Justia Rhode Island Supreme Court Opinion Summaries

An investment scheme exploiting the complexities of certain variable annuity policies led to litigation in the United States Court of Appeals for the First Circuit. The First Circuit certified to the Rhode Island Supreme Court two questions, and the Court accepted those questions pursuant to the discretionary authority provided to it in Article I, Rule 6 of the Supreme Court Rules of Appellate Procedure. The Supreme Court answered (1) an annuity is not infirm for want of an insurable interest when the owner and beneficiary of an annuity with a death benefit is a stranger to the annuitant; and (2) a clause in an annuity that purports to make the annuity incontestable from the date of its issuance precludes the maintenance of an action based on the lack of an insurable interest. View "W. Reserve Life Assurance Co. of Ohio v. ADM Assocs., LLC" on Justia Law

The estate of a former resident of Charlesgate Nursing Center filed a civil action against Charlesgate and related defendants (collectively, Charlesgate), claiming that the former resident was the victim of a sexual assault perpetrated by employees at Charlesgate. During the relevant time period, Charlesgate was insured by Medical Malpractice Joint Underwriting Association of Rhode Island (JUA). The JUA filed the instant action seeking a declaration that it had no duty to defend the Charlesgate defendants against the allegations set forth in the estate’s complaint. Charlesgate counterclaimed requesting a declaratory judgment establishing that the JUA owed a duty to defend Charlesgate in the action by the estate. The superior court granted summary judgment for Charlesgate with respect to the declaratory-judgment count of its counterclaim. The Supreme Court affirmed, holding that the JUA had a duty to defend Charlesgate in the estate’s underlying suit. View "Med. Malpractice Joint Underwriting Ass’n of R.I. v. Charlesgate Nursing Center, L.P." on Justia Law

Reyna Bernard purchased property and executed a promissory note in the principal amount secured by a mortgage on the property. The mortgage was assigned to HSBC Bank, USA, N.A. A fire later destroyed the property. Manuel Rosario entered into an insurance adjusting agreement with an LLC providing that the LLC would assist with the adjustment of the loss in return for a percentage of the total recoverable loss. Thereafter, Bernard defaulted on the note, and the property was sold at a foreclosure sale to HSBC, leaving an unpaid deficiency on the note in the amount of $246,072. Rhode Island Joint Reinsurance Association (RIJRA) subsequently initiated an interpleader action to determine the respective rights of the LLC, Bernard, and Ocwen Loan Servicing, LLC as agent for HSBC with regard to the insurance proceeds. The superior court found that Ocwen was entitled to the entirety of the insurance proceeds pursuant to the language contained in the mortgage. The Supreme Court affirmed, holding (1) Bernard and Rosario failed to demonstrate their entitlement to the insurance proceeds; and (2) the mortgage executed by Bernard was duly acknowledged as statutorily required and was therefore valid. View "R.I. Joint Reinsurance Ass’n v. Rosario" on Justia Law

Plaintiffs, David Miller and Miller’s Auto Body, alleged that they were subject to a malicious investigation into suspected insurance fraud that Defendants, three insurance companies, believed was taking place at Plaintiffs’ auto-body shop. Miller was charged with, among other charges, four counts of insurance fraud. The criminal information was dismissed by the Attorney General, but the dismissal was conditioned on an agreement between Miller and the Attorney General requiring Miller to execute a general liability release in favor of Defendants. More than one year after executing the release, Plaintiffs filed a complaint against Defendants. The trial court granted pretrial summary judgment for Defendants on the majority of Plaintiffs’ claims. Only Plaintiffs’ abuse-of-process claim went to trial. The jury returned verdicts in favor of Plaintiff against the two remaining defendants. The trial court subsequently granted judgment as a matter of law in favor of one defendant but denied the other defendant’s motion for judgment as a matter of law. The Supreme Court affirmed in part and reversed in part, holding that the release executed by Miller before he initiated suit barred all his claims against the defendants. View "Miller v. Metro. Prop. & Cas. Ins. Co." on Justia Law

One evening, Shawn McKiernan drove by Kevin Hough several times in an automobile owned by Rita Bower and taunted Hough as he drove past. McKiernan subsequently exited the insured vehicle and punched Hough, who was knocked to the pavement. Hough suffered a serious head injury as a result of the assault and battery. Hough filed a negligence complaint against Bower as the vehicle owner, alleging liability under the provisions of R.I. Gen. Laws 31-33-6, which imputes vicarious liability upon the owner of a vehicle for its consensual use or operation. Due to the subsequent death of Bower, Quincy Mutual Fire Insurance Company, the insurer of the vehicle, was substituted as a party defendant. The trial justice granted judgment as a matter of law in favor of Quincy. The Supreme Court affirmed, holding that Plaintiff failed to establish the causal relationship between the use of the vehicle and the injuries sustained by Plaintiff required to impute liability under section 31-33-6. View "Hough v. McKiernan" on Justia Law

Plaintiff was seriously injured in a collision while he was a passenger in a motor vehicle owned by the insureds of Defendant. Defendant obtained a judgment for money damages but subsequently settled with the insureds in exchange for an assignment of claims the insureds had against Defendant. Plaintiff then filed this action seeking a declaratory judgment requiring Defendant to pay the entire judgment from the underlying tort action (count one) and a declaration that Defendant was liable for prejudgment interest on the judgment in the underlying tort action (count two). A superior court justice granted summary judgment for Plaintiff on counts one and two. The Supreme Court vacated the judgment in count one and remanded for a new trial and affirmed the judgment in count two. On remand, Plaintiff sought a calculation of prejudgment interest. The superior court granted the motion, determining that Defendant’s argument with respect to the judgment satisfied order had been waived in regards to count two. The court subsequently ordered Defendant to make payment to Plaintiff. Defendant appealed from that order. The Supreme Court affirmed, holding that Defendant waived its arguments with respect to the judgment satisfied order and that the superior court had subject matter jurisdiction over the dispute throughout the litigation. View "DeMarco v. Travelers Ins. Co." on Justia Law

Quest Diagnostics, LLC was an independent contractor for Brown University under an agreement that obligated both parties to name the other party as an additional insured under their general liability policies. In 2006, Pauline Hall, a student at Brown University, sought treatment at the university’s health services clinic. A rapid strep test, to be performed by Quest, was ordered. The test, however, was not performed promptly, and the results were not returned to the health clinic. Hall was subsequently diagnosed with toxic shock syndrome, which resulted in permanent injuries. Hall filed suit against Brown and Quest, and Brown filed a cross-claim against Quest. Hall settled her claims with Brown and its insurers, Pinnacle Consortium of Higher Education and Genesis Insurance Company, but the cross-claim was not resolved. Quest subsequently sought a declaratory judgment that it was entitled to a defense from Pinnacle and indemnification from Pinnacle and Genesis. The superior court granted summary judgment in favor of Pinnacle and Genesis. The Supreme Court affirmed, holding that, under the facts of this case, Quest was not entitled to defense and indemnification from either insurer. View "Quest Diagnostics, LLC v. Pinnacle Consortium of Higher Educ." on Justia Law

After Plaintiff filed a complaint for divorce from Dean Miller, Plaintiff and Dean executed a property settlement agreement providing that Dean would maintain life insurance for the benefit of the parties' four minor children until they reached the age of majority. Dean subsequently executed a service request form listing his children as the beneficiaries of his life insurance policy and instructing that beneficial interests be paid to and managed by Kristin Saunders as custodial trustee for the benefit of his minor children. After Dean died, funds from his life insurance policy were distributed to Saunders. Plaintiff filed a complaint seeking declaratory and injunctive relief asking the superior court to declare that Dean's four children were the sole beneficiaries of his life insurance policy. The court granted Defendants' motion for summary judgment, finding that Dean created a valid custodial trust pursuant to the Rhode Island Uniform Custodial Trust Act (RIUCTA) and that the trust was not inconsistent with Dean's obligations under the property settlement agreement. The Supreme Court affirmed, holding (1) Dean created a custodial trust pursuant to RIUCTA; and (2) Dean did not violate the property settlement agreement by designating Saunders as custodial trustee on the service request form.View "Miller v. Saunders" on Justia Law

The Rhode Island Joint Reinsurance Association brought an interpleader action against multiple defendants for the purpose of determining the proper disposition of insurance proceeds. Bank of America, N.A. (BANA), one of the defendants, moved for summary judgment on the interpleader claim and against defendant Genoveva Santana-Sosa’s cross-claim. The superior court granted summary judgment for BANA, concluding that BANA was entitled to the entire amount of the insurance proceeds and that Santana-Sosa was entitled to none of the disputed funds. The Supreme Court affirmed, holding that BANA was entitled to judgment as a matter of law. View "R.I. Joint Reinsurance Ass’n v. Santana-Sosa" on Justia Law

At issue in this case was which party was entitled to insurance funds under an insurance policy on a parcel of property that sustained water damage. Stanley Gurnick and Phoenix-Gurnick, RIGP claimed they owned the property as a result of a foreclosure sale. Navigant Credit Union claimed it was entitled to the funds as the named mortgagee/loss payee in the insurance policy. The superior court decided that Navigant was entitled to the insurance proceeds because the funds were personal property under the insurance contract and Navigant was named a loss payee under that contract. The Supreme Court affirmed, holding that the hearing justice correctly determined that Navigant was entitled to the insurance proceeds. View "R.I. Joint Reinsurance Ass’n v. O’Sullivan" on Justia Law