Rhode Island Insurers' Insolvency Fund v. New Prime, Inc., No. PC 04-1703 (R.I. Super 4/5/2007)
| Decision Date | 05 April 2007 |
| Docket Number | No. PC 04-1703,PC 04-1703 |
| Parties | RHODE ISLAND INSURERS' INSOLVENCY FUND v. NEW PRIME, INC. and PRIME, INC. |
| Court | Rhode Island Superior Court |
The plaintiff, Rhode Island Insurers' Insolvency Fund (the "Fund"), moves for reconsideration of the Court's November 29, 2006 decision ("Decision")1 to deny the Fund's and the defendants', New Prime, Inc. and Prime, Inc. (collectively, "Defendants"), cross motions for summary judgment. The Defendants have objected to this motion. Jurisdiction is pursuant to Super. R. Civ. P. 59(e).
On December 23, 2000, Irene Desautel ("Desautel") was injured in a motor vehicle accident involving a truck operated by Michael Grimm ("Grimm") and owned by the Defendants. Subsequently, on May 10, 2001, Desautel filed a negligence action in this Court against the Defendants and Grimm, who then filed a third-party complaint against Casco Indemnity ("Casco"), Desautel's automobile insurer, and United Healthcare ("United") and Healthcare Recoveries, Inc.2, Desautel's health insurers. See PC-01-2344.
As a result of her injuries, Desautel collected $380,000 in medical payments from United. At the time of the accident, the Defendants and Grimm were insured by Reliance National Insurance Company (Reliance) for bodily injury claims up to $4,000,000. However, before Desautel could recover under this policy, Reliance was declared insolvent and ordered liquidated. As a result, Desautel recovered $100,000 from Casco, the maximum allowed under her policy for uninsured/underinsured motorist coverage.3 Additionally, she sought recovery from the Fund, a non-profit legal entity created by the state legislature pursuant to the Rhode Island Insurers' Insolvency Fund Act ("Act"). G.L. 1956 § 27-34-1 et seq.
Desautel then entered into negotiations with the Defendants and the Fund, ultimately agreeing to settle her claims for $900,000. The Defendants paid $600,000 of the settlement and the Fund contributed $300,000, while reserving its right to litigate the issue of its obligation to pay. On March 31, 2004, the Fund brought the instant action for declaratory relief, seeking a declaration that 1) the Fund's obligation to Desautel is reduced by the $100,000 she recovered under the Casco policy; 2) the Fund has the right to further offset the payments made to Desautel by United Healthcare; and 3) the Fund has no statutory obligation to Desautel to the extent that any recovery by Desautel and United would be payable to Casco and/or United.
The parties then filed cross-motions for summary judgment pursuant to Super. R. Civ. P. 56. The Fund argued that it bore no responsibility for paying any amount that would be due Casco and United because the Act specifically excludes any amount "[d]ue any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise" from its definition of the "covered claims" for which the Fund is responsible. Section 27-34-5(8)(ii)(C). Further, the Fund argued that Section 27-34-12(a), which governs the nonduplication of recovery, requires Desautel to exhaust her rights under all available insurance policies and grants the Fund an offset for any amount paid by another insurer. The Fund's contribution is statutorily capped at $300,000, and, as Desautel has recovered a total of $480,000 from her insurers, the Fund argued that this offset would reduce its obligation to nothing.
In their own motion for summary judgment, however, the Defendants claimed that United waived its right of subrogation when it signed a stipulation ("Stipulation") stating that it has no right to recover any money it had paid to or on behalf of Irene Desautel. (Defendant's Ex. A.) Absent an actual payment to an insurer, the Defendants argued, the exclusion contained in Section 27-34-5(8)(ii)(C) is inapplicable. In response to the Fund's argument regarding the nonduplication of recovery in Section 27-34-12(a), the Defendants argued that the claims Desautel made against United and Casco are not "covered claims" as defined by Section 27-34-5(8), and that, therefore, they are ineligible for offset under Section 27-34-12(a). Alternatively, the Defendants claimed that, even if the Court were to be persuaded by the Fund's legal argument, the case was unripe for summary judgment because the factual issue regarding the adequacy of Desautel's recovery remained in dispute.
After considering the parties' arguments, the Court issued its Decision. It found that United, by signing the Stipulation, had waived its right of subrogation, therefore barring it from ever collecting any of the proceeds paid to Desautel. Decision at 5. The Court concluded that this waiver meant that no payments made to Desautel would ever be "due" United. Id. As a result, the Court found Section 27-34-5(8)(ii)(C) inapplicable and the Fund's argument unavailing vis-à-vis United. Furthermore, the Court determined that the Fund's argument regarding Section 27-34-12(a), as well as its Section 27-34-5(8)(ii)(C) argument as related to Casco, was unripe for summary judgment. A proper analysis of these arguments, the Court found, was impossible without a factual determination as to whether or not Desautel had been adequately compensated by the settlement. Until the Fund could prove that Desautel has been overcompensated in this matter, the Court held, there was a genuine issue of material fact to be determined at trial. Thus, the Court denied both motions for summary judgment.
The Fund then filed the instant motion, arguing that the Decision was based upon several errors of law and should be reconsidered. The Fund argues the Court erred in determining that the adequacy of Desautel's recovery still remained in dispute. Because Desautel settled her claims against the Defendants and Grimm in full when she entered the settlement agreement, the Fund argues that she has been fully compensated and the current litigation will not affect her recovery. Furthermore, the Fund maintains that the Court misinterpreted the Act when it determined that United had the legal authority to waive its right of subrogation.
The Defendants object to the Motion for Reconsideration, arguing that the Court had adequately considered all of the Fund's arguments at the original hearing and reached the correct legal conclusions in the Decision it issued in November. The Defendants rely on their previous argument that the Stipulation acted as waiver of United's right to reimbursement, removing it from the scope of Section 27-34-5(8)(ii)(C). Additionally, the Defendants continue to argue that the issue of adequate recovery is in dispute, and that the Fund bears the burden of proving that Desautel has been fully compensated before it is entitled to summary judgment.
The Rhode Island Rules of Civil Procedure, like the Federal Rules of Civil Procedure, generally do not recognize or provide for a motion for reconsideration. See generally Hatfield v. Bd. Of Cty. Comm'rs for Converse Cty., 52 F.3d 858 (10th Cir. 1995) (citations omitted). However, the Rhode Island Supreme Court, in noting its governance of the "liberal rules" of civil procedure, has "looked to substance, not labels." Sarni v. Melocarro, 113 R.I. 630, 636, 324 A.2d 648, 651-52 (1974). Consequently, "[a] motion can be construed as made under Rule 60(b) even if it is styled as a 'Motion to Reconsider.'" James Wm. Moore et. al., Moore's Federal Practice 1997 Rules Pamphlet P60.2 [9] (1996). However, a motion to vacate filed within ten days of the judgment should be treated as filed under Rule 59(e), rather than under Rule 60. Armand Eng'g, Inc. v. Town and Country Club, Inc., 113 R.I. 515, 324 A.2d 334 (1974). Therefore, the Plaintiff's motion can be construed as a motion to vacate under Rule 59(e).4
The Rhode Island Supreme Court has addressed the issue of this Court's power to reconsider decisions rendered after a nonjury trial in a civil matter. Corrado v. Providence Redevelopment Agency, 110 R.I. 549, 555, 294 A.2d 387, 390 (1972). In Corrado, our Supreme Court held that the trial court "could review its own decision and grant a new trial only if it found a manifest error of law in the judgment entered or if there was newly discovered evidence which was unavailable at the original trial and sufficiently important to warrant a new trial." Id. at 554-55. The Court defined a manifest error of law as, "one that is apparent, blatant, conspicuous, clearly evident, and easily discernible from a reading of the judgment document itself." American Federation of Teachers Local 2012 v. Rhode Island Board of Regents for Education, 477 A.2d 104, 106 (1984).
"Summary judgment is a proceeding in which the proponent must demonstrate by affidavits, depositions, pleadings and other documentary matter . . . that he or she is entitled to judgment as a matter of law and that there are no genuine issues of material fact." Palmisciano v. Burrillville Racing Association, 603 A.2d 317, 320 (R.I. 1992) (citing Steinberg v. State, 427 A.2d 338 (R.I. 1981); Ludwig v. Kowal, 419 A.2d 297 (R.I. 1980)). During a summary judgment proceeding "the court does not pass upon the weight or credibility of the evidence but must consider the affidavits and other pleadings in a light most favorable to the party opposing the motion." Id. (citing Lennon v. MacGregor, 423 A.2d 820 (R.I. 1980)).
"The party moving for summary judgment has the initial burden of showing that there is no genuine issue of material fact." Santiago v. First Student, Inc., 839 A.2d 550, 552 (R.I. 2004) (citing Heflin v. Koszela, 774 A.2d 25, 29 (R.I. 2001)). The moving party can meet this burden by "'submitting evidentiary materials, such as interrogatory answers, deposition testimony, admissions, or other specific documents, and/or pointing to the absence of such items in the evidence adduced by the parties.'" Id. (quoting Doe v. Gelineau, 732 A.2d 43, 48 (R.I. 1999)). ...
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