Providence County Superior Court
Michael R. DeLuca, Esq. Ronald P. Langlois, Esq. Paul S. Cantor, Esq. James E. Kelleher, Esq. John G. Hines, Esq.
This matter came on for hearing on March 17, 2015 on the motions of Scott Alves, John Alves and Cathy Alves for priority assignment of a declaratory judgment action (C.A. No. 12-5368) and to advance the declaratory judgment action on the trial calendar. Summit Insurance Company has also submitted a Motion for Priority Assignment of the Declaratory Judgment Action.
I Facts and Travel
Scott Alves was injured as a result of a motor vehicle collision in April 2002. Mr. Stricklett, the operator of a motor vehicle, had some insurance coverage with Summit Insurance Company (Summit). Summit investigated the claim, communicated with counsel for the Alves family and, in 2003, questioned whether Mr. Stricklett was liable. Time passed and all counsel appeared to be inactive on this claim for eight years.
In June 2011, counsel for the Alves family made a demand to Summit for $300, 000. As Scott Alves was a minor, he filed an action with his parents as his representatives (C.A. No. 11-5499). The suit alleged that Mr. Stricklett negligently operated his motor vehicle. In 2012, Summit filed a separate action, asking the Court to issue a declaratory judgment determining whether Summit had a duty to pay sums beyond the policy limits.
The motion pending before the Court at this juncture requests the Court to determine which issue should be decided first: the declaratory judgment or the tort action.
Trial courts are conflicted when questions of liability in a personal injury case arise at the same time as issues of insurance coverage. This can result in two lawsuits reaching the court simultaneously. As the existence of coverage may taint the jury on the issue of liability for the injury, the courts attempt to hold the issues separate and apart from the jury.
The Alves family suggests that the high court has already determined that questions of coverage should be advanced, referencing Employers' Fire Ins. Co. v. Beals, 103 R.I. 623, 240 A.2d 397 (1968). However, the actual case language merely recognizes the competing interests:
"If the troublesome issue giving rise to insurer's dilemma is one which is separable from the issues awaiting to be litigated in the principal tort suit, a declaratory judgment should be liberally awarded. Advance determination of such issues is of great assistance to all the parties; and an early resolution of questions of this type, generally speaking, does not adversely affect the interest of the injured party. Thus, declaratory judgment proceedings are ideally suited for preliminary disposition of such issues as whether or not lack of timely notice or failure to cooperate on the part of the insured absolves the insurer of its obligation to defend or indemnify.
"On the other hand, if the vexatious issue giving rise to the conflict of interests between the insured and the insurer is inextricably related to those issues which will ultimately determine the insured's liability to the injured party in the tort suit, courts normally and justifiably deny the application for a declaratory judgment. Nationwide Mut. Ins. Co. v. Dennis, 14 A.D.2d 188, 217 N.Y.S.2d 680. To award a declaratory judgment in such an event would doubtlessly clear up the insurer's obligation to the insured under their insurance contract, but, in our opinion, it would do so at the harsh expense of the injured party. We are of the belief that to allow insurance companies to litigate issues which are identical with ones to be tried later during the injury suit would be tantamount to permitting insurance companies to assume unfairly the control and command of the tort litigation. See 6A Moore, supra, at 3113, and cases cited therein; see also Note, Use Of The Declaratory Judgment To Determine A Liability Insurer's Duty To Defend-Conflict Of Interests, 41 Ind.L.J. 87, 101. To do otherwise would surely jeopardize the injured party's right to direct, control and manage the course of his injury suit." Beals, 103 R.I. at 630-31, 240 A.2d at 401-02.
While there is no clear consensus, it is usually more convenient, and appropriate for the court, to determine whether coverage exists prior to the personal injury trial. Where the issues are severable, as they appear to be here, it is appropriate for the trial court to first determine whether a duty to defend exists, and then allow the liability action to commence. Pennsylvania Gen. Ins.Co. v. Becton, 475 A.2d 1032 (R.I. 1984). This cannot always be achieved, as there may be overlapping issues of fact which require a united trial. Nevertheless, the issuance of a declaratory judgment remains discretionary. Often, the ...