Desjarlais v. USAA Ins. Co.

• Decision Date: 09 June 2003
• Docket Number: No. 2002-137-Appeal.,2002-137-Appeal.
• Parties: Nancy L. DESJARLAIS et al. v. USAA INSURANCE COMPANY.
• Court: Rhode Island Supreme Court

824 A.2d 1272

Nancy L. DESJARLAIS et al. v. USAA INSURANCE COMPANY.

No. 2002-137-Appeal.

Supreme Court of Rhode Island.

June 9, 2003.

Ronald J. Resmini, Providence, for Plaintiff.

Donna M. Lamontagne/Jeffrey S. Fleischaker, for Defendant.

Present: WILLIAMS, C.J., FLANDERS, and GOLDBERG, JJ.

OPINION

FLANDERS, Justice.

Must any derivative claims for loss of consortium, society, and companionship be joined with the underlying personal-injury and the uninsured/underinsured motorist (UIM) claims of any spouse or parent who was injured in an accident (the impaired party)? Or can the impaired party's spouse and children (the deprived parties) later initiate and maintain one or more separate actions seeking to recover for their alleged loss of consortium and society after the impaired party has settled, arbitrated, or litigated his or her claims?

Unless the deprived parties can affirmatively demonstrate that joinder of their derivative claims with those of the impaired party was not feasible before the impaired party settled, arbitrated, or litigated his or her claims, we hold that the deprived parties must join their claims with those of the impaired party before the impaired party settles his or her claims, obtains an arbitration award, or before a judgment adjudicating the impaired party's claims has become final, whichever event first occurs.

Although we reaffirm that the derivative claims of the deprived parties constitute separate claims, we hold that joinder of such claims with the impaired party's underlying tort and UIM claims is mandatory whenever it is feasible to do so. The purpose of this mandatory-joinder rule is to avoid duplicative litigation, potentially inconsistent results, and possible multiple recoveries against the same defendants for related claims that can and should be resolved at the same time. See Super. R. Civ. P. 19 ("Joinder of persons needed for just adjudication."). Here, because the deprived spouse failed to demonstrate that joinder of her derivative claims was not feasible before the impaired party settled his underlying tort claims and arbitrated his UIM claim, we affirm the Superior Court's summary judgment in favor of defendant UIM insurance carrier, USAA Insurance Company (USAA).

Facts and Travell

We recently addressed this same factual situation when we passed on the merits of the impaired party's UIM claim in Desjarlais v. USAA Insurance Co., 818 A.2d 645, 646-47 (R.I.2003) (per curiam) (Desjarlais I). Thus, we have no need to replow this same ground in this case. Suffice it to say that the salient facts pertinent to this appeal and to Desjarlais I arose from a motor-vehicle accident on February 7, 1995, involving David Desjarlais (Desjarlais or impaired party), and another motorist, Jon K. Polis (Polis or the alleged tortfeasor). Id. at 646-47. After the accident, Desjarlais asserted a claim against Polis, whose liability insurer was Nationwide Insurance. Eventually, Desjarlais settled his claim against Polis when Polis's liability insurer, Nationwide, paid him the policy limits of $100,000. Desjarlais's own UIM insurer, defendant USAA, consented to this settlement. At no point during the pendency of this tort claim, however, did Desjarlais's wife, Nancy L. Desjarlais, who is plaintiff in this case, assert her derivative claims against Polis, much less did she seek to join them with the tort claims of Desjarlais. Indeed, plaintiff made no attempt to notify Polis, Nationwide, or USAA of these derivative claims until after Desjarlais had settled and released his claim against the alleged tortfeasor and arbitrated his UIM claim against USAA.

Thus, after obtaining a policy-limits settlement from the alleged tortfeasor, Desjarlais then sought an additional recovery from his own UIM insurer, USAA. Ultimately, the parties submitted his UIM claim to binding arbitration. On July 6, 2001, a panel of arbitrators issued an award in favor of USAA, finding that the damages Desjarlais incurred as a result of the automobile accident were insufficient to require additional compensation from his UIM insurer. The arbitration panel submitted a supplemental decision on July 20, 2001, indicating that its finding was based on Desjarlais's "fail[ure] to prove that he sustained a permanent disability." Again, Desjarlais's wife—plaintiff herein— made no attempt to assert or to join her derivative claims for loss of consortium and society before the arbitration panel rendered its final award in favor of defendant USAA. Ultimately, after a hearing, the Superior Court confirmed the arbitration award in favor of USAA on September 10, 2001.

On August 23, 2001, the day after USAA petitioned the Superior Court to confirm the arbitration award, and approximately six and one-half years after her husband's accident, Desjarlais's wife, plaintiff herein, began this separate lawsuit against USAA, both in her own name and as parent and next friend of her two minor children, Kyle and Sabrina Desjarlais (children). In her complaint, she alleged for the first time that, as a result of her husband's 1995 motor-vehicle accident and injuries, she and her two children incurred separate injuries for loss of consortium and society, respectively. Although Desjarlais attempted to raise his wife's loss-of-consortium claims at the Superior Court hearing on September 10, 2001—the purpose of which was to confirm the arbitration award—his wife and children had failed to join their derivative claims with Desjarlais's underlying tort claims against Polis before Desjarlais settled these claims and released both Polis and his liability insurer, Nationwide. Nor did they attempt to join their claims seeking UIM coverage against USAA with those of Desjarlais in the arbitration proceeding. Thus, at the Superior Court hearing to confirm the arbitration award, the motion justice concluded that the loss-of-consortium claims were not properly before the court because the deprived parties never joined these claims with Desjarlais's personal-injury claims or with the arbitration of his UIM claims.

In due course, USAA moved for summary judgment in this case, arguing that the applicable law required plaintiff to join her derivative claims with those of her husband when he sought to recover for his personal injuries, and that her failure to do so barred her from now bringing and maintaining her derivative claims separately. USAA argued that the very nature of plaintiffs derivative claims prevented her from maintaining them in an independent action after her husband had settled his underlying tort claims and resolved his UIM claim via a judicially confirmed, binding arbitration proceeding. Further, USAA contended, policy considerations—including the need to minimize duplicative litigation and potentially conflicting results—required mandatory joinder of plaintiffs derivative claims with the underlying claims of her husband.

In response, plaintiff argued as follows: although her loss-of-consortium and her children's loss-of-society claims were derivative in the sense that they depended on the success of Desjarlais's underlying tort and UIM claims, they still were separate and distinct causes of action that could be maintained in a separate lawsuit, independent of her husband's personal injury and UIM claims. She also argued that, by USAA consenting to her husband's settlement with Polis for the limits of his liability policy with Nationwide, and by USAA thereafter preventing plaintiff and her children from submitting separate UIM claims for their derivative losses, USAA was allowing one person insured under its policy to reap all the UIM coverage benefits, thereby leaving nothing to cover the losses of its other insureds: namely, plaintiff and her children.

Ultimately, a Superior Court justice granted USAA's motion for summary judgment, ruling that the UIM statute, G.L.1956 § 27-7-2.1, case law interpreting it, and the relevant USAA insurance-policy language did not support plaintiffs position that she should be allowed to maintain her derivative claims independently in a separate proceeding despite the resolution of her husband's underlying tort and UIM claims.

Ruling in favor of USAA, the motion justice said:

"I don't think that it was ever intended that the [UIM] carrier should have to litigate the issue twice. I don't think that it was ever intended that if a[UIM] carrier gave consent to the insured to settle for the policy limits that the carrier was setting itself up for a derivative claim based upon the theory that by consenting to the settlement the [UIM] carrier was allowing one insured to use up all their liability coverage and preventing other insureds from pursuing their derivative claims.

"I think to favor the plaintiff's position would result in chilling the willingness of the [UIM] carriers to consent to permit their insureds to settle with the tort feasors [sic] and then pursue uninsured motorist claims. They would first have to fully examine all potential derivative claims. * * * I don't think that was intended by the statute or the applicable case law. These are derivative claims. They should have been joined with [Desjarlais's] claim against the [UIM] carrier. It was one claim per person, and they should not have to defend it twice."

On appeal, plaintiff argues that the motion justice erred in granting summary judgment in favor of USAA. She asserts that her derivative claims for loss of consortium and her children's claims for loss of society constitute separate causes of action. Thus, she contends, she should be allowed to maintain these claims on behalf of herself and her children in a separate lawsuit, filed later, provided she has asserted such claims within the applicable statute of limitations for doing so. Here, she points out, because her UIM claims against USAA sounded in breach of contract, she filed them well within the applicable ten-year statute of limitations for doing so. See Pickering v....