Steven Dulong v. Merrimack Mutual Fire Insurance Company d/b/a The Andover Companies.
No. 2020-173-Appeal.
Supreme Court of Rhode Island
April 12, 2022
(PC 17-1288)
O P I N I O N
Chief Justice Suttell, for the Court. The plaintiff, Steven Dulong, appeals from a Superior Court judgment in favor of the defendant, Merrimack Mutual Fire Insurance Company, doing business as The Andover Companies (Andover), following the denial of his request for declaratory judgment and grant of Andover‘s motion for summary judgment. On appeal, the plaintiff contends that the hearing justice erred by finding that an endorsement excluding household members other than those explicitly named, as well as entrustment of vehicles to non-named household members, from personal umbrella liability coverage was valid and binding at the time of an accident between a non-named household member and the plaintiff. Accordingly, the plaintiff asks this Court to reverse the hearing justice‘s entry of summary judgment and denial of declaratory judgment. For the reasons set forth herein, we affirm the judgment of the Superior Court.
Facts and Travel
We glean the underlying facts of this case from plaintiff‘s complaint, the submissions of the parties, and the transcript. On or about April 3, 2014, plaintiff and Chelsea Galli were involved in an accident.1 On the date of the accident, Chelsea was driving a vehicle that was registered to her mother, Perrin Galli, while plaintiff was operating a motorcycle. The plaintiff claims that, as a result of the accident, he suffered property damage and extreme bodily injury, which ultimately led to the amputation of his left leg.
According to plaintiff, after the accident occurred, he asserted claims against Travelers Insurance, the Gallis’ primary motor vehicle insurer, and was offered the full policy limits for both bodily injury and property damage. However, plaintiff contends that the Travelers Insurance coverage was insufficient to fully compensate him for his damages. Therefore, plaintiff made an additional claim against both Chelsea and Perrin through an Andover policy that plaintiff asserts provided coverage to the entire Galli family. Andover denied the claim.
Joseph Galli, the named insured, maintained a homeowner‘s policy with Andover that ran from November 2013 to November 2014 (the 2013 policy), and
On October 22, 2012, before the 2012 policy became effective, Joseph executed the RIE. Andover contends that, because of Chelsea‘s driving record, it required the RIE as a condition precedent to issuing an umbrella liability endorsement in the 2012 policy. In relevant part, the RIE provided that:
“The definition of insured is amended to:
“1. Insured means:
“A. You or any relative of yours;
“B. Any other legal entity because of an act or failure to act by you or any relative, but only to the extent that they are covered by one of the policies shown on Part B Declarations;
“C. With respect to the ownership, maintenance or use of a car, motorcycle, motor home or recreational vehicle, ’insured’ is amended to include only the following individuals:
“Lindsay, Joseph & Perrin Galli
“* * *
”EXCLUSIONS
“The following exclusions are added:
“25. The entrustment by an insured of a car, motorcycle, motor home, recreational vehicle or any other motorized land conveyance to any household member who is not an insured (as listed under 1.C above).”
Thus, the RIE purports to exclude all but named drivers from coverage related to the use of a car, and to exclude named drivers from coverage for entrustment of the car to a non-named driver. Because the RIE names all but one member of the Galli family—Chelsea—if effective, it would exclude coverage for Chelsea as a driver and coverage for the entrustment of vehicles to Chelsea by other family members.
In addition to the text quoted supra, the one-page RIE also provides a space for a policy number, where the policy number found on both the 2012 policy and the 2013 policy was typed in. The RIE also contains a signature line, executed with Joseph‘s signature. Underneath the signature line is the designation, “Insured‘s Signature(s)[.]” Whether the RIE was attached to the 2013 policy is a disputed fact; plaintiff contends that it was not.
In March 2017, plaintiff filed a complaint in Providence County Superior Court that was shortly thereafter amended. The amended complaint named Andover as a defendant and sought a declaratory judgment, pursuant to
In January 2019, Andover moved for summary judgment. The hearing justice heard arguments on the motion in March 2020, and, in a bench decision rendered on the same day, granted the motion for summary judgment as to all of plaintiff‘s claims. The order granting summary judgment was entered on April 27, 2020, and judgment for Andover as to all claims was also entered on the same day. The plaintiff timely appealed the judgment.
II
Standard of Review
“This Court will review the grant of a motion for summary judgment de novo, employing the same standards and rules used by the hearing justice.” Bank of America, N.A. v. Fay, 242 A.3d 38, 42 (R.I. 2020) (quoting Nelson v. Allstate Insurance Company, 228 A.3d 983, 984-85 (R.I. 2020)). “We will affirm a summary judgment if, after reviewing the admissible evidence in the light most favorable to the nonmoving party, we conclude that no genuine issue of material fact exists and
“Furthermore, the nonmoving party bears the burden of proving by competent evidence the existence of a disputed issue of material fact and cannot rest upon mere allegations or denials in the pleadings, mere conclusions or mere legal opinions.” Fay, 242 A.3d at 42 (quoting Nelson, 228 A.3d at 985). We also note that “[i]t is a fundamental principle that summary judgment is a drastic remedy, and a motion for summary judgment should be dealt with cautiously.” Shorr, 248 A.3d at 636 (quoting Lehigh Cement Co. v. Quinn, 173 A.3d 1272, 1275 (R.I. 2017)).
Additionally, “[a] decision to grant or deny declaratory or injunctive relief is addressed to the sound discretion of the trial justice and will not be disturbed on appeal unless the record demonstrates a clear abuse of discretion or the trial justice committed an error of law.” Kayak Centre at Wickford Cove, LLC v. Town of Narragansett, 116 A.3d 250, 253 (R.I. 2015) (quoting Foster Glocester Regional School Building Committee v. Sette, 996 A.2d 1120, 1124 (R.I. 2010)).
III
Discussion
On appeal, plaintiff contends that the hearing justice erred by granting summary judgment in favor of defendant and by denying declaratory judgment.
A
Attachment of RIE to 2013 Policy
First, plaintiff argues that the hearing justice erred by finding that the RIE need not have been attached to the 2013 policy to be effective. The plaintiff contends that Rhode Island law requires that all endorsements be attached to their respective insurance policies to be valid. Because the attachment of the RIE to the 2013 policy is a disputed fact, according to plaintiff there is a material disputed fact at issue, and thus summary judgment should not have been granted.
Based on a careful review of the law, we do not agree that attachment is a material fact in this case, because Rhode Island law does not require the attachment of endorsements to their respective policies in every instance, and therefore the RIE could be effective without attachment.
The plaintiff points to Children‘s Friend & Service v. St. Paul Fire & Marine Insurance Company, 893 A.2d 222 (R.I. 2006), in support of his contention that in
While plaintiff asserts, and we agree, that other jurisdictions have held that both attachment and reference are necessary for an endorsement to take effect, plaintiff does not cite, and we have not found, any case from a jurisdiction without a statutory requirement for attachment that holds that an endorsement that is referenced in a policy must also be attached to the policy to be effective. Cf. Twin City Fire Insurance Company v. Terry, 472 S.W.2d 248, 250 (Ky. 1971) (“It seems plain that the legislative policy in this jurisdiction, as interpreted in previous decisions by this court, requires that all terms of an insurance contract be ‘plainly expressed’ in the policy itself. This would appear to foreclose the possibility of incorporation by reference as related to insurance policies.“). Instead, courts in jurisdictions without statutory attachment requirements, such as our own, have held that both attachment and reference are required in situations where an endorsement was attached to a policy, but was not referenced within that policy. See, e.g., Georgia International Life Insurance Company v. King, 172 S.E.2d 167, 169 (Ga. Ct. App. 1969); Alldredge v. Security Life & Trust Company, 92 So. 2d 26, 28 (Ala. 1956). Those courts have reasoned that mere attachment without reference calls into question whether an endorsement is truly intended by the parties to form part of the insurance contract. See Georgia International, 172 S.E.2d at 169 (“It is clear * * * that the paper on which the insurer relies, a copy of which was physically attached to the policy by it, must also be shown to have been intended as part of the policy * * * before it may be considered[.]“). However, the facts in the case at bar present the opposite scenario.
Here, although attachment is disputed, the 2013 policy clearly contains specific references to the RIE. The RIE is referenced by its form number, “H-145 06/96[,]” within the “Forms and Endorsements” section of the 2013 policy‘s
Under well-settled law in Rhode Island, “instruments referred to in a written contract may be regarded as incorporated by reference and thus may be considered in the construction of the contract” so long as “the referring language in the contract * * * demonstrate[s] the parties intended to incorporate all or part of the referenced instrument.” Management Capital, L.L.C. v. F.A.F., Inc., 209 A.3d 1162, 1174, 1175 (R.I. 2019) (first quoting Stanley-Bostitch, Inc. v. Regenerative Environmental Equipment Co., Inc., 786 A.2d 1063, 1065 (R.I. 2001); then quoting 17A Am. Jur. 2d Contracts § 381 (2019)). Therefore, we hold that, when an endorsement is clearly and specifically referenced in the language of an insurance policy, as here, the endorsement is properly incorporated into the policy even without attachment, and thus attachment has no bearing on whether an endorsement incorporated by
B
Signatures Required to Make the RIE Binding as a Matter of Law
Second, plaintiff argues that the RIE was not binding and effective because it was not signed by all of the insureds, which, plaintiff contends, is required as a matter of contract law. The plaintiff avers that the “principles of contract law” require that “all intended parties to a joint contract” sign an instrument for the instrument to be binding. The plaintiff, therefore, submits that the RIE was not binding because it was signed only by Joseph and not by the other insureds.
“An insurance policy is contractual in nature.” Nelson, 228 A.3d at 985 (quoting Medical Malpractice Joint Underwriting Association of Rhode Island v. Charlesgate Nursing Center, L.P., 115 A.3d 998, 1002 (R.I. 2015)). The plaintiff is correct in asserting that general contract principles apply to insurance policies; however, the very authority plaintiff cites to for the proposition that contract law requires all parties to a contract to sign that contract states that “[a] signature on a contract may be required by statute, or by an agreement that the contract will not be
The plaintiff also cites no Rhode Island law, and we have found no such law, which requires that properly incorporated endorsements be signed by any party, let alone by a party other than the named insured.5 See generally 2 Steven Plitt et al., Couch on Insurance 3d § 18:19 (rev. ed. 2010) (stating that “[t]he manner of making an endorsement is immaterial as long as the intent that it be a part of the contract can be ascertained[,]” and nowhere stating that a signature is required to make an incorporated endorsement valid) (footnote omitted); 11 Richard A. Lord, Williston on Contracts § 30:25 (4th ed. 2021) (“As long as the contract makes clear reference to the document and describes it in such terms that its identity may be ascertained
C
Ambiguity of RIE
Third, plaintiff submits that the hearing justice erred by finding that the RIE was unambiguous because, plaintiff argues, it was ambiguous in two respects. First, plaintiff asserts that the RIE was ambiguous as to whose signature was needed to make the RIE binding and effective. Second, plaintiff argues that the RIE was ambiguous as to its nature and scope.
As stated supra, “[a]n insurance policy is contractual in nature.” Nelson, 228 A.3d at 985 (quoting Charlesgate Nursing Center, 115 A.3d at 1002). “Accordingly, when interpreting the disputed terms of an insurance policy, we must do so in accordance with the rules of construction that govern contracts.” Id. (quoting Charlesgate Nursing Center, 115 A.3d at 1002). “It is well-settled that this Court
“In order to determine whether the terms of a policy are ambiguous, we give words their plain, ordinary, and usual meaning.” Nelson, 228 A.3d at 985 (quoting Charlesgate Nursing Center, 115 A.3d at 1002). “[T]he test to be applied is not what the insurer intended, but what the ordinary reader * * * would have understood the language to mean.” Progressive Casualty Insurance Co. v. Dias, 151 A.3d 308, 312 (R.I. 2017) (brackets and deletion omitted) (quoting Allstate Insurance Co. v. Ahlquist, 59 A.3d 95, 98 (R.I. 2013)). This Court “shall refrain from engaging in mental gymnastics or from stretching the imagination to read ambiguity into a policy where none is present.” Nelson, 228 A.3d at 985 (quoting Charlesgate Nursing Center, 115 A.3d at 1003).
“When a policy term is found to be ambiguous, this Court has clearly established that ‘the policy will be strictly construed in favor of the insured and against the insurer.‘” Charlesgate Nursing Center, 115 A.3d at 1003 (quoting Derderian v. Essex Insurance Co., 44 A.3d 122, 127 (R.I. 2012)).
The plaintiff contends that the RIE was ambiguous as to whose signature was required to make it binding. The plaintiff asserts that the RIE‘s signature line designation, which reads “Insured‘s Signature(s)[,]” is ambiguous because of the word “Insured” and the addition of the “(s)[.]” Specifically, plaintiff argues that,
However, as discussed supra, in the absence of a statute or an agreement between the parties, signatures are simply not required to give effect to properly incorporated documents, and the RIE was properly incorporated by reference to the 2013 policy. The plaintiff has not argued, and we will not independently find, that an ambiguous signature line designation, if found here, would represent an agreement between the parties that all insureds were required to sign the RIE to make it binding. Thus, even if the signature line designation was construed as anticipating
Additionally, although plaintiff cites to a case in which an endorsement was found unenforceable because it was unsigned, the endorsement in that instance differs significantly from the RIE here because that endorsement explicitly required a signature in order to be valid and effective. See Hanke v. American Family Mutual Insurance Co., No. 88-2448, 1991 WL 275640, at *3 (10th Cir. Dec. 23, 1991). In Hanke, the endorsement indicated that it was “‘not valid unless the insured acknowledges its receipt and acceptance by returning to the company a copy signed in the space below[,]‘” id. at *3, yet the insured did not sign the endorsement, instead signing only on the declarations page of the policy. Id. at *1. The court thus found the endorsement invalid because the insured‘s “signature on the rider was necessary for the validity of the rider” based on the explicit provision in the endorsement requiring a signature. Id. at *3. This is in stark contrast to the RIE here, which contains only a signature line with a designation, and no language that indicates that a signature is required for the RIE to take effect.
2013 Policy as a New Policy Instead of a Renewal
Fourth, plaintiff contends that the hearing justice erred by finding that the 2013 policy was a renewal and not a new policy. According to plaintiff, this distinction is important because, if the 2013 policy was in fact a new policy and not a renewal, the RIE, which was executed for the 2012 policy, would not apply to the 2013 policy, and consequently the RIE would not have been effective at the time of the accident. However, as we determined above, the RIE was properly incorporated into the 2013 policy through the references to it on that policy‘s declarations pages; therefore, we see no reason why the 2013 policy being a new policy instead of a renewal of the 2012 policy would be relevant in determining the RIE‘s effectiveness at the time of the accident. Thus, even assuming arguendo that the 2013 policy should properly be considered a new policy rather than a renewal, plaintiff‘s argument is unavailing.
E
The RIE‘s Application to Renewals
Finally, the plaintiff argues that, even if the 2013 policy is indeed a renewal, the RIE does not apply to the 2013 policy because the RIE did not facially indicate that it would carry over to subsequent insurance policies beyond the one for which it was originally executed, the 2012 policy. However, the plaintiff cites no law that
IV
Conclusion
For the foregoing reasons, the judgment of the Superior Court is affirmed. The record shall be returned to the Superior Court.
OPINION COVER SHEET
| Title of Case | Steven Dulong v. Merrimack Mutual Fire Insurance Company d/b/a The Andover Companies. |
| Case Number | No. 2020-173-Appeal. (PC 17-1288) |
| Date Opinion Filed | April 12, 2022 |
| Justices | Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ. |
| Written By | Chief Justice Paul A. Suttell |
| Source of Appeal | Providence County Superior Court |
| Judicial Officer from Lower Court | Associate Justice Melissa E. Darigan |
| Attorney(s) on Appeal |
For Plaintiff: Mark A. Fay, Esq. For Defendant: Mark P. Dolan, Esq. Stanley F. Pupecki, Esq. Mark P. Dolan, Jr., Esq. |
SU-CMS-02A (revised June 2020)