## Facts

- Frances Jean Lazenby, a minor, obtained a circuit court judgment against Norman Frank Crutchfield for injuries from an automobile accident.
- The judgment totaled $4,000.79, including $1,087.00 in punitive damages based on Crutchfield’s intoxicated driving.
- Universal Underwriters Insurance Company insured Crutchfield under an automobile liability policy.
- The policy promised to pay on behalf of the insured “all sums” the insured became legally obligated to pay “as damages because of bodily injury” arising from use of the automobile.
- Universal paid the compensatory portion of the judgment but refused to pay the punitive damages, arguing the policy and Tennessee public policy did not require such payment.
- The coverage dispute was submitted on stipulated facts in an equitable action by Lazenby against Universal.

## Issues

1. Whether Tennessee public policy bars enforcement of an automobile liability policy to require the insurer to pay punitive damages assessed against the insured for injuries caused by an automobile accident.
2. Whether policy language promising to pay “all sums” the insured is legally obligated to pay “as damages because of bodily injury” includes punitive damages when the policy contains no express exclusion.

## Decision

- The Tennessee Supreme Court affirmed the chancellor’s judgment for Lazenby.
- The court held the policy’s “all sums” bodily-injury liability language encompassed punitive damages included in the insured’s judgment.
- The court held indemnification for punitive damages in this context was not prohibited by Tennessee public policy.
- Universal was obligated to pay the unpaid punitive damages portion of the judgment.

## Legal Principles

- An automobile liability policy promising to pay “all sums” the insured is legally obligated to pay “as damages because of bodily injury” covers punitive damages arising from an auto accident unless the policy expressly excludes them.
- Tennessee public policy does not, by itself, void contractual coverage for punitive damages awarded for bodily injury caused by an insured driver.
- Courts will generally enforce insurance contracts as written absent a clear statutory or decisional prohibition; public-policy objections must be definite before limiting coverage.
- The insured’s liability for punitive damages and the insurer’s duty to indemnify are distinct questions resolved by the policy language and applicable public policy.

## Conclusion

Tennessee enforced broad bodily-injury liability coverage to require payment of punitive damages awarded against an insured intoxicated driver, concluding that such coverage fell within the policy’s “all sums” language and was not barred by Tennessee public policy absent an express exclusion.


Lazenby v. Universal Underwriters Ins. Co., 383 S.W.2d 1 (Tenn. 1964)