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Miller v. Metro. Prop. & Cas. Ins. Co.

Supreme Court of Rhode Island

March 20, 2015

David F. Miller et al.
Metropolitan Property and Casualty Insurance Co. et al

(PC 06-3336).

Present: Suttell, C.J., Flaherty, Robinson, and Indeglia, JJ. Justice Goldberg did not participate.


Page 333

Flaherty, Justice

This opinion addresses three appeals that have arisen from a labyrinth of litigation brought by the plaintiffs, David F. Miller and Miller's Auto Body, Inc. (MAB), against the defendants, Amica Mutual Insurance Company, Amica Property and Casualty Insurance Company (collectively Amica), Metropolitan Property and Casualty Insurance Company (Metropolitan), and Allstate Insurance Company, Inc. (Allstate).[1] All three appeals were argued

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before the Supreme Court on December 3, 2014. After hearing the arguments and examining the memoranda filed by the parties, we are of the opinion that a release that Miller executed before he initiated suit bars all his claims against the defendants. As a result, and for the reasons set forth in this opinion, we affirm in part, and reverse in part, the judgment of the Superior Court.



The plaintiffs, Miller and MAB, alleged in their complaint that they were subjected to an improper, nefarious, and malicious investigation into suspected insurance fraud that the defendants believed was taking place at plaintiffs' Cumberland auto-body shop. Miller alleged that he was suspected of perpetrating insurance fraud by using " improper estimate and repair methods," eventually precipitating an investigation by the Rhode Island State Police (State Police). On January 16, 2002, Miller was arrested at his place of business; he was subsequently charged in Sixth Division District Court with four counts of insurance fraud, two counts of obtaining money under false pretenses, and two counts of attempting to obtain money under false pretenses. After the District Court complaint was dismissed for lack of a prosecution, the Rhode Island Attorney General (Attorney General) renewed the charges by means of a criminal information in Providence County Superior Court. Eventually, the criminal information was dismissed by the Attorney General pursuant to Rule 48(a) of the Superior Court Rules of Criminal Procedure.[2] However, the dismissal, dated March 28, 2005, was not without cost; it was accompanied by, and conditioned on, an agreement between Miller and the Attorney General. The agreement required that Miller relinquish or transfer his auto-body license, pay restitution to the insurance carriers, and execute a general liability release in favor of the Attorney General, the State Police, and, particular to our analysis, Amica, Metropolitan, and Allstate. By its terms, the document specified that Miller released those parties " from any and all manner of actions, causes of action, debts, dues, claims and demands, both in law and equity arising from the facts alleged in [the Attorney General's prosecution of Miller] which said David F. Miller ever had, now has, or in the future may have." [3] Fifteen months

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after the execution of the release, plaintiffs filed a complaint against those same three insurance companies in Superior Court.

The plaintiffs' complaint alleged eight counts: tortious interference with contractual relations (count 1); tortious interference with prospective contractual relations (count 2); malicious prosecution (count 3); abuse of process (count 4); [4] continued tortious interference with contractual relations (count 5); continued tortious interference with prospective contractual relations (count 6); violation of the Rhode Island Deceptive Trade Practices Act (mistakenly labeled count 6), and a separately pled action for punitive damages (mislabeled count 7).[5] In answers dated July 28, 2006, and July 31, 2006, Metropolitan and Amica, respectively, raised the general release signed by Miller as an affirmative defense to all counts of the complaint.



In July 2001, plaintiffs were placed under an umbrella of suspicion by the State Police, who were examining plaintiffs' insurance claims practices. The State Police had received complaints from several insurance companies, alleging that Miller and MAB were " in the practice of enhancing damage to vehicles as well as billing for damage not sustained to vehicles brought to [MAB] for repair." To enhance its investigation, the State Police devised an undercover " sting" that made use of vehicles that were furnished by defendants Amica and Metropolitan. The two carriers also provided ersatz, or pretext, policies of insurance for those vehicles.

Miller was certainly no newcomer to the auto-body business; his affidavit provided that he had spent over twenty-five years performing auto-body maintenance and repairs, during which time he was an officer in the Auto Body Association of Rhode Island and had served as chairman of the Rhode Island Auto Body Licensing Board. Miller also swore by affidavit that he owned and operated MAB, a Rhode Island corporation with its principal place of business in Cumberland, and was its sole shareholder. It is undisputed that, while the State Police investigation was ongoing, MAB was operating even though its charter had been revoked by the Secretary of State.[6] Miller later testified at trial that

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he was not aware that the charter had lapsed, and when he became aware of the problem, he was unable to renew the charter because the corporation was in arrears for taxes to the state. As of the time of trial in 2012, the charter of MAB had in fact never been renewed. It is also undisputed that Miller continued to operate the business in the same manner as he had prior to the charter revocation. In particular, Miller swore that he " continued to operate the business, repair vehicles, contract with customers * * * and conduct all other operations that [he] had done prior to the issuance of the revocation."

On January 16, 2002, after the State Police had completed its investigation, Miller was arrested and charged. Ultimately, in March 2005, the Attorney General filed a Rule 48(a) dismissal of the criminal charges against Miller, stating in its filing that its decision was " due to evidentiary and proof issues." As previously noted, the Attorney General's dismissal of the pending criminal charges was not without qualification; it was contingent upon Miller's compliance with the three conditions mentioned above. Those conditions were: (1) Miller's payment of restitution to the insurance companies; [7] (2) Miller's agreement to relinquish or transfer the Department of Business Regulation (DBR) auto-body license; [8] and (3) Miller's execution of a general liability release. Miller agreed to those three conditions while he was represented by experienced and well-respected counsel--who, according to legal bills produced at trial, in fact drafted the release--and Miller complied with each condition. However, Miller alleged in his complaint that he was coerced into agreeing to the dismissal and signing the release, later testifying that he " felt that [he] had no choice."

There can be no doubt that Miller had been through a wearying process. By the time the criminal charges were dismissed in 2005, he had been the subject of the state's prosecution efforts for over three years. In July 2006, Miller instituted this suit to recover damages for what he characterized as the victimization that he had encountered throughout the police investigation and the ensuing criminal prosecution. In his complaint, Miller said he believed that the entire investigation was a " crusade" motivated by the carriers' personal animus towards him, an animus fueled by his tireless and effective advocacy for legislative enactments that affected insurance companies' operations and profits. This, he claimed, had placed a target on his back. Miller further alleged that his arrest was " [b]ased upon the false information, false allegations and deceitful conduct and practices of Defendants." During the pendency of his criminal charges, Miller alleged that he had " suffer[ed] catastrophic financial losses" and had endured " severe financial ...

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