Leonard v. McDowell

• Decision Date: 22 May 2003
• Docket Number: No. 2002-57-Appeal.,2002-57-Appeal.
• Parties: Cynthia LEONARD v. Daniel McDOWELL.
• Court: Rhode Island Supreme Court

824 A.2d 1266

Cynthia LEONARD v. Daniel McDOWELL.

No. 2002-57-Appeal.

Supreme Court of Rhode Island.

May 22, 2003.

Ronald J. Resmini, Providence, for Plaintiff.

Donald J. Maroney, Providence, for Defendant.

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

OPINION

GOLDBERG, Justice.

This case came before the Supreme Court on March 5, 2003, pursuant to crossappeals from a judgment of the Superior Court confirming an arbitration award. The plaintiff, Cynthia Leonard (plaintiff), appeals from a judgment denying her motion to vacate the award and granting the defendant, Daniel McDowell's (defendant) motion to confirm the award. The defendant appeals from that part of the judgment declaring that "any loss of consortium claims of [p]laintiffs minor children shall survive any [r]elease that the [p]laintiff may have against the [d]efendant." We shall decide the respective appeals of both parties at this time.

Facts and Travel

On September 7, 1996, the parties were involved in a motor vehicle collision. After plaintiff received consent from her uninsured motorist carrier, MCI (UM carrier), plaintiff and defendant's insurer, Progressive Northwestern Insurance Company (Progressive or defendant's insurer), agreed to submit plaintiffs claim for damages to binding arbitration and entered into an agreement for binding arbitration of her personal injury claim. The contract provided that the maximum amount recoverable was $25,000 and the minimum amount was $2,500, with interest capped at 19 percent. The defendant admitted liability for purposes of arbitration and the sole issue for the arbitrator was the amount of damages owed to plaintiff. Thereafter, the travel of this case was less than expeditious and amicable.

Although the arbitration began on April 25, 2000, it was suspended for several reasons, largely attributable to plaintiff. The initial dispute arose approximately twenty minutes after the hearing commenced, when it became clear that the medical records for three of plaintiffs treating physicians had not been made available to defendant. Consequently, the hearing was delayed until plaintiff complied with her discovery obligations and provided defendant with all records relating to her medical care and treatment. During that time, plaintiff also expressed her dissatisfaction with defendant's refusal to permit plaintiffs UM carrier to participate in the arbitration. Several months before the arbitration agreement was executed, this Court decided Asermely v. Allstate Insurance Co., 728 A.2d 461 (R.I.1999). In purported reliance on Asermely, and a previously written demand, plaintiff argued that she was entitled to unlimited coverage and no longer was restricted to the agreed upon maximum of $25,000. The plaintiff also alleged that the medical treatment for her injuries was far from complete. As a result, plaintiff refused to resume the arbitration on the ground of mutual mistake and changed conditions and also because defendant refused to permit her UM carrier to participate in the arbitration proceeding.

In response, defendant filed a petition to enforce the arbitration agreement, and after plaintiff acquiesced, the arbitration recommenced.¹ At the end of the proceeding, an award was rendered in the amount of $8,280, plus prejudgment interest of $1,573.20, for a total of $9,853.20.

The plaintiff moved to vacate the arbitrator's award and argued that the award was disproportionate to her medical expenses. In response, defendant moved to confirm the award and also sought specific performance of the provision of the arbitration agreement that required plaintiff to execute a release waiving all claims, including—according to defendant—claims for "loss of consortium, loss of support, services or affection, loss of society and companionship." As noted, plaintiff petitioned the trial court to set aside the arbitration award and also to void the release as unenforceable as it related to the loss of consortium claims of her minor children.

The trial justice determined that the arbitration award should not be set aside. However, he also found that the release prepared by defendant that included a release of the minor children's loss of consortium claims was unenforceable, and he entered a judgment that directed defendant to prepare and plaintiff to execute a new release. Additionally, the judgment included a provision that the loss of consortium claims survived the arbitration. The plaintiff timely appealed the confirmation of the award by the trial court; the defendant cross-appealed that portion of the judgment declaring that the minor children's loss of consortium claims survived a release that discharged the tortfeasor from liability as to plaintiffs injuries.

Issues

In support of her argument that the trial justice erred in denying her motion to vacate the arbitration award, plaintiff raises several issues on appeal. First, plaintiff alleges that defendant's discovery violations breached the terms of the arbitration agreement, in particular the provision by which "[t]he parties agree to free and unrestricted discovery, and that no hearing date shall be set until both parties are satisfied that discovery and exchanges of witness names have been completed." The plaintiff asserts that discovery was limited in this case because defendant would not permit plaintiffs UM carrier to join in the arbitration.

While vigorously arguing that the trial justice correctly ruled that the loss of consortium claims of her minor children survived the release, plaintiff alternatively submits that if this Court disagrees and concludes that the loss of consortium claims were not extinguished by the arbitration proceeding, then the award should be set aside on the ground of mutual mistake and changed circumstances. Specifically, plaintiff asserts that when she signed the agreement to arbitrate, she was unaware that her physical condition would require continuing treatment. Further, plaintiff asserts that this Court's decision in Asermely provided further support for her contention that her potential recovery under the Progressive policy should not be limited to $25,000, and that her original agreement limiting the maximum amount recoverable should not be enforced.

In its cross-appeal, defendant argues that the trial court erred in holding that the claim of plaintiffs minor children survived the arbitration proceeding and subsequent release of defendant's liability.

Discovery Violations

[1] The plaintiff argues that her UM carrier should have been permitted to join the arbitration and that defendant's refusal to accede to this demand amounted to a discovery violation. The plaintiff submits that, under G.L.1956 § 27-7-2.1(h), there is no requirement that an insured first bring an action against the tortfeasor before recovering under his own uninsured motorist policy. We fail to discern how the exclusion of plaintiffs UM carrier from the arbitration amounted to a violation of the arbitration agreement or is in any way related to a claim for discovery. Nor has plaintiff pointed to any report or other information that was withheld by defendant as a result of its refusal to permit plaintiff to join her UM carrier.

The defendant maintains that the refusal to permit plaintiffs UM carrier to participate as a party to the arbitration proceeding did not interfere with the parties' ability to conduct free and unrestricted discovery. Rather, defendant argues that it was plaintiff who disrupted the discovery process by failing to provide medical records for three treating physicians and then refused to resume the proceeding, forcing defendant to resort to the Superior Court to enforce the arbitration agreement. Finally, defendant contends that there is no requirement that the claims of plaintiffs UM carrier be joined with the tortfeasor's claim. In short, defendant asserts that if any party were guilty of interfering with discovery it was plaintiff and not defendant. We agree with these assertions. The UM carrier was not a party to the arbitration agreement and thus was properly excluded from the proceeding. It is well settled that arbitration agreements are limited to the issues the parties agree to arbitrate, including who may participate in the proceeding. Neither defendant nor Progressive, his insurance carrier, agreed to an additional party to the arbitration and should not be forced, at the whim of plaintiff, to participate in a more complex and expensive proceeding involving issues wholly unrelated to defendant's liability for damages. Accordingly, we reject this argument.

Mutual Mistake arm! Specific Performance

The plaintiff also has proffered alternate grounds for reversal in this case, and contends that the arbitration award should be set aside on the ground of mutual mistake in light of this Court's holding in Asermely. Moreover, plaintiff argues that at the time she entered into the arbitration agreement, she was unaware that she needed continuing medical care and treatment due to the extent of her injuries. With respect to our holding in Asermely, plaintiff contends that she no longer is bound by either the terms of the arbitration agreement or the provision relating to the maximum amount of recovery. The plaintiff argues that because she previously had made a written demand of defendant for the policy limits of her UM carrier's policy, pursuant to Asermely, she was entitled to unlimited recovery. Most obviously, plaintiff's reliance on Asermely is unfounded and misguided. Our decision in Asermely was issued in May 1999, and plaintiff did not sign the arbitration agreement until September 1999, almost four months later. The fact that plaintiff was unaware of the Asermely decision is insufficient grounds to vacate the arbitration award. Moreover, we fail to see that Asermely has any relevance to this controversy. First, Asermely involved a trial on the merits and not an agreement for binding arbitration that was...