Henderson v. Nationwide Ins. Co.

• Citation: 35 A.3d 902
• Decision Date: 12 January 2012
• Docket Number: No. 2010–374–Appeal.,2010–374–Appeal.
• Parties: David HENDERSON v. NATIONWIDE INSURANCE COMPANY.
• Court: United States State Supreme Court of Rhode Island

35 A.3d 902

David HENDERSON

v.NATIONWIDE INSURANCE COMPANY.

No. 2010–374–Appeal.

Supreme Court of Rhode Island.

Jan. 12, 2012.

Peter J. Comerford, Esq., Providence, for Plaintiff.

Ronald Langlois, Esq., for Defendant.

Present: SUTTELL, C.J., GOLDBERG, FLAHERTY, ROBINSON, and INDEGLIA, JJ.

OPINION

Justice FLAHERTY, for the Court.

David Henderson, the plaintiff, was unloading luggage from a limousine that he had driven to Logan Airport when he was struck by a car and badly injured. At the time of the accident, Henderson was a professional limousine driver employed by All Occasion Transportation, Inc., and he had just completed a trip during which he conveyed customers from Newport, Rhode Island, to Boston, Massachusetts. Henderson made a claim against the driver whose negligence occasioned his injuries, as well as against his employer's insurance company; he reached settlements with both, but remained less-than-fully compensated for his injuries. As a result, Henderson filed an “underinsured-motorist” claim with the defendant, Nationwide Insurance Company, under the terms of his personal automobile insurance policy. Nationwide denied the claim, citing two exclusions from the policy's provisions for uninsured-motorist coverage. We are called upon to determine whether these two exclusions are repugnant to the public policy imbedded in Rhode Island law with respect to the uninsured-motorist-coverage statute. For the reasons set forth in this opinion, we hold that Nationwide's denial of coverage was both lawful and not inconsistent with public policy, and we vacate the judgment of the Superior Court.

IFacts and Travel

The material facts of this case are straightforward and undisputed. All Occasion Transportation employed Mr. Henderson as a professional driver. In that capacity, he worked forty or more hours per week transporting passengers to and from varied destinations. His passengers paid All Occasion a fee for his services, and in turn Henderson was compensated with a salary, in addition to any gratuities that his customers might bestow upon him. Henderson followed a regular routine with respect to his work. On any given day, he would receive a message from All Occasion's main office about an assignment and he would then report to a garage located in Cranston to pick up an assigned vehicle. All Occasion owned a fleet of automobiles, including a number of sedans, limousines, and sport utility vehicles. Depending upon the nature of the assignment, all of these vehicles were available for Henderson's use, but the main office was responsible for designating him a particular vehicle based on the nature of the assignment for a particular day.

The accident that underlies Henderson's claim occurred on June 5, 2003. ¹ On that day, the main office directed him to transport a number of customers from Newport, Rhode Island, to Logan Airport in Boston, Massachusetts. He reported to the Cranston garage, picked up his assigned limousine, and travelled to Newport to meet his passengers. After driving them to Logan Airport, and while he was unloading his passengers' luggage, another vehicle struck Henderson, injuring him severely. He subsequently settled claims against the tortfeasor as well as his employer's insurance carrier. ² However, because he contended that his damages exceed the amounts he had received in those settlements, Henderson filed an “underinsured” motorist claim with Nationwide, his personal automobile insurance carrier.³ Nationwide denied Henderson's claim, citing two exclusions that are contained in Mr. Henderson's policy for uninsured motorist coverage: the “for a fee” exclusion and the “regular use” exclusion. The applicable portions of his policy provide:

“Coverage does not apply to:

“1. Use of any motor vehicle by an insured to carry persons or property for a fee. Motor vehicles used in shared-expense car pools are not considered as carrying persons for a fee.

“ * * *

“4. Bodily injury suffered while occupying a motor vehicle:

a) owned by; or

b) furnished for the regular use of; you or a relative, but not insured for Auto Liability coverage under this policy.” ⁴

After his carrier denied the claim on policy language grounds, Henderson filed suit in Superior Court, alleging that Nationwide had “unlawfully and unjustifiably” denied him coverage.⁵ Eventually, Nationwide moved for summary judgment, and a hearing was held before a justice of the Superior Court on December 9, 2008. The motion justice found the policy exclusions to be “convoluted” and “difficult to understand.” Nevertheless, she determined that the two relevant exclusions were “a plain attempt to vary or qualify the clear and unambiguous statutory definition of uninsured motor vehicle and the requirement that all insurance carriers offer personal protection to their insureds.” She concluded that the exclusions were an “attempt to redefine or vary that which the legislature has defined as a matter of law.” Therefore, she ruled that the exclusions were “void on grounds of public policy.” Accordingly, the motion justice denied Nationwide's motion for summary judgment.

One year later, Nationwide moved to renew its motion for summary judgment. A hearing was held on that motion on December 11, 2009, before the same justice. At the hearing, Nationwide argued that Henderson's testimony from a deposition which was conducted after the initial summary judgment hearing showed that the accident occurred while he was using a limousine to carry passengers “for a fee” and that All Occasion regularly furnished that vehicle for his use. The justice declared that she “gave Nationwide credit for that at the time of the last hearing” and that she had accepted the facts both as true and weighing in favor of the defendant, but nonetheless thought it prudent to grant the motion to renew and reconsider her ruling “[t]o the extent that [she] caught Nationwide off guard with the question of voidness or invalidity * * *.” After considering Nationwide's argument, however, she came to the same conclusion, and again found that the exclusions were overbroad and that they violated public policy. Consequently, she denied Nationwide's motion for summary judgment for a second time. In light of the justice's ruling, the parties declared that Henderson's remaining damages exceeded the policy limits, and Henderson filed a motion for entry of judgment in his favor. On October 1, 2010, a judgment was entered in favor of Henderson for the policy limit of $25,000, inclusive of interest and costs. Nationwide timely appealed that judgment to this Court.

IIStandard of Review

We note at the outset of our analysis that Henderson did not file a cross-motion for summary judgment in this matter.⁶ However, we previously have held that “[a] request for the court to dismiss a case without a trial based on the legal authorities presented sounds in summary judgment.” Kevorkian v. Glass, 774 A.2d 22, 24 (R.I.2001). Our review of the record here reveals such “peculiar circumstances.” Neither party disputed the motion justice's finding that no issues of material fact were genuinely disputed, and both parties presented exclusively legal arguments in the Superior Court. Furthermore, the record indicates that the motion justice's judgment in this matter was conclusive.

In light of these facts, it is our opinion that Henderson's motion for entry of final judgment was essentially a request for the motion justice to rule on the merits of the case. Accordingly, as we would on appeal from a motion for summary judgment, we review this matter de novo. See Zanni v. Voccola, 13 A.3d 1068, 1070 (R.I.2011) (citing Classic Entertainment & Sports, Inc. v. Pemberton, 988 A.2d 847, 849 (R.I.2010)). In such a review, this Court applies the same standards as the motion justice, and we will affirm summary judgment “if, when viewing the evidence in the light most favorable to the nonmoving party, ‘there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.’ ” Trust of McManus v. McManus, 18 A.3d 550, 552 (R.I.2011) (quoting Lynch v. Spirit Rent–A–Car, Inc., 965 A.2d 417, 424 (R.I.2009)).

IIIAnalysis

“In interpreting the contested terms of the insurance policy, we are bound by the rules established for the construction of contracts generally.” Malo v. Aetna Casualty and Surety Co., 459 A.2d 954, 956 (R.I.1983) (citing Colagiovanni v. Metropolitan Life Insurance Co., 57 R.I. 486, 190 A. 459 (1937)). “It is well settled * * * that when the terms of an insurance policy are found to be clear and unambiguous judicial construction is at an end.” Nationwide Mutual Insurance Co. v. Viti, 850 A.2d 104, 106–07 (R.I.2004) (quoting Dellagrotta v. Liberty Mutual Insurance Co., 639 A.2d 980, 980 (R.I.1994)). In that case, the policy's terms must be given their plain, ordinary meaning; the contract terms must then be applied as written and the parties are bound by them. See Malo, 459 A.2d at 956. Additionally, “[c]ontracts for uninsured-motorist coverage * * * must be construed in light of the public policy mandated by the Legislature.” DiTata v. Aetna Casualty and Surety Co., 542 A.2d 245, 247 (R.I.1988) (citing Poulos v. Aetna Casualty & Surety Co., 119 R.I. 409, 412, 379 A.2d 362, 363 (1977)).

Rhode Island's uninsured motorist coverage statute “requires insurance carriers to provide protection for those claimants who voluntarily contract with licensed carriers for liability coverage as against uninsured operators.” DiTata, 542 A.2d at 247 (citing Allstate Insurance Co. v. Fusco, 101 R.I. 350, 355–56, 223 A.2d 447, 450 (1966)); see also G.L.1956 § 27–7–2.1 (uninsured motorist coverage). On numerous occasions, this Court has held that “[t]he purpose of enacting the uninsured-motorist coverage statute was to afford protection to the insured against ‘economic loss resulting from injuries sustained by reason of the negligent operation of uninsured motor vehicles or...