Frazier v. Liberty Mut. Ins. Co.

• Court: Rhode Island Supreme Court
• Writing for the Court: Justice Flaherty, for the Court.
• Citation: Frazier v. Liberty Mut. Ins. Co., 229 A.3d 56 (R.I. 2020)
• Decision Date: 12 June 2020
• Docket Number: PC 17-3533,No. 2018-288-Appeal.,2018-288-Appeal.
• Parties: Timothy FRAZIER v. LIBERTY MUTUAL INSURANCE COMPANY, alias, ABC Insurance Company.

229 A.3d 56

Timothy FRAZIER

v.LIBERTY MUTUAL INSURANCE COMPANY, alias, ABC Insurance Company.

No. 2018-288-Appeal.

PC 17-3533

Supreme Court of Rhode Island.

June 12, 2020

OPINION

Justice Flaherty, for the Court.

The plaintiff, Timothy Frazier, appeals from a Superior Court grant of summary judgment in favor of the defendant, Liberty Mutual Insurance Company. Frazier contends that the trial justice erred in holding that the statute of limitations barred his claim for personal injuries that arose from a fall on the property of Liberty Mutual's insured. This case came before the Supreme Court for oral argument pursuant to an order directing the parties to show cause why the issues raised in this appeal should not summarily be decided. After hearing the arguments of counsel and after thoroughly reviewing the record, we conclude that cause has not been shown and that this case may be decided without further briefing or argument. For the reasons set forth in this opinion, we vacate the judgment of the Superior Court.

IFacts and Travel

Frazier alleges that on November 11, 2013, he slipped and fell in the restroom of a Pizza Hut restaurant that was owned and operated by Mita Enterprises, LLC. On November 2, 2016, Frazier filed a complaint (the first complaint) in the Superior Court against Mita, seeking compensation for his injuries. Frazier then moved for entry of a default against Mita, claiming that Mita had been served with process properly but that it had failed to respond to the complaint. That motion was granted, and default was entered. At a later date, Mita moved to vacate the entry of default pursuant to Rule 55(c) of the Superior Court Rules of Civil Procedure and to dismiss the case for insufficient service of process under Rule 12(b)(5). Mita argued that Frazier had incorrectly served process under the rules governing out of state corporations. On August 4, 2017, the first trial justice granted Mita's motions to vacate the default and to dismiss for insufficient process.¹ Significantly, Mita was represented in the first complaint by attorneys engaged by Liberty Mutual.

On July 31, 2017, Frazier filed a new complaint (the second complaint) against Mita. This time, service of process against Mita was returned non est inventus . Frazier then moved to substitute Liberty Mutual as a defendant, pursuant to Rule 21. Liberty Mutual objected, arguing in part that the statute of limitations barred Frazier's claim against it. However, before any action was taken on Liberty Mutual's statute of limitations defense, Frazier renewed his motion to substitute and sought to amend his complaint pursuant to G.L. 1956 § 27-7-2.² The parties agreed that Frazier's motion to amend his complaint to substitute Liberty Mutual for Mita would be granted, but that Liberty Mutual would reserve its rights to assert any and all defenses. On April 9, 2018, Frazier, pursuant to § 27-7-2, amended his complaint naming Liberty Mutual as defendant.

Liberty Mutual promptly moved to dismiss the amended complaint, arguing that the statute of limitations barred Frazier's action against it. The second trial justice agreed, holding that the three-year statute of limitations barred Frazier's direct action against Liberty Mutual. Thus, she granted summary judgment in favor of Liberty Mutual.³

Frazier timely appealed.

IIStandard of Review

"When we review a hearing justice's grant of a motion for summary judgment, we conduct our analysis de novo ." Hexagon Holdings, Inc. v. Carlisle Syntec Incorporated , 199 A.3d 1034, 1038 (R.I. 2019). "If we determine that ‘there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law,’ then we will affirm the grant of the motion." Id. (brackets omitted) (quoting Sisto v. America Condominium Association, Inc. , 68 A.3d 603, 611 (R.I. 2013) ). "In this endeavor, ‘we view the evidence in the light most favorable to the nonmoving party.’ " Id. (brackets omitted) (quoting Narragansett Indian Tribe v. State , 81 A.3d 1106, 1109 (R.I. 2014) ).

"It is well settled that ‘the question of whether a statute of limitations has run against a plaintiff's claim is a question of law,’ which this Court reviews de novo ." Goddard v. APG Security-RI, LLC , 134 A.3d 173, 175 (R.I. 2016) (brackets and deletions omitted) (quoting Ho-Rath v. Rhode Island Hospital , 115 A.3d 938, 942-43 (R.I. 2015) ). "This Court also reviews questions of statutory construction and interpretation de novo ." Id. (brackets omitted) (quoting Ho-Rath , 115 A.3d at 943 ).

IIIDiscussion

On appeal, Frazier argues that the second trial justice erred when she ruled that the claim set forth in the amended complaint against Liberty Mutual was barred by the three-year statute of limitations set forth in G.L. 1956 § 9-1-14(b). More specifically, Frazier argues that the second trial justice erred when she held that § 9-1-22 (the savings statute) did not preserve Frazier's claim against Liberty Mutual for an additional year because Liberty Mutual was a stranger to the first action that Frazier had filed against Mita.⁴

It is clear to us that Frazier's claim against Liberty Mutual, deprived of the benefit of the savings statute, would be barred by the statute of limitations. That is so because, generally, for a personal injury action, the injured party has three years from the date of the injury to file suit. See Rivers v. American Commerce Insurance Company , 836 A.2d 200, 204 (R.I. 2003) ("It is generally recognized that ‘a cause of action accrues and the applicable statute of limitations begins to run at the time of the injury to the aggrieved party.’ " (quoting Martin v. Howard , 784 A.2d 291, 299 (R.I. 2001) )); see also § 9-1-14(b) ("Actions for injuries to the person shall be commenced and sued within three (3) years next after the cause of action shall accrue, and not after[.]"). Frazier alleged that he was injured on November 11, 2013, and, thus, he had until November 11, 2016, three years later, to file suit against Mita. Additionally, because service of process against Mita was returned non est inventus , under § 9-1-14(c) Frazier had until March 11, 2017, an additional 120 days, to file suit directly against Liberty Mutual pursuant to § 27-7-2.⁵ Here, Frazier timely initiated an action against Mita on November 2, 2016. However, no action was filed against Liberty Mutual until April 9, 2018.

However, in arguing that his opportunity to sue Liberty Mutual pursuant to § 27-7-2 remains viable, Frazier relies on the savings statute, which says:

"If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff * * * may commence a new action upon the same claim within one year after the termination." Section 9-1-22 (emphasis added).⁶

Thus, Frazier's action would be timely if the savings statute applies to his claim against Liberty Mutual by extending the time to file suit an additional year from the date of the dismissal of the first action on August 4, 2017.

Not so fast, says Liberty Mutual. The insurance carrier argues, as it did in the Superior Court, that this Court's holding in Luft v. Factory Mut. Liability Ins. Co. of America , 51 R.I. 452, 155 A. 526 (1931), remains a barrier to the application of the savings statute in this case. In Luft , we said:

"There is no merit in the plaintiffs' further contention that they may prosecute their suits under provision of section 9, chapter 334, G. L. 1923, which permits the bringing of a new suit within one year if the original action was for any cause abated. That statute is not applicable in the case of a defendant which was a stranger to the original action . Luft , 51 R.I. at 455, 155 A. at 527 (emphasis added) (citing Mockel v. Pawtucket Gas Co. of New Jersey , 48 R.I. 485, 139 A. 308 (1927) ).

Essentially, our holding in Luft was that the savings statute could not be employed to extend the statute of limitations for actions against a party who "was a stranger to the original action." Id. Additionally, in Luft , this Court held that the defendant insurance company was a stranger to an original action brought against its insured. Id. Therefore, Liberty Mutual argues that, if we were simply to apply the holding of Luft to the case before us, the savings statute would not benefit Frazier's claim against Liberty Mutual.

Although we agree with the central holding of Luft that the savings statute cannot be used to extend the statute of limitations for an action against a party that was a stranger to the original action, modern society and evolving jurisprudence present a different view of whether an insurer that makes an appearance on behalf of its insured, even specially to contest jurisdiction over the insured, is a stranger to an original action against its insured. It is our opinion that, because an insurance company and its insured are sufficiently linked, an insurance company is not, under these circumstances, a stranger to the original action against its insured. We observe that the holding in Luft is 89 years old, that there is a paucity of facts set forth in that opinion, and that the language that Liberty Mutual clings to is but one unconnected sentence in the opinion.⁷ Therefore, we are constrained to overrule Luft to the extent that Luft is inconsistent with this opinion.

In reaching this conclusion, we note that the savings statute is remedial in nature and therefore should be liberally applied. See McLaughlin v. Dunlop , 70 R.I. 155, 162, 38 A.2d 157, 158 (1944). As such, we must be mindful not to unduly restrict the applicability of the savings statute, especially in light of new circumstances that have arisen since we decided Luft . In today's world, insurance companies open files on reported claims and begin an investigation promptly. In this case, it cannot be disputed that Liberty Mutual was aware of the lawsuit,...