                 IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                                 November 16, 2005 Session

         MARLIN & EDMONDSON, P.C. v. NATIONAL UNION FIRE
          INSURANCE COMPANY OF PITTSBURGH, PA., ET AL.

                   Appeal from the Chancery Court for Davidson County
             No. 02-1794-IV The Honorable Richard H. Dinkins, Chancellor



                  No. M2004-02280-COA-R3-CV - Filed December 22, 2005


        This case involves a denial of coverage under a professional liability insurance policy. The
gravamen of this case is whether the Appellant/insurance company received proper notice under the
policy, of a claim by Appellee/accounting firm. Appellee/accounting firm purchased the Policy
through its usual insurance broker, also an Appellee in this appeal. Appellee/accounting firm
notified Appellee/insurance broker of its claim, but no written notice was forwarded to
Appellant/insurance company. The trial court found, inter alia, that notice to the
Appellee/insurance broker constituted notice to the Appellant/insurance company. Consequently,
the trial court entered judgment against Appellant/insurance company and dismissed
Appellee/accounting firm’s cause of action against Appellee/insurance broker. We reverse and
remand.


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

W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,
J. and HOLLY M. KIRBY , J., joined.

Richard Glassman and R. Douglas Hanson of Memphis, Tennessee for Appellant, National Union
Fire Insurance Company of Pittsburgh, P.A.

Grant C. Glassford of Franklin, Tennessee for Cross-Appellant, Marlin & Edmondson
Barry L. Howard and M. Kristin Selph of Nashville, Tennessee for Appellees, Maurice Pinson and
Cooper, Love & Jackson, Inc.

                                            OPINION

        Marlin & Edmondson, P.C. (“M&E,” “Appellee,” or “Cross-Appellant”) is an accounting
firm located in Nashville, Tennessee. M&E purchased a professional liability insurance policy (the
“Policy”) through Maurice Pinson (“Pinson”), an independent contractor with Cooper, Love &
Jackson (“CLJ,” and together with Pinson and M&E, “Appellees”). The Policy was drafted and
issued by National Union Fire Insurance Company of Pittsburgh, P.A. (“National Union,” or
“Appellant”), part of the AIG group. The term of the Policy was from August 1, 1996 to August 1,
1997. CL&J did not have a direct agency contract with AIG; consequently, when it was necessary
to procure this type of coverage for M&E, Pinson went to Mid-South Benefits, which did have a
written agency agreement with National Union.

       The Policy at issue in this case is a “claims made” policy and consists of the “Accountants
Professional Liability Insurance Declarations,” which provides, in relevant part, as follows:

               NOTICE: EXCEPT TO SUCH EXTENT AS MAY
               OTHERWISE BE PROVIDED HEREIN, THE COVERAGE OF
               THIS POLICY IS LIMITED TO LIABILITY FOR ONLY
               THOSE CLAIMS THAT ARE FIRST MADE AGAINST THE
               INSURED AND REPORTED TO THE INSURER DURING
               THE POLICY PERIOD. PLEASE READ THE POLICY
               CAREFULLY AND DISCUSS THE COVERAGE
               THEREUNDER WITH YOUR INSURANCE AGENT OR
               BROKER.

This portion of the declarations page is written in bold, red type. The Policy itself is
entitled“Accountants Professional Liability Insurance Policy” and reads, in pertinent part, as follows:


                                   INSURING AGREEMENTS
               I. Coverage

                       To pay on behalf of the Insured all sums which the
                       Insured shall become legally obligated to pay as
                       Damages and Claims Expenses because of any
                       Claim or Claims, first made against the Insured and
                       reported in writing to the Company during the Policy
                       Period or Extended Reporting Period, arising out of
                       any Act, Error or Omission of the Insured....

               II. Claims Made and Reported Basis

                       This policy applies only to Claims first made against
                       the Insured and reported to the Company or its
                       authorized agent during the Policy Period or an
                       Extended Reporting Period....



                                                 -2-
                 *                               *                        *

                 A Claim shall be deemed to have been reported when written notice
                 of such Claim is received by the Company or its authorized agent. It
                 is a condition precedent to coverage hereunder that all Claims be
                 reported in compliance with Condition I Notice of Claim.

                 *                                   *                        *

                                           CONDITIONS

                 I. Notice of Claim

                 Upon the Insured becoming aware of any Act, Error or Omission
                 which could reasonably be expected to be the basis of a Claim
                 covered hereby, written notice shall be given by or on behalf of the
                 Insured to the Company or any of its authorized agents as soon as
                 practicable during the Policy Period or Extended Reporting Period,
                 together with the fullest information obtainable. If a Claim is made
                 against the Insured, the Insured shall immediately forward to the
                 Company every demand, notice, summons or other process received
                 by the Insured or by the Insured’s representative(s).

                 *                                       *                        *

                 All notices of Claims or Acts, Errors or Omissions, demands or
                 requests for payment provided for in this policy shall be in writing
                 and addressed to:

                 National Union Fire Insurance Company
                 Accountants Professional Liability Claims Department
                 70 Pine Street
                 New York, New York 10270-0150;

                 Or its duly authorized agent.

(Emphasis in original).

          The Policy does not define the term “agent,” “authorized agent,” or “duly authorized
agent”.

        On or about July 2, 1997, Joe Edmondson, the president of M&E, was notified about a
potential professional liability lawsuit against M&E to be filed by one of its clients, Ms. Akin.


                                                 -3-
Ms. Akin wished to enter into a tolling agreement to extend the statute of limitations in the
matter for six months. Mr. Edmondson then called Mr. Pinson at CL&J to discuss the situation.
On July 3, 1997, Mr. Pinson allegedly advised Mr. Edmondson that National Union had given
permission for M&E to enter into the tolling agreement. That afternoon, M&E signed the tolling
agreement and delivered it to the CL&J offices.

        National Union’s claim manager, Faye Brooks, testified that she “might have had a phone
conversation” on July 3, 1997 regarding this incident but stated that notice was not sufficient
under the Policy because it was not in writing. CL&J claims manager, Regina Harris, testified
that she talked to Mid-South Benefits and provided it with information regarding the tolling
agreement. Mid-South Benefits allegedly told Ms. Harris that it could not help and Ms. Harris
needed to go directly to National Union. Ms. Harris then spoke with Faye Brooks on July 3,
1997 about the tolling agreement.

        On or about December 27, 1997, Mr. Edmondson received the complaint filed against
M&E in the underlying matter and immediately forwarded same to CL&J. Ms. Harris testified
that she faxed a copy of this complaint to National Union on January 9, 1998, along with a cover
sheet that read, in relevant part: “You [National Union] were notified of this incident on July 3,
1997 by the agent Maurice Pinson.”

        By letter of January 14, 1998, Louis.M. Glatt, a claim analyst for A.I. Management and
Professional Liability Claim Adjusters, on behalf of National Union, acknowledged receipt of the
complaint but declined to indemnify and/or defend M&E in the action. Specifically, the letter
reads, in pertinent part, as follows:

               Your firm’s last policy term with National Union expired on August
               1, 1997 and your firm did not purchase an extended reporting
               endorsement. Consequently, you have no valid coverage with
               National Union. Your attention is directed to your inspection of the
               “Insuring Agreements” to your Accountants Professional Liability
               Policy which state:

               “Coverage

               To pay on behalf of the Insured all sums which the Insured shall
               become legally obligated to pay as Damages and Claims Expenses
               because of any Claim or Claims, first made against the Insured and
               reported in writing to the Company during the Policy Period or
               Extended Reporting Period....”

               Accordingly, since the “General Liability Notice of
               Occurrence/Claim” form submitted by Cooper, Love and Jackson,



                                                -4-
              Inc. is dated January 9, 1998 and is outside the term of coverage for
              your policy, National Union disclaims coverage for this law suit.

              With respect to your argument that you provided notice to Cooper,
              Love and Jackson, Inc. which would trigger coverage by National
              Union, you are again invited to inspect the “Conditions” section of
              your Accountants Professional Liability Policy with reference to
              “Notice of Claim”. It states:

              “Upon the Insured becoming aware of any Act, Error or Omission
              which could reasonably be expected to be the basis of a Claim
              covered hereby, written notice shall be given by or on behalf of the
              Insured to the Company or any of its authorized agents as soon as
              practicable during the Policy Period or Extended Reporting Period,
              together with fullest information obtainable....”

              You have indicated to Director Sarah Chermak and myself in a
              telephone conversation of this morning that at no time did you speak
              to any employee of [AIG] or National Union which is a member
              company of AIG. Furthermore, in a telephone conversation on
              January 12, 1998 with Director Chermak, Maurice Pinson of Cooper,
              Love and Jackson, your insurance agents, indicated to her that no
              written claim was made by his office until January 9, 1998 when his
              office submitted a copy of the suit papers served upon you and your
              firm. While Pinson’s records indicate that he placed a telephone call
              to Director Faye Brooks of my office on July 3, 1997 to discuss the
              effects of a tolling agreement on your insurance coverage, neither
              Director Brooks nor Pinson have any record that a copy of the tolling
              agreement was submitted to National Union for its inspection, or that
              Pinson submitted a letter to National Union in accordance with the
              above-referenced “Notice of Claim” provisions of your policy
              describing any “act, error or omission which could reasonably be
              expected to be a basis of a claim...”

        On June 18, 2002, M&E filed a “Complaint for Declaratory Judgment and Breach of
Contract” (the “Complaint”) against National Union seeking declaration from the trial court that
National Union should provide coverage and indemnification under the Policy purchased by
M&E for the underlying suit filed by Ms. Akin against M&E. On August 12, 2002, National
Union filed its “Answer to Complaint for Declaratory Judgment and Breach of Contract,” which
denies that National Union has any obligation under the Policy to indemnify and/or defend M&E
in the underlying suit. On November 1, 2002, M&E moved for leave to amend its Complaint.
The Motion was granted, and, on November 18, 2002, M&E filed its “First Amended Complaint
for Declaratory Judgment and Breach of Contract” (the “Amended Complaint”). The Amended


                                               -5-
Complaint adds causes of action against Pinson and CL&J for negligence and breach of contract.
Pinson and CL&J filed a joint “Answer” on December 31, 2002, in which they generally deny the
material allegations of the Amended Complaint and specifically states that, at all times material
to the suit, “Maurice Pinson was an agent for Cooper, Love & Jackson which acted as agent for
National Union....” Likewise, on January 23, 2003, National Union filed its Answer to the
Amended Complaint reiterating its previous position that it is not liable to M&E under the Policy
and again specifically denying that neither Pinson nor CL&J is or was its agent.

        On February 23, 2004, the case was heard before the trial court, sitting without a jury. At
the close of proof, the Chancellor made the following, relevant findings from the bench:

                       The primary issue or the penultimate issue, as I see it, was
               whether notice to Cooper, Love & Jackson was notice to National
               Union on July 3rd. The proof shows that Mr. Edmondson contacted
               Mr. Pinson on–or tried to contact him on July 2nd and contacted him
               on July 3rd and furnished him a copy of the tolling agreement in the
               afternoon of July 3rd. The evidence also shows that Ms. Harris had a
               conversation with Faye Brooks of National Union on the morning of
               July 3rd, and that Mr. Pinson followed that up a little later that
               morning and made a note that Ms. Brooks had agreed to the nine-
               month extension of time.

                        In her testimony, while Ms. Brooks did not acknowledge or
               recall that call from Mr. Pinson, she testified that she did not dispute
               that it occurred. So I think that Cooper, Love & Jackson was notified
               in all other respects. The notification aspect, written notification
               aspect applicable to the policy occurred on July 3rd, within the policy
               period.

               *                                       *                         *

                       The other area in which National Union might be bound by
               the actions of Cooper, Love & Jackson is with respect to the policy,
               where the policy is, under the notice provisions of the policy, where
               notice is given to the company or any of its authorized agents. The
               question then becomes whether Cooper, Love & Jackson was
               authorized to get this notice under the terms of the policy. The proof
               is clear that there was not an agency agreement between Cooper,
               Love & Jackson and National Union.
                       I do think that question, the fact that authorized agent is not
               defined in the policy, it’s not designated in the policy and there is no
               proof before the Court of, at least there was none to the policyholder,



                                                 -6-
               Mr. Edmon[d]son, about who the authorized agent was, that that must
               be construed against National Union, that prepared the policy.

                        It’s clear that Mr. Edmon[d]son relied on Cooper, Love &
               Jackson and that Cooper, Love & Jackson took actions which were
               consistent with both what Mr. Edmon[d]son needed and what I think
               clearly the company contemplated in terms of its notice, I mean,
               National Union contemplated in terms of its notice provisions. In that
               regard, I note that in...the letter from Mr. Glatt [see supra]...that letter
               declining coverage did not raise the authority issue.... In fact, it talks
               about getting a claim form from Cooper, Love & Jackson. It says
               that, it’s outside the term of coverage of your policy. Never said
               Cooper, Love & Jackson is not our authorized agent....

                        So I think that there was no claim...by National Union that
               Cooper, Love & Jackson was not authorized to at least handle that
               initial receipt and processing of the claim for them.

                        So for those reasons, I’m going to hold that there was proper
               notice of the claim in July of 1997, as required under the policy, and
               that, therefore, this is a covered claim under the policy.

These findings are incorporated by reference into the trial court’s Order of March 1, 2004, which
reads, in relevant part, as follows:

                       The Court declares that National Union Fire Insurance
               Company of Pittsburgh is obligated pursuant to [the Policy] to
               provide coverage to and a defense to Marlin & Edmondson, P.C....in
               the case of Margaret Akins vs. L. Joe Edmondson, et al.....

                       The Court further finds that the actions of National Union Fire
               Insurance Company of Pittsburgh in this case do not constitute bad
               faith and denies the Plaintiff’s claims for bad faith against National
               Union.
                       The Court further finds that the Defendants, Maurice Pinson
               and Cooper, Love & Jackson, Inc., are not liable to Marlin &
               Edmondson, P.C. in this matter.

               *                                         *                             *

                      It is, therefore, ORDERED, ADJUDGED and DECREED that
               Marlin & Edmondson be awarded a declaratory judgment against
               National Union Fire Insurance Company of Pittsburgh, that Joe


                                                   -7-
               Edmondson, Marlin & Edmondson, P.C....are entitled to coverage and
               a defense under [the Policy]....

                      It is further ORDERED, ADJUDGED and DECREED that the
               claims of Marlin & Edmondson, P.C. against Maurice Pinson and
               Cooper, Love & Jackson, Inc. are dismissed with prejudice.

        On March 29, 2004, National Union filed a Motion for New Trial and to Amend.
National Union filed a Supplemental Post-Trial Motion for New Trial and/or to Amend Findings
of Fact and Conclusions of Law on June 11, 2004. National Union’s motions were denied by
Order of August 16, 2004. In its Order of August 18, 2004, the trial court reiterates its denial of
National Union’s motions and, pursuant to Tenn. R. Civ. P. 54.02, declares that final judgment is
entered as to the findings set out in the March 1, 2004 Order, supra.

       National Union appeals and raises three issues as stated in its brief:

               1. Whether the trial court erred in holding that Marlin & Edmondson
               complied with the written notice requirements under the policy;

               2. Whether the provision requiring “written notice” was ambiguous;
               and

               3. Whether Marlin & Edmondson was entitled to avail itself of an
               argument that the notice provision was ambiguous when Marlin &
               Edmondson never read the policy or attempted to review the policy
               to ascertain the proper method or procedure for providing written
               notice as required by that policy.

M&E, as cross-appellant, raises one additional issue as stated in its brief:

               If this Court reverses the trial court’s decision that notice was proper
               whether the court erred in dismissing Marlin & Edmondson’s breach
               of contract and negligence claims against Maurice Pinson and
               Cooper, Love & Jackson, Inc.

        We first note that, because this case was tried by the court sitting without a jury, we
review the case de novo upon the record with a presumption of correctness of the findings of fact
by the trial court. Unless the evidence preponderates against the findings, we must affirm, absent
error of law. See Tenn. R. App. P. 13(d).

       It is well settled in Tennessee that the interpretation of a written contract is a matter of
law, and thus, no presumption of correctness in its interpretation exists. NSA DBA Benefit Plan,
v. Connecticut Gen. Life Ins. Co., 968 S.W.2d 791 (Tenn.Ct.App.1997). The cardinal rule in the


                                                 -8-
construction of contracts is to ascertain the intent of the parties. West v. Laminite Plastics Mfg.
Co., 674 S.W.2d 310 (Tenn.Ct.App.1984). If the contract is plain and unambiguous, the meaning
thereof is a question of law, and it is the Court's function to interpret the contract as written
according to its plain terms. Petty v. Sloan, 197 Tenn. 630, 277 S.W.2d 355 (Tenn.1955). The
language used in a contract must be taken and understood in its plain, ordinary, and popular
sense. Bob Pearsall Motors, Inc. v. Regal-Chrysler Plymouth, Inc., 521 S.W.2d 578
(Tenn.1975). In construing contracts, the words expressing the parties' intentions should be given
the usual, natural, and ordinary meaning. Ballard v. North American Life & Casualty Co., 667
S.W.2d 79 (Tenn.Ct.App.1983). If the language of a written instrument is unambiguous, the
Court must interpret it as written rather than according to the unexpressed intention of one of the
parties. Sutton v. First Nat. Bank of Crossville, 620 S.W.2d 526 (Tenn.Ct.App.1981).

        On the question of notice, the Policy at issue in this case requires that any claims be
“reported” to the company or to an “authorized agent” of the company. The Policy specifies that
“[a] claim shall be deemed to have been reported when written notice of such claim is received
[during the Policy Period or Extended Reporting Period] by the Company or its authorized
agent” (emphasis added). In short, under the plain language of the Policy, there are three
requirements that must be met in order for a claim to be considered “reported”: (1) the notice
must be in writing, (2) the notice must be received during the policy period or extended reporting
period,1 and (3) the notice must be received by National Union or its authorized agent.

        In the instant case, it is undisputed that the coverage period of the Policy was August 1,
1996 to August 1, 1997. It is also undisputed that M&E never reported its claim to National
Union. Rather, M&E relied upon its agent, CL&J and in particular Mr. Pinson. To that end,
M&E provided a copy of the tolling agreement in the underlying professional malpractice case to
CL&J. The fact that Mr. Pinson discussed the tolling agreement, either before or after it was
signed, with a National Union employee does not satisfy the plain language of the Policy because
notice thereunder must be in writing and, consequently, oral notification would not suffice.
However, if CL&J (even if CL&J is not an agent of National Union) sent that tolling agreement
(which was in writing) to National Union, then, under the plain language of the Policy, National
Union (the “Company”) would have received written notice of a claim. Concerning whether the
tolling agreement was sent to National Union, Mr. Pinson testified, in pertinent part, as follows:

                  Q. What did you do with the tolling agreement when you received it,
                  Mr. Pinson?

                  A. It was given to Regina Harris at Cooper, Love & Jackson.



         1
            The record supports a finding that the tolling agreement was discussed with National Union (and likely
approved by them). Even if we assume, arguendo, that the tolling agreement functioned to extend the policy period, the
tolling agreement specifically states that it expires on December 31, 1997. As discussed, infra, the record indicates that
no written notice of the claim was given to National Union until January 1998.

                                                           -9-
              Q. She’s the lady that handled the claims during that period of time?

              A. That’s correct.

              Q. Did you personally fax it [the tolling agreement] or provide it to
              National Union?

              A. No, sir.

              Q. And I think you assumed that Ms. Harris had faxed it to National
              Union, correct?

              A. I assumed that, yes.

Concerning whether she sent the tolling agreement to National Union, Ms. Harris testified, in
relevant part, as follows:

              Q. Now, I believe you [Ms. Harris] had communication with Mr.
              Pinson about the tolling agreement on July 3rd of 1997, correct?

              A. Correct.

              Q. Now, there’s been testimony in the case that the tolling agreement
              was never faxed by Cooper, Love & Jackson to anybody. Is that true?

              A. I have no idea.

              *                                *                        *

              Q. Now, there’s no record that the tolling agreement was ever faxed
              to National Union. But it’s true, isn’t it, that you all [CL&J] had the
              tolling agreement and did, in fact, fax it to CNA?

              A. Correct.

              Q. At their request?

              A. Correct.

              Q. Do you remember National Union ever making a request that you
              fax to it the tolling agreement?

              A. I think I might remember them doing that?


                                               -10-
               Q. And did you ever fax it to them?

               A. I think I may have in ‘98.

(Emphasis added). From the relevant testimony, there is no indication that CL&J faxed, or
otherwise sent, the tolling agreement to National Union during the Policy period. Consequently,
the Company (i.e. National Union) did not receive notice of M&E’s claim within the policy
period.
         The next question that must be addressed is whether M&E’s giving the written tolling
agreement to CL&J constitutes notice to an “authorized agent” of National Union. The trial
court specifically found that, because the Policy does not define the term “agent,” “authorized
agent,” or “duly authorized agent” the term is ambiguous. We disagree. The terms “agent,”
“authorized agent,” and “duly authorized agent” have been used in legalese from time
immemorial. As noted above, the language used in a contract must be taken and understood in
its plain, ordinary, and popular sense. Bob Pearsall Motors, Inc. v. Regal-Chrysler Plymouth,
Inc., 521 S.W.2d 578 (Tenn.1975). In construing contracts, the words expressing the parties'
intentions should be given the usual, natural, and ordinary meaning. Ballard v. North American
Life & Casualty Co., 667 S.W.2d 79 (Tenn.Ct.App.1983). Black’s Law Dictionary 59 (5th ed.
1979) defines “agent,” in relevant part, as follows:

               A person authorized by another to act for him, one intrusted with
               another’s business.... One who represents and acts for another under
               the contract or relation of agency.... A business representative, whose
               function is to bring about, modify, affect, accept performance of, or
               terminate contractual obligations between principal and third
               persons.... One who undertakes to transact some business, or to
               manage some affair, for another, by the authority and on account of
               the latter, and to render an account of it....

(Internal citations omitted).

        Because the term “agent” itself denotes the giving of actual or official power, the addition
of the adjectives “authorized” and “duly (i.e. properly) authorized” to the word “agent” is usually
redundant. See Bryan A. Garner, A Dictionary of Modern Legal Usage 299 (2nd ed.1995).

        Turning to the record in this case, it is undisputed that CL&J had no direct authority to
write insurance policies for National Union. Rather, CL&J went through another broker, Mid-
South Benefits, in order to procure the Policy for M&E. David Sciortino, Vice President and
area manager for CL&J, testified, in pertinent part, as follows:

               Q. While representing the insurance markets...there are certain
               insurance companies with whom Cooper, Love & Jackson has an
               agency relationship, correct?


                                                -11-
              A. Correct.

              *                               *                             *

              Q. Tell me who they are.

              A. Cincinnati, Travelers, St. Paul. We’ve got several.

              Q. But you did not have an agency relationship with National Union,
              correct?

              A. We [CL&J] did not have a contract.

              Q. And you had no agency relationship to bind National Union, did
              you?

              A. No, we didn’t.

From our review of the entire record in this case, and applying the usual and ordinary meaning of
the word “agent” to the facts of this case, we can only conclude that CL&J was not an agent of
National Union. Consequently, the fact that M&E provided the written tolling agreement to
CL&J does not satisfy the Policy requirement that written notice be received by an “authorized
agent”. In addition, as discussed above, no written notice was given to National Union directly.
Therefore, the notice requirement contained in the Policy (a condition precedent to coverage) was
not satisfied in this case, and National Union is not bound to indemnify or defend M&E in the
underlying suit. If any negligence exists in this matter, it must necessarily be on the part of
CL&J. M&E’s complaint alleges and the proof is undisputed that Pinson and CL&J were agents
for M&E in the procurement of the policy, servicing of the policy, and for the purpose of giving
notice of claims. M&E relied upon its agents to the extent that M&E did not even familiarize
itself with the terms of the policy at issue.

        Accordingly, and for the foregoing reasons, we reverse the Order of the trial court. We
remand for entry of a judgment in favor of National Union, and for such further proceedings as
may be necessary concerning the action filed by M&E against CL&J and Pinson. Costs of this
appeal are assessed one-half to Appellee/Cross-Appellant Marlin & Edmondson, P.C., and one-
half to Appellees, Cooper, Love & Jackson and Maurice Pinson.




                                     __________________________________________
                                     W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.



                                              -12-
