà8 àà à(1)€€Sold€the€alcoholic€beverage€or€beer€to€a€person€known€toÏbe€under€the€age€of€twenty„one€(21)€years€and€such€person€causedÏthe€personal€injury€or€death€as€the€direct€result€of€the€consumption€ofÏthe€alcoholic€beverage€or€beer€so€sold;€orÌÌà8 àà8 àà à(2)€€Sold€the€alcoholic€beverage€or€beer€to€an€obviouslyÏintoxicated€person€and€such€person€caused€the€personal€injury€orÏdeath€as€the€direct€result€of€the€consumption€of€the€alcoholicÏbeverage€or€beer€so€sold.Ì€ÌDefendants€argue€that€the€Circuit€Court€judgment€is€void€because€there€was€no€determination€madeÏòòby€a€juryóó€beyond€a€reasonable€doubt€that€Tipððs€sold€the€alcohol€to€a€minor€and€such€person€causedÏthe€injury€or€death.ÌÌà àà àDefendants€certainly€were€aware€as€early€as€1990€that€there€was€a€substantialÏlikelihood€of€litigation€arising€from€the€deaths€of€Moberg€and€Jordan,€and€that€their€clients,€TipððsÏand€Tipton,€probably€were€not€insured.€€They€also€were€aware€that€Tipððs€and€Tipton€would€beÍseeking€indemnification€from€them,€per€the€letter€of€August€10,€1990.€€Defendants€forwarded€theÏApril€10,€1990€letter€to€their€errors€and€omissions€carrier€and€informed€Plaintiffsðð€attorney€of€thisÏvia€letter€dated€June€17,€1990.€€By€letter€dated€February€23,€1993,€the€errors€and€omissions€carrierÏwas€given€an€opportunity€to€participate€in€the€settlement€discussions€and€negotiations,€but€refused€toÏdo€so.€€From€the€record,€it€appears€Defendants€took€no€action€during€the€pendency€of€the€CircuitÏCourt€litigation€to€protect€their€interests€or€those€of€their€clients,€Tipððs€and€Tipton.€€After€the€CircuitÏCourt€judgment€was€entered,€however,€Defendants€finally€filed€ð ða€Motion€to€Intervene€in€theÏunderlying€cases€seeking€an€Order€allowing€them€to€Intervene€and€file€a€Petition€to€Set€Aside€theÏJudgments€entered€in€those€cases€pursuant€to€Tennessee€Rule€of€Civil€Procedure,€rule€60.ðð€€TheÏrecord€on€appeal€does€not€contain€the€ruling€of€the€Circuit€Court€on€this€motion,€but€based€on€theÏcurrent€posture€of€this€case,€we€can€only€assume€it€was€denied.€€Defendants€now€seek€in€this€lawsuitÏto€collaterally€attack€the€final€judgment€of€the€Circuit€Court.€€ÌÌà àà àWe€believe€the€outcome€of€this€issue€is€resolved€by€our€Supreme€Courtððs€opinion€inÏòòJerkins€v.€McKinneyóó,€533€S.W.2d€275€(Tenn.€1976).€€In€òòJerkinsóó,€the€Court€discussed€collateralÏattacks€on€judgments€and€adopted€the€following€reasoning€by€the€United€States€Court€of€AppealsÏfor€the€Tenth€Circuit€inòò€Winfield€Associates,€Inc.€v.€Stonecipheróó,€429€F.2d€1087€(10th€Cir.€1970):ÌÌà8 àà8 àGenerally,€such€an€independent€action€must€show€a€recognizedÏground,€such€as€fraud,€accident,€mistake€or€the€like,€for€equitableÏrelief€and€that€there€is€no€other€available€or€adequate€remedy.€€It€mustÏalso€appear€that€the€situation€in€which€the€party€seeking€relief€findsÏhimself€is€not€due€to€his€own€fault,€neglect€or€carelessness.€€In€thisÏtype€of€action,€it€is€fundamental€that€equity€will€not€grant€relief€if€theÏcomplaining€party€ð ðhas,€or€by€exercising€proper€diligence€wouldÏhave€had,€an€adequate€remedy€at€law,€or€by€proceedings€in€theÏoriginal€action€*€*€*€to€open,€vacate,€modify€or€otherwise€obtainÏrelief€against,€the€judgment.ðð€€The€granting€of€relief€in€this€unusualÏtype€of€proceeding€lies€largely€within€the€discretion€of€the€trial€judge.€Ï429€F.2d€at€1090.ÌÌòòJerkinsóó,€533€S.W.2d€at€281,€282.€€ÌÌà àà àDefendants€took€no€action€to€protect€their€interests€or€that€of€their€clients€in€theÏCircuit€Court€lawsuit€until€after€the€judgment€was€rendered,€at€which€time€they€attempted€toÏintervene€in€the€Circuit€Court€lawsuit€and€challenge€the€validity€of€that€judgment.€€When€they€wereÏunsuccessful,€they€were€entitled€to€appeal€the€denial€of€that€motion€to€this€Court,€which,€from€theÏrecord€before€us,€they€did€not€do.€€Defendants€thus€had€an€adequate€remedy€available€to€them€toÏchallenge€the€denial€of€their€motion€seeking€to€set€aside€the€judgment,€if€indeed€there€was€error.€ÏBecause€they€did€not€appeal€the€denial€of€their€motion€to€intervene€and€have€the€judgment€set€aside,Ïthe€determination€by€the€Circuit€Court€is€final€and€they€cannot€reassert€that€same€argument€in€thisÏcase€in€this€appeal.× ƒ/ ××  ×€€Defendants€had€more€than€sufficient€opportunity€to€protect€their€and€theirÍclientsðð€interests€in€the€Circuit€Court€action,€but€chose€not€to€do€so.€€Defendants€now€ask€much€tooÏlate€to€be€protected€from€their€own€choice.ÌÌà àà àNext,€Defendants€attack€the€juryððs€responses€to€interrogatories€on€the€basis€that€theyÏare€inconsistent€and€cannot€be€reconciled.€€The€interrogatories€posed€to€the€jury€as€well€as€theÏjuryððs€responses€are€as€follows:ÌÌà8 àà8 à1.à0 àDid€Taylor€agree€to€obtain€continuous€liquor€liabilityÏcoverage€for€Tipððs€Package€Store,€Inc.€without€a€gap€inÏcoverage?ÌÌà àà àà àòòà à€€€€x€€€€óóà0 àà0 àà0 àòò€€€€€€€€€óóÌÌà àà àà àà à€€Yesà0 àà0 àà0 à€€€NoÌÌà8 àà8 à2.à0 àDid€Taylor€fail€to€provide€the€coverage€he€agreed€to€provide?ÌÌà àà àà àòòà à€€€€€€€€€óóà0 àà0 àà0 àòò€€€€x€€€€óóÌÌà àà àà àà à€€Yesà0 àà0 àà0 à€€€NoÌÌà8 àà8 à3.à0 àDid€Taylor€fail€to€make€sure€Tipton€knew€and€appreciated€theÏdifferences€between€his€then€existing€liquor€liability€coverageÏand€the€new€coverage€that€Taylor€was€proposing?ÌÌà àà àà àòòà à€€€€x€€€€óóà0 àà0 àà0 àòò€€€€€€€€€óóÌÌà àà àà àà à€€Yesà0 àà0 àà0 à€€€NoÌÌà8 àà8 à4.à0 àDid€Taylor€inform€Tipton€that€the€policy€to€be€issued€was€anÏð ðoccurrenceðð€policy€and€not€a€ð ðclaims€madeðð€policy?ÌÌà àà àà àòòà à€€€€x€€€€óóà0 àà0 àà0 àòò€€€€€€€€€óóÌÌà àà àà àà à€€Yesà0 àà0 àà0 à€€€NoÌÌà8 àà8 à5.à0 àDid€Taylor€ask€Tipton€if€there€were€any€potential€claimsÏmade€under€the€old€ð ðclaims€madeðð€policy€of€which€theÏLexington€Insurance€Company€had€not€been€informed€andÏon€which€no€lawsuit€had€been€filed?ÌÌà àà àà àòòà à€€€€x€€€€óóà0 àà0 àà0 àòò€€€€€€€€€óóÌÌà àà àà àà à€€Yesà0 àà0 àà0 à€€€NoÌÌà8 àà8 à6.à0 àDid€Taylor€tell€Tipton€about€the€availability€of€ð ðtailÏcoverageðð€which€would€protect€Tipððs€Package€Store,€Inc.,€inÏthe€event€that€a€claim€was€made€after€the€ð ðclaims€madeððÏpolicy€had€expired?ÌÌà àà àà àòòà à€€€€€€€€€óóà0 àà0 àà0 àòò€€€€x€€€€óóÌÌà àà àà àà à€€Yesà0 àà0 àà0 à€€€NoÌÌà8 àà8 à7.à0 àDid€Tipton€and€Tipððs€Package€Store,€Inc.€receive€the€letterÏdated€January€3,€1990€from€Casey€Jones€Insurance€GroupÏ(Exhibit€Number€7)?ÌÌà àà àà àòòà à€€€€x€€€€óóà0 àà0 àà0 àòò€€€€€€€€€óóÌÌà àà àà àà à€€Yesà0 àà0 àà0 à€€€NoÌÌà8 àà8 à8.à0 àBy€using€the€term€ð ðapples€for€apples,ðð€did€Tipton€mean€thatÏhe€wanted€continuous€insurance€coverage€with€the€sameÏpolicy€limits€for€liability€as€under€the€Lexington€InsuranceÏCompany€ð ðclaims€madeðð€policy?ÌÌÌà àà àà àòòà à€€€€x€€€€óóà0 àà0 àà0 àòò€€€€€€€€€óóÌÌà àà àà àà à€€Yesà0 àà0 àà0 à€€€NoÌÌà àà àBased€on€the€juryððs€answers€to€the€first€two€interrogatories,€the€Chancery€CourtÏconcluded€there€had€been€no€breach€of€contract.€€The€Chancery€Court€also€made€a€specific€findingÏthat€the€juryððs€answers€to€the€fourth,€fifth,€and€sixth€interrogatories€did€not€negate€the€affirmativeÏfinding€in€the€third€interrogatory€upon€which€the€finding€of€professional€negligence€was€based.€ÏAccording€to€the€Chancery€Court,€ð ðTaylorððs€informing€Tipton€of€the€issuance€of€an€ððoccurrenceððÏversus€a€ððclaims€madeðð€policy,€and€his€inquiry€as€to€potential€claims€under€the€policy,€would€notÏprevent€the€jury€from€finding€that€Taylor€did€not€make€sure€that€Tipton€knew€and€appreciated€theÏdifference€between€the€two€policies.ðð€€The€Chancery€Court€further€stated€that€the€failure€to€adviseÏof€ð ðtail€coverageðð€would€only€ð ðsupport€the€finding€of€the€juryðð.€€In€a€subsequent€opinion,€theÏChancery€Court€discussed€the€verdict,€and€found€the€jury€ð ðapparently€believed€that€the€definitionÏsubmitted€by€defendants,€that€ððcontinuous€coverageðð€meant€coverage€with€no€break€in€time,€was€allÏthat€was€offered€by€the€defendants€and€ultimately€accepted€by€Tipton.ðð€€ÌÌà àà àLitigants€are€entitled€to€have€their€rights€settled€by€a€consistent€and€intelligibleÏverdict.€€òòMilliken€v.€Smithóó,€405€S.W.2d€475,€477€(Tenn.€1966).€€It€is€the€duty€of€the€appellate€courtÏto€reverse€and€remand€for€a€new€trial€when€the€verdict€is€inconsistent.€€òòIdóó.€€When€determiningÏwhether€a€verdict€is€irreconcilable,€ÌÌà8 àà8 àIt€is€the€duty€of€the€court€in€construing€verdicts€to€give€them€the€mostÏfavorable€interpretation€and€to€give€effect€to€the€intention€of€theÏjurors€if€that€intention€be€permissible€under€the€law€and€ascertainableÏfrom€the€phraseology€of€the€verdict.€€If€after€an€examination€of€theÏterms€of€the€verdict€the€court€is€able€to€place€a€construction€thereonÏthat€will€uphold€it,€it€is€encumbent€(sic)€upon€the€court€to€do€so.€ÌÌòòHogan€v.€Doyleóó,€768€S.W.2d€259,€263€(Tenn.€Ct.€App.€1988)(quoting€òòTempleton€v.€Quarlesóó,€52ÏTenn.€App.€419,€432,€374€S.W.2d€654,€660€(1963)).ÌÌà àà àWe€believe€the€Chancery€Court€properly€reconciled€any€apparent€inconsistencies€inÏthe€juryððs€interrogatory€answers.€€There€certainly€is€sufficient€evidence€to€support€a€finding€thatÍTaylor€was€negligent€in€not€making€sure€Tipton€appreciated€the€differences€in€the€two€types€ofÏcoverage.€€Assuming€this€to€be€true,€none€of€the€juryððs€other€responses€to€interrogatories€negate€thisÏconclusion.€€For€example,€Taylor€could€have€agreed€to€provide€ð ðcontinuous€liquor€liabilityÏcoverageðð€with€no€break€in€time€(as€opposed€to€break€in€coverage)€and€have€carried€through€withÏthat€promise,€all€the€while€being€negligent€in€not€making€sure€Tipton€appreciated€the€differences€inÏthe€two€policies.€€We€affirm€the€Chancery€Court€judgment€as€it€gives€effect€to€and€reconciles€anyÏapparent€inconsistencies€in€the€juryððs€responses€to€interrogatories.€€ÌÌà àà àThe€final€issues€on€appeal€involve€the€amount€of€the€judgment€awarded€to€Plaintiffs.€ÏBoth€Plaintiffs€and€Defendants€appeal€the€damage€award.€€The€ð ðclaims€madeðð€policy€withÏLexington€had€policy€limits€of€$300,000.€€The€ð ðoccurrence€policyðð€with€Great€American€hadÏpolicy€limits€of€$1,000,000.€€As€set€forth€above,€one€of€the€interrogatories€posed€to€the€jury€was€asÏfollows:ÌÌà8 àà8 àBy€using€the€term€ð ðapples€for€apples,ðð€did€Tipton€mean€that€heÏwanted€continuous€insurance€coverage€with€the€same€policy€limitsÏfor€liability€as€under€the€Lexington€Insurance€Company€ð ðclaimsÏmadeðð€policy?ÌÌThe€jury€responded€ð ðyes.ðð€€At€trial,€Tipton€claimed€he€told€Taylor€that€he€wanted€ð ðapples€forÏapplesðð,€meaning€that€he€wanted€the€same€insurance€coverage€with€the€same€limits.€€Plaintiffs,Ïhowever,€did€not€get€ð ðapples€for€applesðð€because€what€they€got€was€an€ð ðoccurrenceðð€policy.€ÏDefendants€argue€that€if€Plaintiffs€truly€had€received€ð ðapples€for€applesðð€as€requested,€they€wouldÏhave€obtained€a€ð ðclaims€madeðð€policy€in€the€amount€of€$300,000,€as€opposed€to€$1,000,000.€ÏDefendants€thus€claim€that€their€maximum€potential€liability€is€$300,000,€even€though€PlaintiffsÏpaid€for€policy€limits€of€$1,000,000€with€Great€American.€ÌÌà àà àPlaintiffs€argue€that€the€full€panoply€of€tort€damages€should€be€applicable€andÏDefendants€should€be€required€to€pay€the€full€amount€of€the€Circuit€Court€judgment€against€TipððsÏtotaling€$1,360,032.46€as€indemnification€for€the€negligence€of€Taylor.€€Intervening€Plaintiff€JordanÏargues€that€prejudgment€interest€should€accrue€from€the€date€of€entry€of€the€underlying€judgment€inÏCircuit€Court.€€Tipsðð€and€Tipton€adopted€this€argument€and€likewise€request€same.ÌÌà àà àAt€trial,€Taylor€testified€that€he€did€not€want€to€make€a€proposal€to€Tipton€based€onÏthe€same€amount€of€coverage€that€was€in€existence€with€the€Lexington€policy€(i.e.,€$300,000).€ÏTaylor€stated:ÌÌà8 àà8 àI€did€not€want€to€make€a€proposal€on€the€same€coverages€that€he€had.€ÏIf€he€wanted€that,€he€was€going€to€stay€where€he€was.€€What€I€wasÏtrying€to€do€was€give€him€an€alternative€to€the€program€that€heÏcurrently€had.ÌÌTaylor€was€successful€in€proposing€a€new€alternative,€including€an€increase€in€the€policy€limits€toÏ$1,000,000.€€Tipton€consequently€obtained€a€policy€with€this€higher€policy€limits.€€Had€Taylor€notÏbeen€negligent,€Plaintiffs€would€have€had€a€$1,000,000€policy€which€provided€coverage€for€theÏwrongful€deaths€of€Moberg€and€Jordan.€€We€believe€the€Trial€Court€applied€the€proper€measure€ofÏdamages€which€fully€compensates€Tipððs€for€the€tortious€injury,€but€no€more.€€The€award€ofÏ$1,000,000€puts€Tipððs€in€the€exact€situation€it€would€have€been€in€if€Taylor€had€not€been€negligent.€ÏAt€the€same€time,€however,€requiring€Defendants€to€pay€more€than€that€which€naturally€flowed€fromÏthe€negligent€conduct€would€be€improper€and€result€in€a€windfall€to€Tipððs.€€For€these€reasons,€weÏaffirm€the€judgment€of€the€Chancery€Court€in€favor€of€Tipððs€in€its€award€of€$1,000,000€forÍindemnification€against€the€judgment€awarded€to€the€Jordans€and€the€Mobergs€in€the€Circuit€CourtÏaction.€€ÌÌà àà àAs€to€Intervening€Plaintiff€Jordanððs€request€for€prejudgment€interest,€since€JordanÏwas€not€awarded€a€judgment€in€this€action,€there€is€no€basis€upon€which€to€grant€this€request.€ÏTipton€likewise€is€not€entitled€to€prejudgment€interest€since€we€have€reversed€the€judgment€whichÏwas€awarded€to€him.€€Even€though€we€have€rejected€Defendantsðð€attack€on€the€validity€of€bothÏjudgments,€we€do€not€believe€that€the€Chancery€Court€erred€in€its€decision€not€to€award€prejudgmentÏinterest€on€this€disputed€amount.ÌÌÔ&  Ôà@ àò òòòConclusionóóó óÌÌà àà àThe€judgment€of€the€Chancery€Court€is€reversed€insofar€as€it€awards€a€judgment€toÏPlaintiff€Tipton.€€In€all€other€respects,€the€judgment€of€the€Chancery€Court€is€affirmed.€€This€case€isÏremanded€to€the€Chancery€Court€for€further€proceedings€as€required,€if€any,€consistent€with€thisÏOpinion,€and€for€the€collection€of€costs€below.€€Costs€of€appeal€are€taxed€one„half€to€Appellants,ÏCommercial€Insurance€Managers,€Inc.,€and€George€P.€Taylor,€IV,€and€their€surety,€and€one„half€toÏthe€Appellees€Tipððs€Package€Store,€Inc.,€and€H.€Wayne€Tipton.ÌÌÌÌà àà àà àà àà àà àà à____________________________________Ìà àà àà àà àà àà àà àD.€MICHAEL€SWINEYà àà àÔ'  Ô