Peloquin v. Haven Health Ctr. of Greenville, LLC

• Decision Date: 14 January 2013
• Docket Number: No. 2011–130–Appeal.,2011–130–Appeal.
• Citation: 61 A.3d 419
• Parties: Tracie PELOQUIN, as Administratrix of the Estate of Pearl E. Archambault v. HAVEN HEALTH CENTER OF GREENVILLE, LLC, et al.
• Court: Rhode Island Supreme Court

61 A.3d 419

Tracie PELOQUIN, as Administratrix of the Estate of Pearl E. Archambault

v.HAVEN HEALTH CENTER OF GREENVILLE, LLC, et al.

No. 2011–130–Appeal.

Supreme Court of Rhode Island.

Jan. 14, 2013.

Stephen P. Sheehan, Esq., Providence, for Plaintiff.

Douglas K. Eisenstien, Esq., Pro Hac Vice, for Defendant.

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

OPINION

Chief Justice SUTTELL, for the Court.

In June 2006, Pearl E. Archambault tragically died while in the care of Haven Health Center of Greenville, LLC (Haven Health) after a nurse mistakenly administered a lethal overdose of morphine. The administratrix of her estate, Tracie Peloquin (plaintiff), filed a medical malpractice action and now appeals from the Superior Court's denial of her partial summary-judgment motion and grant of summary judgment in favor of the defendant Columbia Casualty Company (Columbia),¹ the professional liability insurer of the now-defunct nursing facility.² The plaintiff avers that the Superior Court erred in interpreting Rhode Island law, argues that this Court should construe the insurance contract between Columbia and its insured in her favor, and urges this Court to reverse the Superior Court's decision and order that summary judgment be entered in her favor. For the reasons set forth in this opinion, we vacate the judgment of the Superior Court and remand with instructions that the Superior Court enter judgment in favor of the plaintiff for $100,000, plus prejudgment and postjudgment interest that has accrued on that amount.

IFacts and Procedural History³

In June 2006, Archambault was a resident at Haven Health. On June 24 of that year, Denise Hardesty,⁴ a registered nurse employed by Haven Health, misinterpreted a physician's order prescribing five milligrams of a morphine solution, and instead administered five milliliters of that substance to Archambault. As a result of this drug overdose, Archambault died on June 25.

In December 2006, plaintiff filed the present action against Haven Health and Hardesty on behalf of Archambault's estate. During discovery, Hardesty gave deposition testimony acknowledging that she was negligent when she mistakenly administered the incorrect dosage of morphine solution to Archambault. She also testified at her deposition that she was a registered nurse in Rhode Island and a full-time employee of Haven Health at the time of Archambault's death.

When plaintiff filed her complaint, the Greenville Haven Health facility was insured under a claims-made professional liability insurance policy issued by Columbia (Columbia policy). The Columbia policy insured both Haven Health as an entity, as well as “any individual who is or becomes [a Haven Health] ‘employee’ * * * during the ‘policy period’ but only for ‘professional services' performed on [Haven Health's] behalf.” ⁵ This policy limited coverage for professional liability to $1 million per claim and $3 million in the aggregate. However, the policy also contained a self-insured retention endorsement (SIR Endorsement) requiring Haven Health to pay the first $2 million of “all ‘damages' and all ‘claim expenses' resulting from * * * each ‘claim’ under the Professional Liability Coverage Form.” The policy described the parties' obligations under the SIR Endorsement as follows:

“[Columbia's] obligation to pay ‘damages' and ‘claim expenses' as a result of a ‘claim’ is in excess of the Self–Insured Retention. [Haven Health] [is] required to pay all ‘damages' and ‘claim expenses' up to the amount of the Self–Insured Retention listed herein. The Limits of Liability set forth on the Declarations Page are in excess of the Self–Insured Retention regardless of [Haven Health's] financial ability or inability to pay the Self–Insured Retention and in no event are we required to make any payments within [Haven Health's] Self–Insured Retention.”

Thus, under the terms of the policy, Columbia's obligation to pay on a professional liability claim would arise only to the extent that the damages and expenses exceeded $2 million, and Haven Health would be directly responsible for paying any amounts less than that.

In late 2007 or early 2008, Haven Health and two related entities—Haven Eldercare of New England, LLC (HENE) and HavenEldercare, LLC (HE) ⁶ —filed for Chapter 11 bankruptcy.⁷ The next summer, the bankruptcy court approved the sale of substantially all of the assets of Haven Health, HENE, and HE, and dismissed their cases (without a discharge). In 2008, Hardesty filed for Chapter 7 bankruptcy, and she obtained a discharge later that year.

In 2009, plaintiff amended her complaint to add Columbia as a defendant and to assert two counts against Columbia directly, based on G.L.1956 § 27–7–2.4, which permits an injured party to proceed against an insurer when the insured has filed for bankruptcy. The plaintiff also added HENE and HE as defendants. ⁸ Haven Health, HENE, and HE failed to respond to plaintiff's amended complaint, and the Superior Court entered default judgment against each of those defendants on November 20, 2009. The plaintiff was awarded a total of $364,421.63,⁹ against Haven Health, HENE, and HE. Columbia answered plaintiff's complaint and was not defaulted.

The plaintiff moved for partial summary judgment against Columbia on May 10, 2010,¹⁰ urging the Superior Court to declare the SIR Endorsement “void and unenforceable as against public policy” and to enter judgment against Columbia for $238,007.96.¹¹ Columbia objected to plaintiff's motion for summary judgment, and it filed its own cross-motion for summary judgment. The Superior Court granted summary judgment in favor of Columbia, denied plaintiff's summary judgment motion, and entered final judgment against plaintiff. The plaintiff filed a timely notice of appeal.

IIStandard of Review

“In reviewing the parties' cross-motions for summary judgment, we examine the matter de novo.” Derderian v. Essex Insurance Co., 44 A.3d 122, 126 (R.I.2012) (quoting Travelers Property and Casualty Corp. v. Old Republic Insurance Co., 847 A.2d 303, 307 (R.I.2004)). “In reviewing the Superior Court's judgment on the parties' motions for summary judgment, we * * * apply the same standards as those used by the trial court.” Delta Airlines, Inc. v. Neary, 785 A.2d 1123, 1126 (R.I.2001). Thus, “[s]ummary judgment is appropriate when, viewing the facts and all reasonable inferences therefrom in the light most favorable to the nonmoving party, the [C]ourt determines that there are no issues of material fact in dispute, and the moving party is entitled to judgment as a matter of law.” Derderian, 44 A.3d at 126–27 (quoting Travelers Property and Casualty Corp., 847 A.2d at 307).

“[Q]uestions of statutory construction are reviewed de novo by this Court.” Mendes v. Factor, 41 A.3d 994, 1002 (R.I.2012) (quoting Generation Realty, LLC v. Catanzaro, 21 A.3d 253, 258 (R.I.2011)). “When the language of the statute is clear and unambiguous, it is our responsibility to give the words of the enactment their plain and ordinary meaning.” Id. (quoting Generation Realty, LLC, 21 A.3d at 258). “Moreover, when we examine an unambiguous statute, there is no room for statutory construction and we must apply the statute as written.” Tanner v. Town Council of East Greenwich, 880 A.2d 784, 796 (R.I.2005) (quoting State v. DiCicco, 707 A.2d 251, 253 (R.I.1998)).

“The plain meaning approach, however, is not the equivalent of myopic literalism, and it is entirely proper for us to look to the sense and meaning fairly deducible from the context.” Mendes, 41 A.3d at 1002 (quoting Generation Realty, LLC, 21 A.3d at 259). “Therefore we must consider the entire statute as a whole; individual sections must be considered in the context of the entire statutory scheme, not as if each section were independent of all other sections.” Id. (quoting Generation Realty, LLC, 21 A.3d at 259). “It is generally presumed that the General Assembly ‘intended every word of a statute to have a useful purpose and to have some force and effect,’ ” Curtis v. State, 996 A.2d 601, 604 (R.I.2010) (quoting LaPlante v. Honda North America, Inc., 697 A.2d 625, 629 (R.I.1997)), and this Court's “ultimate goal is to give effect to the purpose of the act as intended by the Legislature.” Hanley v. State, 837 A.2d 707, 711 (R.I.2003) (quoting Oliveira v. Lombardi, 794 A.2d 453, 457 (R.I.2002)). “Finally, under no circumstances will this Court construe a statute to reach an absurd result.” Mendes, 41 A.3d at 1002 (quoting Generation Realty, LLC, 21 A.3d at 259).

IIIDiscussion

The plaintiff raises numerous issues on appeal. She maintains that the SIR Endorsement in Columbia's policy is invalid under Rhode Island law, and she further urges that it is void as against public policy. Additionally, plaintiff asserts that the trial justice erred in concluding that G.L.1956 § 42–14.1–2(a) and regulations promulgated based on it do not require nursing facilities to maintain professional liability insurance at a minimum level of $100,000 per claim, $300,000 in the aggregate. Next, plaintiff argues that this Court should conclude as a matter of law that, based on the policy's language, Haven Health and Hardesty should be treated as separate insureds and that statutory minimum coverage requirements should be applied to each, separately. Finally, plaintiff urges that we read the Columbia policy's language to require Columbia to pay prejudgment and postjudgment interest on the full amount of the judgment entered against the insureds, rather than on only that portion of the judgment that is within the per-claim limit. The plaintiff asserts that it would best serve the interests of judicial economy for this Court to enter summary judgment in her favor, rather than remanding the case to Superior Court for further proceedings.¹²

AValidity of the SIR Endorsement

The parties disagree about whether the SIR Endorsement in the Columbia Policy, which required Haven...