Joseph Kevin Adams v. Tennessee Farmers Mutual Insurance Company

The plaintiff made a claim under his homeowner’s insurance policy after his house burned. The insurer denied the claim because, after the policy was issued, the plaintiff deeded the property to his sons so that it would pass to them if he died, and he did not notify the insurer. The plaintiff sued the insurer for breach of contract. The insurer claimed that the plaintiff had no insurable interest in the property, that he breached a “warranty of ownership” under the policy, that he had a duty to disclose the change of ownership after the policy issued, and that he violated a provision of the policy addressing concealment and fraud. The trial court ruled in favor of the plaintiff and ordered the insurer to pay him approximately $72,000 in accordance with the policy limits. The trial court also awarded discretionary costs to the plaintiff, but it denied the plaintiff’s request for prejudgment interest. The insurer appeals, claiming that the plaintiff was not entitled to recover under the policy for various reasons, and that the trial court erred in awarding the plaintiff discretionary costs. The plaintiff contends that the trial court erred in declining to award prejudgment interest. We affirm the trial court’s award pursuant to the insurance policy and its award of discretionary costs, and we vacate the portion of the judgment denying the request for prejudgment interest and remand for such an award.