                IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                                  March 5, 2013 Session

      TENNESSEE FARMERS MUTUAL INSURANCE COMPANY v.
                   W. PHILLIP REED, ET AL.

                 Appeal from the Chancery Court for Blount County
                  No. 2011-113    Telford E. Forgety, Chancellor


                No. E2012-01392-COA-R3-CV-FILED-JUNE 10, 2013


Tennessee Farmers Mutual Insurance Company (“Tennessee Farmers”) sued W. Phillip
Reed, Personal Representative of the Estate of Carol LaRue; Rufus Everett; Delight Everett;
and Lilla Farner seeking a declaratory judgment with regard to rights and obligations under
a commercial general liability insurance policy. Tennessee Farmers filed a motion for
summary judgment. After a hearing the Trial Court entered its order on June 12, 2012
granting Tennessee Farmers summary judgment after finding and holding, inter alia, that the
insurance policy was not ambiguous, that the phrase “property damage” in the insurance
policy did not include the type of loss allegedly suffered by the Everetts and Ms. Farner, and
that the commercial general liability insurance policy provides no coverage to W. Phillip
Reed as Personal Representative of the Estate of Carol LaRue for the claims filed by the
Everetts and Ms. Farner. Rufus Everett, Delight Everett, and Lilla Farner (“Defendants”)
appeal to this Court. We affirm.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed;
                                  Case Remanded

D. M ICHAEL S WINEY, J., delivered the opinion of the Court, in which J OHN W. M CC LARTY,
and T HOMAS R. F RIERSON, II, JJ., joined.

David T. Black, Melanie E. Davis, and Andrew S. Trundle, Maryville, Tennessee, for the
appellants, Rufus Everett, Delight Everett, and Lilla Farner.

John T. Johnson, Jr., and Brandon L. Morrow, Knoxville, Tennessee, for the appellee,
Tennessee Farmers Mutual Insurance Company.
                                               OPINION

                                             Background

              In 2008, Tennessee Farmers issued a commercial general liability insurance
policy (“the Policy”) to Carol J. LaRue d/b/a Financial Resource Center. This policy was
renewed annually through July of 2010. As pertinent to the case now before us on appeal,
Section V of the Policy provides that property damage is defined as:

       a. Physical injury to tangible property, including all resulting loss of use of
       that property. All such loss of use shall be deemed to occur at the time of the
       physical injury that caused it; or

       b. Loss of use of tangible property that is not physically injured. All such loss
       of use shall be deemed to occur at the time of the “occurrence” that caused it.

               In June of 2011, Defendants sued W. Phillip Reed, as Personal Representative
of the Estate of Carol LaRue1 , and Chris LaRue for negligence alleging, in part, that Carol
LaRue had breached a fiduciary duty to Defendants “in rendering financial advice, financial
management, and her negligent failure to disclose the risk involved in the investments she
controlled and made for [Defendants].” Defendants alleged, among other things, that Ms.
LaRue had advised them to invest in promissory notes, which ultimately became worthless
causing Defendants to suffer financial damages.

               In September of 2011, Tennessee Farmers filed this suit seeking a declaration
of rights and obligations under the Policy with regard to the suit Defendants filed against W.
Phillip Reed and Chris LaRue. Tennessee Farmers filed a motion for summary judgment
claiming the policy provided “no coverage for nor any duty to defend the civil action filed
[by Defendants against W. Phillip Reed and Chris LaRue].” After a hearing, the Trial Court
entered its order on June 12, 2012 granting Tennessee Farmers summary judgment after
finding and holding, inter alia:

       3. Carol LaRue was a financial and investment consultant in Blount County,
       and she purchased a commercial general liability insurance policy from
       Tennessee Farmers.

       4. The policy issued by Tennessee Farmers to Carol LaRue contained a
       provision which stated that, “We will pay those sums that an insured becomes

       1
           Carol J. LaRue died in August of 2010.

                                                    -2-
legally obligated to pay as damages because of ‘bodily injury’ or ‘property
damage’ to which this insurance applies.” The subject policy further provides
that, “This insurance applies to ‘bodily injury’ or ‘property damage’ only if the
‘bodily injury’ or ‘property damage’ is caused by an ‘occurrence.’” An
“occurrence” is defined in the policy as an “accident.”

5. According to the allegations in the civil action filed by [Defendants],
against the Estate of Carol LaRue, upon the advice of Carol LaRue, the
[Defendants] invested substantial sums of money in loans to Medical Capital
Holding and AIC. According to the allegations made by [Defendants], the
investments were not secure and no payments were made on the notes by
Medical Capital Holding or AIC to [Defendants]. [Defendants] have alleged
that Carol LaRue was negligent in advising them to invest their money in such
a manner.

6. Tennessee Farmers takes the position that the policy at issue is a
commercial general liability policy and that it is not an errors and omissions
policy. Tennessee Farmers further takes the position that the claim of
[Defendants] is not one for bodily injury or for property damage. Tennessee
Farmers also contends there has not been an “occurrence” as defined by the
policy.

7. The Court finds that the losses sustained by the [Defendants] were not
property damage as defined by the policy. The Court finds that the
[Defendants] made investments which lost value when it turned out that the
makers of the promissory note could not pay.

8. The Court finds that the policy is not ambiguous and that the common
understanding of the phrase “property damage” does not include the type of
loss allegedly suffered by the [Defendants].

9. The Court finds that the loss sustained by the [Defendants] is the type of
loss that would typically be covered under an errors and omissions policy
rather than a commercial general liability policy.

                                     ***

       Based upon the above findings of fact, the Court finds as a matter of
law that the losses sustained by the [Defendants] are neither bodily injury nor
property damage and that the commercial general liability insurance policy

                                       -3-
       issued to Carol LaRue provides no coverage to W. Phillip Reed, Administrator
       Ad Litem and/or Personal Representative of the Estate of Carol LaRue, for the
       claims filed against him by the [Defendants].

Defendants appeal.

                                          Discussion

                Although not stated exactly as such, Defendants raise one issue on appeal:
whether the Trial Court erred in granting Tennessee Farmers summary judgment after finding
that the losses allegedly sustained by Defendants were not property damage as defined in the
Policy.

              “Issues regarding an insurer’s duty to defend are matters of law and may be
resolved by summary judgment when there are no genuine issues as to any material fact.”
Travelers Indemnity Co. of America v. Moore & Assocs., Inc., 216 S.W.3d 302, 305 (Tenn.
2007). Our Supreme Court reiterated the standard of review in summary judgment cases as
follows:

              The scope of review of a grant of summary judgment is well
       established. Because our inquiry involves a question of law, no presumption
       of correctness attaches to the judgment, and our task is to review the record to
       determine whether the requirements of Rule 56 of the Tennessee Rules of Civil
       Procedure have been satisfied. Hunter v. Brown, 955 S.W.2d 49, 50-51 (Tenn.
       1997); Cowden v. Sovran Bank/Cent. S., 816 S.W.2d 741, 744 (Tenn. 1991).

               A summary judgment may be granted only when there is no genuine
       issue of material fact and the moving party is entitled to judgment as a matter
       of law. Tenn. R. Civ. P. 56.04; Byrd v. Hall, 847 S.W.2d 208, 214 (Tenn.
       1993). The party seeking the summary judgment has the ultimate burden of
       persuasion “that there are no disputed, material facts creating a genuine issue
       for trial . . . and that he is entitled to judgment as a matter of law.” Id. at 215.
       If that motion is properly supported, the burden to establish a genuine issue of
       material fact shifts to the non-moving party. In order to shift the burden, the
       movant must either affirmatively negate an essential element of the
       nonmovant’s claim or demonstrate that the nonmoving party cannot establish
       an essential element of his case. Id. at 215 n.5; Hannan v. Alltel Publ’g Co.,
       270 S.W.3d 1, 8-9 (Tenn. 2008). “[C]onclusory assertion[s]” are not sufficient
       to shift the burden to the non-moving party. Byrd, 847 S.W.2d at 215; see also
       Blanchard v. Kellum, 975 S.W.2d 522, 525 (Tenn. 1998). Our state does not

                                               -4-
       apply the federal standard for summary judgment. The standard established
       in McCarley v. West Quality Food Service, 960 S.W.2d 585, 588 (Tenn. 1998),
       sets out, in the words of one authority, “a reasonable, predictable summary
       judgment jurisprudence for our state.” Judy M. Cornett, The Legacy of Byrd
       v. Hall: Gossiping About Summary Judgment in Tennessee, 69 Tenn. L. Rev.
       175, 220 (2001).

               Courts must view the evidence and all reasonable inferences therefrom
       in the light most favorable to the non-moving party. Robinson v. Omer, 952
       S.W.2d 423, 426 (Tenn. 1997). A grant of summary judgment is appropriate
       only when the facts and the reasonable inferences from those facts would
       permit a reasonable person to reach only one conclusion. Staples v. CBL &
       Assocs., Inc., 15 S.W.3d 83, 89 (Tenn. 2000). In making that assessment, this
       Court must discard all countervailing evidence. Byrd, 847 S.W.2d at 210-11.
       Recently, this Court confirmed these principles in Hannan.

Giggers v. Memphis Housing Authority, 277 S.W.3d 359, 363-64 (Tenn. 2009). We review
“a trial court’s interpretation of contract language de novo with no presumption of
correctness.” Travelers Indemnity Co. v. Moore, 215 S.W.3d at 305.

              Before we begin our analysis of the issue raised by Defendants, we note that
after hearing oral argument in this case, we sua sponte ordered the parties to file
supplemental briefs on the issue of whether a specific endorsement to the Policy applied in
this case. The endorsement (“the Endorsement”) to the Policy provides, in pertinent part:

       This insurance does not apply to “bodily injury”, “property damage” or
       “personal and advertising injury” due to the rendering of or failure to render
       any professional service.

The description of professional services contained in the Endorsement includes
“FINANCIAL PLANNING & INVESTMENT.”

              The parties briefed this issue and Defendants asserted that Tennessee Farmers
had waived the issue of whether the Endorsement applied by failing to raise this issue in the
Trial Court or even in this Court. We agree. As our Supreme Court has instructed:

       [T]he basic principles of waiver, includ[e] “the long-standing rule in
       Tennessee that any contractual provision of a policy of insurance, whether part
       of an insuring, exclusionary, or forfeiture clause, may be waived by the acts,
       representations, or knowledge of the insurer’s agent.” Bill Brown Constr. Co.

                                             -5-
       v. Glens Falls Ins. Co., 818 S.W.2d 1, 13 (Tenn. 1991) (emphasis in original);
       see also Rutherford v. Tennessee Farmers Mut. Ins. Co., 608 S.W.2d 843, 846
       (Tenn. 1980). Indeed, this Court has specifically stated that

              [a] waiver is a voluntary relinquishment by a party of a known
              right …. “[I]t may be proved by express declaration; or by acts
              and declarations manifesting an intent and purpose not to claim
              the supposed advantage; or by a course of acts and conduct ….”

       Chattem, Inc. v. Provident Life & Accident Ins. Co., 676 S.W.2d 953, 955
       (Tenn. 1984) (quoting Baird v. Fidelity-Phenix Fire Ins. Co., 178 Tenn. 653,
       162 S.W.2d 384, 389 (Tenn. 1942)).

Gaston v. Tennessee Farmers Mut. Ins. Co., 120 S.W.3d 815, 819 (Tenn. 2003).

Although it appears from the record before us that the Endorsement might well have been
controlling in the case now before us on appeal, we hold that Tennessee Farmers waived this
issue, and we, therefore, will not consider it.

              We turn now to the issue raised by Defendants regarding whether the Trial
Court erred in granting Tennessee Farmers summary judgment after finding that the losses
allegedly sustained by Defendants were not property damage as defined in the Policy. As our
Supreme Court has stated:

              We previously have held that whether a duty to defend arises depends
       solely on the allegations contained in the underlying complaint. St. Paul Fire
       & Marine Ins. Co. v. Torpoco, 879 S.W.2d 831, 835 (Tenn. 1994) (quoting
       Am. Policyholders’ Ins. Co. v. Cumberland Cold Storage Co., 373 A.2d 247,
       249 (Me. 1977)). Accordingly, the insurer has a duty to defend when the
       underlying complaint alleges damages that are within the risk covered by the
       insurance contract and for which there is a potential basis for recovery. Id.

Travelers Indemnity Co. v. Moore, 216 S.W.3d 216 at 305.

             A careful and thorough review of the complaint in the suit filed by Defendants
against W. Phillip Reed and Chris LaRue reveals that, as pertinent to the issue now before
us, Defendants allege that Ms. LaRue:

       violated her fiduciary duty to [Defendants] by either a failure to properly
       investigate the liquidity of Medical Capital Holding and AIC, the entities to

                                            -6-
       which she brokered the loans; or by failing to advise [Defendants] of the
       substantial risks of the recommended investments thereby proximately
       resulting in the total loss of the [Defendants’] investments.… AIC and
       Medical Capital Holding have defaulted on the Notes. Each obligor on the
       Notes is believed to be in bankruptcy or in a receivership and consequently, the
       [Defendants] have sustained the loss of their life savings.

               Defendants argue in their brief on appeal that the promissory notes at issue are
tangible property and assert that they have suffered property damage as a result of Ms.
LaRue’s negligence. Defendants concede that they do not claim to have suffered damages
as a result of physical injury to tangible property. Instead, Defendants argue that they
suffered damages as a result of a loss of use of tangible property. The phrase “loss of use”
is not defined in the Policy.

              In their brief on appeal, Defendants argue that this case is analogous to Marlin
Financial & Leasing Corp. v. Nationwide Mut. Ins. Co., 157 S.W.3d 796 (Tenn. Ct. App.
2004).2 In Marlin Financial this Court examined an insurance policy that, like the case now
before us, used the phrase ‘loss of use,’ but did not provide a definition for this phrase. Id.
In Marlin Financial we stated:

               Since the policy does not define the concept of “loss of use,” we must
       give those words their “usual, natural and ordinary meaning.” See Swanson,
       692 S.W.2d at 419. To aid us in this task, we turn to the dictionary. See Am.
       Justice Ins. Reciprocal v. Hutchison, 15 S.W.3d 811, 815 (Tenn. 2000); Tata,
       848 S.W.2d at 653. The word “use” is defined as “[t]o put into service or
       apply for a purpose.” The American Heritage College Dictionary 1486 (3d ed.
       2000). “Loss” is defined as “[t]he condition of being deprived … of
       something.” Id. at 801. Thus, as applied to the policy language before us and
       considering the operative facts, it appears that, given the ordinary meaning of
       these words, “loss of use” means the deprivation of the ability to put the boat
       racks, the missing floating dock, and the dry storage building into service or
       apply them for a purpose.

             Nationwide strenuously contends that it did not intend to cover
       “economic loss;” but it can point to no language in the policy spelling this out.
       We recognize one could argue that “loss of use” is a vague term and hence
       somewhat ambiguous. This does not help Nationwide. As the author of the


       2
        Puzzlingly, although Defendants rely heavily upon Marlin Financial in their brief on appeal,
Tennessee Farmers fails even to mention this case in its brief on appeal.

                                                -7-
        policy, Nationwide had it within its power to define loss of use in a way that
        would exclude “economic loss.” It failed to do so. Thus, any ambiguity must
        be construed against Nationwide and in favor of Marlin, provided there is a
        reasonable interpretation of the “loss of use” language which would provide
        coverage for AmSouth’s loss. See Allstate, 896 S.W.2d at 571.

                The lease is very clear. Once Island Cove filed for bankruptcy,
        AmSouth had the right to take physical possession of all of the subject
        property. In other words, according to the dictionary, it had the right to
        possess the property and “put [it] into service” or “apply [it] for a purpose.”
        While it was required to do certain things with the property in order to mitigate
        its damages, this does not change the fact that it had the right to use the
        property, i.e., the right to sell it or “lease, otherwise dispose of or keep idle all
        or part of the” property under discussion. It lost that right, at least as to some
        of the property, because of the negligence of Marlin.

              Thus, there is a reasonable interpretation of the policy that would cover
        AmSouth’s loss. Since the insurance company chose not to define the
        somewhat-vague term of “loss of use,” that failure is construed against
        Nationwide and in favor of an interpretation of the policy favorable to Marlin.

Id. at 809-10.

                The analysis of the phrase “loss of use” contained in Marlin Financial is
helpful to our analysis in this case. The factual situation in Marlin Financial, however, is
distinguishable from the facts in the case now before us, which is critical to our analysis in
this case. In Marlin Financial the tangible property at issue consisted of boat racks, a dry
storage building, and a floating dock,3 which, as we noted in Marlin Financial, AmSouth lost
the right to use. Id. at 810. As we stated in Marlin Financial: “it matters not, under the
language of the policy before us, how AmSouth was going to use the property; what matters
is that it had a right to use property and that right was lost due to Marlin’s negligence.” Id.
at 811 (emphasis in original).

              In the case now before us, Defendants argue in their brief on appeal that the
promissory notes constitute tangible property, which they lost the right to use. The
allegations in the complaint Defendants filed against W. Phillip Reed and Chris LaRue,


        3
         In Marlin Financial we noted that the insurance company argued that because the floating dock had
not been built it could not be considered tangible property, but stated that even so, the boat racks and the dry
storage building did constitute tangible property. Marlin Financial, 157 S.W.3d at 809.

                                                      -8-
however, do not allege a loss of use of the promissory notes. Rather, Defendants allege that
they lost their investment. What Defendants actually are alleging is a loss of value, not a loss
of use. Loss of use and loss of investment or value, however, are two very different concepts.
Defendants still have the right to use the promissory notes even though that use may result
in nothing of value to Defendants because their investment lost its value. The fact that the
promissory notes no longer have the same value as they did when Defendants invested in
them does not mean that Defendants are prevented from ‘using’ the promissory notes. While
Defendants attempt to equate loss of use with loss of investment or value, they are not the
same. Defendants did not lose the use of the promissory notes but rather the promissory
notes simply declined in value.

                 What Defendants actually are arguing is that they suffered an economic loss,
i.e., their loss of investment or value, due to Ms. LaRue’s alleged negligence. As this Court
noted in Standard Fire Ins. Co. v. Chester-O’Donley & Assocs., Inc., however, “general
liability policies are not intended to cover the insured’s contractual liability for economic loss
because its work was not that for which the damaged person bargained.” Standard Fire Ins.
Co. v. Chester-O’Donley & Assocs., Inc., 972 S.W.2d 1, 7 (Tenn. Ct. App. 1998).

               Whether “a duty to defend arises depends solely on the allegations contained
in the underlying complaint.” Travelers Indemnity Co. v. Moore, 216 S.W.3d at 305. A
careful and thorough review of the underlying complaint in this case reveals that Defendants
have not “allege[d] damages that are within the risk covered by the insurance contract and
for which there is a potential basis for recovery.”4 Id. There are no genuine disputed issues
of material fact, and Tennessee Farmers is entitled to judgment as a matter of law. As such,
we find no error in the Trial Court’s grant of summary judgment to Tennessee Farmers, and
we affirm the Trial Court’s June 12, 2012 order.

                                             Conclusion

              The judgment of the Trial Court is affirmed, and this cause is remanded to the
Trial Court for collection of the costs below. The costs on appeal are assessed against the
appellants, Rufus Everett, Delight Everett, and Lilla Farner, and their surety.


                                                        _________________________________
                                                        D. MICHAEL SWINEY, JUDGE


        4
         Given our determination that Defendants have failed to allege damages within the risk covered by
the Policy, we need not address whether the promissory notes are, or are not, tangible property under the
Policy.

                                                  -9-
