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Providence Auto Body Inc. v. Peerless Insurance Co.

Superior Court of Rhode Island

April 14, 2014


Providence County Superior Court

For Plaintiff: Peter J. Petrarca, Esq.

Jina Petrarca-Karampetsos, Esq.

For Defendant: Kevin J. Holley, Esq.


Providence Auto Body, Inc. (PAB) brings this suit against Peerless Insurance Company (Peerless) for alleged tortious interference and breach of contract. Previously, this Court dismissed a count seeking preliminary injunction. Currently before the Court is Peerless' motion for summary judgment pursuant to Super. R. Civ. P. 56 as to all remaining counts. PAB opposes Peerless' motion as to all counts.


Facts and Travel

Peerless is authorized to conduct business in the State of Rhode Island. PAB is a Rhode Island corporation that maintains a full collision repair license issued by the Department of Business Regulation. PAB is engaged in the business of repairing collision-damaged vehicles. As a repair shop, PAB has had occasion to repair vehicles that are either insured by Peerless or are owned by claimants of Peerless.

Pursuant to G.L. 1956 § 27-9.1-4(a)(23), the failure of an insurer to obtain an appraisal of a vehicle for which damages exceed $2500 can be considered an unfair claims practice. Therefore, insurance companies, such as Peerless, utilize appraisers and adjusters to appraise vehicles, both at independent repair facilities, such as PAB, and at direct repair shops.[1] As part of the appraisal, the cost associated with labor must be factored in. The cost of labor will vary depending on the hourly rate used by the appraiser. To assist in the calculation of the hourly rate, § 27-29-4.4 was enacted requiring insurance companies to conduct labor rate surveys to establish a prevailing auto body labor rate.[2] During the relevant time period, PAB had a posted labor rate of $88 per hour, and Peerless used an average labor rate in the Providence area of $45 per hour. PAB and Peerless, in part due to the gap between PAB's posted rate and Peerless' average rate, allegedly negotiated for an hourly labor rate of $66 in January 2010. Thereafter, Peerless paid PAB at the $66 per hour labor rate on over twenty claims. This relationship ceased in April 2011 when Peerless instructed appraisers to stop using the $66 per hour rate for PAB vehicle repairs, and instead to use the $45 per hour rate.

One such instance where Peerless instructed the appraiser not to calculate the appraisal using the negotiated rate involved the appraisal of Thomas Tufano's (Tufano) vehicle.[3] Tufano authorized PAB to repair his vehicle. Tufano insured his vehicle with Peerless. Tufano provided notice to Peerless that he would have his vehicle repaired at PAB. During Tufano's communications with Peerless representatives, Tufano was advised that PAB was not on Peerless' referral list. Additionally, Peerless attempted to have Tufano agree to have his vehicle inspected at a different shop. Tufano resisted these attempts. After nearly a week, Peerless contacted Tufano and told him that Peerless was unable to inspect his vehicle at PAB because PAB's charges were in excess of what Peerless was willing to pay for labor. Peerless then asked Tufano if his vehicle could be inspected on a side street near PAB. Eventually, over a month after Tufano initially contacted Peerless, his vehicle was appraised.

Peerless provided written notice to Tufano of its appraisal of estimate of damages. Peerless' estimate was for the total amount of $5001.09. The estimate provided by Peerless utilized the $45 labor rate. Additionally, the notice informed Tufano that it was his right to choose any shop to do the repairs, but in the event that the shop he chose estimated costs in excess of Peerless' estimate, then Tufano was to inform Peerless of such difference. At that time, Peerless would provide Tufano with at least one local repair shop willing to make the repairs for the estimate provided by Peerless. If Tufano still chose to go with PAB, then Peerless would not be required to pay the difference. This procedure was all in accordance with Insurance Regulation 73, § 7(B)(1).[4]

Based on Peerless' refusal to continue to pay the negotiated labor rate and because of the alleged conduct by Peerless, PAB filed suit against Peerless. PAB asserted a count seeking preliminary injunction, which was dismissed by this Court in December 2011. PAB also asserted tortious interference with contracts (Count II), tortious interference with prospective contracts (Count III), and breach of contract (Count IV) claims. Peerless moves for summary judgment as to the three remaining counts, which PAB opposes.

II Standard of Review

"Summary judgment is a proceeding in which the proponent must demonstrate by affidavits, depositions, pleadings and other documentary matter . . . that he or she is entitled to judgment as a matter of law and that there are no genuine issues of material fact." Palmisciano v. Burrillville Racing Ass'n, 603 A.2d 317, 320 (R.I. 1992) (citing Steinberg v. State, 427 A.2d 338 (R.I. 1981)). The court, during a summary judgment proceeding, "does not pass upon the weight or the credibility of the evidence but must consider the affidavits and other pleadings in a light most favorable to the party opposing the motion." Id. (citing Lennon v. MacGregor, 423 A.2d 820 (R.I. 1980)). Moreover, "the justice's only function is to determine whether there are any issues involving material facts." Steinberg, 427 A.2d at 340. The court's purpose during the summary judgment procedure is issue finding, not issue determination. O'Connor v. McKanna, 116 R.I. 627, 359 A.2d 350 (1976). Therefore, the only task for the judge in ruling on a summary judgment motion is to determine whether there is a genuine issue concerning any material fact. Id.

"When an examination of pleadings, affidavits, admissions, answers to interrogatories and other similar matters, viewed in a light most favorable to the party opposing the motion, reveals no such issue, the suit is ripe for summary judgment." Indus. Nat'l Bank v. Peloso, 121 R.I. 305, 307-08, 397 A.2d 1312, 1313 (1979). "[T]he opposing parties will not be allowed to rely upon mere allegations or denials in their pleadings. Rather, by affidavits or otherwise they have an affirmative duty to set forth specific facts showing that there is a genuine issue of material fact." Bourg v. Bristol Boat Co., 705 A.2d 969, 971 (R.I. 1998). However, it is not an absolute requirement that the nonmoving party file an affidavit in opposition to the motion. Steinberg, 427 A.2d at 338. If the affidavit of the moving party does not establish the absence of a material factual issue, the trial justice should deny the motion despite the failure of the nonmoving party to file a counter-affidavit.



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