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Faber v. McVay

Supreme Court of Rhode Island

March 8, 2017

Charles S. Faber et al.
Francine A. McVay et al.

         Providence County Superior Court (PC 09-4512) Associate Justice Joseph A. Montalbano

          For Plaintiffs: Stephen J. Brouillard, Esq. Theresa L. Sousa, Esq.

          For Defendants: Taylor J. Hills, Esq. Frederick E. Connelly, Jr., Esq. Syd A. Saloman, Esq. Timothy J. Robenhymer, Esq. Christopher van Tienhoven, Esq. Christopher B. Weldon, Pro Hac Vice

          Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.


          Maureen McKenna Goldberg Associate Justice.

         This case came before the Supreme Court on January 26, 2017, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. The plaintiffs, Charles S. Faber, M.D. (Dr. Faber), and Karen M. Faber[1] (Mrs. Faber) (collectively, plaintiffs), appeal from a grant of summary judgment in favor of the defendants, Francine A. McVay (McVay), Wickford Insurance Agency, Inc. (Wickford), Lauren Albright (Albright), Mastors & Servant, Ltd. (M&S), Judith Gordon (Gordon), and Marketing Associates Insurance Agency, Inc. (Marketing Associates) (collectively, defendants), [2] on the plaintiffs' claims of insurance malpractice. The Superior Court directed the entry of summary judgment on the basis that the plaintiffs' claims were time-barred under G.L. 1956 § 9-1-14.1, which sets forth a three-year limitation period for insurance malpractice claims. After hearing the arguments of counsel and examining the memoranda submitted by the parties, we are of the opinion that cause has not been shown and that this case should be decided without further briefing or argument. We affirm the judgment of the Superior Court.

         Facts and Travel

         We derive the facts relevant to this appeal from the filings of the parties; they are largely undisputed. From 1998[3] until her retirement in 2005, McVay acted as Dr. Faber's insurance agent. McVay was originally employed by Bodin Insurance Agency but became associated with Wickford around 1994 or 1995. Marketing Associates, [4] an insurance broker, functioned as an intermediary between McVay and Dr. Faber's insurance carriers. According to both Dr. Faber and McVay, Dr. Faber expressed a desire to obtain the best and maximum insurance coverage.

         For the October 2002 to October 2003 term, Dr. Faber's automobile insurance was written by Vigilant Insurance Co.[5] (Vigilant) and included $5, 000, 000 of underinsured motorist bodily injury (UM) coverage.[6] It is alleged that, in late 2002, Dr. Faber inquired with McVay as to whether a different carrier could provide the same coverage for a reduced premium; it is further alleged that McVay reported to Dr. Faber that he could obtain the same coverage and lower his premium payments by contracting with Progressive Insurance for $250, 000 in UM coverage and with Vigilant for an umbrella policy of $5, 000, 000 that also included UM coverage. However, during her deposition, McVay relayed a different version, stating that she informed Dr. Faber that the policies were different and that they would "come back and bite him in the a**." Nonetheless, Dr. Faber directed McVay to make this change, which reduced his premium by $4, 951. The policy changes became effective on December 11, 2002. The umbrella policy with Vigilant provided for $5, 000, 000 in excess liability only, [7] but it did not include UM protection.

         Although Dr. Faber was sent notice of these changes, which included succinct summaries of his coverages, it is undisputed that he failed to read the coverage update. Over the years, he also received notices that detailed his automobile insurance coverage, usually after he added or removed vehicles from his policies. Nonetheless, Dr. Faber testified at his deposition that he did not read these notices but filed them in a drawer because he relied on McVay's insurance expertise. Doctor Faber maintained that he assumed that his automobile policies provided maximum coverage for UM.

         After McVay retired in May 2005, Dr. Faber retained M&S for his insurance needs, and Albright became his direct agent for personal insurance. He was informed by M&S that his policies would be reviewed and that he would be advised if additional coverage was necessary.[8]Doctor Faber again received notice as to the terms and coverage of his automobile insurance. During his deposition, Dr. Faber stated that he did not recall receiving notice of this cancellation and renewal.[9]

         On April 24, 2007, Dr. Faber was injured in a motor vehicle accident that occurred in Scottsdale, Arizona. After he exhausted the tortfeasor's insurance in the amount of $250, 000, he attempted to submit a claim to Vigilant for his excess damages. He was informed that his Vigilant policy did not provide UM coverage, but only excess liability. Doctor Faber did recover $250, 000 under his UM coverage with Progressive.

         On August 6, 2009, plaintiffs filed an action against defendants, alleging that defendants negligently failed to adequately provide the insurance coverage that he expected. On March 14, 2014, McVay and Wickford moved for summary judgment on the basis, inter alia, that plaintiffs' claims were barred by the statute of limitations, § 9-1-14.1.[10] The plaintiffs responded that the discovery rule set forth in § 9-1-14.1(2) served to toll the limitation period because Dr. Faber could not reasonably have discovered the alleged insurance malpractice until he was injured in the collision and submitted a UM claim. Although Dr. Faber conceded that he received the coverage updates from defendants, plaintiffs argued that a reasonable person does not read his or her insurance policies. On April 22, 2014, the hearing justice granted summary judgment in favor of McVay and Wickford, finding that "a reasonable and diligent inquiry would have placed [plaintiffs] on notice of a claim in December of 2002[;] to have timely filed a complaint in compliance with * * * [§] 9-1-14.1, the plaintiffs would have had to have done so on or before December 11, 2005." Because the complaint was filed on August 6, 2009, plaintiffs' claims were held to be untimely. An order granting summary judgment was entered on May 21, 2014. Subsequently, on June 10, 2014, summary judgment was entered in favor of Gordon and Marketing Associates on the same grounds.

         On October 10, 2014, Albright and M&S also moved for summary judgment. Although plaintiffs initially objected to summary judgment, their objection was subsequently withdrawn, and a consent order entered ...

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