The following section from Day on Torts Leading Cases in Tennessee Tort Law​​​ is out of date and should not be used. It remains a part of this site for historical purposes only. An updated version of the book is available by subscription at (Additional information below.)

§10.3 Necessity of Giving Notice of Intention to Seek Penalty

The Case: PacTech, Inc. v. Auto-Owners Insurance Co. , 292 S.W.3d 1 (Tenn. Ct. App. Sept. 22, 2008), perm. appeal denied, (Apr. 27, 2009).

The Basic Facts: Plaintiff insured sued insurer for failure to pay claim in a timely manner.

The Bottom Line:

  • "Auto-Owners contends that PacTech's claim under this statute should have been dismissed by the trial court upon Auto-Owners' motion for directed verdict. We agree." Id. at 9.
  • "In Ginn v. American Heritage Life Insurance Co., 173 S.W.3d 433 (Tenn. Ct. App. 1977), we noted that a formal demand for payment by the insured is a prerequisite to recovery under the statute:
    In order to recover bad faith penalties under [Tenn. Code Ann. § 56-7-105], a plaintiff must prove (1) the policy of insurance must, by its terms, have become due and payable, (2) a formal demand for payment must have been made, (3) the insured must wait 60 days after making his demand before filing suit unless there is a refusal to pay prior to the expiration of the 60 days, (4) the refusal to pay must not have been in good faith.
    Id. at 443 (citation omitted) (emphasis added). In an earlier opinion, Walker v. Tenn. Farmers Mut. Ins. Co., 568 S.W.2d 103,106 (Tenn. Ct. App. 1977), observing the penal nature of the statue and the necessity that it be strictly construed, we further noted that, even though an insured has completed all forms required by the insurer, this is insufficient to meet the requirement of the statute that formal demand be made, and we concluded that such requirement shows that the insurer is 'entitled to notice of the claim for bad faith and a period in which to reflect upon the consequences of its failure to pay.' Id. at 106. There being no evidence that PacTech at any time made formal demand for payment such as would have apprised Auto-Owners of PacTech's bad faith claim, we believe Auto-Owners' motion for directed verdict at the close of proof was well taken and should have been granted." 292 S.W.3d 1.

After an accident, many injury victims and their families want more information on the accident and their legal rights. Consequently, many of them have found their way to these pages. While we are happy you are here, please understand Day on Torts: Leading Cases in Tennessee Tort Law was written to be a quick, invaluable reference for Tennessee tort lawyers. While the book provides the leading case for more than 300 tort law subjects and thousands of related case citations, it is not a substitute for personalized legal advice from a qualified lawyer.

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The foregoing is an excerpt from Day on Torts: Leading Cases in Tennessee Tort Law, published by John A. Day, Civil Trial Specialist, Fellow in the American College of Trial Lawyers, recipient of Best Lawyers in America recognition, Martindale-Hubbell AV® Preeminent™ rated attorney, and Top 100 Tennessee Mid-South Super Lawyers designee. Read John’s full bio here.

The book is now available electronically by subscription at The new format allows us to keep the book current as new opinions are released. BirdDog Law also has John's Tennessee Law of Civil Trial and Compendium of Tennessee Tort Reform Statutes available by subscription, as well as multiple free resources to help Tennessee lawyers serve their clients

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