Sentry Ins. Co. v. Grenga, 88-187-A
| Decision Date | 03 April 1989 |
| Docket Number | No. 88-187-A,88-187-A |
| Citation | 556 A.2d 998 |
| Court | Rhode Island Supreme Court |
| Parties | SENTRY INSURANCE COMPANY v. Anthony GRENGA et al. ppeal. |
This dispute concerns the interpretation of an insurance contract issued by Sentry Insurance Company (Sentry) to Jeanne L. Spillane (Spillane). The dispute centers upon the provisions of the insurance contract.
On April 23, 1984, Anthony Grenga (Grenga) was traveling in an automobile with his wife, Spillane. She owned the automobile and insured it through Sentry. The automobile was involved in a collision with an automobile owned and operated by Manuel DaSilva (DaSilva). DaSilva was insured by the General Accident Insurance Company of Philadelphia, Pennsylvania. Both Spillane's and DaSilva's insurance policies provided the minimum limits of coverage allowed in accordance with Rhode Island General Laws 1956 (1982 Reenactment) § 31-31-7. Grenga settled his claim against DaSilva for the $25,000 limit of his policy.
Grenga suffered serious injuries in the collision, including a herniated lumbar disc. He contends that his damages approximate $150,000 to $200,000. On January 27, 1986, Grenga filed a demand for arbitration with the American Arbitration Association pursuant to the Sentry/Spillane contract. He asks the arbiter to award him $50,000, plus interest, under the underinsured-motorist coverage of the Sentry/Spillane contract. Grenga contends that DaSilva was underinsured because the liability insurance he carried was inadequate to reimburse Grenga for the damages he sustained.
Sentry filed this action seeking a declaratory judgment relative to the rights, status, and legal obligations of the litigants as a result of the insurance contract issued by Sentry. Sentry's motion for a stay of arbitration pending a declaration of liability was granted. Subsequently a Superior Court justice, in a written opinion, ruled that Sentry's insurance contract was "clear and free from ambiguity" and that it did "not afford 'underinsured' motorist coverage."
The first issue on appeal is whether the Superior Court justice erred when he ruled that Sentry was not required to provide underinsured-motorist protection. In determining if error had been committed at the trial level, we must consider Sentry's contract in its entirety while giving the words their "plain, ordinary and usual meaning." West v. Commercial Ins. Co. of Newark, New Jersey, 528 A.2d 339, 341 (R.I.1987) (quoting Malo v. Aetna Casualty and Surety Co., 459 A.2d 954, 956 (R.I.1983)). If the terms of the policy are clear and unambiguous, the task of judicial construction is complete. Malo, 459 A.2d at 956. The parties are bound by the unambiguous terms as written. Id.
However, when an insurance contract is ambiguous or subject to more than one reasonable interpretation, it will be strictly construed against the insurer. West, 528 A.2d at 342 n. 2. The court is to construe the words to mean what the ordinary insured would have understood them to mean, not what the insurer intended them to mean. Elliott Leases Cars, Inc. v. Quigley, 118 R.I. 321, 325-26, 373 A.2d 810, 812 (1977).
Sentry's insurance contract contains two distinct documents. We are required, in determining if there is any ambiguity, to consider both documents. The first document is a single typewritten declarations sheet, and the second is a printed twenty-four-page pamphlet entitled "Your Plain Talk Car Policy," which explains the coverages provided.
The declarations sheet in pertinent part provides that The declarations sheet contains the following list of coverages and premiums:
"COVERAGE LIMIT OF LIABILITY
EACH PERSON EACH OCCURRENCE Car A
$100,000 89.66
"LIABILITY
Medical Expense $3,000
Uninsured/Underinsured Each Accident
Bodily Injury Liab $25,000 $50,000
Property Damage Liab $25,000 8.50
LIMIT OF LIABILITY
"COMPREHENSIVE ACV LESS $50 Deductible 71.95
PLUS TOWING LIMIT $75
TOTAL PREMIUM PER CAR 170.11"
(Emphasis added.)
The declarations sheet clearly lists uninsured/underinsured coverage as well as the limit of liability and the premium charged.
The "plain talk" pamphlet specifically incorporates the declarations page. It provides that ...
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