678 F.Supp.3d 302
D.R.I.2023Background
- On Dec. 1, 2018, Tiffany Briere and her minor daughter were injured in a bus crash; the bus was owned by First Student and registered in Rhode Island.
- FirstGroup (First Student’s parent) had a fleet primary auto policy issued by National Union (effective 12/31/17–12/31/18) with $5 million primary and $25 million umbrella limits; the Policy was issued in New York and delivered to FirstGroup in Ohio.
- The Policy is a multi-state fleet policy and contains state-specific UM/UIM endorsements; there was no Rhode Island UM/UIM endorsement because FirstGroup’s selection form indicated rejection of such coverage.
- Plaintiffs settled with two tortfeasors, continued against First Student and its driver in state court, then voluntarily dismissed that action with prejudice; plaintiffs later sought UM/UIM benefits under the National Union Policy and sued National Union for breach and declaratory relief after denial.
- Central legal dispute: whether Rhode Island’s UM/UIM statute, R.I. Gen. Laws § 27-7-2.1, applies (it applies only to policies “delivered or issued for delivery in this state” and insuring vehicles registered or principally garaged in the state).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.I. § 27-7-2.1 applies to the Policy (delivery requirement) | Policy should be treated as delivered in RI because it insures RI-registered vehicle(s) and certificates were provided in RI | Policy was issued/delivered out-of-state (to FirstGroup in Ohio); statute requires delivery in RI | Statute does not apply: Policy was not delivered or issued for delivery in Rhode Island |
| Whether certificates of insurance constitute policy delivery | Certificates furnished to Rhode Island school districts show delivery in RI | Certificates are not policies and do not effect delivery | Certificates are not delivery of a policy; they confer no contractual rights and do not satisfy the statute |
| Whether constructive delivery to RI occurred (doctrine applies and is met) | Constructive delivery should be recognized/apply because the insured and the risk were in RI; fleet policy context supports flexible delivery analysis | No evidence National Union intended delivery to RI; constructive delivery cannot be based on insured’s agent sending certificates to third parties | Even if constructive delivery exists under RI law, plaintiffs failed to show constructive delivery here; no intent or conduct by insurer to deliver policy in RI |
| Remedy sought (reformation of UM/UIM limits to $5M or minimum RI limits) | Policy limits should be reformed to $5M (or at least RI statutory minimum) because rejection was prohibited by § 27-7-2.1 | UM/UIM statute does not apply; alternative relief (minimum limits) not warranted | Court did not reform limits because statute is inapplicable; plaintiffs’ breach and declaratory claims fail; summary judgment for defendants on Counts I and III |
Key Cases Cited
- Martin v. Lumbermens Mut. Cas. Co., 559 A.2d 1028 (R.I. 1989) (UM/UIM statute applies only to policies delivered or issued for delivery in Rhode Island)
- McNamara v. State Farm Ins. Co., 633 A.2d 1360 (R.I. 1993) (statute inapplicable where policy issued to out-of-state resident)
- Ellis v. R.I. Pub. Transit Auth., 586 A.2d 1055 (R.I. 1991) (certificate of self-insurance is not a ‘policy’ under § 27-7-2.1)
- DeCesare v. Lincoln Benefit Life Co., 852 A.2d 474 (R.I. 2004) (choice-of-law principles and lex loci contractus in insurance contexts)
- Pierzchalski v. Northbrook Prop. & Cas. Co., 914 F.2d 263 (9th Cir. 1990) (similar UM/UIM statutes require in-state delivery and in-state registration separately)
- McGoff v. Acadia Ins. Co., 30 A.3d 680 (Vt. 2011) (fleet policies are not subject to a state’s UM/UIM requirements absent in-state delivery)