                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                  February 16, 2011 Session

          TONY WILLIAMS, ET AL. v. TENNESSEE FARMERS LIFE
                  REASSURANCE COMPANY, ET AL.

                Direct Appeal from the Chancery Court for Giles County
                         No. 3837     Jim T. Hamilton, Judge


                   No. M2010-01689-COA-R3-CV - Filed May 12, 2011


Defendant insurance company denied benefits under policy of life insurance, alleging the decedent
made material misrepresentations in her application for insurance. The trial court found the decedent
did not make misrepresentations on her application, and entered judgment in favor of Plaintiffs.
Defendant insurance company appeals. We dismiss the appeal for lack of a final judgment.

                Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed

D AVID R. F ARMER, J., delivered the opinion of the Court, in which A LAN E. H IGHERS, P.J.,
W.S., and J. S TEVEN S TAFFORD, J., joined.

Robert B. Littleton, Nashville, Tennessee, for the appellant, Tennessee Farmers Life
Reassurance Company.

C. Tim Tisher, Columbia, Tennessee, for the appellees, Tony Williams and Angela Williams.

                                             OPINION

        This lawsuit concerns the denial of benefits under a policy of term life insurance issued by
Defendant/Appellant Tennessee Farmers Life Reassurance Company (“Tennessee Farmers”) to
Barbara Williams (Ms. Williams). In May 2005, Ms. Williams completed an application for
insurance with Tennessee Farmers. In her application, Ms. Williams indicated that she was disabled;
that she had suffered a number of disorders including tuberculosis, a nervous/sleep disorder, arthritis
and lameness; that she smoked; that she had been involved in car accident resulting in “time lost
from performing [her] duties in connection with [her] employment”; and that she had a family
history of tuberculosis, cancer, and suicide. She indicated that she had not used narcotics or other
drugs not prescribed by a physician, and that she had not been treated or arrested for alcohol or drug
problems. Tennessee Farmers issued a policy of insurance with a face amount of $50,000 to Ms.
Williams in August 2005. An amendment to the policy stated that it was “issued with an extra rate
of 50% of the basic annual premium . . . due to medical reasons.” The named beneficiaries of the
policy were Ms. Williams’ husband, Tony Williams (Mr. Williams), and her daughter Angela
Williams (Miss Williams; collectively, “Plaintiffs”). Ms. Williams died of acute methadone
intoxication in May 2006, shortly before her 45th birthday.

        In September 2006, Tennessee Farmers informed Mr. Williams by letter that it was denying
payment under the policy of insurance and returning paid premiums in the amount of $350.50.
Tennessee Farmers stated that medical records obtained subsequent to Ms. Williams’ death revealed
that she had an “extensive medical history” that she had not revealed, and that “[a]ccording to [those]
medical records she had received years of Methadone treatment for a narcotic addiction.” The letter
further stated that, “[a]t the time of her death, she was still receiving narcotic treatment for pain[,]”
and that “records from Maury Regional Hospital include[d] statements regarding her history of
narcotic addiction and chronic Methadone treatment.” Tennessee Farmers also stated that medical
records revealed a long history of major depression, including hospitalization in 1978 and
exacerbation of the condition in 2001, attendance at the Middle Tennessee Methadone Clinic in
2003, and discharge from a pain management program as a result of drug screening. Tennessee
Farmers stated that it would not have issued a policy of insurance to Ms. Williams had it been aware
of her “very significant health history.” It also stated that her “history of narcotic addiction and
Methadone treatment alone would have caused [it] to immediately decline her application.”

         In May 2007, Plaintiffs filed a cause of action against Tennessee Farmers and Mansel
Smelser (Mr. Smelser), their Tennessee Farmers’ agent, in the Chancery Court for Giles County.
In their complaint, Plaintiffs sought enforcement of the policy of insurance, and prayed for a penalty
in the amount of 25 percent for bad faith denial of their claim, and attorney’s fees. Plaintiffs asserted
that, during the underwriting process, Tennessee Farmers requested and received medical records
that indicated that Ms. Williams was going to the methadone clinic and “other information related
to her past medical history and treatment.”

         Tennessee Farmers and Mr. Smelser answered the complaint in July 2007. In their answer,
they denied any bad faith denial; admitted that Tennessee Farmers had requested and received some
of Ms. Williams’ medical records during the underwriting process; and denied that any of the records
that it had received indicated that Ms. Williams had attended a methadone clinic or that she had a
drug-related problem. Tennessee Farmers asserted that, in response to question 6 of the application
for insurance, Ms. Williams “affirmatively denied that she had ever used narcotics or had been
treated for drug related problems.”

       The trial court heard the matter without a jury in May 2010. On June 14, 2010, the trial court
entered judgment in favor of Plaintiffs. In its order, the trial court found that Ms. Williams had not
made misrepresentations in her application for insurance. The trial court ordered Tennessee Farmers
to pay Plaintiffs the sum of $50,000, an amount equal to the value of Ms. Williams’ policy of
insurance. The trial court also awarded Plaintiffs prejudgment interest at the rate of 10 percent per
annum beginning on September 7, 2006, and assessed costs and taxes against Tennessee Farmers.
Only Tennessee Farmers filed a timely notice of appeal to this Court.


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                                           Issue Presented

       Tennessee Farmers presents the following issue for our review:

       Did the trial court err in finding that Plaintiffs’ decedent, Mrs. Barbara L. Williams,
       did not make any material misrepresentations in her application for life insurance
       with Tennessee Farmers Life Reassurance Company?

                                         Standard of Review

        We review the trial court’s findings of fact de novo, with a presumption of correctness, and
will not reverse those findings unless the evidence preponderates against them. Tenn. R. App. P.
13(d); Berryhill v. Rhodes, 21 S.W.3d 188, 190 (Tenn. 2000). Insofar as the trial court’s
determinations are based on its assessment of witness credibility, we will not reevaluate that
assessment absent evidence of clear and convincing evidence to the contrary. Jones v. Garrett, 92
S.W.3d 835, 838 (Tenn. 2002). Our review of the trial courts conclusions on matters of law,
however, is de novo with no presumption of correctness. Taylor v. Fezell, 158 S.W.3d 352, 357
(Tenn. 2005). We likewise review the trial court’s application of law to the facts de novo, with no
presumption of correctness. State v. Thacker, 164 S.W.3d 208, 248 (Tenn. 2005).

       Tennessee Code Annotated provides:

       No written or oral misrepresentation or warranty made in the negotiations of a
       contract or policy of insurance, or in the application for contract or policy of
       insurance, by the insured or in the insured's behalf, shall be deemed material or defeat
       or void the policy or prevent its attaching, unless the misrepresentation or warranty
       is made with actual intent to deceive, or unless the matter represented increases the
       risk of loss.

Tenn. Code. Ann. § 56-7-103(2008). Accordingly, to avoid coverage based on an allegation of
misrepresentation in the application for insurance, the insurer first must demonstrate that the insured
provided an answer that was false. Womack v. Blue Cross & Blue Shield of Tenn., 593 S.W.2d 294,
295 (Tenn. 1980). Second, it must demonstrate that the false statement was made with the actual
intent to deceive, or that it increased the insurer’s risk of loss. Id. Whether an answer was false, and
whether a false answer was made with an intent to deceive, are questions of fact for the trier of fact.
Whether a false answer materially increased the insurer’s risk of loss, however, is a question of law.
Morrison v. Allen, --- S.W.3d ----, 2011 WL 536593, at *9 (Tenn. 2011)(quoting Womack v. Blue
Cross & Blue Shield of Tenn., 593 S.W.2d 294, 295 (Tenn. 1980)).

                                             Discussion

      Tennessee Farmers has appealed the judgment of the trial court pursuant to Rule 3 of the
Tennessee Rules of Appellate Procedure. Although neither party raised the issue of whether the


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order appealed is a final judgment, we must review the record sua sponte to determine whether we
have jurisdiction to adjudicate this appeal. E.g., State ex rel Garrison v. Scobey, No.
W2007-02367-COA-R3-JV, 2008 WL 4648359, at *4 (Tenn. Ct. App. Oct.22, 2008)(no perm. app.
filed); Tenn. R. App. P. 13(b).

        Rule 3(a) of the Tennessee Rules of Appellate Procedure provides, in relevant part:

        In civil actions every final judgment entered by a trial court from which an appeal lies
        to the Supreme Court or Court of Appeals is appealable as of right. Except as
        otherwise permitted in rule 9 and in Rule 54.02 Tennessee Rules of Civil Procedure,
        if multiple parties or multiple claims for relief are involved in an action, any order
        that adjudicates fewer than all the claims or the rights and liabilities of fewer than all
        the parties is not enforceable or appealable and is subject to revision at any time
        before entry of a final judgment adjudicating all the claims, rights, and liabilities of
        all parties.

         Under certain circumstances, a judgment which adjudicates fewer than all of the claims
asserted by the parties may be made final and appealable pursuant to Rule 54.02 of the Tennessee
Rules of Civil Procedure. In order to enter judgment under Rule 54.02, however, the trial court must
make an explicit finding that there is “no just reason for delay” and must expressly direct that a final
judgment be entered. Tenn. R. Civ. P. 54.02. An order is not properly made final pursuant to Rule
54.02 unless it disposes of an entire claim or is dispositive with respect to a party.1 Bayberry Assoc.
v. Jones, 783 S.W.2d 553, 558 (Tenn. 1990). In the absence of an order meeting the requirements
of Rule 54.02, any trial court order that adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties is not final or appealable as of right. Id.

        Oral argument was heard in this matter on February 16, 2011. Upon review of the record,
we determined that it did not appear that the trial court had adjudicated Plaintiffs’ claim for bad faith
denial of benefits or for attorney’s fees. Thus, it appeared that no final judgment had been entered
in the matter. On March 23, 2011, this Court entered an order directing Appellant Tennessee
Farmers to show cause why the appeal should not be dismissed for failure to appeal an appealable
order or judgment.


        1
          We recently have noted that, even if a trial court’s order includes the necessary language from Rule
54.02, a final judgment pursuant to the rule is not appropriate unless it disposes of a claim or party. We
stated, “[a] ‘claim’ denotes ‘the aggregate of operative facts which give rise to a right enforceable in the
courts.’” Chook v. Jones, No. W2008-02276-COA-R3-CV, 2010 WL 960319, at *3 (Tenn. Ct. App. Mar.
17, 2010)(quoting Christus Gardens, Inc. v. Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., No.
M2007-01104-COA-R3-CV, 2008 WL 3833613, at *5 (Tenn. Ct. App. Aug.15, 2008), no perm. app.
(quoting McIntyre v. First Nat’l Bank of Cincinnati, 585 F.2d 190, 191 (6th Cir.1978))). Accordingly, “‘a
complaint asserting only one legal right, even if seeking multiple remedies for the alleged violation of that
right, states a single claim for relief.’” Id. (citing Id. (quoting Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737,
744, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976))).

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         On April 4, 2011, Tennessee Farmers responded to our March order with a motion to suspend
the finality requirement of Rule 3. As grounds for its motion, Tennessee Farmers asserts that the
suspension of the rule would expedite this matter. Tennessee Farmers argues that suspension of the
rule is warranted because our disposition of the issue raised on appeal might moot the claim of bad
faith. It further submits that should the trial court’s judgment be affirmed, the case can be remanded
to the trial court for further proceedings.

       Rule 2 of the Tennessee Rules of Appellate Procedure provides:

       For good cause, including the interest of expediting decision upon any matter, the
       Supreme Court, Court of Appeals, or Court of Criminal Appeals may suspend the
       requirements or provisions of any of these rules in a particular case on motion of a
       party or on its motion and may order proceedings in accordance with its discretion,
       except that this rule shall not permit the extension of time for filing a notice of appeal
       prescribed in Rule 4, an application for permission to appeal to the Supreme Court
       from the denial of an application for interlocutory appeal by an intermediate appellate
       court prescribed in Rule 9(c), an application for permission to appeal to the Supreme
       Court from an intermediate appellate court’s denial of an extraordinary appeal
       prescribed in Rule 10(b), an application for permission to appeal prescribed in Rule
       11, or a petition for review prescribed in Rule 12.

       The purpose of Rule 2 is to empower the courts “to relieve litigants of the consequences of
noncompliance with the rules in those circumstances in which it is appropriate to do so.” Tenn. R.
App. P. 2 (advisory commission comment). Our supreme court has interpreted Rule 2 to permit
suspension of the finality requirements of Rule 3 only for good cause. Bayberry, 783 S.W.2d at 559.

        Tennessee Farmers relies on Ruff v. Raleigh Assembly of God Church, Inc.,
W2001-02578-COA-R3CV, 2003 WL 21729442 (Tenn. Ct. App. July 14, 2003), perm. app. denied
(Tenn. Jan. 5, 2004), for the proposition that suspension of the requirement of a final judgment is
appropriate in this case. In Ruff we stated that, “in order to suspend the requirements of Rule 3(a),
this Court must affirmatively show that the rule is suspended and must give a ‘good reason’ for the
suspension.” Ruff, 2003 WL 21729442, at *5 (citing See Bayberry Assocs., 783 S .W.2d at 559; see
also Tenn. R. App. P. 2.). We suspended the finality requirement of Rule 3 on our own motion,
noting:

       This is the third appeal in a case with a tortured history. These parties have been
       entangled in this case for over ten years and are entitled to some form of closure. We
       find this to be “good reason” to suspend the application of Rule 3(a) and address the
       merits of Mr. Ruff’s appeal.

Id.

       Ruff was an action for assault, battery, false imprisonment and intentional infliction of


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emotional distress filed by the plaintiff against the defendant church. Our 2003 opinion disposed
of the third appeal of a lawsuit that was filed a decade earlier. Id. at *1-2. The appellant raised
twelve issues in his third appeal, one of which was that the trial court failed to render a decision on
his claim for assault. Id. at *2-3. We observed that, in its July 12, 2001 judgment, the trial court
stated that the plaintiff/appellant had filed a complaint against the defendant church for “assault and
battery, false imprisonment, intentional infliction of emotional distress and outrageous conduct.”
Id. at *6. We further noted that, “[l]ater in the judgment, the trial court state[d] that ‘no battery, false
imprisonment, outrageous conduct or intentional infliction of emotional distress occurred.’ The trial
court neglected to mention the assault claim.” Id. Thus, the lack of a final judgment in Ruff resulted
from the trial court’s omission of the word “assault” in its conclusion.

         We more recently suspended the finality requirement of Rule 3 in Malmquist v. Malmquist,
No. W2007-02373-COA-R3-CV, 2011 WL 1087206 (Tenn. Ct. App. Mar. 25, 2011). Malmquist
was a divorce case in which the parties had two children together and, after a marriage of five
months, the husband filed for divorce. The wife filed a counter-claim, “and unnecessarily protracted
litigation ensued” over a period of six years. The parties in Malmquist

        inundated the trial court with filings over a two-year period, many of which contained
        alarming but ultimately unproven accusations. After one transfer of the case and the
        withdrawal of many attorneys, the parties proceeded to trial during which they
        presented the live testimony of 30 witnesses and introduced 122 exhibits. The trial
        court awarded a divorce to both parties on the ground of inappropriate marital
        conduct, designated the husband as primary residential parent, granted the wife
        supervised visitation with the children twice a week, awarded the wife half of the
        401k benefits the husband accrued during the marriage, and provided the wife
        transitional alimony for four months.

Malmquist, 2011 WL 1087206, at *1. The matters which the trial court had not disposed of were
some of a number of petitions for contempt filed in the case. In Malmquist we stated:

        The parties in this hotly contested divorce case . . . deserve closure. The principal
        impediment to both parties moving on from their unsuccessful experiment as a
        married couple is the pending divorce dispute. It is clear the issues pending before
        this Court will remain highly disputed until final resolution of this case. It is also
        evident these parties will litigate any and all potential sources of dispute arising in
        this or related cases so long as this case is pending. Although we do not favor the
        suspension of Rule 3(a), remanding this case to the trial court to resolve the
        aforementioned petitions for contempt would not facilitate review of the issues before
        us. It would only cause further strife and delay. We therefore find good reason to
        suspend the requirements of Rule 3(a) and exercise jurisdiction over this appeal.

Id. at *13 (emphasis added).



                                                    -6-
         The circumstances of the case currently before us do not present good cause for suspension
of Rule 3. We observe that many matters would be “expedited” by appeals of interlocutory orders
of a trial court. As we have noted in the context of Rule 54.02, judicial economy alone does not
justify abandoning the requirement of finality. Brown v. John Roebuck & Associates, Inc., No.
M2008-02619-COA-R3-CV, 2009 WL 4878621, at *5 (Tenn. Ct. App. Dec. 16, 2009)(citations
omitted). Piecemeal review of a claim is not favored. Tuturea v. Tennessee Farmers Mut. Ins. Co.,
No. W2006-02100-COA-R3-CV, 2007 WL 2011049, at *3 (Tenn. Ct. App. July 12, 2007)(citation
omitted).

        This Court will suspend the finality requirements of Rule 3 of the Tennessee Rules of
Appellate Procedure only in the most extenuating circumstances, where justice so demands. The
finality requirements of Rule 3 may not be “waived” by the parties, and we will not suspend Rule
3 as a mere convenience or to work an end-run around Rule 54.02 of the Tennessee Rules of Civil
Procedure, or Rules 9 and 10 of the Tennessee Rules of Appellate Procedure.

                                                Holding

        In light of the foregoing, this appeal is dismissed and this matter is remanded to the trial court
for further proceedings. Costs are taxed to the Appellant, Tennessee Farmers Life Reassurance
Company, and its surety, for which execution may issue if necessary.




                                                         _________________________________
                                                         DAVID R. FARMER, JUDGE




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