West v. Pratt
This appeal addresses the allocation of compensatory and punitive damages between a liability insurer and an uninsured motorist carrier in Tennessee. State Farm Mutual Automobile Insurance Company, the uninsured motorist carrier for plaintiffs Glenn and Shari West, challenged Tennessee Farmers Mutual Insurance Company's, the liability insurer for defendant Horace Pratt, decision to apportion its policy limits between compensatory and punitive damages. State Farm argued this allocation improperly shifted responsibility for punitive damages to them, a result prohibited by Tennessee public policy concerning uninsured motorist coverage. The Tennessee Supreme Court reversed the lower courts' rulings, holding that a liability carrier must first satisfy compensatory damage awards to the extent of its limits before applying any funds to punitive damages, unless the policy explicitly states otherwise. This decision underscores the state's public policy against indirectly burdening uninsured motorist carriers with punitive damage obligations.