Charles S. Faber v. Francine A. McVay

Supreme Court

No. 2015-337-Appeal.
(PC 09-4512)

Charles S. Faber et al. :

v. :

Francine A. McVay et al. :

NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested to
notify the Opinion Analyst, Supreme Court of Rhode Island,
250 Benefit Street, Providence, Rhode Island 02903, at Telephone
222-3258 of any typographical or other formal errors in order that
corrections may be made before the opinion is published.
Supreme Court

No. 2015-337-Appeal.
(PC 09-4512)

Charles S. Faber et al. :

v. :

Francine A. McVay et al. :

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

OPINION

Justice Goldberg, for the Court. 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. Faber1 (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
1
Mrs. Faber has alleged a claim for loss of consortium which is derivative of Dr. Faber’s claims.
2
Chubb Group of Insurance Companies (CHUBB) a/k/a Chubb Indemnity Insurance Company
and Chubb National Insurance Company, Vigilant Insurance Company, and Federal Insurance
Company were also named as defendants. On May 21, 2014, summary judgment was entered in
favor of these defendants, but plaintiffs did not appeal.
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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 19983 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

3
A review of the record indicates that there is conflicting evidence as to when McVay initially
became Dr. Faber’s insurance agent. Accordingly, we refer to the date referenced in the
complaint.
4
Gordon was employed by Marketing Associates.
5
Vigilant is a subsidiary of CHUBB.
6
UM coverage provides protection if the insured is physically injured in a motor vehicle
accident and the tortfeasor does not have adequate insurance coverage.

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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

7
Excess liability coverage provides protection if a claim is asserted against the insured and other
insurance held by the insured is exhausted.
8
Doctor Faber’s automotive policy with Vigilant was technically canceled due to defendant
CHUBB’s internal procedure, but the new policy was renewed by the same carrier on
February 22, 2006, and the coverage was identical.
9
In 2007, Dr. Faber removed two vehicles from his automobile policy and added a new vehicle.
A coverage update was sent to Dr. Faber, which declared that the Vigilant policy only provided
excess liability coverage. As usual, Dr. Faber did not read the update.
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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.

10
General Laws 1956 § 9-1-14.1 provides, in pertinent part: “[A]n action for * * * insurance
* * * malpractice shall be commenced within three (3) years from the time of the occurrence of
the incident which gave rise to the action[.]”
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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 dismissing plaintiffs’ claims against Albright and M&S.11

Final judgment was entered on May 20, 2015. The plaintiffs timely appealed to this

Court on June 1, 2015.

Standard of Review

“This Court reviews de novo a trial justice’s decision granting summary judgment.” Sola

v. Leighton, 45 A.3d 502, 506 (R.I. 2012) (quoting Lynch v. Spirit Rent-A-Car, Inc., 965 A.2d

417, 424 (R.I. 2009)). “[S]ummary judgment is a drastic remedy, and a motion for summary

judgment should be dealt with cautiously.” Cruz v. DaimlerChrysler Motors Corp., 66 A.3d 446,

451 (R.I. 2013) (quoting DeMaio v. Ciccone, 59 A.3d 125, 129 (R.I. 2013)). “Summary

judgment is appropriate only when the ‘pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to judgment as [a] matter of law.’” Sola,

45 A.3d at 506 (quoting Plunkett v. State, 869 A.2d 1185, 1187 (R.I. 2005)). “Only when a

review of the admissible evidence viewed in the light most favorable to the nonmoving party

reveals no genuine issues of material fact, and the moving party is entitled to judgment as a

matter of law, will this Court uphold the trial justice’s grant of summary judgment.” Id. (quoting

National Refrigeration, Inc. v. Standen Contracting Co., 942 A.2d 968, 971 (R.I. 2008)).

Analysis

In Rhode Island, a cause of action for insurance malpractice “shall be commenced within

three (3) years from the time of the occurrence of the incident which gave rise to the action[.]”

11
The consent order makes explicit reference to the April 2014 order that dismissed plaintiffs’
claims against the other defendants based on the statute of limitations.
-5-
Section 9-1-14.1. The plaintiffs do not argue that their claim was filed within this three-year

limitation period. Rather, plaintiffs contend that the discovery rule set forth in § 9-1-14.1(2)

serves to toll the limitation period in this case. In accordance with § 9-1-14.1(2), the limitation

period does not begin to run until “the act or acts of malpractice should, in the exercise of

reasonable diligence, have been discovered.” The plaintiffs’ argument is two-fold: First,

plaintiffs maintain that the limitation period was tolled until Dr. Faber was injured in an

automobile collision and sought UM benefits because he could not reasonably have discovered

his claim for damages until he was denied coverage under the Vigilant policy. Second, plaintiffs

aver that, to the extent that the discovery date hinges on notice of the wrongful conduct as

opposed to the injury, Dr. Faber did not discover, nor should he have discovered, the wrongful

conduct because a reasonable person does not read his or her insurance coverage updates.

Before this Court, all defendants contend that Dr. Faber was provided clear and unambiguous

notice as to his insurance coverage and that these numerous coverage updates put Dr. Faber on

notice as to any alleged insurance malpractice. We agree with this contention.

In the medical malpractice context, this Court has declared, “[t]he discovery date is the

date that the plaintiffs knew or should have known of the ‘wrongful act’ that is the basis of their

lawsuit.” Bustamante v. Oshiro, 64 A.3d 1200, 1204 (R.I. 2013) (quoting Hanson v. Singsen,

898 A.2d 1244, 1249 (R.I. 2006)). We see no reason to depart from this interpretation of the

tolling provision in the context of insurance negligence, and we note that the limitation period for

both causes of action is set forth in the same statute. Our decision in Burns v. Connecticut

Mutual Life Insurance Co., 743 A.2d 566 (R.I. 2000) is instructive. In Burns, the plaintiff

purchased a disability insurance policy from the defendants in 1988, but his application for the

policy contained inaccurate information. Id. at 567. The plaintiff received notice of the policy

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and was directed to “READ [HIS] POLICY CAREFULLY.” Id. The policy stated that it was

issued in consideration of the plaintiff’s application, which was also attached to the policy. Id.

Nonetheless, the plaintiff claimed that he was unaware of these inaccuracies and was not harmed

until the defendants canceled his policy years later in 1993. Id. The plaintiff did not file a claim

until June of 1993. Id. We affirmed the hearing justice’s finding that the plaintiff’s claims were

time-barred, relying on Dionne v. Baute, 589 A.2d 833, 835 (R.I. 1991) for the proposition that a

recipient of a relevant document is under an obligation to examine the document. Burns, 743

A.2d at 568. The focal point of the inquiry was not on when the plaintiff learned of the extent of

his damages, but rather when the plaintiff discovered or should have discovered the liability

causing conduct.

A careful reading of § 9-1-14.1(2) also supports the conclusion that the operative date of

discovery is the date that a plaintiff discovers or in the exercise of reasonable diligence should

have discovered the wrongful conduct of the tortfeasor. See In re Brown, 903 A.2d 147, 149 (R.I.

2006) (“It is a[] * * * fundamental maxim of statutory construction that statutory language

should not be viewed in isolation.”). Although the discovery rule references “injuries or

damages” that may originally be undiscoverable, the rule also provides that the limitation period

is tolled until the “malpractice should * * * have been discovered.” Section 9-1-14.1(2).

This Court adheres to “the longstanding principle that ‘statutes should not be construed to

achieve meaningless or absurd results.’” McCain v. Town of North Providence ex rel. Lombardi,

41 A.3d 239, 243 (R.I. 2012) (quoting Ryan v. City of Providence, 11 A.3d 68, 71 (R.I. 2011)).

Under the interpretation that plaintiffs urge upon the Court, an insured would be free to ignore

deficiencies in his or her policies or coverage and be relieved from taking corrective action

unless and until there was a denial of coverage. The discovery rule does not toll the limitation

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period until the point when damages reasonably are discoverable, but when the negligent conduct

is or should have been reasonably discovered. See Bustamante, 64 A.3d at 1207 (“The discovery

rule does not require perfect crystallization of the nature and extent of the injury suffered or a

clear-cut anchoring to the allegedly negligent conduct of a defendant.”).

In the case at bar, the issue of possible insurance malpractice arose in late 2002, when, in

an effort to reduce Dr. Faber’s premiums, McVay changed carriers and failed to obtain additional

UM insurance coverage for her client. Doctor Faber received a coverage update of the changes

made to his policy, which indicated that the policy was effective on December 11, 2002. The

summary indicates that two vehicles were deleted from the policy and one vehicle was added.

This new coverage is described as “EXCESS LIABILITY ONLY.” This coverage stands out

even more because the previous coverage for the two deleted vehicles is listed as “VEHICLE

LIABILITY, UMBI, UMPD.” Doctor Faber acknowledged that he understood the difference

between UM insurance and excess liability coverage. It is clear that the coverages in the policies

were not identical. Nevertheless, Dr. Faber neglected to read this coverage update. The second

allegation of malpractice occurred in February 2006 when Albright and M&S allegedly failed to

obtain adequate UM coverage. Doctor Faber also received notice of this renewal, which

included a summary of his coverage, but he failed to read this notice as well. Finally, Dr. Faber

was sent coverage updates as he added and deleted vehicles from his policy that detailed the

coverage that he bought. We are satisfied that, in the face of a multitude of opportunities,

beginning in December 2002, Dr. Faber failed to discover the alleged insurance malpractice.

The plaintiffs also urge this Court to hold, as a matter of law, that a reasonable person

exercising reasonable diligence does not read his or her coverage updates. We are unpersuaded

by this contention. Doctor Faber was not charged with reading every iteration of insurance

-8-
jargon in his policies. In fact, we have recognized that “the detailed provisions

of insurance contracts are seldom read by the consumer”; therefore, “[t]he contents of the

declarations sheet is of paramount importance.” Mallane v. Holyoke Mutual Insurance Co. in

Salem, 658 A.2d 18, 20 (R.I. 1995) (quoting Sentry Insurance Co. v. Grenga, 556 A.2d 998,

1000 (R.I. 1989)). Doctor Faber was bound to act as a reasonably diligent insured—to at least

peruse a personalized summary of the policy’s coverage. See Sentry Insurance Co., 556 A.2d at

1000 (“The ordinary insured would assume that such a personalized document would contain

any significant limitations on coverage.”). We therefore conclude that Dr. Faber failed to

exercise the necessary reasonable diligence that was required of him.

Doctor Faber repeatedly stated that he relied on defendants’ insurance expertise when he

changed his automobile policies. However, “[t]o accept [Dr. Faber’s] present assertions of

assuming the coverage was the same could leave an insurer exposed to whatever risks an insured

could later persuade a jury he had been thinking were covered—so long as he had been careful

not to read the policy.” Sutherland v. NN Investors Life Insurance Co., 897 F.2d 593, 596 (1st

Cir. 1990). Cf. Manchester v. Pereira, 926 A.2d 1005, 1012 (R.I. 2007) (“[I]t has long been a

settled principle that ‘a party who signs an instrument manifests his assent to it and cannot later

complain that he did not read the instrument or that he did not understand its contents.’” (quoting

F.D. McKendall Lumber Co. v. Kalian, 425 A.2d 515, 518 (R.I. 1981))); Murray v. Cunard S.S.

Co., 139 N.E. 226, 228 (N.Y. App. Ct. 1923) (Cardozo, J.) (“[One] who omits to read takes the

risk of omission.”). Moreover, we note that the changes in Dr. Faber’s policies reduced his

premium by $4,951, not an insignificant savings. Such a substantial reduction should have

likewise alerted this busy and successful professional that something was amiss, such that he

would have read the declarations page or contacted his agent. Accordingly, we are of the

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opinion that the Superior Court justice did not err in concluding as a matter of law that a

reasonable person would have, at a minimum, perused the summary pages of the coverage

update to ensure that the policy changes were correct and adequate, especially in light of the

sizable reduction in the premium.

Accordingly, the operative date for the commencement of the running of the statute of

limitations certainly was no later than December 11, 2002, the date listed on the first coverage

update. Because the complaint was filed nearly seven years later, it was untimely. As a result,

plaintiffs’ claims against McVay, Wickford, Gordon, and Marketing Associates were untimely

and summary judgment was appropriate.

We also conclude that the plaintiffs’ claims against Albright and M&S equally are

untimely. Doctor Faber received notice of the renewed automobile policy, effective February 22,

2006, and the limitation period commenced on that date and ran until February 23, 2009,12

almost six months before the complaint was filed. We note that Albright and M&S also argue

that the claims against them were dismissed pursuant to a consent judgment that may not be set

aside absent agreement of the parties. Having concluded that the statute of limitations is

dispositive of this appeal, we need not address the consent judgment.

Conclusion

For the reasons articulated herein, we affirm the judgment of the Superior Court. The

papers may be remanded to the Superior Court.

12
February 22, 2009 was a Sunday.
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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

SUPREME COURT – CLERK’S OFFICE

OPINION COVER SHEET

Title of Case Charles S. Faber et al. v. Francine A. McVay et al.
No. 2015-337-Appeal.
Case Number
(PC 09-4512)
Date Opinion Filed March 8, 2017
Suttell, C.J., Goldberg, Flaherty, Robinson, and
Justices
Indeglia, JJ.
Written By Associate Justice Maureen McKenna Goldberg

Source of Appeal Providence County Superior Court

Judicial Officer From Lower Court Associate Justice Joseph A. Montalbano
For Plaintiffs:

Stephen J. Brouillard, Esq.
Theresa L. Sousa, Esq.

For Defendants:
Attorney(s) on Appeal
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

SU-CMS-02A (revised June 2016)