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Johnson v. Johnson

United States District Court, D. Rhode Island

July 8, 2019

ALTIMA JOHNSON, Individually and as Heir and Natural Guardian of CARLTON JOHNSON, Plaintiffs,
v.
HORACE JOHNSON; STATE ROAD AUTO SALES INC.; and ARBELLA MUTUAL INSURANCE COMPANY, Defendants.

          MEMORANDUM AND ORDER

          JOHN J. MCCONNELL, JR. UNITED STATES DISTRICT JUDGE.

         This case arises out of a car accident in which the Defendant, Horace Johnson ("Horace") was the driver, and his cousin, Carlton Johnson ("Carlton") was the sole passenger. Carlton filed this suit through his mother to recover damages for serious injuries sustained in the accident. Althea Johnson ("Ms. Johnson"), Carlton's mother, looks to recover damages for her caretaking of Carlton. The Plaintiffs originally filed this case in the Superior Court of Rhode Island, against the Defendants Horace, his insurer Arbella Mutual Insurance Company ("Arbella"), and the car's lessor, State Road Auto Sales ("State Road"). Arbella removed the case to this Court under 28 U.S.C. §§ 1332, 1441. ECF No. 1, The Defendants now move for summary judgment on all counts. For the reasons below, the Court GRANTS summary judgment to the Defendants on all counts. ECF No. 15.

         I. FACTUAL BACKGROUND

         On December 17, 2017, Horace, a resident of Massachusetts, was driving a car in Providence, Rhode Island. ECF No. 16 at ¶¶ 3, 5. Carlton, a Rhode Island resident then 28 years old, was Horace's passenger. ECF No. 16 at ¶¶ 2, 7, A single-car accident occurred when the car struck a utility pole. ECF No. 16 at ¶ 8. Both Horace and Carlton were seriously injured. ECF No. 16 at ¶ 9. Ms. Johnson, a Rhode Island resident, was not present at the scene of the accident. ECF No. 16 at ¶ 16. However, the Plaintiffs allege that Ms. Johnson "provide[d] round the clock care and assistance" to Carlton after the accident because of his injuries. ECF No. 9-1 at ¶ 16.

         The car Horace was driving on the day of the accident was leased to him by its owner, State Road, a Massachusetts corporation. ECF No. 16 at ¶ 6. Horace was insured by Arbella, also a Massachusetts corporation, under an automobile insurance policy that provided a limit of $100, 000 of bodily injury coverage for guest occupants injured in accidents outside Massachusetts. ECF No. 16 at ¶¶ 10-11.

         In a letter dated January 25, 2018, about a month after the collision, Carlton's counsel reached out to Arbella and demanded a settlement for his bodily injury claims against Horace at the policy limits of $100, 000. ECF No. 16 at ¶ 12. Arbella then investigated to determine their coverage of the incident, claiming a potential issue with Horace's residency. ECF No. 16 at ¶ 13. After the investigation, Arbella's counsel, in a letter dated February 28, 2018, sent a response to Carlton's counsel in which Arbella accepted Carlton's demand to settle his claims against Horace for the policy limits of $100, 000. ECF No. 16 at ¶ 14.

         Carlton and Ms. Johnson then filed suit on March 6, 2018. ECF No. 3. Count I of their complaint seeks damages for Carlton's "severe personal injuries, which continue to date" causing "significant hospitalization, medical treatment, home health care, rehabilitation, lost wages, loss of consortium, permanent injuries, as well as loss of earning capacity." ECF No. 9-1 at ¶ 11. Count II seeks damages for Ms. Johnson's post-accident care of Carlton, namely her "loss of wages, mental and emotional infliction of distress, loss of consortium benefits, and other damages." ECF No. 9-1 at ¶ 16. Count III claims that the Defendants both disregarded Rhode Island insurance settlement law and violated and breached Massachusetts insurance settlement law. ECF No. 9-1 at ¶ 18-19.

         II. STANDARD OF REVIEW

         Summary judgment is called for when the pleadings and discovery materials show "that there is no genuine dispute as to any material fact," so that "the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In determining whether summary judgment is proper, the court views the evidence in the light most favorable to the non-moving party and draws all reasonable inferences in his favor. Continental Cas. Co. v. Canadian Universal Ins. Co., 924 F.2d 370, 373 (1st. Cir. 1991).

         III. DISCUSSION

         A. Settlement

         Both Count I and Count III of the Plaintiffs' complaint hinge on whether the parties entered into a valid settlement contract for the policy limits. First, if there was a valid settlement between Carlton and Arbella, Carlton's bodily injury claims, Count I, cannot be brought in court. Second, a timely settlement between Carlton and Arbella destroys the Count III claims against Arbella, which allege disregard and breach of various insurance settlement laws and bad faith.

         1. Count I

         In Rhode Island, settlements are considered contracts and thus are governed by Rhode Island contract law. Furtado v. Goncalves,63 A.3d 533, 538 (R.I. 2013). Rhode Island contract law requires that a valid contract have "competent parties, subject matter, legal consideration, mutuality of agreement, and mutuality of obligation." Rhode Island Five v. Med. Assocs. of Bristol Cty., Inc., 668 A.2d 1250, 1253 (R.I. 1996). Mutuality of agreement, or mutual assent, requires that "each party to the contract. . . have the intent to promise or be bound." Smith v. Boyd,553 A.2d 131, 133 (R.I. 1989). "In general, assent to be bound is analyzed in two steps"- offer and acceptance." Id. Usually, offer and acceptance will be ...


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