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Allstate Insurance Co. v. Rhode Island Department of Business Regulation

Superior Court of Rhode Island

January 10, 2018

ALLSTATE INSURANCE COMPANY; AMERICAN COMMERCE INSURANCE COMPANY; AMICA MUTUAL INSURANCE COMPANY; LIBERTY MUTUAL GROUP; METROPOLITAN INSURANCE GROUP; NATIONWIDE CORPORATION GROUP; OHIO MUTUAL GROUP; MEMBERS OF THE PROGRESSIVE GROUP OF COMPANIES DOING BUSINESS IN RHODE ISLAND; PROVIDENCE MUTUAL FIRE INSURANCE COMPANY; SELECTIVE INSURANCE GROUP; THE HARTFORD FINANCIAL SERVICES GROUP; THE TRAVELERS COMPANIES, INC.; UNITED SERVICES AUTOMOBILE ASSOCIATION GROUP (USAA); MAIN STREET AMERICA GROUP, Plaintiffs,
v.
RHODE ISLAND DEPARTMENT OF BUSINESS REGULATION, Defendant, EAST BAY AUTO, INC.; EURO MOTOR CARS, INC.; CASALE'S AUTOBODY, INC.; HILLVIEW AUTO BODY, INC.; BIGELOW AUTO BODY, INC.; RANDY'S AUTO, LTD; C.L. ENTERPRISES, INC.; SAFE-WAY AUTO SALES, INC.; MIKE'S AUTO BODY, INC.; WEST WARWICK AUTO CITY, INC.; D&H AUTO GROUP; CURRERI COLLISION CENTER, INC.; NEW CENTURY AUTO BODY, INC.; CRANSTON COLLISION CENTER SALE & SERVICE, INC.; MICHAUD AUTO BODY, INC.; CHOICE COLLISION CENTER, INC.; AUTO SERVICE AUTO BODY, INC.; TODISCO ENTERPRISES, INC.; PROVIDENCE AUTO BODY, INC.; PACHECO: AUTOMOTIVE, INC.; REGO'S AUTO BODY, INC.; ANTHONY'S AUTO BODY, INC.; DETROIT COLLISION CENTER, INC.; RICK'S AUTO BODY, INC.; BLACKSTONE AUTO SALES & BODY, INC.; AUTO BODY CONCEPTS, INC.; WARWICK AUTO BODY, INC.; Interested Parties.

         Providence County Superior Court

          For Plaintiff: Jeffrey S. Brenner, Esq.; Stephen D. Zubiago, Esq.; Melissa E. Darigan, Esq.; David J. Pellegrino, Esq.; Bruce A. Leach, Esq.; Faith A. LaSalle, Esq.; C. Russell Bengtson, Esq.; Todd J. Romano, Esq.; R. Kelly Sheridan, Esq.; Elizabeth A. Suever, Esq.

          For Defendant: Matthew M. Gendron, Esq. Sara K. Tindall-Woodman, Esq.

          For Interested Peter J. Petrarca, Esq.; Jina N. Petrarca, Esq.

          DECISION

          SILVERSTEIN, J.

         Before the Court is Plaintiffs' (Plaintiffs or Insurers) motion for a stay of the pending administrative proceeding ordered by the Rhode Island Department of Business Regulation (DBR) pursuant to G.L. 1956 § 42-35-15. Plaintiffs move for a stay to allow the Court an opportunity to determine legal issues previously presented to the appointed Hearing Officer in a motion to dismiss, which was subsequently denied.

         I

         Facts and Travel

         In February 2017, several auto body repair shops (the Shops) filed a series of Complaints (Shops' Complaints) with DBR against Plaintiffs. Pls.' Compl. ¶ 26. In the Shops' Complaints, the Shops allege that the Plaintiffs failed to comply with the labor rate survey requirements set forth in G.L. 1956 § 27-29-4.4 and promulgated by DBR via Insurance Regulation 108. Id. at ¶ 27. Section 27-29-4.4 and Insurance Regulation 108 require Insurers annually to conduct an auto body labor rate survey to determine a prevailing auto body labor rate for each classification of auto body repair facilities. See § 27-29-4.4; DBR Ins. Reg. 108. The Shops' Complaints alleged that the Insurers either failed to adhere to the survey requirements or failed to complete the survey.

         After receiving the Shops' Complaints, DBR requested responses from the Insurers. Pls.' Compl. ¶ 28. In April 2017, Plaintiffs responded asserting that the Shops did not have standing under the relevant statutes and regulations and that the requested remedies were not authorized. Id. at ¶ 29. Additionally, Plaintiffs requested that DBR close the Shops' Complaints without further action. Id. DBR subsequently issued seventeen orders appointing a Hearing Officer and holding that the Complainants have the responsibility to present their case to the Hearing Officer. Id. at 33-34. In May 2017, the Hearing Officer conducted a hearing and established a briefing schedule which allowed the Insurers an opportunity to file motions to dismiss. Id. at ¶ 35.

         On May 19, 2017, Plaintiffs submitted motions to dismiss with supporting memoranda. Id. at ¶ 36. The motions were opposed by DBR and the Shops. Id. The Hearing Officer heard oral arguments regarding the Plaintiffs' motions on June 20, 2017, and she issued an order denying Plaintiffs' motions on July 28, 2017. Id. at ¶ 41. In her decision, the Hearing Officer further scheduled a status conference to divide Plaintiffs into two categories, one group to analyze "setting a labor rate" and a second to examine "a procedural issue for the survey." Pls.' Compl., Ex. 1 at 12. The Hearing Officer further stated that "[a] briefing schedule will be set for the analysis issue as it is ready to be determined as a matter of law." Pls.' Compl. at ¶ 42. The status conference has been postponed pending the matter currently before the Court.

         Plaintiffs filed their Complaint herein on August 21, 2017, alleging that they have been adversely affected by the Hearing Officer's decision and requesting declaratory relief on a number of legal questions they assert must be answered before the administrative process may continue. See Pls.' Compl. Plaintiffs filed a motion to stay the administrative proceeding on August 31, 2017 pending the Court's decision on the legal issues presented in their Complaint. Both DBR, as the Defendant, and the Shops, as interested parties, filed objections to Plaintiffs' motion and supporting memoranda.

          II

...


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