                  IN THE COURT OF APPEALS OF TENNESSEE
                       WESTERN SECTION AT JACKSON


STATE AUTOMOBILE INSURANCE           )
COMPANY,                             )
                                     )                                FILED
            Plaintiff/Appellee,      ) Gibson Chancery No. H 3443
                                     )                            December 22, 1997
VS.                                  ) Appeal No. 02A01-9703-CH-00071
                                     )                             Cecil Crowson, Jr.
LASHLEE-RICH, INC.,                  )                             Appellate C ourt Clerk
                                     )
            Defendant/Appellant.     )


          APPEAL FROM THE CHANCERY COURT OF GIBSON COUNTY
                       AT HUMBOLDT, TENNESSEE
             THE HONORABLE GEORGE R. ELLIS, CHANCELLOR




MITCHELL G. TOLLISON
HAWKS & TOLLISON
Humboldt, Tennessee
Attorney for Appellant


JAMES E. CONLEY, JR.
THOMASON, HENDRIX, HARVEY, JOHNSON & MITCHELL
Memphis, Tennessee
Attorney for Appellee




AFFIRMED




                                                        ALAN E. HIGHERS, J.



CONCUR:

W. FRANK CRAWFORD, P.J., W.S.

DAVID R. FARMER, J.
     Defendant/Appellant, Lashlee-Rich, Incorporated (“Lashlee-Rich”) appeals the
judgment of the trial court granting Plaintiff/Appellee’s, State Automobile Mutual Insurance

Company (“State Auto”), request for declaratory judgment whereby the trial court ruled that

Lashlee-Rich had violated the clear language of the insurance policies issued by State

Auto and that no coverage existed under said insurance policies issued by State Auto to

Lashlee-Rich. For reasons stated hereinafter, we affirm the trial court’s judgment.



                          FACTS AND PROCEDURAL HISTORY

         On November 9, 1994, Lashlee-Rich was engaged in commercial construction

services when it was chiseling out a concrete water drainage ditch on the interior of a

production facility owned by J. Hungerford Smith (“Smith”). During the work process, an

employee of Lashlee-Rich was using a jackhammer to chisel out the existing concrete

trench when his bit severed a pipe under which there was electrical service running. As

a result, the electrical wiring was damaged.



         Smith is in the business of making ice cream toppings. The electrical line severed

by Lashlee-Rich supplied power to the office area, the sugar system component of the

production process, the main computer, the finance area, and the shipping department of

Smith.



         On November 10, 1994, the day after the damage was done, Lashlee-Rich

contracted with Heglar Plumbing to perform the necessary repairs. At the time of the

incident in question, there was a general liability policy in effect issued by State Auto.



         By letter dated November 11, 1994, Lashlee-Rich sent State Auto’s agent notice of

the occurrence of the incident in question. Also stated in the letter was the fact that the

necessary repairs had been undertaken to keep Smith’s manufacturing facility operational.

However, absent from this letter was any notice to State Auto that Lashlee-Rich had

assumed an obligation to pay Heglar Plumbing for said repairs. Lashlee-Rich never sought

nor received any advice nor authorization from any representative of State Auto to hire

Heglar Plumbing to repair the damage to Smith’s facility.



                                               2
       The bill from Heglar Plumbing for $17,245.95 was submitted to State Auto’s agent

by letter dated November 18, 1994. By letters dated December 15, 1994, State Auto

advised Lashlee-Rich and Smith that its investigation revealed no negligence or liability on

the part of Lashlee-Rich. After receiving this letter from State Auto, Lashlee-Rich made

payment to Heglar Plumbing for the repair work.



       State Auto filed a complaint for declaratory judgment in the Chancery Court at

Gibson County, Tennessee, at Humboldt on March 30, 1995. Lashlee-Rich filed an

answer and motion for joinder on December 5, 1995. On January 11, 1996, Smith filed its

response to motion for joinder and a motion to dismiss. By order dated March 8, 1996, the

trial court denied Lashlee-Rich’s motion for joinder and granted the motion to dismiss

Smith. On December 19, 1996, this cause came before the Chancery Court at Gibson

County.



       At trial, Lashlee-Rich asserted that their prompt action in retaining electrical service

to restore Smith’s facility resulted in a mitigation of the down time and loss of revenues of

Smith. Lashlee-Rich presented further testimony that it acted out of a sense of urgency

in getting the electrical supply restored to Smith. Smoke and sparks were emanating from

the electrical line and Lashlee was afraid of further damage to Smith’s facility. Additionally,

Lashlee-Rich contended that there was a safety issue involved as the exposed main

electrical feed was of sufficient power to pose a danger to life.



       In anticipation of and in response to these assertions, State Auto presented

evidence that Smith would have done whatever necessary to get the plant operational if

Lashlee-Rich had not arranged for Heglar Plumbing to make the repairs. State Auto

produced additional testimony that Lashlee-Rich had a long standing business relationship

with Smith which would have been put into jeopardy if Lashlee-Rich had not undertaken

to repair the damage. State Auto contended that Lashlee-Rich’s assumption of the

obligation to pay for the repair work was for these reasons and not for safety reasons or

to mitigate damages as Lashlee-Rich asserted. Most importantly, State Auto relied upon



                                              3
the provisions in the policies stating that no insureds were to assume an obligation, except

at their own expense, incur an expense or voluntarily make any payments without the

consent of State Auto. State Auto contended that Lashlee-Rich assumed an obligation

and voluntarily made payment to Heglar Plumbing without their consent and, thus these

actions were undertaken at Lashlee-Rich’s own expense.



       The trial court determined that State Auto had no obligation under the policies of

insurance it had issued to Lashlee-Rich and entered a judgment to this effect on January

27, 1997. This appeal ensued.



       On appeal, the issues for review are as follows: (1) Whether the trial court erred in

deciding that Lashlee-Rich violated the language of the policies issued by State Auto; (2)

Whether Lashlee-Rich acted in accordance with general contract principles in mitigating

damages thus excusing any technical breach of the insurance contract; and (3) Whether

State Auto was estopped to assert the defense of voluntary payment by Lashlee-Rich

under principles of waiver and estoppel.



                                 LAW AND DISCUSSION

       Inasmuch as this case was tried by the trial court sitting without a jury, this Court’s

review on appeal is governed by Tennessee Rule of Appellate Procedure 13(d), which

directs us to review the case de novo. Roberts v. Robertson County Bd. of Educ., 692

S.W.2d 863, 865 (Tenn. Ct. App. 1985); Haverlah v. Memphis Aviation, Inc., 674 S.W.2d

297, 300 (Tenn. Ct. App. 1984); T.R.A.P. 13(d). In conducting a de novo review of the

record below, however, this Court must presume that the trial court’s findings of fact are

correct. Under this standard of review, we must affirm the trial court’s decision unless the

trial court committed an error of law affecting the result or unless the evidence

preponderates against the trial court’s findings. Roberts, 692 S.W.2d at 865.



       The applicable provisions of the commercial general liability policy issued by State

Auto to Lashlee-Rich are as follows:



                                              4
      SECTION I - COVERAGES

      Coverage A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY

             1. Insuring Agreement

                    a.     We will pay those sums that the
                           insured becomes legally obligated
                           to pay as damages because of
                           “bodily injury” or “property
                           damage” to which this insurance
                           applies. We will have the right and
                           duty to defend any “suit” seeking
                           those damages. We may at our
                           discretion investigate any
                           “occurrence” and settle any claim
                           or “suit” that may result. . .

                           No other obligation or liability to
                           pay sums or perform acts or
                           services is covered unless
                           explicitly provided for under
                           SUPPLEMENTARY PAYMENTS -
                           COVERAGES A AND B.

      SECTION IV - COMMERCIAL GENERAL LIABILITY CONDITIONS

             2. Duties in Event of Occurrence, Offense, Claim for Suit.
                   d.      No insureds will, except at their
                           own cost, voluntarily make a
                           payment, assume an obligation, or
                           incur any expense, other than for
                           first aid, without our consent.


      The applicable provisions of the commercial umbrella liability policy issued by State

Auto to Lashlee-Rich are as follows:

             PART B. COVERAGES - EXCLUSIONS - CONDITIONS- DEFINITIONS

             SECTION I, COVERAGE A - Excess Liability Coverage.

             1. Insuring Agreement

                    a.     We will pay those sums, in excess
                           of the amount payable under the
                           terms of a ny “underlying
                           insurance,” that the insured
                           becomes legally obligated to pay
                           as damages because of injury or
                           damage to which this insurance
                           applies, provided that the
                           “underlying insurance” also
                           applies, or would apply but for the
                           exhaustion of its applicable limits
                           of insurance.

                    b.     We will have the right to participate
                           in the defense of claims or suits


                                            5
                           against the insured seeking
                           damages because of injury or
                           damage to which this insurance
                           may apply. We will have a duty to
                           defend such claims or suits when
                           the applicable limit of insurance of
                           the “underlying insurance” has
                           been used up by payment of
                           judgments, settlements and any
                           cost or expense subject to such
                           limit.

                    d.     This insurance is subject to the
                           s a m e te r m s , conditions
                           agreements, exclusions and
                           definitions as the “underlying
                           insurance,” except:

                           (1)    We will have no
                                  obligation under this
                                  insurance with
                                  respect to any claim
                                  or suit that is settled
                                  without our consent.

             SECTION II, COVERAGE B - Extended Liability Coverage

             1. Insuring Agreement

             PART E - General Conditions

                    C.     Duties in the event of an incident,
                           claim or “suit.”

                           4.     No insureds will,
                                  except at their own
                                  cost, voluntarily
                                  make a payment,
                                  assume         any
                                  obligation or incur
                                  any expense without
                                  our consent.



    WHETHER THE TRIAL COURT ERRED IN DECIDING THAT LASHLEE-RICH
    VIOLATED THE LANGUAGE OF THE POLICIES ISSUED BY STATE AUTO.

      When the terms of an insurance contract are plainly written and there is nothing to

the contrary, the parties are bound thereby. Artress v. State Farm Fire and Casualty Co.,

221 Tenn. 636, 429 S.W.2d 430, 432 (Tenn. 1968). Where an insurance contract is plain

and unambiguous, the parties are bound by its terms, and courts cannot under the guise

of construction make a new and different contract for the parties. United States Stove

Corp. v. Aetna Life Ins. Co., 169 Tenn. 264, 84 S.W.2d 582 (Tenn. 1935). Insurance



                                            6
contracts are subject to the same rules of construction and enforcement as applied to

contracts generally. McKimm v. Bell, 790 S.W.2d 526 (Tenn. 1990). In the absence of

fraud or mistake, a contract must be interpreted and enforced as written even though it

contains terms which may be thought harsh and unjust. Ballard v. North American Life &

Casualty, 667 S.W.2d 79 (Tenn. Ct. App. 1983); Allstate Insurance Co. v. Wilson, 856

S.W.2d 706, 708 (Tenn. Ct. App. 1993). In construing contracts, the words expressing the

parties’ intentions should be given the usual, natural and ordinary meaning. Id.

       In their brief, State Auto relies on Anderson v. Dudley Moore Ins. Co., 640 S.W.2d

556 (Tenn. Ct. App. 1982) as factually similar to the case at bar. In Anderson, a broker

took a fire insurance application but failed to relay the application to insurer for nearly three

months. Anderson, 640 S.W.2d at 556. When the applicants’ mobile home burned, the

broker voluntarily paid the applicants $10,000 for fire loss, and took from the applicants an

assignment of rights against insurer. The broker then brought an action against the insurer

to recover its payment to the applicants, and later amended its complaint to include cause

of action against the broker’s errors and omissions carrier. Pertinent language in the

broker’s policy with the errors and omissions carrier provided that “[t]he insured shall not,

except at his own cost, voluntarily make any payment, assume any obligation or incur any

expense.” Id. at 559. The middle section noted that although the broker’s errors and

omissions carrier had notice of the potential demand for repayment, the broker never made

any formal request that the carrier investigate, defend, or pay the claim until long after it

had made the ex parte payment to the applicants. Id. at 560. The court went on to state

that it could not ignore the express words contained in the agreement between the broker

and his errors and omissions carrier and ruled that coverage could be denied on that basis.



       In this case, under both the commercial general and commercial umbrella liability

policies, State Auto has the right and duty to defend any suit seeking damages, the right

to investigate any claim and the right to settle any claim or suit that may result. However,

by making the payment to Heglar Plumbing and then seeking reimbursement for such

payment, Lashlee-Rich attempted to bypass the plain, unambiguous language in the

insurance contracts and thereby divest State Auto of its rights to oversee the handling of



                                               7
any claim.



       Furthermore, under the commercial general liability policy, State Auto is under no

obligation to reimburse an insured for payments made by that insured for any obligation

assumed or expense incurred without the consent of State Auto other than for first aid. In

this case, Lashlee-Rich assumed the obligation to pay Heglar Plumbing on November 10,

1994. After a careful examination of the record, however, we find that Lashlee-Rich never

informed State Auto of this assumed obligation to Heglar Plumbing until after the insurance

adjuster made the determination of no liability on Lashlee-Rich’s behalf. State Auto never

consented to Lashlee-Rich’s assumption of the obligation to make payment for the repair

work at Smith. Lashlee-Rich incurred an obligation to pay Heglar Plumbing before State

Auto ever made any kind of decision or had the opportunity to make a decision on the

claim. This is in direct contravention of the provision in question.



       In their brief, Lashlee-Rich argues that their actions fall within the “first aid”

exception of the provision. They contend that the term “first aid” is ambiguous and,

therefore, should be construed in their favor. However, we believe that the plain, ordinary

meaning of “first aid” concerns the emergency handling of personal illnesses or injuries and

not property damage. In fact, Webster’s Ninth New Collegiate Dictionary defines “first aid”

as “emergency care or treatment given to an ill or injured person before regular medical

aid can be obtained.” Webster’s Ninth New Collegiate Dictionary 466 (1985). Lashlee-

Rich would have this Court believe that it acted in a reasonably prudent manner to an

urgent and dangerous situation requiring emergency action so as to render such situation

in “the nature of ‘first aid.’” We fail to find in the record any evidence of personal illness

or injury to anyone thereby causing this incident to fall within the “first aid” exception to the

general commercial policy.



       Additionally, under the terms of both the commercial general and umbrella liability

policies, State Auto is only obligated to pay those sums that the insured becomes legally

obligated to pay as damages. In the case at bar, Lashlee-Rich has not been found legally



                                               8
obligated to pay any amount as damages; therefore, State Auto is not obligated to pay the

$17,245.95 that Lashlee-Rich paid to Heglar Plumbing.



         Like Anderson, we conclude that Lashlee-Rich’s actions were in direct contravention

of the unambiguous language of the policies in question. Lashlee-Rich did undertake an

obligation to pay Heglar Plumbing for the repair work and did, in fact, voluntarily pay Heglar

Plumbing for said work. Lashlee-Rich gave no notice to State Auto and did not demand

payment from State Auto until after it had assumed the obligation to make payment to

Heglar Plumbing. In doing so, undoubtedly, Lashlee-Rich violated the clear language of

the policies by assuming an obligation, voluntarily making payment and incurring an

expense without State Auto’s consent. Lashlee-Rich did all of the foregoing to their own

peril.



         WHETHER LASHLEE-RICH ACTED IN ACCORDANCE WITH GENERAL
           PRINCIPLESIN MITIGATING DAMAGES THUS EXCUSING ANY
              TECHNICAL BREACH OF THE INSURANCE CONTRACT.

         Lashlee-Rich submits that in paying Heglar Plumbing it was mitigating its damages.

We find this argument to be without merit. The doctrine of mitigation of damages,

sometimes called the doctrine of avoidable consequences, imposes upon an injured party

a duty to exercise reasonable diligence and ordinary care in attempting to minimize his or

her damages after the injury has been inflicted. Black’s Law Dictionary 904 (5th ed. 1979).

In this case, Lashlee-Rich is not the injured party. Smith is the party that sustained an

injury. We feel that Lashlee-Rich’s reliance on the doctrine of mitigation of damages is

misplaced.



         Furthermore, even if the doctrine of mitigation of damages were germane to third

party injuries in liability insurance contracts, this doctrine would not apply to the facts of this

case. Malcom Chapin, plant manager of Smith, when asked:

               Q. . . . but as the plant manager faced with the electrical
               problem, you would have taken whatever steps were
               necessary to be sure your plant was ready to go the following
               Monday; wouldn’t you?

               A. Yes.

                                                9
              Q. You would have done whatever it took?

              A. Yes.

Thus, Lashlee-Rich’s assumption of an obligation to pay for the repair work was not

necessary to place Smith’s facility in an operational mode. No damages were mitigated

because if Lashlee-Rich had not agreed to pay for the repair work, Smith was going to do

whatever it took to regain its plant operation. At this point, it is imperative that we note that

State Auto did not deny the claim of Lashlee-Rich. Had Lashlee-Rich been sued for

payment of the repair work, the record evinces that State Auto would have defended the

suit, and any judgment that might have been entered would have been paid pursuant to

the terms of the policy. However, Lashlee-Rich stepped outside the policies by assuming

the obligation to pay and subsequently paying for the repair work. To quote the direct

language of the commercial general liability policy: “No insured will, except at their own

cost, voluntarily make a payment, assume any obligation, or incur any expense, other than

for first aid, without our consent.” Consequently, Lashlee-Rich made the payment to

Heglar Plumbing “at their own cost.”



   WHETHER STATE AUTO WAS ESTOPPED TO ASSERT THE DEFENSE OF
VOLUNTARY PAYMENT BY LASHLEE-RICH UNDER THE PRINCIPLES OF
                     WAIVER AND ESTOPPEL

       Lashlee-Rich’s claim of estoppel as to State Auto is likewise without merit. Lashlee-

Rich contends that State Auto should be estopped from asserting the contractual provision

excluding coverage if the insured “assumed an obligation and incurred expenses” or made

“voluntary payment” in order to attempt to defeat coverage after Lashlee-Rich made

payment to Heglar Plumbing for the repair work. In light of Anderson, had Lashlee-Rich

asked State Auto to do something in relation to the claim which it had refused to do, or had

suit been filed against Lashlee-Rich and State Auto failed to defend, Lashlee-Rich might

have an estoppel argument. Nothing of this nature occurred. State Auto was notified of

the matter only after Lashlee-Rich had already assumed the obligation to pay Heglar

Plumbing for the repair work at Smith. No advice was sought; no authorization was

obtained.




                                               10
       We feel it is imperative to note that at the time of the December 15 letter from State

Auto informing Lashlee-Rich that the insurance adjuster found no negligence on Lashlee-

Rich’s part, State Auto was not cognizant of the fact that Lashlee-Rich had assumed the

obligation to make payment to Heglar Plumbing for the repair work undertaken at Smith.

Neither the November 11 or the November 18 letter from Lashlee-Rich advised State Auto

that Lashlee-Rich had assumed such an obligation. As a result, State Auto’s basis for

nonpayment, as stated in the December 15 letter, was a finding of no liability or negligence

on the part of Lashlee-Rich. State Auto had no reason to invoke the provisions of its

policies concerning assumption of an obligation without the consent of State Auto when

they were devoid of any knowledge that Lashlee-Rich had assumed an obligation to pay

Heglar Plumbing for repair work at Smith.



       Like the trial court, we too understand that Lashlee-Rich may have acted as they did

for several reasons. They undoubtedly have a long, well established business relationship

with Smith and desired to maintain such a relationship. In doing so, however, they found

themselves in direct contravention of the language in the insurance policies issued by State

Auto. As mentioned above, in the absence of fraud or mistake, an insurance contract

must be interpreted and enforced as written even though it contains terms which may be

thought to be harsh and unjust.



       Accordingly, the judgment of the trial court is affirmed. Costs of this appeal are

taxed to appellant Lashlee-Rich, for which execution may issue if necessary.




                                                                HIGHERS, J.



CONCUR:




CRAWFORD, P.J., W.S.




                                             11
FARMER, J. (not participating)




                                 12
