*1 Wayne et al. DeMARCO

TRAVELERS INSURANCE et al.

COMPANY 2008-334-Appeal.

No.

Supreme Court of Rhode Island.

July *2 D’Amico, II, Providence, for

Robert A. Plaintiff. Vice, Zelle,

Anthony Esq., Pro Hac Defendant. SUTTELL, C.J.,

Present: GOLDBERG, FLAHERTY, ROBINSON, INDEGLIA, JJ. OPINION ROBINSON for the Court. Justice of an insur- responsibilities What are single motor vehicle company ance when multiple being results in claims collision insureds, which claims asserted aggregate exceed the limits? That, essence, question is the that this appeal upon calls us answer. defendant, Insurance (Travelers),1 from the Company appeals summary Superior grant partial Court’s plaintiff, Wayne in favor of the appeal, DeMarco.2 On Travelers contends ruling hearing justice erred so reasons, viz.: primary for two release of the individual and the plaintiffs corporation insured Travelers and/or Wayne compa- plaintiffs action are De- We note that defendant insurance 2. The this wife, DeMarco, individu- Marco and his Leesa ny’s proper brief that its name is indicates legal guardians ally parents of two However, as Indemnity Company.” “Travelers assignees of Leo minor children and also as caption opinion the name used in the of this Virginia Transportation Corp. H. Doire and appears identical what on the notice simplicity following For the sake event, appeal. any it has not been asserted in the rec- lead of several of the documents technical this issue of nomenclature is of ord, to the DeMarcos collective- we shall refer any real relevance to the before us. issues ly "plaintiff" or as “Mr. DeMarco.” Superior refer to we shall remand the case to the parties the existence what order” extin- “judgment as a satisfied for further proceedings Court consistent claim Travelers that guished opinion.4 *3 assigned plaintiff to the might have been insureds; the record the that

by I the basis of which a contains facts on that Travelers finder of fact could conclude and Travel Facts reasonably and in its insureds’ best acted 10, 2003, September Wayne On DeMar- dealing particular interests in with this seriously injured co was in a collision while claimant Travelers con- multiple case. traveling passenger as a in a motor vehicle Superior tends that the Court’s order by Virginia Transportation Corp. owned summary judgment granting partial should Transportation) (Virginia operated by vacated and that this should di- be Court Doire, owner, company’s Leo H. when summary entered in rect that be the vehicle veered off the road and struck favor. Travelers’ utility poles.5 passenger, two A second below, For the reasons set forth we Woscyna, seriously injured; Paul was also summary grant partial judg deem the addition, public utility the then known plaintiffs ment in favor as to Travelers’ Narragansett Company6 as The Electric forth liability pursuant principles to the set property damage sustained as a result of Asermely v. Allstate Co.3to Insurance utility poles having At been struck. been unwarranted in view of the state collision, time of the vehicle which However, of the record at that time. we passenger Mr. DeMarco was a was insured ruling hearing justice affirm the of the Travelers; by significantly, defendant applicability to the respect with liability Travelers had limits of rejected offer statute in the $1 settlement multiple Accordingly, claimant context. million.7 Co., Doire) Asermely respect damage 728 A.2d 3. v. Allstate Insurance to the (R.I.1999). utility poles. separate That lawsuit was brought by the lawsuits Mr. DeMarco and Mr. Woscyna that are relevant to this case and express gratitude

4. We wish to our to the Association, opinion. that will be discussed later in this In Property American Insurance course, Virginia Transportation America, due and Mr. Casualty Insurers Association of negotiated independent agreement Doire the Rhode Island Association for Justice for Grid, whereby utility’s with National helpful they and informative briefs that claim them was settled their ex- to this curiae. submitted as amici Court pending money an amount of their own for purpose; pay Travelers did not out Although point ultimately of no real policy proceeds in with that connection settle- appeal, relevance to the issues on we are reason, property damage ment. For this aware that in the record some documents bearing sustained National Grid has no on only utility pole state that one sustained dam- legal the intricate issues that this case re- age. quires analyze. us to Narragansett Company 6. The Electric cur- 4, 2003, 7.On November Travelers’ claim ser- rently does business as National Grid USA vices director to Mr. attor- wrote DeMarco’s Company, Service Inc. We shall hereinafter ney response attorney’s inquiry simply company refer to the as "National Virginia Transportation’s about the limits of Grid." liability coverage. The claim services di- September attorney liability In National Grid com- rector advised "$1,000,- menced a Travelers' in- limit was what she described as a civil action (Virginia Transportation single sureds and Mr. 000 combined limit” and that, if ney went on to state Travelers did

A agree to settle accordance with Leading to the Trial of the Events demand, plaintiffs company the insurance Injury Against Action Personal damages might exposed be Insureds Travelers’ limits and for inter- excess of the (less than February six On assertion, plain- support est. collision), Mr. DeMarco’s after the months attorney cited explicitly tiffs this Court’s to Travelers’ claim ser- attorney submitted opinion in the case of v. Allstate seeking letter a demand vices director Co., (R.I.1999); Insurance 728 A.2d *4 (the limits) policy to million payment of $1 attorney stated in her letter that the that the attor- The letter stated plaintiff. Asermely opinion principles set forth rela- obtaining process in the ney was still company’s potential tive to an insurance “voluminous medical rec- Mr. DeMarco’s responsibility damages for such excess bills,” the letter also indicat- ords and but quoted for interest. The letter then from $190,932.56 totaling hospital that bills ed Asermely opinion, including the lan- already been sent to Travelers. had stating that an guage company’s insurance letter, plaintiffs attorney 2 February fiduciary obligation only extends not to its enclosing that she was “a cour- also stated party insureds but also to to whom the lawsuit that tesy copy [she intended] assigned rights. their The insureds days of the date of [the] to file within plaintiffs attorney quoted letter from also letter,” requested and she language Asermely opinion in the “review and advise.” which company states that insurance 25, 2004, February plaintiffs seriously plaintiffs attor- must consider a rea- On to ney policy sent another letter Travelers’ claim sonable written offer to settle within director, that, stating that limits and if services “we believe which also states settle, personal injuries that our client’s claim for insurer declines to it will be liable your liability far exceeds insured’s for an eventual in- [sic] (unless limit;” attorney de- coverage policy policy sureds excess of the limits her claim be in it can manded that client’s settled show insureds were unwill- settlement).8 policy ing accept the amount of the limits. The attor- the offer of coverage Malpractice was unaware of excess available uation. Medical Joint Under- writing Association Rhode Island v. to its insureds. Fund, Insolvency Rhode Island Insurers' 1097, (R.I.1997). 703 A.2d This fidu- February plaintiff's 8. The 2004 letter from ciary obligation only extends not the in- attorney pertinent part to Travelers reads in insured, also, company’s surance own but as follows: case, party inas this to a to whom the recently Supreme "The Court Rhode Island assigned rights. insureds have their company’s responsi- defined an insurance "It is not sufficient that the insurance bility regard Asermely v. Allstate company good act in faith. An insurance (7[28] 461) (R.I. Company A.2d Insurance fiduciary obligations company’s include a 1999) as follows: duty seriously plaintiff's to consider rea- Supreme "[The Court] Rhode Island has policy within the sonable offer to settle lim- company held that an has a fidu- insurance Accordingly, been its. if has afforded ciary obligation to act in the 'best interests' plaintiff reasonable notice and if a has protect of its insured in order to the insured amade reasonable written offer to a defen- from [and excess refrain policy to] dant's insurer to settle within the limits, greater obligated seriously acts that demonstrate concern insurer is monetary for the insurer's interests than the If the consider such an offer. insurer de- policy financial to setde the case within the risk attendant insured's sit- clines required claim at that time to make a counter- February Travelers’ On attorney “Generally, stated: plaintiffs sent a letter to offer. services director receipt plain- Asermely holds that an insurance carrier attorney acknowledging policy letter. The can be held liable excess of its February tiffs demand that Travel- director stated if it fails or refuses to settle a claim claim services limits make an offer within its limits and a position ers was “not in a time,” noting the policy Demarco at this rendered exceeds limits.” [sic ] Mr. Nevertheless, medi- letter the attor- yet that the insurer had not received same that, describing inju- ney opined cal Mr. DeMarco’s “under the circumstances records ries. The letter from Travelers went on to of this Travelers will not be held express understanding damages the insurer’s liable for in excess of the who multiple persons9 acknowledged “there were were limits.” He that Travelers seriously injured” duty as a result of the colli- had a under Asermely to settle within limits; and that bills unrelated to Mr. he then sion medical but stated equal seriously DeMarco could or exceed his own. since there was at least one other *5 DeMarco, injured The letter from Travelers further stated party addition to Mr. circumstances, pay under such “Travelers if Travelers were to the entire limits DeMarco, policy exhaust its limit of to Mr. such an [could action Travel- not] $1 million by paying it to Mr. Demarco ers could expose personal [sic ].” the insureds to liability stemming from non-DeMarco-re- Nothing in the record indicates that attorney lated claims. The noted that the responded February 25 Travelers to Asermely opinion stated that insurer plaintiffs attorney, demand letter from fiduciary had a obligation to act the best explicit which had made reference to the interests of its insured and to strive to potential liability insurer’s under Aserme- protect liability, insured excess However, 1, 2004, ly.10 on March an attor- attorney expressed and the his view that (see 12, ney retained footnote payment policy “the limits one claim- infra) wrote to claim Travelers’ services may ant be a violation of legal director provide opinion his re- expose will Travelers to extra-contractual garding Mr. DeMarco’s demand for the liability.” policy limits. He stated that the claim thereafter, 4, 2004, respond services director to Mr. Shortly should on March letter, personal inju- DeMarco’s demand but he also ex- Mr. DeMarco commenced a pressed ry Superior his view insurer was not action Court for Provi- limits, peril Although actuality only persons it does so at its the event that 9. two were judgment a trial seriously injured September results in a that exceeds as a result of the limits, 10, collision, including If interest. such 2003 the documents this case appeal is sustained on or is un- being often characterize the claimants as appealed, is liable for the insurer "multiple.” usage Such is not without au- limits, amount that See, exceeds un- support. e.g., thoritative The American it less can show that the insured was un- Heritage Dictionary English Language willing accept the offer of settlement. (4th ed.2009) (defining the word "multi- duty fiduciary obligation The insurer’s is a to, consisting ple” "[h]aving, relating to act in the best interests of insured. individual”). more than one good Even if the insurer believes in faith 27, February 10. Travelers' letter of legitimate that it has defense [a] February party, specific third makes reference to the must assume risk of mis- attorney, plaintiff's letter from it makes calculation if the ultimate should but (Initial absolutely February exceed no allusion to the letter of limits.” final added.)

brackets 25. discharged from in- Mr. DeMarco had been County against Travelers’ dence viz., Virginia Transportation February care on his doctor’s sureds— attorney further asked the plaintiffs Mr. Doire.11 The to contact her so that attorney retained later, February on year Almost a toward a resolu- they moving could discuss the at- attorney wrote to plaintiffs tion of the matter. by Travel- torney who had been retained per- represent its insureds ers to 7, 2005, attorney sent plaintiffs On June had injury litigation plaintiff which sonal attorney Travelers’ retained another let- The in March 2004.12 commenced ter, Mr. DeMarco’s tax enclosing copies of attorney indicated that she was plaintiffs requesting “please that he returns and Woscyna’s attorney Mr. had aware that arbitra- proceed advise if we can towards totaling submitted a settlement demand tion or mediation.” $829,747 Travelers, and she asked that 29, 2005, attorney plaintiffs On June attorney advise Travelers’ the retained wrote to Travelers’ retained again once director “that Mr. DeMarco claim services if attorney and asked him to “advise we yet treating” done and “that Mr. is not position proceed are in a with arbitra- (5) times DeMarco’s medical bills are five tion or mediation with the other claimant Woscyna’s of Mr. medical bills amount in this matter.” * * plaintiffs attorney then ob- 22, 2005, July plaintiffs attorney On said, being suspect “That I served: sent another letter to Travelers’ retained Woscyna’s claim will not be resolved Mr. *6 attorney, settle with the insur- offering to ready until Mr. DeMarco’s claim is to be (the company policy ance for million $1 by asking resolved.” She concluded limits). letter included a detailed de- This attorney to respond retained with his injuries, Mr. DeMarco’s his scription of thoughts. attorney respond- The retained treatment, expenses, course of his medical 23, 2005, February ed in a letter dated wages. and his lost which he stated that he would like to take deposition of Mr. DeMarco “so that we Travelers nor the retained at- Neither position can be in the best assess torney to the several letters responded claim injured person;” of each a notice of attorney just that have plaintiffs we deposition was enclosed. However, described. almost nine months later, 13, 2006, April the retained attor- April plaintiffs attorney On on copies ney, having sent a letter and of her client’s reviewed Mr. DeMarco’s most per- medical recent of documents in the production records and bills to Travelers’ re- attorney; injury litigation, tained the letter indicated that sonal wrote to Travelers’ Wayne represent per- et al. v. in the DeMarco Leo H. Doire and Travelers its insureds Virginia Transportation Corp., Action injury litigation Civil No. the "retained sonal attor- PC 04-1171. ney." attorney It should be noted that this (the Woscyna person Mr. other who legal was provided also services relative to the seriously injured September litigation personal injury directly to Travelers collision) against Virgi- did not file a lawsuit itself; who, notably, attorney he is the in a Transportation August nia and Mr. Doire until 1, 2004, presented letter dated March his 2006, approximately one month before claim re- views to Travelers' services director pertinent statute of would have limitations garding policy Mr. DeMarco’s demand for the barred such an action. (We liberally quoted from that limits. text, supra.) letter in the simplicity, 12. For sake of we shall herein- usually attorney after refer to the retained ney attorneys representing wrote to the provide in order to services director claim DeMarco, Woscyna, Mr. and National of Mr. DeMarco’s Mr. with his evaluation her Woscy- officially Mr. Grid in order “to confirm that compared with that of claim as attorney Company offering that Travelers Insurance The retained estimated na. $995,000.00 ap- remaining policy limit of claim had “a value of Mr. DeMarco’s $885,000, by your including prejudg- respective to be shared proximately he The letter from Travelers’ re- *,**.” He stated that clients.”14 ment interest attorney position tained took no as to how had also reviewed the records and divided; money Mr. that sum of should be but provided demand to Travelers that, if he it stated the above-named claim- Woscyna’s attorney, and estimated amongst at least as ants could not “decide [them- the value of that claim would be divided, claim. The how it should be Travel- high as that of the DeMarco ]selves” attorney interpleader recommended to the ers would file action and retained that, $995,000 amount any deposit director after still- seek into claim services registry claims of the court. outstanding regarding information injury property damage personal 13, 2006, July Mr. On DeMarco’s attor- collected, notify po- should ney responded July to the 11 letter from that the combined value tential claimants attorney.15 pointed the retained He “greatly exceed the of all claims would fact that Travelers been aware of had attorney limits.” The retained severity September of the collision since long as we offer the opined “[s]o 2003. He then noted until it sent the share on a pro for all claimants to 11, 2006, July letter of Travelers had not basis, ‘Asermely’ rata there will be no during made offers to settle that al- premised opinion he on the problem;” three-year span, despite most time the “re- demands of Mr. fact combined attempts” to settle that had peated been Woscyna greatly Mr. ex- DeMarco and behalf of Mr. made on DeMarco. The limit, which fact led him ceeded attorney also noted that Travelers was *7 present to that the case did “not conclude personal injury aware that the trial was ‘Asermely’ an situation.”13 (viz., begin scheduled to on a date certain thereafter, 18, 2006), Approximately September three months and he stated that 11, 2006, July good on Travelers’ retained attor- failure of to make a “[t]he [Travelers] coverage. They 13. The letter from retained attor exceed the available should Travelers' ney claim in coverage to the services director reads made aware that the avail- be pertinent part as follows: only paid when all claim- able but will be "I do not see DeMarco’s demand for $1,000,000 agree pro ants to a rata share of the avail- presenting ‘Asermely’ an coverage.” able problem policy as that demand is for the demands, light 11, in other limits numerous July 14. The 2006 letter from the retained including Woscyna’s demand $5,000 attorney explained $1 that of the mil- $829,747.00. present This case does not an already paid policy lion limits had been to Mr. ‘Asermely’ situation. The first two de- coverage.” payments DeMarco for "medical greatly mands thus far exceed the available coverage. pertinent 15. Mr. DeMarco was at all times any ‘Asermely’ "I like would to foreclose firm; represented by law the same but it problem[J accomplished by can be [That] that, 2006, appears point at some an attor- simply writing to the two claimants who ney in that firm other than the one who have now submitted demands to inform initially represented the client became active- $1,000,000 coverage them of the limited ly representation. involved in the greatly and to total demands thus far that because, situation” “impossible claim settle this within effort faith view, be had never of time cannot now Travelers’ Mr. DeMarco period reasonable attempt.” hour offer to settle” in by this eleventh made “reasonable cured that he attorney further stated way that Travelers would be able to plaintiffs such Travelers’ “eleventh expose did not believe and not pay policy out the limits its policy limits and offer of hour” of its to other claims. the assets insureds claimants “decide suggestion attorney further stated that The retained [themjselves” it how to divide amongst disagreed analysis he with the of Mr. De- obligation Travelers’ un- “discharge would attorney “as to whether or not Marco’s [Asermely], or otherwise relieve der good to make a faith Travelers failed [had] pay damages responsibility from its case;” and he further effort to settle this policy limit.”16 interest well above expressed disagreement with Mr. DeMar- attorney’s co’s “assessment of facts of 2006, 31, Travelers’ retained July On analysis to an they apply this case as July 13 letter attorney responded case or under R.I.G.L. under attorney. emphasized He plaintiffs attorney Section 27-7-2.2.”17 The retained attorney limited himself had plaintiffs wrote that he did not believe that Travel demanding policy the entire limits of $1 limits; million, ers was liable excess of the being aware of the fact despite that, in Mr. and he stated view of DeMar- “only” limits were that Travelers’ $1 demands, Woscyna that Mr. had co’s there would be no resolution million and the fact mak- trial. seriously injured proceeding been and was other than He con also letter ing policy. stating: “Perhaps you a claim under the Travelers’ cluded his result, attorney study Asermely wrote as a should a bit more closel retained placed y.” Travelers and its insureds had been July days re- 16.In his letter of 2006 to the seriousness of this claim until some 60 attorney, attorney prior tained Mr. DeMarco's also to trial.” July he wrote that believed Travelers’ (quoting 17. See footnote G.L.1956 offer of the limits to the three claimants infra entirety). § 27-7-2.2 thinly "appears attempt veiled to be a exposure avoid above and July plaintiff's 18. The beyond policy 2006 letter to attor- limits.” The letter also states ney attorney pertinent part from Travelers' retained reads in as follows: pertinent part as follows: appropriate "We forwarded the notice un- *8 day, you your predecessors [Asermely you "To this and der the case to and Travel- ] Virginia years ago. placed Transportation/ have both In fact we ers made written Compa- Leo Doire and Travelers Insurance policy demands within the limits on Febru- 2004; 25, ny impossible ary February simply in an July situation be- 2004 and 22, 2005, you policy copies cause demand that the entire of which are attached for paid your your limit of One Million Dollars be to review. At no time did we ever receive ** * protestation response. Virginia client. Your that Travelers is a Leo Doire and Transportation policy simply liable in have excess limits considerable assets ignores clearly exposed judg- are the facts of this Neither and to an adverse case. Leo solely Virginia Transportation because ment of Travelers refusal to Doire of or Travel- yet by you just discuss settlement until now. ers have to be informed how money you willing accept "Given the amount of time and that are effort much to pursue complete has been invested to this matter claim. satisfaction To this trial, through day, Virginia our client neither is now steadfast Travelers nor Trans- any portation his decision that we will move has been able forward to discus- with, a trial of this matter. It is unfortunate that sion or to receive communication from, recognize you pay Traveler’s has failed to would allow Travelers to [sic ] 15, 2006, that, Then, plaintiffs attorney a little a The stated August on over view personal injury tri- plaintiffs month before of the fact that trial was scheduled to Travelers commenced an begin, al was to month, begin in less than a Travelers interpleader Superior action Court August respond would have until 30 to to County; Travelers simulta- for Providence letter; August his he stated if neously requesting filed a motion that it be response, there was no he would consider deposit policy to limits into the allowed rejected. the demand He added that his registry of the court. clients would discuss settlement after 23, 2006, August plaintiffs attorney August On 30 date. responded July to the 31 letter from Trav- 30, 2006, August On Travelers’ claim attorney elers’ retained and offered one plaintiffs services director wrote to attor- final time to settle with Travelers for the ney, noting that she was responding to the policy again limits. He noted that attorney’s August 23 letter to Travelers’ personal injury DeMarco trial was sched- attorney. retained The claim services di- 18, 2006, September on begin uled and previously rector stated: “As we have in- very he that “there possi- stated real you, formed duty as result of the owed to bility exceeding policy] of this case [the insureds, our we cannot pay entire limit.” He “If the continued follows: policy your limit to clients.” She noted limit, verdict does exceed that we will do that, if were pay everything power in our to secure that DeMarco, thereby limits to Mr. it would

judgment, including securing expose personal liability its insureds “to through the Virginia Transporta- assets of satisfy Woscyna the claims” of Mr. tion.” He that it position stated was his National Grid. The claim services director applicable would be to the disagreed further with the contention of case, thereby instant strongly suggesting plaintiffs attorney that Travelers had not that Travelers could be liable to extent limits offered its policy to Mr. DeMarco. beyond limits. He further stat- tersely She rather stated: ed that Travelers had never offered the policy limits to Mr. DeMarco. The letter “We have. Those are funds available to plaintiffs attorney concluded as fol- all Unfortunately, claimants. the claim- lows: greatly ants’ claims exceed the available appear your would to be in in- “[I]t limits, thereby precluding ability our you sured’s best interest [sic] pay full policy any single limits to claim- your position reconsider as it relates to ant.” 2004; our past February demands of The claim services director also asserted 25, 2004[;]

February February responded past Travelers had end, we, 2005. To that again, once con- demands Mr. DeMarco’s counsel dated Asermely, demanding sistent with are 25, 2004, February February the One Million Dollars limit from *9 she stated that those Indemnity responses Travelers “were the Company fully to only resolve responses provided this matter as it relates to both we could have your clients.” under the circumstances.” She further ex-

but that we must ed, "Given the situation that policy we see Virginia Transportation's limits absolutely try not this case. no other resolution expose you assets. I, therefore, Mr. Doire’s have creat- more trial. am also " * "Perhaps you closely.” ^[*] ^[*] moving should forward study Asermely preparation a bit in a ing they agreed participate Febru- had to that the letter of her view pressed 7, “in an September mediation on not constitute demand” ary 2005 “[did] all claims a full release of DeMarco had effort to obtain that Mr. it indicated because limits.” She stated within the available injuries. for his completed treatment not that, that, if not able to resolve Travelers were plaintiffs attorney informed She limits, dilemma,” policy it would Travelers all claims within “this order to resolve individually and (1) to settle claims interpleader proceed action and [a] had “filed an the release of the pro- insured[s] “maximize deposit policy motion to the entire liability possi- potential as much registry into the ceeds of million $1 me- ble.” Superior proposed Court” and had satisfactory in order to arrive at a

diation in mediation on parties engaged The among all claim- proceeds division of 7, 2006, unsuccess- September but was ants. 14, 2006, Then, September ful. on four plaintiffs attorney objected to Trav- days plaintiffs before the trial case seeking deposit elers’ motion leave to Travelers’ insureds was set to be- policy proceeds registry into the gin, Travelers’ claim services director Court, on the mo- Superior hearing parties offering pay to wrote $450,000 At September $550,000 tion was held on to Mr. DeMarco and hearing, proposed Woscyna, exchange complete Mr. “in for a no indicating court issue an order release from both claimants” favor of party policy would be allowed withdraw Doire. Virginia Transportation and Mr. hearing place funds until a or trial took “contingent She stated that the offer was determine the division of the proper upon by both DeMarco acceptance [Mr.] until the parties funds—or themselves Woscyna.” The claim services [Mr.] agreement reached an as to the division of by stating her director concluded letter funds and released Travelers and its parties prepared if both were not liability. claims, insureds from Mr. DeMarco’s at- accept the and release all proposal torney argued that the motion should be the pend- Travelers would “continue with denied due to personal the fact that the ing Interpleader Action to let the [c]ourt injury trial against Travelers’ insureds was pro- determine how the insurance begin distributed;” scheduled to in less than two weeks. ceeds are to be she added Mr. attorney explicitly DeMarco’s indicat- alter- open that Travelers would be to an pursue ed that he wanted to be able to native from the claimants that proposal Asermely claim if the trial resulted in a might resolve all claims within the excess limits. limits. The hearing justice interpleader ruled that Woscyna prepared Mr. Although was warranted at that time because offer, Mr. De- accept September Travelers had “a considerable interest inclined to do so. In a Marco was not the outcome” of underlying personal 15, 2006, September letter dated Mr. De- injury litigation; and he denied Travelers’ claim attorney Marco’s wrote to Travelers’ motion seeking deposit leave to to inform her that he and services director proceeds registry into the of the court. accepting his client would not be the set- 5, 2006), Septem-

On the stated that the day (September same tlement offer. He Travelers’ claim services director wrote to ber 2006 letter from Travelers was “the *10 DeMarco, the that Travelers has attorneys representing years Mr. first time Grid, achieve a settle- Woscyna, Mr. and National confirm- made a formal offer to trial, ment,” stipulated “we view this as At Travelers as to liabili- and he added that Travel- attempt by ty, eleventh hour and it not present another did witnesses and be- responsibility to avoid above ers respect damages. September On letter from your policy limits.” The yond jury the returned verdict fol- attorney Mr. DeMarco’s concluded as favor of Mr. DeMarco in the amount of lows: $2,053,795; computed, when interest was

“Because no formal offer was ever made total was in the amount of 14, 2006, we have prior September $2,801,989.07. justice The trial also taxed time, continue to invest considerable and in plaintiffs costs favor in the amount of money legal preparing resources $5,879.32. beginning Mon- upcoming

for the trial 22, 2006, day, September On the same day, 18th. are not now September We attorney independently by retained Mr. $550,000 to settle position accept Doire wrote to Travelers’ claim services all of effort on this case and focus our stating director it was Mr. Doire’s upcoming trial.”

position that Travelers was responsible for entered him. The B attorney undisputed stated that it was Injury Personal Trial Mr. DeMarco had made demands to settle Subsequent Events policy February within the limits on 2 and jury personal trial in the DeMarco 25, 2004, 7, 2005, February February on injury against Virginia Transporta- action 23, 2006, August and on and that “no offer began September tion Mr. Doire on or meaningful response from Travelers oc- trial, morning On the first of 2006. ** within curred a reasonable time *.” again pay Travelers offered to Mr. DeMar- letter, In September attorney his $550,000, co and it indicated that Mr. retained Mr. Doire further stated: willing Doire would be to contribute an “It is important emphasize that no $150,000 personal additional from his monetary DeMarco thereby causing total settle- offer Plaintiffs funds — Ik, ever occurred until September 2006. ment offer to to be the amount plaintiff every At of $700,000. stage proceedings, these Mr. rejected Mr. DeMarco offer, the trial expressed commenced.19 Doire has the desire that Superior during In an affidavit submitted to the ers the course of the trial. The re- bar, that, attorney Court in the case at Mr. Doire stated tained stated after Mr. Doire that, $150,000 during per- on several occasions the course offered to contribute from his trial, personally demanded that he sonal funds to a settlement with Mr. DeMarco pay trial, the entire limits to Mr. morning on the first Mr. Doire "nev- er, claim. Mr. DeMarco settlement his again ever authorized settlement or re- he Doire further stated in the affidavit that quested again.” settlement The retained at- fully aware limits were if torney stated that Mr. Doire never told him DeMarco, personally paid he would be to Mr. Woscyna that he would "take the claim on the him; responsible other claims chin,” pay nor did he demand that Travelers attorney he he averred that told retained limits to Mr. DeMarco. In addi- and Travelers' claim services director at a tion, attorney the retained testified follows meeting during the trial that he would "take deposition: at "Mr. knew his Doire full well Woscyna claim on the chin.” that that million would have been dollars[] however, paid only to Mr. DeMarco and Mr. DeMarco deposition testimony, the re- if he he would it. He attorney disputed tained the statements made could—if consent to regarding requests to Travel- knew that.” Mr. Doire his *11 $700,000, understanding with the clear yet this no offer settle case— contributing some your that insured was original.) (Emphasis

was made.” money. personal of his own asserted that attorney then Mr. Doire’s date, “To no other offer has been made. responsible payment for Travelers was ” trial, your own the middle be- “pursuant Asermely to matter insured demanded that be to settle Travelers had declined cause within the limits and even settled limits; he added that within the then his wishes. The con- you ignored legal bear the ex- Travelers also “should of Travelers has been position sistent having incurred in that Mr. Doire pense” settling capable counsel due independent to retain settle, attempting or even to be- The attor- judgment. an excess threat of cause another claim exists.” “Travelers’ failure to ney asserted that attorney then that it Mr. DeMarco’s stated settle has cost Mr. Doire make offer to was “now clear” that Travelers had not already,” and he con- thousands of dollars entertained settlement demands be- client would by stating that his cluded company “appears to have a cause options protect to his explore legal all company policy delaying potential set- interests. rights and premise tlements based on the that there thereafter, 29, 2006, September on Soon He multiple are claimants.” asserted that attorney Mr. DeMarco’s also wrote a letter there was “no reasonable basis” for Trav- director, to Travelers’ claim services elers to act as it had Mr. De- regarding which he stated: demands, he Marco’s stated that trial “Many prior times to we advised comply compa- “Travelers did so you your counsel that this both case ny policy clearly infringes on the fidu- very potential had a real for a verdict ciary duty it owes [that] to its insureds.” beyond your policy above and limits and attorney The further noted in his letter repeatedly, throughout years we Virginia Transportation “on the was accident, since the demanded the brink of financial ruin as a direct result of Mr. limits settle DeMarco’s claim. significant judgment against it and be- verdict, you Prior to this we advised on cause of Travelers’ steadfast refusal no than 4 that Mr. less occasions De- claimant;” only make an offer to one he willing Marco would be to settle this that it understanding added was his $1,000,000 policy matter for the limit. credit, “all lines of bank accounts and fu- you This presented writing on financing” ture company had been 2, 2004; 25, 2004; February February attorney halted. The by stating concluded 23, finally July August 2005 and on that he believed that the facts he had only response 2006. The we ever re- likely “could outlined result one of the February on ceived was 2004 when largest faith claims in the bad United claim services [the asserted director] years; States” but he also stated that that Travelers could make no offer to willing Mr. DeMarco was nonetheless multiple our client because there were accept the amount of the in full claimants. “ claim, * * * and final satisfaction of his and he only settlement offer ever open added that this offer would remain Friday made in this matter came the only until October Incredibly, before trial. on the trial, later, day of Approximately a second offer to settle the one month on Oc- 30, 2006, attor- case was extended the amount of tober new and different *12 February suggested that Travelers attorney DeMarco’s ney20 wrote to Mr. by retained stating that he had been wait to settlé the claims its should attorney’s respond Travelers to time. insureds at one and the same 29, 2006 letter to Travelers’ September attorney that the second retained indicated He stated that claim services director. pay that had refused to reason Travelers in- Travelers’ conduct the contention that DeMarco, to Mr. even limits fiduciary duty it owed to fringed on the (in though doing attorney’s so would un- “legally factually insureds was its view) have advanced Travelers’ own finan- Citing opinion this Court’s founded.” interests, was it would have cial because acknowledged he that Travelers Asermely, unprotected against Mr. left its insureds duty had a to act the best interests Woscyna’s claim. He that stated Travel- from excess protect its insureds to them any it ers had refused demand where liability, and he asserted “[m]indful remotely “could even be construed” that duty, from the time it was first no- of this putting Travelers was its own interests in- potential tified of the claims its insureds, stating ahead of those of its sureds, sought to settle the by “Asermely guiding law which protect in a manner that would claims decisions, by Travelers has made its liability.” from excess He stat- insuredfs] which it will continue to make its deci- February ed that the 2005 letter from attorney sions.” The concluded letter to the retained attor- plaintiffs attorney requesting plaintiffs attorney ney requesting Woscyna’s that Mr. claim agree stay entry judgment of final not be settled until Mr. DeMarco’s medi- injury in the action personal so cal treatment had ended and his claim parties again attempt could to resolve the ready “explicit to be resolved was an mediation, through noting matter that this recognition that Travelers could not inde- would be in Mr. interest since DeMarco’s pendently settle with one of the claimants any Virginia potential Transportation for exposing without to excess [its insureds] and Mr. Doire to contribute to a settle- liability” acknowledgement and was an likely extinguished ment would be if pool “premature” that it would have been they bankruptcy.21 were forced into Travelers to have settle- “considered] ment” at that time. Then, 7, 2006, on corporate November Virginia Transportation counsel for wrote

Addressing plaintiffs the contention of attorneys a letter addressed to both of attorney company that Travelers had a retained Travelers. He stated that the delaying multiple settlement injury in the case had situations, personal verdict claimant at- second retained “already to the in- great caused harm” torney stated that there was no factual assertion, represented. whom he He further basis for such an and he added sureds plaintiffs attorney’s willing own letter of stated that the insureds were granted thirty day stay entry We 20. shall hereinafter refer to the "new and action attorney” different who is referenced in the request at the of counsel for the attorney" insureds, text as "the second retained in or- but he asserts that later became distinguish attorney der him from the Superior clerk had evident Court throughout opinion whom we have de- jury already entered a on the ver- scribed shall continue to describe as "the dict, pursuant Superior to Rule 58 of the attorney." retained Procedure, September Rules of Civil on Court 22, 2006, day when the verdict was ren- Court, plaintiff In his brief to this states dered. justice personal injury that the trial $500,000, and he directed the insureds for expected to if it could be mediation attend *13 immediately pay that amount any that dis- Travelers to but he"'added productive, be existing poli- the next the place Woscyna within Mr. “under had to take to cussion time, because, accept the in- after such Travelers to days cy.” urged He also ten irrepa- judg- face “substantial DeMarco would for the entire responsibility sureds be forced to file for ment, harm” and would rable amounts excess including the 11 of the Chapter interest, United relief under because of policy the limits Trans- Bankruptcy Virginia Code. States the insurer’s he characterized as what counsel then noted corporate portation’s He informed “mishandling” of the claim. lenders had Transportation’s Virginia Travelers that “the De- attorneys the for compa- reduced” the already “significantly willing to release appear claimants Marco given line of credit and had ny’s operating judgment in consid- your insured from the personal in the judgment notice of the claims of assignment eration of an material event of de- injury case was “a Travelers;” and he against insured your (1) He that the lenders emphasized fault.” willing Travelers was to stated unless immediate resolution demanding an were judg- the entire accept responsibility for * * * Virginia Transporta- of all claims ment, “may have no the insureds (2) that, if the lenders withdrew tion and chapter avoiding means of the need support, company would their financial by] assignment protection than [other immediately operation be forced to cease by stating He concluded of those claims.” loss of “several million dollars and face the have no choice but that the insureds would Virginia Transporta- in annual revenue.” with Mr. DeMarco to resume discussions corporate tion’s counsel asserted that assignment about of their claims opportunities to Travelers had had several they if not receive a against Travelers did Woscyna and Mr. settle with Mr. DeMarco response November policy limits but had failed or re- within 7, 2006, Also on November Travelers regard fused to do so “without insureds; brought declaratory judgment a action consequences” for its he also “ignored the States District Court for the asserted that Travelers had United Island, unequivocal your clear and instruction of naming Virginia District of Rhode limit Doire, DeMarco, insured at trial to offer the to Mr. Transportation, Mr. the DeMarco He further claimants.” Woscyna, Mr. and National Grid as defen- presently wrote that the insureds were requested judgment dants. Travelers a faced with substantial excess due (1) declaring: duty that Travelers’ to de- personal inju- to the result of the DeMarco against its insureds fend or settle claims ry trial possible as well as with a adverse when exhausted the million would end $1 yet-to-be-held verdict in trial of the (2) limits; enti- that Travelers was Woscyna claim. by paying to the policy tled exhaust limits partial pay- million to Mr. DeMarco in $1

Virginia Transportation’s corporate judgment against ment of the Travelers’ that, although counsel next stated the in- (3) insureds; that Travelers had not been preference sureds’ would be to defend limits to Mr. claim, required pay against Woscyna they could not entry judgment prior DeMarco damage take that risk because of (4) case; personal injury that Travel- they already had sustained as result of any payment to make required ers was not the verdict in the DeMarco action. He (absent National Grid Woscyna Woscyna to Mr. or stated that counsel for Mr. had them) where such offered to settle his client’s claims favorable “Releasees”), persons, available to and all other would reduce sums payment (5) corporations firms or and all judgment; Mr. DeMarco’s pay required pay any resulting was not claims or to result from entry of an accident that occurred on or about that had accrued after the interest case; 10, 2003, Cranston, personal injury September Rhode required Travelers was not Island and as claimed in a civil action DeMarco, Woscyna, to Mr. Mr. entitled Paul D. et al v. Leo any payment make Doire, H. Woscyna, Virginia Transporta- National Grid in excess of the Jr. and *14 * * limits; Corporation and that Travelers tion *. indemnify pay its in- required expressly agreed “It is understood and in of the any sureds for amount excess acceptance of the said above policy limits. amount is full accord and satisfaction * * disputed (Emphasis of a claim *.” thereafter, Shortly on November original.) arranged for a mediation Travelers involving to be conducted counsel for Vir- Further in the wake of the November Doire, Mr. ginia Transportation, Mr. De- 17, mediation, agreed Travelers also Marco, respectively. Mr. Woscyna and $550,000 pay plaintiff DeMarco. Mr. mediation, the wake of that Travelers of- accepted DeMarco pro- amount and $450,000 pay the sum of to Mr. fered Virginia ceeded to release Transportation Woscyna; accepted pro- he that offer and However, liability. and Mr. Doire from Virginia Transportation, to release ceeded taking significantly tack different from Doire, Mr. and Travelers from Woscyna, the one taken Mr. Mr. De- day. Woscyna that same The release doc- explicitly Marco declined to release Trav- ument was entitled “RELEASE AND in the elers release document that he ” CLAIM; provides SETTLEMENT it OF signed. pellucid That states in document pertinent part as follows: language that Mr. specifically DeMarco

“For the Sole of Four reserved and all claims Trav- Consideration elers.22 The release document was entitled Fifty Hundred Thousand and 00/100 ” RELEASE; ($450,000.00) Dollars, provides it “GENERAL paid, in hand * * * pertinent part as follows: receipt hereby of which is we D. acknowledged, MEN, WE, PAUL WOSCY- ALL THAT “KNOW * * NA, *, DEMARCO, DOROTHY M. WOSCYNA WAYNE LEESA DE- WOSCYNA, MARCO, and KRISTEN R. a minor BRAEDYN DEMARCO and “Releasors”), (collectively, hereby (collectively, do CHAYCE DEMARCO “Releasors”), discharge release and forever LEO H. in consideration of the sum (Five DOIRE, $550,000.00 Fifty VIRGINIA TRANSPORTA- Hundred 00/100) CORP., TION a Rhode Island corpora- paid by Thousand Dollars to be tion, Travelers Company and TRAVELERS INDEMNITY Insurance of Amer- ica, (collectively, good COMPANY OF AMERICA and for other and valuable Court, plaintiff In his brief to this charac- that Travelers "had no involvement whatsoev- $550,000 payment him terizes Travelers’ procuring” er in the release of its insureds "gratuitous payment" contrast, as a of the amount re- respect to his claim. In Travel- $450,000 maining pay- after the ers asserts its brief that "obtained releas- Woscyna ment to Mr. was deducted. The Virginia Transportation es of Doire and from plaintiff emphasizes to Mr. contrast exchange payment the two claimants in for its Woscyna, accepted payment he without re- limit." leasing liability, alleges and he consideration, day just-refer- as the two adequacy On same receipt enced release documents were executed hereby acknowledged, do of which (November 17, 2006), Mr. DeMarco also release, reraise, quit- and forever hereby agreement Virginia into an -with entered LEO H. DOIRE and said claim unto n Doire,24in Transportation and Mr. which TRANSPORTATION VIRGINIA all they assigned “any to him claims CORP., corporation, Rhode Island [they] may have” and causes of action that (collective- assigns their successors assignment docu- against Travelers.25 “Releasees”), all man- any and ly, the assignment explicitly * * * ment recites against said action which ners of of claims was effected “in consideration of had, ever now said Releasors Releasees contempora- Release executed the General have, may future or in the * * (Emphasis *.”26 neously herewith limitation, any all including, without added.) loss, arising claim out of the damage or *15 assigned plain- The claims that were to the litigation brought matter of subject (1) “in any way tiff include claims against Releasees in by the Releasors related to the conduct of Travelers County Superior the Providence Court of the of the handling Assignees” claims (the Action No. 04-1171 “Lit- being Civil subsequent to the motor vehicle collision igation”), any and verdict or injury resulting personal litiga- and Litigation. in the entered tion or that related to “the manner in any Release shall not in “This General appointed which Travelers and counsel dis- construed, intended, way be nor is it to charged respective obligations their to Company release Travelers Insurance of Virginia, including Doire and but not limit- any America and all claims fraud, ed to all claims for breach of con- may against that Releasors have Travel- tract, good breach of all duties of faith and any way arising Litiga- ers in from the faith, dealing, fair bad further including any aspect tion or thereof. The same but not limited to and all * * are specifically by reserved Releasors.” assignment claims document original.)23 (Emphasis provided Virginia Transportation also DeMarco, copy Virginia [Transportation] 23. A entire DeMarco release docu- [Mr.] appended opinion “Appen- ment is as by able to resolve the claims as demanded dix A.” bankruptcy.” creditors and avoid Virginia Transportation’s corporate 24. coun- copy assignment 25. A of the entire document (and attorneys by not either of the sel retained appended opinion "Appendix to this B.” Travelers) represented Virginia Transporta- respect In addition to what it sets forth with tion and Mr. Doire in connection with their Travelers, possible claims the as- assignment of claims to Mr. DeMarco. signment Virgi- document also indicates that Superior In an affidavit submitted to the Transportation nia and Mr. Doire have as- Court in this Mr. Doire stated that No- signed plaintiff any and all claims day vember 2006 was last business they may causes of action that have bankruptcy petition; before he was to file a attorney the retained and his law firm. day "individually he added that on that he Virginia [Transportation], and on behalf of It will be seen that the fact that the refer- assigned rights all [Mr.] of our DeMarco contempora- enced documents were executed exchange running for a release in favor of neously significance is of to our considerable only Virginia [Transportation] and me.” Mr. reasoning legal practical as to the effect ”[b]y Doire also stated in the affidavit assignment my rights virtue those documents. of all of rights Virginia [Transportation] and the fully C agreed cooperate Doire “to and Mr. part a material of this good faith as Initiation of the Instant Action and his with Mr. DeMarco

Assignment” Summary and Motions for assigned attorney in their exercise of Judgment “any rights against parties rights released.” 22, 2006, shortly On November after Subsequent payment receiving assignment of claims from $450,000 $550,000 amounts and Doire, Virginia Transportation and Mr. Mr. DeMarco signing by of the releases Mr. DeMarco commenced the instant civil filed an Woscyna, and Mr. Superior action in the for Provi- Court then-pending complaint amended County naming dence as defendants Trav- declaratory judgment federal district court attorney elers and retained and his law action, of both the De- attaching copies firm. The complaint contained the follow- at- Woscyna Marco and releases and also one, ing demanding six counts: count for taching stipulation signed counsel declaratory judgment pursuant to Aserme- corporate National Grid and counsel ly ordering pay Travelers to “the entire Virginia Transportation, stipulation which verdict/judgment per- amount” from that National claims indicates Grid’s injury litigation beyond above and sonal against Virginia Transportation and Mr. limits, plus the million all accrued $1 al- Doire been dismissed. Travelers *16 interest, attorneys’ and reasonable fees in the com- leged amended federal court costs; two, demanding and count a declar- plaint policy it had exhausted atory pursuant judgment to G.L.1956 paying limits in million to settle the $1 § 27-7-2.2 in- Woscyna, requiring pay claims of Mr. DeMarco Mr. Travelers to and requested amount;27 and it the federal court terest on the entire count following judicial enter declarations: three, contract; alleging breach of count (1) that Travelers had contrac- satisfied its four, faith alleging bad and breach of fidu- (2) insureds; tual duties to its that Travel- 9-1-33; § ciary duty pursuant to G.L.1956 pay ers had not been to the en- required five, alleging count that Travelers is liable tire limits to Mr. DeMarco where DeMarco “separate apart to Mr. have doing Virginia so would left Trans- legal assignee of Virgi- status” as [his] portation against and Mr. Doire uninsured six, Transportation; alleging nia and count (3) claims; other that Travelers was not by attorney firm legal malpractice pay any required to sums in excess of the represent Virgi- Travelers to retained limits; that Travelers was Transportation personal injury nia required indemnify to in- pay its litigation.28 they might sureds sums that 3, 2007, January justice On the trial who agreed pay Mr. DeMarco connection assignment. injury with an presided personal had over liti- Superior rulings diversity jurisdiction. It is the Court's with re- the basis of Mr. De- spect to count one and count two that are by moving Marco reacted to remand the case subject appeal. Court, of the instant Superior alleging ap- that the attorney pointed and his law firm were non- 12, 2006, 28. On December filed a Travelers 31, 2007, parties. January diverse On notice of removal in the United District States two-page grant- federal court issued a order Island, Court for the District of Rhode remov- ing the motion to remand. ing Mr. DeMarco’s November 22 action against Superior Travelers from the Court on the fact proceeds, notwithstanding against Mr. DeMarco brought gation en- and Mr. Doire Virginia Transportation Asermely actual case involved that the stating judgment an order tered claimant. He also contended single litigation was “satisfied entered in that pursuant Travelers his claims full.”29 extinguished not been when Asermely had 2, 2007, a release of the insureds from filed in the he executed August plaintiff

On that, summary for argued a motion Superior liability. Finally, plaintiff Court counts one and respect to (the “rejected § set- pursuant to 27-7-2.2 complaint, specifically two of his six-count statute”), Travelers was re- tlement offer judgment pursu- final requesting entry of judg- all interest due on the quired pay 54(b) Superior Court ant to Rule injury action—both personal ment in the as to those two Rules of Procedure Civil interest.30 prejudgment postjudgment objected plaintiffs Travelers counts. opposition plaintiffs In motion its and it filed summary judgment, motion for Travelers summary judgment, defendant summary judgment with a cross-motion for nor argued Asermely that neither the rule respect to all counts. there applies § 27-7-2.2 in cases which submitted to the the memorandum policy pro- claimants for the multiple are Superior support of his motion for Court ar- company ceeds. The insurance also summary judgment, plaintiff, rely- partial could not establish a gued plaintiff ing assignment rights on the which he viz., that required element of his insureds, ar- had received from Travelers’ claim— duty under that, Travelers had breached its gued pursuant to the rule established insureds; Asermely, obliged as a contended to its pay matter of him the entire law to and Mr. because Mr. DeMarco Wos- entered amount of the all cyna had released the insureds from personal as a result of the insureds no harm liability, the insureds had suffered *17 injury plaintiff trial. The contended that assignment for an that could be the basis obligation Travelers had such an because it to Mr. DeMar- rights against had “declined to settle the DeMarco claim co. [Ijimit” [pjolicy prior

within the to or dur- hearing respective A on the motions was trial, had, in the ing and therefore words 16, 2007; and, Septem- held on October on Asermely opinion, of the the “assume[d] 23, 2008, a hearing justice ber the issued judg- risk of miscalculation if the ultimate grant- written twenty-three page decision ment should exceed the limits.” ing plaintiffs summary judg- motion for the plaintiff further contended his, denying ment on counts one and two and Asermely applied rule in cases such as entirety.31 in multiple which there were claimants for defendant’s cross-motion Court, signed par- January 29.The the In their submissions to this both 2007 order refer to that order as "the satis- justice ties Superior presid- who had of the Court fied order.” personal injury ed over the trial reads in pertinent part as follows: 30. See footnote infra. hearing “After thereon and in consideration justice 31. It be noted that the should thereof entered in favor of the Superior presided who over the sum- Court 22, 2006, plaintiffs September plus taxed on hearing mary judgment in 2008 was not the $5,879.32. costs in the amount of Said justice presided personal who had over judgment is satisfied in full.” injury jury trial one, by expending limits on a respect hearing to count served With that, although However, plaintiff single respect claim.”33 justice agreed with with only single Asermely hearing justice case involved the instant deter- prin policy proceeds, claimant for the “legal analysis ques- mined that and fact by this in that ciple upon elaborated Court obligations relevant to an tions insurer’s applicable in claim multiple case was also multi-claimant cases beside the [were] Citing approval opin ant cases. with point.” explained She that determination Appeals States ion of the United Court as follows: in the case of Peck for the First Circuit undisputed “It is that Travelers did not Casualty Insurance ham v. Continental attempt negotiate any of the claims Cir.1990) (1st Co., (Selya, 895 F.2d days until before the DeMarco trial was J.),32 in the instant case hearing justice and, instead, on begin locked refused that an insurer faced with a multi stated to consider all of the three claimants’ take af ple claimant situation “should offers, relying settlement on the claim- its insured of so steps firmative to relieve negotiate ants to their claims vis-a-vis liability her as is potential much of his or a global each other and reach settlement light of the sur reasonably possible” Furthermore, the policy within limits. (2), in accor rounding circumstances Travelers refused to make uncondi- seriously con Asermely, dance with “must tional individual settlements until after the claimants’ reasonable offers to sider claim the DeMarco had been reduced to within the limits assume settle judgment, liability and the insureds’ on consequences of its failure to do so.” it and the accumulated interest had at- addressing the settlement issue with only tached. It was then that Travelers claims, particular hearing respect and, therefore, settled one of the claims that an insurer justice further stated questions concerning its of profes- use upon be called to consider which of would faith in good selecting sional skill and presented greatest the claims threat or multiple which of the claims should be also threats to its insureds. She stated settled order to ‘relieve its insured of that an insurer’s ultimate under potential liability so much of his [or her] depend quality would on the reasonably possible’ as is are extraneous its professional the insurer’s exercise of in the context of the circum- narrow making “judgment skills in such a call” (Emphasis stances of this case.” respect to the settlement of claims. *18 original.)34 “in recognized She that there could be hearing justice rejected The also Travel- where the insurer determines

stances its insured’s interests are best ers’ contention that it was not liable to Mr. [that] Although opinion 32. the case Peckham v. Continen well as the of the United States Court Co., (1st Casualty tal Insurance 895 F.2d 830 Appeals for the Fifth Circuit case of Cir.1990), required the First Circuit to ana Davis, Liberty Mutual v. Insurance Co. lyze apply principles of Massachusetts (5th Cir.1969). hearing F.2d The concerning multiple insurance law claimant justice respected dealing also cited a treatise cases, agreement we are in full with the hear law, viz., 22 Eric insurance Mills ing justice that First Circuit’s articulation Holmes, Appleman Holmes’ on Insurance 2d principles applicable that of basic in case is (2003). § 137.2 at 127 the case at bar. language quoted 34. The within the block support quoted in observation quote in the text is from the First Circuit's text, hearing justice cited the First Cir- Peckham, opinion in 895 F.2d at 835. Peckham, opinion cuit’s in 895 F.2d at genuine DeMar- there exist issues of ma- disputed, to the fact that Mr.

DeMarco due terial fact about the nature and extent of liability; its insureds co had released Virginia harm that Doire and suffered hearing justice pointed to ruling, in so judgment.” as a result of the excess the release language the fact that ex- specifically DeMarco executed Mr. 20, 2008, Subsequently, on October (See text from its reach. cluded Travelers 54(b), justice, hearing citing Rule ordered 23, supra.) accompanying footnote in judgment plain- that final should enter respect tiffs favor with to counts one and hearing justice accordingly conclud- timely Travelers filed a notice of two. summary granting judgment ed that appeal. respect favor with to count one plaintiffs Asermely be- appropriate

would be under appeal, On defendant Travelers contends admis- cause Travelers had not submitted hearing justice that the committed revers- the follow- showing any of sible evidence summary in granting judgment ible error (a) ing: plaintiffs that offer to settle for $1 in favor on one two plaintiffs counts (b) reasonable; Trav- million was not that because, view, plaintiffs Travelers’ re- adequate elers had not had time to investi- Virginia Transportation lease of and Mr. consider, offer; respond gate, Doire, as well as the trial court’s eventual (c) plaintiffs August 2006 deadline order,35 extinguished satisfied accepting his final offer was unreason- might claim Travelers that (d) able; that Travelers ever offered to assigned otherwise have been to plaintiff limits; plaintiff settle with for the Further, by the insureds. Travelers ar- (e) that Travelers could not accept gues rule does not offer were de- because limits cases; multiple apply claimant it also pleted or exhausted. contends that the record contains facts on the basis of which a finder of fact could two, respect to count the hearing

With reasonably conclude that the insurer acted justice granted summary judgment also and in its insureds’ best interests han- favor, plaintiffs stating that the terms dling plaintiffs Finally, claim. (the § “rejected 27-7-2.2 settlement offer argues affirming the decision below statute;” 46, infra) see footnote were negative impact would have a in terms of unambiguous” “clear in providing effect, public policy by, in compelling in- an insurer is liable for all interest due on a poli- surers to subordinate the interests of rejected where it has a plaintiffs cyholders third-party to those of claimants. written offer to settle within or at the Accordingly, hearing limits. II justice held that Travelers would be liable § under 27-7-2.2 for both prejudgment of Review Standard and postjudgment judg- interest on the principle “[sjummary It is a basic personal injury ment in the case. *19 judgment remedy, is a drastic and a mo- hearing justice then summary judgment went on to tion for should be deny summary cautiously.” Travelers’ cross-motion for dealt with Estate Giuliano of Giuliano, 386, (R.I.2008) judgment on remaining counts. She v. 949 A.2d 390 (internal that, omitted); “[ajlthough stated quotation Travelers’ failure marks see Convenience, settle of the claims until after the Pike & also Gas Plainfield jury Realty Corp., DeMarco returned its verdict is un- v. 1889 Pike LLC Plainfield 29, supra, accompanying 35. See footnote text.

605 (R.I.2010). 54, that, genuine In a similar is axiomatic a “[w]hen 994 A.2d 57 issue vein, hearing we have indicated that justice “[a] of fact exists the trial must on a motion for sum justice passes issue,” who not decide the in- such an pleadings, must review the mary judgment summary judgment stance appro- is not an affidavits, admissions, interrog answers to Ethier, priate remedy. Gliottone v. 870 atories, appropriate other evidence 1022, (R.I.2005); A.2d 1027 see also Estate a favorable to the perspective Giuliano, (“It most 949 A.2d at 391 impor- is. of party opposing the motion.” Estate Gi tant to bear in mind purpose of of (internal uliano, at quotation 949 A.2d 391 summary judgment procedure is issue omitted). marks (internal determination.”) finding, not issue omitted). quotation marks token, however, By party the same opposes summary judgment who a motion III proving, by

“bears the burden of compe evidence, tent of existence facts Analysis Council, dispute,” Cullen v. Lincoln Town A- 246, (R.I.2008); 960 A.2d and that party upon allegations “cannot rest mere Asermely Applicability of in the present pleadings, denials mere Multiple Claimant Context conclusions, or legal opinions.” Industrial shall first address We Travelers’ conten- National Bank Rhode Island v. Patr of appeal tion the hearing justice on iarca, 336, (R.I.1985); 502 A.2d see in granting summary judgment erred Corp. Air Distribution v. Me Airpro also plaintiff on count one of his complaint, Co., (R.I. chanical 973 A.2d 540-41 alleged which count that Travelers was 2009). judgment liable under for the grant When this Court reviews the of a against its insureds excess the policy summary judgment, motion for does so argues summary limits. Travelers manner, in a de and it applies novo judgment granted should not have been same standards and rules as did the hear respect to this count for several rea- ing justice. Planned Environments Man sons. Travelers asserts that the rule es- Robert, 117, 121 agement Corp. v. 966 A.2d Asermely ap- tablished this Court in (R.I.2009); Voccola, see also Carrozza v. plies only single where there is a claimant (R.I.2009); 962 A.2d Estate policy proceeds for the and where that Giuliano, conducting 949 A.2d at 391. In such claimant offers to settle within the review, must consider the Court limits; Travelers contends light “admissible evidence most fa Asermely principle apply does not Cullen, vorable to the nonmoving party.” (such situation as the at presents) case bar (internal quotation 960 A.2d at 248 marks where there are multiple claimants whose omitted). combined claims the policy exceed limits. grant summary

We shall affirm the Travelers further contends with re- genuine “if there exists no spect issue instant it acted reason- of material moving party ably fact and the and in its insureds’ best interests entitled to as a refusing matter law.” to settle with Mr. DeMarco for Rent-A-Car, Inc., Lynch Spirit v. argues 965 the limits. Travelers also (R.I.2009); A.2d Alves v. Home there was evidence that Mr. Doire *20 Inc., Newspapers, town 857 A.2d opposed payment policy the limits to (R.I.2004). time, however, (2) At the same it Mr. DeMarco and that such opposition explicated Asermely the liability obligations under relieve it of would

by the insured standard. Asermely. under Asermely the issue before Applicability characterizes the 1. Multiple Principles count one as constitut- to in the respect us for this Context impression of first Claimant matter ing a being the Court; the issue as it describes by reviewing begin analysis our We insurer’s vel non of “an existence Asermely in v. Allstate opinion this Court’s liabili- in of the excess for a tort (R.I.1999). Co., Insurance 728 A.2d there are policy limit when ty insurance brought who plaintiff case involved a That limit an insufficient claimants and multiple certain defen negligence action a pay all claims.” a limited amount of insurance dants with trial, jury plaintiff after a the coverage; Asermely the what promulgating Since amounted to damages awarded was rule,” 728 as a “new opinion characterized $36,000 of the lim in excess approximately not delved this Court has A.2d at liability policy. its of the insureds’ ramifications of the hold- into the further trial, 728 A.2d at 462. Prior to Asermely, an in the context of insur- ing in that case subject had of a court- the case been third-party to settle er's decision proceeding, at the con annexed arbitration Accordingly, it is now incumbent claims. which the arbitrator issued an clusion of princi- whether upon us to determine policy plaintiffs award in favor within Asermely apply should ples set forth Although plaintiff willing limits. us, of the before context case the factual award, accept compa the insurance multiple claimants for which there were proceed to trial. ny rejected opted proceeds and the total policy insurance plaintiff prevailed After the at trial on Id. policy those claims exceeded the amount of claim, assigned insureds negligence and, principles apply if those do at limits— who rights plaintiff, proceeded their sense, general whether it is least damages. for company to sue the insurance modify the reach of the necessary to complaint Asermely in the plaintiffs any respect. rule in (1) five counts: a claim that case contained below, For the reasons set forth it is our plaintiff was entitled to interest underlying opinion principles pursuant of the limits excess opinion Asermely apply to cases Court’s (the “rejected § settlement offer 27-7-2.2 involving multiple claims exceed the (2) statute”); that the defen- allegation an limits; it is opinion but further our company had breached its dant insurance upon explicate that it incumbent us to handling faith in the duty good to exercise Asermely principles of the applicability (3) claim; a claim that the plaintiffs multiple claimant context. More- damages was entitled to as a re- plaintiff over, dispute since certain facts in need to alleged fraudulent sult of the defendant’s fact-finder, be resolved it will be pay refusal to misrepresentation and necessary grant for us to vacate than plaintiff limits to the for more summary judgment plaintiff with re- years judg- after the final one and one-half complaint ment; to count one of his spect allegation defendant duty statutorily under the findings remand for further of fact to de- breached its settle;36 faith refusal to termine whether or not met its created tort of bad defendant part provides pertinent § as follows: General Laws 1956 9-1-33 *21 monetary insurer’s interest than the finan allegation an defendant obligations. cial risk attendant to the insured’s situa breached its contractual had (quoting Malpractice tion.’” Id. Asermely, 728 A.2d at 463-64. Medical Underwriting Joint Association Rhode of course, In the defendant insurance due Island v. Rhode Island Insurers’ Insolven judgment. summary moved for company (R.I.1997)). Fund, cy 708 A.2d motion, justice a hearing After a on that in Asermely Court further noted that granted the motion for Superior Court obligation only extends not to the summary judgment respect with to the insureds, company’s insurance but also to claim, rejected statutory settlement offer parties to whom the insureds have as claim, misrepresentation the fraudulent signed rights. their Id. The Court then the bad faith refusal to settle claim. obligation described an insurer’s as fol Court, plaintiffs appeal to this we On lows: grant summary judgment affirmed “It is not sufficient that the insurance misrepre- to the fraudulent respect company good act in faith. An insur- (although faith claims sentation and bad company’s fiduciary obligations ance in- to the plaintiffs appeal sustained the we duty to seriously clude a consider a claim). statutory offer rejected settlement plaintiffs reasonable offer to settle with- Applying at 463-64. Asermely, 728 A.2d policy limits. if Accordingly, it respect the bad faith tort standard with to has been afforded reasonable notice and liability, the an insurer’s extra-contractual plaintiff if a has made a reasonable writ- held that the insurer had not acted Court ten offer to a defendant’s insurer to to settle refusing bad faith because limits, policy settle within the the insur- “fairly claim its insureds was er obligated seriously consider such (internal quotation Id. at 464 debatable.” an offer. If the insurer declines to set- omitted). time, marks At the same howev- limits, tle the case policy within the er, “opportunity took the Court peril does so at its in the event that a promulgate guid- a new rule” to serve as in judgment trial results that exceeds deciding ance to the trial future courts limits, policy including interest.” Id. an company’s opt- cases where insurance ing prior Asermely, not to settle claims to trial even- even if bad faith cannot Under shown, judgment against exposed tuates in a its insured in be an insurer will still be policy potential liability excess of limits. Id. observed for of a We the amount limits, has held that an insur- that exceeds “[t]his Court unless company fiduciary obligation ance has a to the insurer can show that the insured was act in the in unwilling accept plaintiffs ‘best interests its insured settle- protect order to the insured from excess ment offer. Id. The in Asermely Court refrain from following to] acts concluded its discussion with the [and greater unambiguous that demonstrate concern for the statement: “Even if the in- pay pursuant provisions "Insurer’s bad faith refusal made any policy.— claim made under insurance policy, wrongfully or otherwise and in (a) Notwithstanding any law to the con- timely perform bad faith refused to its ob- trary, any an insured under insurance ligations under the contract insurance. general as set out laws or brought pursuant action to this may bring otherwise an action section, may make claim insured also issuing insurer when it is al- compensatory, damages, punitive dam- leged wrongfully the insurer and in bad ages, attorney and reasonable fees.” pay faith refused to or settle a claim *22 608 flexible, Bolton, we eny, necessarily faith that it has a good believes

surer against party, give rigid judicial the third it defense are reluctant legitimate if the risk of miscalculation performs private an insurer that shape,” it must assume should exceed routinely by the ultimate discovery asset “as conducted limits.” Id. policy in- similarly situated insurers other dustry presumably would be deemed involv subsequent decisions In several reasonably” aspect as to that to have acted the failure to settle other than ing contexts Hindle, claims, explicat has 748 A.2d at 260. duty. this Court of its third-party that was first set principle ed further Co., Skaling In v. Aetna Insurance 799 in Trav Asermely. opinion In our forth in (R.I.2002) II), (Skaling A.2d 997 we were Hindle, v. 748 A.2d Co. elers Insurance to review the trial court’s upon called (R.I.2000), an insurer’s we addressed summary judgment in favor of a grant of injured context of an obligations company defendant insurance in the face filed a claim for unin who had plaintiff allegation insured’s of bad faith in its benefits from motorist sured/underinsured investigation connection with insurer’s permission requested and then his insurer handling of the insured’s claim for personal that to settle his insurer Citing motorist benefits. underinsured the defendant-tortfeasor. injury suit with years of three earlier opinion our that argued the insurer had Asermely, Skaling we stated in II: discovery” of the defen “court-ordered necessary assets was so dant’s abundantly it clear that “We have made fiduciary obligations could meet its insurer duty good dealing faith and fair seriously plaintiffs a reason to consider duty engage includes an affirmative limits, offer to settle within the able timely meaningful settlement by Asermely and our subse required negotiations and to make and consider Quincy in Bolton v. Mutual quent decision offers of settlement consistent with an (R.I. Co., 730 A.2d 1079 Fire Insurance fiduciary duty to protect insurer’s 1999).37 Hindle, 748 A.2d at 259. We held liability.” Skaling insured from excess that, in Hindle for an insurer to meet its added). II, (emphasis 799 A.2d at 1005 Bolton, obligations Asermely under that, Skaling further stated in II un- We was not the insurer avail required Asermely, miscalculating der the “risk of discovery itself of court-ordered concern proceeding the merits of a claim and Hindle, ing defendant’s assets. insurer, upon entity trial falls Rather, A.2d at 260. we construed our litigation controls the and with whom the meaning that an precedent as insurer’s Al- insured has contracted.” Id. at 1006. seriously a duty to consider defendant’s though Skaling first-party II involved the offer to settle would be satisfied con an claim of insured an insurer ducting inquiry a reasonable into a defen third-party rather than a claim as atwas of private dant’s assets means asset (as Asermely, issue in we that both indicated discovery contrasted with court-or concerns; implicated cases similar discovery). further dered We observed that, if emphasized we even a claim although reasonableness stan “[t]he debatable, fairly an insurer prog- dard articulated and its insured is Quincy included In Bolton v. Mutual Fire insurance to settle within the limits also Co., (R.I.1999), duty 730 A.2d we held that a tortfeasor's assets to determine subrogation fiduciary obligation "realistically in a that an insurer's to its were reachable seriously plaintiff’s insured to consider offer action.” circumstances, engage in der such obliged imposing nonetheless settle- Aserme- “is *23 in effort to relieve the ment discussions an ly liability on an rejecting insurer for one expense from the burden and insured policy claimant’s demand for the limits And litigation.” very Id. at 1011. we effectively place “would the interests of clearly policy stated that is the of this “[i]t that claimant above that of the insured encourage state to the settlement of con- defendant.” Accordingly, Travelers as- litigation.” troversies in lieu of Id. at rejection serts that an insurer’s of one claimant’s demand is insufficient in and of whether, must as We now determine a prove fiduciary itself breach of its contends, Asermely rule rather, duty; argues it that a “more * where, * apply should not in this case in searching inquiry required is in single contrast to the claimant at issue Travelers contends that the appropriate Asermely, there was more than one claim- standard should abe “reasonableness stan policy proceeds ant for the and the com- dard” such by as that endorsed the First the policy bined claims exceeded limits. in Circuit Peckham v. Continental Casual argued Travelers has to this Court that (1st Co., ty Insurance 895 F.2d Asermely the rationale behind the rule in Cir.1990) single than applies only involving “to cases a what Travelers de —rather injured claimant who makes a settlement “assumption scribes as the of risk” stan policy demand within the limit”—in view of imposed dard by Asermely,39 the rule in that, circumstances, the fact under such “it Travelers submits that hearing justice wholly power within the insurer’s to “correctly called for application [the] a prevent exposure person- its insured’s [of] ‘reasonableness’ standard” in her decision al assets.”38 in (Emphasis original.) (which, recall, explicitly the reader will that, in Travelers contends contrast to the Peckham), argues cited but it situation, single claimant the Asermely factual determination as to whether rule apply should not where there are should have settled with Mr. DeMarco for multiple the policy proceeds claimants for limits and the assessment of the aggregate with claims exceed reasonableness of its conduct should be limits—because in such a situa- jury; made a accordingly, Travelers tion the insurer does not the ability contends that the in hearing justice erred to prevent exposure per- of the insured’s granting summary judgment.40 sonal paying poli- assets—since the entire that, Travelers further from a contends cy limits to one claimant would leave the public policy perspective, insured without protection against affirming the oth- claim(s). that, er Travelers contends un- hearing justice’s decision could have “se- text, quoted language supra, 38. The is from Travelers' cussed we referred to "[t]he brief to this Court. reasonableness standard articulated Asermely progeny” and described it as note, curiae, 39. We as do the amici that this "necessarily flexible.” specifically Court has not stated whether Court, liability neg- a announces strict or a 40.In its brief to this Travelers notes Davis, ligence applied opinion standard when in a case in- that the Fifth Circuit’s 480, (which volving single hearing claimant who makes settle- F.2d at was cited limits, justice rescript opinion) ment offer within the we her held that it deciding jury need not reach that issue the case was "for the to decide whether the refus- However, primarily before us. we would observe al to in [the settle was insurer’s] opinion regard in our in Travelers Insurance Co. v. own interests and with too little for its Hindle, (R.I.2000), 748 A.2d dis- insured's interests.” that Travelers’ argues Mr. DeMarco policyholders, consequences vere” engage nego- settlement “failing to claimants, argues insurers. Travelers claim to forcing the DeMarco tiations an in- compelling rule “inflexible duty satisfy the insurer’s trial” did not policy limit to one of pay its surer to in- eliminating exposure as much of its to avoid lia- order] multiple [in claimants possible. personal sureds the policy in excess of bility for a that, if Travelers had Mr. DeMarco asserts (1) by policyholders limit” harm would *24 prior limits policy with him for the settled coverage insurance leaving them without trial, personal injury it “would to the (2) by requir- remaining claims and for the by minimizing their protected its insureds defending the cost of ing them to cover on the unre- potential exposure maximum because, in the other against claims— (the $450,000 to amount for solved claim” words, to “duty an insurer’s de- Travelers’ injured party, Woscy- the other Mr. which limit has been policy fend ends when the na, prior to the De- willing to settle rule, urges, would paid.” Such a trial). Instead, Mr. DeMarco con- Marco companies place to encourage insurance tends, to because Travelers failed settle one their interests and the interests of own trial, opted proceed him and to with parties third above interests more exposure “the of Travelers’ insureds bal- addition, Travelers of the insureds. In $450,000 approximately looned from would be argues injured that claimants $3,250,000 the verdict”—the lat- following an “inflexible rule” harmed because such representing ter amount the sum of the “an race to be unprincipled would create (with $2,800,000 verdict in- approximately with a present the first insurer terest) $450,000 added to the for which Mr. demand,” claim- policy leaving limit some Woscyna Accordingly, settled after trial. recovery undermining ants with no DeMarco Travelers’ failure to argues, Mr. by apportion policy pro- efforts insurers prior settle with him for the limits severity ceeds on the relative of the based its in a much placed to trial insureds worse injuries. claimants’ position than if the insureds had faced DeMarco, liability only respect Mr. direct part, argues his Woscyna claim. Mr. DeMarco further primary issue to be resolved this contends that Travelers made a conscious passing upon appeal Court in Travelers’ engage not to in settlement decision necessarily “is not the extent to which it took the negotiations position because [Asermely applies generally in cases ] Asermely apply would not in a multi- than injured party where more one is mak- proceeds claimant He then ple case. limit,” ing a claim but argue hearing justice appropriate- that the rather it “the extent to is which Travelers ly granted summary judgment on count is responsible significant judg- for a excess because, complaint one of his a mat- “[a]s ment its insured the narrow law, nature ter of conduct of this egregious context of the undisputed facts company cannot be deemed rea- insurance (Emphasis of this case.” in original.) Mr. sonable.” that, contrary DeMarco asserts to Travel- contention, ers’ hearing justice did Although argues Mr. DeMarco due consider the reasonableness of Travelers’ “egre- to what he characterizes as the conduct, case, he contends undis- facts of this this is not gious” Court puted Asermely facts established that Travelers act- required ap- to decide whether cases, unreasonably ed he plies multiple as matter of law under claimant also nothing that “there is contained Asermely. contends “overriding language Asermely of the concern” advanced specific suggest by requiring engage its insurers to affirma- which would decision” broad, tively negotiations. in settlement policy-based principles should multiple claimant con- applicable be approaching question appli of the acknowledges that text. Mr. DeMarco cability Asermely rule to this “clearly more multiple claimant cases are carefully we first have scrutinized the anal- cases, claimant complicated” single than yses opinions contained of certain multi- facing but he asserts that an insurer appellate other courts that have consid pro- “to ple required claimants should be duty ered an insurer’s to its insured where cautiously” than in the ceed even more multiple there are claimants whose claims single keeping claimant in mind context — aggregate exceed the limits. duty Skaling under II to In Peckham v. Casualty Continental In (1) engage timely meaningful settle- (1st Co., Cir.1990), surance 895 F.2d 830 *25 (2) (in negotiations41 ment and to eliminate the States Appeals United Court of for the words) plaintiffs “as much risk and excess duty First discussed an Circuit insurer’s exposure may possible to its insured as be when faced with what the court described Agreeing under the circumstances.” “thorny as the of an problem” “excess- in reasoning language the and contained Peckham, limits case.” 895 F.2d at 835. rescript hearing justice the decision of the The court noted that such cases are “com suggests in the instant Mr. DeMarco plicated logarithmically when multiple that an appropriate multiple standard exist, likely claims each to outstrip the claimant cases would be the set standard coverage.” Id. When “policy limits are forth the First in Peckham42— Circuit potential much lower than the insured’s ie., liability that an insurer’s for failure to observed, the exposure,” court “the insurer should, hearing settle in the words of the first, put cannot its own interests but must justice, professional “turn on its exercise of negotiate liability as it would if its limits good making judg- skill and faith in (citing were unbounded.” Id. at 834 Mu * * ment call Bonding rach v. Massachusetts and In Co., 184, response In to Travelers’ contention that surance 339 Mass. 158 N.E.2d (1959)).43 338, applying multiple rule to First Circuit negative public explained duty claimant cases would have Peckham that “the nego to policy consequences, asserts tiate in plaintiff good require faith would the carri * * * that this an “overriding state has concern” er to treat the claim as if [the promoting in favor of the settlement of were carrier] alone liable for entire (2) amount,” that, litigation controversies in lieu of and and it further noted “in 338, (1959), Skaling favorably 41. It will be recalled that v. Aetna a case that is cited Co., (R.I.2002) Peckham, Insurance 799 A.2d Supreme the First Circuit in II), (Skaling emphasized that an insurer has Judicial Court of Massachusetts stated duty engage timely "an and although affirmative the settlement of claims is within an * * meaningful negotiations settlement discretion, mitigate danger insurer’s “[t]o added.) (Emphasis that the insurer will favor its own inter- insured's[,] good est to the exclusion of the noteworthy parties 42. It is that both to this requires faith it make decision Peckham, appeal explicitly cite 895 F.2d (whether to settle claim within the limits of arguments. support respective their case) try or to as it would noif applicable limit were to the claim.” Bonding In Murach v. Massachusetts Co., added.) (Emphasis Insurance 339 Mass. 158 N.E.2d circumstances, necessarily conflict with the insurer limits does such straitened He hopes the interest of the insured. conflicting of its inform the insured must compro- used to see the insurance fund interests, rights, him of his advise potential liability of his mise as much of settlement offers keep him abreast course, (internal if the fund is need- possible. Of developments.” Id. meaningful omitted). claim, one when it lessly exhausted on language quotation marks well, the in- might cancel out others as the First Circuit Peck- helpful clarity, company’s sured suffers from the readi- ham on to state: went put point ness to settle. To another right and the “The insurer has both conceded, way, plain- even if be judg- professional duty to exercise usually they settle for less than tiffs will settle, settling, refusing ment trial, recover after if ultimately would so mindful claims—but must do such * attorney’s fees. only to save time best and in of the insured’s interests * * proceeds But where the insurance goal The insurer’s should be good faith. totality with the slight compared are so effect settlement of all or some try any chance of preclude of claims as to multiple claims so as to relieve its of the settlement, comprehensive the insurer’s potential of so much of his liabil- insured upon profits such a settlement insistence reasonably considering ity possible, as is nothing. He would do bet- insured long limits. So paucity *26 leverage ter to have the of his insurance faith, good it acts in the insurer is not money applied to at least some of the per- of omniscience or held to standards claims, reducing to the end of his ulti- use, fection; leeway it has to and should Davis, 412 mate debt.” F.2d consistently employ, its honest business at 480-81. carrier, fíne, in judgment. The will not (inter- prophesy.” to Id. at be held Fifth in went on to Circuit Davis quotation nal citation and marks omit- to achieve a prorat- conclude “efforts ted). ed, may comprehensive settlement excuse an insurer’s reluctance to settle with less just-quoted In the support of statement claimants, than all of the but need not do concerning “right” “duty” the insurer’s and Stating “ques- so.” Id. at 481. that this context, multiple in the claimant the First decide,” jury tion is for the the court in Judge Circuit cited to John Minor Wis- then out the which the Davis set factors opinion dom’s for the States United Court jury should be instructed to consider in a in Appeals Liberty the Fifth Circuit multiple claimant case: Davis, Mutual Insurance v. 412 F.2d Co. (5th Cir.1969). Davis, In the Fifth “Here, in the bearing mind existence of upheld

Circuit the trial court’s determina- multiple expo- claims and the insured’s tion that an in faith insurer had acted bad heavy damages, sure to did the insurer where it failed to settle with one claimant good managing pro- act in faith in policy for the insured’s limits due reasonably in ceeds a manner calculated multiple fact that it was faced with claim- protect by minimizing the insured his expected ants whose claims were to exceed cases, liability? many total efforts to policy limits. The Fifth Circuit ob- agreement, achieve an overall even served: though entailing a refusal to settle im- involved, mediately or more will parties,

“When several claimants are with one evident, rejection duty. a accord with the insurer’s In other cases, of the whole fund to cancel single compromise policy offer to within use in to will act the best interests of their in- single claim will best serve out liability.” sureds; Id. recognition minimize defendant’s the need for a of such in obligations multiple is as acute persuaded principles areWe single claimant situation as it is in the undergird Asermely our decisions in However, recognize claimant situation. we in involv- Skating apply II also cases that, unlike in possible single what was policy claims for insurance ing multiple Asermely, claimant situation at issue in in proceeds, aggregate which claims multiple always claimant case it will not exceed the limits. We are further insurer, possible by exhausting that the flexible set be for an persuaded standards limits, the First in Peckham and forth Circuit guarantee that its in- the Fifth Davis constitute the Circuit not face direct liability sured will to —due jurisprudentially most sensible and sound may the fact that other claims still be complex in- way approach issues outstanding. in multiple volved claimant cases where may It is clear that an insurer have to proceeds are decid- the available insurance engage in a much more complex assess- Today explicate finite. we further edly ment of whether how to settle claims obligations insurer’s under the rule an- duty in order to meet its protect as to nounced so address insured’s best interests the face of mul- complicated set of considerations with claims, tiple aggregate of which ex- grapple deciding

which an insurer must However, ceeds the limits. it is also particular whether and how to settle complexities clear that such do not relieve multiple claims in a claimant case. At the an insurer of duty its “affirmative to en- time, we would that to- emphasize same timely gage meaningful settlement day’s holding way in no lessens an insur- negotiations”44 spite sometimes fiduciary obligation to act in er’s the best *27 Sisyphean challenge that reaching global of its insured a refraining interests taking steps greater policy that “demonstrate settlement within the limits repre- monetary concern for the insurer’s interest undoubtedly sents. There will be some than the financial risk attendant instances where an insured still face will situation,” Asermely, insured’s 728 A.2d at liability direct in even the face of the fact (internal omitted); quotation 464 marks that the insurer acted in the insured’s best holding any way nor does this lessen in an interests; situation, even in a such howev- insurer’s in duty engage to er, the critical issue to be determined is “affirmative timely meaningful negotia- settlement or not the everything whether insurer did tions and to make and consider offers of reasonably could to minimize the amount settlement consistent with an fi- insurer’s liability. of that direct duciary duty to protect its insured from II, liability.” Skaling

excess 799 at A.2d that, We hold when an insurer is added). (emphasis 1005 multiple faced with claimants with claims aggregate exceed the Because insurers have a weighty such limits, fiduciary duty the insurer has a fiduciary duty respect to settlement engage timely meaningful settle negotiations litigation and the in- cases insureds, negotiations in purposeful attempt ment volving helpful their it is to focus many obligations multiple bring on an insurer’s in the about settlement of as claimant possible, context to ensure that insurers claims as is such that the insurer II, Skaling 44. 799 A.2d at 1005.

614 claimant; willingness and the relative much lar its insured of as thereby relieve will to settle. the various claimants liability as potential of the insured’s limits given reasonably possible case, it must be deter In the instant See surrounding circumstances. and the whether Travelers mined a fact-finder Davis, 835; Peckham, 412 at 895 F.2d timely and mean duty engage met its II, 480-81; at Skaling 799 A.2d F.2d at with the negotiations ingful settlement duty, the insurer meeting this of as to relieve its insureds goal being if there were no negotiate must liability as was potential much of their if the to the claims and as applicable limits The determination of reasonably possible. liable for the entire insurer alone would be insurer’s action the reasonableness of an judgment. excess See amount normally be a claimant cases will multiple Murach, 834; Peckham, 895 F.2d at 158 to decide. See question for a fact-finder Davis, at 341. The insurer must exercise that it (stating N.E.2d 412 F.2d at 480 was refusal professional judgment throughout jury its best decide whether the “for always keeping primarily insurer’s] in mind the process, [the settle regard too little own interests and with best interests of its insured and the neces interests”); Southern Gener the insured’s sity minimizing possible its insured’s Holt, v. 262 Ga. al Insurance Co. liability. eventual As with the direct that, (noting in de S.E.2d applied rule when it is for failure termining insurer’s situation, in single claimant order to show claim, must jury generally to settle a “[t]he fiduciary that an insurer has violated its insurer, in view of the decide whether the duty in a claimant the in multiple circumstances, existing has accorded the (or party rights sured of the to whom the same faithful consideration it insured assigned) insured have been need not dem interest”) (internal gives quotation its own onstrate that the insurer acted in bad faith omitted); King marks see also R.E. v. only but that the insurer did not act rea (5th Inc., Aviation, F.2d Avtech sonably its insured’s best interests Cir.1981) material (stating although in light surrounding circumstances. requiring “the undisputed, facts are a case 464; Asermely, See 728 A.2d at see also determination of the reasonableness of the II, Skaling 799 A.2d at 1005-06. parties acts and conduct of the under all *28 determining whether insurer has the facts and circumstances of the case case, duty met its it multiple claimant ordinarily disposed by cannot be necessary will be in a engage compre- (internal summary judgment”) quotation analysis, hensive factual ac- taking into omitted); Regions marks v. Fi Shaffer all surrounding count of the circumstances (Ala.2009) 872, Corp., nancial 29 So.3d 882 in the particular case. Such circumstances (“Ordinarily, question of reasonable [t]he include, would inter alia: the number of by the ness is one of fact to be resolved claimants; (internal the relative extent of the dam- fact.”) quotation trier of marks claimant; ages by Inc., suffered each the time omitted); 970 Botelho v. Caster’s cf. (R.I.2009) damages 541, at which the extent of those (agreeing with A.2d 546-47 insurer; made known to the the amounts “there justice’s the trial assessment demands; of the claimants’ settlement significant were factual issues still to be insured; timing jury, concerning wishes of the and na- which determined ture of the at attempts negotiat- persons might insurer’s reasonable reach dif issues conclusions”); Gliottone, settlement; ing a 870 A.2d at perceived fering likelihood widely “it been rec- (noting has litigation being by particu- commenced are ordi- contains facts on which a fact-finder could negligencé that issues of ognized summary adjudi- reasonably conclude that Travelers acted narily susceptible of cation, be resolved trial and in its insureds’ best interests under but should manner”) (internal ordinary quotation explicated Asermely standard —and it omitted); DeNardo v. Fairmount is likewise clear that there are facts on the marks Cranston, Inc., 121 R.I. Foundries basis of which a fact-finder could reach the (R.I.1979) (“In opposite A.2d conclusion.45 general neg- Rhode Island the rule is that respect to the instant it is With for question jury is a for the unless the ligence a fact-finder to determine the reasonable- conclusion.”). only warrant one facts light ness of Travelers’ actions in of the below, For the reasons set forth it is our surrounding including circumstances— opinion that the issue of whether Travelers important presence factor of the of multi- duty Asermely met its under the case at ple claimants. We therefore hold that properly bar was not one that could summary judgment should not have been summary judgment. one, been resolved on granted respect with to count and we remand this case to the trial court for Proceedings 2. Remand for Further proceedings further consistent with the ex- In view of the fact that we have plications opinion. set forth in this We today explicated parameters opportunity also take this to observe that Asermely applied rule as it is to be appropriate most for the seems issue of the com multiple claimant cases where Travelers’ for the excess judgment limits, it bined claims exceed the is under the modified standard necessary grant for us to vacate the claim, along be tried with the bad faith summary judgment plaintiff with re which is set forth in count four of plain- spect complaint to count one of his original complaint plaintiff tiffs and which findings for further of fact so that remand partial did not address his motion for Trav it can be determined whether or not summary judgment. duty

elers met its to its insureds. We also genuine note that the record reveals that B regarding issues of material fact exist Rejected Applicability of the to ef parties respect actions of Settlement Offer Mr. DeMarco forts to settle claims of Statute Woscyna years leading up and Mr. entry judgment against appeal Travel contends on Travelers also (the § personal injury “rejected ers’ insureds in the case. 27-7-2.2 settlement statute”)46 existing inapplicable It is clear to us that the record offer case *29 among It should be noted that the factual “In civil action in which the defendant issues that must be addressed on remand is by liability is covered insurance and in dispute the as to whether or not the insureds plaintiff which the makes a written offer to willing paid policy were to have the limits the insurer to settle the action defendant’s plaintiff. equal in an amount than less the coverage liability policy limits on the § 46. General Laws 1956 27-7-2.2 has been accrues, at the the force time action and the aptly by "rejected described this Court as the insurer, rejected by offer is the defendant’s Skating settlement offer statute.” v. Aetna then the defendant’s insurer shall be liable Co., 282, (R.I.1999) Insurance 742 A.2d 290 judgment all interest due on the entered for I). (iSkating payment if the of the court even the provides Section 27-7-2.2 as follows: a sought Mr. DeMarco declaration claimants and insuffi- involving multiple (1) prejudgment for the was liable limits. Travelers asserts Travelers policy cient interest that had ac- pre- postjudgment § 27-7-2.2 is to purpose judgment personal crued on the the its own finan- placing an insurer from vent granting In her decision injury insured action. ahead of those cial interests summary as to this judgment for all motion for liability on an insurer by imposing count, hearing justice ruled that on a entered interest due § unam- terms of 27-7-2.2 are clear and if the insurer chose not its insured concluded, biguous. Having so the hear- limits policy claim within to settle the ing justice on to rule that the statute went trial, though the insured had even before clearly applied to Mr. DeMarco’s case in accept such a set- indicated that it would that, undisputed fact view of the tlement; for the rationale justice, hearing words of the “Travelers under liability on insurer imposing accept did not DeMarco’s written offers to a settlement offer rejecting § 27-7-2.2 for equal settle the action in an amount in the context of a case only makes sense policy Travelers’ limit.” single making a claimant in which there is policy within the lim- a settlement demand questions This Court reviews situation, argues, In Travelers its. such statutory de novo. In re interpretation entirely power it is within insurer’s Brown, 147, (R.I.2006); 903 A.2d 149 see prevent facing its insured from direct lia- Germane, 555, v. 971 A.2d 573 also State (in a trial in a bility the event that results (R.I.2009). In approach our to that inter its insured in excess judgment against task, pretive we have said that “our ulti limits) by simply settling policy with goal give mate is to effect to the General prior By to trial. con- single claimant Assembly’s intent.” v. Martone Johnston trast, argues that what it char- (R.I. Committee, 426, School 824 A.2d 431 liability imposed by acterizes as the “strict 2003). have further We stated “[t]he § 27-7-2.2” apply multiple should plain statutory language is the best indica claimant cases where claims Santos, legislative tor of intent.” State v. aggregate policy exceed the limits—since (R.I.2005); 870 A.2d see also in such a an insurer would not be situation Martone, 824 A.2d at 431. And we have able to eliminate the risk of its insured “a unambiguous indicated that clear and facing exposure beyond limits literally statute will be construed.” Mar accepting a settlement offer within the lim- tone, 431; Santos, at 824 A.2d see also Rather, its. Travelers contends even Accordingly, A.2d at 1032. “when the lan if accepted the insurer settlement offer guage unambigu of a statute is clear and liability for the limits to avoid under ous, interpret this Court must the statute 27-7-2.2, § the insured would still face literally give and must words direct the amount of the other ordinary plain meanings.” statute their claim(s) limits, in excess of the due to the (R.I. DiCicco, State v. 707 A.2d fact that the claims exceeded the multiple 1998) (internal omitted); quotation marks amount of the limits. Germane, 574; 971 A.2d at see also Cham (R.I. Ormiston, summary his motion for bers v. 935 A.2d 2007). respect to count two of his complaint,

judgment rejected in ex- been if the insurer does not re- and interest totals sum writing thirty policy coverage spond period cess of in within a of limitation. This (30) days." presumed written offer shall be applied described the the case at bar and are to be on previously This Court has being § 27-7-2.2 as “neither remand to the extent that Travelers is language of Skaling v. Aet found liable. complex ambiguous.” nor (R.I. Co., A.2d

na Insurance C 1999) I). Although we have con (Skaling Travelers’ ar sidered above-summarized Effect of the and the Release carefully, persuaded we remain guments Judgment Satisfied offer rejected that the settlement statute Order unambiguous requires is indeed next Byzan- We turn to the somewhat postjudgment inter prejudgment both by tine issues that are implicated Travel- est be assessed in the instant case. See that, appeal regardless ers’ contention on I, Skaling 742 A.2d at 291. The clear and the applicability Asermely and the § language of 27-7-2.2 in straightforward rejected settlement offer statute multi- applies “any dicates that it civil action cases, ple claimant in the instant any case plaintiff in which the makes a writ claims that Mr. might DeMarco have had to set ten offer to defendant’s insurer (1) extinguished were when he in an equal tle the action amount to or less releasing executed a document its insureds coverage than the limits” and said offer is liability exchange assign- for an (Em rejected by the defendant’s insurer. Travelers; rights against ment of their added.) circumstances, phasis such justice when the trial and/or statute on defendant’s in imposes personal injury action an entered order “all judgment surer for interest due on the stating judgment that the that case had by payment entered the court even if the been “satisfied.” judgment and interest totals a sum policy coverage in excess of the limitation.” 1. The Release Id. argues hearing

Thus, in spite justice of the fact that this case granting erred not its cross- multiple summary at one time involved claimants motion for that was appeared predicated whose combined claims to exceed on the fact that Travelers was limits, the policy reality the inexorable able to eliminate “all liability” faced its that we are now confronted with a civil insureds for the amount of the involving only action plaintiff, Wayne one awarded to Mr. DeMarco in excess of the DeMarco,47whose written offer to settle in limits. Travelers asserts that equal coverage “rejection amount limits was of the DeMarcos’ demand for rejected insurer. Since we are not the million limit not harm” its did $1 (as multiple plaintiffs now confronted with insureds because Travelers “obtained re multiple contrasted with claimants making Virginia leases for Doire and Trans [Mr.] policy proceeds), portation demands for we need not from the two claimants ex (vel limit;” reach applicability change payment the issue of the for its of the policy non) that, result, §of points 27-7-2.2 such a case. We Travelers out as a simply provisions hold that the of the re- pay insureds did have to make jected encompass settlement offer statute ments to the from their own claimants DeMarco, wife, purpose ruling 47. We note for the Mr. DeMarco’s Leesa and his upon applicability § 27-7-2.2 in this personal injury minor children in the action being we view Mr. DeMarco as "the are derivative claims for consortium. loss of plaintiff" to the fact that the claims of —due *31 a not tion between a release and covenant argues Travelers that Accordingly, funds. judgment action a in a context such rights or causes of to execute on any possible one, argues and un- that present under as the Travelers (including claims statute) (1) release settlement offer should enforce the executed rejected der the we might against “according plain have had its by that insureds Mr. DeMarco its rejection of Mr. re- thereby their insurer due to hold that the terms” and demands ceased to DeMarco’s settlement liabili- fully extinguished lease its insureds’ from the insureds were released against exist once them ty for the entered Wosey- and Mr. liability by Mr. DeMarco personal injury DeMarco action since, contends, signing Travelers they longer any rights no had or such that na— of that releases meant as of those respect Travelers with against claims instant, longer the insureds no suffered assign to they that could any harm that could form the basis of a that en- plaintiff. Travelers also asserts against claim the insurer. Travelers es- of the release would forcing the terms sentially that what it describes as argues because, in Travelers’ injustice work no “purported assignment” its insureds’ of view, compulsion “under no plaintiff was rights assigned to Mr. DeMarco in fact Virginia Trans- provide Doire and [Mr.] and, him in Travel- nothing at because release, general op- portation with all— possessed rights ers’ view Mr. DeMarco no agreement not to posed to a covenant against formerly it independent of those judgment.” Travelers con- execute on the insureds, held his claims should general of a release tends “choice therefore have been dismissed. arm’s-length negoti- product was the insureds, ation” and the plaintiff between specifically, points

More independently represented by each coun- “general fact that Mr. DeMarco executed sel; Travelers further contends that opposed release” of the insureds as to “a language “clear of the General Release promise upon covenant or not to execute * * DeMarcos’ counsel reflects drafted the judgment against them Trav- they the DeMarcos received what jurisdic- elers that a number of submits bargained for.” tions outside Rhode Island have deter- mined that a and a covenant not release argues Mr. response, DeMarco legal execute have different effects. Gen- fact, not, Travelers did obtain a release erally, jurisdictions such have held that a exchange pay- “in for” the its insureds general fully discharges release an insured policy proceeds ment of to Mr. DeMarco. contrast, liability; by a covenant not Rather, “Trav- Mr. DeMarco contends that to execute on a judgment does dis- elers had no involvement whatsoever charge underlying liability, the insured’s release, procuring general which was and the therefore rights insured retains part parcel larger of a settlement may properly insurer be agreement assign- that also included an assigned.48 rights ment of the insureds’ and claims legal malprac- Although this Court has never ad- Travelers and dressed the whether in tice claim to DeMarco.” Mr. DeMarco issue of this state between Trav- meaningful legal there should be a distinc- asserts that the settlement 202, 1051, See, e.g., County, 220 Ariz. 204 P.3d McLellan v. Atchison Insurance Store, Inc., (2008); Package Agency, Tip's Inc. v. Commer 81 Hawai'i 912 P.2d Inc., (1996); Tumbling-T Managers, 563-64 see also A cial Insurance S.W.3d Maricopa (Tenn.Ct.App.2002). Ranches v. Flood District Control *32 him reached irre- Marco eliminated event of default insureds and “was elers’ gratuitous partial judgment Travelers’ caused the excess itself of spective * * $550,000 *.” Mr. DeMarco further poli- him of from the contends payment” him he further asserts that he release was the cy proceeds; executed (Mr. in solely “sole reason” that Travelers’ insureds have released insureds would rights Virginia Transportation) Doire and “were exchange assignment for an from certain corporate personal Travelers. Mr. DeMarco also saved to the November 2006 financial ruin.” Mr. DeMarco states that prior *33 extinguished. were Id. at 1343. situation in which his claim typical more from the (in upheld assignment, stating the alleged to We rights of be assignment an words that we consider to considera- “general release” of spite in effective bar) at that “[i]n ble relevance to the case liability. an insured examining agreement, such an we shall case-specific the factors Bearing in mind rather than to look to substance form.” previous para- in the are summarized added). The (emphasis Id. at 1345 Court analyze next the proceed we graph, follows: reasoned as release and as- effect of the legal actual ought not to be ren- agreements “Such conducting In this documents. signment by simplistic impeded dered void or guidance seek from our analysis, we shall assign- maxim that the common-law well as that of other case law as own were un- personal-injury ments of claims jurisdictions. simply enforceable. We cannot upheld being general has This Court salutary applied allow a rule to be in a rights in a assignment an ly permissible in meaning context which it has no which the similar to that instant situation thereby an device appropriate obstruct In Mello v. Insur presents. case General payment for the of a claim an insur- (R.I. America, 525 A.2d 1304 ance Co. of an obligation ance carrier has to its (1) 1987), upheld assignment we an where liability him of insured to absolve with- against had entered an insured judgment depriving right pur- out itself of the in of the limits and excess against sue action another insurance in assigned against its claim insured wholly carrier that it considers to be for bad faith failure settle surer partly liable for the loss.” Id. agreement by injured exchange for an The this reasoning Court Mello found levy against not to execution plaintiff the Etheridge opinion applicable to the Notably, Id. at 1305-06. in Mel- insured. it, holding situation before that an insured reasoning found in lo we drew on this assign injured could to an claimant a bad opinion Etheridge earlier v. At Court’s against faith claim the insurer “for the Co., lantic Mutual Insurance 480 A.2d purpose recovering limited the differ- (R.I.1984), 1341 which involved insureds ence between the received policies provided by covered under two insurance-poli- the insured and the In that the in different insurers. Mello, cy limits.” 525 A.2d at 1306.50 into a sureds had entered structured set injured party tlement with the In the fact that agreement view of this Court has insurers, what, they assigned previously and one of the had to decide occasion they any, legal may to that insurer the claims that had if distinction there be be- The tween a against the second insurer. second release and covenant not to agree in a argued insurer settlement execute context such as the instant assign presents, points ment an unenforceable case Mr. DeMarco involved Wilson, injury claim personal Campione ment of a because case of v. 422 Mass. (1996), injured party “fully had been satisfied” N.E.2d decided rights Supreme and all that he had with Judicial of the respect Court Common- noteworthy plaintiff assignment It is whether the had made in been brought seminal case also her action a release or a consideration of covenant not pursuant assignment the insurer to an judgment. Asermely, to execute on the insureds, rights although from the A.2d at 462. opinion specify Court's in that case did not Massachusetts, plaintiffs The support appealed, of his due wealth of document that argument Supreme that the release course the Judicial Court issued nugatory did not render signed opinion vacating he assignment of claims. Cam- insureds’ remanding trial court and the case for upheld Judicial pione, Supreme Court proceedings. Supreme further Judi- assignment of excess *34 an insured’s split cial Court observed that there was “a party; claims to a third the Massachusetts authority in as to whether a tortfeasor who held that the as- specifically court further legal obligation has been released from the signment was not invalidated a release pay any right against allegedly has an in party the third favor of the executed negligent insurer which assigned could be Campione plain- insured. In the the injured party.” Campione, to an brought against tiffs had an action the at N.E.2d 662. The court went on to state wrongful insured for death and other “majority entry that the rule” was that of vehicle acci- resulting claims from a motor an judgment “coupled excess with a re- trial, par- dent. Id. at 660. Prior to the (or execute) a covenant lease not to in agreement ties reached a settlement insured, favor the of does not invalidate an (1) whereby judgment would enter for the accompanying assignment right of the plaintiffs assigned the insured to sue the insurer for negligence.” (par- Id. plaintiffs against the claims his his insur- language original). enthetical The ance for failure negligent brokers to obtain court then observed that the conflict adequate exchange insurance. Id. In for among jurisdictions various reflected “a claims, assignment plaintiffs the of the balancing of considerations” —in- agreed to seek satisfaction from the cluding the risk of collusion between the amount, they insured for the the injured party. insured and Id. It not- any also released the insured “from all ed other courts were concerned about arising underlying claims” out of the acci- opportunity for collusion where the death; expressly dent and the release was assigns rights injured insured agreeing conditioned on the insured’s exchange in party insulating for a release in cooperate plaintiffs pur- with the their liability prior the insured from to the en- brought suit of claims in connection try judgment against the insured with the Id. assignment. at 660-61. action, underlying fact due to the plaintiffs brought negligence The then under such circumstances the insured action against pur- insurance brokers liability would lose the incentive to contest suant the assignment rights, but the or the extent damages during subse- trial court plaintiffs’ neg- ordered that the quent negotiations or at trial. Id. ligence action should be dismissed because Supreme The Judicial Court Cam any tangible the insured “had not suffered pione proceeded then to examine the deci damages attributable to the defendants’ sion of the States and, Appeals United Court thus, alleged negligence, had no as- for the District of Columbia Circuit signable claim.” Campione, 661 N.E.2d at Gray v. Dealers Mutual Grain Insurance judge 661. The trial reasoned due to Co., (D.C.Cir.1989), noting 871 F.2d 1128 plaintiffs the fact that the had released the Gray rejected court had insured from at the time that risk judg- entered, deciding ment of collusion as a basis for whether insured was never liable assignment accompanied by for a release damages excess of limits accordingly Campione, had no claim that could be was effective. 661 N.E.2d at assigned. Gray, injured Id. party had * * (empha- Id. signment was effective injury action personal

brought added). Court Supreme a motor The Judicial in connection with sis the insured Gray, reasoning F.2d at 1129. stated that it considered vehicle accident. the case offered to settle could party and that injured Gray persuasive to be limits, in- but the rec- for the insured’s reason not to compelling “discern no to that respond did not company negligence surance assignment ognize to defend offer, any steps it take nor did Rather, the court in Cam- claims.” Id. brought by against the lawsuit the insured pione observed: AId. default injured party. agree- effect to appropriate give “It is entered insured eventually carefully ne- led to a ments which have $800,000 in ex- more than an amount settlement, and detailed gotiated Id. policy limits. of his insurance *35 cess voluntarily have as- plaintiffs which the Thereafter, assign “agreed to the insured any claims proving sumed the burden of company” insurance against claim the his against might that [the insured] “in the insured did so injured party; to the broker], in a situation the [insurance releasing exchange injured party] for [the liability for the [the insured’s] where any obligation pay the of [the insured] clear, reasonably primary the accident is injured then party The judgment.” full limits of its paid insurer has the compa- the insurance brought against suit policy, damages are substantial.” Id. In re- ny judgment for the amount. Id. at 663. company argued sponse, the insurance it was “reluctant to The court stated that indemnify the only duty was to that possibility” the of such a settle- foreclose that, the insured had insured and because whereby the insured was agreement ment liability, company’s the been released from given being per- “the benefit of free from also extin- liability to the insured was liability beyond sonal amounts its certain true, the guished. Gray Id. If this were exchange limits in for in- [the insurance observed, then it follow that court would cooperation assisting plain- in the sured’s] assigned to insured] [the “that which [the in- tiffs in their efforts to assert [the injured party] upon was worthless trans- against claims sured’s] [insurance fer.” Id. at 1132. Id. at 663. broker].” Judicial in Supreme The Court Cam opinion It is also our view that the noted that the pione specifically District of Appeals States of for the United Court Gray in had not been Columbia Circuit of v. Second Circuit in the case Pinto [ie., “particularly impressed with what it (2nd Co., Insurance 221 F.3d 394 Allstate Circuit] D.C. termed the ‘somewhat ’ * * * Cir.2000), analysis an that sets forth metaphysical contention deciding in particularly helpful issues legal against basis for the claim the insur upheld In that the court before us. er when the became disappeared insured rights given exchange in assignment an insulated from to a due release injured where an general for a release Campione, a covenant not to execute.” plaintiff received a excess (quoting Gray, 661 N.E.2d at 662 871 F.2d insured, 1132-33) added). against limits an who then (emphasis at The court right proceed against his assigned his then noted that Campione D.C. refusing insurer for bad faith to settle. Gray had Circuit determined assignment was made in Id. at 398. policy, assign “when the insurance ment, “general of a release” dis- and the release executed consideration personal liability the insured’s parties together, charging were considered the as- judgment. general injured plaintiff Id. release” from the plaintiff for the excess (2) (1) release the fact the release document argued The insurer that it “in unenforceable stated was consideration” of the the excess made therefore, that, assignment of the faith bad cause of action. against its insured and straightforward language, a bad Id. In the Sec- longer pursue the insured could no in Pinto following faith claim the insurer and so had ond Circuit made the key a injured plaintiff. aspect statement about of that case: rights assign no considering argument, at Id. “It defies common sense to believe that the Second first noted that an as- Circuit injured plaintiff] contemplated [the re- signment plain- of a bad faith claim to the ceiving as consideration for her release injury personal tiff a suit “is ordi- right [the insured] [the insured] nary pursuing mechanism such [a] longer that no existed.” Id. insurer,” although claim such The court further observed al- assignment “usually exchange though the parties “may not have chosen judg-

for a covenant not to execute on the intention,” the ideal form to execute their ment.” Id. ignored courts have the formal distinction The Second in Pinto next turned Circuit between a release covenant not to *36 of whether the “use of a question to the “in unjust sue order to avoid an result.” exe- release instead of a covenant not to noting Id. While that it was “conscious forbear) (or cute not to sue or to as consid- that more careful drafting would have assignment” eration for the rendered the avoided this using issue the more con- Pinto, judgment unenforceable. excess ventional form of consideration for the as- (parenthetical language 221 F.3d at 403 signment,” the court determined that the original). The court Pinto observed exchange general of a release for an as- that “a release like contract must be signment of a bad faith claim “operates to give construed to force and effect to the claim, preserve the bad faith as if the parties.” intention of Id. 404. In at parties had executed a covenant not to statement, support of the latter the Second sue,” accordingly upheld validity and it quoted approvingly from the Re- Circuit assignment rights injured of the (Second) 284, § statement cmt. Contracts plaintiff. Id. (1981),

c. which states: reasoning We deem the of the Supreme “The principal purpose obligee of the Judicial in Campione, Court the D.C. Cir- given if great weight it can be ascer- Gray, just-summarized cuit in and the rea- * * tained *. If a interpretation literal soning Second Circuit in Pinto to be of a writing purports to be a release highly persuasive with respect to the in- purpose, would frustrate that the writ- Pinto, stant case. As was the case in Mr. may a ing interpreted be as contract not DeMarco and the may insureds not have Pinto, to sue.” 221 F.3d at 404. when, chosen “the ideal form” in exchange that, assignment The Second determined for the rights, “general Circuit (rather it, parties pre- case before intended to release” document than a covenant serve the faith claim bad and allow the not to sue or execute on the document) injured plaintiff pursue contemporaneously claim as the was execut- However, assignee of the The court ed. reviewing insured. based after the relevant (viz., that conclusion on fact that the “general documents release” and document), language of the assignment assignment opinion recited that it is our being made consideration of a “[i]n release document should not be 624 Mr. agreement between assignment same settlement depriving as

construed pre the insureds. We have meaningfulness; judg- our DeMarco and document general ment, viously expressly the release document stated interpret to so rule, at the same certainly unjust lead to “an result” “instruments executed would time, cir- unusual factual and in the purpose the somewhat for the same under Pinto, See 221 this case. are cumstances of course of the same transaction are F.3d at 404. as one instrument and to be considered together.” Ro to be read and construed release is a contrac- note that a We first (R.I. Catanzaro, 91, A.2d 94 telli v. 686 of inter- and that the rules agreement tual (omission (internal 1996) original) quota applicable to contracts generally pretation omitted); tion marks see also Rhode Is writings purport applicable are also Depositors land Economic Protection Young v. be releases. See Warwick Martinelli, Ltd., 821 Corp. Coffey v. Center, Inc., Skating 973 A.2d Rollermagic (R.I.2003); 222, A.2d 226 Maderios v. Sa (R.I.2009) (“A 553, is a contrac- release vino, 839, (R.I.1980); 418 A.2d Old principles agreement, and the various tual Morin, Kentucky Distributing Corp. v. judicial govern the law of contracts (1929). 403, R.I. 146 A. Be controversy concerning the approach to a assignment the release and docu cause release.”); meaning particular of a see also contemporaneously ments were executed (Second) § Contracts Restatement 17, 2006, on November it is clear to us (1981); on cmt. c. 29 Williston Contracts those documents should be construed to (4th ed.2003). § 73:7 gether. narrowly rather than In the instant It is clear from an examination of the instrument,

focusing on the release we *37 the release language assignment of and parties shall look to the intention of the as documents in the case at bar that contemporaneously in the expressed two it contracting parties sought pos- to make executed written documents to determine Mr. DeMarco to pursue sible for claims whether the release document is be Travelers, against including claims under being in effect a covenant understood as for bad faith. DeMar- Mr. on not to sue. See Williston Contracts co, in separate paragraph his release (“Whether § a particular writing 73:8 at document, unequivocally stated: is to be construed as a release or as a by any covenant not to sue is determined General shall not in “This Release construed, intended, parties, by intention of the not way manifested be nor is it instrument.”); the form of the see also release Travelers and all Pinto, 221 at may against F.3d 404. As this Court claims that Releasors examining assignment any way arising stated in of Travelers from the rights Etheridge, Litigation any aspect at issue in in a context thereof. The specifically by such as this “we shall look to substance same are reserved Relea- added.) Etheridge, rather than to form.” (Emphasis See sors.” A.2d at 1345. though Even the document was entitled Release,” Mr.

Accordingly, determining the inten- “General DeMarco took care parties expressly tion of the in the carve out Travelers from the expressed document, Further, the release document. release we examine docu- reach of together assignment assignment ment with the docu- as was the case with the docu- ment, in the contemporane- which was executed ment at issue Pinto case Circuit, whereby ously part with the release and as of the Second the document us, Virginia Transportation of and Mr. It is evident to when we read these rights contemporaneously in the instant case executed documents as assigned Doire were whole, parts larger par- it two of a that the expressly states that was executed “in sought possible ties to make it for Mr. exe consideration the General Release * * pursue DeMarco to the assigned claims contemporaneously cuted herewith (a added.) against party Travelers he specifically (Emphasis Although the release excluded from the reach of the release by explic executed Mr. DeMarco does not document) against the retained attor- itly state that it made in consideration ney and his firm —because the insureds assignment, we do not consider that explicitly agreed part” “as a material omission to be Achilles’ heel—because assignment assist Mr. DeMarco mandatory we it to read the two consider pursuing Reading such claims. these con- contemporaneous together, documents temporaneously executed documents to- assignment clearly document states gether, we believe it is clear from their “in that was executed consideration of "51 * *. language and the care that Mr. DeMarco the General Release In view of attorneys preserve and his took to claims the fact that the release document was against Travelers that plaintiff would not contemporaneously executed with the as have released Travelers’ insureds if he did document, signment explicitly which does expressly part make it overall release, refer to the we are satisfied that transaction that he would be free pursue parties sought both to enable Mr. DeMar- the claims assigned to him pursue co to claims Pinto, (“It insurer.52 See 221 F.3d at 404 assignment. assignment means of the defies common sense to believe that [the document specifically provides Virgi injured plaintiff] contemplated receiving as nia Transportation agree and Mr. Doire consideration for her release of [the in- cooperate fully good “to faith as a mate right that no sured] [the insured] part Assignment” rial of this with Mr. existed.”). longer attorney DeMarco and his in their exercise of the assignment rights “any rights summary, opinion it is our against parties (Emphasis not released.” release document executed Mr. De- added.) Marco, conjunction when read with the *38 contrast, By 51. We note that also the release document sufficient consideration. states that it was made consideration of the specific request same letter included a for $550,000 payment by "and $500,000 Travelers for other pay policy pro- Travelers to ** good and valuable consideration Woscyna’s ceeds to settle Mr. claim. that, Further, although 52. We in the note November in its brief Travelers as- Virginia Transportation's corpo- letter from "purchased” that it in- serts releases for its rate counsel to after Travelers had Woscyna, sureds from Mr. DeMarco and Mr. against entered the insureds in the DeMarco having exchange” obtained the "in releases (which personal injury action letter is in the paying policy proceeds, for out the at oral record), corporate counsel informed Travelers argument before this Court counsel for Trav- appeared "willing that Mr. DeMarco to re- acknowledged elers that the insurer was not your insured[s] lease from the drafting involved in the release document exe- assignment consideration an of claims of by (although cuted Mr. DeMarco he stated your against (Empha- insured Travelers.” that reviewed after it Travelers the document added.) Significantly, sis the letter made no contrast, signed); by was counsel indicated request payment by mention of or for Travel- drafting that Travelers was involved with policy proceeds ers from the in order to ob- by Woscyna, release executed Mr. which ex- DeMarco; argu- tain such a release from Mr. plicitly liability. released Travelers from ably, assignment itself would have been Mr. DeMarco that led to ure to settle with assignment executed contemporaneously (as read), judgment against did not an enormous excess it should be document There is evidence Travelers’ insureds. right pursue DeMarco’s extinguish Mr. the conclusion that support that tends to assignee Travelers as an against claims Travelers’ insureds could only way Mr. Doire. Transportation and Virginia Mr. DeMarco further harm and that give effect to the avoid Accordingly, we shall release compensation could receive parties as evi- expressed intention liability viz., the letters the insureds from by the DeMarco release document denced — indepen- to Travelers from assignment doc- the record contemporaneous and the so, Virginia Doire and note of the dent counsel for Mr. doing we make ument. Mr. De- and counsel for Transportation factual circumstances that are particular First, Accordingly, Marco. it is our view that case. the release presented avoid Travelers should not now be able to assignment and the were executed con- having to deal with Mr. DeMarco’s suit explicit reference is temporaneously, by claiming that it ob- being damages “in consider- excess made to one document Next, Mr. DeMarco tained a release for its insureds —and ation” of the other. had no claims to clearly executed the release with the un- therefore insureds only pur- assign that he would be able to to Mr. DeMarco—when derstanding assign- an reason the were released from rights against sue Travelers as insureds insureds, Mr. liability they assigned and there is evidence was that ee of rights that he is now support very that tends to the conclusion that DeMarco the seeking Mr. would not have to assert Travelers. DeMarco released assign- if an insureds he had obtained Finally, pub- we would note from a rights. Finally, ment of their policy perspective, assignment lic by had been informed counsel for its in- rights in a case as this is “a valuable such sureds that Mr. DeMarco would release may means which the insured obtain specifically insureds from in protection from his insurance and which exchange assignment rights for an so party may compensation the third obtain * * pursue that he could claims Trav- Ashley, Bad Faith Stephen S. elers, Travelers admitted at oral argument Actions, § Liability Damages, 7:18 at document, to having reviewed the release (1997); Etheridge, 7-68 480 A.2d at cf. and there is no evidence that Travelers public (stating, respect poli- to a objected agreement.53 issue, cy company pays “a Further, liability, rather unusual factual loss and absolves the insured from except right proceed against circumstances of this it was the al- for the carrier, leged performed unreasonableness of Travelers’ fail- other has a function *39 suggests your against 53. The dissent our decision of the claims of insured Travel- "subjects that, carriers insurance to ambush ers.” The letter further states if Travel- subterfuge,” stating there is no evidence judgment pay ers did not the excess entered in the record that Travelers ever saw the against the insureds as a result of Travelers’ However, 7, assignment. the November 2006 claim, failure to have the DeMarco the settled Virginia Transportation's corpo- letter from "may insureds have no means of avoid- rate counsel to Travelers reveals that the in- ing chapter protection the need for 11 [other company surance aware that its insureds claims,” by] assignment than the of those considering assignment. were such an The would it states that the insureds have no appeared letter states that Mr. DeMarco choice but to resume discussions with Mr. "willing your to release insuredfs] from assignment. DeMarco about the judgment assignment in consideration of an

627 impedes public litigation plaintiffs’ the insured after rather than that furthers claims, underlying existence “[n]either circumstances of In the narrow policy”). insured], of claims nor their [the in- way in which the only value, therefore been established ha[d] and the third protected could be sured adversary proceedings.” tested per- in view of party compensated, full (emphasis 661 N.E.2d at 662 Campione, was for a bankruptcy, imminence of ceived added). Supreme The Judicial Court exchange release to be executed general Campione went on to state: do not “We assignment. for the that, prejudgment a ignore risk when accurately observes that The dissent settlement is release and combined have determined jurisdictions most which covenant not to execute in favor of the assign- obviates an general that a release tortfeasor, may between the collusion exist weighed pub- “have serious ment of claims injured party and the tortfeasor.” Id. at regarding po- lic considerations added). (emphasis 663 It was due to the collusion,” citing Campione and tential for fact to a parties agreed judg- had jurisdictions. from several other cases prior ment to trial that the court then felt However, in all of those we note factors, necessary it to look at other in- cases, addressing the courts were the risk accident, cluding “the seriousness of assignment of collusion where the and re- liability, of probabili- existence and the had en- place lease took before ty that a fact finder will find that damages tered the insured. any existing exceeded insurance cover- Supreme Judicial Court Cam- age,” to determine that the risk of collu- “split pione specifically noted sion in the it Id. The case before was low. authority” jurisdictions with among other similarly other cases cited the dissent respect to whether a tortfeasor who had involved a discussion of the risk of collu- any rights been released has that can be sion and the need to look to additional assigned injured party “reflect a determining factors in the level of such considerations,” balancing risk, all in agree- the context of settlement “primary noted that rationale” of prior entry judgment. ments reached Eighth courts such as the Circuit which Lawlor, See Red Giant Oil Co. v. not have an concluded that an insured did (Iowa 1995) (“Prejudg- N.W.2d assignable claim “is concern about the risk assignments ment the one herein re- —like protected an insured is collusion when turn for covenants not to execute are not * * * to exe- liability by agreement inherently collusive or fraudulent. prior entry cute ”—be- insurers have available to them [B]ecause cause, circumstances, such insured variety example, of defenses—for cover- “loses the incentive to contest his [or her] fraud, age, and collusion—we fail to see injured par- or the extent of the why legally it should make difference ty’s damages negotiations either in or at who sues the insurer —the insured or the Campione, trial.” 661 N.E.2d at 662 added); assignee.”) (emphasis insured’s (quoting Freeman v. Real Erectors, Shields, Schmidt Estate Stateline Steel Inc. v. (8th Insurance, Inc., & 285, 287, 288, 755 F.2d 150 N.H. 837 A.2d *40 Cir.1985) added)). (2003) The (emphasis Cam- (noting among policy that “chief’ pione agreement case itself involved an for jurisdictions considerations of other “is injured party judgment favor of the concern the risk of collusion when about * ** that, trial, liability the prior protected court observed an insured is judgment against entry judgment,” upholding because had not entered but before 628 in render- hearing justice the part employed assignment that was validity of

the 23, the 2008 September in which her decision of agreement ing of a settlement for a liability stipulated partial had motion for sum- granting plaintiffs insured court because the judgment substantial mary judgment. the risk of collusion that determined 23, September the just-referenced In the stipulated the fact due to low for ruling plaintiffs partial on motion likely reflected actu- in that case

judgment hearing in summary judgment, justice the Oleson, v. damages); Kobbeman al Travelers was liable for the dicated that (S.D.1998) 633, (holding 634-36 N.W.2d inju judgment underlying personal in the prior agreement reached a settlement judgment ry case “to the extent that re was not “intrinsi- entry judgment added.) (Emphasis mains that, fact inter due to the cally collusive” unsatisfied.” 3, underly in the January 2007 order alia, in that case were re- assignees court). ing personal injury pertinent case states damages their quired prove judgment is satisfied in full.”54 part: “Said view, type possibility In our appeal on It is Travelers’ contention juris- most other of collusion about which (when by September the decision did expressed simply have concern dictions plaintiffs summary judg on motion for judgment exist in this case because rendered), judgment in the ment was a full Mr. Doire was the result of underlying personal injury case had al proceeding, pre- rather than adversarial ready been deemed satisfied full for are judgment agreement. settlement We year over a and that therefore Travelers’ of col- consequently satisfied the risk exposure liability had been extin sufficiently low in the case at lusion was guished. validity of the as- upholding bar that public poli- contravene signment does not A review of sum meticulous Travelers’ cy. mary judgment arguments and the papers Judgment 2. The Satisfied Order hearing justice, advanced before the how ever, point reveals that at no in the sum contends appeal, On Travelers also mary judgment process did Travelers raise that Mr. DeMarco’s claims were extin (or the issue of the effect of even the guished by parties what the refer to as a of) satisfied order. existence “judgment satisfied order” that was en repeatedly has indicated that it This Court underlying personal injury tered in the commonly what adheres to called (see 29, supra). support case footnote ie., “raise or waive” we do not con contention, of this Travelers has endeav rule — appeal sider issues on which were not persuade ored to us of the existence of a properly presented during pro raised and linkage between the satisfied or January language ceedings Ryan der of 2007 and the court below.55 See v. January 55. It be observed that the raise or It will be recalled that should (1) waive rule is not some sort of artificial or "judgment order” was entered satisfied arbitrary Kafkaesque hurdle. It is instead an Virginia had after Mr. DeMarco released efficiency important guarantor of fairness and Transportation and Mr. Doire from judicial process. We are in accord Virginia Transportation after and Mr. following observation a distin- ("in release) Doire had consideration of” that guished regarding appellate court the federal assigned contemporaneously to him equivalent waive rule: of our raise or they might claims harsh, overly rule is not meant to be "[The] formalistic, (inter alios). litigators. punish or to careless

629 Providence, FLAHERTY, 941 Justice Bishop dissenting. Roman Catholic of (“Pursuant (R.I.2008) 174, 184-85 A.2d I respectfully most dissent rule, our well-established raise-or-waive holding this case for three reasons. arguments this Court will not address First, the signed by document Mr. DeMar- appeal presented raised on that were not release, general co was a and no amount of review.”); justice to the trial Pollard v. legerdemain by majority or word craft (R.I.2005) 429, Group, Acer 870 A.2d 432 can transform it into something is not. rule as “one (describing the raise waive Second, the execution of release De- principles”); of our most well-established Marco, absolving Virginia Mr. Doire and Brown, 1249, v. A.2d see also Resendes 966 Transportation57 from any liability, and all (R.I.2009); v. DeAngelis DeAngelis, case, effectively ended the no claim leaving (R.I.2007).56 1274, 1280 923 A.2d of Doire against assigned. Travelers to be Accordingly, due to the fact that the Third, the holding Court’s this case is issue of the effect of the satisfied contrary to well-defined principles pub- of below, it prop- order was not raised is not policy. lic erly appeal. expressly before us on We expressing any abstain from view as to the Is this a General Release? possible pro- effect of that order on future necessary A underpinning majori- to the ceedings this case after remand. ty’s reasoning is its conclusion that general signed by release DeMarco should IV not be considered to be a general release

Conclusion all, at but a document from which the opinion, For the reasons set forth in this understanding litigation of further flows. grant partial summary my we vacate the of opinion, holding turns our well- judgment as to Travelers’ liability pursu- jurisprudence settled on the interpretation ant to the principles Asermely, general, set forth of contracts in releases ruling but we affirm the with respect particular, my on its head. It is also opin- the applicability rejected subjects settlement ion that this decision insurance offer statute. papers We remand the carriers to ambush subterfuge, invites collusion, Superior this case to the Court for further and clouds the settlement of seri- proceedings opinion. consistent with this ous cases in the future.58 Rather, case, however, requirement parties may to the instant it is clear that only appeal raise on which respect issues have been defendant’s contentions with presented court maintains the [trial] satisfied order do not meet fairness, efficiency, integrity judi requirements "strict exception.” of that See Russell, system parties.” Boyers (R.I.2006). cial for all v. Texa State v. 890 A.2d Inc., Refining Marketing, co 848 F.2d (7th Cir.1988). Virginia 57. While company, Doire and his Transportation, both were insureds in this exception 56.A narrow to the “raise or waive” reader, for the ease of the I refer to recognized respect rule been has to a parties collectively those as Doire. exceedingly contentions, certain small class implicate rights. principle constitutional See Pol It is axiomatic that a central Group, legal system facilitating predictability. lard v. Acer 870 A.2d n. 10 our (R.I.2005) circumstances, ("[I]n very opinion today, majority limited In its weakens permitted arguments predictability by holding general this Court has concern that a (which ing rights presented parties basic constitutional to be release did intend to serve appeal.”). respect liability by party for the first time on With aas total release of one

630 judgment, can be execute on a majority ment not to striking to me that the

It is only assignment are an of effectively that there considers combined apparently impacted interests were whose an insurer. parties two claim a bad-faith Doire’s. This rather here; and DeMarco’s that case reveals An examination of important two view overlooks shortsighted from the case be factual differences stark First, problem the initial factors. plaintiff-dece the Campione, fore us. In that Doire had insuffi- by the fact caused defendant’s truck was killed dent protect him from serious coverage to cient had broken down after his own vehicle claims, and, second, paid highway. lane of a Cam the breakdown $550,000 a re- and received approximately Campione’s at 659-60. pione, 661 N.E.2d De- liability to DeMarco. of Doire’s lease wrongful death suit brought estate a “gratu- was a assertion this Marco’s Gravel, Inc., Sand and against O’Donnell or that he would have payment, itous” substantially in excess of judgment, a and being paid the documents without signed coverage, was en O’Donnell’s insurance dollars, rings million hollow. over one-half docu Id. at 660. In a series of tered. to read the re- majority purports ments, judg for including agreement documents to- assignment lease and the releases, ment, assignments, conditional the intent and reach gether to discern as agreements, and settlement O’Donnell objective of DeMarco perceived overall rights estate all its signed Campione’s conclusion, To reach its how- and Doire. negligence against an action for bring ever, majority must read each docu- they had not agents two insurance because overlook the fact that separately, ment coverage for adequate obtained insurance liability, of all release absolved Doire Id. at 660-61. trucking company. assignment full effect as if the give Moreover, there release did not exist. is A the actions trial court dismissed in the record that Travelers no evidence agents, Supreme but the Judi- assignment ever saw the document. Campione, cial Court reversed.59 so, doing at 659. In the court N.E.2d respectfully disagree I also with the ma- recognized that this was not a case Wilson, jority’s Campione reliance on v. (1996), which an insurer was accused of bad faith 661 N.E.2d as Mass. of as is the authority proposition for the even a after the settlement release, fact, general opposed agree- to an case here. Id. at 660-61. other), may ordering ability purports not be that which it is reflected in the of attor- In his article on Sir Edward Coke and neys predict be. and clients to the resolution of review, origins judicial Allen Dillard disputes." Boyer, Allen Dillard foreseeable Boyer noted: Authority, "Understanding, Will Sir " 'Certainty quietness is the mother of Origins Edward Cokeand the Elizabethan repose,’ wrote. On another occa- [Coke] Review, Judicial 39 B.C. L.Rev. he '[i]t sion noted is miserable bond- added) (1997) (emphasis (quoting Ed- Sir wandering age slavery when the law is Coke, (1607)). Reports ward Preface to 6 or uncertain.' certainty aspires "The to which Coke is doing, recognized In so the court specious legal not the certitude of the meta- policy considerations most courts balance Rather, physician. looks toward deciding premised type when suits on this observation that the definition economist’s maneuvering, especially light of the risk of commerce, necessary rights orderly is Public rationales in cases collusion. only clearly what can because defined be involving assignments or cove- and releases accurately meaningfully valued or ex- not to execute are discussed nants infra. changed. legal perspective, From the

631 carrier, clearly minority, its entire The Pinto case is in the paid which had out case, I underlying wrongful accept reasoning. death was and cannot its precip- in the action even a defendant not Our well-settled rules of contractual in by assignment Campione. to itated terpretation require that the intent of the Rather, independent it was the Id. at 661. parties by wording is best determined alleged negligent were to be agents who drafted, they of the documents that agreed they because had secured a with upon, Westinghouse and executed. See coverage for O’Donnell. Id. at inadequate Media, Inc., Broadcasting v. 122 Co. Dial 660, reasons, For 661-62. these Cam- 571, 10, 986, R.I. 581 n. 410 A.2d 991 n. 10 to the pione particularly is not relevant (1980) (“[T]he intent [the is Court] seek[s] case before us. may not some intent that undisclosed majority heavily The also relies on Pinto existed in the the contracting minds of Co., parties v. Allstate Insurance 221 F.3d 394 but is instead the intent (2nd Cir.2000). In expressed language an excess of the con tract.”) Associates, against was returned an insured Theroux (citing Bay verdict v. Inc., 746, (1975); stubbornly after the carrier refused to set- 114 R.I. 339 A.2d 266 personal-injury brought by Flanagan Kelly’s System tle a claim a v. Eng Newof land, Inc., 388, single claimant within the insured’s 109 R.I. 286 A.2d 249 (1972)). party Only The injured limit. Id. at 396-98. when the document is ab (and re- exchanged general and the insured surd on its face no one has raised that here) assignment argument ambiguous rely of the insured’s bad- do lease we give faith claim his carrier. Id. at 398. on extrinsic factors to context to the Gorman, parties’ intent.61 See Gorman v. carrier, deciding against In the Sec- (R.I.2005) (“Under 732, 883 A.2d 739 n. 11 way noted that the normal ond Circuit established contract principles, law when preserve such a claim was a covenant * * *, unambiguous there is an contract execute, general not to and not re- applied the terms of the contract are to be Pinto, However, lease. 221 F.3d at 403. written.”); Holyoke as Mallane v. Mutual observing highest that New York’s court Salem, 18, Insurance Co. in 658 A.2d 20 issue, had not addressed the the Second (R.I.1995); & Casualty Surety Aetna Co. predicted Circuit then the Court of (R.I.1993). Sullivan, v. 633 A.2d 686 Appeals proba- for the State of New York bly appropriate apply particular would hold that it was Those rules to releas- es; consistently give applied force and effect to the intent of this Court has even if their were dia- rules of construction to release docu- parties, intentions same metrically opposed they to what said in the ments as it to other forms of contrac- has agreements. Young settlement documents.60 Id. at 403-04. tual See v. Warwick dissenting any purpose.” The in that case said that ment survives the release for justice 60. surprised he that there was no New Id. appeared York law on what to him to be such majority's conclusion, question, working way obvious its to create in the as- majority served value conclusion has extracted from the record sever- Co., signment. correspondences (only Pinto v. Allstate Insurance 221 al some of which are J„ (2nd Cir.2000) (Jacobs, contemporaneous assignment F.3d dis- and re- lease), and, senting). Characterizing majority’s my opinion, hold- inappropriately ing “alchemy,” parties the dissent noted used them to deduce the intent of the authority any jurisdic- they assignment Court cited "no when executed re- judg- support its view that the excess lease. tion to Center, Inc., duty indemnify, by A.2d lawsuit. Skating Rollermagic (“A (R.I.2009) contrast, obligation release is a contrac- refers to the insurer’s principles the various its in pay damages awarded agreement, tual sured.”). govern judicial of contracts of the insurer are of the law The duties *44 controversy concerning the nature; however, a approach to this Court contractual release.”). particular of a meaning held, majority correctly af has and the that the insurer also is firms possible mo- attempting In to divine fiduciary duty a to refrain burdened with Doire and further of DeMarco and tives placing from its own interest ahead of that of the DeMarco construing language insured, good to endeavor in of together, the ma- assignment release and against faith to resolve claims its insured that is hostile reaches a conclusion jority policy coverage, within the limits of the respect- precedent. I to our well-settled in thereby avoiding uncovered risk to the majority’s with the conclu- fully disagree sured. v. Allstate Insurance is a case of form over sub- sion that this Co., (R.I.1999); 728 A.2d 464 Medical stance; the essence of the substance is release, Malpractice Underwriting language in clear Joint Associa which absolved any liability. all DeMarco tion Rhode Island v. Rhode Island In Doire from Fund, to com- dispute Insolvency not that he intended surers’ 703 A.2d does (R.I.1997). Doire from from pletely majority release 1102 As the has party nor does either judgment, reasoned, the excess adroitly that burden becomes any assigned when, that Doire claims he disagree more exponentially difficult as was might against have his insurer to DeMar- here, multiple the situation there are sub Instead, vexing problem that re- co. stantial claims that threaten to exhaust DeMarco, assignee an who mains is policy resources. See Peckham v. Conti Doire, merely stands in the shoes of has no Co., Casualty nental Insurance 895 F.2d against remaining pursue claim to Travel- (1st Cir.1990); Asermely, 728 A.2d at general ers because the release vitiated Although sympathetic that claim. I am to my departure What occasions from the implications the future plight, DeMarco’s here, however, majority’s reasoning is the construing general a release as some- claimants, fact that both DeMarco and Mr.

thing general other than a release are too insured, Doire, Woscyna, released the ignore. to significant Thus, any from and all claims. fulfilled its two duties under its contract of Assigned? What Was beyond It dispute insurance. is that Trav- against In the event that a claim is made DeMarco, duty stranger elers owed no a insured, the carrier must defend and contract; in making insurance indemnify any judgment the insured for carrier, against claim DeMarco against entered the insured to the extent must stand the shoes of Doire. Jeffrey of its limit. E. Thom See question There is as, no some cir- Appleman New Law on Insurance Li cumstances, (Lexis- properly may an insured as- Edition, brary § at 16-145 16.06[1] 2010) may that it sign against claims its (“Liability Nexis insurers are often carrier to another. Mello v. said to General principal have two contractual America, Insurance Co. 525 A.2d the duty duty duties: to defend and the (R.I.1987), this Court held that an indemnify. duty to defend re insured’s bad-faith claim her insur- obligation pay fers to the insurer’s But, a claimant. expense defending policyholder assigned in a er could be Mello, insurance-policy that in a case insured and the significant to note limits.” adop- Id. that was decided before this Court’s Asermely, forth in tion of the new rule set The situation confronting Court there had been no release insured’s dramatically Mello was different Mello, liability. 525 A.2d at 1305. In See present situation in this matter because in Mello, a the insurer had refused settle that case the claimant signed had not a claimant brought by single claim release, and, therefore, the insured still that was within the limit. Id. sum exposed to the claimant for a substan- jury When a returned a verdict judgment.62 tial excess Those facts are insured that exceeded the insured’s cover- simply present here. DeMarco has *45 simply the carrier the verdict age, satisfied any liability, released Doire from and all coverage to the extent of its and walked fully unconditionally, leaving and Doire al- personally the insured ex- away, leaving together “off the hook.”63 posed judgment. to the remainder of the agree many I with the that courts assigned rights Id. The insured then a permissi drawn distinction between the against judgment its own carrier to the assignment ble of those cases resolved creditor, brought who promptly suit a covenant not to execute on a judgment, A against hearing justice the carrier. Id. Mello, as was the case in general and a Superior granted summary of the Court release, See, e.g., as is the case here. Red insurer, reasoning to the Lawlor, 524, Giant Oil v. 528 Co. N.W.2d personal injury the bad-faith claim was a (Iowa 1995) (“[A] 529 covenant not to exe assigned. that could not be Id. contract, merely cute is a and not a appeal, On reversed and va- Court release, underlying such tort lia Mello, judgment. cated the 525 A.2d at bility remains and a breach of contract

1306. We held that “in certain limited action lies if the injured party seeks to right may circumstances insured’s be Thus, judgment. collect its the tortfeasor assigned. The facts of the at case bar ‘legally obligated’ is still injured constitute such limited circumstance.” Id. party, and the insurer still must make In deciding assignee, in favor of the good promise on its contractual to pay.”) Court further said: added); (emphasis Stateline Steel Erec

“We believe that within the tors, Shields, facts of this 332, Inc. v. 150 N.H. 837 assignment justified. case this 285, We (holding A.2d 290-91 that sum therefore hold may that an insured as- mary judgment favor of the insurer was sign against its bad-faith claim its insur- improper party because insured and third er to the insured claimant for the limited assignment accompanied by executed an a sue, purpose recovering release, of the difference be- covenant not to rather than a “[ujnlike release, tween the judgment against noting received a a cove- present any rights against 62. The claimant in Mello v. General Insurance future the re- America, (R.I. Co. 525 A.2d parties. leased 1987), agreed levy not to execution on the judgment against exchange the insured in majority 63. The Mello Court and the in this assignment the insured’s of his claim rely Etheridge case both on v. Atlantic Mutual A insurer. covenant not to execute is Co., (R.I.1984); Insurance 480 A.2d 1341 but notably general distinct from a release be in that there also was no release absolv- executing party relinquish cause does not ing the insured from further right his to execute on the but kind. merely enforcing refrains from it. On the hand, explicitly gives up other a releasor both claims of the tortfeasor’s relinquish right signment a does not not to sue nant action”) inherently was not col- agent an insurance claim, a extinguish cause or if the because it could be set aside omitted); lusive (internal Kobbe marks quotation collusion as a proved raised and (S.D. agent Oleson, 574 N.W.2d man v. Erectors, Inc., defense); Stateline Steel 1998) give whether to effect (considering assign- an (upholding 837 A.2d at 288-89 accompanied by not to execute a covenant by a covenant rights accompanied ment of concluding that “[t]he assignment the risk of part because not to sue looks to the lan pragmatic approach most Kobbeman, low); 574 N.W.2d collusion was covenant to find whether guage of the that a settlement be- (holding at 636-37 on a legally obligated tortfeasor remains and the insured injured party tween the Royal v. In (citing Lancaster judgment”) a covenant not to execute included America, 62, 726 302 Or. surance Co. of cause of action assignment insured’s (1986)).64 When, here, P.2d agents was not “intrinsi- against insurance in favor release has been executed general collusive”). cally insured, simply nothing left there are public policy Those considerations assigned. to be *46 pres- the facts particularly illuminated Policy Considerations Public Here, DeMarco had ob- ent in this case. judgment against a million majority in this tained $2.8 In its decision that Travel- question Doire. There is no squarely minority within the places itself ers was faced with the contractual obli- this jurisdictions of addressed gation pay policy, the remainder of its jurisdictions ad majority issue. The of $550,000, partial to DeMarco in satisfaction explicitly have decided dressing issue judgment. indisputable It is further implicitly general that a release extin done, that been and in the that had ab- liability thereby all and obviates guishes release, of a DeMarco was free to sence any of claims the insured to assignment whatever viable assignment obtain an of See, party. e.g., another Red Oil Giant may claim have had Travel- Doire Co., 529; 528 N.W.2d at Stateline Steel ers. Erectors, Inc., 290-91; 837 A.2d at Lan

caster, 372; Kobbeman, 726 P.2d at 574 very clear the record that It is arriving N.W.2d at 636. In at their deci DeMarco had an amicable rela- Doire and sions, jurisdictions have accident, most of those tionship both before and after weighed public policy serious consider general and that DeMarco executed a re- regarding potential ations for collus an accommodation to lease of as See, Co., e.g., ion.65 Red Giant Oil bankrupt- Doire so that Doire could avoid Indeed, at (determining cy. N.W.2d cove DeMarco’s memorandum of summary for judgment accompanying nant not to execute on entered law his motion following: exchange judgment tortfeasor as- noted Indeed, assign majority approved of the 64. The observes that these cases in- when it assignment volve instances in which the and Campione, Supreme Judicial ment (or covenant) prior release was executed acknowledged that courts balance Court most entry judgment underlying of case. deciding when considerations similar observation, While this an accurate I do not is specifically cited the low risk of suits evaporates think that the risk of collusion given the facts in that case. Cam collusion entered, simply has been because Wilson, pione v. 661 N.E.2d Mass. is, therefore, here. It occurred a distinction 658, 661 n. 10 (1996). without rational difference. accompanied by the execution assignments resolution with negotiated a “DeMarco release, general counsel that of a this Court’s decision corporate and its [Doire] all assignment linguistic gamesman- in this case invites exchange for an nominally between adverse but none- rights against ship [Doire’s] others, cooperating would execute a to a lawsuit. parties DeMarco theless Inevitably, it will make the in favor of so settlement [Doire] release having adequate bank- serious cases which insurance could avoid [Doire] file involved an issue much more difficult. ruptcy. coverage Travelers was not negotiations [Doire] between Conclusion DeMarco, nor was it ever released.” added.) (Emphases above, I For the reasons set forth would have vacated the favor of very type is the my opinion, In entry judg- DeMarco and ordered for distin- collusion that forms the basis in favor of ment Travelers. not to execute guishing between covenants liability. releases of disre- general forbidding APPENDIX public policy gard of sound

GENERAL RELEASE DEMARCO, DEMARCO, MEN, WE, LEESA KNOW ALL THAT WAYNE “Releasors"), m (collectively, the and CHAYCE BRAEDYN DEMARCO DEMARCO Fifty 00/100) $550,000.00 (Five Thousand consideration of sum of Hundred America, good and other paid by and for Company Dollars be Travelers Insurance of acknowledged, hereby consideration, do receipt adequacy valuable and which of remise, hereby release, quit-claim VIRGINIA and H. DOIRE and forever LEO unto said assigns COS?., a and successors their corporation, TRANSPORTATION Rhode Island action, debts, action, “Releasees"), any causes (collectively, the and all of of manners dues, demands, law said Releasees said equity claims both in which had, any have, may of Releasors ever now have for or reason or or means future thing presents beginning day or matter of the date these world to including, limitation, any arising subject damage all loss, out of the without or claim litigation brought by In the matter Providence Releasors Releasees County being Superior (the “Litigation”), Action Court No. 04-1171 Civil Litigation. verdict in. entered intended, construed, any way

This General Release shall not be nor is it America, Company Indemnity release Travelers Insurance Company, *48 Paul, Travelers any (collectively, St. Travelers Insurance of its Company, or affiliates “Travelers”) any any ftwn may and all claims that Releasors way Litigation arising specifically from the aspect reserved thereof. The same are by Releasors. A

APPENDIX be be made under and shall THIS GENERAL RELEASE shall deemed be governed laws of fhc State of by and enforced in accordance with construed Island, Rhode without reference to of law rules. conflict

STATE OF RHODB ISLAND COUNTY OF PROVIDENCE Providence, November, 2006, day personally on the appeared me 17* before In DeMarco, Wayne executing to me by person known and known me to be the foregoing Instrument, and he be his acknowledged him'pxecuted.to idstr^mj^t said See act and deed. WITNESS:

STATE OF RHODE ISLAND OF COUNTY PROVIDENCE Providence, November, 2006, day personally appeared on the 17"' before me DeMarco, executing foregoing Leesa to me person known and known me to bathe

instrument, bp acknowledged Ij^hbr act she said her free instrument ok^uted deed.

Assignment valuable,consideration, the General Release and in consideration of and good For herewith, hereby and are receipt adequacy of which contemporaneously executed undersigned, Doire, individually, Virginia Transportation Leo and acknowledged, corporation, (collectively, “Assignors”), do Island and of each them Rhode Corp., a DeMarco, DeMarco, Wayne Chayce Braedyn to Leesa DeMarco and assign hereby DeMarco, and (collectively, rights, all “Assignees”) of them title and each Virginia and to and and causes any of each of them and all claims Doire and interests have, may including any indemnity, rights both of either or them and all action of had, have, equitable, ever each of Travelers and they or now or which contractual Travelers, being Doire Virginia by and DeLuca firm provided to and Michael counsel Marusak, counsel”) Gidley, (“appointed any way the conduct LLP Sarli & related of handling subsequent to die Assignees, in the of the claims of the Travelers at all times of brought County litigation that resulted in vehicle accident Providence motor Virginia Wavne DeMarco et al vs. Leo R Doire and Court entitled Superior Transportation 04-1171(the Coro.. “litigation”) which Civil Action No. and manner and respective obligations to appointed discharged counsel Doire and their fraud, contract, including Virginia, but not breach of all limited to claims for ail breach of faith, good any and dealing, including frith duties of fair bad further but limited to claims, called, Assignment negligence. Asermelv so all shall malpractice This assign Virginia may claims operate Assignees also that the Doire and all agents against any insurance professionals. insurance agree Assignors cooperate fully good part as frith material Assignees assigned Assignment and their in efforts to these counsel exercise rights any rights parties as well as not released. Assignment pursuant governed by shall This be deemed to be made to and Island, enforced construed and with the laws of the without inaccordance State Rhode conflict reference to of law rules. WHEREOF, Assignors Assignment IN WITNESS has each of caused this November, duly be day executed 17th

(signatures page) on continued next B

APPENDIX *50 ISLAND RHODE STATE OF PROVIDENCE OF

COUNTY county providence da; said on J7th me before pvember, Doire, by party Leo me H.C. to be appeared own me personally ¡fed by foregoing he a< instrument and in itrument said him executing the his be free act and deed. executed Virginia WITNESS:' Transportation Corp. OF

STATE RHODE ISLAND OF COUNTY PROVIDENCE county November, In Providence day on the said 17th before me

personally appeared Doire, Leo Virginia H.C. President Transportation Corp., to me known and party known me be foregoing for and on instrument executjjjg-the ofVirginia behalf Transportation acknWáé&gedsaid Corp., he instrument him be executed to his tree act aiípthe in said Virginia deed capacity frebáct deed of Transportation Corp.. notes (at agreed which he and the insureds structured the settle- mediation time policy proceeds Woscyna “specifically to Mr. ment documents in order to pay him), preserve any Travelers had been informed and all claims” Trav- already “prevent that the insureds and he were elers and order to the excess judgment con- extrajudicial negotiations forcing Virginia [Transpor- settlement from to him into cerning assignment bankruptcy.” argues of claims He also tation] that, if any monetary assignment “without contribution” from of claims were to be Travelers. Mr. DeMarco contends that held to be invalid due to the existence of document, only paid reason Travelers him the the release he would be forced (the $550,000 pursue after litigation against amount that remained further the in- $450,000) settling Woscyna’s theory Mr. claim for sureds under the the settle- ment agreement was to exhaust the limits so that its failed for lack of consider- judgment ation. declaratory action federal ripe. court would be require This case does not us to ad- argues question further that draw- dress the hypothetical Mr. DeMarco as to what, contexts, ing general a distinction between a release in other factual might be not to in this case the differential effect general covenant execute of a release legal argu- opposed would be “to advance technical to a covenant not to sue or relative to the of documents execute on a ments form —because substance, spirit over the true and intent instant case it is clear that the release document, parties executing together those docu- when read with the * * virtually assignment ments *.” Mr. DeMarco asserts that simultaneous document, general rights neatly the execution of a release “was does not fit into necessary absolutely category, especially to facilitate the as- either in view of the signment Virginia [Transporta- surrounding and allow rather unusual circumstances * * to remain in He tion] business execution of those documents. The Virginia Transportation assignment notes that was not fact that the release and docu- judgment-proof contemporaneous- “a defendant with the lux- ments were executed ury allowing ly,49 the fact explicit excess there is lan- linger place guage indicating and remain under a cove- in the release document litigation being nant not to execute while this that Travelers was not released rather, pressed many years;” liability, on for more and the tending evidence he in order show argues, bankruptcy, to avoid insureds would not have Virginia Transportation satisfy assignment needed to been released but for the rights, lenders “that the with De- distinguish settlement all instant case explicit It will be recalled that there is consideration of the General Release executed * * language assignment stating contemporaneously (Empha- document herewith added.) assignment "in of claims was effected sis