Vittorioso v. ACE American Insurance Company et al

Filing 92

MEMORANDUM AND ORDER denying 34 Motion for Summary Judgment; granting 54 Motion for Summary Judgment; adopting 80 Report and Recommendations. So Ordered by Chief Judge William E. Smith on 8/24/2016. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
ACE AMERICAN INSURANCE COMPANY,
)
)
Defendant.
)
___________________________________)
JOHN VITTORIOSO,

C.A. No. 13-687 S

MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
This

is

automobile

a

dispute

accident,

between

John

the

victim

Vittorioso,

and

of

a

hit-and-run

his

employer’s

automobile insurer, ACE American Insurance Company (“ACE”).
parties seek to adjudicate one issue:

The

the uninsured motorists

(“UM”) coverage limit under the applicable insurance policy (the
“Policy”) that ACE issued to the employer.

Magistrate Judge

Lincoln D. Almond issued a Report & Recommendation (“R&R”) (ECF
No.

80)

on

the

parties’

cross-motions

for

summary

judgment,

recommending that the Court grant Plaintiff’s motion solely as to
the amount of available UM coverage and that ACE’s motion be
denied.

ACE timely objected, arguing that the R&R misinterpreted

Rhode Island Law when it determined the Policy’s UM coverage limit.
(ECF No. 84.)

For the reasons that follow, the objection is

1

OVERRULED

and

the

R&R

is

ACCEPTED

pursuant

to

28

U.S.C.

§

636(b)(1).
I.

Background
The R&R thoroughly recounts the underlying facts, and they

need not be repeated in detail here.

Briefly, on October 2, 2012,

Plaintiff was injured in a hit-and-run automobile accident while
driving a vehicle leased to Aramark, Plaintiff’s employer.

When

Plaintiff submitted a claim to recover for bodily injuries under
Aramark’s Policy, ACE indicated that Aramark’s UM coverage limit
– the coverage implicated in Plaintiff’s claim - was $25,000, the
minimum amount required under Rhode Island law.

Although this is

the limit stated in the Policy, Plaintiff challenges it.

Pointing

to the UM Coverage Selection Form Aramark completed in September
2012 — which stated that the UM coverage should be the same as the
bodily injury (“BI”) coverage — Plaintiff argues that the UM
coverage limit is $2,000,000. ACE disavows this Coverage Selection
Form because Aramark allegedly completed it in error.

According

to ACE, Aramark actually wanted to contract for the lowest amount
of UM coverage permissible under Rhode Island Law.
The R&R recommended reforming the Policy to reflect the UM
coverage Aramark selected in the UM Coverage Selection Form.
started

by

analyzing

R.I.

Gen.

Laws

§

27-7-2.1(a)

and

It
the

regulations interpreting it that were in effect at the time.
Section 27-7-2.1(a) requires insurers to provide UM coverage at
2

the insured’s bodily injury (“BI”) limit unless the insured selects
a different limit in writing.

See R.I. Gen. Laws § 27-7-2.1(a).

The regulations then in force went on to specify that if an insured
wanted to elect UM coverage less than the BI limits, it had to do
so on a form utilized for that purpose.

See R.I. Dep. of Bus.

Reg. Ins. Reg. 10 (attached as Ex. F to Pl.’s Mem. in Supp. of
Mot. for Summ. J., ECF No. 58-6).

Relying on this writing

requirement, the R&R concluded that it must give legal significance
to Aramark’s selection in the Coverage Selection Form.

According

to the R&R, if Aramark’s selection was in error, “it is not an
onerous burden” for ACE to have (1) read the form, and (2) sought
clarification or confirmation from Aramark about the amount of UM
coverage it wanted prior to issuing the policy.

(See R&R 9-10,

ECF No. 80.)
ACE strongly disagrees that the Court is bound by Aramark’s
Coverage Selection Form.

Relying heavily on Carpenter v. Hartford

Fire Ins. Co., 990 F. Supp. 2d 180 (D.R.I. 2014), it argues that
the R&R should have overlooked the Form and deferred to Aramark’s
intent, which was to purchase the minimum amount of UM coverage
allowed under Rhode Island Law.
II.

Discussion
A

few

principles

of

statutory

and

contract

construction

provide useful background for ruling on this Objection.

First,

the Rhode Island Supreme Court has stated that when a statute’s
3

meaning is less than clear, a court’s “task is to establish and
effectuate the intent of the Legislature.”

Ferreira v. Integon

Nat. Ins. Co., 809 A.2d 1098, 1100 (R.I. 2002) (quoting R & R
Assocs. v. City of Providence Water Supply Bd., 765 A.2d 432, 436
(R.I. 2001).

However, “[i]f a statutory provision is clear and

unambiguous, ‘there is no room for statutory construction and we
must apply the statute as written.’”

Id. (quoting Cummings v.

Shorey, 761 A.2d 680, 684 (R.I. 2000).

Second, specifically as to

Rhode Island’s UM statute, while the legislature intended the
statute

to

“afford[]

insurers

some

financial

protection

from

unwarranted claims,” the “primary object remains indemnification
for an insured’s loss rather than defeat of his or her claim.”
American States Ins. Co. v. LaFlam, 69 A.3d 831, 835 (R.I. 2013).
Finally, if insurance policies do not conform to a statute’s
requirements – including the statute’s notice requirements – “the
language of the policy will be disregarded and the contract will
be construed to conform to the statute.”

Fama v. Prudential Prop.

& Cas. Ins. Co., 694 A.2d 741, 742 (R.I. 1997) (quoting VanMarter
v. Royal Indem. Co., 556 A.2d 41, 44 (R.I. 1989)).
As the R&R recognized, the terms of § 27-7-2.1(a) are clear:
(1) by default, insurers must provide their customers with UM
coverage equal to a policy’s BI limit; (2) an insured may contract
for UM coverage below this default coverage by indicating an
alternative level of coverage in writing on a form provided for
4

that purpose; but, in any event, (3) the UM BI coverage cannot be
less than a $25,000/$50,000 split.
with these statutory requirements.

Here, Aramark and ACE complied
Aramark submitted what, by

ACE’s own admission, is the Policy’s UM Coverage Selection Form.
This form, which meets the statutory requirements, unambiguously
indicates that Aramark wanted coverage equal to its BI limits.
So, Aramark selected a lawfully permissible level of coverage, on
the statutorily required form, all in perfect compliance with the
statute. Pursuant to the statute, the Policy should have contained
this level of UM coverage.

Since it does not, the Court is

obligated, under clear Rhode Island precedent, to reform the
Policy.
ACE, of course, objects to this result and urges the Court to
look past the UM Coverage Selection Form to extrinsic evidence of
the parties’ intent.

As Carpenter and the case on which it relied,

daSilva v. Equitable Fire & Marine Insurance Co., 263 A.2d 100
(R.I. 1970), hold, there are certain circumstances when this
approach is appropriate.
93.

See Carpenter, 990 F. Supp. 2d at 189-

However, the rule articulated in these cases is quite narrow,

requiring two explicit conditions to be met: (1) that the coverage
selection form unambiguously expresses the parties’ intent; and
(2) but for a technical error on the form, the form would comply
with § 27-7-2.1(a).

See id. at 191-93 (giving effect to a UM

selection form where the insured’s mistaken, unlawful selection on
5

the form – selecting no UM coverage rather than the minimum
coverage permissible under law – opened the door to considering
the insured’s intent, which the parties agreed was to contract for
the minimum amount of coverage permissible under Rhode Island law);
daSilva, 263 A.2d at 102-03 (overlooking technical imperfections
in the insured’s written rejection of UM coverage where the writing
unambiguously indicated the insured’s intent).
The facts here do not satisfy these conditions.

As noted

above and in the R&R, Aramark’s UM Coverage Selection Form was
unambiguous; it indicated Aramark wanted UM coverage equal to the
Policy’s BI limits.
writing

The Form, thus, complies with § 27-7-2.1(a)’s

requirement

and

is

not

technically

deficient.

Consequently, unlike in Carpenter and daSilva, the Court has no
reason to consider Aramark and ACE’s intent.

If, as ACE now

claims, Aramark chose the wrong level of coverage in the Form, it
should have read the Form and sought to correct it prior to issuing

6

Aramark the insurance contract. 1

The law does not allow ACE to

choose when to give effect to the Form and when not to. 2
III. Conclusion
For the foregoing reasons, ACE’s objection is OVERRULED and
the Report and Recommendation is ACCEPTED pursuant to 28 U.S.C. §
636(b)(1).

Plaintiff’s Motion for Summary Judgment (ECF No. 54)

is GRANTED as to Count I solely as it relates to the amount of
available UM BI coverage.

Defendant’s Motion for Summary Judgment

1

ACE argues that it “requested [minimum UM coverage] ‘in
writing’ on a form created for that purpose when it submitted the
Corrected UM Coverage Election Form.” (Def.’s Obj. 9, ECF No. 841.) ACE, however, omits a key fact: that it did not obtain this
“corrected” form until September 2013 - a year after ACE issued
its initial policy, and a year after Plaintiff’s accident. (See
Ex. E to Aff. of Sherry Ardito, ACE 592, ECF No. 36-5.) This Form
has no bearing on the amount of UM coverage that ACE should have
written into the Policy, which took effect on October 1, 2012.
2

In a footnote in its Reply Brief, ACE asks the Court, in
the alternative, to certify this case to the Rhode Island Supreme
Court. (Def.’s Reply 4 n.1, ECF No. 86.) To the extent that ACE’s
request is even proper, it is denied. As detailed above, the R&R’s
recommendation, which this Court adopts, is fully supported by
Rhode Island law.
7

(ECF No. 34) is DENIED.

This matter shall be placed on the next

trial calendar for trial on Count I.
IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: August 24, 2016

8