Tennessee Fire Loss Victim’s Statutory Bad Faith Penalty Appropriately Awarded
Brandi Burge’s mobile home and all of its contents were destroyed by fire in July 2013 while insured by Farmers Mutual of Tennessee. Farmers Mutual paid an advance in August 2013, but denied the claim without disclosing why. Suit was filed one year later. After 10 months of discovery Farmers Mutual declared (in discovery responses) the policy void ab initio because Plaintiffs failed to disclose “multiple mortgages on the property.” At a bench trial three years after the fire, the trial court entered judgment for Plaintiffs for damage to the mobile home, loss of personal property, additional living expenses, and a statutory bad faith penalty of 15 percent. On appeal the judgment was affirmed, but modified to increase the award on the mobile home and to add post-judgment interest.