Atmed Treatment Ctr., Inc. v. Travelers Indem. Co.
| Decision Date | 09 December 2022 |
| Docket Number | 2021-130-Appeal.,PC 19-11553 |
| Citation | 285 A.3d 352 |
| Parties | ATMED TREATMENT CENTER, INC. v. The TRAVELERS INDEMNITY COMPANY. |
| Court | Rhode Island Supreme Court |
Neil P. Philbin, Esq., for Plaintiff.
Brian W. Haynes, Esq., for Defendant.
Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.
This insurance coverage dispute came before the Supreme Court on October 4, 2022, on appeal by the plaintiff, Atmed Treatment Center (Atmed), seeking review of a Superior Court final judgment and order granting summary judgment in favor of the defendant, The Travelers Indemnity Company (Travelers), and denying Atmed's motion for summary judgment. For the reasons set forth herein, we affirm the judgment of the Superior Court in part and vacate in part.
The material facts in this case are not in dispute. This controversy arose from an allegation of racial discrimination that purportedly occurred at the Atmed Treatment Center in Johnston, Rhode Island, on July 14, 2015. On November 23, 2015, Folosade Olofinlade, a woman of Nigerian national origin, filed a charge of discrimination (charge) with the Rhode Island Commission for Human Rights (commission). In the charge, Olofinlade alleged that, on July 14, 2015, she and her two-and-one-half-year-old daughter had accompanied her brother-in-law to the Atmed Treatment Center in order for him to be evaluated for symptoms of illness. At the time, Olofinlade was thirty-eight weeks pregnant. According to Olofinlade, she informed Atmed that her brother-in-law had a history of malaria
and that that was likely the cause of his illness. Ms. Olofinlade alleged that she and her daughter were then quarantined in a small room with her brother-in-law for approximately four hours without access to food, water, or a restroom. She also alleged overhearing an employee declare on the telephone that Atmed might have its first case of Ebola,1 despite having no facts to support such a statement.
According to Olofinlade, after four hours of confinement, she and her family members were transported to a local hospital in accordance with "Hazmat protocol."2 In her charge, Olofinlade alleged that Atmed's conduct "caused a serious delay in transport, undue stress, panic, anxiety, confusion, and fear for both [her] and [her] child." Ms. Olofinlade averred that her brother-in-law was never diagnosed with Ebola
or any other infectious disease. According to Olofinlade, the events that transpired at Atmed "indicate[d] that both [she and her daughter] were treated in a disparate manner on the basis of [their] national origin, race and color." Ms. Olofinlade claimed that Atmed's conduct constituted discrimination in violation of Title VII of the Civil Rights Acts of 1964, the Rhode Island Civil Rights Act, and other state and federal laws.
Atmed notified Travelers of Olofinlade's charge and demanded that Travelers defend it against the claims in accordance with a commercial general liability insurance policy (policy) that Atmed held with Travelers. The policy was effective from June 2015 to June 2016 and provided Atmed coverage for commercial general liability. Among the sections of the policy pertinent to this lawsuit are:
" ‘Personal injury’ resulting from or as a consequence of discrimination, whether intentional or unintentional, based upon a person's sex, sexual preference, marital status, race, creed, religion, national origin, age, physical capabilities, characteristics or condition, or mental capabilities or condition."
In response to Atmed's demand, Travelers informed Atmed by letter that Olofinlade's charge was not covered under the terms of the policy. Travelers explained that, in its view, the allegations made in Olofinlade's charge "d[id] not set forth a claim for ‘bodily injury’ or ‘property damage’ caused by an ‘occurrence.’ "3 Travelers also stated that the "Expected Or Intended Injury" exclusion4 and the "Discrimination" exclusion both precluded coverage. To support its decision to disclaim coverage, Travelers quoted numerous provisions of the policy. Significantly, however, Travelers omitted certain relevant portions of the policy that are germane to our analysis. Atmed retained counsel to defend.
Ms. Olofinlade obtained a right-to-sue authorization from the commission and filed an action against Atmed in the Superior Court on behalf of herself and her daughter on October 10, 2017.5 The operative complaint against Atmed consisted of various claims sounding in discrimination and tort. Specifically, the amended complaint set forth claims for: (1) discrimination in violation of the Rhode Island Civil Rights Act of 1990 (RICRA), G.L. 1956 chapter 112 of title 42; (2) negligence/premises liability; (3) intentional infliction of emotional distress; (4) false imprisonment; (5) discrimination in violation of Title VI of the Civil Rights Act of 1964; and (6) discriminatory practices prohibited in places of public accommodation in violation of G.L. 1956 chapter 24 of title 11. Atmed continued with retained counsel to defend it against Olofinlade's suit. On January 17, 2019, Atmed removed the case to the United States District Court for the District of Rhode Island, where it remains pending.
It was not until August 20, 2019, that Atmed notified Travelers of Olofinlade's suit and demanded that Travelers undertake its defense.6 In a letter to Atmed dated September 10, 2019, Travelers agreed to participate in Atmed's defense against Olofinlade's claims, subject to a reservation of rights. Travelers, however, has not reimbursed Atmed for its legal costs incurred before August 20, 2019.
On December 5, 2019, Atmed commenced this action seeking a declaratory judgment that Travelers had a duty to defend Atmed before the commission (count one). The complaint also asserted a breach-of-contract claim based upon Travelers’ disclaimer of coverage and its explanation for its decision to disclaim coverage (count two), and insurer bad faith (count three).7
On March 19, 2020, Atmed filed a motion for partial summary judgment as it relates to counts one and two. Travelers filed an objection along with a cross-motion for summary judgment. A hearing on the parties’ cross-motions for summary judgment was held in the Superior Court on July 22, 2020. At the conclusion of the hearing, the trial justice reserved decision on the motions. On September 18, 2020, the trial justice issued a bench decision granting Atmed's motion as to liability only (original decision). The trial justice deferred ruling on Atmed's recoverable damages, explaining that she would give Travelers the opportunity to dispute the reasonableness of the attorneys’ fees Atmed had incurred. The trial justice directed the parties to refrain from preparing an order on the cross-motions for summary judgment until the issue of damages was resolved.
On November 3, 2020—before an order entered—Travelers filed a motion for reconsideration, or, alternatively, for separate and final judgment. Atmed objected and a hearing was held on December 17, 2020. The trial justice proceeded to issue a second bench decision, in which she granted Travelers’ motion for reconsideration; granted Travelers’ cross-motion for summary judgment; and denied Atmed's motion for partial summary judgment. Conflicting (and confusing) orders subsequently entered on April 12, 2021, that culminated in an order granting summary judgment for Travelers on all counts, including count three that had been severed and stayed.8 Notably, Travelers had not moved for summary judgment as to count three of the complaint. On April 15, 2021, Atmed filed a timely notice of appeal. In deciding this case, we touch upon several of the hallmarks of summary-judgment jurisprudence.
"Although we stress that the Superior Court Rules of Civil Procedure say nothing [about] a motion to reconsider, we do note that ‘a party's motion to reconsider has been treated by this Court as a motion to vacate a judgment under Rule 60(b).’ " McLaughlin v. Zoning Board of Review of Town of Tiverton , 186 A.3d 597, 604 n.9 (R.I. 2018) (quoting Turacova v. DeThomas , 45 A.3d 509, 514-15 (R.I. 2012) ). "It is well settled that [a] motion to vacate a judgment is left to the sound discretion of the...
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