Heritage Healthcare Servs., Inc. v. Beacon Mut. Ins. Co.

Plaintiffs were a certified class of approximately 14,000 policyholders of Beacon Mutual Insurance Company, a state-chartered workers’ compensation insurance provider. Plaintiffs filed suit against Beacon, alleging that they were denied money that should have been equitably distributed to all policyholders as dividends, among other claims. The superior court dismissed the complaint and entered judgment in favor of Beacon, concluding that Plaintiffs’ claims were derivative in nature and that Plaintiffs failed file suit in accordance with R.I. Gen. Laws 7-1.2-711(c) and Rule 23.1 of the Superior Court Rules of Civil Procedure. Plaintiffs appealed, arguing that their claims met the requirements of a direct, and not a derivative, action and were therefore not subject to the procedural requirements of section 7-1.2-711(c) and Rule 23.1. The Supreme Court affirmed, holding that Plaintiffs’ claims were derivative in nature, and therefore, Plaintiffs were required to comply with the procedural requirements set forth in section 7-1.2-711(c) and Rule 23.1 before they commenced suit. Because Plaintiffs failed to comply with these requirements, the district court’s dismissal of the suit was proper. View "Heritage Healthcare Servs., Inc. v. Beacon Mut. Ins. Co." on Justia Law