Wayne DeMarco v. Travelers Insurance Company
102 A.3d 616
| R.I. | 2014Background
- In 2003 Wayne DeMarco was severely injured as a passenger in a vehicle insured by Travelers; a jury awarded him a judgment exceeding the $1,000,000 policy limit.
- DeMarco repeatedly demanded the insurer pay policy limits; Travelers declined or counteroffered and later sought a global settlement among multiple claimants, which failed.
- Insureds (Virginia Transportation and Doire) settled with DeMarco, assigning to him any claims they had against Travelers; the underlying trial justice entered an order stating the underlying judgment was “satisfied in full.”
- DeMarco sued Travelers under multiple theories, including a claim under R.I. Gen. Laws § 27-7-2.2 (rejected-settlement-offer statute) seeking prejudgment and postjudgment interest; the Superior Court granted summary judgment on that claim.
- This Court (DeMarco I) vacated summary judgment on the Asermely-based excess-liability claim (remanding for trial) but affirmed the § 27-7-2.2 ruling; on remand the Superior Court calculated interest and ordered payment, which Travelers appealed.
- Travelers argued the “judgment satisfied” order rendered the § 27-7-2.2 claim moot (and thus divested subject-matter jurisdiction); the Supreme Court rejected that collateral attack and affirmed the payment order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Superior Court retained subject-matter jurisdiction over the § 27-7-2.2 claim | DeMarco: Superior Court had jurisdiction and the claim remained live because he received an assignment of insureds’ claims | Travelers: The judgment-satisfied order made the controversy moot and thus divested jurisdiction | Court: Jurisdiction existed; mootness is distinct from subject-matter jurisdiction and Travelers waived the argument in earlier proceedings |
| Whether the judgment-satisfied order extinguished DeMarco’s assigned § 27-7-2.2 claim | DeMarco: The order memorialized settlement but did not extinguish assigned claims; assignment created a justiciable controversy | Travelers: The order showed the judgment was satisfied and therefore no claim for interest remained | Court: The order memorialized the settlement/exchange (assignment for release) and did not extinguish the assigned § 27-7-2.2 claim |
| Applicability of § 27-7-2.2 to award prejudgment and postjudgment interest | DeMarco: Statute’s plain language mandates insurer liability for interest when insurer rejected a settlement offer within policy limits | Travelers: Liability under § 27-7-2.2 should be affected or conditioned by other dispositional events (e.g., judgment satisfied order) | Court: § 27-7-2.2 is clear and requires interest; affirmed application and calculation of interest |
| Whether § 27-7-2.2 liability should be conditioned on outcome of remanded Asermely claim | DeMarco: Statute imposes interest liability independent of the Asermely excess-liability adjudication | Travelers: Court should await trial on Asermely claim because multiple claimants complicate the insurer’s fiduciary choices; immediate interest imposition may be premature/absurd | Court majority: Rejected conditioning § 27-7-2.2 on Asermely outcome; dissent argued for waiting but majority affirmed statutory application |
Key Cases Cited
- DeMarco v. Travelers Ins. Co., 26 A.3d 585 (R.I. 2011) (DeMarco I) (affirming applicability of § 27-7-2.2; vacating Asermely-based summary judgment and remanding for trial)
- Asermely v. Allstate Ins. Co., 728 A.2d 461 (R.I. 1999) (establishing insurer liability risk when it rejects a policy-limits settlement demand and a later judgment exceeds policy limits)
- Etheridge v. Atlantic Mut. Ins. Co., 480 A.2d 1341 (R.I. 1984) (upholding insured’s assignment of claims against insurer and refusing to obstruct an insurer-protecting payment device)
- Boyer v. Bedrosian, 57 A.3d 259 (R.I. 2012) (mootness and justiciability discussion; subject-matter jurisdiction may be raised anytime)