§77.4 Liability of Insurer for Acts of an Attorney

The Case: Trau-Med of America, Inc. v. Allstate Ins. Co., 71 S.W.3d 691 (Tenn. 2002).

The Basic Facts: Plaintiff brought suit against Defendant insurance company for tortious interference with a business relationship, conspiring to destroy Plaintiff's business reputation and a number of other claims after Defendant allegedly, inter alia, made libelous statements and created "defamatory documents for the purpose of ruining its reputation in the legal community." 71 S.W.3d at 695-697.

The Bottom Line:

  • "The preliminary issue in this case is whether an insurance company can be held vicariously liable for the actions of counsel hired by the company to represent the insured." Id. at 697.
  • "However, where, as here, the insurer is alleged to have 'controlled the details of the attorney's performance, or dictated the strategy or tactics employed,' or otherwise directed the attorney's conduct of the actual litigation, the insurer may be held vicariously liable for the conduct of that attorney. Givens v. Mullikin, [75 S.W.3d 383 (Tenn. 2002)]." Id.
  • "After carefully examining the factual averments in the complaint, we conclude that Trau-Med has made sufficient allegations that, if proven, would give rise to vicarious liability on the part of Allstate. Specifically, Trau-Med claims that in several actions filed in the Circuit Court of Shelby County, Allstate 'instigated and caused [Motions] in Limine to be filed,' which alleged that Trau-Med was engaging in unlawful activity. Trau-Med further maintains that 'the allegations in these Motions in Limine were instigated by Allstate through its financial clout with the attorneys it hired to represent its policyholders; that the allegations are totally false[, and] were maliciously made with the intent to destroy [Trau-Med] and its business.' Consequently, if the proof supports the allegations in the complaint that Allstate exercised actual control over the attorneys hired to defend the insureds by directing them to file defamatory motions, Allstate is vicariously liable under the laws of agency for the harm proximately resulting from the attorneys' conduct." Id. at 697-98.

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.

Rather than researching these legal issues alone, we urge you to contact one of our award-winning lawyers who can sit down with you, review your case, answer your questions and clearly explain your rights and your options in a no-cost, no-obligation consultation. Our experienced attorneys handle all personal injury and wrongful death cases on a contingency basis, so we only get paid if we win. If for any reason you are unable to come to our office, we will gladly come to you.

To schedule an appointment, contact us online or call us at 615-742-4880 or toll-free at 866-812-8787.



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.

To order a copy of the book, visit www.dayontortsbook.com. John also blogs regularly on key issues for tort lawyers. To subscribe to the Day on Torts blog, visit www.dayontorts.com.

Client Reviews
Everything was great. You guys are a great representative. I was satisfied with everything. Truly appreciate John Day and his hard-working staff.
★★★★★
We thought that you did an excellent job in representing us in our lawsuit. We would recommend you to anyone. Mitch Deese
★★★★★
The Law Offices of John Day is, without a doubt, the best in Nashville! They treated me with the utmost respect and tended to my every need. No question went unanswered. I was always kept informed of every step in the process. I received phenomenal results; I couldn't ask for more. I would definitely hire the Law Offices of John Day again. Anthony Santiago
★★★★★
I would definitely recommend to anyone to hire John Day's law firm because everyone was helpful, made everything clear and got the job done. I am satisfied with how my case was handled. June Keomahavong
★★★★★
It's been a long battle but this firm has been very efficient and has done a remarkable job for me! I highly recommend them to anyone needing legal assistance. Everyone has always been very kind and kept me informed of all actions promptly. Linda Bush
★★★★★
I had a great experience with the Law Offices of John Day. The staff was very accommodating, and my phone calls/emails were always responded to in a timely manner. They made the entire process very easy and stress-free for me, and I had confidence that my case was in good hands. I am very happy with the results, and I highly recommend! Casey Hutchinson
★★★★★