Aetna Cas. & Sur. Co. v. Farr

• Decision Date: 22 July 1991
• Docket Number: No. 90-196-A,90-196-A
• Citation: Aetna Cas. & Sur. Co. v. Farr, 594 A.2d 379 (R.I. 1991)
• Court: Rhode Island Supreme Court
• Parties: AETNA CASUALTY & SURETY COMPANY v. Shirley FARR et al. ppeal.

Page 379

594 A.2d 379

AETNA CASUALTY & SURETY COMPANY v. Shirley FARR et al.

No. 90-196-Appeal.

Supreme Court of Rhode Island.

July 22, 1991.

Michael G. Sarli, Gidley, Lovegreen & Sarli, Providence, for plaintiff.

Ronald J. Resmini, Ronald J. Resmini Ltd., Providence, for defendant Shirley Farr.

Robert J. Dumouchel, Higgins & Slatter, Providence, for defendant Peerless Ins. Co.

OPINION

WEISBERGER, Justice.

This case comes before us on the plaintiff's appeal from a judgment in favor of the defendants and from a decision denying the plaintiff's motion for summary judgment. We affirm the trial justice's decision denying the motion and remand the case for further findings of fact. The facts of the case insofar as pertinent to this appeal are as follows.

The plaintiff, Aetna Casualty & Surety Company (Aetna), delivered a business-automobile liability policy to MCA, Inc. (MCA), at MCA's corporate headquarters in California. Pursuant to the language of the policy, MCA specifically rejected uninsured-motorist insurance in states where such coverage is not mandatory.

Coverage under the Fleet Policy issued to MCA was effective from December 31, 1982, to December 31, 1983. During that time, defendant, Shirley Farr (Farr), was involved in an automobile accident with an uninsured motorist in Connecticut. Farr was employed by Spencer Gifts, a subsidiary of MCA, and was driving a company car in the course of her employment when the accident occurred.

Spencer Gifts (Spencer) is principally located in New Jersey and had leased the company car Farr used from Sherwood Leasing Company (Sherwood). Sherwood, also located in New Jersey, owned the car, which was registered in New Jersey. Although Farr resided in New Jersey when the Aetna policy was issued, she had moved to Rhode Island prior to the time of the accident.

In addition to providing the fleet coverage, Aetna was also MCA/Spencer's workers' compensation carrier. As a result of the automobile accident, Farr brought a claim against MCA/Spencer for workers' compensation benefits. Upon signing a release dated May 30, 1985, she received $40,000 from Aetna and MCA/Spencer.

Several months later, Farr instituted an action to recover uninsured-motorist benefits, pursuant to the Aetna policy, by filing a claim in Rhode Island through the American Arbitration Association. Aetna responded by filing a petition for declaratory judgment and a motion for summary judgment. Count 1 of its complaint alleged that Farr was not legally entitled to uninsured-motorist benefits under the fleet policy since MCA/Spencer had opted not to purchase such insurance from Aetna.

In January of 1987 Peerless Insurance Company (Peerless) filed a motion to intervene as a defendant in this case. Peerless had issued an automobile insurance policy to Farr's husband, and Farr made an additional claim for uninsured-motorist coverage pursuant to that policy. Adopting Farr's position, Peerless argues that Aetna is obligated to pay the uninsured-motorist claim. It maintains that Peerless is only responsible for any possible excess that may remain after the amount due under the Aetna policy is paid.

Peerless's motion to intervene and Aetna's motion for summary judgment and petition for declaratory judgment were heard together by a Superior Court justice. He issued a written decision granting Peerless's motion to intervene and denying Aetna's motion for summary judgment and petition for declaratory judgment. The trial justice determined that New Jersey was the forum with the most significant interest in the dispute and that its substantive law should control the case. Since uninsured-motorist coverage is mandatory in New Jersey, MCA/Spencer's rejection of such coverage in its policy with Aetna was not valid. Therefore, he held, Farr was entitled to uninsured-motorist coverage under the Aetna policy. Aetna filed a notice of appeal on September 9, 1987, and again on February 10, 1988. During the pendency of this appeal Aetna added a second count to its complaint in the Superior Court.

Aetna's second count, with which we are presently concerned, alleged that by executing a release on May 30, 1985, Farr forfeited all causes of action arising from the automobile accident. A second justice of the Superior Court initially granted Aetna's motion for summary judgment in regard to count 2 but proceeded to vacate the judgment since Peerless had not been notified of the summary-judgment proceedings. Upon hearing Aetna's motion for a second time, the same trial justice denied its motion for summary judgment. He determined that although the release signed by Farr precluded further claims to workers' compensation benefits, it did not operate, as a matter of law, as a general release of all rights and benefits that Farr might choose to pursue, such as uninsured-motorist benefits. He held in essence that the release was ambiguous and that it would be necessary to determine the intent of the parties as a question of fact.

Aetna filed a petition for a writ of certiorari, requesting review of the trial justice's denial of its motion for summary judgment on count 2, which was denied by this court on October 13, 1989. Aetna next moved to assign the case for a trial regarding the factual question of the parties' intent in executing the release. Although this motion was granted, Aetna proceeded to move for entry of judgment, which was denied by the trial justice. Final judgment on count 2 was entered on March 26, 1990, in favor of defendants (for reasons which are not apparent on the record), and on that same date Aetna filed its notice of appeal to this court.

The release Farr signed upon receiving $40,000 from MCA/Spencer stated in pertinent part that Farr

"do[es] hereby remise, release, discharge and forever quit-claim unto the said payors, their successors and assigns, any and all...