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Richmond Motor Sales Inc. v. Nationwide Mutual Insurance Co.

Superior Court of Rhode Island

December 11, 2015

RICHMOND MOTOR SALES, INC.,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY RICHMOND MOTOR SALES, INC.,
v.
ESURANCE PROPERTY AND CASUALTY INSURANCE COMPANY RICHMOND MOTOR SALES, INC.,
v.
ESURANCE PROPERTY AND CASUALTY INSURANCE COMPANY

Providence County Superior Court

For Plaintiff: John O. Mancini, Esq. Nicholas J. Goodier, Esq.

For Defendant: Kristen M. Whittle, Esq. Matthew P. Cardosi, Esq.

DECISION

MATOS, J.

Before the Court are cross-motions for summary judgment, pursuant to Super. R. Civ. P. 56, in three cases. The cases have not been consolidated but are marked by a common plaintiff in all three cases, Richmond Motor Sales Inc., (Richmond), a common defendant in two cases[1], and, more pertinently, a common issue-a request for a declaratory judgment that a rental car company, in these cases Richmond, may initiate and pursue a private cause of action against the insurer of a party who has rented an automobile from the rental car company for damage to the automobile while in the custody of the insured, pursuant to G.L. 1956 § 27-7-6. [2] The Court will review the pertinent facts and travel relative to each case and then address the issues common to all three cases and one remaining issue specific to the matter referred to infra as the Mendez case.

I Facts & Travel

A The Mendez Case (PC-2013-3954)

On March 7, 2011, Herman Mendez (Mr. Mendez) rented a 2009 Chevrolet Impala from Richmond. (Am. Compl. ¶ 4.) On March 20, 2011, the rental car caught fire while it was parked at Mr. Mendez's home in Providence. Id. at ¶ 7. According to a Providence Fire Department Fire Investigation Report, the cause of the fire was a "mechanical malfunction." Id. at Ex. C. At the time the vehicle was damaged, Mr. Mendez was insured by Nationwide.[3] Id. at ¶ 5.

Subsequently, Richmond filed a claim with Nationwide seeking compensation for the damage to the vehicle. Id. at ¶ 8. After its investigation of Richmond's claim, Nationwide determined the cause and origin of the fire was an electrical problem with the vehicle. (Def.'s Mem. in Supp. of its Mot. for Summ. J., Ex. B.) Since Mr. Mendez's policy with Nationwide covered property damage for which Mr. Mendez became legally responsible because of an auto accident, Nationwide denied Richmond's claim. Id. at Ex. C (emphasis added). Sometime after Richmond submitted its claim to Nationwide, Richmond and Mr. Mendez executed an "Assignment and Release" wherein Mr. Mendez assigned his "entire right, title and interest in" the claim, and Richmond "fully and completely" released Mr. Mendez from liability.[4] Id. at Ex. A.

On October 1, 2013, Richmond filed its Amended Complaint asserting three counts against Nationwide: (1) declaratory judgment as to an alleged violation of § 27-7-6, entitled "Rental vehicle coverage"; (2) bad faith/breach of implied good faith; and (3) damages. On December 3, 2013, after Nationwide moved to dismiss Count II (bad faith), Richmond voluntarily dismissed the count pursuant to Super. R. Civ. P. 41(a). Id. at Ex. E. Thus, Richmond's requests for declaratory judgment and damages remain.

B The O'Brien Case (PC-2014-3632)

In January of 2014, Nicole O'Brien (Ms. O'Brien) rented a 2008 Pontiac Grand Prix from Richmond. (Compl. ¶ 4.) Richmond agreed to rent Ms. O'Brien the car upon establishing that she had an active automobile insurance policy, which was issued by Esurance. Id. at ¶¶ 5, 6. On February 7, 2014, the car was damaged as a result of hitting a snow bank while in the custody and control of Ms. O'Brien. Id. at ¶ 7. Subsequently, Richmond filed a claim with Esurance for damages recoverable pursuant to Ms. O'Brien's policy. Id. at ¶ 8. Esurance's adjuster, George Origlia, calculated the total cost for repairs to be $3216.70. Id. at ¶ 10; Compl. Ex. C, Estimate. The repairs were completed in March of 2014, and the car was returned to Richmond's fleet of rental vehicles. (Compl. ¶ 11.) Richmond was unable to rent the car for twenty-eight days total. Id. at ¶ 12.

Richmond alleges that, despite numerous attempts, it has not obtained payment from Esurance for both the damages to the car and Richmond's temporary loss of use of the car. Id. at ¶ 13. As a result, in July of 2014, Richmond filed its Complaint containing three counts: (1) declaratory judgment as to an alleged violation of § 27-7-6; (2) bad faith/breach of implied good faith; and (3) damages.

Esurance originally moved to dismiss Richmond's claims pursuant to Super. R. Civ. P. 12(b)(6). On February 20, 2015, a justice of this Court granted Esurance's motion as to Count II (bad faith) and Count III (damages), but denied Esurance's motion as to Count I (violation of ...


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