*1 Wayne et al. DeMARCO
v.
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
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
“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
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,
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
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.
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,
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,
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
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,
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
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
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.”
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
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
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
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.
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
caster,
372; Kobbeman,
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