American States Insurance Company v. LaFlam
Filing
16
OPINION AND ORDER finding as moot 5 Motion to Sever; denying 6 Motion to Dismiss; granting Plaintiff's 10 Motion for Judgment on the Pleadings; denying 13 Motion for Certification of a Question to the RI Supreme Court. So Ordered by Judge William E. Smith on 4/22/11. (Jackson, Ryan)
UNITED STATES DISTRICT COURT
DISTRICT OF RHODE ISLAND
____________________________________
)
AMERICAN STATES INSURANCE COMPANY, )
)
Plaintiff,
)
)
v.
)
)
JOANN LAFLAM,
)
)
Defendant.
)
___________________________________ )
C.A. No. 10-357-S
OPINION AND ORDER
WILLIAM E. SMITH, United States District Judge.
Plaintiff
brought
this
Defendant
American
action
Joann
States
seeking
LaFlam
Insurance
a
Company
declaratory
(“LaFlam”)
is
(“ASIC”)
judgment
not
that
entitled
to
uninsured/underinsured motorist (“UM”) benefits under a policy
issued
to
contractual
counterclaim
LaFlam’s
employer
limitations
against
period
ASIC,
(the
has
alleging
“Policy”)
expired.
breach
because
LaFlam
of
the
filed
contract,
a
bad
faith, and declaratory judgment; she also seeks a declaratory
judgment that ASIC is contractually obligated to pay her claim.
Before the Court are the parties’ cross-motions for judgment on
the pleadings, LaFlam’s motion for certification of a question
to the Rhode Island Supreme Court, and ASIC’s motion to sever
and stay discovery on LaFlam’s bad faith counterclaim until her
breach
of
resolved
contract
is
limitations
concludes
claim
whether
provision
that
is
the
is
resolved.
Policy’s
The
three-year
enforceable.
certification
is
question
be
contractual
Because
unnecessary
to
the
and
Court
that
the
limitations provision is enforceable, judgment shall be entered
in ASIC’s favor.
The Court does not need to reach ASIC’s motion
to sever and stay discovery.
I.
Background
On April 25, 2007, LaFlam was involved in an automobile
accident while driving a vehicle insured under a policy issued
by ASIC to her employer.
LaFlam sustained personal injuries as
a result of this accident.
On April 3, 2008, LaFlam sent ASIC a
letter
and
of
representation
connection with this incident.1
ASIC
contacted
LaFlam
notice
of
potential
claim
in
Shortly thereafter, on April 23,
to
acknowledge
the
letter
of
representation and to request additional information.
Between September 2008 and May 2009, ASIC contacted LaFlam
on four separate occasions to request additional information and
1
LaFlam characterizes this letter as a “claim,” while ASIC
contends that because it stated that “a claim may be made,” it
was not itself a claim.
This dispute is immaterial to the
outcome of this matter.
2
updates on her medical status.2
On January 15, 2010, LaFlam
requested authorization from ASIC to settle her underlying tort
claims
against
the
two
automobile accident.
tortfeasors
responsible
for
the
ASIC gave LaFlam such authorization on
February 18, 2010.
On May 19, 2010, LaFlam sent a letter to ASIC demanding $1
million to settle her UM claim under the Policy.3
instant
action
counterclaimed
roughly
for
breach
three
of
months
contract
ASIC filed the
later.
and
bad
LaFlam
faith;
in
response, ASIC moved to sever and stay discovery on LaFlam’s bad
faith counterclaim until her breach of contract counterclaim was
resolved.
on
the
ASIC and LaFlam have filed cross-motions for judgment
pleadings
under
Rule
12(c),
and
LaFlam
has
moved
to
certify the following two questions to the Rhode Island Supreme
Court: “(1) Is a contractual three year statute of limitations
[sic]
provided
within
the
uninsured
motorist
portion
of
an
2
ASIC contacted LaFlam on September 29, 2008, November 6,
2008, January 14, 2009, and May 28, 2009.
(See Def.’s
Countercl. for Declaratory J. ¶¶ 38 – 41.)
3
LaFlam alleges that “during this period” ASIC’s authorized
representative told her that she should not request arbitration
because the file was being reviewed and an offer would be made.
(See Def.’s Countercl. for Declaratory J. ¶ 46.)
ASIC denies
this allegation, and LaFlam did not pursue this issue in her
motion papers or during argument. The Court therefore does not
consider whether ASIC should be estopped from enforcing the
limitations provision.
3
insurance policy void as against public policy?; and (2) Does
the statute of limitations [sic] provided within an uninsured
motorist [insurance policy] begin to run prior to the time it is
clear
that
the
insured
will
not
recover
all
sums
from
the
tortfeasor(s)[?]”
Certification is not appropriate in this case.
“When state
law is sufficiently clear . . . to allow a federal court to
predict its course, certification is both inappropriate and an
unwarranted burden on the state court.”
Gilmore v. Citigroup,
Inc. (In re Citigroup), 535 F.3d 45, 62 (1st Cir. 2008) (quoting
Manchester
2002)).
Sch.
Dist.
v.
Crisman,
306
F.3d
1,
14
(1st
Cir.
Although LaFlam characterizes these questions as issues
of first impression, as set forth in the analysis below, Rhode
Island law is clear on both issues.4
II.
Legal Standard
“A motion for judgment on the pleadings is appropriate when
it is clear from the pleadings that the movant should prevail.”
Burns v. Conley, 526 F. Supp. 2d 235, 241 (D.R.I. 2007).
The
Court considers a motion for judgment on the pleadings under
4
The analysis below centers on the first question.
Sufficient authority, however, also exists for this Court to
conclude that the limitations period for a UM claim, whether by
statute or contractual provision, begins to run at the date of
the accident. See Metro. Prop. and Cas. Ins. Co. v. Barry, 892
A.2d 915, 924-25 (R.I. 2006) (for UM claims, “the date the cause
of action accrues . . . is the date of injury”).
4
Rule 12(c) according to the same standard by which it decides a
Rule 12(b)(6) motion.
See id.
The Court may base its decision
on “documents the authenticity of which are not disputed by the
parties; documents central to plaintiff[’s] claim; and documents
sufficiently referred to in the complaint.”
Curran v. Cousins,
509 F.3d 36, 44 (1st Cir. 2007) (quotation marks, citation, and
internal alternations omitted).
Just as the Court ordinarily considers cross-motions for
summary judgment separately, the Court normally considers crossmotions for judgment on the pleadings in turn.
See Tyrrell v.
Toumpas, Civil No. 09-cv-243-JD, 2010 WL 2246280, at *1 (D.N.H.
Jun. 2, 2010).
Here, however, “the parties do not dispute the
factual basis of the claims and instead present only a legal
issue for determination . . . . As such, the motions present the
legal issue as a ‘case stated,’ which does not require separate
consideration.”
together
the
See id.5
parties’
The Court will therefore consider
arguments
on
whether
the
contractual
limitations provision in the Policy is enforceable.
5
Although comparing LaFlam’s counterclaim for declaratory
judgment with ASIC’s answer to her counterclaim appears to
reveal a potential factual dispute, the parties’ memoranda in
support of their cross-motions for judgment on the pleadings
focus exclusively on legal arguments; none of the disputed facts
is material.
The Court therefore analyzes the parties’
arguments in the context of the single legal issue before it.
5
III. Analysis
ASIC’s complaint requests a declaratory judgment stating
that because LaFlam failed to file a legal action against it
within three years of her accident, she is barred under the
Policy’s contractual limitations provision from asserting any
claims
against
it.6
LaFlam
argues
that
the
contractual
limitations period in the Policy is void both as a matter of law
and as against public policy.
Because this dispute is a matter
of contract interpretation, and because the contract was made in
Rhode
Island,
determination.
Rhode
Island
law
governs
the
Court’s
See Michaud v. Merrimack Mut. Fire Ins. Co.,
Civ. A. No. 94-0175B, 1994 WL 774683, at *9 (D.R.I. Nov. 16,
1994).
The
Rhode
Island
Supreme
Court
has
recognized
that
a
“limitations period in an insurance policy is a term to which
the parties are specifically bound.”
Lyden,
6
986
A.2d
231,
235
Progressive N. Ins. Co. v.
(R.I.
2010)
(quoting
Nat’l
That provision states:
Any legal action against us under this Coverage Form
must be brought within three years after the date of
the ‘accident’.
However, this Paragraph . . . does
not apply to an ‘insured’, if, within three years
after the date of ‘accident’, we or the ‘insured’ have
made a written demand for arbitration in accordance
with the provisions of this Coverage Form.
(See Pl.’s Compl. for Declaratory J. ¶ 7.)
6
Refrigeration, Inc. v. Travelers Indem. Co. of Am., 947 A.2d
906,
910
(R.I.
2008)).
The
Rhode
Island
Supreme
Court
has
upheld a contractual limitations period of one year in a fire
insurance policy, DiIorio v. Abington Mutual Fire Ins. Co., 402
A.2d 745, 747 (R.I. 1979), and a limitations period of two years
in a property insurance policy.
824
A.2d
458,
461
(R.I.
Hay v. Pawtucket Mut. Ins. Co.,
2003).7
Therefore,
the
three-year
limitations provision in the instant Policy is clearly not void
as a matter of law.
To address LaFlam’s claim that the provision is void as
against public policy, however, the Court must look to R.I. Gen.
Laws
§
27-7-2.1,
which
governs
UM
coverage.
Provisions
in
contracts for UM coverage “must comport with the public policy
mandates” underlying this statute.
See Casco Indem. Co. v. R.I.
Interlocal Risk Mgmt. Trust, 929 F. Supp. 65, 70 (D.R.I. 1996),
rev’d on other grounds, 113 F.3d 2 (1st Cir. 1997) (quoting
Carlton v. Worcester Ins. Co., 744 F. Supp. 395, 399 (D.R.I.
7
LaFlam cites two cases in support of her argument that the
limitations provision is void. See Messler v. Williamsurg City
Fire Ins. Co., 108 A. 832 (R.I. 1920); Kennedy v. Cumberland
Eng’g Co., 471 A.2d 195 (R.I. 1984).
Both are distinguishable
from the instant action because the contractual or statutory
limitations periods in those cases operated or could have
operated to totally deny access to the courts for adjudication
of a claim even before it arose.
See id.
In this case,
however, LaFlam could have sought UM benefits from ASIC shortly
after the accident, and certainly could have done so within the
three-year limitations period.
7
1990), aff’d, 923 F.2d 1 (1st Cir. 1991)).
Any provision that
restricts the coverage afforded by § 27-7-2.1 is “void as a
matter of public policy.”
See id. (quoting Rueschemeyer v.
Liberty Mut. Ins. Co., 673 A.2d 448, 450 (R.I. 1996)).
The
limitations
period
in
the
Policy
operates
not
to
restrict coverage, but to fix the time within which an insured
may bring legal action against the insurer.
The limitations
period does not limit the scope of the coverage available under
the Policy in any way.
statute
of
limitations
In Rhode Island, the default 10-year
set
forth
in
§
9-1-13(a)
applies
to
actions filed for the recovery of UM benefits.
Pickering v. Am.
Emp’rs Ins. Co., 282 A.2d 584, 588 (R.I. 1971).
And because the
statute
the
governing
limitations
UM
periods,
limitations
claims
even
provision,
is
the
in
the
silent
absence
maximum
on
of
a
10-year
issue
of
contractual
statute
of
limitations that applies to all contract actions would bar some
UM claims.
See R.I. Gen Laws § 9-1-13(a).
In essence, LaFlam asks this Court to hold that contractual
limitations provisions in contracts for UM coverage are void as
against
public
policy,
even
though
neither
the
Rhode
Island
General Assembly nor the Rhode Island Supreme Court have ever
endorsed
this
position.
Moreover,
the
Rhode
Island
Supreme
Court has had the opportunity to declare contractual limitations
8
provisions in UM policies void as against public policy, but has
declined to do so.
Similarly,
although
See Progressive N. Ins., 986 A.2d at 235.
the
Rhode
Island
General
Assembly
has
expressly restricted contractual limitations provisions in other
contexts,8 it has included no such restriction in the UM statute.
Because both the Rhode Island Supreme Court and the Rhode Island
General Assembly have declined to carve out an exception to the
general rule that parties are bound to limitations provisions,
this
Court
has
no
basis
on
which
to
hold
that
limitations
provisions in contracts for UM coverage are void as against
public policy.
LaFlam
also
argues
that
the
language
in
ambiguous and must be interpreted in her favor.
the
Policy
is
“An ambiguity
occurs only when the contract term is reasonably and clearly
susceptible
of
more
than
one
interpretation.”
Rosciti
v.
Liberty Mut. Ins. Co., 734 F. Supp. 2d 248, 251 (D.R.I. 2010)
(quoting Merrimack Mut. Fire Ins. Co. v. Dufault, 958 A.2d 620,
8
See, e.g., R.I. Gen. Laws § 6A-2-725 (limitations periods
for actions for breach of contracts for sale must be no less
than one year and no more than four years); R.I. Gen. Laws § 6A2.1-506 (limitations periods for actions for default under lease
contracts must be no less than one year and no more than four
years); R.I. Gen. Laws § 34-36.1-4.16 (in condominium purchase
context, limitations periods for actions for breach of express
and implied warranties of quality must be no less than two years
and no more than six years).
9
625
(R.I.
2008)).
The
only
reasonable
meaning
of
the
limitations provision here is that an insured must bring legal
action against ASIC within three years.
Because the language of
the limitations provision is clear on its face, this argument
must fail.9
IV.
Conclusion
For the reasons stated above, the Court GRANTS Plaintiff’s
motion for judgment on the pleadings, and DENIES Defendant’s
motion
for
judgment
on
the
pleadings
and
motion
for
certification of a question to the Rhode Island Supreme Court.
It is therefore unnecessary to consider Plaintiff’s motion to
sever and stay Defendant’s bad faith counterclaim.
IT IS SO ORDERED.
/s/ William E. Smith
William E. Smith
United States District Judge
Date: April 22, 2011
9
LaFlam raised a number of affirmative defenses in her
answer (laches, waiver, failure to join a necessary party, and
others) that were not developed in her motion papers.
Issues
are considered waived if they are not accompanied by some
attempt at developed argumentation, see Chopmist Hill Fire Dep’t
v. Town of Scituate, C.A. No. 09-531-ML, 2011 WL 198432, at *7
(D.R.I. Jan. 18, 2011) (citing United States v. Zannino, 895
F.2d 1 (1st Cir. 1990)); accordingly, this Court has considered
only those issues addressed in LaFlam’s motion papers.
10
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